• J L Londoño and J Frenk.
• Inter-American Development Bank, Washington, DC 20577, USA.
• Health Policy. 1997 Jul 1; 41 (1): 1-36.

AbstractHealth systems throughout the world are searching for better ways of responding to present and future challenges. Latin America is no exception in this innovative process. Health systems in this region have to face a dual challenge: on the one hand, they must deal with a backlog of accumulated problems characteristic of underdeveloped societies; on the other hand, they are already facing a set of emerging problems characteristic of industrialized countries. This paper aims at analyzing the performance of current health systems in Latin America, while proposing an innovative model to promote equity, quality, and efficiency. We first develop a conceptualization of health systems in terms of the relationships between populations and institutions. In order to meet population needs, health systems must perform four basic functions. Two of these-financing and delivery-are conventional functions performed by every health system. The other two have often been carried out only in an implicit way or not at all. These neglected functions are 'modulation' (a broader concept than regulation, which involves setting transparent and fair rules of the game) and 'articulation' (which makes it possible to organize and manage a series of transactions among members of the population, financing agencies, and providers so that resources can flow into the production and consumption of services). Based on this conceptual framework, the paper offers a classification of current health system models in Latin America. The most frequent one, the segmented model, is criticized because it segregates the different social groups into three segments: the ministry of health, the social security institute(s), and the private sector. Each of these is vertically integrated, so that it performs all functions but only for a particular group. As an alternative, we propose a model of 'structured pluralism', which would turn the current system around by organizing it according to functions rather than social groups. In this model, modulation would become the central mission of the ministry of health, which would move out of the direct provision of personal health services. Financing would be the main function of social security institutes, which would be gradually extended to protect the entire population. The articulation function would be made explicit by fostering the establishment of 'organizations for health services articulation', which would perform a series of crucial activities, including the competitive enrollment of populations into health plans in exchange for a risk-adjusted capitation, the specification of explicit packages of benefits or interventions, the organization of networks of providers so as to structure consumer choices, the design and implementation of incentives to providers through payment mechanisms, and the management of quality of care. Finally, the delivery function would be open to pluralism that would be adapted to differential needs of urban and rural populations. After examining the convergence of various reform initiatives towards elements of the structured pluralism model, the paper reviews both the technical instruments and the political strategies for implementing changes. The worldwide health reform movement needs to sustain a systematic sharing of the unique learning opportunity that each reform experience represents.

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