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Venezuela Government Audits the Private Healthcare System

Posted on Dec 09, 2010 by Sergio Ulloa ()  | Tags: health care, Health Insurance, Insurance Activity Law, Mission Barrio Adentro, US Health reform, Venezuela health insurance, Venezuela private healthcare, Wikileaks

Venezuela's private health system is currently undergoing an audit after allegations surfaced that insurance companies, and private health service providers, are putting their profit before the health of its members. The audit will be carried out by Venezuela's Public Defender´s Office, Institute for the Defense of People's Access to Goods and Services (INDEPABIS), and the Venezuelan Superintendent of Insurance Activity. The audit will evaluate the private health sector following implementation of the Insurance Activity Law in July this year. As part of the audit, 40 clinics in metropolitan Caracas will be inspected, as well as the availability of a 24 hour phone line for patients to report feedback on Venezuelan insurance and private health related services. The private health system is a fairly new industry in Venezuela. Privatization of health care was introduced by the Government in the 1990s due to deterioration of public health system. Since then, the private sector has grown considerably in Venezuela with around 42 per cent of the population covered by some form of private health insurance. The public health system has been neglected and as a result individuals, who can afford it, seek private healthcare. The Insurance Activity Law, enforced by The National Assembly of the Venezuela Government, has issued regulations on insurers in order to improve the system and increase coverage in the country. The new law addresses issues such as social exclusion in private health insurance and protection of consumer's rights. Insurance companies are concerned that the new law will affect the health insurance industry in that the system will eventually collapse. Further to this, a confidential US Embassy cable released by Wikileaks blames Venezuela's President Chavez for the country's ongoing healthcare crisis, revealing his intention to nationalise private health institutions. Although the healthcare system was in crisis prior to the election of Chavez, according to the embassy cable, due to mismanagement the system has further deteriorated under his rule. With the release of the US Embassy Cable as a part of the greater "cablegate" story analysts are now suggesting that the audit of the Venezuelan healthcare system may have ulterior motives, pointing to the past acts of President Chavez and his nationalization of a number of critical industries. During the 1980s, Venezuela was recognised as having the leading healthcare system within South America. The healthcare system was funded entirely by the Government, providing full subsidence of health care services within the country. However in the 1990's Venezuela's healthcare system deteriorated rapidly. Government healthcare funding, under President Caldera, had significantly dropped. At the time, the country was experiencing an inflation crisis and low oil prices resulting in spending cuts; cuts which included healthcare funding which eventually lead to privatisation of the health system. By the mid 1990's it was increasingly evident that the Venezuelan healthcare system needed some form of overhaul. In 2003, under President Chavez, Mission Barrio Adentro was created following an agreement with Cuba. This health reform, translating to 'Mission inside the neighborhood', improved access to healthcare resources by building thousands of medical clinics across the country, staffed with adequately trained medical professionals employed from Cuba. In the meantime, the private health sector continued to grow. With the deterioration of Venezuela's public healthcare system, the private health sector has become the main source of adequate healthcare within the country. A lack of Government healthcare funding has seen underpaid medical staff quit their positions at public healthcare institutions, in addition to a drastic reduction in the number of essential medical supplies available in the country, which has lead to the permanent closure of many public hospitals in Venezuela. As a consequence of these events, and the overall reduction of public healthcare services, there has been an increased reliance on the private healthcare sector in Venezuela. In turn this has put consumers in a vulnerable position, resulting in the allegations of abuse within the country's healthcare system. As with the rest of the world, private healthcare services are very expensive in Venezuela. However, due to the stagnation of the public system there have been allegations within the country that the private medical sector may be unduly profiting due to the situation. In certain instances the Venezuelan government has accused insurance companies of rejecting claims with no legal grounds, or making it difficult for patients to receive their entitlements. There are reports that health insurers have declined instant approval of emergency cases, although the Chamber of Insurers of Venezuela (CAV) has denied these allegations. Last month the Venezuelian Government forcefully nationalized La Previsora, the country's leading health insurance provider, due to their alleged involvement with three banks that violated banking regulations. Under the Insurance Activity Law, the Venezuelian Government is enforcing regulations on insurers to increase coverage across the population. Pre-existing conditions and acquired illnesses must be covered by Venezuelan insurers. This coverage will also extend to seniors, those on pensions or retired, individuals with a disability, to people with physical or mental illnesses, as well as coverage to those who earn less than 25 tax units per month (US$ 377). The Government will also control the regulation of premium increases and emergency cases in private health facilities will be treated straight away. The Insurance Activity Law reflects similar changes that are occurring in the United States, given the introduction of the US Health Reform implemented this year. With similar principles, the new insurance laws make it easier for citizens to obtain private health insurance coverage with the aim to reduce the financial burden on the Government. The deterioration and quality of public healthcare services is likely to continue if the Venezuelan Government does not provide adequate investment into the healthcare sector. Growth of private insurance coverage will increase across the country and there will be a greater ease of access to insurance entitlements. Whether or not the Insurance Activity Law will be detrimental on the Venezuela health insurance industry is yet to be determined.
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