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Some problems of the health sector in the 1980s

The crisis under which Costa Rica initiated the decade of the 1980s shows a change from the development style that predominated in previous decades. Trejos, in Chapter 5, describes the development strategy that was followed in the country from 1950 to 1980 and, in particular, the promotion of social welfare. The crisis of the 1980s manifested itself in a lower industrial output (-4.3% and -7.7% in 1981 and 1982, respectively) and in the main exports in the agricultural and animal sector (-8.3%) in 1982 as well as in price inflation (65.1% and 81.8% in 1981 and 1982) that provoked a significant deterioration in the quality of life and the working conditions among blue-collar workers and peasants and among the urban middle classes.

The crisis was also felt in other sectors, for example, in diminished public and private investment, increased unemployment and underemployment, increased fiscal deficit, decline in foreign trade, increased foreign debt, and a strong imbalance in international payments. In a sense, this was a crisis that affected the development strategy followed during the previous decades.

To some degree, the government response to the crisis was accompanied by stabilization and, simultaneously, by a process of structural adjustment that was slow and gradual. This process also emerged as the mechanism through which the government has responded to the new international trend toward the globalization of production in order to solve the economic problems of Costa Rica.

This process of structural adjustment consists of a governmental and economic restructuring that allows Costa Rica to function within the new environment of the international globalization and flexibility of production. Detailed analyses of this process can be found in Trejos end Villalobos (1992). Some measures that were taken were decreased protection of production for internal markets, reduction and elimination of subsidies for public services, opening of borders for both imports and exports, devaluation of the colon, restructuring of the public sector, and cuts in the government budget to reduce the fiscal deficit and pay the foreign debt. In order to carry out this process, letters of intent were signed during the 1980s with the International Monetary Fund (IMF) (in 1982,1985,1987, and 1989) and two agreements of structural adjustment with the World Bank, one in 1985 and the other in 1987.

As a result of the crisis in 1982-1983, the initial response of the health authorities was to take the following actions: press the government to meet the financial agreements that it had previously reached with the health sector, reduce the number of medicines considered as basic, forbid the purchase of new equipment, retire employees early, eliminate benefits and privileges received by CCSS workers, and eliminate high-cost services such as contact lenses and sophisticated dental procedures. Additional actions were taken afterwards as part of the adjustment process. These actions involved expenditure control, efficiency improvements, service coordination and integration between CCSS and the Ministry, and decentralization of operations through a process of administrative regionalization of health services.

This process was conceptualized by Dr. Edgar Mohs, who was the Minister of Health between 1986 and 1990:

The crisis showed us that it was necessary to revise and transform the structure and operation of the health sector to make it more solid, efficient, and modern. It also exposed problems of size, competition, and technical weaknesses as well as the organizational flaws of many concepts and institutions. It became clear that the government had to become smaller, more efficient, and a better administrator of knowledge and resources. System theory also gained ground, including the principle of competition between the public and the private sector. (Mohs, 1991, p. 2)

In that sense, the actions taken by the health authorities during those years are evidence of a radical change in the way the health problem was perceived. This is perhaps the most peculiar situation that began to surface during those years. It involves two essential aspects that are deeply related: the need to restructure the institutions and the revision of the model used for the provision of health services. In the following sections we will find out what happened during those years with respect to the general function and financial situation of the health sector and the evolution of the epidemiological profile.

Deterioration of the National Health System

During the 1980s, the health sector presented problems that were the outcome of the low efficiency in the system, which resulted in part from the crisis and the process of structural adjustment and in part from intrinsic problems in the administrative model that was being followed in the provision of health services.

In the case of the Ministry of Health, there was a series of factors that converged to generate a low efficiency level in most of the programs. On the one hand, the loss of political interest regarding the function of this institution resulted in budgetary cuts. On the other hand, the reduction in social investment caused by the process of structural adjustment (PSA) had a severe effect on the Ministry, since this institution relies heavily on the federal budget. Whereas in 1980 the Ministry contributed 17.25% of expenditures, in 1990 this figure was only 11.13%. Meanwhile, the population increased from 2,284,495 in 1980 to 3,014,596 in 1990. This represents an increase of 730,101 inhabitants whose increased demand for health services from the Ministry has not been fully met.

