Technology, Alliences Address Hospital Infrastructure Problems
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Technology, Alliences Address Hospital Infrastructure Problems

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Wed, 09/05/2018 - 11:08

Mexico’s population is gaining weight and getting older. These two troubling trends show no sign of abating and the incidence of associated diseases, such as Parkinson’s and Alzheimer’s, diabetes and cardiovascular disease, are rising in tandem, along with the resource burden for care.

Mexico is facing severe consequences of a lifestyle and a shifting demographic that are fueling a dramatic rise in diabetes and cardiovascular conditions. As the population gains weight and ages, Mexico’s health system is becoming overwhelmed. A potential scenario is that a sick individual might want to visit a doctor, but whether he can access one will depend largely on factors that are out of his control, such as where he lives, his workplace and his socioeconomic status.

The availability of hospitals and clinics in Mexico varies widely, with Mexico City holding not just the largest number, according to the Ministry of Health, but also the most specialized centers in areas ranging from oncology to pulmonary diseases. A person receiving a cancer diagnosis in Mexico City has more treatment options than someone in the mountains of Chiapas. In the latter case, the individual may have to travel to the state capital to visit a hospital with an oncology unit.

The latest OECD data shows Mexico had a total of 4,538 hospitals in 2017. However, most of those units have been built by the private sector, which held a total of 69 percent of all hospitals in Mexico, according to the Ministry of Health’s latest Report on the Health of Mexicans. Moreover, while the number of hospitals has grown it has not done so equally across the country, with Baja California, Queretaro and Mexico City concentrating most of the new units. Private hospitals are often out of reach to many in a country where 80.4 percent of its working population earns less than MX$7,952 (US$427) per month, according to El Economista.

FRACTURED, SATURATED PUBLIC SECTOR

Despite a higher number of private hospitals, the fundamental problem for their public counterparts remains the same: their services are saturated. Tuffic Miguel, Director of IMSS, says that the government institution provides medical attention to six out of every 10 Mexicans, or 80 million people. So many people visiting so few hospitals translates into long wait times for patients and a lack of resources to care for them. For instance, according to patients and doctors, IMSS clinics faced a two-year drought of hepatitis B vaccine across the country that placed infants at a significant risk. While representatives from the institution minimized the problem at first, it was not until mid-2018 that state ministers of health from Queretaro to Tamaulipas recognized the problem and announced that it would be addressed.

The problem is compounded by the fact that IMSS is only one of the many healthcare providers in a fractured system. Mexican law states that the government must provide workers and their families with social security but it is estimated that 32.6 million Mexicans do not have access to healthcare services, according to INEGI. For those who do, there is no universal provider of care. Patients are assigned a provider – IMSS, ISSSTE, SEDENA, SEMAR or PEMEX – based on where they work. This is significant because services are not interchangeable. When patients need specialized care that their provider does not offer in their home state, they will not be able to access a nearby hospital from a different network. Instead, patients must travel to the nearest hospital within their network that offers the available service, which may be located several states away.

“In Mexico the lack of coordination and the fragmentation of the health system hinder its potential,” said Guillermo Ferrari, General Manager of Eseotres. The consequences of Mexico’s siloed healthcare system include a simultaneous saturation of some hospitals and the underutilization of others, even if they are next to each other. This results in an inefficient use of resources. In its review of the Mexican healthcare system, the OECD warned that healthcare expenditure is not as efficient as it could be as the country has the highest healthcare administration costs of all its members, totaling 10 percent of all healthcare expenditure.

Unifying these different systems remains a challenge and a goal for the sector. In his campaign proposal to INE, President- elect Andrés Manuel López Obrador said that tying these systems together and universalizing healthcare would be one of his government’s objectives. But this goal has been on the books for years and, in the meantime, players in the healthcare sector continue to look for strategies that will increase their reach.

THE IMPACT OF ALLIANCES

Public-Private Associations (PPA) were conceived as a strategy to address both gaps in infrastructure and the limited resources of the public sector. “Our population’s demand for healthcare is growing fast. If the sector does not grow in turn, many will be left without care,” says Miguel Castillo, Director General of Hospital Sedna. “Public-private alliances allow the healthcare sector to increase its reach, with the patient as the main beneficiary, since it can ensure better care and at a much faster pace.” PPAs consist of partnerships between the public and private sectors in which the latter is responsible for the construction, operation and maintenance of a hospital or the provision of a specific service. Under this scheme, the private partner is compensated by periodic payments or subrogation of the services for a contractually agreed time.

