Health Worker Salaries and Benefits: Lessons from Bolivia, Peru
and Chile
Final Report
Gonzalo Urcullo, Julio Von Vacano, Carlos Ricse y Camilo Cid
April 2008
Reproduced with permission
Executive Summary
The most common problems related to Health Workers Salaries and Benefits (HWSB) in
Bolivia, Peru and Chile are: i) shortage of health workers, disparity of skills (many specialized
physicians, few general physicians or public heath specialists), ii) poor distribution of health
workers, iii) inadequate working environments, including technological deficiencies; and, iv) low
knowledge about the characteristic of HWSB, which impedes planning.
The data collected about Bolivia, Peru and Chile shows that in general, the wages of doctors
during the last fifteen years have had to increase more than the wages of other works (a similar
phenomenon occurring with education workers).
Health workers salaries respond to many different criteria. The basic salary represents
between half and two-thirds of the total income. The rest is made up of time-on-the-job bonuses,
bonuses for working in remote areas, adjustments for advanced studies and other special
designations.
Several political and economic variables play in the determination of salary levels.
Amongst the political factors are the bargaining power of unions and other groups (professional
bodies, for example). In the economic arena, economic growth and inflation are important factors.
Regarding policies oriented to recruit and retain health worker, the public sector continues
to be, in these countries, the largest employer and in general has no major problems finding
employees, with the exception of specific specialties which arise from time to time. Retention,
however, is growingly difficult due to the fact that the private sector offers better working
conditions. In face of this, the public sector in these countries has chosen to allow health workers to
make their services available both to the public and private sectors.
Table 1 shows main findings from the 3 countries of the study.
Table 1 Summary of Main Finding of the Study
Topic
Context
Area
Economic growth
(1999-2008)
General behavior
of salaries
Public spending
(WHO, 2004)
Financing of health
care
Bolivia
Peru
3.2 %
Chile
4.0 %
4.6%
Real increase in minimum wage.
Private salaries higher than
public salaries, with slight trend
towards equalization
Real increase in minimum wage.
Private salaries higher than public
salaries, with slight trend towards
equalization.
Real increase in minimum wage.
Private salaries higher than public
salaries.
General government
expenditure on health as % of
total expenditure on health:
61%. Total public health
spending USD 369 million
(4.15% of GDP), USD 40 per
capita.
Social security 35%, households
32%, Treasury 15%, external
cooperation 15%
General government expenditure on
health as % of total expenditure on
health: 47%. Total public health
spending USD 1,384 million (1.93% of
GDP), USD 48,64 per capita.
General government expenditure on
health as % of total expenditure on
health: 47%.Total public health spending
USD2,670 million (2.9% of GDP). USD
48.41 per capita
Households 37%, employers 35%,
government 24%, others 4%
Public spending 44%, out-of-pocket
spending 29%, private insurance 27%.
Insurance coverage is 90%. The public
insurer FONASA covers 80% of the
population and the private insurers
compete for the remaining 20%.
Insurance is financed by an obligatory
contribution equal to 7% of salary plus
voluntary additional payments for
expanded coverage. Insurers also
demand copayments.
i
Table 1 Summary of Main Finding of the Study
Topic
Salaries
Area
Supply of
professionals
Bolivia
Health workers: 40,000.
Professionals 39%, technicians
5%, aides 24%, administrators
17%, service workers 15%.
Peru
Health workers: 140,000.
Doctors 17%, nurses 16%, midwives
3%, dentists, 7%, technicians and
aides 36%, administrators 16%
Number of core
health workers
(WHO)
Density per 10.000
population of core
health workers
(WHO)
Composition of
salaries
Year: 2001. Physicians 10,329.
Nurses 18,535. Dentist 5,997
Year: 1999. Physicians 29,799.
Nurses 17,108. Dentist 2,809
Chile
Health workers: 69,000.
Doctors 13%, paramedics 33%,
administrators 32%, non-professionals
(including some nurses and midwives)
16%, dentists 2%, others 4%.
Year: 2003. Physicians 17,250. Nurses
10,000. Dentist 6,750
Year: 2001. Physicians 12.2.
Nurses 21.9. Dentist 7.1
Year: 1999. Physicians 11.7. Nurses
6.7. Dentist 1.1
Year: 2003. Physicians 10.9. Nurses 6.3.
Dentist 4.3.
Base salary 70%
Health insurance 8%
Pension 2%
Housing allowance 2%
Family allowance 1%
Bonus for seniority 4%
“Vaccination bonus” 2%
Border bonus 2%
escalafon 1%
Increased share of national
budget. From 9% of budget in
2001 to 10% in 2005. Salaries
for the sector increased less
than those of the education
sector but were among those
with the largest increases.
Base salary, bonuses, and benefits.
Because of inflation, the largest
component of salary is specific
bonuses and leveling adjustments.
Base (depending on grade), special
bonuses (seniority, profession, new
responsibilities, etc.), overtime pay.
Increased share of national budget.
From 13% in 2000 to 15% in 2007.
Salaries for the sector increased less
than those of the education sector but
were among those with the largest
increases.
Special
characteristics
The ministry has 43 salary
levels.
Salary differences are
substantial among physicians
but less notable among other
health workers.
Merit-based
bonuses
To recruit health
workers
To retain health
workers
Nonexistent
The salaries of doctors are triple
those of the other health
professionals and quintuple those of
technicians and aides.
Salary differences are substantial
among physicians but less
pronounced among other health
workers.
ESSALUD workers earn more than
their Ministry of Health counterparts
(from 50% to 100% more, depending
on the area).
Payments for productivity
According to household surveys, income
of doctors fluctuated over the last 10
years, falling and then rising, but not
recovering to 1996 levels (measured in
equivalence in dollars).
According to official statistics, real
salaries of physicians in pesos increased
between 1999 and 2006 by 6%, less than
other sectors including teachers, tax
auditors, and members of the judicial
branch, whose salaries increased by
about 30% over the same period.
Chile attracts medical professionals from
other countries. Most of these practice in
primary care, where salaries are lower
than those of specialist physicians.
To train health
workers
Assign points and receive
bonuses for training.
Training is not adequately
planned.
Evolution of
salaries
Policies
Increase the public budget for
the sector
Immobility of functionaries.
Bonuses for seniority.
Flexible contracts for non-personal
service workers
None.
Immobility is limited because the
majority of workers are under nonpersonal service contracts.
Many health professionals emigrate,
although the flow has decreased in
recent years.
None.
The available formation often fails to
meet local needs, and tends to focus
on training workers who will work in
the exterior.
ii
Part of salary is linked to performance
A firm general policy with allowed flexible
contracts on a small scale
There is a career ladder.
Flexible schedules for doctors and the
option to do shift work, allowing doctors
to work in both the public and private
sector at the same time.
Minimum required hours for training for
each functionary. Training is focused on
the topics of greatest interest to the
country.
Below we summarize the main characteristics of health workers’ salaries and benefits in
Bolivia, Peru, and Chile.
Bolivia. No information is available regarding the private health sector in Bolivia. Salary
scale information for the public health subsector is limited to a classification of personnel by
function, level of care, and municipality in which they work. This affects the ministry of health’s
ability to make informed decisions on the allocation of human resources. The ration of human
resources for health and population served began to improve in 2002 in all three levels of care,
although unfortunately the emphasis has been on tertiary care rather than primary.
The distribution of human resources for health is inequitable. In the municipalities of the
two poorest quintiles, 63% of the personnel is nursing staff, whereas among the richest quintiles
there are more physicians per inhabitant. The distribution of human resources is concentrated in
urban areas, at the expense of rural areas, especially in terms of physicians and licensed nurses.
Physicians, licensed nurses, nutritionists, and pharmacists are in higher demand in the social
security system.
The current salary system does not provide performance incentives or incentives to work in
underserved areas. This contributes to the low quality of care in the public health subsector and the
lack of human resources in rural areas. Other factors also impact the productivity of human
resources in the public health subsector, such as high turnover of personnel and the concentration of
morning shifts.
The average annual growth rate for human resources from 2201 to 2005 has been 5.2%.
The number of health professionals has increased more rapidly than that of other professions. Due
in part to the increased supply of health services, such as care provided by the Universal Maternal
and Child Insurance package, the National Health System requires more human resources and a
better methodology for efficiently allocating existing human resources in order to reach its goals.
Peru. Salaries in the Peruvian health sector are not determined by an express policy but are
the result of the evolution of various policies (fiscal austerity, mainly) or legislation (regarding
public employment, professional regulations, etc.). This has meant that the supply of human
resources is regressive in terms of the needs of the population (because there is no difference
between salaries in urban and rural zones, human resources are concentrated in the cities, although
there is a greater need for them in rural zones).
Currently Peru is a middle-income country, but the salary situation described above is the
result of more difficult times in the Peruvian macroeconomy. Because of their fiscal impact,
appointments, salary raises, and new bonuses have been prohibited. This has led health personnel
to seek different mechanisms (including union strikes) for increasing their income, with an everdecreasing margin for maneuvering as the State continued to control the situation. This issue must
be resolved so that the population of Peru can receive quality, compassionate care regardless of
income.
Chile. There is a scarcity of certain health workers, such as specialist physicians, primary
care physicians (PHC), medical technologists for radiology, specialized nurses, and emergency
medicine physicians. In addition, despite some advances, the current institutional framework
remains lacking in terms of incentives that would attract and support human resources more in
accordance with the health needs of the population.
Salaries in the health sector depend on the type of worker and on various technical
parameters, but also on the pressure and protest power that workers are capable of exerting on the
public sector. Various laws have been established in order to provide salary bonuses and criteria for
performance evaluations; but in practice salaries don’t depend on the workers performance.
iii
Salaries of health workers are greater than those of the average Chilean workers, but lower
than professionals in other areas. Similarly, although in recent years the real salaries of health
workers have increased more rapidly than those of the average Chilean worker, they have increased
more slowly than the real salaries of professionals in sectors such as education. Furthermore, there
are large salary gaps among the various types of health workers. For example, salaries of physicians
are nearly 3 times higher on average than those of their closest colleagues (university-educated
nurses).
Main conclusions and recommendations of this study are show in Table 2:
Table 2 Main conclusions and recommendations
Bolivia
There are insufficient numbers
of health workers; however, the
greater problem is the inequity
of their distribution. There are
many qualified personnel in
urban areas and very few in the
rural areas.
Peru
In the last 15 years, there has been
disorganization within the field of human
resources for health in Peru, resulting in gaps
between need, demand, and supply. Today
the supply of health education produces
graduates and licensees far in excess of the
demand for health services. Strangely, this
already inflated supply offered by universities
and institutions of higher learning is still
insufficient to meet the demand for health
education, and so these institutions continue
to open more and more slots. This has
created a mismatch between the working
world and the health education world.
Salary
composition
Salaries are not based on a
policy that provides productivity
incentives but rather rewards
seniority and professional
merits. This situation is difficult
to change due to the existence
of powerful unions that defend
this system of pay and oppose
performance evaluations.
Salaries of personnel named under the public
regimen include: a basic salary, bonuses and
benefits. Salaries of health workers are
different according to the institution where
they work. It would be advisable to develop a
unified policy for the various labor regimens
with transparent salaries and bonuses.
Evolution of
salaries
The most significant change
during the period analyzed was
that the salaries of the rest of
the public health sector were
brought to the levels of those of
social security employees.
However, while the nominal
salaries of these health workers
increased 10 to 15% annually,
on average, in real terms
salaries have remained very
low.
Incentives to
recruit, train, and
retain health
workers
There are no incentives to
recruit or train health workers.
Retention of workers is carried
out via the escalafon and
seniority benefits. Hiring in the
public sector is often not meritbased.
There are no reliable statistics regarding the
evolution of health sector salaries. An
indirect measurement of their progression
would be the evolution of the public budget
allocated for health workers’ salaries and
bonuses. The health sector grew rapidly from
2000-2007, with its budget increasing by a
factor of 2.5. (Given that in this period the
average increase in personnel was less than
10%, it may be inferred that salaries
increased by nearly 100% over the period.)
In this period the health sector’s budget (and
the salaries of its personnel) grew more
rapidly than did those of other public sectors
such as education (which grew by a factor of
1.7), defense and security (1.24), and justice
(2.0).
The main incentive for a worker in Peru is
salary. Salary raises are traditionally
approved to maintain purchasing power in
times of inflation or as a response to union
pressure. One method of obtaining a raise is
through promotions; but, the Laws of Public
Budgets in recent years established that
promotions – as well as salary raises – were
Number of health
workers
iv
Chile
During long periods there have been
shortages of human resources for health. In
these cases, supply has driven the market,
which has been problematic for the public
sector. However, MINSAL has developed
methods for addressing this problem, using
payment mechanism and incentives. The
various forms efforts to address the shortage
have included different contract modalities,
such as 22-28 hour weeks for physicians,
increasing nurses’ salary grades, rotating
remote assignments, assistance with job
placement for a spouse when a specialist is
transferred, etc. The immigration of foreign
doctors into Chile (mainly Ecuadorian) has
also been a key factor in sustaining and
developing PHC.
The composition of public health
functionaries' salaries includes dispositions
from ad-hoc legislation that regulates the
labor market, which differentiates this sector
from other professions (with the exception of
certain sectors such as the armed forces).
The composition of salaries includes: grade
(each group has different grade scales), base
salary, salaries by profession, salaries
according to seniority, raises for increased
responsibility, overtime hours, and other
special dispositions.
Between 1994 and 1998, real salaries of
health workers increased between 11% and
19% and allowances by 9%. Between 1999
and 2006 their salaries increased by 5%.
However, this increase has been less than
that of the salaries of workers in other
sectors. The data show a relative
disadvantage in the salary increases of
physicians within the public health system. In
comparison with teachers’ union members,
for example, the difference between 19992006 was about 23.5%.
The policy in Chile for recruiting human
resources for health is based on a general
norm regarding contracting of personnel,
along with some legal instruments that allow
for contracting key personnel at the margins
of the limits of the general norm. Chile’s
policy for retaining workers is also related to
the legislation to make the norms that govern
Table 2 Main conclusions and recommendations
Bolivia
Peru
prohibited. As promotions and therefore
salary raises are restricted, the remaining
form of incentive for human resources is
bonuses. None of bonuses are linked to the
worker’s performance.
v
Chile
salaries more flexible, allowing payments
beyond the general standard. Chile’s policy
for training personnel is, by law, that all
functionaries must be trained.
Table of Content
1.
Introduction ................................................................................................................... 1
2.
Objective ....................................................................................................................... 1
3.
Methodology ................................................................................................................. 2
4.
General characteristics of the countries......................................................................... 3
5.
Bolivia ........................................................................................................................... 4
6.
7.
8.
5.1
Health System....................................................................................................... 5
5.2
Economic context ................................................................................................. 6
5.3
Salaries of health workers................................................................................... 11
5.4
Incentives and policies to recruit, retain, and train health workers..................... 19
5.5
Conclusions and recommendations .................................................................... 20
Peru.............................................................................................................................. 21
6.1
Health System..................................................................................................... 21
6.2
Economic context ............................................................................................... 22
6.3
Salaries and benefits for health workers ............................................................. 31
6.4
Incentives and policies to stimulate human resources ........................................ 47
6.5
Conclusions and recommendations .................................................................... 51
Chile ............................................................................................................................ 53
7.1
Health System..................................................................................................... 54
7.2
Economic context ............................................................................................... 56
7.3
Salaries of health workers................................................................................... 59
7.4
Incentives and policies to recruit, retain, and train health workers..................... 72
7.5
Conclusions and recommendations .................................................................... 73
Bibliography ................................................................................................................ 75
vi
List of Figures
Figure 1 GDP growth rate (%) ........................................................................................................... 6
Figure 2 GDP Participation by Economic Activity............................................................................. 7
Figure 3 Average monthly salary in Bolivia’s public and private sector (Current USD) ................... 8
Figure 4 Total Health Spending as % GDP (2004) ........................................................................... 10
Figure 5 Evolution of Public Health Workers’ Salaries and Items ................................................... 14
Figure 6 Real monthly income of social sector: health, education workers and all workers, 19972005 (International dollars 2000)...................................................................................................... 16
Figure 7 Nominal monthly income of private social sector/health and private education workers,
1995-2005 (Base index 1995 = 100) ................................................................................................. 17
Figure 8 Nominal monthly income of different health workers, 1995-2005 (Base index 1995 = 100)
........................................................................................................................................................... 18
Figure 9 Evolution of the Gross Internal Product (GDP) 1990-2007 (change in annual percentage)
........................................................................................................................................................... 23
Figure 10 Growth of GDP and urban employment in companies with 10 or more workers (annual
change in percentage)........................................................................................................................ 24
Figure 11 Employment in companies with 10 or more workers in major cities (annual change in
percentage, 2006/2005) ..................................................................................................................... 25
Figure 12 Annual Evolution of Urban Work 2000-2006 and 2006-2007, in Lima and Regions...... 26
Figure 13 Labor productivity in Latin America (percent change) .................................................... 27
Figure 14 Average public and private sector income from 2000-2007 (in USD) ............................ 28
Figure 15 Financing and Health Spending Assignment .................................................................... 30
Figure 16 Health Professional Rate by South American Country, 2004........................................... 32
Figure 17 Health Professional Rate Evolution per 10,000 population, 1980-2004........................... 33
Figure 18 Distribution per Quintile Health Professional Rate per 10,000 population, 2004 ............ 35
Figure 19 Distribution of health and education workers by decile of income per capita (average
between 2003 and 2007) ................................................................................................................... 46
Figure 20 Internal User Satisfaction, MINSA 2003.......................................................................... 48
Figure 21 Perception of Progress Opportunities, Salaries and Incentives, MINSA 2003................. 48
Figure 22 Structure of financing for public health spending............................................................. 55
Figure 23 Structure of heal spending 1998 – 2004 (percentage)....................................................... 55
Figure 24 Growth of the GDP in Chile, 1999-2006 (percentage) ..................................................... 56
Figure 25 Evolution of central government spending (as a percentage of GDP).............................. 58
Figure 26 Evolution of nominal salaries by economic activity......................................................... 66
Figure 27 Evolution of nominal indexed salary by economic activity (base 1994=100).................. 67
vii
Figure 28 Evolution of nominal salary in the communal, social, and personal services category, by
occupational group ............................................................................................................................ 67
Figure 29 Evolution of nominal indexed salary in the communal, social, and personal services
category, by occupational group ....................................................................................................... 68
Figure 30 Monthly per capita income of health workers, 1996-2006 ............................................... 68
Figure 31 Income per capita per month for public and private sector physicians............................. 69
Figure 32 Distribution of health workers by income decile per capita (average from CASEN surveys
1996 and 2006).................................................................................................................................. 69
Figure 33 Monthly income per capita for health workers, by education level, 1996-2006............... 70
Figure 34 Growth rates for productivity, real salary, and economic growth, 1998-2006 ................. 72
viii
List of Tables
Table 1 Summary of Main Finding of the Study.................................................................................. i
Table 2 Main conclusions and recommendations .............................................................................. iv
Table 3 Main indicators for Bolivia, Peru y Chile .............................................................................. 3
Table 4 Purchasing power ................................................................................................................... 4
Table 5 Percentage of workers by economic activity.......................................................................... 7
Table 6 Evolution of minimum monthly wage in Bolivia and inflation rate (current Bs.) ................. 7
Table 7 Average Monthly Salary in the Public Sector by Institutional Group (current USD)............ 9
Table 8 Average Salary in the Private Sector by Economic Activity (current USD) ......................... 9
Table 9 Composition of Social Spending 2004................................................................................. 10
Table 10 Permanent Human Resources of the Health Public Sector 2006 ....................................... 12
Table 11 Distribution of Human Resources in Health by Department, 2005 ................................... 12
Table 12 Composition of health salaries, 2001 ................................................................................ 13
Table 13 Evolution of Spending and the Public Sector Salary Schedule of the Different Sectors
2000–2005 (current millions Bs.)...................................................................................................... 14
Table 14 Evolution of Spending and the Public Sector Salary Schedule of the Different Sectors
2000–2005 (as percentage total salary schedule) .............................................................................. 14
Table 15 Evolution of monthly base salaries for certain categories of workers in the public health
sector (in current USD.) .................................................................................................................... 15
Table 16 Summary of Incentives (in 2001 USD).............................................................................. 19
Table 17 Decomposition of the growth by demand sector 1997-2006 (GDP points) ....................... 23
Table 18. Decomposition of by supply sector 1997-2006(GDP points) ........................................... 23
Table 19 Metropolitan Lima: Distribution of Employed EAP by market structure , 2001-2005
(percentages) ..................................................................................................................................... 27
Table 20 Evolution 1990-2006 of minimum living wage, inflation, and exchange rate................... 28
Table 21 Average monthly income by economic activity (in thousands of current S/.) ................. 29
Table 22 Social spending by major component (in millions of 2001 S/.) 1/ ..................................... 29
Table 23 Main indicators related to health spending 1995-2000 ..................................................... 30
Table 24 Health Spending by Provider 1995-2000 (percentage) ...................................................... 31
Table 25. Departmental Distribution of Health Professional Rate per 10,000 population, 1980-2004
........................................................................................................................................................... 34
Table 26 Spending on Public Sector Salary Schedule by Country Region, 2000–2007 (millions of
current S/.)......................................................................................................................................... 35
Table 27 Amount of monthly Bonuses for Ordinary Public Hospital Guards by Health Professional,
2005................................................................................................................................................... 37
Table 28 Detail Medical Monthly Remuneration Schedule by Public Institution, 2006 (in S/.) ...... 38
Table 29 Detail Public Non Medical Professional Monthly Remuneration Schedule, 2006 (in S/.) 38
ix
Table 30 Normative comparison ....................................................................................................... 40
Table 31 Salary Schedule in Health Sector by Public Institution, 2006 (in current S/.) ................... 42
Table 32 Average ESSALUD worker’s salary by occupational group, 2005 ................................... 43
Table 33 Spending on Salary Schedule by Principal Sector, by Expense Category, 2000–2007 (in
millions of current S/.) ...................................................................................................................... 44
Table 34 Public Workers: Average Monthly Income in current USD .............................................. 44
Table 35 Number of individuals interviewed in the Encuesta Permanente de Empleo, 2003-2007. 45
Table 36 Number of individuals interviewed in the ENAHO 2005.................................................. 45
Table 37 Evolution of nominal, real, and inflation-adjusted salaries, (1995-2006).......................... 57
Table 38 Evolution of tax income and spending on personnel, 1999–2006 (in 2006 Chilean pesos)
........................................................................................................................................................... 58
Table 39 Total Spending and Sources of Financing within the Chilean Health System, for the year
2000 (in millions of year 2000 pesos) ............................................................................................... 59
Table 40 Main Norms and Laws Governing Human Resources for Health in Chile........................ 60
Table 41 SNSS workers in Chile, 1999............................................................................................. 60
Table 42 Physicians per 10,000 inhabitants in selected South American countries.......................... 61
Table 43. Chile: Number of health workers 1999-2007.................................................................... 61
Table 44 Chilean physicians by specialty, 2000-2004 ...................................................................... 62
Table 45 Public Health System Figures, Chile, 1998........................................................................ 62
Table 46 Change in number of contracted physicians in SNSS........................................................ 63
Table 47 Change in number of contracted physician-hours in SNSS (per week) ............................. 63
Table 48 Distribution of medical personnel by Regional Counsel, 2006.......................................... 63
Table 49 Composition of health workers’ salaries............................................................................ 65
Table 50 Descriptive statistics on monthly salaries of hospital workers 2007 (current Chilean pesos)
........................................................................................................................................................... 65
Table 51 Evolution of public sector readjustments and CPI (measured for the periods form January
– November of each year) ................................................................................................................. 70
Table 52 Nominal cumulative adjustments 1999-2006 (various sectors) ......................................... 71
Table 53 Absolute differences between cumulative salary raises in three public health subsectors,
1999-2006 ......................................................................................................................................... 71
Table 54 List of Interviewed people for the study ............................................................................ 77
x
List of Acronyms
AETAS
PHC
Bs
CLAS
DIRESAs
ELITES
ESSALUD
EPS
FF.AA
FONASA
HIPC
INEI
ISAPRE
MAI
MEF
MLE
MINSA
MSD
GDP
EAP
PNP
S/.
SBS
SIL
NPS
SNSS
SUMI
SII
UCAP
UDAPE
USD
Extraordinary Stipend for Work in Health
Primary Health Care
Bolivianos (Bolivian currency)
Local Communities for Health Administration
Regional Health Departments
Itinerant teams in remote zones
Social Security in Peru
Health Service Providers in Peru
Armed Forces
National Health Fund
Heavily Indebted Poor Countries Initiative
Peruvian National Institute of Statistics
Chilean Private Health Plan Provider
Institutional Care Modality
Ministry of Economy and Finance
Free Choice Modality
Ministry of Health in Peru
Ministry of Health and Sport in Bolivia
Gross Internal Product
Economically Active Population
National Police of Peru
Nuevos Soles (Peruvian currency)
Basic Health Insurance
Disability subsidies
Non-personal services
National Health Services System
Universal Maternal and Child Insurance
Internal Taxation Service
Professional Training and Accreditation Unit
Social and Economic Policy Analysis Unit
United States Dollars
xi
1. Introduction
Many countries are met with obstacles to improving their health systems due to the
problems regarding their health workers. These problems include an insufficient supply of
workers, poor distribution of workers within the county, lack of needed workers in specific
specialties, weak ministries of health and institutions in general relating to the health sector.
There is also a problem of low morale among health workers, due to poor working conditions
and low salaries, which are often lower than those of other professionals with similar levels of
education and training. The combination of some or all of these problems leads to an
inadequate supply of health care services. This study focuses on the issue of salary and benefits
for health workers.
The classic economic theory indicates that workers’ salaries depend on the supply and
demand for their services in the market, which is often segmented into specialties and niches.
According to Marx, the existence of an “industrial reserve army” means that in a capitalist
economy, salaries will be barely sufficient to stimulate the work needed. According to J.M.
