Health Systems & Reform

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Restructuring Health Reform, Mexican Style

Michael R. Reich

To cite this article: Michael R. Reich (2020) Restructuring Health Reform, Mexican Style, Health
Systems & Reform, 6:1, e1763114, DOI: 10.1080/23288604.2020.1763114

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HEALTH SYSTEMS & REFORM
2020, VOL. 6, NO. 1, e1763114 (11 pages)
https://doi.org/10.1080/23288604.2020.1763114

POLICY REPORT

Restructuring Health Reform, Mexican Style

Michael R. Reich
Department of Global Health & Population, Harvard T.H. Chan School of Public Health, Boston, Massachusetts, USA

ABSTRACT ARTICLE HISTORY

Mexico’s health system is undergoing major restructuring by the administration of President Received 18 March 2020
Andrés Manuel López Obrador (known as AMLO) starting in December 2018. The government Revised 24 April 2020
has eliminated the 2003 health reform (Seguro Popular) from national laws and government Accepted 28 April 2020.
agencies and is returning Mexico to a centralized health system with integrated public financing KEYWORDS
and delivery and reduced private participation. This article looks at the political drivers of Mexico’s Health reform; Mexico;
restructuring reform. Three main ethical principles are identified as the foundation for the health system; Seguro
government’s health system vision: universality, free services, and anti-corruption. The article Popular; INSABI
then compares what existed under Seguro Popular with the new system under the Instituto de
Salud para el Bienestar (INSABI), which began on 1 January 2020. The analysis uses the five policy
levers that shape health system performance: financing, payment, organization, regulation, and
persuasion. The article concludes with five lessons about the reform process in Mexico. First,
undoing past reforms is much easier than implementing a new system. Second, the AMLO
government’s restructuring emerged more from broad ethical principles than detailed technical
analyses, with limited plans for evaluation. Third, the overarching values of the AMLO government
reflect a pro-statist and anti-market bias, swimming against the global flow of health policy trends
to include the private sector in reforming health systems. Fourth, the experiences in Mexico show
that path dependence does not always work as expected in policy reform. Finally, the debate of
Seguro Popular versus INSABI shows the influence of personality politics and polarization.

Health reforms are constructed through politics but
they are also dismantled and restructured through pol-
itics. Both the United States and Mexico are now wit-
nessing this restructuring of reforms—but with
important differences. In the US, President Donald
Trump has been constrained in his efforts to undo
Obamacare, by his lack of control of the votes in his
own party in the US Congress (remember McCain’s
dramatic opposing vote in the US Senate?1) and by
the decisions of judges around the country. But in
Mexico, President Andrés Manuel López Obrador
(known as AMLO) has bulldozed ahead in eliminating
the national health insurance plan of Seguro Popular
and creating a new health system, through his electoral
victory with a majority of the popular vote, his majority
control of both houses of the Mexican Congress, and
support received from a majority of state governors.
Mexico’s tectonic changes in its health system are
transforming the country, as the old comes down and
the new pushes forward. In early 2020, the costs and
uncertainties of these transitions were fiercely debated
in the press2 and in the President’s morning press
conferences.3 Major transformations were unfolding
in the five main policy levers that shape health system
performance: financing, payment, organization, regula-
tion, and persuasion.4 This article looks first at the
political drivers of Mexico’s restructuring health
reform, and then summarizes the policy changes
according to these five policy levers. The article con-
cludes with five lessons about the process of this mas-
sive reform ongoing in Mexico.
Political Drivers for the New Reform
Outside Mexico Seguro Popular has often been viewed
as a landmark national health reform moving toward
universal health coverage,5 but within Mexico criti-
cisms have been harsh and long-standing, especially
from the left.6 When AMLO was mayor of Mexico
City in the early 2000s, he and his health secretary
resisted the reform from a leftist perspective7 and
refused to sign an agreement with the federal govern-
ment to join the Seguro Popular. Mexico City only
joined after AMLO left office in 2005. AMLO

