A draft Healthcare Reform Bill is expected to be introduced to Congress at the start of the next legislative session in September 2014. Statements by President Enrique Pe?a Nieto suggest this draft Bill will set out a blueprint for transformational reform, with a Universal Social Security System funded from general taxation, to ensure nation-wide access to quality medical care.
Commitments in the bi-partisan ?Pact for Mexico? also point to radical reform. We think the reality will be much more modest. Below is our point-by-point guide to the underlying challenges in the Mexican healthcare system, the reform commitments made by the President and our assessment of what the eventual reform will look like.
1. Challenge: fragmented systemThe healthcare system in Mexico has long suffered from fragmentation between IMSS, Seguro Popular, ISSSTE and others. The result has been fragmented care for patients and significant diseconomies of scale. Over 7% of Mexican?s remain without healthcare coverage.
Reform commitment: universal Access
The Government?s stated goal is to ensure adequate access to healthcare services for all Mexicans. It emphasizes the need for equal access to medical care for all patients regardless of which institution they are affiliated with
What we expect: partial integration
Universal access will not be achieved but patients will likely be able to seek treatment in most public health institutions regardless of which they are affiliated with. This will go some way to increasing access to treatment and care.
We expect joint tenders between public health institutions for the purchase of drugs will be expanded, as institutions look to reduce costs and increase efficiency. This is a strategy that is being applied by IMSS and ISSSTE and has demonstrated clear benefits.
2. Challenge: Burden of non-communicable disease
Demographic and lifestyle trends have led to a sharp increase in non-communicable diseases, which account for 43.5% of all hospital expenditure and 73% of all deaths. Topping the list are diabetes, heart disease, and malignant tumors. The obese are more prone to suffer from these conditions, which explains the Government?s determination to tackle globe-topping obesity rates.
Reform commitment: Shift to preventative healthcare
The government is seeking to shift the focus from treatment to prevention. A central part of this is tackling obesity through public education and the promotion of healthy living. Efforts will be focused on the implementation of services designed to promote prevention, early detection, diagnosis and treatment, and reduced complications.
What we expect: No fundamental switch
Prevention is easier said than done. The Mexican healthcare system is far from mature in this sense. Changing this will require not only government reform but a short-term increase in spending and a major shift in public awareness and education. We expect an increased focus in public education, especially on obesity, funded partly by the sugary drinks tax announced in October. However we do not expect to see any major change in the structure or strategy of health provision.
3. Challenge: Inadequate quality of service
Quality of healthcare remains hugely variable in the public system with pockets of high-quality care all too often shadowed by poor medical practices, poor access to medicines and corruption.
Reform commitment: Raising quality across the boardThe government aims to focus on improving the quality of care in six key areas - protection against health risks, certification of health services, medical arbitration, certification of health personnel, national healthcare audits and regulation of health. This implies a professionalization of healthcare specialists and highlights the need for a collaborative approach to quality care.
What we expect: National standards, variable results
The issues in the quality of health are closely linked to resources. Although reforms aiming to put mechanisms in place to guarantee a good quality of service, corruption and lack of transparency and inefficiency will remain. Providing medical training will not be enough; resources must be distributed effectively so that infrastructure and technology can be available for all patients across the country. What will probably be put in place is a set of national standards to improve quality throughout the different institutions, though implementation and achieving compliance will still be a challenge.
So, what does this mean for healthcare companies?
The public health system?s financial difficulties, the joint tenders for drug purchase strategy to reduce costs and the ongoing fragmentation of the system, will all mean further price pressures on healthcare companies selling to the public system.
There will be a continued preference for the purchase of generic drugs and access to innovation will continue to be delayed through the intentionally complex and bureaucratic three-step access system.
The focus on prevention, especially in relation to obesity, cardiovascular diseases and diabetes, will serve as an opportunity for healthcare companies that commercialize products which reduce the impact of these conditions.
It will remain crucial for all companies to demonstrate a clear value case through health economics, reducing the long-term burden of diseases through less chronic illness and lower levels of hospitalization.
Efforts made by the industry to support the long-term goals of healthcare reform - looking at bold innovative solutions such as risk sharing - are likely to be welcomed, and likely to pay dividends in the long-term.
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