Guillermo Paraje, Director of Research at UAI Business School, is a Doctor of Economics at Cambridge and an expert on health system reforms. He was a member of the Presidential Advisory Commission for the Reform of the Private Health Insurance System (2014). “Ispress’s clinic has $500 million in debt. The system works by accumulating debt. At some point, no more can be done.”
-The government has introduced a small ispress law and now a group of MPs has introduced an alternative project. What are its positive and negative aspects?
-Alternative Project actually predates Short Law. And this is a mistake, because the table of factors, which the Supreme Court in its judgment ordered to be used for all schemes from 2020 onwards, will be the same for new schemes, only for the post-2020 changes. I do not understand how a project that is an order of law can order something contrary to the order given by justice. It seems to me that it does not have much destiny.
-And the minor law?
The minor law is going to be hotly debated and certainly some aspects are being amended, but it seems to me that it overrules the Supreme Court’s decision. And here’s a central theme: if a failure occurs, it is implemented or it is unknown. One can try to reduce some of the effects, but there is failure. Because if the Supreme Court’s decision is not followed, what are we left with?
– Is this an adequate response or could it lead to bankruptcy of isapres?
-This may be an appropriate response and may lead to bankruptcy of the isapre system. Let’s see, the Isapre system is a system that is already broken. Shorter Law oxygenates it a bit, but it is structurally less so. And it has been at a loss as a result of the ineffectiveness of isapres to adjust its operations. And also because the people who chose isapres have taken it upon themselves to prosecute any price increases in isapres that have been announced in the last ten years. It is the same isapre users who are also to some extent responsible. Those price increases were determined by the court to be illegal.
But the system works. People go to clinics, do surgeries, get medical consultations.
-Yeah, but they have $500 million in debt at the clinic. It works to collect debt. At some point, it can’t be done anymore. That is the subject. It has worked, but in recent years it has backfired. Many of the gains given away over the years have been due to increased Ouse premiums, which to be honest are a bit reprehensible and have been proscribed. We’ll have to see how that story ends.
Could it spark new demands?
– Yes, because isapre can revise the price of GES premium when something changes in the GES basket. And that GES premium increases, if one looks at isapres earnings, they’re pretty pro-cyclical; One can see in which year the GES premium increased precisely because the profit of Ispress increased. There are now claims that it is illegal and the courts are looking into it. If the courts rule that this is illegal, Ispress will have to revise its conduct regarding the increase in GES premiums and this will also have a significant financial impact. It is a system that is very complex.
– Will the end of Isapre be a disaster, a health disaster?
– If it gets messy, yes. You have to understand that 85% of the population of this country is not in isapre. And it is also important to understand that isapres is one thing and the provider is another. It is in charge of contracting with insurance providers to provide care for its beneficiaries, and FONASA does so in most establishments with 85% of the population consisting of people from Isaprés. So, depending on how you do this, it can be a relatively orderly transition, or it can be really messy and complicated.
– According to your point of view, what would be the solution?
Any solution must begin with compliance with the Supreme Court’s decision. I believe that the government should be more concerned about the financial health and financial impact of the private lenders who have such huge debt from Ispress today, rather than Ispress itself. What if this sector disappears? What about the lending sector? How do we make sure that clinics don’t close in regions, so that health centers don’t close in metropolitan areas? How do we ensure continuity of treatment for those affected? It seems to me that these should be the problems that the government should solve or try to solve.
-How do you evaluate the management of the Minister of Health?
The ministers seem technically impeccable to me. Not only during his time as minister, but before as well. He has had this serious problem, which gives me the impression that it has taken away all his time and the possibility to devote himself to other problems which are also very serious in the health system. So far it has given a good response and it is expected that this problem will be solved soon, so the health ministry can also solve the problems which are complex, which have to be solved.
– In what form?
Well, there are waiting lists, an epidemiological profile of the population that is becoming more complex due to the increasing prevalence of chronic diseases. There are public health failures, there are efficiency issues, all those kinds of things should be a priority.
Is a comprehensive reform of the system necessary?
-I believe it should be comprehensively reformed and with a system logic. Since we can’t do it over and over again, see what we want to keep, what we want to improve, what things are unnecessary. a national discussion.
– But what would that arrangement be like?
The provider system should be mixed, public and private. People could choose between one and the other under certain conditions. And the huge resolution capacity of the private sector should be maintained and incentives should also be given for improvement. Given the crisis of the private insurance system, that is, isapres, it would be necessary to start thinking about moving to national insurance with the possibility of having private supplementary insurance.
You have studied taxes on sweet drinks, tobacco and alcohol because of their consequences on health. Do you propose to upload them?
These three products cause serious harm to the health of the population, not only to the elderly, but also to children in the case of sweetened drinks. And these damages to health create a huge economic burden. Health resources, for example, that can be used for other unavoidable diseases and that are used to cure diseases that we can easily avoid if we consume less of these products. So one remedy is taxation, taxes that already exist in Chile, but in all cases are few and poorly designed.