CONTACT Michael R. Reich michael_reich@harvard.edu Department of Global Health & Population, Harvard T.H. Chan School of Public Health, 677
Huntington Avenue, Boston, MA 02115, USA
This article has been corrected with minor changes. These changes do not impact the academic content of the article.
© 2020 The Author(s). Published with license by Taylor & Francis Group, LLC.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted
use, distribution, and reproduction in any medium, provided the original work is properly cited.
e1763114-2 M.R. REICH
continued his criticisms of Seguro Popular in his unsuc-
cessful presidential campaigns in 2006 and 2012, and in
his third and successful run in 2018.
AMLO’s most succinct criticism of Seguro Popular is
a play on words of the reform’s name: “ni es seguro, ni
es popular.”8,9 The first word, seguro, means insurance
but also means safe; and the second word, popular,
means for the people but also popular. This critical
phrase (“neither safe nor popular”) provided political
salience and polemical value. The phrase also reflected
AMLO’s core criticisms of Seguro Popular, which can
be summarized as follows10:
(1) Not universal in coverage of population: Critics
have pointed out that Seguro Popular did not
provide coverage for the entire population,
with AMLO’s Minister of Health stating in
2019 that 20 million Mexicans still lacked cov-
erage after 15 years of the program11—even
though Mexico declared in 2012 that the coun-
try had achieved Universal Health Coverage
(and put up a bronze plaque in the Ministry’s
headquarters, shown in Figure 1).
(2) Not universal in coverage of services: Critics
have argued that the specified packages of ser-
vices and medicines covered by Seguro Popular
denied people medical care that they needed
and produced economic costs to patients and
families6 (in contrast to the theoretical access to
all services and medicines in social security
provided by the Instituto Mexicano de Seguro
Figure 1. Mexico celebrates achievement of universal health coverage in 2012.
Social or IMSS for formal sector workers and
the Instituto de Seguridad y Servicios Sociales de
los Trabajadores or ISSSTE for government
workers).
(3) Not sufficient reduction in out-of-pocket
spending: Critics have argued that Seguro
Popular did not sufficiently reduce high levels
of out-of-pocket spending by people for ser-
vices and medicines12,13 (although out-of-
pocket spending did decline as a proportion
of total health spending from 52.2% in 2000
to 41.4% in 201514).
(4) Resulted in widespread corruption: AMLO and
his government have criticized Seguro Popular
as a major source of corruption, due to its
involvement of the private sector and lack of
effective accountability for public funds sent to
the states.3,15
(5) Not improve people’s well-being: The over-
arching political arguments against Seguro
Popular are that it did not improve the health
conditions of the Mexican people and did not
contribute to reducing poverty.6
Overall, AMLO and his advisors viewed Seguro Popular
as a public policy that was an externally generated “neo-
liberal” creation, and that wasted public resources and did
not benefit the Mexican people.6 It is worth noting, how-
ever, that Seguro Popular did improve access to many
health services in Mexico (including high-cost services
under the Fund for Protection Against Catastrophic