These associations have been well-received by both sectors and are expected to continue as a strategy to increase access to care. “The country will continue facing budget issues, so financing will require innovative strategies. PPAs are one possibility as the private sector is likely the most qualified to provide these services to the public sector,” says Francisco Soberón, Director General of INMEGEN. In 2017, SHCP announced three projects to construct new IMSS hospitals in Nayarit, Nuevo Leon and State of Mexico and a fourth to substitute the current IMSS’ General Hospital of Tapachula, Chiapas (Hospital General de Zona). In July 2018, IMSS’ Miguel said that the institute had completed four more contracts under this scheme.

OUT-OF-THE-BOX THINKING

Another strategy to increase access to care and a business opportunity rolled together are private organizations with services that target the lower or middle class, an overlooked niche. Hospitaria is taking this approach in Monterrey. “Most hospitals in the city either focus on high-income populations while the rest are public hospitals focused on those with low income. There are almost no hospitals for the middle class, so Hospitaria’s services are targeted toward the middle class and lower-middle class population,” says Patricio González, Director General of Monterrey-based Hospitaria.

Privately-operated clinics are also an attractive opportunity for both local and international companies. For instance, Mexican hospital supplier Vitalmex aims to diversify into this sector with the construction of its own private clinics. “In 2018, we will begin the construction and operation of these clinics, which will be directed to a sector of the population that does not have access to services for nontransmittable diseases” says Jaime Cervantes, Director General of Vitalmex. A foreign company that was attracted by this market is Keralty, which comprises a network of over 76 medical centers spread around the world and operates in Mexico under the name Clinitas. “We are convinced there is a need in Mexico for the provision of health services that truly address the basic health problems of the population,” says Massimo Pachón, Director General of Clinitas.

Hospital Christus Muguerza is also looking toward the development of specialized clinics, in this case for cancer. Clinics of this type expect to provide excellent care while keeping costs down by focusing on a single medical specialty. To keep its costs down, salauno, a network of ophthalmology clinics in Mexico City, created a vertical supply chain that can make large acquisitions and negotiate better prices from anywhere in the world, explains Javier Okhuysen, salauno’s Director General.

Another barrier to care is Mexico’s large and complex geography. With the majority of hospitals and clinics clustered in cities, rural towns and communities are often too far away from healthcare services. “Many remote communities do not have health services or only have access to a small, local clinic,” says Ricardo Reyes, Medical Manager of Dr. Vagón, El Tren de la Salud. Dr. Vagón was created to save those living in far-flung communities a lengthy and expensive trip to a hospital by bringing the hospital to them in the shape of an 11-carriage train.

TECHNOLOGY TO THE RESCUE?

As they focus on providing care, hospitals also strive to increase or maintain their customer base, keeping operational costs down, performance up and patient complaints to a minimum. Okhuysen has a strategy to improve its internal operations and the performance of doctors working at his clinics. “We are exploring many areas, including using artificial intelligence in the interpretation of electronic clinical files to help doctors with their decision-making process.”

Technology is increasingly penetrating hospital operations and has the potential to greatly change them. In its report Hospital of the Future, Deloitte states that future hospitals will leverage technology to transform care delivery, patient experience and operations and staff management. Moreover, technology can be used to help doctors improve care by compiling, processing and providing information with which to make decisions. “It is very common for clinics to have a large amount of patient information mixed up and dispersed. Moreover, franchises of the same clinic or hospital do not communicate with each other; therefore, if the patient changes their location, they must again provide all their medical information,” says Jorge Camargo, Co-CEO and Co-founder of Ecaresoft.

However, as Mexican hospitals implement the technology in their practices, the general problem for the healthcare sector remains unchanged. “The great challenge that Mexico has is the fragmentation of data, a direct consequence of the fragmentation of the country’s health system. Therefore, in Mexico it is difficult to produce valuable information about the health sector,” says Xavier Valdez, Director General of IQVIA.

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