Pursuing Universal Health Coverage Through Local Community Participation in Peru
By Elizabeth Annis, Jocelyn Fifield, Jaime Bayona Garcia, and Hannah Ratcliffe
In 1992, the Peruvian government initiated a series of structural and organizational reforms designed to strengthen the economic and social stability of Peru. Before this time, the country had been plagued by civil conflict between the government and armed guerilla movements for decades, particularly in the most rural regions of the Andean highlands. This bloody and tumultuous conflict eroded civil stability and confidence in the government throughout the country. At the start of the 1992 reforms, efforts were focused on transferring responsibility for various social services from the public sector to the private sector. However, health services for low-income populations remained a government responsibility. Despite poor performance and large equity gaps—in 1990, the under-5 mortality rate was 79.7/1000, the female life expectancy rate was 68, and the male life expectancy rate was 63.21—government attention to the health sector at the beginning of the 1990s was limited, and the general population viewed health care initiatives as a secondary issue to improving security and education.2 Only once the government achieved greater economic stability around 1993 were more efforts and financial support dedicated to health services.
At this time, Peru outlined three main health sector goals: universal health coverage, elimination of health inequalities, and restructuring of health services.3 Peru started to rebuild its health system and expand geographic accessibility to services in order to address inequalities and an uneven distribution of resources between urban and rural areas. However, these reforms were fraught with challenges. As the number of primary care facilities increased, issues with additional and higher costs, poor management, and poor information systems arose. In response, the Ministry of Health (MINSA) decided to restructure health services by instituting strong management and administrative processes to achieve improved quality of care.2 This prompted the creation of a new program: Comités Locales de Administración de Salud (CLAS), which focused on the restructuring of health services through local community participation and decentralization.3
Creation of CLAS
In April 1994, Peru formed the Shared Administration Program (SAP) to allow for the direct involvement of local communities in health resource allocation and administrative decision-making. The SAP provided a platform for the implementation of CLAS associations. Under the CLAS reform, CLAS associations were formed at the local community level as non-profit civil associations to assume governance and oversight over primary health care service delivery using public funds. A primary goal of the CLAS system was to improve relationships between the government and local communities, particularly in rural areas that had experienced significant structural violence over the preceding decades. Through the implementation of CLAS, administrative power for rural health services was transferred from state governments to local communities. Once established, CLAS associations would work with regional health providers to draft a Local Health Plan, identifying local health conditions, potential health issues, and a budget to implement improvement efforts.
Each CLAS association consisted of six community members plus the medical director of its respective health facility. The community members were nominated by the community and then democratically elected to a two-year term. From amongst its members, the CLAS association internally elected three members to its Board of Directors (President, Secretary, and Treasurer) for one-year terms.4 CLAS associations were given broad authority to make operational decisions at their local level, provided that alignment with national policy was maintained.3
The implementation of CLAS associations also reformed systems controlling local personnel management. In standard, non-CLAS health facilities, Peruvian health workers were hired by the central government and provided job security and benefits regardless of their or their facility’s performance, minimizing the ability of managers to hold providers accountable for poor performance. By contrast, CLAS allowed health facilities to hire privately contracted health workers and determine salaries based on performance, thus providing a point of leverage to increase accountability for the quality of care delivered to patients.
To complement this attention to quality of care, CLAS associations provided a platform for increased community engagement and participation by encouraging the direct request for, and incorporation of, community feedback in health services planning. CLAS associations would review service improvement requests from the community as well as address claims of patient mistreatment. If they found evidence of mistreatment, subsequent action and solutions differed but would generally be determined through collaboration between the CLAS member, CLAS manager, and most often the Regional Health Office (DISA/DIRESA). This review process created an open forum to discuss community concerns and elevated the importance of community opinion.
Finally, the CLAS system also reformed the financial management of health facilities. In non-CLAS areas of Peru, facilities were funded directly from the central government and insurance reimbursements but were given limited control over how funds were spent and were unable to autonomously use any internally generated funds. By contrast, CLAS associations were able to determine spending patterns for their facility. Every association was given access to a private bank account to manage their internally generated resources, and MINSA funds and insurance reimbursements from the government health insurance program were managed through this same account. This financial system provided local communities greater flexibility in spending on supplies, facility management, and personnel salaries based on local priorities.