Expenses, as well as services for basic maternal care16), and
that the federal government over time made various policy
changes to address problems in implementation and
improve health system performance.17
The above criticisms provided the foundation for the
AMLO government’s vision of a new Mexican health
system, founded on three main ethical principles:
(1) Universality: a system that provides all health
services (not just financing to pay for services)
from public providers to all Mexicans without
social security as a right based on citizenship,
without any process of application or affiliation.
(2) Free services: a system that provides all health
services for free from the public sector, not
through private providers, to reduce out-of-
pocket spending by individual patients.
(3) Anti-corruption: a system that reduces corrup-
tion by centralizing control over purchasing
and service delivery and by reducing private
sector participation in the public health sector.
These three principles emerge from public statements
by the President and top officials in the Ministry of
Health,2 and from policy documents for the new
system.10 For example, in his morning press conference
on 11 February 2020, President López Obrador stated3:
The goal is that on December 1 of this year there will
be a totally different, efficient public health system,
with medicines, high quality and free medical care …
The purpose is to guarantee the right to health of those
without social security.
Restructuring Mexico’s Health System
In broad terms, AMLO’s team of health policymakers
since coming to office in December 2018 has sought to
remove all traces of Seguro Popular18 from national
laws and government agencies and return Mexico to
a centralized health system with integrated public
financing and delivery and reduced private sector par-
ticipation. The six-year single term for Mexican presi-
dents encourages the AMLO administration to take fast
executive and legislative action.
The government thus is engaged in a complex, radi-
cal, and still ongoing restructuring of Mexico’s health
system, with a focus on the “public sub-system” (out-
side of social security and under the Ministry’s control).
This paper examines that restructuring through the five
policy levers that affect health system performance,
comparing what existed under Seguro Popular with
what the AMLO government is introducing under the
HEALTH SYSTEMS & REFORM e1763114-3
Instituto de Salud para el Bienestar (INSABI), which
began operations on 1 January 2020 (see Table 1).
(1) Financing
Financing involves the sources of money for a health
system. At the broadest level, Seguro Popular was financed
with a national health insurance model. Seguro Popular
received about 80% federal funds and 20% state funds—in
short, almost entirely from general taxes, because almost
no one paid an individual premium (due to the lack of an
effective assessment of income at the time of enrollment,
nearly everyone self-declared in the three lowest income
deciles, all exempt from premium). INSABI, by contrast,
is financed with a national health system model, with all
funds from general taxes, and no expectation of individual
premiums.
In terms of financing levels, Seguro Popular was
intended to increase government spending on health, so
that more personnel could be hired, more facilities could
be operated, more services could be delivered, and the
population covered could be expanded. Seguro Popular
thus represented a reform designed to spend more money
on health (reflecting Mexico’s low level of health spending
as a proportion of GDP within OECD countries and Latin
America14). INSABI’s budget for 2020 included an extra
40 billion pesos (about a 35% increase on top of the base
budget of 112.5 billion pesos previously allocated to
Seguro Popular) to improve health facilities and services
and hire more health workers, to assure free care for then
69 million Mexicans without social security.19 An inde-
pendent cost analysis of selected health services for this
entire population, however, estimated the amount needed
as 793 billion pesos (plus an additional annual 18 billion
pesos for regularizing the contracts of health workers),
suggesting that INSABI was seriously underfunded to pay
for what the government promised to deliver.20
Another key dimension of financing is how funds are
transferred from the federal level to Mexico’s 32 states.
Under Seguro Popular, the federal level sent funds to
states as block grants, calculated according to the number
of affiliated persons in the state, as an incentive to increase
enrollment. The center provided funds to new institutions
created in each state (called Regimen Estatal de Proteccion
Social en Salud or REPSS). The REPSS were designed to
exist outside of the state health agencies, in order to
separate financing from provision, as a mechanism to
improve the efficiency and quality of service delivery.
INSABI, by contrast, will provide financing directly to
state hospitals and primary care clinics (which will
become part of INSABI as federal institutions) and the
hire workers directly for those facilities. At the end of
January 2020, INSABI had signed agreements (Acuerdos
e1763114-4 M.R. REICH

Table 1. A comparison of Seguro Popular and INSABI

Seguro Popular INSABI
Financing
Financing: National Insurance Model, but with premiums paid by National Health System model, with financing from general
Basic model government taxes
Financing: Increase government health spending, in order to expand Lower government health spending, with reduced corruption;
Total government services no clear target for total health spending
spending
Financing: from federal Decentralize to state as block grant, with amount determined Recentralization of control over procurement and personnel
to states by number of affiliated persons, based on separate financing and delivery, based on integrated financing and provision
from provision
Payment
Payment mechanism Strategic purchasing allowed by states, including use of private Centralized state provision of supplies and services, and
within states (Market companies for supplies and services, open to private sector reduce private sector participation at state level
orientation)
Payment for what? Government pays for a limited list of conditions and Government pays for all services, according to the principle of
medications: CAUSES, 294 interventions for 647 medical “Todo para todos,” within the limits of budgets set by Ministry
conditions; plus 66 catastrophic conditions of Finance (Hacienda)
Payment by patients No patient payment for listed services and medications; out-of- Principle of free services and medicines, to reduce out-of-
pocket payment for unlisted services and medicines in public pocket payment by patients in private and public sectors
sector
Organization
Organization at federal Established Seguro Popular, as organization to operate the Created Instituto de Salud para el Bienestar, as new
level financing system organization to integrate financing and delivery, and
eliminated Seguro Popular
Organization at state Created new organization in each state (REPSS) responsible for Eliminated REPSS and integrated financing and provision at
level buying services in order to separate financing from provision state level, with more delivery done directly by central INSABI
Organization of central Created new organization to consolidate purchasing for certain Centralize purchasing under Ministry of Finance (Hacienda)
purchasing medicines across Seguro Popular and social security and reduce procurement by individual health agencies;
eliminate consolidated purchase agency
Organization of rural Use the principle of “money follows the patient” to provide Use the principle of central employment of health workers and
service delivery payment for facilities and health workers in rural areas central ownership and management of health facilities to send
people and manage services in rural areas
Organization of people Increased coverage for nonsocial security through voluntary Provide services (not coverage) for everyone, with no
covered affiliation, seeking to reduce double coverage with social affiliation process
security
Regulation
Regulation of spending Spending guidelines for states on proportions for personnel Centralization of purchases in order to reduce state discretion
by states and medicines on spending
Regulation of health Regularization of state workers resulted in full time contracts Regularization of new health workers hired directly by INSABI
workers and union membership to work at the state level
Regulation of medicines COFEPRIS created in order to regulate pharmaceuticals and Used COFEPRIS to shut down important medicine producer
(and facility thru foods and also health facility quality and then purchased medicines in France (methotrexate)
accreditation) without registering product in Mexico
Persuasion
Persuasion to improve Use of incentives at both individual and state levels to Eliminate Mexico’s conditional cash transfer programs to
health, nutrition, and encourage enrollment in Seguro Popular and encourage incentivize poor to improve education and health; replace
education of poor improvements in service quality with educational grants to families
Source: Author

