HEALTH-MEXICO:
Social Security System in Coma

Diego Cevallos


MEXICO CITY,  (IPS) - Ana Trasviña, 26, died last year as a result of medical negligence and a shortage of medicines in a hospital run by Mexico's Social Security Institute (IMSS).

Unfortunately, hers was not an isolated case, according to her father Arturo Trasviña, but another symptom of the crisis facing the social security system, which is on the verge of collapse.

''Like my daughter, many people continue to die and suffer as a result of inadequate treatment in IMSS health care centres,'' Ana's father told IPS.

Studies indicate that the IMSS, which provides health coverage to some 12 million of Mexico's more than 100 million people, is basically bankrupt due to the enormous resources that go towards maintaining the privileged wages and pensions of its 491,000 workers and retirees.

Under contracts that the union of IMSS employees has signed with the government, the Institute's employees can retire after 28 years of service, regardless of age, and with a pension larger than their last paycheck.

In addition, when IMSS workers receive a raise, the pensions of retirees grow proportionally. Today, IMSS workers retire at an average age of 53 and the average monthly pension stands at more than 1,500 dollars.

But the situation is far different for the two million private sector retirees who paid a portion of their wages into the system in order to obtain health care coverage and a pension. They had to wait until age 65 to retire, and today they draw pensions of no more than 200 dollars a month.

Mexico's economically active population amounts to 40 million people, but slightly more than half of all workers are in the informal sector, which means they do not pay into the social security system and have no hope of retiring with a pension.

Government workers, meanwhile, are covered by the Institute of Security and Social Services for State Workers (ISSSTE).

It is the country's private sector formal economy workers who receive health care coverage from the IMSS.

Since pensions reform partially privatised the system in 1997, 12.2 million private sector workers have been paying into private retirement funds. That means they will not receive a pension from the IMSS on retirement.

However, they do still receive health coverage from the Institute.

But complaints of poor treatment and shortages of medicine have become rife in the 1,785 health centres run by the IMSS, while the Institute's directors complain that there just aren't enough funds.

This year, the IMSS will shell out more than 15 billion dollars to the Institute's 376,000 active workers and 115,000 pensioners, while it will spend a mere 71 million dollars on repairs and construction of health care infrastructure.

It will also pay 3.05 billion dollars to cover the pensions of the two million private sector retirees who chose to retire before the 1997 pensions reform took effect.

When the 12.2 million active workers who still receive IMSS health care coverage retire, they hope to receive larger pensions than they would have under the social security system, because the private retirement funds are run by financial institutions that invest the money of their clients to make it grow.

But while the burden on Mexico's public accounts was eased by the 1997 pensions reform, it did not save IMSS finances.

Today, around half of social security expenses are paid by the state, whose share is growing at a rate of three percent a year, while the rest is financed by the contributions of active workers.

According to Trasviña, his daughter was one more victim ''of the state of coma in which the IMSS is living.''

On the afternoon of Jan. 11, 2003, Ana went to the emergency room of an IMSS hospital in the central Mexican city of Guadalajara, showing symptoms of sinusitis. She was given a brief check-up and sent to a waiting room where 100 patients were in line ahead of her.

Eight hours later she died of respiratory failure blamed on the delay in receiving medical attention and the shortage of medicines.

The case was brought before the independent governmental National Human Rights Commission. The IMSS is one of the four state bodies that are the targets of the largest number of complaints filed with the Commission.

''The IMSS could die within five years'' if it is not overhauled, IMSS Director Santiago Levy warned in February, urging the Institute's employees to renegotiate their current pensions scheme and asking business and private sector employees to increase their payments into the system.

On Mar. 14, the union of IMSS employees agreed to a gradual increase of its members' contributions, from the current three percent of their wages to six percent in 2012.

However, Levy insists that their payments into the system must eventually be expanded to 15 percent.

With respect to private sector employers and employees, no agreement has been reached on the proposal for boosting their contributions to the IMSS -- for health coverage, not future pensions -- from 15 to 19 percent of wages.

''We have already compromised, and we won't give up any of our privileges, because we have won them through hard work and negotiations,'' said the leadership of the union of IMSS employees.

With the support of other trade unions, they are threatening to hold a strike to bring the country to a halt if the government insists on reforming the IMSS pensions system.

''It's all just a big lie. The IMSS isn't in crisis,'' said Juana Martínez, a leader of the union of IMSS employees, which since its creation was used by successive Institutional Revolutionary Party (PRI) governments to hand out jobs to the party faithful.

The privileges mentioned by Martínez were often gained in exchange for political support for the PRI, which governed Mexico from 1929 until 2000, when President Vicente Fox of the National Action Party took office.

In 2001, the Fox administration announced that the IMSS was basically bankrupt.

The president has indicated his continued interest in reforming the IMSS, but says that in order to do so, the benefits enjoyed by the Institute's 491,000 workers and pensioners must be scaled back.

But with support from the PRI, now the main opposition party, the IMSS workers say they will give up none of their perks.

Due to the relative strength of the country's political forces, transforming the IMSS appears to be a virtually impossible task, according to analyst Enrique Quintana.

The Institute's debts run to 35 billion dollars, while it holds only 2.4 billion dollars in reserves. Not even by selling off all its assets could it cover the deficit, states an IMSS report to Congress.

The problems facing the social security system have grown in line with the system of pensions for its employees, while the state chose to steadily increase spending to keep the IMSS from going broke.

Francisco Aguirre, head of the firm Valuaciones Actuariales (Actuarial Appraisals), told IPS that ''social security could stop operating in less than eight years due to its financial inviability.''

The IMSS is heading inexorably to its death, but the union of IMSS workers is blind and the government looks like it will leave the problem to Fox's successor, who will take office in 2006, just as his predecessors left the problem to the current administration, said political scientist Martín Peralta.