If Costa Rica can, why can't we?

By Shabnam Minwalla

Britain's model National Health Service is today impoverished and short-staffed. Canada is inching towards privatisation. Healthcare in the US yields handsome profits for a few corporations but indifferent care for most patients. And yet Costa Rica, which spends just $ 562 per capita on health, obtains results that rival the US, and the public sector in Sri Lanka manages to cater to 60% of all health needs. A quick look at healthcare systems globally

To what extent is the government of a country responsible for providing healthcare? What should be the role of the private sector? Is a healthy population achieved merely by spending huge sums of money on the healthcare system? How, for example, does Costa Rica, which spends just $ 562 on the health of each of its citizens, obtain results that rival the US, which spends almost $ 5,000 per citizen? What hope is there for India, where the per capita expenditure is a measly $ 80?

International experiences with healthcare throw up more questions than answers.

The healthcare systems of most countries today seem to be in flux. As part of its cost-cutting drive, the British government has been pruning the Nation Health Service and encouraging privatisation. Canada's much-touted Medicare programme too is inching towards privatisation -- pushed along by spiralling costs and the realisation that consumers tend to abuse services that are completely free. At the other end of the spectrum is the American system that is virtually run by mammoth, profit-oriented companies and throws up great material for a horror film.

Here are a few healthcare models -- across the financial, political and geographical spectrum -- which give a sense of the international experience with healthcare. Compare them with the statistics for India, below.


Per capita health expenditure: $ 80 in 2004

Public healthcare as percentage of GDP: 0.9

Private healthcare as percentage of GDP: 4.2

Health indicators: Life expectancy: 63.7 years; under-five mortality: 93 per 1,000

Sri Lanka

Per capita health expenditure: $ 122

Public healthcare as percentage of GDP: 1.8

Private healthcare as percentage of GDP: 1.9

Health indicators: Life expectancy: 72.5 years; under-five mortality: 19 per 1,000

In Sri Lanka, the public sector caters to 60% of the country's health needs, and meets 95% of the demand for in-patient care. Interestingly, the public healthcare system offers both ayurvedic and allopathic treatment and drugs. Though a countrywide network of health facilities has been developed to provide free healthcare, relatively underserved geographical areas and population groups still exist. In the past, the government allocated considerable resources to medical infrastructure such as hospitals, but the prolonged
ethnic conflict has shifted public spending from social projects to defence and greatly undermined the country's health sector.

Realising that an inflow of funds was necessary, the Sri Lankan government tapped the World Bank for assistance and is now involved in a number of joint projects to tackle problems like malaria and malnutrition. The government has also encouraged the private sector to play an increasingly important role in the provision of healthcare, by offering various incentives. Government doctors were allowed to engage
in private practice in the late-1970s, which led to a rapid expansion of the private sector. Financial incentives were offered to investors to establish modern hospitals.

United States

Per capita health expenditure: $ 4,887

Public healthcare as percentage of GDP: 6.2

Private healthcare as percentage of GDP: 7.7

Health indicators: Life expectancy: 77 years; under-five mortality: 8 per 1,000

The United States spends much more per capita than any other country in the world. But perhaps because health is treated like any other commodity -- soap or shoes -- this investment yields handsome profits for a few corporations but indifferent healthcare for helpless consumers.

Indeed, there are many reasons why callous and profit-motivated health maintenance organisations (HMOs) are as detested as tobacco firms in the US today. Millions of Americans are denied treatment even as 300,000 beds remain empty in hospitals across the country. As insurance premiums spiral, more than 43 million people have been forced to remain uninsured and are unable to access care when they need it. Even those who have insurance coverage find that after years of paying the premium, when they finally need to avail of services only a fraction of the cost may be covered. A study found that of the 1 million Americans who filed for bankruptcy in 1999, nearly half were pushed over the edge by their medical bills.

The mighty HMOs function according to formula -- rewarding doctors who incur minimum treatment costs and penalising those who prescribe multiple tests and expensive treatment. Huge administrative departments work overtime to find excuses for why patients' costs should not be covered. And, in the constant rush for profit, patients' needs are routinely neglected -- often with tragic consequences.