de Coordinación) with 23 state governments making
INSABI responsible for providing free health services to
the population without social security in those states, with
discussions ongoing with the remaining 9 states.21 Some
states, such as Jalisco, signed agreements with the federal
government to opt out of INSABI, while still agreeing to
provide free services in accord with federal principles.22
Questions remained, however, about how accountability
would be achieved for millions of previously “lost”
finances from Seguro Popular in various states around
Mexico (where the use could not be verified by the
Federal Audit Office).23
(2) Payment
Payment is how money (collected through financing) is
used to purchase health services and medical products,
including how hospitals and doctors are paid and how
medicines are procured. As noted above, under Seguro
Popular, funds to provide basic health services from the
federal government went to a new organization in each
state (REPSS) that was created outside the state
Secretary of Health.1 The REPSS were over time
removed from the state health agencies, in order to
separate purchasing from delivery, and they were
responsible for buying services (facilities and health
personnel) according to state-decided payment policies.
INSABI, by contrast, has re-integrated financing and
provision, bringing them back together at the federal
and state levels (the REPSS were eliminated). INSABI
thus has a direct fiscal relationship with the state
Secretary of Health but also with health facilities and
health personnel located in states, and will directly own
and operate facilities and employees in states.

Within states, under Seguro Popular, the REPSS were
supposed to implement the principle of separation of
purchasing from provision (as a step toward “strategic
purchasing”24). This principle, however, was unevenly
implemented by states, and in some cases was resisted
by health workers and unions, by governors, or by state
Secretaries of Health, who did not want to lose control
of resources. Purchasing by the REPSS allowed states to
contract with private providers for clinical, pharmacy
and other services, such as maintenance and laundry,
and many states did so, especially for medicines and
equipment. Private contracting was intended to intro-
duce competition at the state level, and thereby
improve performance, accountability, quality, and effi-
ciency, but had mixed results and problems with imple-
mentation along with cases of corruption.25 INSABI, by
contrast, has re-centralized purchasing and provision
and reduced decentralized state authority to purchase
separately. INSABI embodies a strong statist, public
sector, and centralized approach. In its centralized pur-
chasing, INSABI has changed certain companies that
provide medicines and equipment, sometimes creating
supply chain disruptions. INSABI also plans to regular-
ize more than 17,000 health workers directly as federal
employees in 2020 to deliver health services in states,26
and seeks to reduce the private sector’s role in health.
A major question under payment is: What is pur-
chased? In Mexico, the federal agency of CNPSS
(Comisión Nacional de Protección Social en Salud)
decided on a single national set of services that would
be covered by states in primary and secondary level
facilities for Seguro Popular (a specified package known
as CAUSES, with 294 medical interventions) plus 66
catastrophic conditions that would be delivered in ter-
tiary care institutions (under the Fund for Protection of
Catastrophic Expenses) plus all health services for chil-
dren under five years old (from the Seguro Medico Siglo
XXI).27 Patients were not required to pay a copayment
or deductible for listed services under these three pro-
grams. Patients who required non-listed services or suf-
fered from non-specified conditions had to pay out of
pocket for services and medicines (even at public facil-
ities). INSABI, by contrast, operates under the principles
of universality and free services. Even though by law
national tertiary hospitals in Mexico can charge for
services, the AMLO government has forced them to
provide services for free while implementing “drastic
cuts” to budgets.28 This approach has created financial
problems and limited supplies in top-tier national
hospitals,28 contributing, for example, to the firing of
the Director of the National Institute of Neurology
HEALTH SYSTEMS & REFORM e1763114-5
when service delivery problems and other irregularities
were reported.29
(3) Organization
The most dramatic organizational changes in Mexico’s
health sector were the elimination of CNPSS as
a government agency and Seguro Popular as a public
policy and the establishment of INSABI as a new gov-
ernment entity. The disappearance of Seguro Popular
on 31 December 2019 had significant organizational
consequences: its employees were either fired or trans-
ferred, individual enrollment files were packed up and
warehoused, and computer databases around the coun-
try were erased. At the same time, INSABI began
operations under the direction of Juan Ferrer, an arche-
ologist and public administrator with limited experi-
ence in the health sector but with a close personal
relationship with the President.30
Organizational restructuring also occurred at the
state level. As noted above, the state purchasing agen-
cies for services and medicines (REPPS) disappeared,
and their employees were transferred to state health
agencies and were asked to engage directly in service
delivery or health promotion (rather than administra-
tion). Some REPPS functions were assigned back to the
state Secretaries of Health, and some functions—such
as procurement of medicines and hiring of health per-
sonnel—were transferred to INSABI in Mexico City
under the new policy of centralization. Exactly which
functions are going where and how was still being
worked out in January 2020, creating various uncer-
tainties in the health system.2 With state health facilities
to be owned by INSABI, most Mexican states will in
effect no longer be responsible for the delivery of per-
