lunes, 30 de julio de 2018

¿Por qué localizar una nueva refinería en el puerto de Dos Bocas no es una buena idea?



Comparto en lo general las prioridades fijadas en la propuesta de rescate del sector energético que ha esbozado el próximo presidente de México.  Está claro qué hacer.  Mi discrepancia está en cómo hacer.  Y no se trata de encontrar prietitos en el arroz, sino de contribuir a que los recursos públicos de inversión federal tengan el uso que más aporte al desarrollo integral del país.

AMLO anunció el pasado 27 de julio que una de sus prioridades para el sector energético es la construcción de una nueva refinería en el puerto de Dos Bocas, y que ya se están elaborando los proyectos para que se inicien las obras el año próximo.

Celebro la intención de ampliar la capacidad de refinación del país, pero me parece una mala idea, que ocasionará costos innecesarios y desaprovechará oportunidades de integración industrial, la ubicación del proyecto en el puerto de Dos Bocas.

En esta nota explico mi opinión y solicito respetuosamente que la tomen en cuenta los responsables de elaborar el proyecto.  No debemos olvidar que el uso de recursos públicos de inversión federal supone una responsabilidad y requiere de un proceso técnico-administrativo para validar su viabilidad.  Es importante dar velocidad a la concreción de los proyectos, pero me parece más importante aún que primero se haga cabalmente su planeación y evaluación, a fin de que la ejecución sea más eficiente y se seleccione la mejor opción. 

Una refinería es una instalación industrial de gran escala que tiene una larga vida útil.  La de Minatitlán, por ejemplo, tiene más de cien años si tomamos como referencia el proyecto que hizo Pearson, o más de sesenta si consideramos el proyecto que ya hizo PEMEX.  La refinería de Salina Cruz, la última que se construyó en el país, data de finales de los setenta, por lo que tiene cuarenta años.  Y en ese horizonte temporal, hacia el futuro, es probable que las refinerías de nuestro país ya funcionen, por lo menos en parte, con crudo de importación.[1]  De ahí que las consideraciones logísticas, para recibir crudo nacional e importado, y para distribuir petrolíferos a las distintas regiones consumidoras del país cobran mayor importancia.

Por otro lado, y atendiendo a la necesidad de impulsar el desarrollo de las regiones del país a través del fomento a su especialización productiva y a la consolidación de clusters industriales, la nueva capacidad de refinación tendría que ubicarse en una zona donde ya existen infraestructura y servicios industriales básicos (energía eléctrica, agua, red de ductos, técnicos y profesionales experimentados, etc.).  Nada de esto hay en la actualidad en Dos Bocas para satisfacer los requerimientos del proyecto[2].  Sí existe, en cambio, en el corredor Minatitlán-Salina Cruz. A lo largo de la franja del Istmo de Tehuantepec se han desarrollado instalaciones de almacenamiento de crudo (domos salinos de Tuzandépetl), así como una red de ductos transístmica para el transporte de crudo, gas y petrolíferos entre ambas refinerías, y en conexión con sus puertos respectivos en Pajaritos (terminal marítima de PEMEX) y Salina Cruz (monoboyas y terminal marítima de PEMEX)[3]  Además, en otras partes del mundo, la concentración y la cercanía entre las plantas de refinación y las petroquímicas es un factor de competitividad, ya que propicia el aprovechamiento de los subproductos del proceso de refinación como insumos de la industria petroquímica, en un volumen suficiente y sin costos logísticos adicionales.

Una refinería en Dos Bocas atendería mercados que hoy se atienden desde Minatitlán:  la Península de Yucatán a través del puerto de Progreso, Tabasco y el norte de Chiapas por tierra.  Además, la producción de petrolíferos a partir de un procesamiento de 300 mil barriles diarios de crudo[4], será bastante mayor al consumo regional, por lo que se tendría que regresar un volumen significativo mediante un nuevo poliducto[5] de Dos Bocas a Minatitlán, para su distribución a través del sistema nacional de ductos.  Se requerirían inversiones adicionales para atender el mercado peninsular:  se tendrían que construir muelles y tanques de almacenamiento para los distintos productos (gasolinas, diesel, turbosina) en el puerto, hacer dragados adicionales en el canal de navegación y -muy probablemente- completar, por lo menos en parte, los rompeolas que se quedaron inconclusos desde principios de los ochenta en el siglo pasado.  Comparativamente, si la nueva capacidad de refinación se localiza total o parcialmente en Salina Cruz (200 a 300 mil barriles para ampliar la refinería ya existente, y hasta 100 mil barriles para ampliar la capacidad de Minatitlán), podría satisfacer el consumo del país en el litoral del Pacífico, incluyendo los estados completos de Chiapas, Oaxaca, Guerrero, Colima, Sinaloa, Sonora y la Península de Baja California, evitando las importaciones crecientes que ya se están realizando, así como el crecimiento futuro de la demanda en estas regiones.

