HEALTH FINANCING PROFILE - GUATEMALA 89375 Guatemala is an upper-middle income country in Central America. The Guatemalan Peace Accords (“Accord for a Firm and Lasting Peace”) were signed on December 29, 1996 bringing to an end over three decades of civil war marked by high casualties, emigration and internal displacement. The Peace Accords contained articles dealing with social justice issues, including codification of the right to health services for all. Life expectancy at birth has risen from 62.3 in 1990 to 70.6 in 2012. Though Guatemala has made progress towards the Millennium Development Goals, it continues to lag behind other upper middle income countries in many areas such as infant and maternal mortality, contraceptive coverage and skilled birth delivery coverage (Table 2).1 Both access to healthcare and health outcomes vary widely between the urban population and the ru- ral, often indigenous, populations. For example, close to 77% of women have skilled birth assistance in urban areas compared to 36% of women in rural areas.2 The Guatemalan government continues to address these inequities mainly through the Expansion of Coverage Program (PEC) which explicitly targets health and nutrition service coverage to rural, indi- gent and mostly indigenous populations, largely through contract agreements with non-governmental organizations (NGOs). Health Finance Snapshot Total Health Expenditure (THE) as a share of gross domestic product (GDP) has risen from 4% to 7% from 1995 to 2012. General Government Expenditure on Health (GGHE) as a percentage of THE, however, continues to hover around 35% while out of pocket expenditures remain high. Table 1. Health Finance Indicators: Guatemala 1995 2000 2003 2005 2007 2009 2012 Population (thousands) 10,016 11,237 12,099 12,717 13,359 14,034 15,083 Total health expenditure (THE, in million current US$) 538 1,079 1,397 1,755 2,456 2,663 3,405 THE as % of GDP 4 6 6 6 7 7 7 THE per capita at exchange rate 54 96 115 138 184 190 226 General government expenditure on health (GGHE) as % 36 40 37 35 33 36 36 of THE Out of pocket spending as % of THE 59 53 53 54 54 51 53 Private insurance as % of THE 2 2 2 3 3 4 3 Source: WHO, Global Health Expenditure Database; National Health Accounts, Guatemala Figure 1. Total Expenditure on Health per capita, 4 Out of pocket spending (OOPS) makes up a considerable por- Guatemala tion of health spending (Table 1, Figure 1), consistently repre- Total Expenditure on Health per capita senting over 50% of THE. (USD at official exchange rate) • OOP costs are point-of-service fees (i.e.: for consultations, medications, etc.) and do not include private insurance pre- miums. • Those in the highest income percentiles pay relatively high shares of their income for consultations, while lower income earners pay high shares of their income for medications that are not available in public facilities.3 • Private insurance expenditures as a percentage of THE re- main low at just 3% of THE and have only increased by 1 percentage point since 1995. Source: WHO, Global Health Expenditure Database; National Health Accounts, Guatemala Health Status and the Figure 2. Demographic Indicators, Guatemala Demographic Transition Non-communicable diseases are on the rise in Guatemala with obesity rates, diabetes and car- diovascular conditions gaining in importance. High Crude birth rate mortality from violence continues. Guatemala has (per 1,000 a gradually aging population with the dependen- population) cy ratio expected to increase considerably after 2025.3 This is concerning as only 18% of Guate- Infant mortality malans are enrolled in the nation’s social security rate (per 1,000 scheme and are eligible to receive retirement or live births) disability benefits. Under-5 Demographic Transition mortality rate (per 1,000 4 Birth rates are declining (Figure 2). births) 4 Life expectancy is increasing. 4 The ‘bulge’ in the population pyramid is slowly moving upward (Figure 3). Source: United Nations Statistics Division and the Instituto Nacional de Estadística, Guatemala. 