Keynes, salaries are flexible upwards but inflexible downwards. Currently there is a new stream
of thought that explains the behavior of salaries as a function of the negotiating power of the
workers, particularly collective negotiation. In this study, above and beyond the theoretical
models, we analyze the behavior of health workers’ salaries in three Latin American countries:
Bolivia, Chile, and Peru, based on empirical experience.1 The analysis for each country is
detailed in a separate chapter, each following the same structure. First we describe the Heath
System and the economic context of each country. Next we analyze the salaries of the country’s
health workers. Then we describe the incentives, the factors that affect the productivity of these
workers, such as policies adopted by the three countries to recruit, retain, and motivate health
workers.
The sections that describe the economic context address issues such as economic
growth, generation of sources of employment, behavior of salaries, and public and social
spending. The sections that analyze salaries within the health sector explain the health market
of each country, the number of health workers, the categories of workers, the composition of
salaries (seniority, bonuses for rural clinics, bonuses for specialty clinics, overtime pay, health
insurance benefits, disability, retirement, and life insurance, subsidies, etc.) and their
determinants (negotiation, pressure, legal dispositions, ability to hold both public and private
jobs, social and/or macroeconomic factors, etc.). These sections also describe the evolution of
health workers’ salaries, comparing it with the evolution of salaries in other sectors of the
economy, including an analysis of the main National Surveys. The final section of each chapter
describes the incentives, factors that affect productivity, and the policies adopted to train, retain,
and motivate health workers.
The present study relied on diverse publications and recent studies, as well as in-depth
interviews.2
2. Objective
The general goal of this research was to offer useful policy-oriented information to
health sector decision-makers by collecting information on the patterns and trends of health
worker salaries and benefits and analyzing their determinants and impact in Chile, Peru, and
Bolivia.
The specific research objectives were to:
a.
Collect data and analyze current salaries and benefit levels and trends in
Bolivia, Peru and Chile.
1
Countries are sorted from low to high level of human development.
2
See Appendix A.
1
b.
c.
d.
e.
f.
Describe the structure of health worker salaries in those three countries.
Analyze the determinants of salaries and employment levels.
Analyze policies to enhance the productivity and quality of human resources.
Analyze incentives for health workers to move to and remain in rural areas.
Analyze policies oriented to recruit, train and retain —in general, to
motivate— health workers.
3. Methodology
To meet the specific objectives (a) and (b) we collected data mainly from the following
sources: National Statistical Institutes; Ministries of Health; Superintendence of Health (in the
case of Chile); public insurers; private insurers; research centers; and publications. On the basis
of these data we compared health worker salaries with those of workers from other sectors. We
assessed the nominal and real evolution of health and non health workers salaries over time. To
obtain qualitative data, we held personal interviews with key staff from the above institutions.
Some of the key questions that guided our research to understand current salaries and benefits
levels and their trends over time were:
•
•
•
•
•
•
•
•
Is there a law that determines civil servant salaries and benefits and what does it
state?
Are health workers hired under the same conditions as other workers in the public
sector? If not, what are the differences?
Are health workers salaries adjusted periodically and how?
Do health workers work solely in the public sector? Or can they or do they also
work in the private sector? Can they legally do so?
What are the salary differences between the public and the private sector for health
workers?
What are the salary differences with a sector?
What variables (experience, seniority, etc) are considered in salary determination?
What other non-monetary benefits do government health workers receive and how
do these benefits impact on their motivation?
To analyze the determinants of salaries and employment levels (objective c), we
reviewed existing studies of the determinants of salaries and benefits and complemented them
with interviews with MOH staff, health workers’ unions and associations, independent health
workers and research centers. Specifically, we attempted to answer the following key questions:
•
•
•
•
•
How are health workers salaries and benefits determined?
What kinds of assessments are in place to evaluate health worker performance?
How are salaries adjusted on the basis of observed performance?
Can workers who perform poorly be fired easily? How easily can health workers be
promoted, receiving monetary or other benefits or incentives when they perform
well?
Do health workers have trade unions or health workers associations? How much
power do these unions or associations have?
Are health workers supervised? By whom?
To analyze policies to enhance the productivity and quality of human resources
(objective d), we reviewed existing research and conduct interviews of key health sector
decision-makers and researchers. Some of the questions that guided these interviews were:
•
What human resources policies related to health workers have been implemented to
support health policy objectives?
2
•
•
•
•
•
•
•
What is the full set of formal and informal incentives conferred to government
health workers?
What attempts have been made to improve the productivity and quality of human
resources in the public health sector?
What incentives have been implemented to align health worker and health policy
objectives?
How effective has been the measurement of health worker performance and its
retribution through salaries and other incentives?
To what extent have salaries and other incentives been modified in practice in
response to changes in health workers’ performance?
What consequences have these salaries and incentives had on performance?
What has been the cost of salary/incentive measures to promote health worker
performance? How do those costs compare with the benefits, measured as improved
performance?
To analyze incentives for health workers to move to and remain in rural areas (objective
e), we identified effective policies to allocate health workers to all regions within each of the
three study countries (in particular to rural areas), through a bibliographical review and through
interviews with MOH staff.
To analyze policies oriented to recruit, train and retain —in general, to motivate—
health workers (objective f), we reviewed existing studies and complement their findings with
interviews. Here we asked the following key questions:
•
•
•
•
What are the main problems to recruiting and retaining health workers?
Have there been policy changes to solve the problems?
Is there a brain drain? If so, what are its causes, possible solutions and
consequences? What measures have these countries implemented against it? What
are the results and lessons from these experiences?
What are the main policies and conditions that favor health worker training?
4. General characteristics of the countries
To illustrate the similarities, differences, level of development, and degree of
advancement achieved by the health systems of the countries analyzed, Table 3 shows some of
the main demographic, socio-economic, and health indicators of each country.
Table 3 Main indicators for Bolivia, Peru y Chile
Latin America and
the Caribbean
Bolivia
Peru
Chile
549.0
1.3
2.4
9.2
1.9
3.7
27.3
1.2
2.6
16.3
1.1
2.0
4,767.3
5.5
6.5
1,100.0
4.6
12.2
2,710.0
6.4
3.4
6,980.0
4.0
11.7
117.6
87.6
29.3
114.8
80.0
35.7
116
92.4
34
100.3
90.8
47.8
72.5
26.2
64.8
52.0
70.8
23
78.2
8.0
Demography and surface area (2005)
Population, total (million)
Population growth (annual %)
Fertility (number of children per woman)
Economy (2006)
GNI per capita, Atlas method (current US$)
GDP growth (annual %)
Inflation (annual %)
Education
School enrollment, primary (% gross)
School enrollment, secondary (% gross)
School enrollment, tertiary (% gross)
Health status and health care
Life expectancy at birth (years)
Infant mortality rate (per 1,000 live births)
3
Table 3 Main indicators for Bolivia, Peru y Chile
Prevalence of HIV/AIDS (% of total population)
Immunization, DPT (% of children ages 12-23 months)
Health financing (2004)
Health expenditure per capita (current US$)
Health expenditure, total (% of GDP)
Health expenditure, public (% of total health expenditure)
Health expenditure, private (% of total health expenditure)
Out-of-pocket health expenditure (% of private expenditure on health)
Latin America and
the Caribbean
0.6
91
Bolivia
0.1
81
Peru
0.6
97
Chile
0.3
91
272
7
52.0
48.0
74
66
7
61.0
39.0
82
125
4
49
51
80
359
6
47.0
53.0
46
Source: The World Bank
To facilitate the comparisons among the three countries, Table 4 presents some relevant
measures regarding purchasing power. Given that the main objective of this study is to compare
the incomes of health workers in the three countries, one of the most relevant data points is the
relationship to price levels. Using 2005 data, Bolivia is 69.4% cheaper than Peru; Peru is 39.4%
cheaper than Chile; and Bolivia is 136.2% cheaper than Chile.
Table 4 Purchasing power
Bolivia
Peru
Chile
Real per capita expenditures
100
158
257
Purchasing power parity
100
197
279
Price index
Source: Authors, based on United Nations data
100
169
236
5. Bolivia
Since the early nineties, Bolivia has executed a series of political, economic, and social
reforms. These reforms have included changes to the health sector and public administration,
such as strengthening civil services. In spite of the modernization of the economy, which has
including shrinking the public sector, this segment of the public sector has remained substantial,
although it has turned its focus towards the social sector and has practically retired from
productive activity.
In the public health and social security sectors, there is a surplus of doctors in urban
areas and a deficit in rural communities. Because of this fact, the Unit of Social and Economic
Policy Analysis (UDAPE), the government’s think tank, suggests that it is possible that at least
part of the need for health workers in Bolivia could be covered via a better distribution of
existing personnel among the various levels of care.
One problem that Bolivia faces is continual strikes among health workers. On average,
these workers strike 4 to 7 weeks out of the year.
Another problem often cited by those involved in the health sector is a shortage of
personnel, which in Bolivia is referred to as a shortage of items (one item being equivalent to
one full-time worker in the public sector). According to a study carried out by the World Bank
in 2002, there is a deficit of 3230 full-time workers in primary and secondary health facilities.3
However, using funds from the Heavily Indebted Poor Countries Initiative II, of which Bolivia
was a beneficiary, the country increased the ratio of personnel-population in these health
facilities.4 The increase in items in tertiary-care facilities was more that the amount established
3
World Bank (2002)
4
The HIPC program arose as an initiative of international financing organizations and of some
developed countries to forgive some or all of the external debt of the poorest highly indebted countries,
with the condition that these nations use the funds that would have been used to pay the debt for social
sector investments, with the goal of relieving poverty.
4
in the National Dialogue law, the legal instrument developed to determine distribution of the
HIPC funds.
5.1
Health System
The Bolivian national health system consists of various public and private entities,
institutions, and organizations that provide health services, under the regulation of the Ministry
of Health and Sports. The system includes the Public System, short-term Social Security,
churches, private for-profit and non-for-profit institutions, and practitioners of traditional
indigenous medicine. The national Bolivian health system has four levels of administration:
•
•
•
•
National, corresponding to the Ministry of Health and Sports (MDS)
Departmental, corresponding to the Departmental Health Services (SEDES),
which are dependent on the Prefecture
Municipal, corresponding to the Local Health Directories (DILOS)
Local, corresponding to the health facility in its area of influence and mobile
brigade at an operative level
The three levels of care are structured in practice according to the Health Networks’
organization:
•
•
•
First level: The supply of services is focused on health promotion and
prevention, outpatient services, and mobile hospital units. This level of care is
carried out by practitioners of traditional medicine, the mobile health brigades,
health posts, doctors’ offices, health centers with or without inpatient beds,
and polyclinics. This level is the entry point to the health care system.
Second level: This level includes more complex outpatient services and
hospital stays in the basic specialties of internal medicine, surgery, pediatrics,
obstetrics and gynecology, and, optionally, traumatology. The operative unit
on this level is the Basic Auxiliary Hospital.
Third level: This level consists of specialist and subspecialist inpatient and
outpatient consults, complementary diagnostic services, and treatment with
advanced technologies. The operative units on this level are the general
hospitals and specialty hospitals and institutes.
Administratively, the system is structured according to the Health Networks. Each
Network consists of a number of public and private health centers providing different levels of
care at various levels of complexity. There are two types of Networks:
•
•
The Municipal Health Network, which consists of one or more first-level
Health Care Centers (Health Centers and Health Posts) and a Basic Auxiliary
Hospital to which the centers may refer patients. A Network Administrator is
responsible for managing the network.
The Departmental Health Network, consisting of Municipal Networks and
third-level Health Care Centers, which are located in the capital cities of each
department. A Technical Director of SEDES is responsible for managing the
network.
Health financing. The total expenditure of the Bolivian health sector was US$ 323
million in 1995 (4.7% of GDP), or $44 per capita on health per year. The main instrument for
financing national health spending is social security (35%), followed by households (32%), the
General Treasury of the Nation (15%), external cooperation (15%), and finally, the
municipalities (3%). Excluding external cooperation, total spending on health would be $275
million per year (4% of GDP), or $37.5 per capita. Public spending on health (General Treasury
5
of the Nation, municipalities, and companies via social security contributions) reached $170
million (2.5% of GDP), of $23 per capita.
There is a relative stability in the financing of the health sector. The ability to increase
spending substantially would depend on increased income, whether at the household level, via
companies, or at the government level, either national or municipal. Give the current limits,
there are major inequities in the financing system. One concrete example is Social Security,
which accounts for 35% of the spending but only covers 20% of the population. Measures to
reduce these gaps could include redistributing the financing or broadening the coverage of
social security.
Salaries. Health workers in the public subsector and in social security are paid fixed
monthly salaries that do not provide productivity incentives. In the private subsector there are
mixed salary mechanisms, with fixed and productivity-linked components.
5.2
Economic context
Economic growth. In recent years the Bolivian economy has registered positive
growth rates. The increase in GDP in the 1990s fluctuated between 4% and 5%; at the end of
the decade until 2003 the growth rate fell to levels between 1.5% and 3%. From 2004 to 2007,
the GDP returned to a growth rate of 4% to 5%.(Figure 1)
Figure 1 GDP growth rate (%)
6,00%
5,00%
4,00%
3,00%
2,00%
1,00%
0,00%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: National Institute of Statistics
Sectoral dynamism. The composition of the GDP shows that in recent years
manufacturing and agricultural activities have decreased in importance, overcome by more
dynamic activities such as public administration services, mineral mining, and production of
petroleum and gas.
6
Figure 2 GDP Participation by Economic Activity
Participacion en PIB según Actividad Económica
(%)
Industrias manufactureras
2006 (p)
Agriculrura, silvicultura,caza y pesca
2005 (p)
Servicios de la Administración Pública
2004 (p)
2003
Transporte y Almacenamiento
2002
Comercio
2001
Servicios comunales, sociales, personales y
doméstico
2000
Propiedad de Vivienda
1999
Minerales Metálicos y no Metálicos
1998
Servicios Financieros
1997
1996
Petróleo Crudo y Gas Natural
1995
Servicios a las Empresas
1994
Restaurantes y hoteles
1993
Construccion
1992
Electricidad gas y agua
1991
Comunicaciones
1990
0%
20%
40%
60%
80%
100%
Source: National Institute of Statistics. (p) Preliminary
Generation of sources of employment. The majority of the population is employed in
the agriculture and livestock sector, commerce, restaurants and hotels, public administration,
and industrial manufacturing. The importance of public administration as an employer has
grown in recent years while that of the manufacturing sector has decreased. The mining sector
(exploitation of mines and extraction of hydrocarbons) has increased its share of the GDP but
reduced the number of workers it employs.
Table 5 Percentage of workers by economic activity
1999
2000
2001
2002
2003
2005
2006 (p)
Agriculture and livestock sector
Economic Activity
39.95
38.94
41.02
42.39
39.97
38.61
39.50
Commerce, restaurants and hotels
20.11
19.82
20.26
18.81
20.31
18.81
18.33
Industrial manufacturing
11.40
10.12
10.33
11.17
10.65
10.93
10.50
Construction
5.84
6.65
4.81
5.38
6.56
6.47
5.45
Transport and communications
4.98
4.32
4.72
4.60
4.52
6.02
5.53
Financial and enterprise activity
2.50
3.23
2.63
2.50
2.20
2.77
3.85
Exploitation of mines and extraction of hydrocarbons
1.45
1.44
1.14
0.99
1.17
1.67
1.22
Electricity, gas and water
0.22
Source: UDAPE, Based in National Institute of Statistics data
0.47
0.38
0.21
0.37
0.33
0.29
Behavior of salaries. The minimum wage in 2007 was set at Bs. 525 ($US 68). Table
6 shows the evolution of the minimum wage in Bolivia along with inflation, allowing us to
evaluate the real evolution of this variable.
Table 6 Evolution of minimum monthly wage in Bolivia and
inflation rate (current Bs.)
Year
Bs
Growth of
minimum wage
7
Inflation
Table 6 Evolution of minimum monthly wage in Bolivia and
inflation rate (current Bs.)
Year
Growth of
minimum wage
Bs
Inflation
1991
120 -
-
1992
135
12.5%
10.5%
1993
160
18.5%
9.3%
1994
190
18.8%
8.5%
1995
205
7.9%
12.6%
1996
223
8.8%
8.0%
1997
240
7.6%
6.7%
1998
300
25.0%
4.4%
1999
330
10.0%
3.1%
2000
355
7.6%
3.4%
2001
400
12.7%
0.9%
2002
430
7.5%
2.5%
2003
440
2.3%
3.9%
2004
440
0.0%
4.6%
2005
440
0.0%
4.9%
2006
500
13.6%
5.0%
5.0%
0.0%
2007
525
Source: Based in National Institute of Statistics data
While real minimum wage has increased, the average salary in dollars has decreased
both in the public sector and in the private sector (Figure 3). In general, salaries in the private
sector are higher than those in the public sector; however, the gap between the two sectors has
decreased. This is due mainly to a more pronounced drop in private sector salaries than in
public sector salaries. The average private sector salary in 1996 was $US 331; 10 years later, in
2006, the average private sector salary was $US 245, a 26% drop. In the public sector, the
average 1996 salary was $US 213, dropping to $US 184 in 2006, a fall of 14%. In both cases,
private and public sectors the number of observation is statistically representative.
Figure 3 Average monthly salary in Bolivia’s public and private sector (Current USD)
350
300
250
200
150
100
50
0
1996
1997
1998
1999
2000
2001
Public sector
2002
2003
Private sector
Source: Based in National Institute of Statistics data. (p) Preliminary
8
2004
2005 2006(p)
The poorest-paid public sector employees are those that work in central administration.
Workers in the decentralized administration sector receive markedly higher salaries, nearly three
times higher than those of their counterparts in central administration. On the other hand, the
highest-paid public sector employees are those that work in public financing institutions,
followed by university functionaries. These data are shown in Table 7.
Table 7 Average Monthly Salary in the Public Sector by Institutional Group (current USD)
Institutional Group
1996
1997
2004
2005
2006
213
212
204
196
191
190
194
203
187
179
184
Central Administration
158
160
154
141
138
133
140
157
145
137
145
Decentralized Administration
547
563
571
620
518
482
523
517
495
433
420
Regional Government
478
491
471
447
381
355
334
265
261
253
245
Municipals Government
286
295
295
309
306
311
303
280
264
257
237
Social Security Institutions
305
309
304
333
316
338
330
328
302
292
309
University
412
411
408
454
477
525
547
524
490
469
453
449
491
441
444
507
495
508
471
401
371
329
General
1998
1999 2000
2001
2002 2003
Central Government
Territorial Government
Social Security and Universities
Public Non Financing Enterprises
Public Enterprises
Public Financing Institutions
Financing Institutions
700 726
768 716 681
714 683 613
580 579
538
Source: UDAPE, Based in National Institute of Statistics data (Three-monthly Labor Survey, Salaries and Public Sector Salary) and Ministry of Labor
(Administrative Register from Private Sector).
On average, the poorest-paid private sector employees are those that work in
restaurants, bars, and cantinas; metal working; lumber exploitation; and the food industry. The
highest-paid private sector workers are those that work in the petroleum industry,
communications, basic services, and financial services. These data are shown in Table 8.
Table 8 Average Salary in the Private Sector by Economic Activity (current USD)
1996
1997
1998
1999
2000
2001
2002
331
332
322
322
304
299
286
282
273
255
Restaurant, Bar and Cantinas
108
106
108
119
115
108
112
93
84
77
90
Metal Products
135
118
130
122
118
116
110
103
104
102
105
Wood Production, Except Furniture
150
167
154
154
138
124
111
101
92
82
79
Textiles, Clothes, Leather Products and Shoes
165
156
148
152
146
145
146
140
144
140
136
Sugar and Sweet Products, Noodles
200
203
187
180
176
161
168
140
153
127
140
Flour and Bakery
195
201
193
182
187
183
171
163
148
152
162
Meat Preservation and Meat Products
193
212
221
214
195
185
174
151
162
161
146
Social Services and Health
193
210
214
204
186
186
176
167
157
157
162
Construction
195
193
204
189
176
166
179
179
192
169
175
Hotels
247
238
227
213
191
189
181
172
164
159
152
Dairy Products
303
252
222
207
196
179
193
156
172
162
156
Movies, Radio, Television and Other Entertainment
262
258
245
242
227
208
189
179
176
143
161
Manufacture of Minerals non Metallic Products
209
224
227
226
226
243
235
182
197
166
172
Education for Adults and Other Education
249
246
254
257
222
190
187
187
179
184
188
Primary, Secondary and Superior Education
238
239
238
246
242
240
230
220
229
221
207
Exploitation of Mines
255
269
269
265
241
242
227
218
228
244
227
Commerce
297
300
285
273
258
263
254
241
228
206
198
Real State Services, Enterprises and Renting
349
352
339
271
264
248
247
232
237
240
210
Paper Products and Editing and Printing Activities
309
318
294
293
289
291
268
254
252
234
215
Substances and Chemical Products
301
317
321
323
275
276
267
267
245
230
223
Various Food Products
346
332
282
282
287
297
289
328
316
315
350
Drinks and Tobacco Products
411
414
388
379
362
312
309
303
336
309
304
GENERAL
9
2003 2004 2005 2006
245
Table 8 Average Salary in the Private Sector by Economic Activity (current USD)
1996
1997
1998
1999
2000
2001
2002
Transport and Storage
454
458
449
431
409
399
376
2003 2004 2005 2006
346
340
323
304
Financial Intermediary
699
695
610
662
624
610
571
599
492
453
426
Production and Distribution of Electricity, Gas and Water
799
791
759
733
683
668
609
605
565
519
518
Communications
726
764
714
687
635
748
661
608
586
559
616
Exploitation of Oil and Natural Gas
838 813 781 784 716 809 769 852 760 448 460
Source: UDAPE, Based in National Institute of Statistics data (Three-monthly Labor Survey, Salaries and Public Sector Salary)
and Ministry of Labor (Administrative Register from Private Sector).
Public spending and health spending. Public spending on health rose between 19952002, with an especially significant change between 1997 and 1999, with the implementation of
the public insurance programs such as the Basic Health Insurance (SBS) package and the
Universal Maternal and Child Insurance (SUMI) package launched in 2003.
Figure 4 Total Health Spending as % GDP (2004)
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
Peru
Ecuador
Venezuela
RB
Chile
Mexico
Bolivia
Brazil
Paraguay
Argentina
0.0%
Colombia
1.0%
Source: World Economics Indicators 2005
Total health sector spending in Bolivia was US$ 323 million in 1995 (4.7% of the
GDP), or $44 per capita. The main financing instrument for national health spending is social
security (35%), followed by household spending (32%), funds from the National General
Treasury (15%), external cooperation (15%), and, finally municipal contributions (3%). Not
counting external cooperation, total health spending was $275 million per year (4% of GDP), or
$37.5 per capita. Public health spending (National General Treasury, municipal contributions,
and companies via social security) was $170 (2.5% of GDP), or $23 per capita. The
composition of social spending for 2004 is shown in Table 9.
Table 9 Composition of Social Spending 2004
Indicator
Value (2004)
Total expenditure on health as percentage of GDP
6.8
General government expenditure on health as percentage of total expenditure on health
60.7
Private expenditure on health as percentage of total expenditure on health
39.3
General government expenditure on health as percentage of total government expenditure
12.8
External resources for health as percentage of total expenditure on health
9.1
Social security expenditure on health as percentage of general government expenditure on
health
65.3
Out-of-pocket expenditure as percentage of private expenditure on health
82.5
Private prepaid plans as percentage of private expenditure on health
10
8.8
Table 9 Composition of Social Spending 2004
Indicator
Value (2004)
Per capita total expenditure on health at average exchange rate (current US$)
Per capita total expenditure on health at international dollar rate
Per capita government expenditure on health at average exchange rate (US$)
Per capita government expenditure on health at international dollar rate
Source: PAHO/WHO
65.8
185.9
40.0
112.9
There has been a relative stability in the financing of the health sector. Increasing
spending substantially would require increasing the capacity for spending, either on the part of
households, companies, or the government, both at a national and a municipal level. Given
current limits, there are major inequities in financing; one concrete example is the social
security system, whose spending comprises 35% of the total, but whose coverage only extends
to 22% of the population. Measures to bridge these gaps could include redistribution of
financing and broadening the coverage of social security.
5.3
Salaries of health workers
Health market. In Bolivia, there are three major segments within the health market:
the public sector, social security, and the private sector (both profit and non-for-profit). The
Bolivian health system is divided into three levels of care. The Ministry of Health and Sport
(MSD) is charged with sectoral regulation, policy development, national norms, and
implementation. The provision of health care services is the administrative responsibility of the
municipal government. The public services provided by MSD covers 43 to 48% of the
population; social security covers 22%; and the private sector covers 10%. It is estimated that
20 to 25% of the population goes without access to health services, due mainly to the fact that
much of the rural population lives very far from any health center, sometimes with major
geographical barriers in the way. There is also an issue of exclusion due to social, economic,
and cultural barriers, such as discrimination, use of a language other than the official language,
or beliefs or adherence to indigenous medicine.
Health workers. According to the Employment Census of 1996, 2.46% of the
Economically Active Population (PEA) belongs to the health sector. This represents 39,957
individuals linked to this sector of the labor market. The Registry of Professionals of the Unit
of Professional Training and Accreditation of the MSD lists 32,684 individuals. Of these,
13,374 are doctors, 5,569 are biochemists or pharmacists, 5,166 are dentists, 4,270 are licensed
nurses and 3,742 are nursing assistants. The public sector is the largest employer with a total of
60.83%. The rest are distributed among social security, non-governmental organization, and the
private sector. There is no information available regarding the percentages employed in these
subsectors.
In the municipalities, of the two poorest quintiles, 63% of personnel are in nursing. This
explains part of their low resolutive capacity. In the richest quintiles there are a greater number
of physicians per capita.
The annual growth rate of human resources between 2001 and 2005 has been 5.2% on
average, and health professionals have had a higher growth rate than other areas. However,
there has also been an increased demand for health services, occasioned by the creation of
SUMI and its broadening in 2005 to provide coverage to women of reproductive age and the
creation of the Health Insurance for the Older Adult program for citizens over 60 years old.
Therefore, the national health system requires more human resources as well as a method to
effectively distribute existing human resources and guarantee adequate implementation of these
initiatives. Similarly, the government’s proposal to implement new public insurance programs
targeted to the population between 5 and 60 years should be taken into account when evaluating
the demand for health personnel.
