Report Nº: 99120/12/2022
Private medicine came out of the pandemic battered. It combined an enormous effort made by the health personnel, with frozen fees and medical tariffs. Just when it was beginning to recover its lost purchasing power, a tweet from the Vice-President sent it back to defunding.
The Argentine health sector is made up of some 1,500 public hospitals and 4,000 private hospitals, in addition to some 20,000 labs and imaging centers. There are 200,000 medical professionals and a similar number of nurses. In general, both doctors and nurses tend to combine their work in the public sector with private practice. These numbers indicate that the Argentine health system is mixed and the private sector (prepaid medical companies, private hospitals, labs, imaging centers, physicians, and nurses) plays a leading role.
During the pandemic, the prices of private medicine were partially frozen. In response to legal claims, in 2021 the Justice ordered the government to define a price adjustment formula according to the costs of the sector. This led to implement, since August 2022, the “Health Costs Index”. As this index gave in 2022 increases higher than inflation, the Vice President of the Nation said, via Twitter, that this was unacceptable. The reaction was to change the formula for another that takes 90% of the variation of the RIPTE (an index that measures the variation observed in salaries and is used to adjust social security benefits).
How well-founded and pertinent is the Vice-President’s tweet? In this regard, the evidence provided by the Ministry of Health states that:
These data show the gross mistake made when public policies ignore the evidence. Official information indicates that private medical prices have not yet recovered the loss incurred during the pandemic. This was a particularly traumatic instance that forced redoubling efforts to cope with the two waves of covid and to compensate prices of inputs that were rising at three-digit rates with frozen medical fees and tariffs, first, and insufficiently indexed, later. This year’s above-inflation increase only made up for part of what was lost in the pandemic.
With the new formula that emerged after the Vice-President’s tweet, the defunding of private medicine is deepened. Establishing that prices will be updated at a rate of 90% of the variation in salaries implies that the fees of doctors and health personnel will systematically grow below the salaries of the rest of the population. This absurdity has a high impact on private hospitals where labor costs represent 75% of the total cost. With unfairly indexed medical fees, the deterioration of medical quality is foreseeable. The defunding will be compensated with more delays in appointments and co-payment increases. Regulating based on demagogy, not on evidence, harms the population because it disorganizes the healthcare system and demotivates healthcare personnel.
This is another reflection of the social consequences of having a poorly organized and poorly managed public sector. In Argentina, it is understood that public hospitals are financed by taxes to care for people without health insurance coverage. Those who have or had during their active life a formal job have access to social security coverage financed by salaries. But as both systems –in general– work poorly, many people make an additional effort to pay out of pocket for prepaid health insurance. The novelty is that now, in addition to the poor management of public hospitals and the deficient regulation and control of the social security systems, there is a policy of defunding private medicine.
One warning sign is that public and private hospitals are not able to fill all the vacancies available for medical residencies. Critical specialties, such as pediatrics and general medicine, do not have enough residents. This foreshadows that in a few years there will be a shortage of doctors. This is another manifestation of the damage caused by opportunistic and demagogic policies.