Per capita health expenditure: $ 2,792 in 2004

Public healthcare as percentage of GDP: 6.8

Private healthcare as percentage of GDP: 2.8

Health indicators: Life expectancy: 79.3 years; under-five mortality: 7 per 1,000

Canada's problems are dramatically different from those of its next-door neighbour. For over 30 years Canada has taken pride in its universal programme, which is founded on the belief that every citizen should have equal access to quality healthcare. But, skyrocketing costs and plummeting satisfaction levels forecast a dire future for Canadian Medicare.

Part of the problem is that in a free-care system there is no personal accountability. So people access services even when they don't really need them, leading to excessive queuing. It can take 25 weeks to get an appointment with an ophthalmologist, almost 21 weeks to receive orthopaedic care, over 16 weeks to see a neurosurgeon, and nearly 12 weeks for a gynaecological examination. Doctors and nurses are overloaded and there is a very high turnover. Moreover, there is the widespread feeling that low-income groups and minorities are less able to access quality services. This is compounded by the fact that the poorer sections are unable to afford supplemental private insurance.

The situation is becoming critical because costs are climbing rapidly for the Medicare system -- and in individual provinces, where most of the administration is done, 30% of annual provincial budgets are allocated to healthcare. At the moment, the perturbed Canadian government is examining a range of solutions -- a degree of privatisation, extracting payment for services, and a fundamental restructuring of the system -- to help Medicare hold its own against the growing private sector.

United Kingdom

Per capita health expenditure: $ 1,989

Public healthcare as percentage of GDP: 6.2

Private healthcare as percentage of GDP: 1.4

Health indicators: Life expectancy: 78.1; under-five mortality: 7 per 1,000

The United Kingdom's National Health Service (NHS) was born in 1948 and was the first free healthcare system available on the basis of citizenship rather than payment of fees or insurance premiums. For decades it was a model to be emulated, but the last 25 years have seen a series of measures that have curbed its scope and efficiency. Public expenditure on health in the UK has been slashed, and the system is undeniably cash-starved. New management techniques have ensured that financial figures and management professionals influence decision-making, rather than the needs of patients and health professionals. A large number of services -- including laboratory, catering and diagnostics -- are now being outsourced. Certain areas of medicine, like dentistry and ophthalmology, are now outside the ambit of the NHS.

Today the NHS is chronically impoverished and short-staffed. The queues for services are enormous, and more and more consumers feel compelled to turn to the private sector in an emergency.


Per capita health expenditure: $ 1,607

Public healthcare as percentage of GDP: 5.4

Private healthcare as percentage of GDP: 2.2

Health indicators: Life expectancy: 79.2 years; under-five mortality: 6 per 1,000

Spain is another example of how politics determines whether an unemployed or low-income individual will be able to afford a bypass operation or cancer treatment. The popular and efficient Spanish National Health Service (NHS) was set up in 1986 by the socialist government, and offered universal coverage, free primary healthcare and active prevention and promotion programmes. Studies reveal that 80% of the Spanish population would rather be admitted to a public hospital if ill.

When the conservative Partido Popular gained power in 1996, however, there was a gradual dismantling of the healthcare system. This has resulted in the curtailing of services offered by the NHS, privatisation of services like laboratories, high-tech diagnostics and even patient care in certain hospitals, and an increased role for private insurance companies. There is, however, strong and active opposition to this gradual conversion of a basic right into merchandise, which is bound to result in unequal care and even a drop in overall standards.

South Africa

Per capita health expenditure: $ 652

Public healthcare as percentage of GDP: 3.6

Private healthcare as percentage of GDP: 5.1

Health indicators: Life expectancy: 48.8 years; under-five mortality: 65 per 1,000

Since the overthrow of the apartheid regime in 1994, the healthcare system in South Africa has been facing two huge challenges: massive inequities in service and access and the HIV/AIDS epidemic, which has infected one in nine citizens. The government clearly believes that healthcare is its responsibility and it aims to offer an equally accessible and free basic package of primary healthcare to all citizens. While progress has been made, a lot remains to be done. Many people still face physical and financial barriers while accessing health facilities. Extending services to underserved areas is one of the most significant challenges the healthcare system faces.

At the moment the large private system outstrips public health expenditure.