11
Regional distribution. Sixty-one percent of the human resources of the public
subsector are concentrated in the “backbone,” which includes the departments La Paz,
Cochabamba, and Santa Cruz. These data are shown in Table 10. The departments Beni and
Tarija have the largest number of personnel financed by TGN resources, 95% and 92%,
respectively, while in Cochabamba only 82% of personnel are financed by this source. The
“backbone” possesses 62% of the country’s full-time doctors and 74% of part-time doctors
(nine departments).
Table 10 Permanent Human Resources of the
Health Public Sector 2006
Number of personnel
financed by TGN
(average/month)
Department
Beni
Chuquisaca
1,158
1,540
Cochabamba
2,351
Oruro
849
Pando
339
La Paz
Potosí
3,701
1,399
Santa Cruz
Tarija
3,878
1,314
Total
16,530
Source: Treasury, Ministry of Economics.
The distribution of human resources in health by department is unequal. In analyzing
the distribution by inhabitant, the departments with fewest doctors per capita are La Paz,
Cochabamba, and Santa Cruz. According to the charges registered on the salary scale for 2005,
the department Pando had the highest number of personnel for every 10,000 inhabitants;
however, the budget assigned to human resources is the lowest of the nine regions (1.5 million
dollars). On the other hand, the departments La Paz and Santa Cruz have the lowest number of
human resources per 10,000 inhabitants, but theses departments spend a greater percentage of
their budget on health workers’ salaries. This difference is explained by the large numbers of
technical personnel (54%) in Pando and the greater numbers of professionals in La Paz and
Santa Cruz (39% and 36%, respectively). These data are shown in Table 11.
Table 11 Distribution of Human Resources in Health by
Department, 2005
Department
Chuquisaca
Health
Professional
34%
Technical
Personnel
41%
Administrative
Total
Staff
25% 100%
La Paz
39%
37%
24%
100%
Cochabamba
37%
42%
21%
100%
Oruro
34%
44%
21%
100%
Potosí
32%
49%
19%
100%
Tarija
33%
40%
27%
100%
Santa Cruz
36%
44%
21%
100%
Beni
28%
51%
21%
100%
Pando
29%
54%
16%
100%
Source: Ministry of Health and Sport.
In the opinion of the experts interviewed, it is important to study the current distribution
of human resources in terms of cost, facility, and place of work, in order to quantify the
country’s needs and efficiently distribute human resources within the public health subsector.
The national human resources in health policy should include a method for assigning personnel
12
at both a departmental and municipal level, taking into account the types of health facilities in
each area.
Categories of health workers and salary differentials. The salary scale for MSD for
2005 included 43 salary levels, distributed among three areas: i) health professionals; ii) health
technicians; and iii) administrative support. According to UDAPE, the gap between the
maximum and minimum salary is $US 950. The gap is smaller within the areas of health
professionals and health technicians, reaching US$ 150 and US$ 100, respectively.5 The
excessive quantity of salary levels negatively affects the management ability of MSD.
Composition of health salaries. In 2001, 70% of the total cost of human resources
corresponded to basic salaries, 30% to long and short term social security contributions, housing
subsidies, family allowances, “vaccination” (worker’s union) bonuses, border bonuses,
professional specialization bonuses, and escalafon (professional ranking) bonuses. This
composition has not changed significantly to date.
Table 12 Composition of health salaries, 2001
Thousand USD (000)
Percentage
Basic Salaries
Description
42,501
70%
Health Insurance
4,844
8%
Social Security Contributions
947
2%
Housing Subsidies
969
2%
Family Allowances
541
1%
Seniority Premium
2,629
4%
Vaccination (worker’s union) Bonuses
1,100
2%
Border Bonuses
1,313
2%
Professional Specialization Bonuses
5,498
9%
550
1%
escalafon (professional ranking) Bonuses
Total
60,892
100%
Source: Health sector reform in Bolivia: Analysis on decentralization context, World Bank 2004
The evolution of health workers’ salaries, reflected by the percentage increase in
resources devoted to total payroll payments, compared to the growth of the number of these
workers, represented by the number of items, shows that there is no correlation between these
two variables, as shown in Figure 5. In the opinion of those interviewed, the salary increases of
the health workers is linked to economic cycles and policy negotiations between the sector and
the government in office. According to these experts, increases in salary are not linked to real
growth of the salaries in response to increased productivity.
5
UDAPE (2006).
13
Figure 5 Evolution of Public Health Workers’ Salaries and Items
8.0%
25,000
7.0%
20,000
6.0%
5.0%
15,000
4.0%
10,000
3.0%
2.0%
5,000
1.0%
0.0%
1998 1999 2000 2001 2002 2003 2004 2005 2006
Number of items
%Salary increase
Source: MSD
Evolution of health salaries and comparisons with other sectors. Table 13 and
Table 14 show the evolution of spending and the salary schedule of the different sectors of the
Bolivian economy, in nominal and percentage terms, respectively.
Table 13 Evolution of Spending and the Public Sector Salary Schedule of
the Different Sectors 2000–2005 (current millions Bs.)
Sector
Education
2000
2001
2002
2003
2004
2005
1,919.3
2,090.6
2,483.8
2,764.5
2,965.7
3,085.3
Health
362.2
406.8
504.1
554.1
596.2
626.9
Police
392.3
421.3
449.1
485.1
515.1
533.2
Defense
700.8
762.3
799.4
840.6
869.8
888.1
Others
610.5
706.6
637.7
811.2
961.7
1,082.1
Total
3,985.1
4,387.6
4,874.1
Source: Ministry of Economics and Budget Vice Ministry
5,455.5
5,908.5
6,215.6
Table 14 Evolution of Spending and the Public Sector Salary Schedule of the
Different Sectors 2000–2005 (as percentage total salary schedule)
Sector
Education
Health
Police
2000
2001
2002
2003
2004
2005
48.2
47.6
51.0
50.7
50.2
49.6
9.1
9.3
10.3
10.2
10.1
10.1
9.8
9.6
9.2
8.9
8.7
8.6
Defense
17.6
17.4
16.4
15.4
14.7
14.3
Others
15.3
16.1
13.1
14.9
16.3
17.4
100
100
100
100
Total
100
100
Source: Ministry of Economics and Budget Vice Ministry.
The percentage of spending on payroll is particularly high in the education sector,
where it represents 50.2% of total public spending on salaries. Health sector spending on
payroll represents 10.1 per cent of total public spending on salaries.
Table 12 presents the evolution of base salaries for 5 categories of health workers:
•
Doctors (1) refers to general practitioners
14
•
•
•
•
Nurses refers to licensed nurses
Doctors (2) are general practitioners within the escalafon, that is, those with
seniority or merit awards
Doctors (3) refers to specialists within the escalafon
The category “nursing assistants” has no special specifications
There are four noteworthy findings in the table below. First, the salary differential
among doctors can be over 100%, and the differential between a doctor and a nursing aide can
be nearly 1000%, that is, 10 times higher. Second, for a number of years in a row, the base
salary remained the same, although in other sections we saw that income varied from year to
year. This indicates that adjustments in income were due to bonuses and other allocations rather
than to raises in base salary. This is likely because adjustments in the base salary entail labor
costs, whereas adjustments to other components of income do not. For example, an institution
would pay increased social security taxes if it raised a worker’s salary, but not if it gave out a
bonus. Third, salaries are not always adjusted at the same time in all the categories. Sometimes
one category receives a raise while the others do not. Fourth, adjustments are not always
proportionally equivalent across categories.
Table 15 Evolution of monthly base salaries for certain categories
of workers in the public health sector (in current USD.)
Year
Doctors (1)
Nurses
Doctors (2)
Doctors (3)
Nursing Aides
1990
220
110
280
560
60
1991
220
110
280
560
60
1992
260
110
280
560
60
1993
260
110
280
560
60
1994
260
110
280
560
60
1995
260
110
280
560
60
1996
260
110
280
560
60
1997
280
140
370
740
80
1998
280
140
370
740
80
1999
280
140
370
740
80
2000
280
140
370
740
80
2001
350
180
460
920
110
2002
350
180
460
920
110
2003
350
180
460
920
110
2004
350
180
460
920
110
2005
350
180
460
920
110
2006
Source: MSD
350
180
460
920
110
National survey analysis. Although several household survey databases were made
available by Bolivia’s National Statistical Institute, we could not use them properly because of
lack of documentation. Neither the questionnaire nor variable dictionaries were available for the
Encuesta Nacional de Empleo (National Labor Survey), the Encuesta Integrada de Hogares
(Integrated Household Survey) or the Encuesta Continua De Hogares 2003-2004 (Continuous
Household Survey). However, we were able to use the National Statistical Institute web site’s
statistical generation facility, which allowed us to generate income data down to the
social/health sector level, and income variation data down to the type of worker level.
Unfortunately, the statistical generation facility only provided health worker data in the private
sector. Public sector health worker salary information was not available.
Figure 6 shows the historic trends in monthly income of private social sector and health
workers, compared to private education workers and the average Bolivian private and public
worker (inclusive of social sector/health and education workers). Here, monthly income refers
15
to the gross cash income received by workers, before any deductions by the employer. It
includes the base salary, bonuses, commissions, etc. During the 1997-2005 period, health
workers’ income has stayed lower than education workers’ and the average Bolivian worker.
The fact that the average Bolivian worker’s income is 60-70 percent higher than health workers
is explained in great part by the high salaries of workers in the energy production sectors. This
gap has widened with time.
Monthly worker income (International
dollars 2000)
Figure 6 Real monthly income of social sector: health, education workers and all workers, 1997-2005
(International dollars 2000)
1200
1000
800
600
400
200
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
Year
Private sector social services and health workers
Private sector education workers
All workers
Source: Instituto Nacional de Estadística, Bolivia, 2008
Although smaller, the gap between education and social sector/health workers has also
increased, reaching a maximum of $274 international dollars in 2004. The difference in income
variation between health and education workers is better seen in Figure 7, which shows monthly
income expressed as an index number instead of international dollars. The index’s base is 100 in
1995 for both types of workers. Interestingly, social sector/health worker income increased
faster than education worker income in the period 1996-1999. However, this tendency reverted
in the fourth trimester of 1999. Social sector/health worker income decreased abruptly, while
education worker income continued to increase steadily. Although social sector/health worker
started increasing again in 2000, it did not reach the 1999 levels until 2002 (and this, only in
nominal terms). Also, the growth rate of these workers’ income has slowed down, widening the
gap with education workers. Possible causes for the 1999 inflection are: the Asian crisis, which
affected Bolivia’s main commercial partners, Brazil and Argentina; cocaine production
eradication policies; and fiscal deficit caused by pension system reforms. These economic crises
might have reduced demand for health services, directly affecting salaries in this sector.
Demand for education, in contrast, is less prone to an economic crisis.
These economic crises may reduce income of both private health and education
workers, but the income of private education workers is more stable than the income of private
health workers. This happens because the income of private health workers is often determined
on a fee-for-service basis. This means that reduced demand for health services -as a
consequence of the economic crisis- will instantly reduce these health workers’ income. On the
other hand, the income of private education workers is normally determined by long-term
contracts, and is thus not immediately affected by reduced demand for education services as a
consequence of the economic crisis. The graph shows a pattern consistent with this hypothesis.
16
In 1999, the income of private health workers dropped suddenly, while the income of private
education workers remained practically unchanged.
Monthly worker income (Base Index
1995 = 100)
Figure 7 Nominal monthly income of private social sector/health and private education workers, 1995-2005
(Base index 1995 = 100)
250
200
150
100
50
0
4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 3 4 1 2
1995 1996
1997
1998
1999
2000
2001
2002
2003
2004 2005
Year / Trimester
Private sector social services and health workers
Private sector education workers
Source: Instituto Nacional de Estadística, Bolivia, 2008
The analysis of income variations by type of health worker shows differences in the
way that clinical professionals (doctors and nurses) and other health workers saw changes in
their income. During 1998-1999, all health workers’ salaries, except doctors’ and nurses’,
increased slowly and then decreased slowly. In contrast, doctors’ and nurses’ salaries increased
abruptly at the beginning of 1998, and fell in the same way at the end 1999. This could be
explained by the fact that doctors’ income tends to be more variable than other health workers’
income. In fact, doctors’ income is likely to be more prone to health service demand shocks,
because many doctors charge fees for services. Other health workers, on the contrary, tend to
get paid fixed salaries, which respond more gradually to health service demand variations. If
health service demand decreased during this period as a consequence of the economic crises,
gradualism and shock differences between types of health worker could be explaining the
observed trends. Another result is that administrative manager income has seen slow increase in
the 1996-2005 period when compared to other health workers.
17
Figure 8 Nominal monthly income of different health workers, 1995-2005 (Base index 1995 = 100)
Monthly worker income (Base Index
1995 = 100)
250
200
150
100
50
0
4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 3 4 1 2
1995 1996
1997
1998
1999
2000
2001
2002
2003
2004 2005
Year.Trimester
Administrative managers
Clinical professionals
Clinical non professionals
Other non professionals
Other professionals
Source: Instituto Nacional de Estadística, Bolivia, 2008
Governance of salary policies. In Bolivia, the crisis in the 1980s led to a decreased
flow of state funds to the health sector, to nearly half of what it had been in the previous decade.
This meant a significant decrease in per capita spending, from about US$ 16 in 1980 to about
US$ 4 by the end of the decade. At the beginning of the decade, most health spending was
supported by state resources from within the country, but by the end of the decade, half of total
health spending depended on funds from international cooperation.
The crisis had an effect on both physical and human terms: by the end of the 1980s, the
number of physicians per 10,000 inhabitants was under 5, one of the lowest rates in Latin
America. Furthermore, the rate failed to increase during the decade, in contrast to most
countries, who saw an increase in doctors per capita in spite of the crisis. There was also a
shortage of other health professionals.
The salaries of health personnel in the public sector remained at the same levels as in
the 1980s until 1996. The government tied salary increases to inflation and the US dollar,
resulting in nominal annual increases of 5 to 10% but no real increases in US dollars. In 1996,
salaries were raised about 20% in the sector, which did result in an increase in real salary.
The second major change occurred in 2000, when the public subsector leveled the
salaries of its workers with those in the social security subsector, who had been earning higher
salaries.6 This matching of salaries continues to date. In the same year, the workday was
changed to 6 hours, also to match the social security subsector.
The health reform to date has failed to create meaningful incentives for productivity.
Even when new financial resources become available for the health sector, as in 2001 with the
funds from the debt-relief program, or in 2006, with the resources from the Direct
6
Social Security workers are public employees and represent a subset of public health workers.
The salaries of social security workers are greater than those of other public workers. This decision was
aimed at bring the salaries of other public health employees to the levels of the public social security
workers.
18
Hydrocarbons Tax (IDH), the funds are used to create new items (job positions) to cover the
deficit of health workers, a product of the 1980s crisis, rather than to increase salaries.
5.4
Incentives and policies to recruit, retain, and train health workers
Incentives. The composition of health workers’ salaries in Bolivia includes other
components apart from the basic salary. The escalafon or professional ranking system provides
rewards for scientific activity and years of service in the sector. There is also a bonus for
working near the border, a “vaccination” bonus for all personnel affiliated with the workers’
union, and a seniority bonus paid according to number of years working within the system.
Finally, the sector pays for health insurance, pensions, and housing subsidies according to the
corresponding legal dispositions. This remuneration system fails to take into account the
performance (output or productivity) of the human resources.7 Table 16 summarizes the
incentives provided to Bolivian public health sector workers.
Table 16 Summary of Incentives (in 2001 USD)
Benefits
Professional
Nurses.
Doctors
Basic Monthly Salary
$440
$292
Seniority Premium
Vaccination (worker’s
union) Bonuses
$6-$65
$6-$65
N.A.
N.A.
$88
$58
$264-$440
$175-$292
$101
$67
$1.134
-258%
$775
-265%
Border Bonuses
Professional Specialization
Bonuses
escalafon (professional
ranking) Bonuses
Maximum Salary
(% of Basic Salary)
Nurses
Assistants
Incentives Description
$188
Bs. 43 to 430 depending on the years worked in the
$6-$65 health system
Bs. 1.150 (USD 160) (once a year), conditioned to
$14 the worker’s union affiliation (CSTSB)
20% of the basic salary for working in the border
$38 area or in Beni/Pando
60%, 80% to 100% of the basic salary for 1, 2 or 3
years of additional education (Professional
N.A. Specialization or magister degree)
23% of the basic salary against 51 gained points
through academic and scientific work, positions with
higher responsibility, union activities and/or work in
N.A. rural areas (4 years).
$305
-162%
Source: Based in information from MSD; basic salaries and exchange rate year 2001.
N.A. Not Available
The available incentives do not necessarily succeed in improving professional
performance, either in terms of productivity or quality of services provided. One clear example
of this is the workers’ union bonus. For the seniority and specialization bonuses, one could
suppose that more years of experience and a higher level of formal education would improve the
functionary’s performance, and therefore improve quality of care; however, a worker can
perform poorly and still continue to accumulate academic degrees and/or seniority and receive
the bonus.
Productivity. The key players interviewed by the authors in Bolivia have identified the
following factors that negatively affect the productivity of health personnel:
•
Absences from work on the part of functionaries, due to the lack of adequate
measures to monitor the attendance of personnel.8
7
Starting in the year 2000, MSD’s Extension of Coverage to Rural Areas program was
developed to create an economic incentive for workers; however, this was not adopted systematically by
the municipalities involved. Therefore the only incentive to broaden coverage in underserved areas is the
border bonus, granted to personnel who work within 50 Km of any border.
8
There are no official data, but some specialists estimate that due to the lack of control
mechanisms, up to 50% of public health functionaries fail to complete their entire assigned workday.
19
•
•
•
•
Frequent strikes, both within the sector and in other areas that affect the
sector, such as the regional work stoppages
Frequent training courses for personnel that occasion absences from work and
whose content is not necessarily applicable to the worker’s area
High turnover rates, causing shortages of specific skills among personnel
Concentration of personnel in morning shifts in health facilities, leaving gaps
in afternoon coverage
Policies. The policies applied in Bolivia to recruit human resources for the public
sector basically consists of increasing the budget for the sector, by increasing the percentage of
the total budget allocated for health. The availability of resources generated by the HIPC II
program encouraged this approach. When the Bolivian public health sector contracts health
workers, it normally does not subject them to merit-based competition.
The policy applied by the public health sector in Bolivia to retain human resources
basically consists of immobility of functionaries. This approach has been followed since the
1980s. Basically, when a health functionary enters the system as an item, he or she cannot be
removed from his or her post, only transferred, except in cases of proven negligence or other
severe faults. This disposition is heavily controlled by the respective professional colleges. The
other policy of retention is an incentive structure that rewards seniority, professional
specialization, the escalafon, and even belonging to a union.
The policy applied in Bolivia to train human resources for the public sector basically
consists of a point system, based on the academic hours put in by a functionary; cumulatively
these allow the worker to climb the professional ladder or escalafon. The more academic hours
in health courses a functionary takes, the higher he or she climbs on the ladder and the larger his
or her bonus. However, the country has not developed a structured training policy on a national
level for these professionals. The courses or seminars must follow the initiatives of the various
MSD units, to prepare workers to implement new policies or provide updates on special topics.
Other continuing education institutions are the scientific medical societies, which also offer
these training courses and have the same point values for the escalafon.
5.5
Conclusions and recommendations
a) Number of health workers
There are insufficient numbers of health workers; however, the greater problem is the
inequity of their distribution. There are many qualified personnel in urban areas and very few in
the rural areas.
b) Salary composition
Salaries are not based on a policy that provides productivity incentives but rather
rewards seniority and professional merits. This situation is difficult to change due to the
existence of powerful unions that defend this system of pay and oppose performance
evaluations.
c) Evolution of salaries
The most significant change during the period analyzed was that the salaries of the rest
of the public health sector were brought to the levels of those of social security employees.
However, while the nominal salaries of these health workers increased 10 to 15% annually, on
average, in real terms salaries have remained very low.
d) Incentives to recruit, train, and retain health workers
There are no incentives to recruit or train health workers. Retention of workers is
carried out via the escalafon and seniority benefits. Hiring in the public sector is often not
merit-based.
20
6. Peru
In the past decade, under the third generation of health reforms in Peru, health actions
have focused on economic efficiency and have put issues of public health and human resources
for health on the back burner. The situation is complex; two decades of economical and sectoral
reform have limited spending, frozen salaries, pushed workers into precarious jobs, restricted
budgets in the public sector, and allowed a series of productive achievements without human
development.
The larger cycle of human resources is characterized by regularities that feed back into
the cycle. A means of regulation and self-regulation is needed to maintain the cycle, including
not only juridical but also political, social, and cultural means. All studies of human resources
in Peru in recent years have shown that aspects of this regulation – or de-regulation, we should
say – has modified the status of health professionals and health education.
6.1
Health System
The Peruvian health services system is segmented and fragmented. The system is made
up of two subsectors: public and private. The former consists of the Ministry of Health
(MINSA), the Health Social Security System (ESSALUD), and the health services of the Armed
Forces and the National Police. The latter consists of the private companies, non-for-profits,
private practice physicians and paramedics, as well as providers of traditional or folk medicine.
Public subsector. The public subsector has three levels: central, regional, and local.
MINSA functions as the head of the central level of organization, issuing policies, norms, and
technical procedures to regulate activity within the sector. It is also the largest health services
provider. The sector’s institutions are organized by level of care (specialized facilities, national
hospitals, auxiliary hospitals, health centers, and health posts). However, the reference and
cross-reference mechanisms remain deficient.
MINSA’s Decentralized Public Organisms – OPD – have administrative and budgetary
autonomy.9 They are responsible for administering the financing of the variable costs of basic
care for women, children, students, and adults in a social emergency situation (Integrated Health
Insurance); scientific and applied health research on topics including traditional medicine and
nutrition and the education of biologists (National Institute of Health); and the regulation of the
health providers market (Superintendence of Health Providers – SEPS).10
The Regional Health Offices – DIRESA – are the health sector organisms in the
regional governments. They also have administrative and budgetary autonomy and provide
health services at regional hospitals, auxiliary hospitals, rural hospitals, local hospitals, health
centers, and health posts. On a local level, the municipalities and welfare societies are
responsible for the administration of and budgeting for certain health facilities.
The health services of the Armed Forces and the National Police provide health services
to its members, immediate family, and employees at its own health facilities. They are financed
mainly by funds from the public treasury, and less significantly, by copayments from family
members of policyholders.
9
The salaries of OPD functionaries are not fixed by the institution itself but rather by the
disposition of Legislative Decree No. 728, which will be explained in greater detail below. The economic
incentives for workers within this regimen are greater than those for MINSA functionaries.
10
One OPD is SEPS, the entity responsible for regulating the Health Service Providers (EPS),
the private entities authorized by SEPS to provide ambulatory low-complexity services to ESSALUD
beneficiaries who opt for the “simple coverage” modality. The EPS receive an ESSALUD transfer for at
least 30% of the insured worker’s contributions.
21
Health Social Security System. ESSALUD is the main entity in this system. (Until
1996 it was called the Peruvian Social Security Institutes – IPSS). By law, this institution
provides health, economic, and social services to complement its role as an insurer. ESSALUD
beneficiaries are primarily workers within the formal sector of the economy and their immediate
families, and the system is financed with contributions in the form of payroll deductions. The
system provides health services at specialized institutes, national hospitals and hospital
networks, polyclinics, medical centers, and health posts. Social security is complemented by
EPS that are accredited by SEPS, who provide lower-complexity interventions at private
facilities.
Private subsector. The formal private providers are the private specialized and general
practice clinics, medical centers and polyclinics, doctors and dentists offices, laboratories,
diagnostic imaging service providers, and health facilities for certain mining, petroleum, and
sugar companies (called autoproductoras). Both for-profit and non-for-profit (classically
represented by NGOs) organizations provide some primary care services. Informal providers
include practitioners of traditional medicine, healers, bonesetters, and midwives.
These private providers are funded in three ways: 1) direct out-of-pocket payments for
each service provided; 2) sale of services to private insurers; and 3) sale of services through
prepaid programs, not including private insurers. In this context, ESSALUD has begun to
purchase certain services (for example magnetic resonance imaging studies) from some private
providers.
Health financing. The largest portion of health spending in Peru comes from direct outof-pocket payments from households (37.3%), followed by contributions from employers
(35.0%), and finally the government (24.0%), according to data from 2000. As far as where
these resources end up, families use 55% of their out-of-pocket payments on medications, while
only 7% of the government’s funds are used for this purpose.
Health spending. In terms of health spending according to service provider, the
majority of funds are utilized in MINSA (26%) facilities, Social Security (ESSALUD) (25%),
private organizations (23%) and pharmacies (18%). The government spends their resources on
operation services (60%), administration and regulation (23%), investments (10%) and
medications (7%). Households spends their resources on medications (45%), private care (38%)
MINSA facilities (12%) and insurances (5%).
6.2
Economic context
Economic growth. Currently, the Peruvian economy is enjoying the longest expansive
phase in its history, characterized by a favorable external context and the implementation of
monetary and fiscal policies that guarantee the sustainability of current growth. Two
fundamental characteristics define this episode. First, growth is impelled by private internal
demand; in particular, there is a significant increase in private consumption and investment.
Second, productivity has experienced a sustained growth, increasing by about 20% from 20012006.
These characteristics have permitted an increased growth rate for productivity,
reflecting improved structural conditions underlying the productive capacity of the Peruvian
economy. The Ministry of the Interior considers a baseline scenario to be one in which external
and internal conditions remain slightly favorable over the next years, allowing the economy to
grow at a rate faster than the current rate. In particular, they do not expect a drastic deceleration
of the global economy, but rather a “soft landing” in which the main destabilizers of the
industrial economies will gradually correct themselves. According to this hypothesis, the
Peruvian economy is on a path to consolidate a process of expansion and sustained growth the
likes of which are rarely seen in Latin America, estimating an average growth rate of at least 7%
over the next years (see Figure 9).
22
Figure 9 Evolution of the Gross Internal Product (GDP) 1990-2007 (change in
annual percentage)
14,0
12,8
12,0
10,0
8,6
8,0
7,6
6,9
6,0
8,3
6,4
5,2
4,8
5,2
3,9
4,0
3,0
2,5
2,1
2,0
0,9
0,2
0,0
-0,4
-0,7
-2,0
-4,0
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
-5,1
1990
-6,0
Source: INEI. Projections of the Ministry of Economy and Finance (MEF)
Table 17 illustrates that the behavior of the most important component of the growth of
GDP is internal private demand. The growth in this area has been impelled by investment and
private consumption (internal private demand expanded by 9.1% since 2005). The consumption
capacity of the population has increased by 5.6% (annual average) in the last five years,
contributing to an average annual growth of 4.8% in economic activity over the same period.
