LATIN AMERICA: U.S. HMOs Boost Margins in New Markets

      As the managed care market in the U.S. becomes increasingly saturated and profit margins shrink, for-profit HMOs are pouncing on potentially lucrative Latin American markets, according to a policy brief in today's New England Journal of Medicine. International lending organizations are pushing Latin American countries to privatize their pension-based health care systems, and HMOs are zeroing in on "social security funds in Latin America as a major new source of financial capital." Companies such as Aetna and CIGNA are targeting the swelling upper middle classes of Argentina, Brazil, Chile and Ecuador, which have the income and motivation to seek out managed care benefits such as continuity of care and primary care physicians.

Running Amok?
      The result, the authors state, is that without the market scrutiny present in the U.S., companies place little emphasis on quality control or preventive care and have actually restricted access for "vulnerable groups of patients." In Chile, nearly 24% of patients in the country's HMOs receive services from public clinics because they cannot afford their HMO's co-payments. And as managed care companies take control of the administrative aspects of public institutions, the increased costs in such areas "have diverted funds from clinical services." The authors recommend greater scrutiny of HMOs in these countries and conclude, "Given the mixed effects of managed care in the United States, the outlook for the people of Latin America is not necessarily favorable" (Stocker et al., 4/8 issue). Co-author Dr. Howard Waitzkin said that "there's a real fear that Latin Americans will lose their constitutional right to health care" (Physicians for a National Health Program release, 4/7).

Weighing In
      Writing in an accompanying editorial, Dr. EliseoPerez-Stable of the University of California-San Francisco echoed Stocker's concerns regarding preventive care. "[M]anaged care organizations can operate in Latin America with fewer restrictions than in the United States," shielded from the "public outcry fueled by stories in the news media." While the emergence of managed care could create a health system with better emphasis on coordinated care, Perez-Stable says it "is not the current situation, which resembles more closely a new corporate imperialism in health care" (NEJM, 4/8 issue).