The budgetary deficits had immediate implications for the functioning of preventive programs for the general population. One of the first indicators that became affected was coverage. The primary health care program, which reached 60% of the rural and high-risk urban population in 1980, only covered 40% of these populations in 1990. The situation might have been even worse than it appears, since the health workers who are responsible for this program have to carry out their work without adequate equipment, transportation, and economic resources to cover households in their areas of concentration.

The Immunization Program also suffered an important loss in coverage. A survey carried out in 1987 (Valadez et al., 1987, p. 12) found a coverage of only 44% for measles vaccine (following the standard procedures of PAHO/WHO). This situation might explain the severe measles epidemic in 1989-1991 in Costa Rica.

The Dental Prevention Program also suffered an important loss in coverage. Table 1 illustrates how the increased level of school enrollment is associated with a decrease in the number of children served. Indeed, coverage declined from 45.9% in 1980 to 25.5% in 1990.

Another preventive program that has been severely affected is the Nutrition and Integral Care Program. Whereas in 1987 this program served 105,813 beneficiaries, this figure decreased to 59,110 in 1991. This decline represented a 44% reduction in coverage from 1987. The expenditures for this program declined from 55 million colones in 1986, when the program showed the maximum expenditures down to 33 million colones, adjusted to the 1966 value, in 1991. The component that was most affected during this period was the provision of food products. Expenditures for food declined from 27 million colones in 1986 to 11 million colones in 1991. By contrast, personal services increased during the same period from 13 million colones in 1986 to 20 million colones in 1991. It is obvious that the reduction in expenditures in the Nutrition and Integral Care Program has been achieved by reducing the number of rations and also very likely by a lower quality of the food received by the beneficiaries.

Inefficiency also affects the services provided by the CCSS at different levels. The high proportion of administrative workers found in the clinics (almost 30%) is almost twice the level found in the national and regional hospitals (Vallejo and Lunes, 1991).

Inefficiency in the use of resources is a factor that diminishes the quality of the services offered in the national hospitals Mexico (HM), San Juan de Dios (HSJD), and Calderón Guardia (HCG). These hospitals utilize resources of the health sector that could be used at the primary health care level (based on information provided by the System of Administrative Information of the CCSS). These three hospitals are located in the national capital of San José and are highly specialized. The medical services in HSJD have a cost per discharge of 137,298 colones, whereas in the HCG this figure is 60,125 colones; the cost is 2.3 times higher in HSJD than in HCG, although the average stay was similar in both hospitals. The differences in expenditures were even higher in the gynecology service, where the cost per discharge in HM was 113,278 colones versus 24,963 colones in HCG.

A similar situation occurred in the surgical and obstetrics area. In the latter we observed that a vaginal delivery costs 3.7 times more in HM than in HCG. The cost per day per bed occupied also showed significant differences that can only be explained by poor efficiency. In HSJD the cost per day per bed occupied in the medical service was twice as much as in HCG, and in HM the cost per day per bed occupied in the gynecology service was 4.3 times more than in the HCG.

TABLE 1. Dental Coverage of School Children 1980,1985, and 1990

Source: Ministry of Public Education and Department of Dentistry of the Ministry of Health

There is a substantial variability in costs, which may be highly significant: the cost of a surgery is 22,024 colones higher in HM than in HCG, and the cost of a food ration in HSJD is 2.4 times higher than in HCG. In the case of HSJD, the cost of a food ration is so high (592 colones) that there is no doubt that it would be cheaper for the hospital to provide this service through a restaurant in the capital.

In order to understand the financial implications for the health sector of this low level of efficiency, an estimate was generated using the four services, surgery, laboratory, pharmacy, and nutrition. HCG was used as a reference because it had lower costs than the other two hospitals. Based on the volume of production in each hospital and the costs of HCG, we estimated savings of 860,833,870 colones in 1991 if all the hospitals had the same level of expenditures as HCG.

Even though some of these problems were already present, the crisis and the adjustment process deepened them, justifying the proposal for revision of the way the health sector operates.