4 The total fertility rate (TFR) has fallen from 5.6 in 1990 to 3.9 in 2011. Epidemiological transition Table 2. International Comparisons: Health Indicators 4 Mortality from infectious disease and nutrition- Upper Middle al deficiencies remains high while non-com- Guatemala Income Country % Difference municable disease mortality is creeping up Average (Figures 4 and 5). GNI per capita (year 2000 US$) 2,195.3 1,899.0 -13.5 Prenatal service coverage 93.2 93.8 -0.6 Figure 4. Mortality by Cause, 2008, Guatemala Contraceptive coverage 54.1 80.5 -26.4 Nutritional Skilled birth coverage 51.5 98.0 -46.5 Deficiencies Sanitation 78.6 73 5.6 Respiratory TB Success 83 86 -3 Infections Infant Mortality Rate 29.1 16.5 12.6 Maternal & <5 Mortality Rate 34.3 19.6 14.7 Perinatal Maternal Mortality Rate 120 53.2 66.8 Communicable Life expectancy 70.6 72.8 -2.2 Diseases THE % of GDP 7 6.1 0.9 Non- GGHE as % of THE 36.3 54.3 -18 Communicable Physician Density 0.9 1.7 -0.8% Diseases Hospital Bed Density 0.6 3.7 -2.9% Source: WHO, Global Burden of Disease Death Estimates (2011) Source: The World Bank, World Development Indicators database Figure 5. Non-Communicable Disease Mortality, 2008, Figure 3. Population Pyramids of Guatemala Guatemala Cancer 1950 1980 Diabetes 2010 75-79 Neuropsychiatric Conditions 60-64 Male Cardiovascular 45-49 Female Diseases 30-34 Respiratory Diseases 15-19 Violence 0-4 500 0 500 1000 0 1000 2000 0 2000 Other Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010 Revision. Source: WHO, Global Burden of Disease Death Estimates (2011) Health System Financing and Coverage Guatemala’s health system is fairly unique in its formal reliance grams (such as the Expansion of Coverage Program, PEC) meant to upon contract agreements with NGOs both for health service de- expand the reach of public health services, particularly into poor livery as well as administrative duties (although the latter has rural areas with large indigenous populations. Financing for these mostly been phased out as of 2011). Following the Peace Accords expansion programs, however, has fluctuated greatly and has been in 1996, healthcare services were guaranteed to all citizens. Since characterized as being overly vulnerable to the changing priorities that time, Guatemala has introduced and continues to modify pro- of consecutive political administrations.2 Figure 6. Timeline of Guatemala’s Public Health System2,3 Guatemala’s civil war ends with the Health Services Improvement Program Peace Accords and explicit rights to (HSIP) initiated to expand coverage and health are codified and guaranteed. improve efficiency and equity. 1996 1997 Integrated Health Care System (SIAS) containing the Expansion of Coverage Program (PEC) implemented to contract with NGOs to pro- vide health services in mainly rural areas in the poorest Departments. Public sector: 4 Ministry of Public Health and Social Welfare (MOH) Figure 7. Population Health Coverage by Sector • Funded through general taxation (non-contributory). • Provides free or low-cost primary, secondary and ter- tiary care to all who receive services at public facili- ties. • Provides universal coverage with access to and avail- ability of MOH facilities being the limiting factors. 4 Guatemalan Social Security Institute (IGSS) • Funded through worker and employer contributions for those in the formal sector. Source: Lao Pena, Christine. “Improving Access to Health Care Services through the Expansion of • IGSS runs its own facilities with a strong curative fo- Coverage Program (PEC): The Case of Guatemala”, World Bank UNICO Series, No. 19, 2013 cus and also provides coverage for specialized ser- vices from private providers (i.e.: ophthalmology, oncology, cardiology, hemodialysis, etc.). Figure 8. Health Facilities by Type • IGSS facilities are concentrated in urban areas. Private sector: 4 Non-profit providers (faith-based organizations, civil society, foundations, etc.). 4 For-profit providers (medical facilities, pharmacies, traditional Mayan providers, etc.). Source: Lao Pena, Christine. “Improving Access to Health Care Services through the Expansion of Coverage Program (PEC): The Case of Guatemala”, World Bank UNICO Series, No. 19, 2013 Table 3. Contributions and Coverage in Guatemala’s Health System. Beneficiary Contribution Employer Contribution Health Services covered Type of facilities used Primary, secondary and tertiary; Public: Ministry of None, no enrollment required N/A prescription medications when Public. Health (Some point-of-service, out-of-pocket fees apply). available at the public facility. Payroll contributions: Public: Guatemalan Obligatory 3% of salary for accident, disability, Primary, secondary and tertiary; Social Security Insti- retirement and survivorship insurance. 