An important concurrent reform in Peru was the development of national insurance schemes. In 1998, the Maternal-Child Insurance Program (SMI) launched as a pilot program to reduce out of pocket costs for childbirth-related services. SMI depended on CLAS’s financial management processes, and thus, was initially only implemented at CLAS facilities. Eventually, in 1999, the SMI program was expanded to non-CLAS facilities. Because CLAS facilities received reimbursements directly, SMI resulted in improvements in infrastructure and human resources as facilities spent the funds according to their needs. However, these same effects were not observed in non-CLAS facilities, demonstrating the utility of allowing facilities direct access to and flexibility in the use of insurance reimbursements in this context.4
To expand and strengthen the benefits of Peru’s insurance schemes, in 2002 the SMI program and the Free School Insurance scheme – developed in 1996 to provide free medical and dental care to students- combined to create Comprehensive Health Insurance (SIS) Program, a system to structure payments for health care and medicines and the transferring of funds to hospitals.5 With this development, CLAS associations received funding through SIS refunds and SIS enrollment bonuses when enrolling new patients in the program.6
Initially, CLAS was cautiously implemented at only 16 primary health care facilities with one CLAS association per health facility location. This pilot demonstrated strong success, including doubling child health care coverage and increasing accessibility of care for low-income individuals.7 Building on this success, the CLAS program expanded, and policies shifted to allow each CLAS association the ability to manage multiple health facilities. Data from 1996 to 2000 shows that rural mothers sought more care for their children at CLAS facilities than non-CLAS facilities for treatment of diarrhea and acute respiratory infections (Figure 1).7 Additional data from 1998 shows that the introduction of CLAS facilities corresponded to greater equity of care, in part because CLAS facilities were more likely to waive fees for low-income patients compared to non-CLAS facilities.4
According to MINSA, in 1994, there were 133 CLAS-operated facilities covering a population size of 958,473, and by 1998, that number grew to 637 CLAS-operated facilities covering a population of about 4 million.3 By 2002, there were 783 CLAS associations managing 2,133 facilities, about 31% of all health facilities in Peru.4 These CLAS facilities include both rural and urban centers, slightly favoring the latter, as well as health facilities of various infrastructure and personnel levels, including large health centers and small health posts.
In 2007, the Peruvian Congress passed legislation ensuring five more years of support for the CLAS system, and consequently, the number of CLAS facilities remained relatively constant until 2012.4 The 2007 law also restructured CLAS association membership with the goal of improving the balance between community and local government control. As a result, the new composition of CLAS associations consisted of one community leader, one health promoter from the community, representatives of relevant social health organizations, and one representative each from the health facility, network management center, regional government, and district municipality.7
Ultimately, the CLAS system attempted to address two main health system failures: equity and efficiency. Through more sustainable payments and direct access to financial resources, CLAS facilities provided more affordable care to the poor by eliminating user fees for low-income residents in rural areas.4 Across many measures, the CLAS system was initially a success. CLAS associations increased community participation, facilitated local priority setting, and improved planning health services in accordance with local needs. Increased flexibility allowed CLAS associations to develop locally appropriate incentives to increase accountability, decentralize control over personnel, produce shifts in resource procurement, and meet the demands of the community. By making care more responsive, person-centered, and accessible, CLAS resulted in increased utilization, coverage of essential services, and improved outcomes.
Figure 1: Percent of rural mothers seeking health care for a sick child under age five, by residence in a jurisdiction of CLAS or non-CLAS: 1996-2000 Source: Altobelli LC. Case Study of CLAS in Peru: Opportunity and Empowerment for Health Equity. 2008;1–3
Challenges and Decline of CLAS
Despite these successes, the CLAS system lost the support of MINSA in the early 2000s and is no longer a key aspect of Peru’s ongoing health reform efforts. Many factors contributed to this decline, including a limited relationship between local communities and state government, governmental power transitions, and resistance from physician unions.
