Venezuela to Completely Overhaul Its Health Care System

Chavez announced Mission Barrio Adentro III, which will reorganize and fully fund Venezuela's ailing hospital system. Funds will come from a new development fund constituted from "excess" Central Bank foreign currency reserves.

Caracas, Venezuela, August 29, 2005 —Venezuela’s President Chavez said yesterday that his government would completely overhaul its ailing health care system in the next two years, mostly by purchasing state-of-the-art medical equipment from abroad. The plan, known as Barrio Adentro III (Inside the Barrio III), involves the expenditure of nearly $2.5 billion from Central Bank reserves that the National Assembly recently dedicated to a $6 billion special development fund.

Chavez made the announcement during his weekly television program Aló Presidente, which took place in one of Caracas’ military hospitals. Chavez took the opportunity to announce that all of Venezuela’s 13 military hospitals would from now on be open to the public.

Already since the time before Chavez came into office in 1998, Venezuela’s hospital and medical system was considered to be in a shambles. Insufficient hospital beds and supplies meant that patients had to bribe doctors and to bring their own medical supplies and instruments if they wanted treatment. The situation in the country’s hospitals had hardly changed during Chavez’s presidency. However, in early 2003 the government began Mission Barrio Adentro, which brought tens of thousands of Cuban doctors to Venezuela to provide free primary care in the poorest neighborhoods, which reduced the pressure on hospitals somewhat.

Two months ago, Chavez announced the creation of Barrio Adentro II, which involved the construction of community clinics in the country’s poorest neighborhoods. In contrast, Barrio Adentro III, is dedicated towards the overhaul of the existing hospital system, where all hospital care would be completely free of charge.

Chavez explained yesterday that in the country’s interior there are only 1.3 hospital beds for every thousand inhabitants, which is less than half of what the World Health Organization recommends.

“The first and most important use [of the Central Bank money] is to purchase necessary equipment, the most modern in the world,” said Chavez. “That’s Barrio Adentro III: a hospital revolution.”

According to the new Central Bank law that set aside foreign currency reserves for the National Development Fund (Fonden), these funds may only be used for purchases abroad, in foreign currency, or for paying off Venezuela’s foreign debt. The Central Bank law reform passed last July and allows for the transfer of up to $6 billion in foreign currency reserves to the development fund. Venezuela’s foreign reserves are currently at over $30 billion, which many economists say is more than enough for an economy the size of Venezuela’s.

Chavez argued that Venezuela’s hospital crisis was largely the fault of decentralization. “What city hall will have the resources for this if at times they don’t even have resources for garbage collection? It’s because the financing system was weakened during the Fourth Republic (1958-1998) and now is when we are strengthening it,” said Chavez in his TV program.

“When we conclude Barrio Adentro III, we should have also concluded Barrio Adentro I and II. We will all work so that by the end of 2006 we can say that we have a true public health system in Venezuela for the first time in 200 years,” declared Chavez.