It is public knowledge that Ispress is facing a serious financial problem, which can ultimately be attributed to two Supreme Court rulings. The provisions of these judgments are having a very negative impact on the income of the above insurers, due to which their indebtedness is increasing rapidly. Not only this, except for government interference. It is feared that an early and possible bankruptcy of Ispress will result in a major crisis for the entire health system. In fact, this situation has further fueled the debate on the country’s healthcare system.
In fact, if the government allows Ispress to collapse and offers to transfer its customers to Fonasa, it will – for all practical purposes – operate a single state health insurer, similar to the British National Health Service. Will build a premier institution. Favored by the government
From an economic point of view, such a single insurer would be inefficient, as it would have monopoly and monopoly power. It would be a monopolist, as it would become the sole provider of health insurance for all practical purposes. It would be a monopsonist because, in effect, it would also determine the quantity of health services demanded. And we know that monopolies and monopolies are inefficient. Furthermore, in the case of this single insurer, implicit rents tend to translate into jobs at higher than optimal wages in the company, rather than higher revenue for the government.
The alternative to the centralization and nationalization of health described earlier – restrictive and disabling of freedom of choice – is to build on what already exists. This can be achieved by significantly increasing competition between insurers (Fonasa and Isapress) and health providers (hospitals, clinics and others). The central tool for achieving this greater competition should be the definition of some standard health plans offered by all insurers (in replacement of the current hundreds of plans, which prevent any comparison), a system of compensation of risks between insurers system that largely facilitates change of insurer, and a health subsidy scheme for low-income people.
Like any crisis, a health crisis also provides an opportunity for progress. It is true that circumstances could be used to lay the foundation for a national health system similar to the English one, which would be more inefficient than the present one, in addition to limiting our freedom of choice. But it can also build on what already exists to create a more efficient health plan that vastly expands the possibilities of choice, and is more equitable as well.
for rolf luderseconomist