Antes de formular un proyecto ejecutivo en un sitio predeterminado, es necesario elaborar con imparcialidad el análisis costo-beneficio (ACB) de todas las inversiones que se requieren, y otros factores necesarios -cuantificables o no-, y llevar a cabo el proceso de deliberación institucional que busca maximizar el impacto positivo de los proyectos -requisitos previstos en la Ley Federal de Presupuesto y Responsabilidad Hacendaria (artículo 34)-, para dejar atrás la socorrida práctica de llevar a cabo estos estudios y procesos sólo para respaldar decisiones tomadas previamente, con criterios exclusivamente políticos, por la autoridad en turno.

Sin duda, los criterios políticos están presentes en la orientación de las políticas, en la definición de objetivos de desarrollo, en el diseño de las estrategias sectoriales y regionales de todo gobierno.  Pero no puede ser el factor exclusivo en las decisiones de inversión.  En particular, la localización inicial de las nuevas refinerías en el Proyecto de Nación de AMLO (Dos Bocas, en Tabasco, y Atasta en Campeche), sugiere que hay de fondo un deseo de compensar a estas entidades federativas por casi cuarenta años de extracción de hidrocarburos que, además de indudables beneficios económicos, también tuvo impactos sociales y ambientales negativos.

El asunto aquí es si establecer una refinería en Dos Bocas es, por un lado, la mejor manera de compensar a la región, y si esa es la mejor manera de desarrollar el puerto; y por otro lado, desde la óptica de la industria petrolera, si ese es el mejor sitio para ampliar la capacidad de refinación que necesita el país, y promover una integración más eficiente de la industria de refinación con la petroquímica.

El mejor aprovechamiento del puerto de Dos Bocas (véase vínculo siguiente) tiene tres vertientes que no guardan relación con el establecimiento de una refinería:

·         Diversificación para atender la carga comercial de la región (exportaciones agroindustriales, pesqueras y forestales), así como la importación de productos diversos que consoliden la función de Villahermosa como centro de distribución en el sureste (y que hoy llegan por tierra desde la frontera norte).
·         Consolidación de la función de soporte al abastecimiento de la industria petrolera costa afuera actual y futura
·         Consolidación de la función de almacenamiento de crudo, nacional e importado, y de la elaboración de mezclas para mejoren la calidad del crudo que se envía al sistema nacional de refinación.



----------------------------------------------
El conocimiento de estos temas es producto de mi experiencia profesional en los últimos 25 años.  Participé en la elaboración de los dos primeros Programas Maestros de Desarrollo Portuario (PMDP) de Dos Bocas, y fui autor de dos programas de comercialización dentro de los PMDPs de Coatzacoalcos-Pajaritos, así como de dos análisis costo-beneficio de la terminal marítima petrolera de PEMEX en Salina Cruz.




[1] Esto, si no es que antes se decide importar crudo para hacer mezclas con el crudo pesado que se produce en el país, a fin de facilitar y hacer menos costosos los procesos de refinación interna.
[2] Una refinería como la que se plantea, para procesar 300 mil barriles diarios de crudo, podría requerir alrededor de 600 hectáreas que es el área que actualmente ocupa una refinería semejante (la de Salina Cruz).  El puerto de Dos Bocas tiene del orden de 150 hectáreas propiedad de PEMEX que están destinadas al uso portuario y logístico.  El resto del polígono que ocupa Dos Bocas (alrededor de 1,500 hectáreas) ya tiene un uso; parte es de la API, parte es una zona pantanosa rodeada por el Río Seco, y la mayor parte consiste en la terminal de abastecimiento y el área de almacenamiento de crudo de PEMEX.
[3] La terminal marítima de PEMEX en Salina Cruz está inconclusa.  Hay proyecto para concluirla.
[4] Entre 180 y 200 mil barriles diarios de petrolíferos (gasolinas, diesel y turbosina), al nivel promedio de conversión que registraron las refinerías del sistema nacional entre 2014 y 2017.
[5] Ya hay uno que lleva productos de Minatitlán a Villahermosa, para el consumo de la zona, pero que será insuficiente para regresar un volumen mayor de Dos Bocas a Minatitlán.

martes, 24 de julio de 2018

¿Por qué el tren maya no es una buena idea?