sonal health services.
The AMLO government also reorganized the pur-
chasing of medical inputs by the federal government.
Along with Seguro Popular, Mexico created a central
purchasing agency, called the CCPNM (Comisión
Coordinadora para la Negociación de Precios de
Medicamentos y otros Insumos para la Salud). This
entity included the social security agencies, in order to
reduce huge variations in purchase prices across health
agencies and across states.31 The CCPNM used its
enhanced market power (for purchasing large volumes
pooled across various organizations) to negotiate lower
prices for patented medicines with pharmaceutical
companies. Under INSABI, purchasing has been cen-
tralized in the hands of the Ministry of Finance (known
as Hacienda), and the CCPNM disbanded (even though
e1763114-6 M.R. REICH
it was working relatively well), as part of efforts to
reduce corruption and increase efficiency, with the
first tender announced in March 2019.32 Problems in
implementing the new purchasing system, however,
have created disruptions in Mexico’s supply chain for
anti-cancer medicines (and other medicines and sup-
plies), and given rise to public dissatisfaction, including
emotional public protests by parents of children with
leukemia.33
Another major organizational change is reducing the
private sector’s role in the health system. Seguro
Popular allowed state REPPS to purchase services and
supplies from the private sector, and states used this
flexibility in various ways, contributing to some
instances of corruption (for example, in the purchase
of medicines and contracting of human resources34).
The private sector also had a significant role in provid-
ing cancer treatment (for example, through nonprofit
organizations) financed by the Fund for Protection of
Catastrophic Expenses under Seguro Popular. INSABI,
in contrast, has followed the AMLO government’s anti-
private sector orientation. INSABI announced that it
will not ban the use of the private sector in delivering
services for public agencies, but it will no longer pro-
vide money to purchase those services in private facil-
ities (including nonprofit organizations) and instead
will provide medicines and physicians to those private
facilities as support in kind. A major private nonprofit
provider of breast cancer treatment in Mexico City, for
example, announced on 20 February 2020 that it would
no longer provide free care to poor people because of
the lack of a financing agreement with INSABI.35
INSABI responded by saying that the private provider
had an “ethical, moral and juridical obligation” to con-
tinue providing free care to existing patients.36 After
public protests by women with breast cancer,37 the
government and the provider reached an agreement,
with the government reimbursing services already pro-
vided in 2019, the provider agreeing to continue free
services for existing patients, and the government say-
ing that federal facilities would treat all new patients in
2020 moving forward.38
A major organizational challenge is how to deliver
medical services in rural areas of Mexico, where doctors
and nurses are reluctant to live. This distributional
problem occurs in many countries throughout the
world.39 Seguro Popular sought to solve that problem
but was not fully successful since many rural areas
remained without effectively functioning health services
or health workers. And the pasante system of sending
medical students in their last year of studies continued
to face multiple problems related to insecurity, super-
vision and quality of care.40 INSABI plans to improve
services in hard-to-reach rural areas by directly hiring
33,000 Medicos de Bienestar to work as federal employ-
ees and by directly building and owning health clinics
as federal facilities.17 It will be important to assess how
effective INSABI will be in encouraging health workers
to take positions in insecure and isolated rural
communities.
A final organizational challenge is who receives cov-
erage for services. Seguro Popular developed
a mechanism to provide on-demand enrollment at
any time for individuals, and over time developed sys-
tems to identify social security members and exclude
them from Seguro Popular services and coverage.17 This
reflected a concern about “double affiliations.”17 If
INSABI’s benefits are provided to people based on
basic human rights, then questions arise about benefi-
ciaries: Who will be given free medicines and free
services? Can people be denied services, and if so on
what basis? For example, will people with social secur-
ity in Mexico be allowed to receive free services from
INSABI without reimbursement from their insurance
plans? More broadly, will migrants from other coun-
tries be given free medical services (for example, citi-
zens of Guatemala or the United States in border
areas)? If people cannot receive free services and are
charged for services received, then how will prices be
determined?
(4) Regulation
One important area of health system regulation
involves money, especially health spending by states.
Under the financing mechanism of Seguro Popular,
states initially had substantial discretion in deciding
how to spend the federal money they received. The
amount of money was calculated according to the
number of affiliated persons in the states, as an incen-
tive to increase enrollment. That incentive process
worked to encourage affiliation (although the incentive
initially was calculated by family,34 which resulted in
many one-person families, as states abused the process
to receive more central funding). But there were initi-
ally few restrictions over state spending, resulting in
diverted funds for other uses (as theories of corruption
predict41). Over time, the federal Seguro Popular intro-
duced spending guidelines (such as proportions on
personnel and on medicines) in order to shift state
spending patterns to more “desirable” patterns, with
some limited success.17 For INSABI, federal authorities
are seeking to reclaim control of state health spending
by directly hiring workers and purchasing medicines
for distribution to the states.