In Peru, rural communities have historically felt disconnected from the state government. When CLAS was originally introduced, the process decentralized and ceded control of health services from the government to local communities, but did little to build bridges or working relationships between these two groups. Thus, both the community-based CLAS associations and the regional health authorities functioned as individual entities. This dichotomous relationship resulted in a lack of clarity regarding system and organizational guidelines, as well as uncertainty regarding the division of responsibilities between groups.2
These shifts in power contributed to additional struggles. In order for CLAS to be implemented, MINSA had to release their control over the distribution of funding to regional levels—and its willingness to do so was continuously in flux. Throughout the 1990s, there was stable support for the expansion of CLAS, but during the 2000 and 2001 governmental transition, the government paused financial contributions for health services, including the SMI insurance program. This decision produced a lack of financial security for CLAS facilities, limiting their receipt of sufficient funds through insurance reimbursements. As a result, CLAS struggled to ensure flexibility for spending on personnel, supplies, and infrastructure and the system only remained financially solvent through support from SAP, its parent program. Similar political considerations during the 2006 presidential election halted progress to solidifying CLAS in the Peruvian primary health care system and may have further weakened the system.
A contributing factor to these shifts in political support was resistance from the physicians working in the health facilities. Although CLAS focused on increasing local community participation, it did little to engage physicians in charge of primary health care services, and the physician union in Peru was often at odds with the CLAS program. Under the CLAS system, CLAS associations were newly able to monitor health worker performance and demand accountability and adherence to standards. At the same time, privately contracted workers in CLAS facilities received much less generous benefits packages than publicly employed physicians. Another influential factor to the physicians’ resistance was the elevation of local community oversight. Physicians often did not feel it was their responsibility to respond to the needs of the local community members, and ultimately resented that their traditional approach and authority was being diluted by the local community’s new role.4 As a result of these changes, physicians went on strike against CLAS from late 2003 to early 2004, causing CLAS associations to struggle to hire a sufficient number of staff for their facilities. As physicians distanced themselves from CLAS, the country’s political elites became critical of CLAS, eventually withdrawing support.
Post-CLAS: Comprehensive Health Insurance and a Focus on Quality
As CLAS declined, the importance of the SIS Program for ensuring better access to care increased, and the program began to receive greater support. While initially launched as a small initiative that accounted for only ten percent of MINSA’s budget, SIS has since become a prominent component of Peru’s health reforms as a two-tiered system that aims to reduce health-related economic barriers for the poorer populations. The process to enroll in SIS is simple: patients apply at health facilities and are then grouped by income into either the “fully-subsidized” or “semi-contributory” group.8
The SIS Program provides enrollees a benefits package of specific treatments—determined based on population health needs—available at zero cost; hospitals and health centers are prohibited from charging user fees, and instead receive payment for these services from SIS. In order to facilitate this transition of funds from SIS to the health facility, SIS’s regional use of funds is up to their discretion (similar to CLAS’s financial independence), but the amount of funds available to SIS is determined by the Ministry of Economy and Finance. The key difference between CLAS and SIS in terms of financial flexibility is that SIS funds are distributed to “implementation units” rather than the health facilities. Over time, the benefits package provided under SIS has increased and now covers 65% of disease categories.5 Further, there is little local community feedback and participation in priority setting and funds management at the facility level.
In 2009, Peru approved a Universal Health Insurance policy and created the role of National Superintendent of Health (SUNASA) to provide guidance and structure to the SIS Program and other insurance plans and to ensure quality care. Additionally, to further expand access to care, in 2012 EsSalud, SIS, and regional governments created a service exchange agreement allowing patients covered under different plans to utilize services provided by all three groups. These systems, combined with the decentralization of public health oversight to the regional governments from 2003 to 2009, have contributed to increased insurance coverage in Peru. As of 2013, the percentage of population covered by health insurance had risen to 65% (from 53% in 2008), with the poor population representing the highest proportion of those insured.