On the other hand, exports only increased by 0.3% in real terms in 2006. Taken
together with the real increase in commercial imports, the preceding figure means a negative
contribution to the increase in economic activity.
Table 17 Decomposition of the growth by demand sector 1997-2006 (GDP points)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
PIB
6.9
-0.7
0.9
3.0
0.2
5.2
3.9
5.2
6.4
8.0
Private internal demand
6.2
-1.3
-3.9
2.8
0.4
4.5
2.9
3.8
4.1
9.1
Public internal demand
1.2
0.4
0.6
-0.5
-1.0
-0.1
0.4
0.5
1.2
1.2
Foreign trade
-0.5
0.3
4.2
0.6
0.8
0.7
0.5
0.9
1.1
-2.2
Source: MEF
On the supply side, non-primary sectors represented over 70% of the economic activity,
which is to be expected given that the main stimulus to growth of GDP is due to the
performance of these sectors. The utilization rate for installed non-primary manufacturing
capacity has registered sustained growth since 1999, reaching levels of 80% by then end of
2006. Furthermore, the sustained growth of construction activity during the last five years,
especially in 2006, has been one of the driving forces behind the economic growth, which is
consistent with the significant increase in private investment in the past year (20.2%). On the
other hand, as shown in Table 18, primary sectors had an insignificant increase in 2006, as a
consequence of reduced productivity in the mining sector growth.
Table 18. Decomposition of by supply sector 1997-2006(GDP points)
GDP
Primary sectors
Non-primary sectors
1997
6.9
0.9
5.1
1998
-0.7
-0.2
-0.5
1999
0.9
2
-0.6
2000
3.0
1
1.6
23
2001
0.2
0.5
-0.2
2002
5.2
1.4
3.3
2003
3.9
0.6
2.9
2004
5.2
0.9
3.7
2005
6.4
1
4.6
2006
8.0
0.7
6.7
Table 18. Decomposition of by supply sector 1997-2006(GDP points)
Taxes on products
Source: Ministry of Economy and Finance
1997
0.8
1998
1999
-0.5
0
2000
0.3
2001
-0.1
2002
0.4
2003
0.5
2004
0.6
2005
0.8
2006
0.6
In summary, the current economic expansion is sustained by non-primary sectors, which
works in the country’s favor as it involves value-adding activities. Furthermore, the growth is
impelled by private consumption and investment, that is, by greater dynamism of internal
demand.
Employment. After 2002, employment has recuperated, registering 47 months of
continuous growth (its average annual growth over the past 19 months has been 4.9%), due to
the favorable recent economic environment. Urban employment levels in large companies
increased significantly on a national level, as shown in Figure 10.
Figure 10 Growth of GDP and urban employment in companies with 10 or more
workers (annual change in percentage)
15,0
10,0
5,0
0,0
-5,0
Empleo Nacional Urbano
PBI
Jul-06
Oct-06
Abr-06
Ene-06
Jul-05
Oct-05
Abr-05
Ene-05
Jul-04
Oct-04
Abr-04
Ene-04
Jul-03
Oct-03
Abr-03
Ene-03
Jul-02
Oct-02
Abr-02
Ene-02
Jul-01
Oct-01
Abr-01
Ene-01
-10,0
Empleo Lima Metropolitana
Source: INEI and Ministry of Labor and Promotion of Employment
This increase in employment has been heterogeneous, in terms of economic sectors and
geographic regions. The increase has been greater in the provinces than in Metropolitan Lima
and has been concentrated in manual labor sectors.
On a regional urban level, employment has grown in a decentralized manner. The zones
linked to export activities have had a significant growth (Trujillo, Talara, Sullana, and Ica),
while the city with the sharpest dip in employment has been Chimbote. These data are shown in
Figure 11.
24
Figure 11 Employment in companies with 10 or more
workers in major cities (annual change in percentage,
2006/2005)
Trujillo
27,9
19,0
Talara
Sullana
14,1
Ica
12,1
Tarapoto
11,7
Huancayo
11,1
11,0
Tacna
Piura
10,1
Arequipa
9,8
Chiclayo
9,8
Cajamarca
9,5
9,3
Huaraz
Chincha
8,1
Cuzco
7,3
Puno
4,7
Pucallpa
4,0
2,5
Pisco
Paita
1,7
Iquitos
Chimbote
-0,9
-6,9
-10,0
-5,0
0,0
5,0
10,0
15,0
20,0
25,0
30,0
Source: Ministry of Labor and Promotion of Employment
The growth of urban employment has accelerated in the past year, in comparison with
the previous five year period, and at a faster rate than the baseline for cities on the interior of the
country, as shown in Figure 12
25
Figure 12 Annual Evolution of Urban Work 2000-2006 and 2006-2007, in Lima and Regions
2001-2006*
2007 **
Perú
ú Urbano
14,8
8,2
Lima Metrop.
21,6
8,5
* Crecimiento promedio anual.
**Acumulado Enero-agosto 2007 /
Enero-agosto 2006
TUMBES
PIURA
Talara: 14,8%
Sullana: 13,9%
Piura: 11,1%
TUMBES
Paita: 2,1%
LORETO
AMAZONAS
PIURA
Chiclayo: 4,8%
LORETO
Tarapoto: 6,2%
AMAZONAS
Trujillo: 7,0%
LAMBAYEQUE
LAMBAYEQUE
SAN MARTIN
CAJAMARCA
SAN MARTIN
CAJAMARCA
LA LIBERTAD
LA LIBERTAD
Huancayo: 7,4%
ANCASH
ANCASH
HUANUCO
HUANUCO
Trujillo: 17,4%
UCAYALI
UCAYALI
PASCO
JUNIN
JUNIN
CALLAO LIMA
CALLAO LIMA
MADRE DE DIOS
HUANCAVELICA
MADRE DE DIOS
Lima: 8,4%
Puno: 6,3%
HUANCAVELICA
CUSCO
APURIMAC
ICA
OCEANO
PACÍFICO
Cusco: 10,1%
PASCO
CUSCO
APURIMAC
PUNO
AYACUCHO
OCEANO
PACÍFICO
AREQUIPA
ICA
PUNO
AYACUCHO
AREQUIPA
Ica: 6,3%
Ica: 8,4%
Pisco: 6,7%
MOQUEGUA
Arequipa: 11,8%
TACNA
TACNA
Variación porcentual del empleo:
ciudades de mayor crecimiento (2000-2006)
* Crecimiento promedio anual 2001
MOQUEGUA
Variación porcentual del empleo:
ciudades de mayor crecimiento (2006-2007)
-2006
** Crecimiento acumulado Enero-agosto 2007/Enero-agosto 2006.
-
26
Furthermore, this context has favored companies with 100 or more workers, impacting
smaller companies on a more minor scale (see Table 19). Policies that encourage the growth of
small companies should be considered, as these situations account for more than 50% of the
employed population (although these jobs are often low quality and are usually informal, that is,
without benefits or contracts).
Table 19 Metropolitan Lima: Distribution of Employed EAP by market structure ,
2001-2005 (percentages)
Market Structure
2001
I. Public sector
2002
2003
2004
2005
9.6
9.0
7.8
7.8
7.6
II. Private sector 1/
45.3
44.7
48.2
47.1
51.9
Micro-companies
22.4
18.6
20.0
20.0
21.4
Small companies
9.2
12.9
12.8
13.4
13.4
13.7
32.7
13.2
34.7
15.4
33.9
13.7
34.8
17.1
31.8
Medium and large companies
III. Independent
Professional, technical, and similar
Non-professional / non-technical
3.9
3.2
3.5
2.8
3.1
28.8
31.5
30.4
32
28.7
IV. Unpaid labor for family
5.3
5
3.8
4.6
3.9
V. All others 2/
7.1
6.5
6.3
5.8
4.9
Total
100.0
100.0
100.0
100.0
100.0
Employed EAP
3, 411,790 3,334,304 3,361,308 3,366,936 3,400,312
1) Includes employers. Micro-companies have 2-9 workers, small companies 10-49, and medium and large 50
or more.
2) Includes household workers, interns, and others
Source: Ministry of Labor and Promotion of Employment
Productivity. The growth in employment has been accompanies by increased
productivity, as shown in Figure 13. In fact, Peru has shown one of the greatest increases in
productivity in Latin America.
Figure 13 Labor productivity in Latin America (percent change)
Var. %
4,0
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
-0,5
3,6
2,0
1,8
1,4
1,0
0,6
0,9
0,4
0,3
-0,1
Perú
Colombia
Chile
1990-1999
Brasil
México
2000-2005
Source: Groningen Growth and Development Centre and The Conference Board (Total Economy Database)
However, the prevalence of precarious employment persists in various economic
sectors. Although unemployment is low, currently invisible under-employment is around 30%
of the EAP.11 This means that although more jobs are becoming available, one shouldn’t lose
sight of the issue of the quality of those jobs. It is important to note that only one in five
11
Invisible under-employment refers to the percentage of Peruvians who work full-time (35
hours per week) but receive salaries below the minimum living wage.
27
salaried workers in the private sector has access to benefits such as disability insurance, a
pension, merit bonuses, and others mandated by current legislation.
Salaries. The minimum wage in 2007 was S/. 550 (US$ 183). The following table
shows the evolution of the minimum living wage, inflation, and the exchange rate with the
American dollar.
Table 20 Evolution 1990-2006 of minimum living
wage, inflation, and exchange rate
Year
Minimum living
wage (monthly
current S/.)
Inflation
Exchange rate
(current S/. by 1 USD)
1990
25
7481.7
0.21
1991
38
409.5
0.77
1992
72
73.5
1.25
1993
72
48.6
1.98
1994
132
23.7
2.19
1995
132
11.1
2.25
1996
132
11.5
2.45
1997
300
8.5
2.66
1998
345
7.3
2.92
1999
345
3.5
3.38
2000
410
3.8
3.48
2001
410
2
3.50
2002
410
0.2
3.51
2003
410
2.3
3.47
2004
460
3.66
3.41
2005
460
1.62
3.29
2006
500
2
3.27
Source: Developed using data from the INEI and the Central
Reserve Bank
In general, salaries in the private sector are greater than those in the public sector. In
both sectors, salaries have increased by more than 15% in recent years. Furthermore, the gap
between the sectors has decreased slightly. The average private sector salary in 2000 was US$
700, compared with US$ 243 in the public sector. In 2006, the average private sector salary
was almost US$ 800, compared with US$ 300 in the public sector (see Figure 14).
Figure 14 Average public and private sector income from 2000-2007 (in USD)
900
800
700
600
500
400
300
200
100
En
e00
Ju
l-0
En 0
e01
Ju
l-0
En 1
e02
Ju
l-0
En 2
e03
Ju
l-0
3
En
e04
Ju
l-0
4
En
e05
Ju
l-0
En 5
e06
Ju
l-0
En 6
e07
Ju
l-0
7
0
Gobierno General
Privado urbano
Source: Developed using data from the Ministry of Labor and Promotion of Employment
28
According to economic activity, the sector with the lowest income was agriculture,
followed by transport, communication, and commerce. On the other extreme is the mining
sector, which brought double the average of the other sectors, sustained by the strong increase in
exports and the high prices of minerals in recent years (see Table 21). On average, during the
period from 2000 to 2006, income has increased by about 10%.
Table 21 Average monthly income by economic activity (in thousands of
current S/.)
Economic activity
2000 2001 2003 2004 2005 2006
Average of all activities
2.43
2.42
2.59
2.64
2.59
2.61
Agriculture
2.06
2.30
2.17
2.47
2.56
2.83
Mining
5.24
5.70
5.07
5.12
4.79
5.10
Manufacturing
3.02
2.96
3.13
3.33
3.10
3.06
Electricity, gas, and water
2.81
2.84
3.03
3.18
3.27
3.29
Construction
2.87
2.71
2.32
2.31
2.36
2.47
Commerce
2.69
2.71
2.44
2.67
2.61
2.63
Finances / insurances
3.47
3.66
3.36
3.42
3.20
3.14
Transport, storage, communication
2.64 2.65 2.86 2.89
Source: developed based on data from the Ministry of Labor and Promotion of Employment
2.72
2.69
Public and social spending. Basic social spending refers to the direct financing of
goods and services that will reach the target population (for example, food rations, medicines,
school books, payment for services provided by teachers and physicians, implementation of
workshops and hospitals, etc.). It excludes, therefore, other spending such as administrative
costs.
According to the data displayed in Table 22, total social spending reached about S/.
17,000 million in 2001, just over s/, 23,000 million in 2006, which in real terms represents a
cumulative increase of 42%.
Table 22 Social spending by major component (in millions of 2001 S/.) 1/
Spending by central and regional governments 2/
Total social spending
1. Social spending not including social insurance contributions 3/
2001
34,352
17,288
2002
35,057
18,743
2003
38,306
19,412
2004
38,671
20,440
2005
41,374
22,339
2006 8/
43,607
23,014
10,918
11,844
12,221
12,630
13,851
14,638
1.1 Basic social spending 4/
4,608
4,733
4,823
5,038
5,569
5,845
1.2 Complementary social spending 5/
6,311
7,111
7,398
7,593
8,282
8,793
2. Social insurance contributions 6/
6,370
6,899
7,191
7,810
8,488
8,375
Social spending on social programs prioritized under PSPs 7/
7,291
7,997
7,740
8,739
9,579
10,025
1/ A taxonomy of social spending based on typical records of the programs’ functional classification.
2/ Includes social programs administered by municipalities (Glass of Milk and other social programs developed during the recent decentralization)
3/ Includes administrative-type costs.
4/ According to the framework developed at the Oslo Conference, this is defined as spending on: Basic education (grade school and primary school);
basic health, food and nutrition, water, and sanitation
5/ Refers to activities and/or projects of a social character that are not considered basic social spending, such as secondary education, higher education,
social and productive infrastructure, rural electrification, rural highways, etc.
6/ Social insurance contributions (directed to ESSALUD), classified as administrative
7/ Such as typical and atypical budgetary chains. Includes administrative costs.
8/ Preliminary
Source: General Office of Economic and Social Issues, MEF
Spending on health. Taking into account income from all subsectors, total health
spending in Peru for the year 2000 was 8,738 million S/. (US$ 2,510 million), which was
equivalent to 4.7% of the GDP, representing a per capita expense of US$ 97 per year. Although
health spending increased in nominal terms between 1995 and 2000, in real terms it has
29
contracted slightly (see Table 23). The decrease is evidenced as well by the drop in per capita
annual spending, falling behind per capita spending in Brazil (US$ 267), Venezuela (US$ 233)
and Colombia (US$ 186).
Table 23 Main indicators related to health spending 1995-2000
Indicators
1995
1996
1997
1998
1999
2000
Spending on health (millions of current S/.)
5,413 6,173 6,849 7,484 8,483 8,738
Spending on health (millions of current USD)
2,404 2,521 2,575 2,558 2,509 2,510
Spending as a % of GDP
4.48
Real spending on health (millions of 1995 S/.)
4.51
4.35
4.50
4.87
4.72
5,413 5,440 5,351 5,379 5,560 5,299
Real spending per capita (1995 S/.)
227
224
217
214
218
204
Spending on health per capita (1995 USD)
101
104
104
102
98
97
Consumer price index (1995=100)
100
112
121
130
134
139
Source: National accounts 1995-2000. Ministry of Health and Pan American Health Organization.
These are the most recent national accounts carried out in Peru.
The largest portion of health spending in Peru comes from direct out-of-pocket
payments from households (37.3%), followed by contributions from employers (35.0%), and
finally the government (24.0%), according to data from 2000. As far as where these resources
end up, families use 55% of their out-of-pocket payments on medications, while only 7% of the
government’s funds are used for this purpose (see Figure 15).
Figure 15 Financing and Health Spending Assignment
Represents 4.7% of GIP
2610 million dollars
(year 2000)
Who
Who
spends
spends
more?
more?
1
Households
37.3%
Medications
45%
What
What do
do
they
they spend
spend
on?
on?
Private care
38%
MINSA
12%
2
Employers
35.0%
Private insurance
EPS
Self-insurance
Prepaid insurance
10%
EsSalud
82 - 90%
Insurance
5%
3
Government
24.0%
4
Ext Coop
1.8%
Operations
Services
60%
Administration
Regulation
23%
Investment
Other expenses
10%
Medications
7%
Source: Developed based in national accounts 1995-2000.
In terms of health spending according to service provider, the majority of funds are
utilized in MINSA facilities, Social Security (ESSALUD) facilities, private for-profit facilities,
and pharmacies, as shown in Table 24. From 1995 – 2000, national accounts show that funds
30
used at MINSA facilities remained stable, while funds spent at ESSALUD and private facilities
increased.
Table 24 Health Spending by Provider 1995-2000 (percentage)
Provider
1995
1996
1997
1998
1999
2000
MINSA
25,40
27,40
24,90
27,10
25,40
26,10
Health
5,00
4,60
4,40
4,60
4,30
4,10
Other Publics
0,80
0,60
0,40
0,40
0,30
0,10
Privates Nonprofit Organization
1,50
1,30
1,50
1,70
1,80
1,60
Privates Organization
18,30
19,20
21,10
20,80
22,00
23,60
Pharmacies
24,90
23,80
24,20
19,90
18,00
17,70
ESSALUD
20,80
19,70
20,40
22,80
25,70
25,10
3,30
3,40
3,10
2,70
2,50
1,70
100,00
100,00
100,00
100,00
100,00
100,00
Total million 1995 soles
5.413
6.173
6.849
7.484
8.483
8.738
Total million 1995 dollars
2.404
2.521
2.575
2.558
2.509
2.510
Plan Administrator
Total
Source: National Accounts 1995-2000. Ministry of Health and PAHO
Health spending is about 4.7% of the GDP of Peru, below the average for Latin
America and the Caribbean, which is 7.3%. Health spending per capita has not significantly
increased in 10 years, remaining at around 97 dollars per person, or around 2,610 million dollars
annually.
6.3
Salaries and benefits for health workers
Health market. The Peruvian health sector is divided into 4 subsectors of providers:
MINSA, Social Security (ESSALUD), health services of the Armed Forces and the National
Police (FF.AA), and the private subsector. The private subsector includes various types of
facilities and services: offices, clinics, insurance, and Health Service Providers (EPS).
Health workers. In the past 15 years, the number of human resources in the health
sector has grown. In 1992, the total workforce for MINSA and ESSALUD was approximately
66,000 workers. By 1996, this number had grown to 101,000, and there are now about 128,000
workers between the two institutions. The Peruvian health system comprises an estimated
139,000 workers total.
On a national level, the total number of human resources in the health sector is 139,231
workers and professionals (in 2004), of which 97,382 work for MINSA (2005); 35,399 for
ESSALUD (2004); and 6,490 for EPS. This last figure includes both personnel from EPS and
affiliated doctors and professionals. The figure for MINSA’s human resources includes 29,119
contract workers providing non-personal services (NPS). It also includes workers within the
Basic Health Program for All and CLAS (facilities whose administrated is shared with the
community.
Of the total number of human resources in 2004, 22,763 (16.9%) were doctors; 21,332
(15.8%) were nurses; 8,104 (6.0%) were midwives; 3,614 (2.7%) were dentists; 8,871 (6.6%)
were catalogued as other health professionals; 48,285 (35.8%) were technicians or assistants;
and 21,874 (16.2%) were administrative or other.
Peru had 11.5 physicians per 10,000 inhabitants in 2004. This rate was nearly 4 times
lower than that of Uruguay and 3 times lower than that of Argentina, the highest in the region.
However, Peru did have one of the highest rates of nurses per inhabitant (80 per 10,000), four
times higher than that of Paraguay and 1.5 times higher than that of Brazil. The rate of dentists
31
per inhabitant was low (1.1 per 10,000), 12 times lower than that of Uruguay and 9 times lower
than that of Brazil, the countries with the highest rates. (see Figure 16).
Doctors
Nurses
Paraguay
Chile
Peru
Colombia
Ecuador
Venezuela
Brazil
Argentina
Uruguay
45
40
35
30
25
20
15
10
5
0
Bolivia
Figure 16 Health Professional Rate by South American Country, 2004
Dentists
Source: PAHO. Health Situation in Latin America. Basic Indicators. WDC, 2004. Elaborated by IDREH
There are a total of 943 positions in specialized medical residency programs nationally,
of which 61.8% are financed by MINSA, 20.5% by ESSALUD, 16.5% by the health services of
the Armed Forces (FF.AA) and the National Police of Peru (PNP), and 1.2% by private
funding.12 There is no residency program for other health professions. Of the funded medical
intern positions in Peru, 965 are funded by MINSA and 130 by ESSALUD. In 2004, 2,308
positions were funded by the Rural Urban Marginal Service (SERUMS), 997 of which were for
doctors and 1,311 for the other 11 professions.
Evolution of the number of workers. In the 1990s, there was an increase in the
number of human resources, and in particular the number of contract personnel provided nonpersonal services. The number of salaried personnel increased by 27% from 1992-1996, while
fixed-term contract workers increased by 68%, and workers contracted for non-personal
services increased by 400%. The increase in this last group was so marked that the
preponderance of fixed term contract workers in 1992 was surpassed in 1996 by the nonpersonal service workers. In ESSALUD, the fixed term contract modality predominates, while
in the private sector and in MINSA non-personal service contracts are most common. The
health services of the FF.AA and PNP were the only institutions whose increase in human
resources was due to an increase in salaried employees (see Figure 17).
12
In Peru there are medical specialty programs funded by the State (such as for pediatrics,
cardiology, neurosurgery, etc.). There is an alliance among public hospitals (who provide care in the area
of specialty) and universities (who guarantee academic quality). The State finances 943 positions per
year for these programs.
32
Figure 17 Health Professional Rate Evolution per 10,000 population, 1980-2004
12
10
8
6
4
2
Doctors
Obstetrics
Dentists
2002
2000
1999
1996
1992
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0
Nurses
Source: MINSA – Statistics and Informatics’ Office, ESSALUD 2005, EPS 2004. Developed by IDREH
In 1990, fiscal adjustments were applied with the aim of containing the hyperinflation
experienced in Peru. These measures included reducing public spending (“fiscal austerity”),
leading to a reduction in the number of personnel in the health sector and other sectors.
The reduction in personnel during the period of fiscal adjustments and other associated
measures led to a series of social protests by health workers. After many years of constant
physician strikes and union pressure applied by health workers, in 2005, as a reaction to the
medical strikes, the Congress of the Republic issued a law governing MINSA physicians’
contracts and salaries, which applied to 3,693 physicians. This law was followed by similar
laws applying to the other health professions. Within the ESSALUD system, the issue of
contracts and salaries remains unresolved.
Distribution of MINSA and ESSALUD health workers.13 In terms of distribution by
department, workers are concentrated in the capital (Lima), and in general show a marked
centralism in distribution. Lima has a rate of doctors per 10,000 inhabitants 5.4 times that of
Huancavelica (17.7 versus 3.3), and this rate is also higher than the national average of 11.5.
Eight departments have a rate of nurses per 10,000 inhabitants that is higher than the national
average: Arequipa, Moquegua, Tacna, Ayacucho, Lima, Pasco, Madre de Dios, and Ica. Nurses
are also concentrated in urban areas, although there are significant numbers in some poorer
departments. Of all nurses in Peru, 40.23% are found in Lima.
The distribution of midwives is more equitable. This is probably due to the fact that
general practitioners, the main competition for midwives, are concentrated in Lima, and
therefore the midwives disperse to the regions. The rate per 10,000 inhabitants is higher than
the national average in 15 departments, and they are more concentrated in poorer and rural
areas. Of all midwives in Peru, only 25.32% are found in Lima. The number of dentists per
10,000 inhabitants is lower than that of the previously-mentioned professions, and they show a
centralized distribution as well. Dentists are basically concentrated in the coastal departments.
Moquegua has the highest rate of dentists per inhabitant, 7 times greater than that of Cajamarca,
the department with the lowest rate. Of all dentists in Peru, 44.25% are found in Lima (see
Table 25).
13
There are no statistics regarding the geographic distribution of health workers in the private
sector. Nor is there available information regarding the health workers in the armed forces or PNP, for
reasons of national security.
33
Table 25. Departmental Distribution of Health Professional Rate
per 10,000 population, 1980-2004
Department
Lima
Doctors
Nurses
Midwives
Dentists
17,7
10,4
2,4
2,0
Arequipa
16,0
14,5
4,5
2,7
Tacna
12.7
13.4
5.6
2.5
Ica
10.3
8.8
2.6
2.1
Perú
9.9
8.0
2.9
1.3
Moquegua
9.8
14.2
6.2
3.6
Madre de Dios
8.7
9.2
7.0
1.9
Lambayeque
8.0
6.6
1.5
0.6
La Libertad
7.7
6.2
2.1
0.6
Pasco
7.5
9.3
4.8
1.3
Ancash
6.4
4.6
2.6
1.0
Ayacucho
6.4
10.6
6.2
1.8
Tumbes
6.3
5.9
3.6
1.2
Ucayali
6.2
7.1
3.8
1.0
Piura
5.7
4.1
2.9
0.7
Cusco
5.3
7.5
2.6
1.0
Junín
5.0
7.9
2.4
1.0
Amazonas
4.6
4.4
3.4
0.9
Apurímac
4.4
6.6
3.9
1.4
Puno
4.1
6.5
2.6
0.7
Huánuco
3.9
6.8
3.4
0.6
San Martín
3.8
2.9
3.2
0.5
Loreto
3.7
2.9
1.4
0.5
Cajamarca
3.7
5.6
3.3
0.5
Huancavelica
3.3
4.5
3.3
0.9
Source: MINSA – Statistics and Informatics’ Office, ESSALUD 2005, EPS 2004.
Developed by IDREH
In terms of distribution by poverty level, there are 3.7 times more doctors per inhabitant
in the richest quintile than in the poorest quintile. There has been a trend towards more
equitable distribution, as the ratio of doctors per inhabitant for the richest versus poorest
quintiles was 17:1 in 1992 and 5.54:1 in 1996. For nurses, the ratio is 1.4:1. The ratio of
dentists per inhabitant, while their absolute numbers are low, for the richest versus poorest
quintiles is 1.43:1. In contrast, there are actually more midwives per inhabitant in poor regions
(see Figure 18).
