It’s Business Time

The Correa administration has taken steps to improve the preventative health capabilities of Ecuador as well, in large part through massive investment in facilities and public utilities that will deter the spread of pestilence and pathogens. Potable water is now available in over 91% of all urban areas, up from 82% only six years ago. In rural areas, availability is now 57.9%. And while Correa claims to be implementing 21st century socialism, the statistics for potable water skew downward amongst the lowest 20% of Ecuadoreans, where only 58.3% have access to potable water (versus the top 20%, where the number is 99%). According to the Ministry of Public Health, access to working sewage is even more limited, again by income. Only 29.6% of the bottom quintile has access to sewage (versus 96% for the top fifth). A similar disparity plays out between urban and rural residents in Ecuador, where 77% of urban dwellers have access to sewage, while for their rural counterparts, the number is only 23.7%. Of course, operating costs for public infrastructure rise as population decreases, and more public amenities are coming on line every day in rural areas.

ON THE MONEY

The 2013 healthcare budget reflects a similar commitment to creating healthy lifestyles. The largest component was infrastructure and equipment maintenance, which was allocated 65% of spending. In second place, human resources spending was allocated 18% of the budget, followed by medical products and pharmaceutical costs at 8%, and basic services, consulting, communications, and property costs, at 9% in total. Ecuador’s remarkably low pharmaceutical expenditure is in large part due to the country’s implementation of compulsory licenses for pharmaceutical manufacturing. The right of countries to issue compulsory licenses is enshrined in the World Trade Organization’s TRIPS Agreement of 1995, as well as in a unanimous Doha Declaration of 2001 on intellectual property and public health. One compulsory license, issued in 2010 for Lopinavir/Ritonavir a critical HIV/AIDS treatment, immediately lowered costs by 27%. Unlike China, which has used similar legal strategies to produce and export copycat pharmaceuticals, President Correa has stated that medicine is a human right, which cannot be patented.

Healthcare spending has more than doubled under Correa. A comparison of the overall health budgets and investment between 2008 and 2013 shows that in addition to rising from $879 million to $2.43 billion, $398 million in 2013 went towards facilities and buildings. In other words, very few hospitals were built in the years leading up to the 2008 constitutional reform. Overall health spending by category reflects the same trends. In 2008, investment in human resources was only $5.5 million; however, by 2013 this number was up to $113.98 million, as the number of medical professionals was ramped up in line with commitments to improved healthcare. Similarly, pharmaceutical investment rose from $51.59 million in 2008, to $131.79 million in 2012. Bucking this trend, installation, maintenance, and repairs was the highest in 2008, at $6.9 million, reflecting the immediacy of the response to the reforms. Overall spending and investments in pharmaceuticals rose from $133.2 million in 2008 to $277.1 million in 2013. While these numbers represent improvements during the Correa administration, comparisons with 2000 are even more striking. In the year 2000, national health spending was only $101 million. From 2000 through 2006, overall health spending was $2.07 billion, whereas from 2007 through 2013, this number was $9.12 billion, which equals a 439.5% increase in overall spending under President Correa. Likewise, the per capita health budget in 2001 was only $15, whereas by 2013 this number had risen to $117.

PEOPLE POWER

As of early 2014, there were approximately 140 hospitals in the Public Health Network, 22 new hospitals under construction, and 24 more being remodeled. Plans also include 950 health centers nationwide, with a standard of two beds per 1,000 residents. Many more health professionals are in the pipeline as well. Minister of Health, Carina Vance, has announced that almost 600,000 scholarships were created, while a further 17,000 health professionals received raises. These numbers are reflected in overall human resource spending which reached $1.13 billion in 2013. By March 2013, the MSP reported that almost 300 health professionals had returned to the country under the plan Ecuador Saludable, Vuelvo Por Ti (Healthy Ecuador, I Come Back For You). This program attracts Ecuadorean and foreign health professionals from abroad with higher salaries and other benefits. Until 2011, Ecuadorian health professionals earned a salary of between $855 and $1,590 per month. The implementation of new public policies and initiatives offers physicians in Ecuador improved living conditions and salaries between $2,034 and $2,641, plus all legal benefits, meaning that total compensation can reach $3,900. There is also a remuneration increase for nurses, whose earnings can increase from $986 to $2,034, in addition to other benefits.

TRIMMING THE FAT

In late 2011, Ecuador raised its taxes on tobacco products to $0.08 per cigarette unit, making them the foremost taxers of tobacco. This move raised the prices of cigarettes by approximately 80% and raised the tax share of tobacco sales to 77.4%, up from 64% in 2010. Despite the high taxes, Ecuadoreans are still some of the top boozers in Latin America, only consuming less than Argentina and Guyana. The state has stepped up its efforts to curb this thirst in recent years. A new tax package in 2011 increased the ICE ad valorem rate on spirits from 40% to 75%, and added a specific tax of $6.20 for every liter-equivalent of alcohol, which was phased in by 2014. And while these steps have flooded the country with cheap bootlegged alternatives, the state is pressing ahead and this time, fast food chains are squarely in President Correa’s sights. According to Ecuador’s Health Ministry, 30% of school age children, 20% of teenagers, and 30% of adults suffer from obesity, and Correa argues that these costs must be shifted to the responsible parties, namely international fast food chains. While this law has yet to make its way through congress, the legislative attention paid to unhealthy vices and improving services is evidence that Ecuador means business when it comes to national health.