Democratizing Private Medicine Through Public-Private Agreements

Q: What is CMH doing to mitigate the impact of COVID-19 in Mexico?

A: CMH established a partnership with the government to support patient care during the pandemic. This was the result of a global analysis of different healthcare systems right when the pandemic started to spread in China and Europe. The public and private sectors wanted to break barriers and build alliances to collaborate and create a response to the pandemic. Together with ANHP and other state hospital associations from Jalisco, Sonora, Mexicali, Queretaro and Nuevo Leon, we created a common front to approach the government and establish a bridge that would allow the creation of the needed structure for this project.

We analyzed the capacity of the private sector to collaborate with the public sector. When the outbreak started spreading, private hospitals had wider capacity as already programmed surgeries were being postponed due to fear of contagion. This allowed us to negotiate with the government and to collaborate by offering our services to treat non-COVID-19 patients coming from public institutions.

Q: How can this partnership improve healthcare access?

A: The lack of structure and human resources to provide healthcare in Mexico is evident. Most of our indicators regarding healthcare fall behind compared to other OECD countries. Right now, we are working on a proposal to secure healthcare attention in Mexico beyond profit. In the near future, hospital building might be limited to take advantage of the already existing infrastructure within the private sector to ensure the best service offering. This dynamic could follow the same transparent scheme proposed during the COVID-19 crisis in which the government would pay for our services at the same prices determined for the same procedure in the public sector. This opens a great opportunity for both sectors.

Before COVID-19, the private sector would have around 40 percent bed availability, which could perfectly be used to attend patients from the public sector at those referenced prices. Under the right collaboration framework, the private sector could start investing in infrastructure to attend government beneficiaries, focusing on service provision rather than the building itself as in regular PPPs. Within this model, the private sector would charge for its services instead of rent for the building. This is a much more effective way to secure patient access in both sectors. The private sector has been promoting these initiatives knowing that it would involve more agreements, finding new financing models and creating more accessible insurance products to democratize medicine.

Q: What challenges have CMH hospitals faced to maintain their regular activity and income during the COVID-19 crisis?

A: CMH prioritized the protection of medical staff and all care providers as they are the pillar of attention. Next, we created a strategy based on different information from hospitals in Latin America to establish protocols and preventive measures according to the Mexican authorities’ guidelines. As a result, we reported a very small number of COVID-19 cases among our staff.

One of the main challenges was economic. We had to convert our hospital spaces because, even though we agreed to take care of non-COVID-19 patient flows, we still needed to be prepared to treat other patients as we would not deny them service. Therefore, we established rigorous measures to protect staff, patients and families.

As for our COVID-19 patients, we were in constant communication with AMIS to monitor service costs and determine which protocols would be useful to provide the most reasonable healthcare costs for both insured and out-of-pocket patients.

Q: How will CMH take advantage of the growing insured client base following the pandemic?

A:. Mexico still faces the reality of a 7 percent insurance penetration, mainly due to corporate insurance policies that might not be renewed by the end of the year given the expected increase in premiums for 2021. This scenario could balance out the expected growth in individual insurance policies, which means the industry would be in the same place as before COVID-19.

Our work here as a sector is to create a virtuous circle. Our challenge is to create low-cost insurance products supported by quality attention at CMH hospitals. CMH is paying close attention to care prices to work together with insurers and offer more accessible premiums, thus reaching a greater number of people. There needs to be a change in commercialization strategies to achieve this, however.

Q: What are CMH and its members doing to join the sector’s digital transformation?

A: We have been working with a digitalized supply chain system built on SAP. CMH faced the challenge of registering joint inventories, which drove us to consolidate all our supply needs, placing joint orders that would save us significant costs. We achieved savings of 12 percent with this consolidated purchase. However, with the pandemic-related disruptions we faced a different dynamic regarding supplies like masks and gloves. Mass consumption impacted the market, so we had to focus on constant supply rather than on the costs of such products. CMH started to carefully administrate inventories to place timely orders and to avoid shortages. 

As for the integral digitalization of our care services, we are still looking for a complete platform that interconnects our internal structure and that will capture all the information we generate to create a complete digitalized environment. This is our greatest challenge, to create a digitalized environment for the private healthcare sector and to manage the data required for such a system. We need to transform all the data collected throughout the years to successfully offer better attention to the patient.

Q: What are the main areas that you expect will change in the hospital environment in Mexico after COVID-19?

A: We faced many scenarios that will impact the hospital environment. For instance, patients with mild COVID-19 symptoms were sent home to recover because they did not need to be hospitalized. However, this raised the potential of sending a message of abandonment to the patient, even though this was not the intention. This scenario opened up the spectrum for telemedicine and digital consultations and checkups but it has also brought to light the many needs and deficiencies of this practice in Mexico, such as payment methods, clinical records or medicine prescriptions. We are well aware that all of these solutions exist but their implementation is still not a reality in the country. By implementing the right telehealth tools, hospital care could be delivered at the patient’s home with all the necessary equipment.

Consorcio Mexicano de Hospitales (CMH) is a group of 45 small and medium-sized hospitals distributed across 23 states. Together, the hospitals have 1,200 beds, 6,000 doctors and care for 125,000 patients