El próximo presidente de México anunció ayer su intención de canalizar recursos públicos a siete programas y proyectos de inversión prioritarios como parte del Presupuesto de Egresos de la Federación 2019.  Aunque mencionó una suma global de 500 mil millones de pesos a erogar, es presumible que el monto final será resultado de las modalidades que se definan para la instrumentación de dichos programas y proyectos, ya que en algunos casos podrían aplicarse esquemas de participación público-privada o incluso de financiamiento 100 porciento privado.

Se trata de una combinación de programas con clara orientación social (el mejoramiento de zonas urbanas marginadas en centros turísticos y ciudades fronterizas; la reconstrucción de viviendas afectadas por el sismo del pasado 19 de septiembre; la construcción de caminos rurales en Oaxaca y Guerrero; y la ampliación de la cobertura de servicios de internet de banda ancha a todo el país), con un programa de desarrollo regional integral en el Istmo de Tehuantepec, y con un proyecto de transporte para enlazar puntos de atractivo turístico en los estados de Quintana Roo, Campeche y Chiapas.

A este último me referiré en esta nota.  A mi juicio, el tren maya (como se le ha bautizado) no tiene razón de ser, y mucho menos si su existencia va a depender de recursos públicos.  Vamos por partes.

Naturaleza del proyecto

El tren maya es un proyecto de construcción de infraestructura ferroviaria, de adquisición de equipos de transporte (locomotoras y vagones de pasajeros) y de servicio público regular de pasajeros en la ruta de 830 kilómetros entre Cancún-Tulum-Bacalar-Calakmul-Palenque.

Demanda del proyecto

La población de las localidades que conecta y otras localidades cercanas, así como los visitantes nacionales y extranjeros a esta zona.[1]  El centro de población de mayor tamaño en la zona de influencia del proyecto es Cancún, que ahora tendrá del orden de los 650 mil habitantes.  La Riviera Maya aportará otros 200 mil habitantes.  Y Palenque, el centro urbano, rondará los 50 mil habitantes.  La única ciudad de cierto tamaño que se encuentra a corta distancia es Chetumal, con alrededor de 300 mil habitantes.[2]  ¿Cuántos de estos habitantes tomarán el tren maya para vacacionar?  ¿Cuántas veces al año lo harán? 

En cuanto a los visitantes al nodo turístico principal, Cancún y la Riviera Maya,  en 2017 -conforme a las encuestas periódicas que se realizan- fueron casi 12 millones de personas las que arribaron a la zona, de las cuales dos terceras partes llegaron en vuelos internacionales.  Si bien la estancia promedio es mayor a 6 días, el 73.5% de los turistas compran paquetes, y de éstos casi el 50% son de la modalidad todo incluido.  Esto significa que su interés está en permanecer en la zona.  La razón que los atrae es en un 75% el sol y la playa.

Pero además, existen actualmente opciones de servicio de autotransporte buenas, o incluso de renta de auto, que serán, presumiblemente, más baratas que el tren maya.  Las carreteras a lo largo de la ruta se han modernizado recientemente y su aforo está lejos de la saturación.

El tren maya no va a generar más visitantes, sólo diversificaría los destinos y los modos de transporte que ya están disponibles a los visitantes actuales.  El visitante a Cancún y la Riviera Maya tendría la posibilidad de hacer un recorrido de 9 horas para llegar a Palenque, visitar la zona arqueológica, pernoctar y regresar al día siguiente.  Probablemente, el tren podría parar unas dos o tres horas en Calakmul (que se encuentra más o menos a la mitad del recorrido) para que se pudiera visitar también esta zona arqueológica, ya sea a la ida o al regreso.  Un convoy (locomotora más vagones de pasajeros) sólo podría hacer un solo viaje de ida y vuelta Cancún-Palenque en un día.

Viabilidad financiera del proyecto

Si estos datos relacionados con la posible demanda del servicio se contrastan con la experiencia internacional de los trenes rápidos, la conclusión es más que evidente.  Los pocos trenes rápidos que son autosuficientes en el mundo enlazan ciudades de muchos millones de habitantes en Europa, en Japón y ahora en China.  Y son opciones de transporte atractivas no solo para turistas sino primordialmente para personas que trabajan.  Las carreteras están regularmente saturadas y el transporte carretero tiene un costo semejante (por el alto costo de los combustibles y el peaje).

