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News Article

The Need for Deprivatization Of Healthcare

By Miriam Bello | Wed, 04/08/2020 - 18:31

It is not unknown that Mexicans spend a lot of money on health. According to AMIS, Mexicans pay directly out of pocket an average of MX$4,388 (US$183) a year to treat diseases and maintain their health. The lack of an insurance culture is widely known among society, as these products are considered more like a premium service.

While the federal budget from IMSS and ISSSTE has grown in this public administration, only 52 percent of the population is attended by public social security institutions, while 48 percent pay for any illness, accident or health complication through private insurance or out of pocket. Spending on health (public and private) in Mexico represents 5.8 percent of national GDP. The country ranks second in the highest private spending on health, behind the US that basically has no public healthcare system, and has 2.4 members of medical staff, 2.8 nursing workers and just 1.5 beds per 1,000 inhabitants, which puts it last in OECD’s healthcare rankings.

According to IMCO, there are three key factors making patients spend out of pocket for health. First, patients are not the center of the system. There is no instance that seeks to empower patients, to inform, advise, protect or defend them. Second, patients do not have indicators to know which services are better. Decision-making is based on anecdotes and recommendations instead of objective and systematized data, and decisions are mainly related to payment capacity. Lastly, patients do not know if their doctor relies on scientific evidence.

Out of pocket spending imposes very high social costs on Mexico. The resources that families allocate for this could have be used to achieve a higher level of education or increase their wealth. In aggregate terms, this can have a very important impact on the economy. In the most conservative scenario, where affected households have a 20 percent out of pocket expense for chronic diseases, income losses could reach 1 percent of GDP.

In Mexico, chronic diseases represent seven of the 10 main causes of death, with the two most relevant being diabetes and heart disease. According to the OECD, the country has an obesity epidemic and estimates show that by 2030, 40 percent of Mexican adults will be obese. This will be the main risk factor for the development of chronic diseases.

The increase in proven cases of COVID-19 in Mexico shows the poor state of the public health system, to which 20 million people do not have access, either because the infrastructure is too far away, because out-of-pocket spending is unsustainable or because there are not enough beds in hospitals.

Photo by:   On Health
Miriam Bello Miriam Bello Senior Journalist and Industry Analyst