Evolution of the Epidemiologic Profile

During the 1970s, the health sector developed and was able to provide the population with substantial health benefits. The infant mortality rate declined from 61.6/1,000 in 1970 to 19.1/1,000 in 1990. Life expectancy at birth increased from 68.1 years in 1965-1970 to 73 years in 1975-1980. Mortality associated with infectious and parasitic diseases moved from first place as cause of death in 1970 (6/10,000) to eighth place in 1980 (1.5/10,000). Gastroenteritis and colitis, which was the leading specific cause of death in 1970, moved to fifteenth place as specific cause of death in 1980.

Unexpectedly, chronic degenerative diseases emerged as important. During that decade, cardiovascular disease became the leading cause of death in the country, and myocardial infarction became the leading specific cause of death. The rate of cancers increased from the levels in 1970, and these diseases became the second specific cause of death. During that decade, the mortality rate from metabolic disorders increased from 1.6 in 1970 to 2.4 in 1975, and congenital anomalies became more important as causes of death.

During the 1980s, the downward trend in infectious and parasitic diseases continued, although at a slower pace when compared with the previous decade. The infant mortality rate declined until it reached 13.9/1,000 in 1989, and life expectancy at birth increased to 74.7 years in 1985-1990.

In agreement with the information provided by the nutritional monitoring system of the Primary Health Care Program, moderate malnutrition increased from 1.91% in 1987 to 2.6% in 1990. In fact, there were 15 counties where the number of cases with this type of malnutrition increased more than 100%. Severe malnutrition also increased during this period, and between 1987 and 1990, there were 14 counties that showed an increase of 100% or more in the number of cases with this type of malnutrition. There were only three counties where severe malnutrition declined (Novygrodt, 1992).

Not only did chronic degenerative diseases become the leading cause of death, but their rates increased during the decade. The rate of circulatory diseases increased from 10.3/10,000 in 1980 to 11.0/10,000 in 1989. The rate of tumors increased from 6.8/100,000 in 1980 to 8.1/100,000 in 1989. In 1989 more than 61% of recorded mortality (64% of male mortality and 58% of female mortality) was due to circulatory diseases, tumors, and accidents.

In spite of this clear change in the epidemiological profile of the country, there were no substantial changes in either the organization or the policies and strategies of the health sector. In reality, the efforts for change were more related to the new conditions that were imposed by the process of structural adjustment of the 1980s than to any of the changes in the epidemiological profile of the country.

By the end of the 1980s, the health sector seemed to be moving backward instead of forward as it had been doing in the previous decades. The proportion of the population reached by primary health care strategies dropped, health investments concentrated on curative services, some infectious diseases became important (malaria, measles), and nutrient deficiency disorders, such as iron deficiency anemia and severe malnutrition, showed signs of increasing.

Evolution of the Financial Situation of the Health Sector

The economic crisis and the structural adjustment measures that are implemented by governments to face it affect the health sector very quickly. Government expenditure on health is one of the components that is most affected. Between 1960 and 1980, in Costa Rica these expenditures increased significantly, reaching the highest level between 1979 and 1980 at 8.6% of the gross national product. From then on, expenditures declined to 6.1 % of the gross national product in 1982. The following year, expenditures recuperated slowly, but they never reached the levels of 1980. By 1990 health expenditures represented 7.8% of the gross national product.

Per capita health investments were also affected. In 1980 the investment was 6,698 colones per inhabitant (in constant colones based on 1985). This investment declined to 3,534 colones per inhabitant in 1982, and at that point it began to recover slowly, never reaching the level of 1980. In 1990 the per capita investment reached 5,640 colones. The proportion of the total government budget devoted to health declined. Whereas in 1980 the expenditures for health represented 14.5% of the total government budget, this figure declined to 13.0% in 1982 and to 12.0% in 1984, and due to a slow recovery, this figure increased to 14. 0% in 1988. The money received by the health sector was also affected during this period. Whereas in 1981 the federal budget provided 13.9% of the budget of the health sector, this figure declined to 10.4% in 1986 and to 9.6% in 1988.

During this decade, the Ministry suffered severe budgetary- cuts. The Ministry receives funds mainly from three sources: the federal budget, the General Directorate of Family Resources (DESAF), and the national lottery. These three sources provided 2,400.9 million colones to the health sector in 1982, 2,836.5 million in 1985, and 2,086.4 million in 1990. In other words, in real terms the budget of the Ministry has been declining because the value of the colon dropped during this time.