En la ruta Cancún-Palenque no habría un flujo de pasajeros suficiente para cubrir los costos de operación y recuperación de la inversión del proyecto, y no se justifica financiar con recursos públicos un servicio que no añade valor a lo que ya existe.

Por otra parte, y como es típico en proyectos de esta magnitud, se empiezan manejando cifras conservadoras que después, al hacer las cuentas de mayor detalle, resultan ser mucho más elevadas.  El tren maya, según sus promotores, costaría del orden de 64 mil millones de pesos.  Esto supone 78 millones de pesos por kilómetro (para una ruta total de 830 kilómetros).  Sin embargo, el tren rápido que está proyectando el gobierno del estado de Quintana Roo menciona un costo de 400 mil millones de pesos para un trayecto total de 126 kilómetros (o sea un costo de 317 millones de pesos por kilómetro, cuatro veces más que el costo estimado del tren maya).

Alternativas al proyecto

El tren maya se anuncia como una inversión que va a detonar desarrollo en el sureste, cuando en realidad sólo constituye una opción de transporte[3] para comunicar algunos puntos de atracción turística entre sí, en forma más rápida.  Si un visitante va de Cancún a Palenque por autobús, es probable que su tiempo de recorrido sea dos o tres horas más que el que tendría en el tren maya.  Lo cual no tiene mayor importancia, dado que el visitante no tiene ninguna prisa especial.  Si el visitante opta por rentar un auto, iría probablemente de Cancún a Calakmul, y ahí pernoctaría en alguno de los pequeños hoteles ecológicos de la zona, después de visitar el sitio.  Al día siguiente, se trasladaría a Palenque y haría lo mismo. 

Si no se hace el proyecto de tren maya, no pasa nada.  En realidad, el elemento que puede aumentar el flujo de visitantes a sitios como Bacalar y Calakmul[4], es la promoción que se les haga, así como el desarrollo de ciertos servicios complementarios.[5]  Adicionalmente, para que el acervo de visitantes a la región fuera en realidad mayor, y no sólo una redistribución de los que ya llegan a Cancún, se podría impulsar el turismo de transbordador, entre el estado de la Florida en Estados Unidos y la Península, a través de los puertos de Tampa, Progreso, Puerto Morelos y Seybaplaya.  También se podrían mejorar las carreteras en un circuito interior peninsular que los tres gobiernos estatales que integran la Península de Yucatán han buscado realizar para atraer visitantes de turismo carretero a pueblos y sitios de gran atractivo que no son destinos tradicionales.  Ello ayudaría, de paso, a contar con mejores caminos rurales en la zona central de la Península.

Otros beneficios de no hacer el proyecto

El tren maya atravesaría en una parte importante de su recorrido a la principal zona de bosque tropical de la Península.  Se podría argumentar que al ir paralelo a la carretera actual el impacto adicional sería mínimo, pero no es así.  El nivel de disrupción hacia la vida silvestre que tiene una vía férrea, más si se trata de un tren rápido, es mucho mayor que el de una carretera  (si hay duda al respecto, se le podría solicitar a CONABIO que hiciera una valoración, habida cuenta que tiene una actividad importante en la región a través del corredor biológico mesoamericano).  Por tanto, y en principio, se evitaría un costo ambiental importante.  Máxime si se descarta también la idea poco afortunada de urbanizar mil quinientas hectáreas en el corazón de la reserva especial de la biósfera de Calakmul (que por lo demás estaría prohibido, al ser área natural protegida), para hacer un “mini-Cancún”, estilo FONATUR.

En vez de invertir más de 60 mil millones de pesos que no se van a inyectar a la región más que en una pequeña proporción, cabría pensar en una cartera de proyectos productivos agropecuarios, pesqueros, forestales, turísticos y de otra índole que sí podrían dinamizar a la región y distribuir los beneficios en forma amplia.

Dichos proyectos se generarían a partir de una estrategia de desarrollo regional participativa, que le daría una mayor legitimidad a los proyectos seleccionados.

