Comparing Health Systems and Challenges in Costa Rica and the United States

At first glance, the health care system of the United States, a country of 318 million people with a gross national income per capita of $52,610, does not appear to share much in common with that of Costa Rica, a small and still developing country in Latin America (United States). The United States contains considerably more human and capital resources than Costa Rica, which is home to just 4.8 million residents who enjoy a gross national income per capita of $12,500 (Costa Rica). Another source of differentiation is the fact that the two countries are implementing reforms that are moving their respective health systems in opposite directions.

Costa Rica is decentralizing its health care system after more than three decades of government control by relying upon private clinics and physicians to provide care (Costa Rica). In contrast, the United States is adopting a more centralized system with greater government responsibility for universal coverage. Despite opposing reforms and disparities in economic power, the present success of each country’s health care system is nearly identical in World Health Organization (WHO) ratings. Although it ranks 50th in relative health care expenditures to GDP, Costa Rica ranks 37th in overall quality in the world (Costa Rica). The United States, which is ranked 1st in expenditure relative to GDP but 38th in health care, falls just below Costa Rica (United States).

This similarity in ranking manifests itself despite cultural and economic differences because the countries are facing similar health care problems. The expenditure on health care per capita as a percentage of GDP has been accelerating in both countries and particularly in the United States, which spent 17.9% of its 2012 GDP on health care (United States). Despite spending less, Costa Rica still devotes a significant 10.1% of its GDP to medical costs (Costa Rica). The source of uncontrollable health care spending shares the same roots in demographic changes and increasing rates of chronic diseases. With similar mortality rates, in addition to similar male and female life expectancies – 77 years and 81 years for Costa Rica, respectively, and 76 years and 81 years for the United States – the countries are confronting a demographic shift in which moderate fertility rates barely replace aging populations (Costa Rica).

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By 2025, more than 20% of the population of Costa Rica will be over the age of 60 years, resulting in an increased demand for health services and a smaller share of income contributions (Boddiger, 2012). Similarly, the Organization for Economic Cooperation and Development (OECD) predicts that the United States age-dependency ratio will increase from 0.50 to 0.61 by 2050, reflecting an aging population that will require even greater health resources (United States).

Furthermore, the incidence of obesity, high blood pressure, high blood glucose levels, and tobacco use are comparable between Costa Rica and the United States, with both juggling populations where nearly two-thirds of adults are overweight or obese (Boddiger, 2012). The increase in chronic diseases and shifting demographics are reflected in recent changes in each country’s major causes of death, with cardiovascular illnesses and cancer dominating the primary causes of mortality. The financial burden of aging populations and a rise in preventable, chronic diseases has contributed to skyrocketing health care expenditures (Boddiger, 2012). The similar factors influencing health care in Costa Rica and the United States allow for a comparison of their attempts to improve population health through policy changes.

Health Care Reform in Costa Rica

In order to understand the present financial troubles of Costa Rica’s health care system and anticipate future difficulties for the United States, perspective on the origin and structure of medical practice in Costa Rica is critical. In the early 1970s, the Costa Rican government decided to improve the nation’s health by undertaking a massive series of reforms resulting in government-supported medical care. The Caja Costarricense de Seguro Social (CCSS), founded in 1941, is the institution responsible for funding and providing personal health services (Del Rocío Sáenz et al., 2011, 2-3). Originally designed to collect a payroll tax for health insurance on behalf of low and middle income workers, the CCSS was expanded to all residents by a series of mandates in the 1970s (Morgan, 1987, 87-88).

Under the Partido Liberacion Nacional (PLN) administration run by President Figueres, all of the nation’s hospitals and health professionals were nationalized by 1980, but even more extravagantly, health care services were promised to all citizens, regardless of their contributions to the state pension fund (Morgan, 1987, 86). This was accomplished with the 1973 law requiring the transfer of all buildings, funding sources, equipment, and health care personnel to the state (Morgan, 1987, 89).

After nationalizing its hospitals, Costa Rica established a tri-level system of care. The primary units, called the Equipos Básicos de Atención Integral en Salud (EBAIS), serve smaller populations of a few thousand people with primary care and basic testing services (Del Rocío Sáenz et al., 2010, 7). Supplementing the clinics is the second tier, which includes 31 larger, regional hospitals that provide emergency services, outpatient surgeries, and greater diagnostic capabilities (Del Rocío Sáenz et al., 2011, 9-10).

Finally, the tertiary level consists of seven large, national hospitals that provide highly complex care for serious conditions. Several years after its initial establishment, the CCSS compensated for economic losses in many of its first-level, rural regions by hiring private cooperatives that now provide health care services to as much as 15% of the population (Del Rocío Sáenz et al., 2011, 10). As of 2010, the entire system provided 1.23 beds per every 1,000 Costa Ricans (Del Rocío Sáenz et al., 2011, 13).

For funding, the CCSS utilizes payments from workers, employers, and the state, with relative proportions changing over time but ultimately resulting in employees and employers responsible for the vast majority of funds. Workers contribute 8.25%, employers contribute 14.16%, and the state contributes 0.50% for a total contribution rate of 22.91% of an individual’s salary (Del Rocío Sáenz et al., 2011, 10). The proportion of health care funded by the state has steadily decreased throughout the years as financial problems threatened to destabilize the CCSS, increasing the burden of funding on residents. The state’s contribution dropped dramatically over a short period, from 18.3% in 1993 to 9.2% in 1999 to just 7.3% in 2001 (Del Rocío Sáenz et al., 2010, 9). The state’s contribution rate of 0.50% in 2013 demonstrates the dramatic cost-cutting measures undertaken to ensure the long-term sustainability of the CCSS.

Utilizing these contributions, the CCSS funds a three-faceted insurance system consisting of sickness and maternity insurance; disability, old age, and death insurance; and the non-contributory scheme (Del Rocío Sáenz et al., 2011, 2-3). Sickness and maternity insurance covers the vast majority of services, including preventative care, rehabilitation, surgery, hospital stays, clinical tests, and pharmaceuticals. Disability, old age, and death cover pensions for the elderly, the disabled, and widows and orphans. Finally, the non-contributory facet pays the medical expenses of individuals who do not contribute to the CCSS.

While originally established to assist impoverished individuals who could not contribute, the non-contributory scheme also provides primary care and emergency services to Costa Ricans who had the capacity to fund social security but elected not to contribute. Overall, the CCSS improved the rate of insured Costa Ricans to a level that has plateaued today between 85.6% and 87.6% (Del Rocío Sáenz et al., 2011, 6-7). Although the state has promised insurance to all, many individuals are still uncovered, including undocumented migrants, 28.8% of agricultural workers, and indigenous populations lacking access to care (Del Rocío Sáenz et al., 2011, 7). However, the health insurance expansion dramatically cut the rate of catastrophic health expenditure by families facing a health crisis to just 0.31% in 2004 (Del Rocío Sáenz et al., 2010, 6).Continued on Next Page »