The financial weakness of the Ministry has increased the relative importance of CCSS as a financial source for the public health sector. CCSS has made transfers co the Insurance Institute and to the Ministry to help them finance their services and has incorporated many of the preventive activities of the Ministry within its own institutional activities. Nevertheless, CCSS also suffered financially at the beginning of the decade. In 1981 CCSS had a deficit of 239 million colones, and by 1982 the surplus was only 79 million colones. The deficit accumulated in 1982 was greater than 2,000 million colones. This situation forced the institution to increase the fees charged to its members from 6.8% to 9.3%, and therefore the following measures had to be taken (based on an interview in August 1992 with Dr. Guido Miranda, Executive President of CCSS 1982-1990):

• Payment of benefits to 2,000 employees; many of whom were qualified technical personnel

• Establishment of a basic package of required medicines

• Requiring the exclusive use of this package

• Prohibition of prescription of patent medicines and a maximum of three prescriptions per visit in outpatient care

• Controls to reinforce compliance with the norms establishing the patients per hour per doctor allowed (five patients/hour for family practitioners and four patients/hour for specialized doctors)

• Establishment of norms for the length of hospital stays

With the fee increases and the measures taken to control expenditures during 1982-1986, CCSS showed a financial recovery that was sustained until 1987. During this period (1983-1987) an excess of incoming funds was generated in relationship to expenses under the Illness and Maternity Program which allowed this institution to modify the effects of the crisis and to become an increasingly predominant financial force in the health sector. In 1990 the contributions from CCSS represented 75% of expenditures in the health sector.

After 1987, CCSS showed a significant financial weakening, going from a surplus of 1,764 million colones in 1987 to a deficit of 364 million in 1990. One factor determining this situation was the public debt accumulated by the government. During the decade, the government went from having a debt of 319,245 million colones in the Illness and Maternity Insurance in 1980 to a debt of 3,799,731 million in 1990. The debt for Handicapped, Elderly, and Death Insurance was 584,619 million colones in 1990.

The government payments have been partial, delayed, without full compensation for inflation, and often provided as government certificates. Therefore, CCSS has financed part of the adjustment measures, shifting part of the surplus of the institution toward other financial priorities of the Costa Rican government.

Organizational Response to the Crisis and the Process of Structural Adjustment

The issues mentioned above raise questions concerning the structure and the operation of the health sector and require a search for solutions for the problems. The Ministry of Health is the institution in the health sector that was most affected by the economic crisis, and it needs to search for alternative models of organization that will allow it to adjust to the new situation.

Proposal for the Integration of Health Services

In their book La Integración de Servicios de Salud en Costa Rica (The Integration of Health Services in Costa Rica), Jaramillo and Miranda state:

The strategy revolves around the intention to create and consolidate a new model for health care in the country, a National Health Care System that functions following an integrated approach, with better efficiency than the existing services and above all at a lower cost.... It is intended to offer health benefits that are integral and with enough quality and quantity to cover the demands of these services throughout the country based on the existing financial resources. Jaramillo and Miranda, 1985, pp. 10 and 11)

The economic and fiscal crisis of the country created conditions at the beginning of the 1980s requiring the search for alternatives that allowed a better utilization of existing resources without affecting the coverage and quality of the services. The integration of services represents one of these alternatives.

Between 1982 and 1985, the integration of services became the most important policy in the health sector, fully backed by CCSS and the Ministry of health. In 1985, 80 out of 198 (40.4%) health units (health centers and clinics) of the Ministry of Health and CCSS were integrated (Alfaro and Chaves, 1986).

With the change of government in 1986, the integration of health services was no longer a priority. Although, in 1989 and 1992, new agreements involving the integration of health services were signed. However, in reality this process had political and technical limitations that hindered its development in the last two administrations. In an evaluation carried out in August-September 1991 (Garcia, 1992) only 31 of 53 centers of the Ministry of Health were integrated in the same physical location, and only nine of them had a single head. These numbers reflect the fact that during the last two administrations there have not been important advances in the process of physical and functional integration of the health services of the two institutions.

