Brazil's March towards Universal Coverage: Brazil's Landmark Reform in 1988 Has Brought Health Coverage to Millions of People, but the System Is Underfunded, Report Claudia Jurberg and Gary Humphreys in a Continuing Series on Health Finance

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In 1988, half of Brazil's population had no health coverage. Two decades after establishing its Unified Health System (Sistema Unico de Saude), more than 75% of the country's estimated 190 million people rely exclusively on it for their health care coverage.

One beneficiary is 44-year old Marlene Miranda da Cruz, who lives in the Manguinhos slum of Rio de Janeiro and receives care through the Family Health Programme (Programa de Saude da Familia).

Da Cruz, who struggles to make a living by selling beauty products, has two sons, one of whom has a neurological disorder and is bedridden. "My son needs care 24 hours a day," she says, "meanwhile I have to look after my four grandchildren." Today she has come to the Family Health Programme clinic because one of her grandchildren has contracted chickenpox. "I know that I will be well attended here," she says.

Da Cruz is one of 35 000 people served by the Manguinhos clinic, which is run by 11 teams of health workers, including physicians, nurses, dentists and community agents. "At the end of the year there will be 16 teams to take care of 45 000 Manguinhos residents," says Alex Simoes de Melo, the clinic's managing director.

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The Family Health Programme, which covers some 97 million Brazilians, is a key part of the national Unified Health System. It employs more than 30 000 teams of health-care workers who make concerted efforts to reach the country's poor and isolated communities.

Apart from offering primary health care free at the point of service, mainly through the Family Health Programme, the Unified Health System provides a wide range of hospital services, including heart surgery, sophisticated medical imaging and laboratory diagnostics. It also supports a robust vaccination programme, prevention campaigns, basic dental care and 90% subsidization of many essential medicines.

Decentralization has played a fundamental part in Brazilian health-financing reform. In 1996, legislation transferred part of the responsibility for the management and financing of health care to the country's 26 states and more than 5000 municipal governments. States are required to allocate a minimum of 12% of the total budget to health while municipal governments must spend 15% of their budget on health. The federal government also contributes money raised from taxes. At the municipal level this system seems to work well: 98% of the municipalities meet the 15% budgetary requirement and some spend more than 30%, according to Antonio Carlos Nardi, health secretary and president of the National Council of Municipalities Secretaries for Health (Conselho Nacional de Secretarios de Saude).

"Communities are actively involved in decisions about municipal budgets," says Professor Sulamis Daim, of the State University of Rio de Janeiro.

"Maringa municipality is a particularly striking example of popular participation," says Nardi, with the community "participating in discussions at city hall, in how budgets are allocated, in the supervision of accounts and in the approval of the annual management reports." Maringa municipality, 400 kilometres west of Sao Paulo in Parana state, has committed more than 20% of the total budget to health in the past six years, well above the 15% required.

This kind of commitment is less evident at the state level, with more than half of the 26 states failing to meet the required 12% funding target. "One of the weaknesses of this system is that there is a very broad concept of health expenditure," says Dr Francisco de Campos, national secretary of the Secretariat of Human Resources for Health at the Ministry of Health. "Some states have used the money for sanitation or additional health insurance for civil servants. While this may indirectly affect the health of the population, we need to define health expenditure more precisely."

At the federal level, the main problem is the lack of funds. …