34
Figure 18 Distribution per Quintile Health Professional Rate per 10,000
population, 2004
20
18
16
14
12
10
8
6
4
2
0
Q1
(poorest)
Q2
Doctors
Q3
Nurses
Q4
Obstetrics
Q5
(richest)
Dentist
Source: MINSA – Statistics and Informatics Office, ESSALUD 2005, EPS 2004. Developed by IDREH
Regional distribution. An analysis of the regional distribution of salary budgets, as
illustrated in Table 26, shows that over 20% of the total budget is used to fund salaries and
social benefits. Furthermore, this relative proportion has increased from 22% in 2000 to 27% in
2007 – there was an increase in total public budget (80%) and but an even greater increase in
salary schedules (120%). As this tendency demonstrates, on the one hand, there is a sustained
interest on the part of the political authorities in improving salaries, but on the other hand, this
means that the budget has become more rigid in this same proportion at least.
Of the total salaries paid within the public sector, about 50% were through Regional
Governments. Although regional salaries have increased by 100% (from S/. 3,230 million in
2000 to S/. 6,372 million in 2007), the weight relative to the total public sector salaries paid (S/.
6,283 and S/. 13,997 million, respectively), has decreased from 51% to 46%. This finding
demonstrates that National Government (Ministries and Public Decentralized Organisms)
policies had a greater impact on increasing salaries than has the incomplete decentralization
policy, including financing in the department of Lima.14
Table 26 Spending on Public Sector Salary Schedule by Country Region, 2000–2007 (millions of current S/.)
Country Region
2000
2001
2002
2003
2004
2005
2006
2007
Total public sector
28,636.58
34,542.18
35,307.81
41,468.35
42,274.67
45,062.01
49,906.69
51,721.89
Total salaries and
obligations
6,283.03
9,270.61
9,875.74
10,610.02
11,416.38
12,443.82
13,499.11
13,997.43
Total salaries in
regions
3,230.06
3,358.03
3,892.26
4,222.25
5,010.29
5,614.79
6,043.83
6,372.41
449.50
461.51
562.71
596.34
744.45
881.42
957.06
978.59
7.37
8.05
10.13
10.47
13.47
15.78
16.87
17.12
Ancash
30.79
31.85
37.72
39.31
48.61
56.35
60.65
60.88
Apurimac
12.08
11.92
15.04
16.19
20.74
24.51
27.93
29.25
Arequipa
37.97
38.85
48.26
51.21
65.13
79.94
86.07
85.83
Ayacucho
17.52
17.95
22.34
23.73
28.91
34.03
41.75
46.74
Cajamarca
17.68
18.16
22.04
23.75
28.86
37.28
40.37
40.90
Total health salaries
in regions
Amazonas
14
To convert S/. to aprox. equivalent in USD, divide by 3.
35
Table 26 Spending on Public Sector Salary Schedule by Country Region, 2000–2007 (millions of current S/.)
Country Region
2000
Cusco
27.10
Huancavelica
2001
2002
2003
2004
2005
2006
2007
27.81
33.37
36.39
47.49
54.29
58.86
59.50
8.83
9.43
11.14
11.39
15.54
21.36
20.36
21.08
Huanuco
16.45
15.73
19.02
20.01
24.58
29.10
32.05
31.40
Ica
28.05
28.94
36.72
37.90
47.18
57.83
58.25
58.88
Junín
36.66
37.48
46.06
48.02
60.84
68.00
76.66
73.69
La Libertad
33.02
33.81
40.54
41.26
53.12
63.71
68.94
72.74
Lambayeque
17.60
18.38
22.71
23.85
28.66
34.02
37.05
37.22
Loreto
17.96
18.26
21.48
23.45
30.30
36.05
39.87
40.54
Madre De Dios
5.18
5.78
7.87
8.34
10.93
12.19
13.98
13.34
Moquegua
8.72
9.04
10.71
12.50
15.24
17.96
19.07
19.28
Pasco
6.08
6.24
7.48
7.80
10.74
12.76
13.59
13.73
Piura
26.37
26.99
31.93
34.93
43.41
54.19
59.24
63.51
Puno
41.95
42.93
52.81
56.66
66.00
73.99
79.27
79.86
San Martin
19.73
20.09
23.57
24.30
30.10
34.74
37.42
37.75
Tacna
14.25
14.75
17.56
18.71
22.17
26.05
27.88
28.43
5.89
6.05
7.63
8.42
10.97
13.43
14.03
19.46
Ucayali
17,76
21,44
23,85
12,25
13,05
16,58
Source: Ministry of Economics and Finance’s Consulta Amigable (http://ofi.mef.gob.pe/transparencia/default.aspx)
26,91
27,46
Tumbes
The regional distribution shows that salaries are fairly proportional to population size,
although the internal distribution (provinces and districts) is not homogenous, due to the
tendency of human resources to concentrate in urban zones at the expense of rural zones. From
2000-2007, the public budget that financed the salaries and social benefits of health workers has
also increased in each region by about 100%.
Composition of health salaries. In the public sector, the salary schedule for
administrative workers and care providers is framed by the system established by Legislative
Decree No. 276 (DL 276), which contains a section setting forth a “Universal Salary System
(SUR).” Laws specific to certain professions provide additional benefits to those established by
DL 276. In addition, other supplementary benefits and bonuses have been provided through
other means as a way of recruiting and retaining personnel.
As with most public sector matters, the salary schedule is complex and not very
transparent. Salaries are formally controlled by DL 276, but there have been numerous
modifications and addendums. The SUR rewards seniority and strives for equalization.
However, the “universal system” was never truly implemented as such. The emphasis on
equalization was impeded by the disparate salaries in place before DL 276 was ratified (in
1984), and then by the hyperinflation and fiscal crisis, which forced the system to adopt
emergency measures that further complicated and confused the system. The need to increase
salaries without increasing the fiscal cost, due to mandates regarding leveling of retirement age
as established in decree 20530, led to the practice of providing stipends, bonuses, and other
types of payments.
The SUR organizes salaries into three main components: base salary, bonuses, and
benefits. Because of the hyperinflation that Peru has experienced, base salaries have become
inconsequential compared with the stipends, general increases, and sectoral increases (some of
which are salary-based and subject to discounts and others not). Of the various bonuses, two
stand out:
•
Bonuses for “Guard Work,” defined as “activity carried out in response to a
need, including multiple activities and/or activities distinct from everyday
duties, not to exceed 12 hours.” Guard work is compulsory for professional
36
care providers and non-professional provider under 50 years old. Even if the
duties are completed during the normal workday, workers receive a bonus.
Law 28,167 gives special treatment to bonuses for ordinary hospital guards
and establishes a pay scale for each type of guard: regular day shirt, regular
night shift, regular Sunday and holiday day shifts, and regular Sunday and
holiday night shifts.
Table 27 Amount of monthly Bonuses for Ordinary Public Hospital Guards by
Health Professional, 2005
Health Professional
Other professionals
Professionals: doctors,
nurses and obstetrics
Technician
Auxiliaries
59.70
79.60
Regular Sunday
and Holiday Day
Shift
99.50
44.03
58.70
73.38
88.05
36.67
47.56
59.45
71.34
34.71
46.28
57.85
69.42
Regular Day
Regular Night
Shift
Regular Sunday
and Holiday
Night Shifts
119.40
Source: Law 28167
•
Equalizing salaries to the levels within Social Security – ESSALUD. The
medical workers law established in 1990 set out to gradually bring up the
salaries of physicians working in the health sector to the levels of salaries
within the Peruvian Social Security Institute (now ESSALUD). In order to
comply with this disposition, the concept of “IPSS Leveling” was introduced;
however, salaries failed to equalize in the 1990s. In recent years, the country
has made significant progress towards equalization. This topic has been a
major issue during labor conflicts in the sector. Now, other professions are
demanding the same benefit. The goal of fixed, homologous salaries should
be reconsidered, given that the sources of financing are completely different.
Taking into account these various salary schedules, including base salaries and the
multiple bonuses and stipends, the remuneration of physicians and other health professionals
can be broken down as shown in Table 28 and Table 29.
37
Table 28 Detail Medical Monthly Remuneration Schedule by Public Institution, 2006 (in S/.)
Basic
Basic
Allowance 1st
Special Allowance
Reunified
Transport and Compensation for
Career Level Remuneration Remuneration
Segment DS 047(DU 098-98 + DU
Remuneration(*)
Food
Inflation (DL 559)
(DS 028-89) (DU 105-2001)
2005/EF
073-97 + DU 011-99)
Institution
Doctors from MINSA and Public
Decentralized Organization
Doctors from Regional
Governments
Allowance 2nd
Allowance 3rd Allowance 4th
Segment DS 047- Segment DU 002- Segment DU
2005/EF
2006
003-2006
N5
0.06
50.00
45.84
5.01
1,598.04
924.89
410.00
100.00
200.00
116.00
N4
0.06
50.00
42.44
5.01
1,527.78
883.57
380.00
100.00
200.00
90.00
N3
0.05
50.00
40.52
5.01
1,465.76
847.70
360.00
100.00
200.00
40.00
N2
0.04
50.00
39.61
5.01
1,398.50
809.47
335.00
100.00
200.00
-
N1
0.04
50.00
37.80
5.01
1,301.27
753.91
320.00
100.00
200.00
-
N5
0.06
50.00
45.84
5.01
1,598.04
924.89
560.00
100.00
200.00
116.00
N4
0.06
50.00
42.44
5.01
1,527.78
883.57
530.00
100.00
200.00
90.00
N3
0.05
50.00
40.52
5.01
1,465.76
847.70
510.00
100.00
200.00
40.00
N2
0.04
50.00
39.61
5.01
1,398.50
809.47
485.00
100.00
200.00
-
N1
0.04
50.00
37.80
5.01
1,301.27
753.91
470.00
100.00
200.00
-
(*)This term represents the aggregation of several basic salary raises given out from the 1980s through 1991.
Source: Remuneration System PHL 2006 – MINSA
Table 29 Detail Public Non Medical Professional Monthly Remuneration Schedule, 2006 (in S/.)
Occupation
Nurse
Obstetrics
Career
Level
Basic
Remuneration
Reunified
Remuneration
Special
Bonus
14
0.06
42.44
28.35
13
0.05
40.58
27.79
12
0.05
39.64
11
0.04
38.69
10
0.04
V
0.06
IV
III
Transport
and Food
Life
Expense
Special
Allowance
Transport
and Food
Special Bonus
(Law 25671)
Allowance
DS 081-93
Allowance
DS 019-94
Allowance
DU 080-94
Allowance
DU 098-96
Allowance
DU 073-97
5.01
47.00
35.00
3.10
60.00
70.00
124.00
156.00
91.35
105.97
5.01
47.00
35.00
3.10
60.00
70.00
120.00
151.00
89.52
103.85
27.51
5.01
47.00
35.00
3.10
60.00
70.00
118.00
148.00
88.53
27.22
5.01
47.00
35.00
3.10
60.00
70.00
115.00
144.00
87.21
37.66
26.91
5.01
47.00
35.00
3.10
60.00
70.00
112.00
141.00
86.04
99.80
42.44
28.35
5.01
47.00
35.00
3.10
60.00
70.00
124.00
156.00
91.35
105.97
0.05
40.58
27.79
5.01
47.00
35.00
3.10
60.00
70.00
120.00
151.00
89.52
103.85
0.05
39.64
27.51
5.01
47.00
35.00
3.10
60.00
70.00
118.00
148.00
88.53
102.69
Allowance
DU 011-99
Allowance
DU 105-2001
Allowance
DS 122-2005
Allowance
Law 28701
122.93
50.00
50.00
991.21
120.46
50.00
50.00
973.36
102.69
119.12
50.00
50.00
963.65
101.16
117.35
50.00
50.00
950.78
115.77
50.00
50.00
122.93
50.00
50.00
991.21
120.46
50.00
50.00
973.36
119.12
50.00
50.00
963.65
Total
939.33
II
0.04
38.69
27.22
5.01
47.00
35.00
3.10
60.00
70.00
115.00
144.00
87.21
101.16
117.35
50.00
50.00
950.78
I
0.04
37.66
26.91
5.01
47.00
35.00
3.10
60.00
70.00
112.00
141.00
86.04
99.80
115.77
50.00
50.00
939.33
38
Table 29 Detail Public Non Medical Professional Monthly Remuneration Schedule, 2006 (in S/.)
Occupation
Career
Level
Basic
Remuneration
Reunified
Remuneration
Special
Bonus
Transport
and Food
Life
Expense
Special
Allowance
Transport
and Food
Special Bonus
(Law 25671)
Allowance
DS 081-93
Allowance
DS 019-94
Allowance
DU 080-94
Allowance
DU 098-96
Allowance
DU 073-97
Allowance
DU 011-99
Allowance
DU 105-2001
Allowance
DS 122-2005
Allowance
Law 28701
Total
Dentist,
Pharmaceutical
Chemist
VIII
0.06
42.44
28.35
5.01
47.00
35.00
3.10
60.00
70.00
124.00
156.00
91.35
105.97
122.93
50.00
50.00
991.21
Health Engineer
Doctor,
VII
0.05
40.58
27.79
5.01
47.00
35.00
3.10
60.00
70.00
120.00
151.00
89.52
103.85
120.46
50.00
50.00
973.36
Vet, Biologist
VI
0.05
39.64
27.51
5.01
47.00
35.00
3.10
60.00
70.00
118.00
148.00
88.53
102.69
119.12
50.00
50.00
963.65
Psychologist,
Nutritionist
V
0.04
38.69
27.22
5.01
47.00
35.00
3.10
60.00
70.00
115.00
144.00
87.21
101.16
117.35
50.00
50.00
950.78
Social Assistant,
Medical Technologist
IV
0.04
37.66
26.91
5.01
47.00
35.00
3.10
60.00
70.00
112.00
141.00
86.04
99.80
115.77
50.00
50.00
939.33
Nutritionist, Clinical
Laboratories,
VII
0.05
34.34
21.54
5.01
32.40
42.60
3.10
60.00
70.00
105.00
130.00
80.65
93.55
108.52
50.00
50.00
886.76
Physiotherapist,
Occupational
Therapist
VI
0.05
34.04
21.45
5.01
32.40
42.60
3.10
60.00
70.00
103.00
129.00
80.10
92.92
107.79
50.00
50.00
881.46
V
0.05
33.75
21.36
5.01
32.40
42.60
3.10
60.00
70.00
101.00
127.00
79.40
92.11
107.32
50.00
50.00
875.10
IV
0.04
33.45
21.27
5.01
32.40
42.60
3.10
60.00
70.00
99.00
124.00
78.54
91.11
105.68
50.00
50.00
866.20
III
0.04
33.15
21.18
5.01
32.40
42.60
3.10
60.00
70.00
97.00
122.00
77.84
90.29
104.74
50.00
50.00
859.35
Technologist
Specialized in X-Rays,
V
0.04
33.75
21.36
5.01
32.40
36.60
3.10
60.00
70.00
101.00
127.00
78.44
90.99
105.55
50.00
50.00
865.24
Technologist
Specialized in
Laboratories and
Physiotherapy
IV
0.04
33.45
21.27
5.01
32.40
36.60
3.10
60.00
70.00
99.00
124.00
77.58
89.99
104.39
50.00
50.00
856.83
III
0.04
33.15
21.18
5.01
32.40
36.60
3.10
60.00
70.00
97.00
122.00
76.88
89.18
103.45
50.00
50.00
849.99
II
0.03
32.86
21.09
5.01
32.40
36.60
3.10
60.00
70.00
95.00
120.00
76.17
88.36
102.50
50.00
50.00
843.12
I
0.03
32.39
20.95
5.01
32.40
36.60
3.10
60.00
70.00
90.00
118.00
74.96
86.95
100.56
50.00
50.00
830.95
Source: Remuneration System PHL 2006 – MINSA
39
During the 1990s, Legislative Decree No. 728 established that the private sector’s labor
regime was to be applied to the public sector, in response to various needs. One of these was
the need to avoid the costs of leveling the retirement age as directed by DL 20,530 and another
was the complexities of the SUR. Furthermore, in the health sector in particular, the application
of this regimen was motivated by the desire to be able to use flexible contracts and rapidly add
personnel to primary care facilities as a way of significantly broadening coverage for this
service. In the health sector, this regimen is made up of public institutions, but whose
employees have a work regimen similar to that of private employees. This regimen includes
workers within the Superintendence of Health Service Providers, the Integrated Health System,
and, even before the 2006-2007 appointments, the Associations of Local Communities for
Health Administration (CLAS). El CLAS es un régimen mixto, en el que los recursos son
públicos y los operadores son Personas Jurídicas privadas.
The institutions included in the regimen described above typically contract personnel
via open competition, even though the norms governing the regimen do not require the
institutions to do so. Similarly, although there is no standardized career structure, most public
entities under this regimen have developed their own promotion structures. In addition to openended contracts, this regimen allows fixed-term contracts with a maximum duration of 5 years.
The management of personnel in terms of dismissals in these entities is more flexible
than in the public sector, and job stability is limited by disciplinary actions, capacity, and
institutional organization. However, this regimen is the most favorable for the worker in terms
of benefits (see Table 30). The personnel that fall under this regimen enjoy a series of benefits
in addition to their salaries: 30 days paid vacation per year; two merit bonuses per year; and one
bonus per year for time served. These workers have legal protection against arbitrary firings
(prior to dismissal the employer must follow a process in which the worker has the right to
present a statement, and dismissals without cause are subject to fine). They are also covered by
social security. These benefits also apply to fixed-term contract workers.
Table 30 Normative comparison
Area
Legal workday
Overtime hours
Work on holidays
Vacations
Legislative Decree 276 and special laws
Professionals: 6 hours per day
Others: 7:45 hours per day
Professionals: receive “Guard Work” bonuses
Others: no overtime pay
Professionals: receive larger “Guard Work” bonuses
Others: no
30 days per year
May accrue vacation days over 2 periods
Unused vacation days are payable
No penalty for failing to use vacation days
No compensation for incomplete vacations
Christmas and
Independence day
bonuses
Bonuses for
seniority
amount determined by MEF
Life insurance
Causes for dismissal
No
disciplinary actions, inefficiency, or ineptitude (the last
2 causes are not used in practice)
Procedure for
dismissals
administrative process undetaken by a disciplinary
committee, with a worker’s representative
Reinstatement
Possibility of reinstatement, if worker wins case against
the complaint
One bonus per year, over and above regular salary
40
Legislative Decree 728”
8 hours per day
Bonus of 50% over of regular rate of pay
Double pay for holiday work
Also 30 days per year
May accrue vacation days only with
permission
Unused vacation days are payable
Penalty for failing to use vacation days
Compensation for incomplete vacations
A full salary
One bonus per year. Deposited piecemeal
Una remuneración por año. Se deposita por
partes en entidad financiera.
Yes, after 4 years of service
Dismissal with just cause (disciplinary action
or for incapacity); and
Dismissal without cause, with severance pay
Procedure: communication with worker to
present charges, except in case of a flagrant
offense
Dismissals for poor performance: term of 30
days for worker to improve
No possibility of reinstatement, except in case
of unfair dismissal (union members,
pregnancy, etc.)
Table 30 Normative comparison
Area
Pay for dismissals
Legislative Decree 276 and special laws
Severance pay for dismissals
Legislative Decree 728”
Severance pay for arbitrary dismissal: 1½
salary, with a maximum of 12
Source: Authors
This regimen was implemented under the framework of the CLAS model. In this
model, management of primary care facilities was turned over to local entities. MINSA cedes
use of primary care facilities either directly to the CLAS or through the regional governments
and their respective Regional Health Departments (DIRESAs), according to a management
contract that includes the active participation of the local governments. MINSA agrees to
transfer funds as a “social subsidy” to support the facilities. With these funds, CLAS contracts
personnel under the private regimen, with its inherent advantages of flexibility, stability, and
social protection. The co-management arrangements developed under the CLAS model have
stimulated active community participation and have produced valuable lessons learned for nonfor-profit civil associations.
Under this arrangement, a contract worker may be better-paid than the permanent
employees within the career structure, to compensate the worker for difficult working
conditions and lack of job stability. The personnel contracted by the CLAS work alongside
personnel contracted under other regimes in the local facilities. In recent years, however, the
salaries of permanent employees have risen, via bonuses and payments “for productivity,” to the
point that they are practically equal to or even higher than those of the “DL 728” personnel.
Types of contracts. There are more types of contracts in the health sector than in the
rest of the Peruvian public sector combined. Health professionals (physicians and others),
technicians, aides, and administrative workers were incorporated into the system without being
incorporated into the career structure, at different salary levels and with difference funding
sources. The types of contracts are as follows:
•
•
•
•
•
•
Contracts under DL 276
Contracts for “Non-Personal Services” (NPS):
Financed by the Public Treasury
Financed directly with funds collected by each entity
Financed with SIS funds
Financed with funds provided by the municipality
The majority of contract workers fall under the “Non-Personal Services” regimen. This
was a creation improvised to get around the rigid budgetary restrictions limiting new hires, as a
quick solution to a lack of human resources. It was decided that fixed-term contracts would be
allowed. In some cases, it has been decided that the legal basis for these contracts is the Civil
Code, while in others, it is the law of Contracts and Acquisitions of the State. In either case,
there is no formal labor relationship, and therefore labor rights do not apply, such as a
maximum number of hours per shift, job stability, vacations, etc. However, the workers subject
to these contracts must follow a set schedule and many even fulfill managerial responsibilities.
These contracts are renewed periodically, in some cases every 3 months, in others annually, and
only if there is a vacant position budgeted.
During the 1990s, the personnel requirements in the sector increased, thanks to various
programs to target spending, such as the Basic Health for All Program (PSBPT) (starting in
1994), the CLAS (starting in 1994), the program for itinerant teams in remote zones (ELITES,
today called AISPED)(starting in 2000). These programs used the Non-Personal Service
worker contracting mechanism to get around budgetary restrictions. In some ways, this regimen
had the advantage of being an expeditious, temporary measure to cover personnel shortages at a
time in which these services were urgently needed in extremely impoverished regions.
41
furthermore, these personnel were initially better paid than their permanent counterparts. The
reason for the higher level of pay was to compensate these workers for lack of job stability,
although the difference in pay has decreased over time. Contract workers, like permanent
employees, tend to prefer to leave isolated regions after a few years and gravitate towards urban
zones. If the transfer is not approved, they tend to leave their post.
Over the ten-year period, a number of workers began aspiring to less precarious
working conditions. The decreased difference between their pay and that of permanent
employees exacerbated their discontent. Incorporating these workers into the permanent
employee career structure became inevitable, as no other solutions were proposed.
According to recent laws, this modality will be disappearing. The General Law of the
National Budgetary System, Law 28,411, established a guiding principle that “contract workers
or non-personal service providers who have been performing permanent functions shall be
gradually incorporated into the public system as permanent employees, in such a way as to
avoid expending additional Public Treasury resources.” The Budgetary Law for 2005
established that non-personal service contracts may only be authorized for temporary functions,
which means that facilities cannot use the NPS mechanism for activities or functions equivalent
to those performed by permanent employees. It does permit, however, the successive renewal
of contracts in place prior to December 31, 2003, as well as the replacement of personnel who
provided services before that date. Therefore, the NPS personnel and positions already in
existence will be maintained, but new contract personnel may not be hired to perform
permanent functions.
On the other hand, nearly all medical personnel who were hired as contract workers
have been incorporated into the career structure. However, there are still significant numbers of
care providers who are contract workers, striving to become permanent employees. According
to data from the Ministry of Health, there are currently 26,780 persons working as contract
employees (Regimen 276 or NPS), nearly 11,000 of whom work in the regions and 15,789 in
Lima.
Evolution and comparison of salaries of health workers. Until the 1970s, the health
sector had relatively high salaries and good working conditions, and health professionals
enjoyed social prestige, making the health careers popular among university applicants. In the
1980s, however, the number of training programs proliferated, salary disputes erupted, and
health professionals went on long strikes each year, all signs that the professions were losing
their prior status. In the 1980s, the health sector became ungovernable due to labor conflicts.
The strikes ended in 1990, when the health workers’ law homologized MINSA salaries with
those of Social Security employees.
Currently, in general physicians earn more than other professionals and technical
personnel in the health sector. Generally, their salaries are triple those of the other
professionals, and quadruple those of technicians and aides. As has been true for decades,
salaries are highest for all professionals within ESSALUD, followed by those within MINSA
(See Table 31).
Table 31 Salary Schedule in Health Sector by Public Institution, 2006 (in current S/.)
Occupation
Doctor
Nurse, Obstetrics
Career Level
MINSA
ESSALUD
Air Force
Army
N5
3,749.84
2,874.24
3,436.53
N4
3,578.86
2,743.47
3,265.18
N3
3,409.04
2,629.87
3,095.05
N2
3,237.63
2,509.36
2,926.05
N1
3,068.03
2,333.55
2,752.58
14
991.21
1,052.52
1,067.05
13
973.36
995.26
1,031.51
12
963.65
988.82
10,009.72
11
950.78
959.85
983.72
42
3,375.00
Table 31 Salary Schedule in Health Sector by Public Institution, 2006 (in current S/.)
Occupation
Career Level
MINSA
10
939.33
Dentist, Pharmaceutical Chemist
VIII
Health Engineer Doctor,
VII
Vet, Biologist
ESSALUD
Air Force
Army
925.96
955.37
991.21
1,052.52
1,067.05
973.36
995.26
1,031.51
VI
963.65
988.82
10,009.72
Psychologist, Nutritionist,
V
950.78
959.85
983.72
Social Assistant, Medical Technologist
IV
939.33
2,154.00
925.96
955.37
A
659.95
2,108.00
942.73
864.99
B
651,75
1.520,00
876,55
849,96
C
653,69
842,67
829,52
D
635,56
819,05
811,23
E
631,21
807,03
791,90
F
630,86
800,24
782,23
A
615,26
1.200,00
737,62
B
615,07
1.032,00
728,74
C
614,91
719,89
D
614,73
657,02
E
614,56
644,51
Technologist Assistant
Assistant
F
Source: MINSA Human Resources Management Office
2,154.00
613,96
The difference in pay by rank on the salary schedule is most notable for physicians
(more than 20% on average), slight for other professionals, and practically inexistent among
technicians.