To complement these improvements in financial coverage, Peru has worked to address its human resource deficit by creating new training and educational opportunities. Since 1960, the number of medical schools increased from 3 to 21 and the number of nurse-training programs increased from 8 to 35.5 To ensure quality across this growing number of institutions, Peru also established a national system (SINEACE) to evaluate, accredit, and certify training programs, and as of 2013, 186 out of the total 234 registered training programs were accredited. Additionally, Peru has sustained since 1981 the Servicio Rural Urbano Marginal en Salud (SERUM) Program, which promotes geographic equity in the posting of health workers by requiring medical students to spend one year working in an underserved community providing health services.9 However, there is minimal motivation for students to remain in the public sector working in these rural communities after their placements and most therefore leave for placements in the private sector or in urban areas once they are able.5
Peru has made significant strides towards improving care and achieving Universal Health Coverage over the past three decades. For example, Peru has achieved 93% coverage of complete immunizations, 95% of pregnant women access antenatal care, contraceptive use has reached 73%, and the percentage of facility-based births increased from 24% in 2000 to 58% in 2012 in rural settings and from 58% in 2000 to 85% in 2012 in urban settings.8 Child health outcomes have improved significantly: rates of stunting among children under five years of age declined from 36.5% in 1992 to 13.1% in 2013, suggesting improvements in nutrition, and the infant mortality rate declined from 55 deaths per 1,000 live births in 1992 to 17 deaths in 2013. Additionally, the maternal mortality ratio declined from 265 per 100,000 live births in 1990-95 to 93 in 2004-10, and the rate of communicable, maternal, neonatal, and nutritional disorders declined from 54% in 1990 to 28% in 2010.8
Peru’s focus on community engagement, decentralization of care delivery and decision-making, and increased financial access to care over the last several decades has significantly contributed to these dramatic improvements in coverage and outcomes. This case study of Peru provides an example of how a country encouraged local community engagement, increased financial coverage, and reevaluated and adjusted its health reform efforts to meet changing needs. Although CLAS in Peru ultimately encountered resistance and decline (especially around local community engagement in priority setting), the success of its initial implementation paved the way for future wider coverage reforms, and may offer several lessons for countries seeking to increase local community engagement.
- Pan American Health Organization. Health in the Americas Country Volume: Peru [Internet]. Health in Americas. 2012. Available from: https://www.paho.org/salud-en-las-americas-2012/index.php?option=com_doc...
- Bowyer T. Popular participation and the state: Democratizing the health sector in rural Peru. Int J Health Plann Manage. 2004;19(2):131–61.
- Iwami M, Petchey R. A CLAS act? Community-based organizations, health service decentralization and primary care development in Peru. J Public Health Med. 2002;24(4):246–51.
- Altobelli LC. Case Study of CLAS in Peru: Opportunity and Empowerment for Health Equity. 2008;1–31. Available from: https://www.future.edu/wp-content/uploads/2018/06/2008-08-case-study-cla...
- Vermeersch C, Medici AC, Narvaez R. Peru - Universal health coverage for inclusive and sustainable development : country summary report [Internet]. 2014. Available from: http://documents.worldbank.org/curated/en/437741468076132999/Peru-Univer...
- Altobelli L, Sovero A. Cost-Efficiency of CLAS associations for Primary Health Care in Peru. Lima, Peru: Futuras Generaciones; 2004.
- Altobelli L. Effectiveness in Primary Healthcare in Peru. In: Beracochea E, editor. Improving Aid Effectiveness in Global Health [Internet]. New York: Springer; 2015. p. 161–70. Available from: https://books.google.com/books?hl=en&lr=lang_en&id=93iBCgAAQBAJ&pgis=1
- Francke P. Peru’s comprehensive health insurance and new challenges for universal coverage [Internet]. Washington, DC: The World Bank Group; 2013. Available from: http://documents.worldbank.org/curated/en/371851468086931725/Perus-compr...
- Mooser A. Mandatory Rural Service: A Primary Care Lesson From Peru [Internet]. Primary Care Progress. 2012 [cited 2018 Apr 20]. Available from: http://www.primarycareprogress.org/blogs/16/118