Uruguay Health Profile 2012

Social safety nets In this field substantial progress has been made in recent years, firstly because the extension and improvement of social services was a high priority for the government, and secondly because the performance of the economy permitted a substantial internal restructuring of government expenditure. Between 2004 and 2009 the share of social expenditure in the government’s budget rose from 35.7% to 49.1%. Uruguay had long been a traditional bureaucratic welfare state based on distribution at a very high level, built along European lines, but for decades it had no longer been able to deliver, and the claims of the insured had been devalued. When the Vázquez administration came into office in 2005, the Uruguayan welfare state was in plain crisis, though it still displayed Latin America’s highest level of spending on social protection (more than 20% of GDP as compared to an average of about 5%).

Like all traditional systems of social provision, it needed comprehensive reform and restructuring as a result of demographic change (Uruguay’s population has the highest average age of any in Latin America) and rising emigration rates among younger people, significant unemployment oscillating between 10% and 15% (2003 – 2006), an extended informal sector of an estimated 40% of the labor force (2003), and the need for more efficiency and equity. Social security, unemployment and health insurance were in particular need of restructuring, and substantial cuts had to be made in the early retirement, pensions and benefit schemes of an overstaffed and privileged, though neither highly professionalized nor efficient civil service (with strong unions). By December 2008, some of these parameters had significantly changed. More than 150,000 new jobs had been created during the Vázquez administration’s tenure.

Unemployment had fallen to a record low below 7% (in Montevideo below 6%), formal employment had gone up (by 25% in the private sector alone between 2004 and 2007, most of it in construction, industry and trade) reaching a record high of 57% in 2007, wages had increased, and the poverty rate had fallen continuously. Though most of this change was due to the economy’s improved performance (and the government’s cautious economic and financial policies supporting this trend), it was also backed up and secured by the Frente Amplio government’s social policy reforms, which occurred in two waves.

In its first two years, the administration implemented many urgent and occasionally inconsistent ad-hoc measures such as reducing public health costs and cutting many benefits, while further subsidizing the deficit of the Banco de Previsión Social budget (without structural modifications). However, it also launched a two-year emergency plan targeting poverty (PANES), and allocated extra funds with a focus on food, health, family benefits for the unemployed and poor, and education in problem areas. The plan made use of available resources, particularly in the health sector, and combined the traditional mechanisms of unemployment insurance and welfare benefits for the needy with new requirements of the “workfare” type. In 2007 PANES was succeeded by a more ambitious, comprehensive and extended social and welfare scheme (Plan de Equidad), addressing all sectors involved including social security, family benefit payments, social assistance for the elderly and disabled, anti-poverty programs (including food stamps), unemployment and education. In particular, child benefit payments (asignaciones familiares) were increased and substantially extended, encompassing most minors under age 18 (around 700,000 in total in 2009). New, comprehensive health-care reform legislation came into effect in January 2008. In addition to extending the number of beneficiaries (including, among others, almost 400,000 children in 2008 alone), it established an integrated national health system (Sistema Nacional Integrado de Salud, SNIS), creating a fund to provide health care for pensioners and people in formal employment which will be financed by contributions from the state, private employers (5% of payroll) and employees (3% – 6%), and is designed to pay private and public health care providers (like the health maintenance organizations (HMOs) in the United States) according to a differentiated scheme. The reforms of the various (widely autonomous) agencies administering the social security schemes for the different sectors of the employed population (cajas) have not yet been finished nor coordinated. Nor has the structural problem of pensions and benefits for the state civil servants, the military and the police been systematically addressed; the budget for 2009 suggests that their wages and pensions will be raised to levels seen prior to the Southern Cone crisis.

Equality of opportunity exists in principle, and its level has somewhat improved in recent years, after a long period of deterioration in which marginality and poverty reached critical dimensions. There are a number of institutions, traditional and new, designed to compensate for gross social differences, and the Vázquez government’s emergency programs have intensified their numbers and activities. Women have equal access to education, public office, and other public goods. In 2005, the ratio of women’s to men’s adult and youth literacy rates was 1.01, and the ratios of female to male enrollment in primary, secondary and tertiary education were respectively 0.98, 1.16 and 2.03. The ratio of estimated female to male earned income in 2005 was 0.55, a figure that has not changed substantially in recent years. The GDI value in 2006 was 0.856, the GDI/HDI ratio 99.6% (putting Uruguay at 37th place of 157 countries), and the gender empowerment measure (GEM) was 0.542 (putting the country at 66th place of 108 countries). Unemployment rates among men were 8% in 2006, as compared to 14% among women. In January 2009 total unemployment in Montevideo jumped from 5.9% (in December 2008) to 8.4%, but unemployment among women rose from 7.6% to 11.1%.

HEALTH & DEVELOPMENT
The Uruguayan Constitution mandates that the State legislate all health- and public-hygiene-related issues and provide prevention and care services free of charge only to the indigent population and people who cannot afford them. The Ministry of Public Health (MPH) is the agency responsible for setting standards and regulating the health sector, developing prevention programs, and administering assistance. The Uruguayan economy is based on the production and export of primary goods, especially livestock. This makes it very vulnerable to the subregional context and very exposed to the world market.

The performance of the Uruguayan economy over the last 50 years has been modest: the real GDP growth rate between 1960 and 2004 was 1.9%, while the world average was 3.7%.a After the economic and financial crisis of 2002, the country entered a growth phase in mid-2004. Health services coverage among the total population is 43% for the public sector and 46% for the private sector (approximately 10% has no formal coverage), while the public sector accounts for 25% of the total health expenditure and the private sector, 75%.

The current government, which came to power in March 2005, has proposed a reform of the health sector with a view to achieving universal coverage with equity. Its linchpins are: a) the creation of an integrated national health system; b) the transfer of MPH health services to an autonomous agency; and c) the creation of a national health  fund.

Uruguay has an aging population; 3.2% of the total population is aged 80 or older. Chronic noncommunicable diseases account for 70% of deaths and 60% of the country’s total health care expenditures. A 2006 survey found that among the adult population aged 25 to 64, 60% was obese, 34% had high blood pressure, 33% had high cholesterol, 38% had sedentary lifestyles, 31% were smokers, and 7% were diabetics.

Consequently, only 1 in every 100 adults in this age group has none of these problems.

OPPORTUNITIES
• Government with an absolute parliamentary majority
• National and departmental policies with a social approach based on the reduction of
inequities
• Greater focus on citizen participation, decentralization, and the intersectoral approach

CHALLENGES
• Country’s foreign debt burden (87% of GDP), with limited mobility for investment
• Social response of the health sector to the demographic and epidemiological transition
and to the needs of vulnerable groups
• Growth of poverty and extreme poverty, especially among children
• Strengthening of essential public health functions (EPHFs)
• MERCOSUR in crisis