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Analysis

Public-Private Collaborations Boost Sector

Wed, 09/06/2017 - 12:06

The Mexican healthcare system is fragmented and many industry experts believe that increased collaboration between the public and private sector and within the industry could increase cost- effciency and lower waiting times at busy institutions

The public sector has made great advances in recent years in dealing with the country’s large volume of patients and in improving quality of care, but there is still room to improve. According to the OECD, 5.3 percent of the Mexican population spent at least one night in hospital in 2014, equivalent to around 6.4 million people. In addition, it reports that in the same year, an average of 2.6 doctor consultations were carried out per capita, equaling 312 million visits. Outsourcing services, used in the right way, may benefit both institutions and patients, hospital operators say.

Seguro Popular, one of the country’s main social security institutions, does not own any hospitals itself. It outsources to public and private hospitals the services needed by its insured patients. The agency has a catalogue of required services that private hospitals can address according to their capabilities and for which they can seek accreditation. Once a hospital is certified, Seguro Popular can begin referring patients.

“[The relationship] is important because of the volume of patients the government brings but also as a contribution to balancing the health offering in di erent segments of the population,” says Miguel Castillo, Director General of Hospital Sedna, which offers oncology services to Seguro Popular to treat breast, colon and prostate cancer. Due to the high incidence of those cancers in Mexico, these services are in high demand. According to the WHO, in 2014 there were 20,444 cases of breast cancer, 14,016 cases of prostate cancer and 8,651 cases of colorectal cancer in Mexico. The relationship with Seguro Popular is so fruitful that the hospital hopes to expand the number of services it o ers to the government, looking to add general surgery and high- risk pregnancies to its list. Castillo hopes that these further accreditations will increase the number of patients seeking treatment at the hospital.

Despite the many benefits for the health system, there are still some kinks to be worked out. “Our relationship (with the Seguro Popular) is strong but there are certain rules that keep us from offering it more products and services,” says Alejandro Alfonso, CEO of ABC Medical Center. “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.”

Alfonso additionally explains that unlike IMSS patients, Seguro Popular patients can expect treatment in any participating hospital, which results in many patients traveling in from city outskirts or from more rural or less developed states to the big cities. “Seguro Popular was created with the theory that ‘money will follow the patient,’ so the belief is that wherever he or she goes there is 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 services can be found. When those patients arrive at hospitals in the city, the center’s administrator must find a way of covering each patient’s costs because the state to which the patient belongs will not pay,” he says.

IMSS does have hospital infrastructure but it is often overwhelmed with demand because it is responsible for the health of over 70 million Mexicans. In this case, the construction of hospitals and clinics in conjunction with the private sector may be a better option.

“What IMSS has done is take advantage of new legislation to facilitate the construction of new infrastructure, clearly without medical care being in the hands of the private sector at any point, which is a legal impossibility,” says Mikel Arriola, Director General of IMSS. “We are having facilities built at a faster pace, more efficiently and without the hurdles associated with direct public investment. We have had bidding processes for four hospitals. We are looking to be more e cient. We want to build more hospitals with less money. We have MX$20 billion (US$1.1 billion) to build 12 hospitals and four of those will be through PPPs.”

The relationship between public and private entities will continue and even expand for the foreseeable future. Obesity, for example, is one treatment area that will benefit from the relationship. The OECD reports that more than one in three people in Mexico are obese. To help alleviate the issue, in 2016, Seguro Popular announced that due to the high obesity rates bariatric surgery would be o ered through the public sector.