Disparity a Challenge in Public-Private Cooperation

Q: How is ABC Medical Center cooperating with the public sector?

A: The healthcare situation in Mexico demands private hospitals work together with the government because it is not economically viable for the government to meet healthcare service demands by itself. The key is to find the right way to make this happen to avoid the perverse incentives in the private and public sectors that pollute association. ABC Medical Center has been working with public healthcare through Seguro Popular and by offering occasional services to other government institutions. As a not-for-profit organization, we can a ord to treat patients below cost and this is important because helping those who do not have enough resources is a part of our founder’s legacy. The challenge is to determine the price the government can pay for these services and how economically and clinically e cient we can be as a private hospital when providing this aid. If there are no clear rules about quality and a ordability, we may find ourselves in a situation wherein we can no longer help the population.

I am concerned about the decision to create general hospitals without a structured business plan. The word “general” by itself might be counterproductive because it suggests the hospital can treat any manner of illness and it does not highlight the public’s true needs. A general hospital is not built based on a study of the population and popular diseases. For its construction, rent is paid to a private company, which fulfils its construction and installation contract, at which point the government takes operational control of that hospital. The little money this general hospital receives is spent paying the private company and there is not enough left to treat patients, which indebts the government. Instead, to improve existing services there should be an inventory of the country’s hospital capacity and an analysis of how they could be better used. There are empty surgical theaters at certain times of the day in private hospitals that could be used by the lines of people in public hospitals.

Q: What is the thrust of ABC Medical’s relationship with Seguro Popular?

A: Our relationship is strong but there are certain rules that keep us from offering it more products and services. For every MX$1 it pays us, we have to give MX$0.19 to the government. Seguro Popular does not pay VAT but as a private hospital we are not exempt.

Another issue is the difficulty of selling services to Seguro Popular. Hospitals have to undergo several time- consuming registration processes so the patient stream is initially slow. Seguro Popular was created with the theory that “money will follow the patient,” so everywhere he or she goes there will be a budget to pay for the service. The actual situation is that the federal government gives each entity a budget targeted as money for Seguro Popular but a given entity may not necessarily be equipped with the services specific patients need. Therefore, there is a large migration of patients to Mexico City, where large hospitals, specialized clinics and good service can be found. When those patients arrive at the hospitals in the city, the center’s administrator must find a way of covering patient costs because the state to which the patient belongs will not pay.

The truth is that money does not follow the patient because security systems for patient care in Mexico are sectored. With IMSS coverage, a patient can only go to IMSS facilities. Mexico operates a vertical system, so there are many patients for whom there is no budget. We see teenagers with high-risk pregnancies camping outside hospitals, waiting for care without a place to sleep, and most of these are helped by civil organizations.

Q: What approach could help solve the health system’s current situation?

A: The solution is not easy and is not short term. First, we have to discuss which healthcare model we want to follow with the participation of many social agents. Once the model is established, we can decide our course of action.