A second area for regulation involves health work-
ers. Under Seguro Popular, many states hired new
health workers on three-month contracts without ben-
efits, and these workers did not qualify for union
membership. Over time, states revised some of these
contracts in a process of “regularization” that produced
a diversity of contracting situations but including long-
term contracts with full benefits and union
membership.34 Under INSABI, the federal government
is directly hiring new health workers under regularized
contracts that qualify them for union membership. The
government is also promising to convert job positions
from temporary contracts to permanent unionized con-
tracts progressively over time (although this has not yet
started and could be difficult to implement). This direct
hiring of physicians and other health workers seeks to
fulfil a major promise of the AMLO government to
expand access to doctors and nurses especially at the
primary care level. Regularized contracts and union
membership, however, do not necessarily lead to ade-
quate performance by health workers. Seguro Popular
did not include effective supervision or incentives to
improve the performance of new health workers,25 and
it is not clear how INSABI will monitor or assess the
performance of the expanded health workforce, espe-
cially if they are federal employees who are working in
health facilities in states around the country.
A third area for regulation is for medicines and
facility quality. Mexico’s health regulatory agency is
called COFEPRIS (Comisión Federal para la
Protección contra Riesgos Sanitarios) and was created
in 2001, in the same time period as Seguro Popular, as
an autonomous technical agency within the Ministry of
Health. COFEPRIS covers the regulation of health-
related drugs and technologies, toxic or dangerous sub-
stances, products and services, health at work, risks
derived from environmental factors, and basic
maintenance.42 The full policy of the current govern-
ment toward regulation of health risks is still evolving,
but in January 2020, the AMLO administration
announced in the Diario Oficial de la Federación that
it would now be officially authorized to import medi-
cines from certain high-quality regulatory nations
(Switzerland, EU, USA, Canada and Australia) without
requiring review and approval by COFEPRIS.43 This
step legalized what the government began in 2019—
directly purchasing and importing medicines abroad
without regulatory approval by COFEPRIS, in order
to address supply chain problems (such as methotrexate
for childhood cancers) created by actions taken against
domestic manufacturers.44 This action by the AMLO
government suggests a willingness to weaken regulatory
controls in order to allow government imports from
HEALTH SYSTEMS & REFORM e1763114-7
new foreign sources, raising concerns about potential
quality problems in imported medicines, although the
government argued this would improve access to
affordable and approved medicines.
(5) Persuasion
Under Seguro Popular, various forms of persuasion
were used to encourage enrollment in the insurance
scheme. At the individual level, enrollment centers at
health facilities “caught” potential members when they
showed up for services, and enrolled them on the spot.
Seguro Popular did not have a specified enrollment
period and had no exclusions for existing health con-
ditions. In addition, Seguro Popular had no means
testing: individuals self-declared their income level,
predominantly in a low-income group that waived pay-
ment of a premium. As mentioned above, federal pay-
ments to the state were calculated based on the number
of enrollees, as an incentive for states to enroll as many
people as possible. In addition, members were required
to re-enroll, with the idea that this would create an
incentive for states to improve the quality of services,
in order to encourage individuals to re-enroll. These
strategies were successful in encouraging large numbers
of people to enroll (reaching 53.5 million people in
January 2018 or 43.3% of total population,17) although
the impacts on quality improvement were doubtful.
INSABI has not so far engaged in persuasion-based
interventions, reflecting the AMLO government’s gen-
eral emphasis on making services available and free for
all people without social security in Mexico. More gen-
erally, the AMLO government has opposed the use of
incentives to change behavior, as reflected in its deci-
sion to eliminate Mexico’s conditional cash transfer
program known as Prospera Programa de Inclusión
Social (started in 1997 and previously called Progresa
and Oportunidades). This program provided direct pay-
ments to poor families when they engaged in specific
education, nutrition and health activities. At the end of
2007, Prospera included around 6.6 million Mexican
families, covering just over 20% of the national
population.45 Although the program was rigorously
evaluated and showed important impacts on the beha-
vior and well-being of poor families,46 the AMLO gov-
ernment ended Prospera because they stated that it did
not reduce poverty, was vulnerable to political abuse
and corruption, and was connected with the neoliberal
perspective.47 The government assigned the budget pre-
viously used for Prospera to a new educational scholar-
ship program, to encourage students from poor families
to stay in school.48
e1763114-8 M.R. REICH

