Living in Costa Rica

. . .Where the living is good

By Jo Stuart
jostuart@amcostarica.com

The past and the future of Costa Rica's health service
October 4, 2005

I have written a lot about Costa Rica’s governmental health insurance plan.  The other day I was at a meeting where the speaker, Leonardo Garnier, a professor of Economics and sometime columnist, gave us a history and possible future of the institution known as the Caja. 

The Caja Costarricense de Seguro Social was not created full-blown from the onset.  Before 1940, there was little public-sponsored social welfare in Costa Rica.  It was President Rafael Ángel Calderón  (1940-44), a paternalistic representative of the elite of Costa Rica who first enacted a social security program that would insure the workers of the banana and coffee industries in the Central Valley.  That was approximately 10 per cent of the population.  This act stunned his supporters, but social security survived the 1948 Civil War. 

By 1961 that number of people covered had grown to only18 percent of the population.  But after 1961 new laws and constitutional reforms included independent workers, as well.  By 1973 Costa Rica became a country whose citizens did not have to fear catastrophic medical expenses.  By 1975 health coverage was expanded to include marginal and indigent peoples. (The government would pay their monthly fees.)  By 2004 the percentage of Costa Ricans covered by government health insurance reached 88 percent.  Those not covered were mainly the rich, who chose not to belong to the system.

Charts comparing various countries with respect to their health coverage costs and their life expectancy showed that the United States spends more every year on health care than any other country (over $5,000 per person). Costa Rica spends $700 per person. Life expectancy in Costa Rica has increased from 47 in 1948 to 80 today.  That is currently higher than in the U.S.  Part of the success of the program here is due to the decision of the government to include preventive measures —  improvements in sanitation, prenatal care, infant nutrition, potable water and education of the public. These measures are responsible for an infant mortality rate that is also better than that in the U.S.  However, although $700 seems little, 9.3 percent of Costa Rica’s gross domestic product is spent on health.

There are problems that threaten the continued success of one of the most successful health programs in the world. Among them are questions like what are the limitations of what it covers?  Does it deplete its budget on one case that must get medical attention abroad?  Does it cover plastic surgery?  What are the rules it should stick to?

Costs have increased, in part because of the new technology that is constantly becoming available and because the population is becoming more demanding in what it feels it has a right to.  Who is going to finance this increase?  Now many of the elite and rich of the country do not belong to the Caja.  However, if one of them suddenly finds he needs an expensive operation, it is not unheard of that his doctor will tell him to join the Caja and within a month he gets his operation in a Caja hospital,

And then there is the problem of internal reform.  There is waste and inefficiency within the system, and, as we know, unscrupulous people who benefit. Once private patients could use the facilities of a Caja hospital, getting private rooms, better food, faster attention.  But they paid for it.  Unfortunately, said Professor Garnier, this practice has been discontinued, which has encouraged the competition of private hospitals. The health business is a very profitable one.

Professor Garnier does not feel that the passage here of the Central American Free Trade Act will affect the Caja and its services greatly. One concern, he said, is the ruling that drug companies must show that their prescription drugs have been tested for efficacy and safety to get approval and then would be free from any competition from generic or competitive drugs for five years.  The Caja uses many generic drugs so this would be a hardship (but Garnier said that it would mainly affect local drug companies.)  The positive side of that, to my mind, is that perhaps there will be fewer drugs prescribed.  I think Costa Ricans, along with most of the rest of the world, are over-medicated as it is.

As for Costa Ricans demanding some changes in the free trade agreement before accepting it, Professor Garnier said that knowing the loud voices of the influential in Costa Rica and the president of the U.S. and the people he would listen to, any changes would probably make the agreement worse rather than better for the little guy.