In summery, 10 years after the process was launched, the progress in the integration of the CCSS and the Ministry of Health is still limited and far from reaching the goals proposed by Jaramillo and Miranda in 1985. The process did not contribute to the development of a new model, given that each institution continued working under its own rules, and in the majority of the cases they simply shared physical space, following the same regulations and procedures that were already in place before the process of integration began.

The consolidation of a National Health Care System was also not attained, largely because the authorities insisted on maintaining the functional autonomy of the institutions, which made it very difficult to develop an integral approach for health. Contrary to the integration approach, there is evidence that curative approaches were given priority, relegating preventive measures to a less important role. This was detrimental to the visualization of strategies necessary to approach the national health problems (Sanguinetti, 1988, p. 130).

Most of the integrated centers lacked operational plans and the intention to carry out joint activities. In addition, the procedures that were followed to guarantee a rational utilization of resources were far from being cost-effective. Lastly, it is worthwhile to note that beginning in 1986 there has been a lack of political pressure to carry out and consolidate the process of integration as it was originally planned.

The Local Health Care Systems (SILOS)

The second important experience of the Ministry of Health and CCSS in response to the crisis and the programs of structural adjustment was the development of the so-called Local Health Care Systems (SILOS). At the beginning of the administration of President Arias (1986-1990), the strengthening of the National Health Care System (SNS), equity in services, decentralization, and community participation became part of the national health policy. The operationalization of this policy involved strong support for the SILOS model and the relegation of the proposal of service integration to a second plane of importance. At this moment, the SILOS were conceived within this new policy as the alternative for the reorganization and reorientation of policies and technical and administrative procedures for the National Health Care System.

In 1987, as part of this process, Decree No. 19,265-S ordering the creation of SILOS in Costa Rica was signed. This decree establishes that the

Ministry of Health will provide basic health care services through a program called "Program of Integrated Health" that guarantees the provision of basic services for health improvement and promotion, the prevention of diseases, and an integral control of the environment, the individual, the family, the community and its environment.

Article No. 6 of this decree establishes that the SILOS will "organize, administrate, and coordinate" the resources available through the elaboration of an operational plan and a local budget. Nevertheless, the decree does not establish the decentralization of human and financial resources to implement the operational plan of the SILOS and the administration of the budget.

Parallel to the signature of the decree by the Ministry of Health, the CCSS assumed the PAHO document (CD 33/14) "Development and Strengthening of the SILOS" as its own. The general norms for the National Health Care System were established in 1989. The organizational basis of the National Health Care System is the SILOS, which are defined as

the group of establishments and organized representatives of the community located in a predefined geographical area that utilize resources in a rational way and that coordinate or carry out their activities following a local plan based on the primary health care strategy.

During this same month, the Ministry of Health-CCSS agreement for the integration and coordination of services was signed, which basically added the strategy of the SILOS to the 1984 agreement. This agreement maintained the functional autonomy of both the Ministry and CCSS and assigned the responsibility for promotion, health improvement, and disease prevention to the Ministry of Health and for health recuperation and rehabilitation to CCSS. Both institutions maintained separate budgets, norms, and material goods.

An important event during this period was the establishment of mechanisms for interinstitutional coordination. The general norms of the National Health Care System propose different coordinating committees: the National Sectorial Council, the Technical Interinstitutional Council, the Regional Technical Interinstitutional Council, and the Area Technical Council. The Ministry of Health-CCSS agreement for the integration and coordination of services establishes the following coordinating mechanisms: Local Technical Council, Basic Technical Council, Health and Social Security Council, and the Local Health Committees.

In November 1990 and February 1992, the development of the SILOS was evaluated. These evaluations identified some achievements and the persistence of important difficulties for health care at the regional and local level. With respect to decentralization:

...there are hidden mechanisms that are still being utilized to concentrate the power of decision at the central and regional level, because there were more advances with the delegation of authority and responsibility... than with the delegation of administration of resources.

Other areas that showed little development were social planning and community participation. This last observation is very significant, since these evaluations were unable to detect any progress in this area, which is the cornerstone of the SILOS strategy (Ayala et al., 1992).

