The state's efforts in the health field began in 1890 with the creation of an agency in charge of public hygiene and sanitation. Despite some subsequent initiatives to prevent and treat work- related accidents, it was not until 1924, with the establishment of the social security system, that the state assumedÍÍÍÍ an active role in providing health care to the population. Between the mid-1920s and the early 1950s, state-run programs for health care were organized around the pension funds. During the 1940s, public health experts argued that the individual pension funds could not organize health delivery systems for their affiliates in a rational way. It was also argued that a system was needed that would provide more comprehensive coverage to the whole population, not only those who had accounts in the pension funds, if the country were to improve its overall health indexes. The eventual acceptance of these arguments by policy makers led in 1952 to the creation of the National Health Service (Servicio Nacional de Salud--SNS).

The SNS continued to provide care to all those who held accounts in the various funds, free of charge to workers and their families in the social security system and for a variable fee to others. In addition, it extended health care to the population at large regardless of ability to pay. Services to those who were poor could be slow and often inadequate if a condition was not life- threatening, but accidents and other emergencies normally were given immediate attention. Moreover, the SNS tried to identify specific health problems and focus on providing care in these areas, such as giving all women primary prenated and postpartum care (and access since the 1960s to contraception), inoculating the population against certain diseases, and working to improve nutrition and hygiene through extension programs and publicity. It is estimated that 65 percent of the national population used the state-run system for curative medicine without paying fees. The SNS coexisted with private medical practices and hospitals, which were preferred by people who could afford them. The military developed its own system of clinics and hospitals. In the late 1960s, the government took the initiative to develop a new program for white- collar employees, permitting users to select their physicians. The program was funded by payroll deductions but required users to pay a fee equal to 50 percent of the cost of their care. The program developed its own primary- and preventive-care clinics and laboratories, although it relied on the hospitals of the SNS for backup care of the more serious cases and for hospitalizations. All but 15 percent of hospitalizations took place in SNS hospitals.

All physicians were obligated to work for the SNS for two years after graduation they were usually sent to rural areas and small towns where there were chronic shortages of doctors. During the rest of their professional lives, physicians were also obligated to work a certain number of hours a week for the SNS, for which they received relatively small honoraria in exchange, physicians took advantage of many of the 200 faciliilities of the state system to treat and test theÍÍÍÍir private patients.

By the early 1970s, the state-run health programs faced a financial crisis. Given that the SNS was intimately tied to the social security system, the military government could not change the latter without altering the former. Thus, in 1980 and 1981 policy makers redesigned the nation's health care institutions.

As a result, the Chilean health system in the early 1990s contained essentially five components. The first is the main successor of the SNS, now called the National System of Health Services (Sistema Nacional de Servicios de Salud--SNSS). In 1988 the SNSS employed about 62,000 professionals, including about 43 percent of the nation's 13,000 physicians, many fewer than had worked for the SNS because physicians no longer had any obligation to serve the public health system. The SNSS's administration was decentralized into twenty-seven regional units, and control over its clinics and primary-care centers was transferred to the nation's 340 municipal governments. However, the national government remained the main source of funding for these various units, and it continued to control their basic design, including staff size and equipment. The SNSS's funding comes from general state revenues and from a contribution of 7 percent of taxable income (up from the original 4 percent in 1981) from the employed population. Access to the SNSS is open to everyone, free of charge in the case of indigents and of those whose income falls below a certain level a variable percentage of the cost up to 50 percent is paid by those with higher incomes.

The SNSS organizes and implements the broad public health programs in areas such as inoculations and maternal-infant care. It provides periodic preventive medical care to all children under six years of age not enrolled in alternative medical plans. Through this program, which has broad national coverage, low-income mothers can receive supplemental nutritional assistance for their children and for themselves as well if they are pregnant or nursing. As a result, the incidence of moderate to severe childhood malnutrition among those participating in the program has been reduced to negligible levels in Chile, while only about 8 percent of all children suffered mild malnutrition in 1989. The SNSS is the largest health care provider in the country. In the late 1980s, it served 8.2 million people, or about 64 percent of the total population, and its total expenditures on its participants in 1987 equaled about US$22 per person.

