Ángela Spatharou
Partner
McKinsey & Company
/
View from the Top

Little, but Promising, Change

Wed, 09/06/2017 - 13:46

Q: Last year, you told MHR that companies were not making drastic changes in the face of global economic challenges. What is your view now?

A: In both the public and private sectors, we have seen more significant e orts to reduce costs, which have taken di erent forms. Organizations are delivering more consistently against programs they have developed in previous years and are looking forward to a tangible impact by 2018.

In the private health provider and insurance sectors, many organizations are looking more drastically to leverage digital and advanced analytics tools. In some cases, this is generated by the local market environment and led locally; in others, this may be an area of focus led by headquarters that are abroad. There is definitely a step-change, meaning it is not just business as usual but quite often a part of a comprehensive e ort to revolutionize core processes and improve customer experience and retention. This is where digital has diverse functionality, supporting cost reduction, growth and customer experience improvements.

Q: To what extent are digital advances penetrating hospitals?

A: It di ers between the public and private sectors. In the public sector, there seems to be an issue of “bottlenecking” in many organizations in how much can be done to improve information-management systems or to introduce analytics and digital platforms on a national scale. There are often small, grass-roots innovative initiatives in individual hospitals or regions, but these can only be scaled up through the center. There are still problems around digitalization, with frequent delays in core programs that go back a few years. In the private sector, the situation is a little di erent. Particularly, the problems of health insurance businesses in Mexico within international firms that are faced locally have often been addressed in other geographies and solutions can be deployed at speed.

Q: What are the most prominent issues you have noticed?

A: There is still a general issue of access through the systems, both in terms of specialized care, where there are many delays, and in basic access to primary care. What we have seen is consumers finding other avenues to secure access to  basic care. For example, access to primary care in doctors’ o ces located in pharmacies out-of-pocket. The theme of e ective and timely access is vital for Mexico.

Quality remains another priority issue. Different systems in Mexico recognize there is a lot of internal variation and even more variation across systems. If this is not addressed within the next few years, it should become a clear priority for any next administration. This is one of the important topics people will put on the table. Leaving quality aside, there has been progress in cost reductions and e ciency e orts. Many initiatives have been in the media like the consolidated purchases but there is still ground to cover.

Innovation is emerging, often through interesting startups, but there has been much less investment in Mexico to-date than in other geographies. Start-ups at di erent levels of maturity need to undergo di erent rounds of financing and access to funds for innovation in Mexico remains an issue. While there is more access to funding now than before, it is still not enough to sustain a robust market. The startup market is particularly di cult on the retail side. If a model relies on consumers signing up and paying a small amount each month, investors often find between two and three years down the line that the numbers may not materialize. The quickest avenue to market is still through an institutional buyer. Recently, we were talking to a start-up that o ers micro-insurance to individual consumers for healthcare services but it is now morphing into a company providing care management products to institutional buyers interested in capping their employee or insured risk – a B2B model. Speaking broadly, there is a large amount of insecurity in the Mexican labor force. Consumers with poor job security may not want to commit to regular installments. The percentage of people in the private health insurance market is still relatively small; typically the largest part is sponsored through employer coverage.