ESSALUD salaries are higher than those provided by MINSA. For physicians
(professional P1), they are nearly 1.5 times higher, and for other professionals (P2), 2.2 times
higher.
Table 32 Average ESSALUD worker’s salary by
occupational group, 2005
Occupational Group
Levels
Amount S/. (1)
E2
E3
E4
E5
E6
11,000
8,500
6,500
4,580
3,325
Professional
P1
P2
P3
P4
3,375
2,154
1,726
1,252
Technical
T1
T2
2,108
1,520
Executive
A1
A2
Source: Salary Schedules ESSALUD 2005
1/ Salaries DS 018 + Bonus DS 019
Auxiliary
1,200
1,032
The public budget for salaries (including bonuses and estimated obligations) has
doubled from 2000 to 2007. The budget for NSP contracts has also increased considerably
although it has not doubled.
43
A comparative analysis of the public budget for salaries in various sectors shows that
the budget has increased 2.5 times in the health sector, 1.7 times in education, 1.24 in defense
and security, and 2.0 times in justice. Despite these increases, the total public budget has
increased by only 50% for education, 23% for defense and security, and 15% for health.
Table 33 Spending on Salary Schedule by Principal Sector, by Expense Category, 2000–2007 (in millions of current S/.)
Function
Health and Drainage
Education and Culture
Defense and Security
Justice
Expense Category
2000
2002
2003
2004
2005
2006
2007
Personal and Obligations
813.1
1,051.4
1,342.2
1,557.1
1,764.0
1,864.1
2,022.9
2,071.6
Non Personal Services
Personal and Obligations
Non Personal Services
215.7
3,875.1
143.3
224.5
4,047.8
155.6
253.7
4,618.7
167.7
279.0
5,015.8
174.7
273.5
5,534.2
176.3
255.2
6,024.1
177.5
284,0
6,505.3
186.9
315.6
6,864.8
219.4
Personal and Obligations
2,554.3
2,476.4
2,472.6
2,541.2
2,562.5
2,890.6
3,123.5
3,186.5
Non Personal Services
Personal and Obligations
2.2
297.6
19.8
309.9
28.0
348.2
25.8
393.9
30.1
428.4
36.5
477.5
42.5
555.7
47.2
607.1
Non Personal Services
Personal and Obligations
Total
2001
30.6
36.6
42.8
43.9
41.2
48.1
48.7
66.7
6,283.0
9,270.6
9,875.7
10,610.0
11,416.4
12,443.8
13,449.1
13,997.4
698.0
754.6
816.4
813.5
830.0
898.8
1,084.4
1,095.9
Non Personal Services
Source: Ministry of Economics and Finance’s Consulta Amigable (http://ofi.mef.gob.pe/transparencia/default.aspx)
No uniform statistics regarding salaries and income are available for Peru. The
National Institute of Statistics and Information – INEI – carries out a trimestral salary survey on
a national level in urban areas, covering the 26 largest cities in Peru. The survey includes a
sample of workers in the private sector in companies with at least 10 employees. Using this
information, MEF created the following table:
Table 34 Public Workers: Average Monthly Income in current USD
Profession
2001
2002
2003
2004
% variation
2004/2001
Teachers
181.29
195.02
225.91
263.93
45.6%
University Instructors
399.65
398.56
446.08
486.84
21.8%
1,327.78
2,560.80
2,589.10
2,638.69
98.7%
Police
290.47
303.90
336.57
372.31
28.2%
Military
290.47
303.90
336.57
372.31
28.2%
Physicians
817.82
1,017.44
1,116.35
1,164.09
42.3%
Judges
Source: MEF. Conversion to US$ according to official exchange rate of the Central Reserve Bank.
National survey analysis. We sought to analyze data from the Encuesta Nacional de
Hogares ENAHO (National Household Survey) and the Encuesta Permanente de Empleo
(Continuous Labor Survey). However, the health worker sample sizes in these surveys were too
small to draw any useful conclusions. For example, the number of medical doctors interviewed
in the Encuesta Permanente de Empleo each year was between 4 and 10, and the number of
nurses was between 1 and 6 (Table 35). In the ENAHO, there were only 2 medical doctors and 4
nurses interviewed (Table 36). The estimation of income statistics, or the analysis distributions
by income decile, would turn out very imprecise if we used such small samples. For example,
the distribution of health workers and education workers across income deciles is not smooth,
like in Chile. Although health and education workers seem to belong in the richer segments of
the population, the oscillations seen in the distribution could be very well caused by the large
variance inherent to small samples (Figure 19). Also, consider that this Figure grouped all
different health workers together, in addition to summing the samples from 2003 to 2007, in an
attempt to make the sample bigger.
44
Table 35 Number of individuals interviewed in the Encuesta Permanente de Empleo, 2003-2007
Type of worker
2003
2004
2005
2006
2007
Health professionals (except nursing)
4
7
10
6
4
Nursing and midwifery professionals
1
1
6
2
3
College, university and higher education teaching profession
1
2
3
4
2
Secondary education teaching professionals
1
1
1
Primary education teaching professionals
3
2
1
Special education teaching professionals
4
4
6
3
2
Other teaching professionals
34
40
41
42
36
Modern health associate professionals (except nursing)
13
23
7
8
3
3
2
2
Pre-primary education teaching associate professionals
2
2
Special education teaching associate professionals
1
Nursing and midwifery associate professionals
Primary education teaching associate professionals
1
1
1
Other teaching associate professionals
1
Source: Authors based on the Encuesta Permanente de Empleo, 2003-2007
Table 36 Number of individuals interviewed in the ENAHO 2005
N
Type of worker
Health professionals (except nursing)
2
Nursing and midwifery professionals
4
College, university and higher education teaching profession
7
Secondary education teaching professionals
0
Primary education teaching professionals
1
Special education teaching professionals
30
Other teaching professionals
74
Modern health associate professionals (except nursing)
11
Nursing and midwifery associate professionals
4
Primary education teaching associate professionals
0
Pre-primary education teaching associate professionals
0
Special education teaching associate professionals
0
Other teaching associate professionals
Source: Authors based on the ENAHO 2005
0
45
Figure 19 Distribution of health and education workers by decile of income per capita
(average between 2003 and 2007)
Number of workers (thousands)
20
15
10
5
0
1
2
3
4
5
6
7
8
9
10
Decile of income per capita
Health workers
Education workers
Fuente: Encuesta Permanente de Empleo.
Governance of salary policy. In the past 15 years, the human resources for health field
in Peru has become disordered, resulting in disparities between needs, demand, and supply.
Today the education supply in health produces graduates at a higher rate than the demand for
practitioners, yet the supply at universities and other institutes remains lower than the demand
for education in health. As a result, the institutes continually increase the number of slots per
class.
There is a mismatch between the labor market and the education system. If there are no
positions available in the labor market, the health education system is not responding to the real
demand for services but rather the enormous demand for education of high-school graduates.
The result is that a large number of graduates emigrate and a number of practitioners remain
unemployed. Higher education is mainly financed privately.
Periodically Peruvian society broadens the coverage of its health system. The effective
demand for service, then, has expanded as the health system has been democratized. A new
development during the most recent expansion, from 1993 to 2005, is that there has been a
greater demand for human resources. From 1993 to 1007, there was an extensive and intensive
exploitation of resources, symbolized by the launching of the Basic Health Program for All
(PSBT) in 1994 the increase in financing, human resources, and facilities. In 1998, programs to
cover students, mothers, and children were introduced (predecessors to the current Integral
Health Insurance, SIS). These new programs increased productivity and output by taking
advantage of available installed capacity and the intensively exploiting human resources. In this
way, MINSA and ESSALUD have been able to address changing cultural patterns of accessing
health services, as the population now seeks care at a higher rate than previously. It should be
noted, however, that in recent years there has been an increase in income, although the increases
have all been in bonuses rather than base salary, because of fiscal restrictions against increasing
pensionable salary.
Human resources for health have increased over the past 15 years as well. In 1992, the
labor force working within MINSA and ESSALUD was approximately 66,000 workers; by
1996, this figure had increased to 101,000, and today it has risen to 128,000. The Peruvian
health system encompasses a total of about 139,000 workers. This labor force is financed with
an annual amount equivalent to 4.7 of Peru’s Gross Internal Product, which is below Latin
46
America and the Caribbean’s average of 7.3%. Per capita spending on health has remained
stable over the past 10 years. Currently spending is at 97 dollars per person, or around 2610
million dollars per year. Of that total, households spend 37.3%, companies spend 25.05%, and
the government spends 24.0%.
Until the 1970s, workers in the health sector enjoyed relatively high salaries, a
reasonable workload, and high social status, making health careers attractive to students
applying to universities. In the 1980s, however, with the proliferation of training institutes,
along with the massification of graduating health professionals and containment of salaries of
the health workers, health professionals experienced a decline in their situation. They resisted
by staging large-scale annual strikes. In the 1980s, the health sector became ungovernable due
to labor conflicts. This age of strikes ended in 1990 with the Law of Medical Work, which
made MINSA salaries comparable to those of workers in the Social Security system.
However, in the 1990s, the balance continued to be disturbed, in both the labor market
and the health education field. In the labor market, labor unions agitated in defense of
appointments to positions and standardized salaries. In the health education arena, schools
began operating like businesses, responding to the demand for education rather than the need for
professionals.
During the administration of President Alberto Fujimori (1990-2000), labor strikes
began to lose their effectiveness. At the same time, health professionals and workers began to
be contracted rather than appointed, and salaries were broken down into various parts. There
was a base salary, plus additional income from funds collected directly from the consumer, as
well as bonuses and salaries from second or third jobs. This development created a dispersion
of the labor force, with workers seeking additional sources of income rather than concentrating
their efforts.15
The result of all of these occurrences for the labor market has been an increase in union
conflict and a climate of relative dissatisfaction. Today 59.4% of health personnel feel that their
salary or pay is too low for the job that they do. It is no coincidence that the frequency of labor
strikes in health has risen. Over 81.25% of the demands that result in a labor strike are related
to sector economic policies, especially salary raises, other benefits, and calls to increase the
health sector budget.
6.4
Incentives and policies to stimulate human resources
Incentives. A 2003 MINSA study of employee satisfaction investigated satisfaction
regarding: current work, work in general, interaction with immediate supervisor, opportunities
for advancement, salary and incentives, interaction with colleagues, and work environment.
15
The authors have not been able to obtain evidence to support this view, but it is consistent with
information obtained in the interviews conducted.
47
Figure 20 Internal User Satisfaction, MINSA 2003
100%
80%
5
11
6
11
13
13
10
30
17
18
37
20
19
34
26
36
Work in
general
Strongly agree
16
26
19
16
23
19
0%
Current job
8
13
33
33
40%
35
17
21
60%
20%
9
16
31
24
30
9
Interaction
Progress Salaries and Relationship Working
with direct oportunities incentives
with work environment
chief
colleagues
Somewhat agree
Indiferent
Somewhat disagree
Strongly disagree
Source: Ministry of Health. External and Internal User Satisfaction Survey and Health Workers Satisfaction Survey 25
DISAs. Lima, January 2003.
The area with the lowest satisfaction ratings was salaries and incentives, with only 25%
either totally or mostly satisfied, followed by opportunities for advancement, with 45%. When
employees were asked about their perceptions in these two areas, they noted that they felt the
institution failed to meet their expectations regarding monetary and non-monetary
compensation.
Figure 21 Perception of Progress Opportunities, Salaries and Incentives, MINSA 2003
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
14,7
16,8
20,3
20,7
18
19,4
25,4
27,5
19,5
17,7
Training
oportunities on
integral care
Training
oportunities on
human
development
38,4
21,9
28
Strongly agree
Somewhat agree
Indiferent
24,3
20,3
16,8
12,6
7,9
20,2
Salary is adequate
for my job
Concerns about
staff needs
Somewhat disagree
Strongly disagree
9,6
Source: Ministry of Health. External and Internal User Satisfaction Survey and Health Workers Satisfaction Survey 25 DISAs.
Lima, January 2003.
The main incentive for a worker is salary. Salary raises are traditionally made either to
maintain recruitment ability in times of inflation or in response to labor union pressures.
One way to obtain a raise is to be promoted. According to law, promotions are not
automatic. In addition to serving in a post for a given time, Law 23,536 indicates that a worker
must undergo an evaluation to obtain a promotion, with satisfactory mark scores in the
following areas: professional qualification, personal evaluation, work experience, and minimum
time at previous level of career structure. The law also indicates that every year there should be
an open contest for promotions “if there are vacancies and available funds.” It should be noted
48
that the career structure is organized by levels and not by position; therefore, promotions do not
necessarily involve a change in function.
However, these regulations have never been applied. The budgetary laws did not
explicitly prohibit promotions, but it did impede them. The norms require that every raise or
salary adjustment be authorized by supreme decree of the MEF.
The medical workers’ law passed in July of 2001 resolved the problem of “career
freezing” by instituting automatic promotions. The first disposition specified that physicians
should be incorporated into the career structure according to years of service accumulated by
July 2001:
•
•
•
•
•
Level 1: up to 5 years of service
Level 2: 5 years, 1 day to 10 years of service
Level 3: 10 years, 1 day to 15 years of service
Level 4: 15 years, 1 day to 20 years of service
Level 5: over 20 years of service
Nurses, midwives, and dentists were also given a “one time only” automatic promotion
according to a similar process. The norms for medical technicians did not provide any
dispositions regarding promotions.
After the special process of readjustment of levels, the regulations regarding promotion
of professionals were then to be applied, unless a budgetary norm suspended promotions. The
regulations provided in the medical workers’ law included criteria to be used for the promotion
evaluation process: length of service (30%), professional qualification (35%), and evaluation
(30%). Physicians must obtain a minimum of 70 points to be promoted. According to the
regulations in the administrative career law, professional qualification represents work potential,
and includes education, training, and experience. Therefore, the system rewards doctors who
obtain titles and certificates, participate in courses, undertake teaching roles, produce scientific
work, publish, and receive awards.
The Legislative Decree 276 and the health professionals’ career law indicate that
personnel are subject to periodic evaluations, which are referred to as part of the promotion
process. The law goes further, assigning an additional significance to the evaluation: “The
servant who fails to achieve the appropriate points for two consecutive two semesters will be
removed from the career structure for professional insufficiency” (article 51), but this
disposition has never been applied. On the other hand, the special laws regulating the health
professions, when they refer to evaluations, only do so in relation to the promotion process.
In practice, according to information obtained from MINSA’s Office of Human
Resources Management, no all health facilities carry out semestral evaluations of work
performance as indicated by RM 386-91-SA. When they are carried out, the immediate
supervisors are responsible for conducting them, and then they are ratified or amended by the
facility superiors. These evaluations, therefore, fail to apply the objective criteria. The
superiors can easily change the evaluations turned in by the immediate supervisors, either
because of cronyism or to avoid problems and disputes. As a result, the evaluations as currently
carried out are of little utility.
Because promotions and therefore pay raises are limited, another way to motivate
human resources is using bonuses. The aides, salaried workers, and contract workers under
regimen DL 276 are eligible for this type of benefit, defined in the following way:
“compensation apart from the base salary, retirement benefits, or raises.” These payments are
diverse:
•
Food allowance: for example, some facilities may provide a package of goods
valued at approximately S/.300, while others offer snack service during the
work day at an average value of S/. 150.
49
•
•
•
Education allowance: for training
Family allowance: health services, medications, and social assistance provided
by the establishment
Various cash payments: for managerial responsibilities, specialization, and
coordination of work teams, and payments for “productivity,” known as
AETAS (Extraordinary Stipends for Work in Health)
Of these, the most important are the AETAS. This is an additional payment of S/. 30 per
day up to a maximum of 22 days per month (S/. 660 total). Doctors, nurses, midwives,
technicians, etc. all receive an equal AETA payment; what varies is the number of AETAS that
each receives. The personnel in the public hospital centers that have “better clients” receive
more AETAS. Therefore, in Lima, doctors receive up to 22 AETAS each month; in the interior
of the country, only 9 (S/. 270). Nurses in the interior used to receive fewer than four AETAS
per month. After the September 2004 strikes the national government guaranteed the transfer of
sufficient funds from the Treasury to finance at least four AETAS per month for the nurses.
None of these benefits is related to the worker’s performance. They are only asked to
complete one additional hour of work beyond the normal work shift and arrive on time.
Whether or not a worker receives this bonus, and its value, depends only on whether the funds
are available, not on the worker’s efforts or results. The Public Treasury finances only a part of
these bonuses, and the rest depends on the facility’s own funds. The more a facility is able to
charge for its services (generally in urban zones, which tend to be better-off economically), the
more resources they can devote to these benefits. The fact that a significant part of a worker’s
compensation depends on the facility’s own funds creates incentives for the personnel to
generate and increase profits. This may create barriers to the poorest members of society
receiving care.
Finally, another way to increase income is through pluri-employment. Studies from all
previous years have indicated that some medical workers have more than one job, but the State
and Social Security positions are increasing at a slower rate than that at which new professionals
are graduating. The most recent data regarding physicians who work for EPS who do not also
work for MINSA or ESSALUD indicates that their average salary is S/. 3,240 (USD 1,080).
Given the crisis state of private clinics and the private subsector in general, except for a small
subgroup of the elite, one could assume that these doctors have casual employment elsewhere as
well. The private subsector only provided care for 7.8% of the population with symptoms or
illnesses in the year 2000, and the EPS covered scarcely 0.4%. Nurses and midwives, on the
other hand, without position in the two principal subsectors are in an even worse situation, as
they typically do not have access to positions in private facilities. This has led to international
emigration.
Reports from the Office of Migration have noted that the number of emigrant physicians
has risen from 4416 in 1992 to 14,130 in 2004; that is, an increase of 220%. During the same
period, the number of emigrant nurses rose from 2,726 to 7,560 (an increase of 117.3%); the
number of emigrant midwives from 48 to 1240 (2683%) the number of emigrant dentists from
184 to 2,212 (1147%). In the case of the nurses, the country that receives the greatest number
of these emigrants is Italy, followed by the United States and Spain. This jump in the numbers
of emigrant professionals reflects the disequilibrium between an oversupply of educated
professionals and the demand for services in the country. Part of the education system is
preparing health professionals who will work abroad.
Another expression of discontent is the number of labor conflicts. About 81.25% of the
demands that lead to strikes are related to the political-economic state of the sector, in particular
salary increases and other benefits and the demand for a larger budget for the health sector.
Opposition to sectoral reforms was the main reason for 10.94% of the strikes. The conflicts
protagonized by professional organizations and health workers in Peru has become a notable
component of the social movement, in particular among labor unions of the State. Since 2003
to 2004, the number of nationwide health sector labor conflicts rose from 6 to 11.
50
Policies. Peru’s policy regarding the hiring of health personnel in the public sector was
based on non-personal service contracts. This was due to the fact that the norms that regulated,
among other things, the mechanism by which health workers entered a health facility’s staff and
staff’s salaries, became inapplicable due to the severe inflation faced by Peru in the late 1980s
and early 1990s.
According to the analysts we interviewed, Peru had no policies regarding retention of
health workers. The obstacles to giving out raises and promotions made the public sector less
attractive than the private sector. On the other hand, as there is actually a surplus of health
workers within the public system, the real problem is the lack of mechanisms to dismiss
employees. It is nearly impossible to dismiss a functionary due to the policy of immobility of
functionaries. However, the increased number of personnel contracted under the non-personal
services modality has allowed a bit of flexibility in this area. In addition, the issue of migration
and flight of trained health personnel is a severe problem on a national level, but it is decreasing
as the Peruvian economy enjoys a period of robust expansion that is projected to continue.
There is also a lack of clear policies regarding the training of health functionaries. This
lack of regulation makes the supply of health workers precarious. Universities, for
professionals, and technical institutes, for technicians and aides, generally fail to prepare the
human resources for the needs of the Peruvian labor market. Some centers have even
specialized in training workers for the foreign market. For this reason, each health institution in
Peru should invest in preparing training courses on health care and basic administration topics
(paperwork, etc.). Until the late 1990s, there was a School of Public Medicine within the
Ministry of Health that was directly responsible, on a national level, for training human
resources as a function of individual or institutional demand. This institution was replaced by
the Institute of Human Resources – IDREH – which focused more on regulation than on
training until it ceased to exist in 2006. There is now an office within the Ministry of Health
that carries out these functions.
6.5
Conclusions and recommendations
a) Number of health workers
In the last 15 years, there has been a disorganization within the field of human resources
for health in Peru, resulting in gaps between need, demand, and supply. Today the supply of
health education produces graduates and licensees far in excess of the demand for health
services. Strangely, this already inflated supply offered by universities and institutions of
higher learning is still insufficient to meet the demand for health education, and so these
institutions continue to open more and more slots. This has created a mismatch between the
working world and the health education world.
As a consequence, the number of human resources for health has increased over the past
15 years. In 1992, the work force of MINSA and ESSALUD comprised approximately 66,000
workers. By 1996, the number had increased to about 101,000 and now comprises 128,000
workers. The Peruvian health system as a whole employs about 139,000 people.
Because there are insufficient jobs, the health education market is responding not to the
real demand for services but to the enormous demand for education by high school graduates.
Therefore, a large number of graduates emigrate while many others remain unemployed.
It would be advisable to simultaneously regulate the formation of human resources and
the health sector, to synchronize the need, demand, and supply of human resources according to
the epidemiological profile of each region (provincial and district) of the country. Regulation
should start with simplifying and organizing the current norms.
b) Salary composition
Salaries of personnel named under the public regimen (Legislative Decree No. 276)
include:
51
•
•
•
A basic salary, which, due to the hyperinflation faced in Peru, has dwindled to
an average monthly salary of little more than US$ 10.
Bonuses, both personal (linked to seniority) and familiar (linked to number of
dependents) and differentials to compensate workers for special job
circumstances (managerial responsibilities, or exceptional working
conditions). More recently new bonuses have been created to increase
workers’ incomes; the main types include “guard work” bonuses and bonuses
meant to bring MINSA and Social Security salaries in line with one another.
Benefits, allocated based on years of service, paid holidays for Independence
Day and Christmas, and compensation for years of service (2 salaries when a
worker completes 25 years and 3 when he or she completes 30 years).
Salaries in the private regimen (Legislative Decree No. 728) are simpler: salary
according to salary scale with benefits according to dispositions of the relevant law (social
security for health, unemployment insurance, and a pension fund).
Finally, salaried workers were incorporated into service without losing their position in
the salary structure, under various figures and with funding from diverse sources. The types of
contracts are the following:
•
•
Contracted under legislative decree 276
Contracted under the non-personal service regimen (SNP):
ƒ Financed with funds from the public treasury
ƒ Financed with funds directly collected by each entity
ƒ Financed with SIS funds
ƒ Financed with funds contributed by the municipality
In these cases, the salary consists of a net honorarium and the relevant taxes, basically
the income tax.
It would be advisable to develop a unified policy for the various labor regimens (under
legislative decree 276, legislative decree 728, and the multiple non-personal-service regimens)
that would lead to the development of a new public salary structure for health workers. The
policy should include the development of an express salary policy, according to the unified
labor regimen, with transparent salaries and bonuses. This salary policy should also include the
mechanisms for periodic raises for the entire health system, or better, yet, a general policy for
the public sector as a whole to prevent distortions among the different sectors.
c) Evolution of salaries
There are no reliable statistics regarding the evolution of health sector salaries. An
indirect measurement of their progression would be the evolution of the public budget allocated
for health workers’ salaries and bonuses. The health sector grew rapidly from 2000-2007, with
its budget increasing by a factor of 2.5. (Given that in this period the average increase in
personnel was less than 10%, it may be inferred that salaries increased by nearly 100% over the
period.) In this period the health sector’s budget (and the salaries of its personnel) grew more
rapidly than did those of other public sectors such as education (which grew by a factor of 1.7),
defense and security (1.24), and justice (2.0).
d) Incentives
The main incentive for a worker in Peru is salary. Salary raises are traditionally
approved to maintain purchasing power in times of inflation or as a response to union pressure.
One method of obtaining a raise is through promotions; therefore, individual and collective
union struggles have been focused on promotions, attempting, for example, to make them
independent of performance reviews. Therefore, this “incentive” become a fiscal pressure, the
Laws of Public Budgets in recent years established that promotions – as well as salary raises –
were prohibited.
52
As promotions and therefore salary raises are restricted, the remaining form of incentive
for human resources is bonuses. Employees named and contracted under the regimen of
Legislative Decree 276 are eligible for bonuses defined in the following way: “of a nonremunerative nature, non-pensionable, and not the basis for calculating raises.” These payments
vary widely:
•
•
•
•
Food allowance: for example, some facilities may provide a package of goods
valued at approximately S/.300, while others offer snack service during the
work day at an average value of S/. 150.
Education allowance: for training
Family allowance: health services, medications, and social assistance provided
by the establishment
Various cash payments: for managerial responsibilities, specialization, and
coordination of work teams, and payments for “productivity,” known as
AETAS (Extraordinary Stipends for Work in Health)
None of these bonuses are linked to the worker’s performance. They only require the
worker to complete an extra shift and to be punctual. Whether or not the bonuses are granted
depends not on the efforts or results of the worker, but rather on the availability o funds. The
Public Treasury finances only part of these bonuses, and the rest depends on the establishment’s
own resources (RDR).
In light of this situation, developing a new salary policy would be advisable. Such a
policy should include performance incentives and should align with national priorities
(allocating human resources to rural zones, for example) or sectoral priorities (specialization in
given areas of health).
7. Chile
The development of human resources for health care is an indispensable requisite for
ensuring the sustainability of the Chilean health care system. However, as in many other
countries, there is a scarcity of certain health workers, such as specialist physicians, primary
care physicians (PHC), medical technologists for radiology, specialized nurses, and emergency
medicine physicians. In addition, despite some advances, the current institutional framework
remains lacking in terms of incentives that would attract and support human resources more in
accordance with the health needs of the population.
Salaries in the health sector depend on the type of worker and on various technical
parameters, but also on the pressure and protest power that workers are capable of exerting on
the public sector. It is clear that a victory by some types of workers (physicians, for example)
provides a stepping-stone for the victories of others. The overall status of the country’s
macroeconomic situation and wage policies in the public sector also play a role in determining
salary increases within the public sector. Public sector salaries, in turn, influence the private
sector, as public sector salaries are used as a reference for labor contracts in the private sector.
