Angela Spatharou
Partner, Latam Healthcare Systems and Services Practice
McKinsey & Company
View from the Top

Helping Businesses with Best Practices

Wed, 09/07/2016 - 14:23

Q: Could you give us a brief history of your Mexican operations, how you got to Mexico and what success you have had here?

A: McKinsey & Company started in Mexico in the '70s. We were one of the first management consulting firms to develop a client base in Mexico City. We now serve clients out of Mexico City and Monterrey. McKinsey is a globally incorporated firm, so we work closely with colleagues internationally including in Spanish-speaking Latin America and North America. In Mexico we offer services across different sectors such as energy, financial services and private equity, consumer goods, healthcare services, pharmaceuticals and medical devices, telecommunications and automotive, among others. We offer a broad range of functional services like strategy, corporate finance, operations, technology and digital sales and marketing.

In the early days, we supported pharmaceutical and medical devices companies, often large multinationals setting up operations in Mexico or interested in strengthening their local strategy and operations, but also Mexican-owned operators, both in pharmaceutical production and distribution.

Our Health Systems and Services practice followed a few years ago, initially focusing on strategy and operations. In recent years, we have served Mexican health systems on issues around service design, financial sustainability, or developing different models of care for specific patient segments, such as patients suffering from diabetes and other chronic conditions.

We have also helped clients on a variety of programs in terms of scale and resources. For example, we have supported whole system transformation efforts, in which Mexican health systems launch multi-year national programs to increase patient access to services by improving operations. We have also supported individual providers on quality improvement, clinician leadership or the development of academic medical centers. Mexico is part of our McKinsey North American client service group, but we also work extensively within Latin America. Many colleagues who lead healthcare programs with Mexican clients often work with clients in Colombia, Brazil, Chile, Costa Rica and the Dominican Republic.

Q: How are you guiding your clients into complying with best practices in Mexico and also how are you collaborating with institutions to create this legal framework?

A: Bringing the best practices within Mexico and internationally to our clients is an intrinsic part of the value we hope to contribute. At the same time, we are not a law firm and do not engage on issues around the legal framework, nor do we provide legal advisory services. Our observations in general are that there is sufficient legislation across the general Mexico system, but there may be lack of clarity in some areas, or a fair amount of process in others. When we work with a client in Mexico, we are trying to make sure that there is as much transparency as possible on the legal context and rules applicable, so they can pursue legitimate strategies within the context of the legal system and contribute to Mexican society.

Q: How are you able to input your opinion and change the healthcare system in Mexico?

A: As a company we try to have a positive impact through the programs we support directly, working with clients in different systems. We may also have the opportunity to organize conferences where decision-makers come together and discuss priority issues across the system, expressing their ideas openly. Two years ago we held a conference on chronic disease management where we brought a select number of industry people together and created a forum where system leaders could exchange ideas on topics of great importance to Mexico.

One of the areas we are passionate about is care innovation. We hope that our work within this area, for example on chronic disease management, may help set a precedent creating a dynamic for the system to introduce more integration across levels of care and leverage cutting-edge technologies and advanced analytics to significantly improve quality of care and patient outcomes.

Before I came to Mexico, I worked in the UK and supported clients within the English NHS. One of the topics I worked extensively on was defining a truly integrated care model for chronic disease management. As we know, chronic patients need tailored support to keep symptoms under control and avoid unnecessary complications that may lead to loss of quality of life, dependency and often emergency hospitalizations. Complications do not only affect the individual patient, but also put the health system under enormous strain. Putting an integrated system of care in place means that primary, secondary and tertiary care have a single view of the patient and work in a holistic way to improve his or her health.

Over the last few years, we have worked with health systems in Mexico, helping them develop their models, improve the business case for investment in services and put in place the mechanisms that will allow them to care for patients differently. We know this produces better results and allows for a more sustainable management of care.

Q: What have you accomplished for the healthcare system or the health of patients?

A: We have worked with several public healthcare systems and private providers in Mexico and across Latin America. Models such as the integrated care model have resulted in reductions of clinical complications of around 20-25 percent, depending on the patient segment. We have also achieved a reduction on cost per patient close to 15 percent, an important step for many systems struggling to provide services sustainably. We have worked with a number of individual hospitals on operations and performance improvements where we have seen increases in numbers of patients treated within existing resources between 15-20 percent on average. In particular, we have seen through operational “lean” type improvements in surgical theaters and better planning of surgical capacity, leading to up to 30-40 percent of additional surgical capacity within existing resources. This has significant impact on patient access to services but also significant financial impact on the organizations because they can manage their costs much more sustainably.

Q: Has the Mexican healthcare industry been impacted by macro-economic conditions, particularly the exchange rate with the dollar? How are institutions responding?

A: In a typical year healthcare leaders often review a broad agenda of topics covering quality improvement, leadership development, productivity and new models of care. In a year with more macro-economic pressures, healthcare leaders are focused on finding ways to extract more value from what they already have, not spending further but providing more services.

Overall the reactions seem more incremental than a “step change” or a major radical shift. In some cases, there may be more renegotiation around older contracts that are in US dollars because the exchange rate has a strong impact. We cannot predict what will happen in the next year or two but we would not be surprised if we see a more extreme response from organizations than we have seen thus far.

Q: Where are we going to see the company this year, in terms of new projects, new clients and growth?

A: We are continuing to be involved with major Mexican healthcare systems on topics around operational efficiency and whole system transformation. We would like to bring the topics of quality and standardization of services back to the agenda as well. In addition, we have started investing across McKinsey and specifically in Mexico in advanced analytics and digital, which in our experience is key for Mexican systems to unlock growth in some areas and efficiency in others. Many systems struggle with the fact that they do not have a consolidated view of their own resources, patient outcomes and associated costs.

There are hospitals where leadership cannot cite how many people they employ. Digitalization and advanced analytics can be powerful tools to help create a distinctive view of what is happening and to aid decision-making for policymakers and hospital directors alike. We have already built this in other markets and are very excited to do so also in Mexico.