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Open Contracting helps reduce healthcare costs in Chile

Collaboration between reformers inside and outside the Chilean government has helped reduce the cost of medicines and boosted citizen access to affordable healthcare.

With healthcare accounting for more than 30 per cent of the average household income, families in Chile have had to develop different strategies, such as making online campaigns to raise funds to buy medicines or help finance treatments.

That’s made online campaigns to raise funds to buy medicines and help finance treatments a fact of life for many citizens. 

However, a community of civil society organizations, journalists and activists has turned the spotlight on government spending.

With a focus on public procurement that’s powered by recent open contracting reforms to increase transparency and the quality of public procurement data, the activists highlighted the high cost of medicines, lack of competition, conflicts of interest and dubious deals in the health sector. 

This was further amplified by country-wide protests in 2019 with the resulting public pressure leading to improved purchasing practices and competition.

And now, civil society is helping steer the reforms.

The people responsible for conflicts of interest have been held accountable and key reforms to procurement have empowered Chile’s central purchasing agency for medicines, CENABAST, to use its buying power and market intelligence to reduce prices for citizens. 

As a result, in 2020 CENABAST bought 60 per cent of medicines at a lower cost, saving the government an estimated $9 million.

And although it’s early days, expenditure on medicines is generally coming down with the cost of Paracetamol, for example, halved. 

The road to public procurement reform began in 2003 when Chile became an early leader in the world of e-procurement. The country now has a fully digital transactional system.

In response to a series of procurement scandals, in 2015 Chile significantly increased the transparency, standardization and quality of information available.  By 2018, accessible and open data was published across Chile’s procurement process.

Now, more than 5.9 million procurement processes are available in a standardized format, helping to increase the level of transparency, social control and access.  

And with the support of BHP Foundation partner Open Contracting Partnership (OCP) and others, the government has also published a series of reports and tools to track and monitor public procurement in Chile. 

Read the full article here.