However, there is practically no labor movement within the private sector, which instead
follows the laws of the market.
Salaries of health workers have risen in recent years. However, this increase has been
less than that of the salaries of workers in other sectors, such as education (professors) and
justice. In fact, according to household surveys in Chile (CASEN), salaries of health workers
actually decreased slightly in 2003, recovering by 2006 for physicians only. On the other hand,
there is a lack of information regarding health workers and their salaries, which is a barrier to
developing plans to develop human resources in this area.
53
7.1
Health System
The Chilean health system is a mixed system, both in the provision of health services
and in health insurance. The providers and insurers, both public and private, are regulated by
the Superintendence of Health.
The public provision of health services is carried out by the so-called Health Services.
These entities develop and administer health care networks over a given region. The networks
(SNSS, National Health Services System) are responsible for preventive and curative care, as
well as rehabilitation and health promotion. The Health Services are functionally decentralized,
state entities with legal status and an independent capital structure. They are subject to the
oversight of the Ministry of Health and must comply with the Ministry’s policies, norms, plans,
and programs. Each Health Service owns and operates several hospitals with different levels of
complexity as well as multiple open care centers (public hospitals and municipal health
facilities). They may establish contracts with private providers to serve certain zones or types of
care. Primary health care is provided by Primary Care Centers.
Private health care professionals provide care at hospitals, clinics, and independent
offices, and serve both the insured as well as beneficiaries of the public system. Physicians may
work in both a public hospital and private office or clinic simultaneously.
Within the social security system, a unique public administrator, the National Health
Fund (FONASA), coexists with various private administrators. FONASA covers nearly 80% of
the insured population, and the private insurers compete for the remaining 20%. Active and
passive workers pay an obligatory fee equal to 7% of their eligible income into the health
system, with a ceiling of approximately $US 150 per month.16 Workers may opt to affiliate
with the public insurer or the private insurer of their choice, and the chosen insurer receives
their fee.
FONASA operates on the basis of a distribution scheme (financed with the 7% of
income fee from its beneficiaries and with resources from general national taxes). Beneficiaries
of FONASA may choose between two modalities of care: institutional (closed) or free-choice.
In the former, beneficiaries receive care at public sector hospitals or primary care centers. In the
latter, beneficiaries receive care from private providers within this modality. The institutional
modality requires a copayment that varies according to level of income. Those whose income is
lower than a set minimum are exempt from copayments.
The private insurance system is made up of Private Health Plan Providers (ISAPRES),
which operate on the basis of individual contracts with their affiliates. The benefits provided
are directly linked to the fees paid. Affiliation with an ISAPRE requires a fee determined by
each ISAPRE. Fees vary according to type of insurance and characteristics of the affiliate.
Furthermore, the worker may opt to pay higher fees, above 7% of income, to obtain greater
benefits.
Health financing. In Chile, the entire population is guaranteed access to the public
health system, whether or not they have the resources to pay premiums. By law, dependent
workers must enroll in FONASA or an ISAPRE by making a contribution equal to 7% of their
income to the health system. These monthly contributions account for about a third of
FONASA’s funding. About half of FONASA’s funding come from Sate funds. The ISAPRES,
in contrast, are funded mainly by their beneficiaries’ monthly contributions. Funding for social
security health benefits in Chile, not including co-payments, comes from contributions to
ISAPRES (35%), contributions to FONASA (24%), and government subsidies (41%).
Funding for health care in public facilities comes from four main sources: government
subsidies, monthly contributions, operational income, and co-payments. The percentage of
16
Active workers are those who are working at the moment. Passive workers are those who have
retired, that is, they have stopped working and receive retirement benefits.
54
funding for health care in public facilities from government subsidies increased by 10% from
1990 to 1993. In the following years, this figure remained constant at about 55%, before
dropping down to about 50% by 2002 and 2003. Operative income and co-payments
represented a low proportion of funding throughout the period studied, and the proportion
represented by co-payment decreased slightly (see Figure 22). For example, in 2003, the public
sector spent US$ 2300 million on health care, of which 51% came from government subsidies,
35% from monthly contributions, 6.4% from operative income, and 7.3% from co-payments.
Figure 22 Structure of financing for public health spending
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
0%
Public Expenditure
Contribution
Operative Income
Copayment
Source: Superintendent of ISAPREs
Health spending. Health care spending in Chile amounts to 6% of the GDP and is
financed by both public and private sector entities. Private health spending consists of out-ofpockets payments on health care and payments for health insurance premiums. In 1998,
spending on the former was 59% higher than on the latter. By 2000, the trend had reversed, and
spending on health insurance premiums had eclipsed out-of-pocket spending on health care.
The decrease in private health spending as relative to public spending, therefore, can be
explained as a decrease in out-of-pocket spending on health care. Figure 23 demonstrates how
public spending and private spending on health insurance premiums have increased relative to
out-of-pocket spending on care.
Figure 23 Structure of heal spending 1998 – 2004 (percentage)
100%
80%
60%
40%
20%
0%
1998
1999
Public Expenditure
2000
2001
Out of Pocket Payment
Source: Own elaboration based on data from the World Bank
55
2002
2003
2004
Private Prepayment
7.2
Economic context
Economic growth. Between 1999 and 2006, the Chilean economy expanded, year after
year, with the exception of 1999 in which it contracted by 0.7%. This mild recession was the
result of various factors, mainly the Chilean economy’s internalization of the so-called “Asian
crisis.” Overall, the economy grew at an average annual rate of 4.2%, with a maximum of 6%
in 2004. Over this period, the gross internal product grew a cumulative 32.6%. (See Figure 24).
Figure 24 Growth of the GDP in Chile, 1999-2006 (percentage)
8
7
6
5
4
3
2
1
2007
2006
2005
2004
2003
2002
2001
2000
1999
-1
1989-1998
0
Source: Central Bank of Chile
Generation of employment. The level economic growth maintained since 2000 has
meant that unemployment has reached its lowest levels in recent years. It decreased from a rate
of over 10% in 1999 to less than 8% in 2006 (7.8%), as shown in Figure 23. According to the
ILO, the greatest increase in jobs from 1997 to 2006 was for salaried positions. The number of
self-employed individuals and workers in other occupational categories (domestic workers,
employers, and unpaid family workers) remained stable. The service sector generated the most
employment, with the goods sector contributing few new jobs. The four main sectors
generating new jobs are all within the service sector, especially general and commercial
services. The service sector represents 64% of jobs, up from 58.6% at the start of the period,
while industry jobs represent only 13.3% of the market in 2006, down from 16.2% in 1997.17
17
Reinecke , Gerhard and Velasco Jacobo 2007. “Employment report for 2006”. International
Labor Organization (ILO).
56
Figure 23: Evolution of the unemployment rate
11
10
(% )
9
8
7
6
5
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: OIT
Salaries evolution. Between 1995 y 2006, the average and minimum real salary in the
Chilean economy increased. This explains because of the nominal increase of these salaries
above the CPI evolution (inflation). The inflation remains during the whole period below 2
digits and mostly under 4%. Table 37 shows the nominal, real salaries and the inflation
evolution.
Table 37 Evolution of nominal, real, and inflation-adjusted salaries, (1995-2006).
Real
average
monthly
Year salary
1995
5,0
1996
3,4
1997
2,6
1998
1,5
1999
1,2
2000
1,2
2001
0,4
2002
0,5
2003
0,6
2004
1,9
2005
-1,9
2006
4,7
Fuente: OIT
Real
average
hourly
salary
4,8
4,1
2,4
2,7
2,4
1,4
1,6
2,0
0,9
1,8
1,9
2,0
Real
minimum
monthly
salary
4,5
4,2
3,6
5,1
8,9
7,2
3,3
3,1
1,8
2,9
1,8
2,6
Nominal
monthly
average
salary
13,6
11,0
8,8
6,4
4,5
5,0
3,9
3,0
3,5
2,8
1,2
8,2
Nominal
hourly
average
salary
13,5
11,8
8,7
7,9
5,8
5,3
5,2
4,6
3,8
2,9
5,0
5,4
Nominal
minimum
monthly
salary
13,1
11,9
9,9
11,3
12,5
11,2
6,9
5,6
4,6
3,9
5,0
6,1
CPI
8,2
7,4
6,1
5,1
3,3
3,8
3,6
2,5
2,8
1,0
3,2
3,4
Public spending. The central government spending remained relatively stable between
1999 and 2005, at 22 to 25% of GDP, as shown in Figure 25.
57
Figure 25 Evolution of central government spending (as a percentage of GDP)
45
40
35
(% of GIP)
30
25
20
15
10
5
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
0
Fuente: Larrain y Selowsky (1970-1985), BID (1986) and DIPRES (1987-2004)
Tax and non-tax state income grew each year from 1999-2006, with the exception of
1999, when the drop was greater than the drop in GDP, in percentage terms, after which the
percent growth in income was greater than the percent growth in GDP. Cumulatively, state
income grew by 106.5% over the period. On the other hand, tax income grew cumulatively by
74.6%. The cumulative increase in aggregate spending on personnel was 46.8%. This is due to
improved efficiency in tax collection, overall economic growth, and a trend towards reduced
spending on personnel by the state (see Table 38).
Table 38 Evolution of tax income and spending on personnel, 1999–2006 (in 2006 Chilean pesos)
Years
Total
Revenues
Var (%)
Annual
Fiscal
Revenues
Var (%)
Annual
Personal
Spending
Var (%)
Annual
% of Public
Spending in Total
Revenue
% of Public
Spending in Fiscal
Revenues
1999
$ 9,237,728
-4.90%
$ 7,119,701
-6.00%
$ 2,008,070
6.80%
21.70%
28.20%
2000
$ 10,314,379
11.70%
$ 7,868,827
10.50%
$ 2,089,678
4.10%
20.30%
26.60%
2001
$ 10,739,581
4.10%
$ 8,196,438
4.20%
$ 2,146,488
2.70%
20.00%
26.20%
2002
$ 10,819,243
0.70%
$ 8,554,204
4.40%
$ 2,226,365
3.70%
20.60%
26.00%
2003
$ 11,397,977
5.30%
$ 8,744,465
2.20%
$ 2,293,957
3.00%
20.10%
26.20%
2004
$ 13,672,923
20.00%
$ 9,709,269
11.00%
$ 2,452,350
6.90%
17.90%
25.30%
2005
$ 16,280,721
19.10%
$ 11,564,031
19.10%
$ 2,602,802
6.10%
16.00%
22.50%
2006
$ 20,060,506
23.20%
$ 13,221,062
14.30%
$ 2,760,449
6.10%
13.80%
20.90%
Accumulate
106.50%
74.60%
46.80%
Source: Candia et- al-, 2007
Therefore, in terms of spending on personnel by the state, there is a drop in
participation, both in relation to total income as well as in relation to tax income; from 21.7% to
13.8% and from 28.2% to 20.9%, respectively. This reflects an overall cost-containment policy
on the part of the government, in terms of spending on personnel.
Spending on health. In recent years, there has been an increase in public spending on
health as a percentage of GDP, but a decrease in public health spending as a percentage of the
total public budget. In 1999, public spending on health represented 2.6% of the GDP and
15.4% of total public spending, while in 2007 these figures were 3.2% and 14.6%, respectively.
During the same period, total public social spending increased from 15.4% to 17.1% of GDP.
Most of the new health spending was allocated for increased number of health services
provided, such as PHC and specialist clinics, biochemical and hematological tests, and imaging
58
exams, along with an increase in public sector beneficiaries (MINSAL, 2007, FONASA, 2007).
This increased spending has been correlated with a tendency towards improved health impact
indicators (such as life expectancy, infant mortality) and quality of life indicators, as measured
by the Index of Human Development (based on these two indicators) (MINSAL, 2007).18
Health spending in Chile is about 7% of GDP. The insurance system, consisting of
FONASA and the ISAPRE (private health plan providers), spends about 5.5% of the GDP. The
private sector spends 2.6% of the GDP, and the public system spends another 2.9%, to finance
the population ensured under FONASA. A little less than 1% of the GDP is spent by
complementary systems, such as workers compensation (Mutuales, Law 16.744) and the Armed
Forces. About 10% of the population is not covered by any health insurance system. These
individuals spend about 1% of the GDP on direct payments to providers and on medications.
Table 39 shows total Spending and Sources of Financing within the Chilean Health
System.
Table 39 Total Spending and Sources of Financing within the Chilean
Health System, for the year 2000 (in millions of year 2000 pesos)
Contributions
FONASA
(%)
ISAPRE
(%)
ISAPRE + FONASA
(%)
OTROS
(%)
TOTAL CHILE
(%)
Public
spending
Out of
pocket
Total
398,906
463,377
237,863
1,100,146
36.3%
42.1%
21.6%
100.0%
642,279
12,071
322,721
977,071
65.7%
1.2%
33.0%
100.0%
1,041,185
475,448
560,584
2,077,217
50.1%
22.9%
27.0%
100.0%
229,727
178,734
378,029
786,490
29.2%
22.7%
48.1%
100.0%
1,270,912
654,182
938,613
2,863,707
44.4%
22.8%
32.8%
100.0%
%GDP
2.91%
2.59%
5.50%
2.08%
7.58%
% PIB
3.36%
1.73%
2.48%
7.58%
Source: Cid, 2006. Developed using data from the National Accounts of FONASA-PAHO,
2001.
Financing of health services. The major source of financing for health services in
Chile is the obligatory contribution of 7% of salary to health plans, and the additional
contributions (for private plans), which represents 50% of the financing overall of FONASA
and the ISAPRES. Second are out-of-pocket payments, representing 33% of the total, and third
is fiscal support, representing 23% of total financing.
Twenty-two per cent of FONASA services are financed with out-of-pocket payments,
compared with 33% of ISAPRE services. These payments include co-payments for medical
visits and spending on medications and other items. Spending on medication represents 44.4%
of the total out-of-pocket cost; within FONASA, it represents 53.5% and within the ISAPREs,
37.7%, although the total actual cost is about the same in both subsectors. Spending on
medications per beneficiary in the public subsector is approximately 1/3 of that in the private
sector (Superintendence of Health).
7.3
Salaries of health workers
Health market. In Chile there are two main markets for health workers; the public and
the private sectors. However, many health professionals work in both subsystems, especially
physicians.
18
MINSAL, Ministry of Health. FONASA, National Health Fund.
59
Contractual relationships for public workers are framed within the norms of public
administration in general and health in particular. In the private sector, on the other hand,
contracts are drafted in the context of the work code that governs labor relationships for private
sector workers in Chile (see Table 40).
Table 40 Main Norms and Laws Governing Human Resources for
Health in Chile
Public Sector
Working relationships are governed by
public and health administration statute
National Health Services System
Medical doctor personnel: law 15,076
Other personnel SNSS: administrative
statute, law 18,834
Law 19,296 (public workers associations)
Annual budgeting law
Staff law (by health services)
Law 19,490 Bonus and allowances by
Individual and Institutional Performance
Primary health care
Primary health care statute (Law 19,378)
Source: MINSAL, 2000
Private Sector
General workers code governs all contracts in the
private sector. Working relationships governed by
the code are relatively flexible and non-regulated.
Health workers. Within the public sector, there is a distinction between workers
within the SNSS and within the municipal primary care centers. The two groups of workers are
governed by different legislation and depend institutionally on different entities – SNSS and the
local (municipal) government, respectively. Physicians are also distinct from other health
professionals and workers, as they are also governed under a different institutional framework.
The health sector is large and diverse, including physicians, dentists, pharmacists, nurses,
midwives, nutritionists, medical technicians, kinesthesiologists, occupational therapists,
audiologists, paramedics, and personnel in social work and health administration. For example,
in 1999, there were 12,501 physicians, dentists, and pharmacists governed by law 15,076, while
there were 56,508 SNSS health workers governed by the administrative statute.
Table 41 SNSS workers in Chile, 1999
Law
Governed by Law 15.076
Governed by Law 18.834
(Administrative Statute)
Health Professional
Doctors
Dentists
Biochemist/Pharmaceutical
Chemist
Destination Cycle (recently
graduated general practitioner
assigned to health services in
Chile)
Sub total
Administrators
Professionals
(Nurses)
(Midwives)
Technical aides and paramedics
Administrative assistants
Sub total
Total
July 1999
8,861
1,081
321
2,238
12,501
1,630
11,042
(3,537)
(2,159)
23,051
20,785
56,508
69,009
Source: MINSAL, 2000
( ) Total Professionals
According to the University of Chile and the Division of Personnel Administration and
Development in the Ministry of Health, in Chile there are 8.4 doctors per 10,000 inhabitants in
the public health system in. Specifically, there are 2 general practitioners per 10,000 inhabitants
60
and 4.9 specialists per 10,000 inhabitants, according to the scale used by the World Health
Organization (WHO). These figures are from a 2004 study.
A comparative analysis using data from the World Health Organization (WHO) shows
that Chile is at a disadvantage in terms of number of physicians compared with other South
American countries. Eight of ten countries in South America have a greater number of
physicians per 10.000 inhabitants than Chile, with only Brazil having fewer. The Table 42
below shows this data.
Table 42 Physicians per 10,000
inhabitants in selected South American
countries
Country
Indicator
Argentina
Bolivia
Brazil
Colombia
Chile
Ecuador
Paraguay
Peru
Uruguay
Venezuela BR
Source: Candia et. al. 2007 from WHO
30.1
12.2
9.3
13.5
10.9
14.8
11.1
11.7
36.5
19.4
This shortage of doctors means that the average workload of each physician is higher,
and that the country falls short of international standards for adequate patient care and quality.
Bastías et. al., 2000, estimated the number of doctors in Chile using the figures for
incoming first-year medical students, adjusted according to average attrition. They calculated
that the percentage of foreign doctors in relation to the total number of practicing physicians is
on the rise, from 24% in 1992, 34% in 1997, and an estimated 45% in 2007 if the trend
continued.
It should be noted that the immigration of health professionals has had a strong positive
impact on primary health care, despite legal difficulties associated with their incorporation into
practice, especially within specialist fields. Within the primary care field, over half of
physicians are foreign, mainly from Ecuador.
The 2000 study by Bastías et.al. demonstrates the scarcity of Chilean doctors and
compares a series of countries according to the hypothesis that the number of doctors is
correlated with degree of development of a country. In this comparison Chile fares poorly, with
fewer doctors per inhabitant than its closest neighbors, such as Argentina. This relationship is
also demonstrated by correlating the number of physicians with per capita income within a
country.
These estimates were made in 2000. Current figures available for Chile regarding the
overall number of doctors and other health professionals are in Table 43.
Table 43. Chile: Number of health workers 1999-2007
Year
Doctors
University
Nurses
Others
Total medical
registered in
medical college
Total Medical
not working in
the SNSS
1999
10,899
3,537
55,742
N,A,
N,A,
2000
10,505
3,677
54,745
18,236
7,731
2001
12,348
4,055
59,019
18,556
6,208
2002
15,706
6,761
84,872
19,151
3,445
2003
15,006
6,900
85,689
20,320
5,314
2004
16,359
6,325
84,458
20,726
4,367
61
Table 43. Chile: Number of health workers 1999-2007
Year
Doctors
University
Nurses
Total medical
registered in
medical college
Others
Total Medical
not working in
the SNSS
2005
N,A,
N,A,
N,A,
N,A,
N,A,
2006
N,A,
N,A,
N,A,
N,A,
N,A,
2007
20,035
7,746
N,A,
N,A,
N,A,
Source: developed using data from the Health Statistics from the INE, Statistical Compendium, 2006
N.A. Not Available
The shortage of doctors persists despite a major increase of 83% between 1999 and
2007 and despite larger increases in the numbers; other health professionals are growing in
number more quickly. For example, the number of nurses grew by 119%.
Evolution of the Number of Health Workers. According to records from the Chilean
Medical Association, the distribution of physicians by specialty in recent years is shown in
Table 44:
Table 44 Chilean physicians by specialty, 2000-2004
2000
Medical Specialization
Anesthesiology and
reanimation
Quantity
2001
%
Quantity
2002
%
Quantity
2003
%
2004
Quantity
%
Quantity
%
502
2.75
506
2.73
516
2.69
632
3.11
547
2.64
1,233
6.76
1,233
6.64
1,291
6.74
1,490
7.33
1,348
6.50
Internal medicine
2,256
12.37
2,256
12.16
2,258
11.79
2,421
11.91
2,111
10.19
Gynecology and obstetricians
1,146
6.28
1,062
5.72
1,068
5.58
1,253
6.17
1,134
5.47
Pediatric
1,808
9.91
1,813
9.77
1,825
9.53
2,228
10.96
1,983
9.57
Psychiatric
487
2.67
487
2.62
492
2.57
661
3.25
661
3.19
Traumatology and orthopedic
443
2.43
453
2.44
456
2.38
570
2.81
503
2.43
General zone medicine
805
4.41
779
4.20
786
4.10
822
4.05
659
3.18
General integral medicine
543
2.98
543
2.93
543
2.84
620
3.05
516
2.49
Other specialization
2,952
16.19
3,072
16.56
3,091
16.14
5,686
27.98
4,361
21.04
Specialization non declared
6,061
33.24
6,352
34.23
6,825
35.64
3,937
19.38
6,903
33.31
Total
18,236 100.00
18,556
Source: Developed using INE data. INE, Health Statistics, 2005
100.00
19,151
100.00
20,320
100.00
20,726
100.00
General surgery
The large percentage of the main specialties has remained stable over time, while some
specialties are under-represented, such as psychiatry, anesthesiology, and traumatology. The
overall figures for health professionals and workers in 1998 were as Table 45 shows.
Table 45 Public Health System Figures, Chile, 1998
Health professionals and workers
Doctors, dentists, chemist pharmaceuticals
Professionals clinic non doctors
Administrative professionals
Clinical area: auxiliaries and technical
Administrative and secretaries
Cleaning auxiliaries, drivers, guard
Total
%
Source: MINSAL, 2000
Primary health
care
2,707
3,708
171
7,320
2,859
3,372
20,137
22.2%
SNSS
12,649
8,102
4,446
22,721
9,879
12,729
70,526
77.8%
Total
15,356
11,810
4,617
30,041
12,738
16,101
90,663
100.0%
%
16.9%
13.0%
5.1%
33.1%
14.0%
17.8%
100.0%
Physician-hours contracted by SNSS 1999-2007. The above sections noted the
growth in the number of doctors in Chile from 1999 to 2007. The number of public sector
physicians increased in particular, so one would suppose that the number of private sector
62
physicians dropped. However, according to a study by Candia et. al., 2007, these trends are not
so clear if one analyses according to amount of physician-hours rather than by person.
According to the above study, between 1999 and 2007, the public health system
increased the number of contracted positions in absolute terms by 1995 contracts, representing
an increase of 16%.
Table 46 Change in number of contracted physicians in SNSS
Contracting Categories
1999
2007
Absolute
Variation
Percentage
Variation
11 hours per week
286
2,330
2,044
22 hours per week
4,149
5,301
1,152
715%
28%
33 hours per week
1,327
1,164
-163
-12%
44 hours per week
3,287
1,977
-1,310
-40%
Total daytime
9,049
10,772
1,723
19%
PHC 28 hours per week
3,084
3,326
242
8%
Total
12,133
Source: MINSAL, developed by C. Candia, 2007
14,098
1,965
16%
However, there was a drop of 2.3% in number of physician-hours contracted over the
same period. The position type with the largest increase in contracts was for 11-hour/week
contracts, which resulted in an absolute increase of 22,484 contracted hours per month,
representing an increase of 715%. On the other hand, there was a 40% drop in the number of
44-hour/week contracts, resulting in a drop of 57,640 contracted hours per month.
Table 47 Change in number of contracted physician-hours in SNSS (per week)
Contracting Categories
1999
2007
Absolute
Variation
Percentage
Variation
11 hours per week
3,146
25,630
22,484
22 hours per week
91,278
116,622
25,344
715%
28%
33 hours per week
43,791
38,412
-5,379
-12%
44 hours per week
144,628
86,988
-57,640
-40%
Total daytime
282,843
267,652
-15,191
-5%
86,352
93,128
6,776
8%
Total
369,195
360,780
-8,415
Source: MINSAL, information for June 2007, developed by C. Candia, 2007.
-2%
PHC 28 hours per week
Distribution of Health Workers. The excessive concentration of human resources, in
particular physicians and specialist physicians, in the metropolitan region of Santiago, is
reflected in the distribution of medical collectives by region (see Table 48). The association’s
regional councils are in the main cities in Chile.
Table 48 Distribution of medical personnel by Regional Counsel, 2006
Consejo Regional
Arica
Iquique
Antofagasta
Copiapó
La Serena
Valparaíso
Santiago
Rancagua
Talca
Chillán
Hombres
132
164
374
174
338
1.336
8.181
409
359
229
Mujeres
39
54
127
52
114
486
3.961
140
137
90
Total
171
218
501
226
452
1.822
12.142
549
496
319
63
Porcentaje
0,8%
1,1%
2,4%
1,1%
2,2%
8,8%
58,6%
2,6%
2,4%
1,5%
Physicians by
10,000 population
7,4
7,6
8,0
6,7
6,1
10,6
17,3
5,7
6,1
4,6
Table 48 Distribution of medical personnel by Regional Counsel, 2006
Consejo Regional
Bío-Bío
Concepción
Temuco
Valdivia
Osorno
Puerto Montt
Coihaique
Punta Arenas
No Information
Total
Source: INE, 2006
Hombres
194
902
480
235
139
291
81
163
186
14.367
Mujeres
73
432
209
109
65
114
50
52
55
6.359
Total
267
1.334
689
344
204
405
131
215
241
20.726
Porcentaje
1,3%
6,4%
3,3%
1,7%
1,0%
2,0%
0,6%
1,0%
1,2%
100,0%
Physicians by
10,000 population
7,1
6,3
5,9
6,3
7,5
8,2
9,7
9,8
Nearly 59% of doctors belong to the Santiago regional counsel; even in other major
cities, the percentage is very low, including Conception (6.3%) and Valparaiso (8.8%). With
the exception of Temuco (3.3%) all the other regional counsels (14) have percentages under 3%
and most are around 1%.