7% of worker’s salary. prescription medications. IGSS facilities and private facilities. Additional 0.85% of salary to add on optional mater- tute (IGSS) nity & common diseases coverage. Insurance premiums vary with for-profit insurers. Private insurers offer varying cove- Private (for-profit, non-profit and Private Co-payments of varying amounts must be paid to N/A rage options. traditional Mayan care). private providers. Source: Bowser, Diana, Mahal, A. “Health Financing in Guatemala: A Situation Analysis and Lessons from Four Developing Countries”, Harvard School of Public Health. 2009. The Expansion of Coverage Program (PEC)2 4 Mainly targets women and children for pri- mary-level health and nutrition services in PEC: Basic Health Package2 rural, largely indigenous areas. • Care for women: during pregnancy, birth, and postpartum; 4 Has expanded from 3 to 20 of Guatemala’s nutritional supplements; family planning; and cervical and 22 Departments since inception in 1997. breast cancer detection. 4 Population coverage has increased from • Infant and toddler care: immunizations; control of common 0.46 million in 1997 to 4.3 million in 2012 (Figure 10). PEC is estimated to provide illnesses and nutritional deficiencies; and growth monitor- health and nutrition services to 54% of the ing for children up to two years of age. country’s rural population. • Illnesses and emergency care: endemic and infectious dis- 4 PEC services are based upon a model of eases; accidents and injury. mobile health care where local contract- ed NGOs staff a health team that travels • Environmental health: vector control, proper waste dispos- through the jurisdiction. al, water quality, and food and home hygiene. PEC Financing2 4 Capitation payments of US$6 – 9 are made to non-profit NGOs who are responsible for Figure 9. PEC’s Budget and Population Covered, 1997-2011 mobile service provision in jurisdictions of approximately 10,000 individuals each. Millions US$ (at official exchange rate) 4 PEC 2012 and 2013 budgets were signifi- cantly increased in order to help achieve primary care targets that are included in the new results-based agreement between the Ministry of Finance and the MOH. 4 Recurrent delays in payments (up to 6 to 12 months) to NGOs have been anecdotally reported to have led to cutting back of ser- vices. 4 Around 15% of PEC’s funding comes from external sources; the bulk comes from gov- ernment revenues, enhancing the influence of changing political priorities. Source: Lao Pena, Christine. “Improving Access to Health Care Services through the Expansion of Coverage Program (PEC): The Case of Guatemala”, World Bank UNICO Series, No. 19, 2013 Challenges and Future Agenda2 4 Up until 2008, the Guatemalan government had two mechanisms to audit the work of NGOs contracted through the PEC: the social audit system and technical teams based in regional offices. These were eliminated due to lack of funding and have yet to be replaced by any systematic and institutionalized form of monitoring and evaluation. 4 At present, the significant increases in the PEC’s annual budget apply only to operating costs, excluding funding that would be needed to construct, equip and staff health centers to References provide regular services to rural populations. 4 Most existing feedback mechanisms between the government and NGOs 1 World Bank. World Development Indicators are punitive. Performance may be enhanced through the use database. of results-based systems with positive incentive mech- 2 Lao Pena, Christine. “Improving Access to Health Care Ser- anisms. vices through the Expansion of Coverage Program (PEC): The Case of Guatemala”, World Bank UNICO Series, No. 19, 2013 4 PEC has increased vaccination rates and prenatal ser- 3 Bowser, Diana, Mahal, A. “Health Financing in Guatemala: A Situation Analysis and vices coverage in rural areas, reaching populations that Lessons from Four Developing Countries”, Harvard School of Public Health. 2009. typically do not have access to MOH-run facilities. User satisfaction with these NGO-provided and administered This profile was prepared by Dr. Deena Class, A. Sunil Rajkumar and Eleonora Cavagnero services is high. It will be important for the government with inputs from Michele Gragnolati. to carry out systematic reviews to understand these successes in relation to the challenges inherent in pro- viding health services to remote and highly dispersed populations.