Perhaps the factor that most affected the development of this new strategy of health care was the decision of the 1990-1994 government to consider as a political priority the idea of carrying out a global restructuring of the health sector. For this reason, the policy advocating the strengthening of the SILOS was relegated to a second priority, as illustrated by the dissolution of the commission that was responsible for this process (COMINSILOS). The process is restricted to the isolated efforts of some regional heads of the CCSS and the Ministry of Health.

Mixed Private and Institutional Health Care System

As part of the process, during the 1980s CCSS also developed some alternatives to the prevailing model. Specifically, during the first half of the 1980s, the so-called Mixed Health Care System was developed and the Private Sector System was strengthened.

In the Mixed System the physician sees patients in his or her own office and has the concession from CCSS to provide prescriptions, direct laboratory and radiologic examinations, and refer patients to CCSS hospitals and clinics. Under this system the patient pays the physician and is not reimbursed by CCSS.

This system was established in April 1981 with the objectives to:

• Reduce the outpatient burden in clinics and hospitals (CCSS Five-Year Plan, 1986-1990).

• Establish a closer physician-patient relationship (CCSS Report, July 1987, p. 3; cited by Ugalde and Ruede, 1988).

On the other hand, the Private Sector Health Care System consists of medical facilities installed voluntarily by private businesses and is usually run by part-time personnel (physicians, nurses, secretaries, etc.) working for two to three hours.

As with the Mixed System, services involving laboratory, pharmacy, radiology, and specialist referrals are received by patients without cost from CCSS.

This system was created with the objectives to:

• Reduce the load of outpatient care in clinics and hospitals.

• Reduce the economic loss for businesses associated with the time their employees spend visiting the CCSS clinics.

This program was initiated in 1970 with one business; it increased to 371 businesses in 1983 and to 613 in 1986.

Even though these two systems have had an important development during the period, they also suffer from limitations of the prevailing model for the provision of health services:

• Both systems reproduce the outpatient care model of the CCSS, which is based on curative medicine and prescription of medications.

• In both systems, laboratory exams, prescriptions, and specialist referrals are the responsibility of CCSS, which increases the demand on these services.

• In spite of the enormous potential of the private sector system, it does not carry out preventive efforts or develop programs involving occupational health. There are three elements that are responsible for this situation:

• Physicians are not trained in occupational health.

• Businesses hire physicians to offer curative medicine to their workers, thus eliminating the need for visits to the outside clinics.

• It is difficult for a physician hired by a business to solve workers' health problems that are caused largely by the inadequate working environment.

Health, Service Cooperatives

The first cooperative enterprise for the administration of SILOS (COOPESALUD R.L.) was created in 1986. The project was launched with PAVAS in 1988 through the services of CCSS, and in 1989 the Ministry of Health adopted the cooperative in its programs. In January 1990, another cooperative (COOPESAIN R.L.), in the county of Tibás, began to administer and oversee the clinic in this location.

Both cooperatives were organizations run by their members and defined as

those enterprises organized for the production of goods and services in which the working members oversee all activities and provide the working force with the main purpose of realizing productive activities in return for economic and social benefits that are proportional to their effort. (Marie and Vargas, 1991).

These cooperatives promote the development of a new health care model based on:

• A biosocial approach to the health-disease process.

• Global and equitable coverage of the population.

• Incorporation of the community in the process of diagnosis, programming, evaluation, and control of health services.

• Development of a family and primary health care model that strengthens and promotes the system of integral health care.

• Programmed activities based on the health diagnosis of the community and the definition of priorities.

The development of this model is based on the health area (subregion or health district) with a population of 15,000 to 30,000 in rural areas and 15,000 to 45,000 in urban areas.

Health areas are themselves subdivided into sectors with 500 to 2,000 houses. Each sector is assigned basic equipment in integral care (EBAI) consisting at least of a general physician, a nurse's aide, a technician in community health, and a consultory assistant. This team is responsible for the primary health care activities in each community. In the large sectors, two or more EBAIS are included.

The services provided by both cooperatives include:

• General medical attention and basic specialties such as gynecology and obstetrics, pediatrics, internal medicine, surgery, psychiatry, dentistry, and family and community medicine.

