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Exportation of managed care to third-world countries may be detrimental rather than advantageous to their health

With managed care saturation in the United States and limited prospects in Europe, managed care organizations (MCOs) have turned their eyes toward third-world countries, especially those in Latin America. At the same time, third-world countries are under strong pressure by lending institutions such as the World Bank to accept managed care as one way to privatize their health and social security systems. However, a recent commentary by Howard Waitzkin, M.D., Ph.D., and Celia Iriart, Ph.D., of the University of New Mexico, suggests that this exportation of managed care may be detrimental to the health of people who live in third-world countries.

In fact, managed care executives note that a major factor in moving their programs to Latin America is their access to the social security funds within these countries, which provide a source of new capital and profits. These are very large funds managed by government or publicly regulated agencies, which include health care and retirement benefits for many employed workers in large private or public enterprises. Latin American countries typically have established public sector health care institutions, including public hospitals and clinics, for the unemployed and others without insurance.

The authors cite several examples of the downside of managed care in Latin America. The copayments required under managed care plans have introduced barriers to care and have increased strain on public hospitals and clinics. For example, in Chile, about 24 percent of patients covered by MCOs receive services annually in public clinics and hospitals because they cannot afford copayments. To apply for free care at public hospitals in Argentina and Brazil, indigent patients now must undergo lengthy means testing; at some hospitals the rejection rate for such applications averages between 30 and 40 percent. Latin American MCOs also have attracted healthier patients, while sicker patients gravitate to the public sector.

More details are in "How the United States exports managed care to third-world countries," by Drs. Waitzkin and Iriart, in the May 2000 Monthly Review 52, pp. 21-35.

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