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a blog from young economists at Nova SBE

analysis on the Honduran health system

Honduras is a latinamerican country, in Central America, which is unfortenately also one of the poorest and countries in the continent, despite a growing latinamerican union in past decade full of opportunities for growth in every sector.

One of the basic and probably most important matters (so is education) to have in a prosperous country, is having a good health system, a public one first of all, to ensure a good way of life to a population who can then start working for the welfare of their nation. 

 The honduran health system  is divided in a large public sector and a small private one. In the first one, there are two main institutions who are responsible for the public health services: the health secretariat (la Secretaria de Salud-SS) and the Honduran Insttute of Social Security (IHSS). The first one is the public organism in charge of covering the health necessities of the whole honduran people, with the government funds and the external and internal help. The second one, the IHSS, is the oorganism who covers the honduran workers in the legal economic activities, financed by the subscriptions of the workers and their chiefs. From an eonomic point of view, the system is the ame as in all the countrieswith a social security system, but what is frightening is to see that despite the fact that its a public service the subscriptions paid by the employers are of 5% of the wage, the workforce subscirbes only to 2.5% of their wage, and  the government brings barely 0.5% to finance the IHSS. On the other hand, the SS gets 76% fom the National  Treasure, some from donations, and 11% from external credits. This anlysis on the origin of the funds, shows a to big dependance from external help, and therefore increasing debt. And since the military push that occured in june 2009 in the country, the International help and credits have been stopped, leaving the SS with major financing problems to cover the population, because the governemnt decided  to make  some  cuts in their contribution to the health sector,because of the political crisis. Even do I assume that economics of health is a difficult science when it comes to ethic, it seems to me that Honduras should not call the health matter a public good, because if they really mean it, the health policies would prevail over the political & economic crisis the world knows since 2009. The expenses  in Health care in the GDP were 5.7% in 2008, much like most centralamerican countries. Economics of Health tell us that  the  more a population is insured and maybe even with co-insurance, people have tendency to increase their health expenses. In Honduras, poverty affects aproximatevily 64%, with 55.5% living in rural areas, which explains a lot why only 18% of the honduran people are covered by the Social Security; it’s not even half of the working population. A study made in 2008 shows  us  that the health comsumption (if it is viewed as a consumption good or service) was of 227$ per capita. However the conclusion of higher medecine prices over the time, proved in Economics of  Healths, are true but not because of a high number of users (as the figures show us), but more because of a shortage of supply of medecines, who are mostly imported from american farmaceutical firms, that only the people with private insurance (2.9%) can easily afford. 

Also one of the main issues in the huge lack of health care being provided to the  population, is that more than half the population live of agricuture or live in the rural  areas, whereas most of the public hospitals  nad clinics are in the two main honduran cities, and in some of the provincial capitals. I understand why Grossman integrates  the distance variable in  his model. These farmers don’t have the necessary means  of transport to go to  the cities, and if they do it is tirying, they have no insurance  for mosr of them, so they will only go if it is  urgent. An astonishing data is that in Honduras, in 2006-2008, there were a little more than 20 000 persons working in the public sector, in which there was 2 794 doctors and 1 242 nurses  working, in a population of neraly 8 million people, which leaves the country with a ratio of about 1 doctor for every 1000 persons, and 1.1 profesional nurses for 1000 persons too. 

There are many more reasons that explain the incompetent system of the honduran  health care, such as  the only union of doctors in the country who only ask for higher wages, and follow personal and political interests. By doing so, they spend most of the year on strikes, paralyzing the public hospitals (a little more than 30 in the country) and forcing the people to go to the private clinics and hospitals (about 60 in the country) where they will pay much more, or simply  won’t be cured or treated because of no insurance. 

In addition  to  all this, it is way too bureaucratic, and the ministers of health and everything related to it are just some people put their who know nothing about the health crisis, or optimizing the ressources, finding new funds, implementing active and more social policies; because they are some “friends” of the president and  deputees, and congressmen. I believe Economics of health might help me to understand what is the optimum to achieve in a determined context, but applying is much harder because politics and that idiosyncracy particular to politics who live n another planet.

Jean-Marc David


Author: studentnovasbe

Master student in Nova Sbe

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