The second component of the health system is the National Health Fund (Fondo Nacional de Salud--Fonasa). Fonasa is part of the SNSS, except that those who register in the program may select their own primary-care physicians, as well as specialists. In this sense, Fonasa continues the modus operandi of the program initiated in the late 1960s for white-collar employees, except that anyone can register in it. Fonasa affiliates direct their payroll or self- employment contributions to the fund. Pensioners of the state-run system, the INP, may also choose to participate in Fonasa. The fund reimburses its users a variable portion of the cost of medical attention on presentation of vouchers for services that have been performed (an average 36 percent reimbursement in 1989). In 1987 Fonasa served 2.5 million people, and health expenditures in it amounted to US$79 per affiliate.

The Security Assistance Institutions (Mutuales de Seguridad-- MS) constitute the third element in the health system. These consist of hospitals that deal primarily with treatment of the victims of work-related accidents. These institutions house some of the best trauma and burn centers in the country. The MS are financed out of employer contributions equivalent to about 2.5 percent of their total payrolls and completely cover the medical expenses of employees of the affiliated enterprises who are injured at work. In addition, the MS pay a temporary disability pension. The 1.96 million employees who have access to these institutions work for 52,000 different enterprises. This program is among the better funded, given that its income of US$123 million amounted to about US$62 per covered worker, while the rate of work-related accidents was only about 10.8 percent per year for all incidents, however minor. Safety experts hired by the MS system are also in charge of inspecting workplaces and suggesting improvements to prevent accidents. The MS are composed of numerous institutions administered by boards with employer and employee representatives. In 1987 they ran eight hospitals and nineteen clinics, mainly in Chile's most important urban centers. The product of initiatives taken by some of the country's largest employers in the late 1950s, the MS expanded greatly in the 1980s.

Private insurance companies belonging to the Institute of Public Health and Preventive Medicine (Instituto de Salud y Previsional Prevención--Isapre) constitute the fourth element in the health system. People enroll by asking their employers to direct their health deduction to these companies, and they pay an additional premium depending on the specific insurance policy. Medical services are reimbursed to users at a percentage of cost. In 1987 about 1.5 million people were enrolled in the Isapre, with expenditures of about US$166 per enrollee. Critics of the Isapre insurance companies noted that they did not help mitigate the nation's highly regressive distribution of income because they channeled the deductions of many people with higher incomes out of the SNSS. Moreover, as private carriers, the Isapre companies may deny enrollment to those who are at higher risk (as a result of serious illness or age), and they are prone to drop those who become excessive risks. Consequently, the SNSS must take up the burden of covering the health care of high-risk individuals.

The fifth component of the health care system is private medicine, which includes private hospitals and clinics. Most physicians, dentists, and ophthalmologists maintain a private practice even if they work for the SNSS or other systems. There are also private health insurers who do not form part of the Isapre structure because they do not collect their premiums from payroll deductions. In 1987 they insured 500,000 people drawn from the population with the highest incomes.

In 1992 Chilean health indicators were much closer to those of industrial nations than to those of the developing world (see table 14, Appendix). The four leading causes of death in Chile are circulatory diseases (27 percent), cancer (18 percent), accidents (13 percent), and respiratory illnesses (11 percent). Medical visits average about 3.5 per person per year, or about 2 to 2.5 for the general population and 1 to 1.5 for maternity and child check- ups. The SNSS handles 89.1 percent of all these visits (16.3 percent of them through Fonasa). Fully 98.4 percent of all births occur with professional assistance in hospitals or maternity clinics. In rural areas, where women might need to travel longer distances to give birth, they can spend the last ten to fifteen days of pregnancy in special hostels. Inoculations of infants and children are virtually universal for tuberculosis, diphtheria, pertussis, tetanus, poliomyelitis, and measles.

According to the Pan American Health Organization, the number of cases of acquired immune deficiency syndrome (AIDS) was gradually rising, with 3.8 per million population in 1987, 5.4 per million in 1988, 6.3 per million in 1989, 8.9 per million in 1990, and 11 per million in 1991. As of the end of 1991 in Chile, 196 individuals with AIDS in Chile had died. According to Health Under Secretary Patricio Silva and the National AIDS Commission, of the 990 individuals who were registered as having been infected with the AIDS virus in the country, 630 had become sick and half of them had died by the end of 1992. The report stated that 93 percent of those diagnosed were men and 7 percent were women.

Although the government of President Patricio Ayl win win did not make structural changes to the health system, it increased funding for the portions of the system that most benefited the poor, especially primary care services. The salaries of health workers in the public sector were increased. The government also enhanced the decentralization of authority in the public health sector by giving local and regional governments more decision-making power over the distribution and equipment of health-care resources and provisions within the limits of national government funding allotments.

Data as of March 1994