The Chilean Health Care Reforms: Model or Myth?

Abstract

The privatization of key industries under the military rule of Augusto Pinochet amounted to a complete transformation of the Chilean economy and social landscape. In this paper, I analyze how market forces have affected the health care system. Chile's initiative, which has become known as the Chilean model, has set an example for much of Latin America. This model involved drastic spending cuts to public health care expenditures, decentralization, and privatization. While de­velopment indicators point to the system's modernization under the model, resultant inequality across income and rural and urban spheres have left many Chileans unable to afford the higher cost, higher quality private care. I define the basic conditions for the model's success and question its applicabil­ity to other national contexts, specifically in Latin America. Because of extreme income disparity in Chile (and throughout Latin America), countries considering this model of health care reform should strategically address this issue and weigh domes­tic forces when accessing the value of replicating this model.