Y si se pudiera soñar, una parte de esos recursos alcanzaría para resolver un problema creciente y potencialmente grave que tienen tres de las principales ciudades de la Península, y que se refiere a la falta de drenaje sanitario y de tratamiento de aguas residuales municipales en Mérida, Campeche y Cd. del Carmen.  Por la naturaleza geológica de la región, el agua subterránea es abundante, pero se está contaminado, además de que al correr hacia el mar, está también afectando a la pesca ribereña y el potencial de la maricultura. 



[1] Se ha comentado que el tren maya también podría dar servicio a los trabajadores que se desplazan todos los días a lo largo de la Riviera Maya, pero me parece que este tipo de servicio sería incompatible con un servicio turístico como el que se plantea.  Los usuarios trabajadores requieren varias estaciones a lo largo de la ruta Cancún-Tulum, a corta distancia una de otra (tipo Metrobús).  Este régimen de servicio no es apto para un tren rápido.  Es probable, por otra parte, que el proyecto de tren del gobierno del estado de Quintana Roo, si se enfoca más como Metrobús que como tren rápido, sí tenga una demanda suficiente y viabilidad financiera.
[2] Los otros sitios que son conectados en la ruta tienen una población muy reducida:  Tulum, 22 mil habitantes; Bacalar, 13 mil habitantes; Calakmul, no tiene una localidad propiamente dicha cerca de la zona arqueológica-natural que constituye el punto de atractivo (la cabecera municipal alcanza los 4 mil habitantes y se encuentra a más de 50 kilómetros de la zona arqueológica).
[3] La inversión en los equipos de transporte benefician a empresas externas a la zona y probablemente del extranjero.  La inversión en la obra civil genera temporalmente empleos de baja remuneración.  Los rieles también se llevan de fuera de la región y sólo los durmientes, en su caso, podrían ser elaborados en los varios aserraderos de la región, dependiendo de las especificaciones técnicas que tuvieran.  Los empleos para operar el tren son muy pocos.
[4] Palenque tiene un comportamiento distinto porque el acceso principal a este sitio es vía Villahermosa, que se encuentra a hora y media por carretera.  La infraestructura turística en este lugar es mayor.
[5] Hace unos diez años, el gobierno del estado de Campeche formuló con apoyo de FONATUR planes maestros para el desarrollo de dos corredores turísticos:  Xpujil-Escárcega y Campeche-Carmen.  Los componentes de dicho corredor eran paradores turísticos con todos los servicios que demanda un turista, así como pequeñas instalaciones hoteleras asociadas a atractivos naturales no tradicionales (lagunas, bosques naturales, zonas arqueológicas distintas de Calakmul, etc.).  No se ha avanzado en este propósito que sí está en sintonía con el tipo de turismo de la región.

miércoles, 18 de julio de 2018

Oportunidades en materia de salud dentro de la Alianza del Pacífico


 Escribí esta nota en 2016, como parte de un equipo de trabajo de PwC México encargado de formular un informe sobre el Futuro de la Alianza del Pacífico.


a)    Relevance

Global health estimations have determined that reductions in mortality account for about 11% of recent economic growth in low-income and middle-income countries.  Between 2000-2011, 24% of the growth in “Full Income” in these two country groups came from the value of life-years (VLYs) gained because of improved health conditions.[1] So , investment in healthcare makes a lot of economic sense.  The economic benefits of investment in healthcare are estimated to be more than ten times greater than costs.[2]

Also, in Latin America, during the 1980s, health emerged as a fundamental human right and it is now protected by specific laws or even national constitutions. That is the case of the Pacific Alliance region, where the quest for effective universal health coverage continues.

“A change in values has transformed health systems. Personal health care was once regarded as the work of charity. It then became the prerogative of one sector of the economy (a labour benefit), and now it is deemed by many as a social right. Public health was initially about mitigating risks to trade, then about the opening of new territories; today it is about investing in people.”
Daniel Cotlear (World Bank), Octavio Gómez Dantés (National Institute of Public Health of Mexico), et al[3]

Democratic national agendas now include universal health coverage, with equity and quality as a central issue.  Other important drivers have been the demographic and epidemiological transitions of Latin American societies.

Due to the decline in the total fertility rate and the rise in life expectancy, the four member countries of Pacific Alliance are experiencing a deep change in the epidemiological and demographic profile of its population, consisting of an increasing aging population and a rapid transition in disease burden, from communicable to non-communicable and chronic illnesses.
 



 SOURCE:  Universal health coverage in Latin America;  Octavio Gómez Dantés, et al;  The Lancet, series in three parts, October 2014.

