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Decentralization of Health Systems in Latin America. Thomas Bossert, Ph.D. March 2001 Harvard School of Public Health. Objectives of Decentralization. Equity Efficiency Quality Financial Soundness Local Choice and Accountability Improve Working Conditions.

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decentralization of health systems in latin america

Decentralization of Health Systems in Latin America

Thomas Bossert, Ph.D.

March 2001

Harvard School of Public Health

objectives of decentralization
Objectives of Decentralization
  • Equity
  • Efficiency
  • Quality
  • Financial Soundness
  • Local Choice and Accountability
  • Improve Working Conditions
objectives of decentralization 2
Objectives of Decentralization (2)
  • For each objective there are good reasons and evidence both in favor and against decentralization
  • For instance: Many centralized systems are highly inequitable (e.g. Paris) but many decentralized systems can also be inequitable when rich localities spend more than poor localities
Warning !
  • There is a lot of bad information out there!
    • Simplistic assumptions of economists
    • Anecdotal stories of “my decentralization”
    • Data that doesn’t prove anything
  • Beware of ideological advocates and detractors.
what kind of decentralization could achieve these objectives
What kind of decentralization could achieve these objectives?
  • Usual typology:
    • Deconcentration -- to districts of MOH
    • Devolution -- to states or municipalities
    • Delegation -- to semi-autonomous agencies
    • Privatization
decision space approach
“Decision Space Approach”
  • Principal Agent Theory – how can the “principal” shape local choice of “agents” so that the choices will improve the services (CEO of company as “principal” and line managers as “agents”)
  • Decision Space – map of rules
  • Incentives – matching grants, technical assistance
decentralization experiences in lac
Decentralization Experiences in LAC
  • Classic Unitary Cases: Chile, Colombia, Bolivia
  • Decentralization in Federal Systems: Brazil, Venezuela, Mexico
  • Several new initiatives: Nicaragua, Paraguay, Argentina, others?
lac hsri study data for decision making project
LAC HSRI Study: Data for Decision Making Project
  • Three major LAC unitary country experiences with decentralization: Chile, Colombia, Bolivia
  • All cases of “devolution” to municipalities
  • All had more than three years of decentralization
general trend of decision space
General Trend of Decision Space
  • Decision Space narrows over time
  • Trend is toward:
    • moderate choice on allocation of expenditures and on contracting services and short termstaff
    • wide choice on community participation
general trend of decision space 2
General Trend of Decision Space (2)
  • narrow choice on salaries and civil service permanent staffing
  • narrow choice on service delivery choices
equity objective
Equity Objective
  • Data on Chile and Colombia show some interesting ways of promoting equity of expenditures
  • Major mechanisms are formula driven intergovernmental transfers to municipalities and an equity fund for own source revenues
colombia earmarking
Colombia Earmarking
  • Intergovernmental transfers allocated according to a formula based in part on per capita assignments
  • Funds are “forced” to be assigned to health and to some specific programs in health
colombian allocation to prevention and promotion
Colombian Allocation to Prevention and Promotion
  • Increases from 2.6 pesos per capita in 1994 to 5.8 pesos in 1997
  • Gap between wealthiest and poorest declines from 1.4 times to 1.1 times
human resources decisions
Human Resources Decisions
  • Salaries in Chile
    • narrow gap between poorest and richest municipalities (Gini of 0.17)
    • rural salaries higher than urban salaries
  • Contract Staff in Colombia
    • poorer and “certified” municipalities were more likely to hire contract staff
quantitative findings on other performance variables
Quantitative Findings on Other Performance Variables
  • Equity of utilization -- no strong relationships with decentralization
  • Efficiency (utilization/expenditures) -- no strong relationships
  • Quality -- no adequate indicators to evaluate (but PHR study of immunizations in Colombia shows decline)
bolivia qualitative case studies
Bolivia Qualitative Case Studies
  • found that decentralization is perceived to work better when the local authorities -- especially the mayors -- know and respect the laws and regulations of decentralization and take their own initiatives in the health sector
  • suggests a formal training program by the Ministry of Health to be held after each election period for all local officials.
bolivia case studies 2
Bolivia Case Studies (2)
  • Bolivia study also suggested that effective decentralization may also depend on good relations among the mayor, local health providers and the local community.
  • On-going training programs that encourage consensus building and conflict resolution at the community level may improve the effectiveness of decentralization.
nicaragua project arch
Nicaragua Project - ARCH
  • Budgetary Analysis shows disparities of per capita expenditures among SILAIS and more limited local control than expected.
  • Percentage range for allocation to hospitals, PHC and offices
  • Opening dialogue among MINSA, SILAIS, mayors, donors for pilots and policy
  • “Decision Space” can be a means of shaping local choice and it can change over time
  • Moderate choice over budgets and narrow choice over service norms and priority programs seems prudent
  • Few systems allow much local choice over salaries and permanent employees but some allow short term contracting
conclusions 2
Conclusions (2)
  • There are powerful financial mechanisms that can be used to improve equity:
    • formula based intergovernmental transfers
    • earmarked percentage distributions
    • equalization funds
  • Decentralization implies changes at center as well as local level -- both are needed for effectiveness
conclusions 3
Conclusions (3)
  • Training programs for new local authorities are probably important
  • Conflict resolution training in communities is also probably a useful means of improving local effectiveness