Challenges Ahead actions on financing, payment, organization, regulation

and persuasion (described above) with the broad goals
Through INSABI, the AMLO government is massively
of the AMLO government represents a major substan-
restructuring the Mexican health system, dismantling
tive policy challenge.
policies that have been in place since the early 2000s,
Second, the AMLO government’s restructuring
and introducing new structures and processes that are
emerged more from broad ethical principles than
still under development. The impacts of these changes
detailed technical analyses, with limited plans for
will take time to manifest, assess, and evaluate. It will
evaluation. The government has not published techni-
be important to assess the consequences for health
cal analyses to justify its policy choices, or provided
system outputs (for example, service utilization or
a clear plan for evaluating impacts of the new policies
vaccination rates) and health outcomes (for example,
adopted. The current government’s sweeping restruc-
cancer survival rates or child growth), and both
turing of the health sector is troubling to academics and
national averages as well as distributional measures
technocrats, civil society organizations and citizens who
(for example, by income group, by state, by ethnic
believe that the careful collection and analysis of infor-
group, and by rural residence).
mation should be the basis for evaluating and reform-
While the government’s policies are still evolving,
ing public policies. Concerns have been raised about
several lessons about the restructuring can be sug-
how the consequences of the current policies will be
gested, especially about the processes of reform. These
evaluated over coming years.
are offered here to help explain what is currently hap-
Third, the overarching values of the AMLO govern-
pening in Mexico, how a major reform that survived
ment reflect a pro-statist and anti-market bias, swim-
two changes in national political administration did not
ming against the global flow of health policy trends to
survive a third.
include the private sector in reforming health systems.
First, undoing past reforms is much easier than
AMLO’s policies are restoring the Mexican state to
implementing a new system. In many ways, the
a model of centralized power and reducing the role of
AMLO government moved to eliminate the existing
private facilities and companies. Policies with a market
system of Seguro Popular before it had fully planned
orientation, performance incentives, or private sector
or designed a new system. This approach is consistent
involvement are viewed as “neoliberal” and the source of
with what AMLO has done in other policy areas (such
corruption. But the restoration of a centralized-state sys-
as education49), and follows a populist pattern seen in
tem may reintroduce problems such as widespread ineffi-
other countries. In some cases, the decision was to
ciency and underperformance. The prevailing
eliminate and not replace, as with the package of spe-
assumptions are that removal of the private sector will
cified services provided under Seguro Popular. In this
reduce corruption and therefore reduce waste, and that
case, the government issued broad policy statements
federal control of state health services will reduce public
about “everything for everyone” (todo para todos) leav-
sector corruption, so that health budgets can provide
ing specific questions unanswered and creating confu-
more services than previously.10 It will be important for
sion among both providers and patients. For example,
the AMLO government to put in place effective mechan-
INSABI has to deliver services within the limits of the
isms for measuring corruption, wastage, and efficiency in
available budget each year, which effectively constrains
the new health system as it takes shape, to assess these
the principle of “everything for everyone” (although
assumptions.
how resources will be allocated is not clear since the
Fourth, the experiences in Mexico show that path
agency started without the usually required “rules of
dependence50 does not always work as expected in
operation” [reglas de operación]). In other cases, a past
policy reform. Path dependence predicts that the ben-
policy has been replaced by a new policy with a new
eficiaries of reforms will aggregate into effective sup-
name but without major changes in substance. For
port for existing policies and will oppose efforts to
example, the AMLO government replaced the list of
undo and dismantle policies that provide tangible ben-
medicines provided under Seguro Popular (known as
efits to them. AMLO’s restructuring of the health sys-
CAUSES or Catálogo Universal de Servicios de Salud)
tem shows that even major reforms like Seguro Popular
with a new list under INSABI (now known as the
can be undone, when the positive feedback loops are
Compendio Nacional de Insumos de Salud) and with
not sufficiently clear or appreciated, when the reform’s
mostly the same products.2 The continuation of
beneficiaries are persuaded to vote for a populist poli-
a limited list of specific medicines would seem to con-
tician, and when the new administration controls not
tradict the broad policy statement of “everything for
only the executive branch but also the legislature.
everyone.” Effectively integrating the different policy
AMLO’s promise to expand unionized health workers