• Dental services.

• Pharmacy.

• Laboratory.

• Radiology.

• Emergencies.

• Health promotion and preventive services.

• Community medical care.

Four years after the first experience with health services administered under the cooperative model, it was noteworthy that there were only two clinics that followed this approach. Some reasons that have been mentioned for explaining the limited development of the model are:

• Lack of managers who are capable of overseeing these types of projects.

• Lack of a legal framework for public health institutions to hire managers.

• The monopoly of public services by CCSS.

• Lack of motivation of government officials to get involved with privatization efforts.

• Opposition from technocratic sectors in CCSS.

• Delayed payments from the Ministry of Health, which threatens the financial viability of this type of project.

Capitation

In 1987 the community of Barva de Heredia launched a very original project (the capitation project) that attempted to break with the traditional norms in the field of medicine within CCSS.

Capitation is a mode of organization for health visits which relies on payment to the physician based on the number of patients enrolled, regardless of the number of visits from the patients. The maximum number of patients that can be seen by each physician is about 2,500, and the physician has to work full-time for the system.

Capitation promotes the following principles:

• Competitiveness among physicians.
• Patients can freely select their physicians.
• A physician can freely decline to take care of a patient.
• Physicians can freely organize their working style.

In practice, the capitation system in Barva experienced multiple problems that might be responsible for the lack of diffusion of this system. The outpatient study conducted by Ugalde and Ruede (1988) concluded that:

• In practice, the model implemented differs from the European model.

• The model has not diminished the level of bureaucratization and centralization of outpatient care.

• There is no competition among physicians, due to the small size of the population.

• Existing data do not show an improvement in the productivity of the physicians; therefore, it is likely that the costs per visit have not declined.

• Physicians and health workers and managers responsible for the process in CCSS in general show a lack of understanding of the system of capitation.

• The program has a biomedical orientation and does not integrate curative and preventive activities.

• From the beginning, it was noticed that the program had a legal limitation, given that according to the legal criteria of CCSS the relationship between physicians and CCSS is a worker-employer relationship.

The model of capitation was later extended to two additional communities, one located in Heredia and the other in Alajuela. Nevertheless, the internal problems of the system have prevented it from serving as a new model for the provision of health care.

Restructuring of the Health Sector

Toward the end of 1989, the need was first recognized to reorganize and reorient the functions of the Ministry of Health with the purpose of "renovating and assuming the directive role attributed to it by the legislation." According to Dr. Mohs, this process would allow the Ministry to "guarantee the provision of integral services to the community... and the fulfillment of health policies" (Ministerio de Salud, 1989, p. 1).

The structural changes proposed for the Ministry at that moment included the elimination of the General Directorate and the creation of three areas: service to the public, environmental care, and administration. In addition, the elimination of a significant number of departments was proposed. However, this proposal was abandoned by the Ministry of Health due to the opposition from unions and an inadequate political moment (the proposal was to be implemented only six months before the election).

With the arrival of the Calderón administration (1990-1994), the idea that the health sector needed restructuring gained force and had the support of the World Bank and the Interamerican Bank for Development (BID). The basic idea was to assign direction of the health sector to the Ministry and to move its health services to CCSS.

A health reform proposal that was recently elaborated by the Ministry and CCSS with the assistance of the World Bank lists the following components or areas of intervention as priorities: strengthening a single directorate of the Health System whose chairman would be in charge of the Ministry; decentralization in the administration of services and implementation of actions; diversity in the provision of services; transparency in the origin and destiny of resources; provision of services based on criteria of integration, quality, and efficiency; reorganization of the structure and function of the sector; evaluation of the models and programs that meet the needs of the population.

It is obvious that these initiatives cannot be accomplished with only a change in the administration of services. These actions would involve a new mentality about the responsibilities and the role of the government with regard to the health care of the population. This also signals a redefinition of the role that traditionally has been played by the private sector in the health system. The idea is that the private sector assumes a more active role in the provision of health services, in an effort to overcome the problems of efficacy and efficiency that are currently present in the Costa Rican government. All these aspects will need to be taken into account when addressing the challenges posed by new policies, strategies, and models for the provision of services that are delivered by the health sector.

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