Shortage of medical professionals and specialists. Access to medical specialists is
concentrated in MINSAL, which finances specialization grants. However, traditional centers of
medical education (University of Chile, Catholic University, and other traditional universities)
and other private education centers carry out the training in association with a clinical practice
site (nearly always within the private sector in this case), but in any case specialization is
concentrated mainly among the health services and in the traditional universities. These are the
institutions that certify the specialists, as specialization is not covered by any legislation.
Recognition of a specialty is ultimately given by CONACEM (National Commission of Medical
Specialties), whose members include representatives from the medical association, the faculties
of medicine, scientific societies, and a MINSAL representative who does not vote. Reform
legislation currently under development in Chile states that this role is to be turned over to the
Ministry of Health.
MINSAL has promoted a policy of decentralization of management to encourage
efficiency and equity within the health system, with the idea that a more direct relationship will
create a better response to the population’s health needs. However, specialist physicians remain
concentrated in the metropolitan region and major cities in Chile.
During long periods there have been shortages of human resources for health.
Ophthalmologists and radiologists, for example, have been scarce. In these cases, supply has
driven the market, which has been problematic for the public sector. However, MINSAL has
developed methods for addressing this problem, using administrative mechanisms (specific
payment mechanism) and contracts (incentives). The various forms efforts to address the
shortage have included different contract modalities, such as 22-28 hour weeks for physicians,
increasing nurses’ salary grades, rotating remote assignments, assistance with job placement for
a spouse when a specialist is transferred, etc. The immigration of foreign doctors into Chile has
also been a key factor in sustaining and developing PHC. This immigration is increasing in
significance (Lastra, 2007).
It should also be noted that the health education market is deregulated, and in recent
years there has been a significant increase in supply, due to the incorporation of health majors
into private universities. Furthermore, there is legal freedom to create new institutions,
associated with a clinical campus. However, there remains a shortage of specialists within the
public health sector.
Clearly the public health sector is the major source of demand for human resources.
However, in recent years competition for human resources has increased within the private
sector. The existence of private insurance, vertical integration, and the movement of private
64
physicians to partnerships or associations have all decreased the prevalence of independent
practices, especially group private practices, and created tension in the labor relations between
salaried physicians and the private health industry.
Composition of health salaries. Public sector health workers are governed by a
normative framework emanating from guidelines and policy negotiation, combined with health
planning criteria for the public supply of health care. Therefore, it is logical to expect that these
criteria would outweigh market criteria in the contracts, as occurs in other sectors, in particular,
private labor markets.
The composition of public health functionaries' salaries includes dispositions from adhoc legislation that regulates the labor market, which differentiates this sector from other
professions (with the exception of certain sectors such as the armed forces). The mobility of
human resources is restricted by law, in order to support job stability and health planning.
Dismissals are practically impossible; even where the evaluation system permits removal from
office after several years of poor performance reviews; in practice workers are seldom
dismissed.
Table 49 Composition of health workers’ salaries
Personnel governed by Law N° 18.834
•
•
•
•
Higher government authorities
Administrators with a professional salaries
Administrators without a professional salaries
Technicians, administrators, and aides
•
•
•
•
•
•
•
Grade (each group has different grade scales)
Base salary
Salaries by profession
Salaries according to seniority
Raises for increased responsibility
Overtime hours
Dismissals
Other special dispositions
Source: Authors
Personnel governed by Law N° 15.076
Professional functionaries working:
• 11 hours per week
• 22 hours per week
• 33 hours per week
• 44 hours per week
• 28 hours per week
Personnel governed by Law N° 19.664
Professional functionaries working:
• 11 hours per week
• 22 hours per week
• 33 hours per week
• 44 hours per week
• 28 hours per week
•
•
•
•
•
•
•
•
•
•
•
•
Grade
Base salary
Merit-based raises
Salaries by profession
Salaries according to seniority
Three-year periods
Dismissals
Other special dispositions
Base salary
Qualified experience
Continuing education
Three-year periods
Other special dispositions
Salary levels. In spite of the multiple components, salaries do not tend to vary greatly
by type of worker, as shown in the table below, created from a sample of 35 hospitals in Chile.
The workers whose salaries varied more than 20% were physicians (endowed, general zone, and
general practice).
Table 50 Descriptive statistics on monthly salaries of hospital workers 2007
(current Chilean pesos)
Professional
Midwife
Average
Maximum
Minimum
Coefficient of
Variation
962,871
1,143,020
818,002
8%
1,400,851
1,767,482
1,277,338
10%
Social assistant
943,980
1,075,862
859,359
6%
Technical paramedics
408,672
483,353
348,718
8%
Cleaning auxiliaries
342,241
469,562
274,635
13%
Grant holder doctor
1,346,660
2,175,591
1,001,309
22%
Biochemist
1,237,008
1,650,056
983,159
16%
367,396
568,560
302,830
16%
1,380,080
2,175,591
1,001,309
21%
Anesthetist
Administrative
General zone medicine
65
Table 50 Descriptive statistics on monthly salaries of hospital workers 2007
(current Chilean pesos)
Professional
Average
Nutritionist
Maximum
Minimum
Coefficient of
Variation
943,980
1,075,862
859,359
6%
Pediatric/Neonatology
1,370,070
1,741,778
1,115,069
13%
Surgical Gynecologist/obstetrics
1,447,105
1,941,119
1,183,880
14%
Psychologist
943,980
1,075,862
859,359
6%
Medical technology
929,094
1,220,447
728,473
11%
General Practitioner
1,363,796
2,175,591
1,001,309
21%
Nurse
940,521
1,313,077
704,446
Source: MINSAL, sample of 35 hospitals in Chile. Note: the unit of analysis is each hospital
14%
Salaries in the public sector are used as a frame of reference for the private sector.
However, private sector salaries are higher, and contracts and labor relations are more rigid, in
terms of negotiating salary raises.
Evolution of salaries of health workers. Average salaries for communal, social, and
personal services, including health care, is close the average salary for the Chilean economy in
general (represented in the figure below by the activity called “General.”) Figure 25 shows this
data for 3 different years, each separated by a period of 6 years.
Figure 26 Evolution of nominal salaries by economic activity
900000
800000
700000
600000
1994
2000
2006
500000
400000
300000
200000
100000
Communal,
social and
personal
services
Finance
services
Transports and
communication
Commerce,
restaurants and
hotels
Construction
Electricity, gas
and water
Manufacture
Mining
General
0
Source: Authors, based on INE data
To illustrate the differences in the evolution of salary levels according to economic
activity, the authors developed an index (1994=100) to express the relative variation
experienced by each economic activity. As shown below, the largest salary increases by far
were in the mining sector, due to the positive evolution of prices within the sector, especially for
copper, Chile’s main export product. The evolution of salaries in the health sector has followed
a pattern similar to the average, as shown in Figure 27.
66
Figure 27 Evolution of nominal indexed salary by economic activity (base 1994=100)
700
600
500
400
300
200
100
0
1994
2000
Communal,
social and
personal
services
Finance
services
Transports and
communication
Commerce,
restaurants and
hotels
Construction
Electricity, gas
and water
Manufacture
Mining
General
2006
Source: Authors, based on INE data
Workers in the education sector fall into the same category as health workers:
communal, social, and personal services. This category, which includes workers from both
sectors as well as other sectors, was used by the INE to track the evolution of salaries through
2005. In 2006, average monthly salaries for teachers diverged from those in social services and
health. Salaries for teachers were higher than for health workers, at $380,855 (approximately
US$ 780) for the former and $348,159 (approximately US$ 696) for the latter. In other words,
the average salary in the education sector was 12% higher than in the health sector. However,
due to the limitation noted, it is not possible to track how this difference has evolved over time
using this source of information.
Below we elaborate on the evolution of salaries within the communal, social, and
personal services category. Figure 28 shows the evolution of salary by occupational group. As
shown, salaries vary within the sector by occupational group. For example, physicians, who
would be classified as professionals, would receive approximately double the salary of the
average health worker.
Figure 28 Evolution of nominal salary in the communal, social, and personal services category,
by occupational group
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
1993
1997
Administrative
personal
Personal
services and
protection
Skilled
workers
Plant an
machine
operators and
Unskilled
workers
Technicians
Professionals
Mangers
General
2001
67
Source: Authors, based on INE data
Figure 29 shows the difference in the evolution of salary by occupational category
within the sector. Physicians and plant managers have enjoyed the greatest salary increases
over time.
Figure 29 Evolution of nominal indexed salary in the communal, social, and personal services
category, by occupational group
300
250
200
1993
150
1997
100
2001
50
Unskilled
workers
Plant an
machine
Skilled
workers
Personal
services and
Administrative
personal
Technicians
Professionals
General
Mangers
0
Source: Authors, based on INE data
National survey analysis. The CASEN surveys (National Socioeconomic
Characterization Survey) provides basic data about the income of health workers over time.
According to the survey, the salaries of physicians and dentists rose significantly in 1996,
reaching about 2,500 dollars per month per capita. However, this income has fallen, as reflected
in the 2000 and 2003 surveys, to a little over 1,800 dollars per capita per month, recovering in
2006 to about 2,000 dollars per capita per month.
3.000
2.500
2.000
2000)
Monthly income per capita (International dollars
Figure 30 Monthly per capita income of health workers, 1996-2006
1.500
1.000
500
0
1994
1996
1998
2000
2002
2004
2006
2008
Year
Medical doctors/Dentists
Nursing and midwifery professionals
Medical assistants/Nursing associate professionals
Traditional medicine practitioners/Faith healers
Source: CASEN surveys 1996, 1998, 2000, 2003 y 2006
Salaries of physicians are much higher than those of other health workers, nearly 3
times higher on average than those of their closest colleagues (university-educated nurses).
68
Although this gap decreased in 2000, when the salaries of nurses reached their highest point
among the years surveys, the gap widened again in 2006 with the increase in the salaries of
doctors and dentists. The salaries of aides and non-professional nurses remained practically
unchanged during the period surveyed.
Salaries of physicians are much higher than those of other health workers, nearly 3
times higher on average than those of their closest colleagues (university-educated nurses).
Although this gap decreased in 2000, when the salaries of nurses reached their highest point
among the years surveys, the gap widened again in 2006 with the increase in the salaries of
doctors and dentists. The salaries of aides and non-professional nurses remained practically
unchanged during the period surveyed.
3.000
2.500
2.000
2000)
Monthly income per capita (International dollars
Figure 31 Income per capita per month for public and private sector physicians
1.500
1.000
500
0
1994
1996
1998
2000
2002
2004
2006
2008
Year
Medical doctors/Dentists in the public sector
Medical doctors/Dentists in the private sector
Average worker in the public sector
Source: CASEN surveys 1996, 1998, 2000, 2003 and 2006
Physicians and dentists clearly make up the deciles with the highest income levels of the
Chilean population, followed by university-educated nurses and midwives. Non-universityeducated nurses and aides are distributed most evenly, and can be found in practically all
income deciles, although they are concentrated in deciles 6, 7, and 8.
Figure 32 Distribution of health workers by income decile per capita (average
from CASEN surveys 1996 and 2006)
Number of workers (thousands)
20
15
10
5
0
1
2
3
4
5
6
7
8
9
Decile of income per capita
Medical doctors/Dentists
Nursing and midwifery professionals
Medical assistants/Nursing associate professionals
69
10
Source: CASEN surveys 1996, 1998, 2000, 2003 and 2006
Evolution and comparison of salaries of health workers. An analysis of the CASEN
survey data regarding physicians and other health professionals versus teachers (primary and
secondary) reveals that between 1996 and 2006, the income of physicians fell, while that of
teachers, in general, rose. During the same period, the salaries of professional midwives and
nurses remained stable, although there were significant variations within the period.
Figure 33 Monthly income per capita for health workers, by education level, 19962006
Monthly income per capita
(International dollars 2000)
3.000
2.500
2.000
1.500
1.000
500
0
1994
1996
1998
2000
2002
2004
2006
2008
Year
Medical doctors/Dentists
Nursing and midwifery professionals
Higher education teaching profession
Primary/Secondary education teaching professionals
Source: CASEN surveys
On the other hand, according to Candia et. al., 2007 and data from the National Institute
of Statistics, the overall cumulative increase in public sector workers’ salaries was 9.2%,
reflecting an average annual growth of 1.2%. An annual breakdown, along with the behavior of
nominal readjustments, the CPI, and real adjustments in salaries within the public sector follows
in the tables below. The Table 51shows real and nominal readjustments for public sector
salaries along with CPI variation.
Table 51 Evolution of public sector readjustments and CPI (measured for the
periods form January – November of each year)
Year (Dec)
Readjustments PH
CPI Nov-Nov
Real Readjustments PH
1999
4,90%
4,30%
0,60%
2000
4,30%
4,70%
-0,40%
2001
4,50%
3,10%
1,40%
2002
3,00%
3,00%
0,00%
2003
2,70%
1,00%
1,70%
2004
3,50%
2,50%
1,00%
2005
5,00%
3,60%
1,40%
2006
Accumulated
Average
Accumulated 2000-1999
5,20%
2,10%
3,10%
38,30%
26,80%
9,20%
4,10%
3,00%
1,20%
31,80%
21,60%
8,60%
Source: INE and Candia et. al, 2007
We can compare the readjustments experienced by health sector workers with those
experienced by other workers in order to determine how health workers fared, relatively. The
70
following figure presents the nominal salary increases of workers within the Internal Taxation
Service (SII), other fiscal entities, the teachers union, the judicial branch, and the doctors
governed under laws 15,076 and 19,664.
Table 52 Nominal cumulative adjustments 1999-2006
(various sectors)
Nominal
Readjustments
1999-2006
Sectors
Readjustments public sector
38,3%
CPI
26,8%
SII
60,9%
Regulator Entities
31,8%
Teachers College A.G.
56,0%
Judicial Power
52,8%
Medical College (18.834, 15076, 28 AP)
31,8%
Medical College (19.664)
Source: INE and Candia et al., 2007.
32,9%
Real salary increases were greatest for SII employees, with a 34% cumulative real
increase (including 3698 functionaries, of which 1434 were auditors), followed by the teachers
union, at 29.1% (including 149,683 teachers), and the judicial branch, at 25.9%. In contrast, the
real cumulative salary increase for doctors governed by law 19,664 was 6.0%, and for doctors
under law 15,076, only 5%.
The data show a relative disadvantage in the salary increases of physicians within the
public health system. In comparison with SII auditors, the difference was extreme – 31% for
doctors under law 15,076 and 30% for doctors under law 19,664 over the period studied. In
comparison with judicial branch employees, the difference was 20.9% for doctors under law
15,076 and 19.9% for doctors under law 19,664 over the period studied. Finally, in comparison
with teachers’ union members, the difference was 24.1% for doctors under law 15,076 and
23.1% for doctors under law 19,664.
Table 53 Absolute differences between cumulative salary raises in three public
health subsectors, 1999-2006
Law
Difference SII (%)
Difference Teacher
College (%)
Difference Judicial Power
(%)
15.076
31%
24,10%
20,90%
19.664
Source: Candia et.al.2007
30%
23,10%
19,90%
Governance of salary policies. Salary levels are readjusted annually for all workers.
Salary raises in the public sector are used as a frame of reference for salary negotiations in the
private sector. However, the health sector stages independent negotiations to define its annual
salary raises. In general, the starting-off point is a floor proposed by the government, usually
based on inflation for the previous year. The health workers’ unions, mainly the National
Confederation of Health Workers (Confenats) negotiate a higher increase that not only
compensates for inflation but also “allows the workers to share in the benefits of a growing
economy” and “reduces inequities” with respect to salaried workers in the private sector or
workers in other economic areas, who on average earn higher salaries. after a period of
negotiations, which may include pressure tactics such as strikes or demonstrations, the union
succeeds in securing a salary raise that is higher than the rate of inflation (real salary always
increases) but lower than the salary that the workers desired.19 One strategy that the
19
The last salary negotiation resulted in a 15-day strike staged by 30,000 health workers.
71
government has used has been to divide the striking workers and sign agreements with minority
sectors.20
The evolution of salaries is not correlated with economic growth, nor with productivity,
as shown in Figure 34. Therefore, it seems that salaries are linked mainly to political conditions,
the unions’ ability to negotiate and apply pressure, and the government’s political strength.21
However, inflation and economic growth are reference points for salary negotiations.
(%)
Figure 34 Growth rates for productivity, real salary, and economic growth, 1998-2006
7
6
5
4
3
2
1
0
-1
-2
-3
1998
1999
2000
Productivity
2001
2002
2003
Real wages
2004
2005
2006
Economy growth
Source: INE
This method of determining salaries is about to be replaced by another system involving
medium-term agreements and linked to the achievement of determined goals. This salary policy
is intended to do away with linking salaries to seniority and the capacity of physicians and
health workers to apply pressure tactics.
7.4
Incentives and policies to recruit, retain, and train health workers
From the worker’s point of view, incentives include continuing education opportunities,
the work environment, salaries, the prestige of the facility for which they work, health benefits,
the workday (flexible hours) and shift schedules (allowing for increased income), the
availability of cutting-edge technology, and captive markets of patients for physicians (for
example, in specialized hospitals or national institutes).
The major legal changes in recent years have sought to allow flexibility in the
management of productive levels, contracting modalities, and mobility within the career ladder.
For example, the law that governs physicians, dentists, pharmacists, and other health workers
was modified to include a provision for salary raises and a system to evaluate performance and
provide merit-based incentives, after a prolonged negotiation with the medical association. The
law strengthened the role of the health services offices (decentralized MINSAL organisms in
20
For example, during the last CONFENATS strike, the government signed an agreement with
the University Health Services Professionals (FENPRUSS), which has 13,000 members. This group
accepted the government’s proposal and returned to work immediately.
21
It could even be suggested that whether or not it is an election year may influence the
definition of salary raises. In 2006, presidential elections were held, and this year saw the highest
increase in salaries. 2000 was also an election year, and the raises were not especially high, but at that
time the economy was just beginning to recover from the Asian crisis.
72
charge of the health network in a geographic-population zone) in hiring personnel and
determining the salaries of physicians, dentists, and pharmacists, the establishment of a career
ladder, and the organization of a salary system to simplify and link spending with performance
(MINSAL, 2000). This law expressly allowed for:
•
•
•
The development of a career ladder, with contests for open positions,
guaranteed training, job stability, and incentives to be determined by the
directors of services, according to local circumstances
Decentralization of the role of director of services, for the management of
allocations, determination of variable salaries, management of training courses
and seminars, availability of positions, and local agreements regarding filling
of positions
Performance-based rewards in terms of individual salaries and collective
bonuses
Despite the preceding modifications, implemented as medical law No. 15,076 in the late
1990s, salaries of public functionaries in health care, in general, standardized. This allows for
better planning of resources but is a barrier to providing incentives.
On the other hand, before this modification and negotiation of the medical law, in 1995,
Law No. 19,490 was implemented to provide performance-based incentives and to create a
system to evaluate individual performance according to the needs of SNSS. Various other laws
have been established as well, almost always surrounded by conflict, in order to provide salary
bonuses and criteria for performance evaluations. (MINSAL, 2000). For example, between
1994 and 1998, real salaries increased between 11% and 19% and allowances by 9%.
Policies. The policy in Chile for recruiting human resources for health is based on a
general norm regarding contracting of personnel, along with some legal instruments that allow
for contracting key personnel at the margins of the limits of the general norm. A recent law
increased the power of the Health Services Offices (decentralized organisms within MINSAL
that are responsible for the health network for a given geographic-population zone) in hiring
personnel and determining the salaries of physicians, dentists, and pharmacists, the
establishment of a career ladder, and the organization of a salary system to simplify and link
spending with performance.
Chile’s policy for retaining workers is also related to the legislation to make the norms
that govern salaries more flexible, allowing payments beyond the general standard. In addition,
the country has developed a series of performance-based incentives and implemented a
performance evaluation system to evaluate individual performance according to the needs of
SNSS. Another powerful incentive to help with retaining personnel is the possibility of a
flexible schedule, so that workers can take on a second activity if they choose. Facilities may
contract physicians with different weekly schedules, and they may also choose rotating shifts.
Chile’s policy for training personnel is, by law, that all functionaries must be trained.
All public institutions must allow their workers at least 5 working days, equivalent to 40
chronological hours or 53.5 credit hours, to participate in continuing education. Training in
health has been mainly focused on the following areas: care models, development of network
administration modes, strengthening of the system of explicit guarantees in health, development
of abilities, improving a hospital’s capacity to adapt to continual changes in the environment,
improving quality of care, and improving patient relations.
7.5
Conclusions and recommendations
a) Quantity of health workers
Chile has 8.4 doctors per 10,000 inhabitants in the public health system (2004).
Specifically, there are 2 general practitioners per 10,000 inhabitants and 4.9 specialists per
10,000 inhabitants. There is an excessive concentration of human resources, in particular
73
physicians and specialist physicians, in the metropolitan region of Santiago. Nearly 59% of
doctors belong to the Santiago regional counsel; even in other major cities, the percentage is
very low (under 7%).
During long periods there have been shortages of human resources for health.
Ophthalmologists and radiologists, for example, have been scarce. In these cases, supply has
driven the market, which has been problematic for the public sector. However, MINSAL has
developed methods for addressing this problem, using administrative mechanisms (specific
payment mechanism) and contracts (incentives). The various forms efforts to address the
shortage have included different contract modalities, such as 22-28 hour weeks for physicians,
increasing nurses’ salary grades, rotating remote assignments, assistance with job placement for
a spouse when a specialist is transferred, etc. The immigration of foreign doctors into Chile has
also been a key factor in sustaining and developing PHC.
b) Salary composition
The composition of public health functionaries' salaries includes dispositions from adhoc legislation that regulates the labor market, which differentiates this sector from other
professions (with the exception of certain sectors such as the armed forces). The composition of
salaries includes: grade (each group has different grade scales), base salary, salaries by
profession, salaries according to seniority, raises for increased responsibility, overtime hours,
and other special dispositions.
In 1995, Law No. 19,490 was implemented to provide performance-based incentives
and to create a system to evaluate individual performance according to the needs of SNSS.
Various other laws have been established as well, in order to provide salary bonuses and criteria
for performance evaluations; but in practice salaries don’t depend on the workers performance.
c) Salaries evolution
Between 1994 and 1998, real salaries of health workers increased between 11% and
19% and allowances by 9%. Between 1999 and 2006 their salaries increased by 5%. However,
this increase has been less than that of the salaries of workers in other sectors. The data show a
relative disadvantage in the salary increases of physicians within the public health system. In
comparison with teachers’ union members, for example, the difference between 1999-2006 was
about 23.5%.
d) Incentives oriented to recruit, train and retain health workers
The policy in Chile for recruiting human resources for health is based on a general norm
regarding contracting of personnel, along with some legal instruments that allow for contracting
key personnel at the margins of the limits of the general norm. Chile’s policy for retaining
workers is also related to the legislation to make the norms that govern salaries more flexible,
allowing payments beyond the general standard. Chile’s policy for training personnel is, by law,
that all functionaries must be trained.
74
8. Bibliography
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body.” Chilean Medical Association A. G., 2007
González David, 2006, Formation of human resources for health. Chilean Journal of
Public Health, 2006, Vol 10. University of Chile
GRADE 2006. Study on human resources for health in Peru: Management, distribution,
regulation, working conditions and salaries, and training.
Institute of Human Resources – IDREH, 2006. National plan for the decade for the
development of human resources for health.
Institute of Human Resources – IDREH, 2005. Country report: status and challenges
regarding human resources for health. Formulated by Juan Arroyo.
Institute of Human Resources – IDREH, 2005. The lines of national policy for the
development of human resources for health. Formulated by Lizardo Huamán.
Lastra J (2007). Chilean Journal of Public Health
Ministry of Economy and Finance, 2007. Multi-year macroeconomic framework 20082010.
Ministry of Economy and Finance, Consulta Amigable (“Friendly Consultation”)
website: http://ofi.mef.gob.pe/transparencia/default.aspx.
Ministry of Health and the Pan American Health Organization, 2003. National accounts,
1995-2000.
National Observatory on Human Resources for Health, 2006. Is Peru responding to the
challenges of the decade regarding human resources for health.
National Statistical Institute of Bolivia. Survey: “Medición de las condiciones de vida”
(life conditions measuring). MECOVI 2002. www.ine.gov.bo
National Institute of Statistics (INE), 2006. “Remuneraciones medias (1993-2006)”.
www.ine.cl
National Institute of Statistics (INE), 2006. Statistical Annuary, 2006. www.ine.cl
National Institute of Statistics (INE), 2006. Statistical Annuary, 2005. www.ine.cl
Pan American Health Organization, 2007. Study on the compensation of health
professionals in Ministry of Health facilities. Written by Manuel Núnez.
Unit of Social and Economic Policy Analysis (UDAPE) and Pan American Health
Organization PAHO (2004). Description of Health exclusion in Bolivia. www.udape.gov.bo
Unit of Social and Economic Policy Analysis (UDAPE). 2006. Reflections about the
Health Human Resources in Bolivia. Working paper 02/2006. www.udape.gov.bo
World Bank 2002. Health sector reform in Bolivia: Analysis on decentralization
context. www.worldbank.org
Ministry of Health, 1999. Project evaluation report MINSAL- World Bank. Project
coordination unit MINSAL-World Bank
Ministry of Health, 2000. Regulation of human resources in Chile. Division of Human
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www.mideplan.cl; 1996 forward.
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Cooperation
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(MIDEPLAN).
CASEN
surveys
Superintendence of Health (2006). “Equity in financing and financial protection in
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76
Appendix A
Table 54 List of Interviewed people for the study
Name
Adhemar Esquivel
Fernando Landa
Ciro Puma
Eduardo Chávez
Lizardo Huamán
Giovanni Escalante
Manuel Núñez
Cristián Candia.
Verónica Bustos
Gloria Uribe
Hernán Sepúlveda
Country
Bolivia
Bolivia
Bolivia
Bolivia
Peru
Peru
Peru
Chile
Chile
Chile
Chile
Position
Researcher
Social Vice Chairman
Administrative Director
President
Researcher on Human Resources Management
Representative
Person in charge of Human Resources
Economic Advisor
Human Resources Advisor
Human Resources Advisor
Chief of Work Relations
77
Institution
UDAPE
UDAPE
Ministry of Health
Medical College
Ministry of Health
PAHO
Medical College
Medical College
Ministry of Health
Ministry of Health
Ministry of Health