probably helped avoid potential opposition from
powerful trade unions, and the decision not to touch
the social security organizations also may have helped
reduce potential resistance to restructuring. In addition,
AMLO promised to deliver more benefits with his new
plan than provided by Seguro Popular, an approach that
could have undermined popular opposition to the
changes.3 AMLO is doing in Mexico to Seguro
Popular what Trump would have done to Obamacare
in the USA if he had more control over majority votes
in both houses of the US Congress. In short, massive
shifts in elections can change political institutions in
ways that undermine the expected path dependence of
policy reforms like Seguro Popular and produce massive
policy changes—and in ways that may be difficult to
reverse.
Finally, the debate of Seguro Popular versus
INSABI shows the influence of personality politics
and polarization. Mexico’s disagreement over health
policy is playing out between the former national
Minister of Health who created Seguro Popular
(Julio Frenk), and the former Mexico City Minister
of Health who refused to join the system in the early
2000s and now serves as national Vice-Minister of
Health (Asa Cristina Laurell). Over the past two
years, Frenk has written frequently in the Mexican
and international press protesting the decision of
AMLO to eliminate Seguro Popular and criticizing
the problems of INSABI and health policies of the
current government. Frenk and his supporters seem
to support a restoration of past policies that have now
been eliminated. On the other side, Laurell and her
supporters seem to support a removal of past policies,
pushing the government to erase all elements of the
health policies that Frenk initiated, without a careful
assessment of the benefits provided previously and
the harms likely to occur if a substitute cannot be
effectively implemented. The losers in this kind of
polarized policy reform are the Mexican people who
will pay the costs with their health and well-being and
their lives.
Notes
1. Payment for selected services associated with the 66
specified conditions under the Fund for Protection of
Catastrophic Expenses used a fee for service method,
and were provided at tertiary care institutions accre-
dited for the condition by Seguro Popular.
2. The new list of medicines (Compendio Nacional de
Insumos de Salud) was apparently decided by compar-
ing the lists used by Seguro Popular and the major
social security institutes and then including those pro-
ducts shared by all of them.
HEALTH SYSTEMS & REFORM e1763114-9
3. A national monthly poll, however, showed significant
increases in dissatisfaction related to the AMLO gov-
ernment’s actions on health in February 2020 as
INSABI was implemented, reaching 53% disapproval
(bad/very bad) and 29% approval (good/very good).51
Disclosure of Potential Conflicts of Interest
No potential conflict of interest was reported by the author.
Acknowledgments
The author appreciates comments and suggestions that
helped improve this paper, from: Martin Lajous, Andrea
Luviano, Veronika Wirtz, Corrina Moucheraud, Octavio
Gómez-Dantés, Thomas Bossert, Laura Vargas, Kevin
Croke, and Gustavo Nigenda.
ORCID
Michael R. Reich http://orcid.org/0000-0003-3338-0612
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