San José, Costa Rica, since 1956

Health agency report slams Costa Rica's Caja management

No new hires and a wage freeze are two urgent steps that the board of directors of the Social Security System (Caja) should implement to avoid a financial collapse of the institution by 2015.

That is the main conclusion of a study by the Pan American Health Organization (PAHO), made public on July 15, one day after President Laura Chinchilla acknowledged that the Caja is in deep financial trouble (TT, July 13).

According to the report, salary payments for overtime, late-night shifts and on-call bonuses are driving employee wages up, with little oversight of scheduling.

In Costa Rica, guardias refers to a common practice among health care professionals, particularly physicians, who work an extra night’s shift after a regular day shift. With guardias, some hospital employees earn up to $7,000 per month.

Caja President Ileana Balmaceda said overtime payments would continue, but the approval of new shifts would be carefully analyzed. “This is not to diminish the quantity of our services,” said Balmaceda. “It is just a way to use resources more efficiently.”

Costa Rica’s publicly managed health care system is financed through mandatory contributions made by all workers and employers every pay period. Salaried employees pay slightly more than nine percent of their gross monthly income, while employers pay almost 27 percent, based on the same salary.

According to PAHO, between 2006 and 2010, total Caja revenues increased by nearly 20 percent, while total expenses increased by more than 21 percent. Of total expenditures, almost 72 percent was used to pay salaries and bonuses, and remaining money was invested in improving the coverage and quality of medical services.

During the same period, Caja wages increased by 17 percent annually, far more than for other public employees, who received 2.5 percent raises based on accrued annual inflation.

Another cause of the Caja’s crisis is its inability to collect unpaid contributions from government agencies ($832 million) and private companies ($97 million), which owe the Caja $929 million.

According to PAHO, from 2005 to 2010, the Caja hired 10,956 employees, most of them doctors and nurses, for a total of 48,251 employees in 2010.

More health care workers, however, did not translate to more services for patients.   Appointments, surgeries and childbirths decreased by 1 percent during the five-year period.

The report also found that Caja employees request more sick leave than other public workers. The number of Caja employees requesting sick leave increased by nearly 7 percent during the same period. Workers are paid a full salary while on sick leave, something no other government employee receives.

The report notes that many of the Caja’s financial problems worsened between 2007 and 2010. In light of the report, Eduardo Doryan, then-president of the Caja, resigned this week as president of the Costa Rican Electricity Institute.

Despite the Caja’s many woes, Balmaceda remained optimistic this week that the institution’s financial troubles can be turned around. “Thank God, our patient [the Caja] was diagnosed early enough to maybe be saved,” she said. “If we apply strict controls over expenditures, by 2012 we will see the first positive signs of an institution in recovery.”

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