Neoliberalism and Its Discontents: Impact of Health Reforms in Chile

By Tsai, Thomas C.; Ji, John | Harvard International Review, Summer 2009 | Go to article overview

Neoliberalism and Its Discontents: Impact of Health Reforms in Chile


Tsai, Thomas C., Ji, John, Harvard International Review


Chile has often been regarded as a model for the rest of Latin America. With the highest human development index in Latin America according to the United Nations Development Program, Chile has emerged from the Pinochet years as a modern and stable middle-income country. The success of Chile has often been touted as a result of the "Miracle of Chile," the deregulation and neoliberal economic policies of the military dictatorship. Compared to countries with similar gross national product, Chile also has good health indicators, but questions remain if this was due to Chile's high economic growth rate and dramatic reduction in poverty or due to the privatization of its health insurance system in the 1980s. With the institution of the health reforms of President Lagos in 2004, Chile explicitly guaranteed health care for a list of conditions for the first time. Although neoliberalism has dominated the narrative of Chile, Chile's legacy of social protection may also explain the trajectory of its health reforms, and both narratives must be considered if Chile is to serve as an example for other developing countries.

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Strong History of Social Protection

Due to Chile's unique political history, its health system has been studied extensively for being the innovator in health reform in Latin America. The Chilean War of Independence marked the beginning of Chilean independence from Spain. What was a divide between the independents and royalists ended up in a full-fledged civil war in 1810, resulting in a formal proclamation of independence in 1818 and the surrender of Spanish troops in 1826. After the defeat of the Spanish, the Chilean Civil War of 1829 broke out, ending with the victory of conservative over liberal forces and the formation of a new constitution in 1833.

Two decades of war gave birth to the Chilean system of democratic representation. The constitution served as the expression of balance of forces in which all parties and their constituents obtained some tangible benefit from participating in the system. The strong role of the democratic government in Chile also allowed the legislature to be a central breeding ground for most of the reform measures.

From 1918 to 1938, the state took a paternalistic role in public heath beginning with the first Sanitary Law in 1918, establishing basic public responsibility for sanitation and public health programs. In 1924, the Social Security Law was institute to provide social services to workers and their relatives. In 1938, the reform concluded with the implementation of Law of Preventive Medicine establishing screening of syphilis, tuberculosis, cancer and cardiovascular disease to all blue and white-collar workers.

For the next decade, Chile implemented Bismarkian social interventions by utilizing tax revenues to provide a national system of public hospitals, clinics, sanitary and public health services. This formed as a result of National Health Services in 1952, which remained the major health care provider in Chile for the next four decades. The actual implementation of the National Health Service was a gradual process of consolidating existing hospitals and primary care clinics and posts around the country. Maternal health improved greatly in this period as the emphasis is placed on prenatal care and family planning. In response to the growing role of the state in health, the Chilean School of Public Health was established by a group of Chilean physicians trained at Johns Hopkins University and Columbia University.

In 1941, the Popular Front Government started a legislative battle when they advocated a unified public health system that united the management of all hospitals under a single government agency. The argument in favor of more state intervention is that after 20 years of modest state intervention, the figures of morbidity and mortality remained relatively high. In 1945, infant mortality was 184 per 1000 live birth. …

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