The public sector is mainly funded from the general tax base and, to a much less degree, from user fees. In the private sector, prepaid health plans accounted for 76.6% of the private expenditure on health in 2000.

Costa Rica

Per capita health expenditure: $ 562

Public healthcare as percentage of GDP: 4.9

Private healthcare as percentage of GDP: 2.3

Health indicators: Life expectancy: 78 years; under-five mortality: 11 per 1,000

Thanks to its commitment to health and social reform, Costa Rica has the best health outcomes of any country in Latin America. The publicly-funded, comprehensive healthcare system is considered one of the world's most successful universal systems -- and has brought this middle-wealth country's health indicators in line with those of OECD countries. 'Universality' in the Costa Rican system means that 100% of the population is given comprehensive public health insurance and has equal access to services. Workers contribute 15% of their salary to this health insurance, but even those who are unemployed can access services in a variety of ways. One reason for the success of this system is the large contingent of mid-level workers who, while much cheaper than doctors, effectively extend health programmes to rural areas.

Thirty per cent of the population used the private sector in 2001, partly because of long waiting lists, which could extend up to three months. Mixed medicine, in which a patient will pay for a private consultation with the physician of his choice, and insurance will pay for the diagnostic services and drugs, is becoming increasingly popular. On the whole, however, studies reveal that 70% of the population is very satisfied with the public health system in this country.


Per capita health expenditure: $ 345

Public healthcare as percentage of GDP: 2.1

Private healthcare as percentage of GDP: 1.8

Health indicators: Life expectancy: 73 years; under-five mortality: 8 per 1,000

The Malaysian healthcare system has won international recognition from the World Health Organisation and other health agencies. Government health services in particular, financed by taxes and other public revenues, have achieved impressive coverage. People in rural areas have recourse to an extensive network of government health centres and klinik desa with referral backup, while urban residents have access to government as well as private hospitals and clinics. More than 90% of the population live within five kilometres of a primary healthcare facility -- leading to health indices almost on a par with those of richer industrialised nations. 

Today, however, the cash-strapped public system is facing trouble -- an exodus of senior, experienced staff to the remunerative private sector, chronic understaffing and low morale. Although the government is spending a modest 2.1% of GDP on healthcare, it claims it cannot afford the burden any longer. It is therefore in favour of "corporatising and privatising" the public health system and adopting a variation of the American managed-care model. Although it has promised that the privatisation of public hospitals in Malaysia will be undertaken alongside a public health insurance scheme, the private insurance lobby seems to be working overtime to block this.


Per capita health expenditure: $ 229

Public healthcare as percentage of GDP: 6.2

Private healthcare as percentage of GDP: 1.0

Health indicators: Life expectancy: 76.7 years; under-five mortality rate: 9 per 1,000

The Cuban National System of Health was established in the 1960s, based on the belief that access to health services is a basic human right. By 1989, all Cubans had access to free health services and Cuba witnessed a dramatic improvement in life expectancy and a fall in infant mortality.

The '90s were, however, difficult years for Cuba. The Soviet Union and Eastern Bloc were big markets for Cuban products, and with their demise the Cuban economy encountered severe problems. These were compounded by prolonged economic sanctions against Cuba. Nevertheless, the Cuban government decided to continue supporting the health system and to retain its universal, free-of-charge character.

Today, however, the health system is in urgent need of resources, medical equipment and drugs. Health experts foresee the need for a complete overhaul.

(Shabnam Minwalla is a Mumbai-based journalist)


  1. Costa Rican Health Care: A Maturing Comprehensive System , Greg Connolly, 2002
  2. South African Health Care: A System in Transition , Greg Connolly, 2002
  3. Canadian Health Care: The Universal Model Evolving, Greg Connolly, 2002
  4. UNDP Human Development Report, 2004
  5. Towards a Citizens' Proposal for Healthcare Reforms , Chan Chee Khoon, 2000
  6. The Trouble with Conservative Counter-reforms in Spain , M Sanchez Bayle and Hixinio Beiras
  7. Transformation of the Cuban Health Sector , Felix Sanso Soberat
  8. Global Capital and Healthcare Reform , Jean Shaoul

InfoChange News & Features, June 2005