A decade of HMOs in Chile: market behavior, consumer choice and the state

The military government in Chile imposed laboratory-like conditions to restructure that nation's health care system into one with greater free-market competition. The vanguard of this restructuring was the private medical market where HMO-like plans known as ISAPREs (Institutes de Salud Previsional), spearheaded these efforts. This paper analyzes the evolution of this first decade of these widely celebrated HMOs in Chile. The discussion centers on the changing role of the Chilean welfare state and the treatment of medical care as a culturally defined commodity. It concludes with a critical review of the pros and cons of HMOs by considering to what extent free-market conditions actually prevail.