Communicable diseases tend to afflict the very young more profoundly, so mortality from communicable diseases has a larger cumulative effect on the years of lives lost and hence on the overall human capital productivity of these countries.
 



 Figure 7.F: Mortality by main WHO categories for Pacific Alliance member states in 2016, forecast (Base Case)

Peru has been substantially more affected by communicable diseases, and in particular, respiratory infections that cause mortality. Colombia has had a very high death rate relative to intentional injuries, which are result of the guerrilla conflict.


 





















One of the underlying reasons for the distinct disease burden in Colombia and Peru is owing to a gap in urban-rural healthcare coverage in these countries. As countries mature in their healthcare delivery system, the gap in urban-rural healthcare access narrows.


Figure: Urban-rural divide in access to basic sanitation by country

These structural shifts required a different institutional design to attend with increasing emphasis the life-cycle of long term illnesses over the traditional episodic and acute care, characteristic of communicable diseases.  Prevention and primary care became the main elements of the new strategy.  Financial sustainability was a major concern, not only because treatment of new diseases was more expensive than that of traditional illnesses, but also because of the intents to achieve coverage of large social groups that had been left out of the health system (unemployed and people working in the informal sector, and their families).

From a per capita healthcare spending perspective, Pacific Alliance countries are situated between countries with basic healthcare coverage and countries with advanced healthcare.


Figure: Average healthcare spend per capita over the last decade by country type (Advanced, Pacific Alliance and basic healthcare coverage)

Health systems in the Pacific Alliance region has been segmented, up to date, in three categories:  for the poor (subsidized social insurance); for salaried working population (contributory regime); and for the rich, with private institutions and private insurance.  Although this segregation has been reduced (through intents to equalize benefits between the two public segments, or even merge them; and regulation for the health system as a whole, including public and private components), differential access still exists and efficiency issues arise.[4]  Health services’ quality became a great concern. 




 SOURCE:  Universal health coverage in Latin America;  Octavio Gómez Dantés, et al;  The Lancet, series in three parts, October 2014.

The organizational and financial efforts of the four countries have reflected in the following indicators:

·         Chile, only 3% of population was reported as non-insured in 2011, although out-of –pocket expenses[5] were estimated to be 32% of total health expenses in 2012
·         Colombia, had 12% of population non-insured in 2012, and out-of-pocket expenses reached 14% of total health expenses
·         Mexico, 21.4% of the population reported having no insurance coverage, and out-of-pocket expenses were 44% of total health expenses in 2012.
·         Peru, approximately 38% of the population remained uninsured in 2012 and out-of-pocket expenses were estimated in 36% of total health expenses.

Out-of-pocket expenses have remained high, due to people dissatisfaction with their health service as well as lack of insurance.  Other organizational and financial changes have been promoted to increase efficiency and enhance quality throughout the whole health system.

Chile, Colombia, and Peru have separated the purchaser and provider functions of health care, introducing contracts with which insurers incentivize health providers to improve performance.  Chile, Colombia and Mexico have expanded the package of minimum health services guaranteed to poorer population.  At the same time, the four countries have introduced reforms to strengthen the system’s financial base through pooling funds from many sources. Although specially Peru and Mexico have a biger challenge to reform their Health Systems  



SOURCE:  Universal health coverage in Latin America;  Octavio Gómez Dantés, et al;  The Lancet, series in three parts, October 2014.

 



 SOURCE:  Universal health coverage in Latin America;  Octavio Gómez Dantés, et al;  The Lancet, series in three parts, October 2014.







SOURCE:  The quest for universal health coverage:  achieving social protection for all in Mexico;  Felicia Marie Knaul (Harvard Global Equity Initiative), Octavio Gómez Dantés (National Institute of Public Health), et al;  The Lancet, August 16, 2012.

In this context, new elements appear:  development of e-health[6]; increasing importance of detailed information and patient data for health system planning, monitoring and evaluation; innovation in models of care, particularly in rural and remote areas, through ITC platforms and community-led delivery pilots.

Electronic Health Records (EHRs) are a critical element in the health system, since they gather the patients’ information and should be capable of sharing it with any health institution where the patient is treated, and even with the patient himself.  But several technical issues like interoperability are still unsolved.  Patients’ information is the cornerstone for a better individual treatment, and also for the health system planning and evaluation, and for the analysis of drug prescription outcomes.

Also new models can be found in distinct areas as:

·         Pharmacies with medical services attached next door
·         Telemedicine strategies to make the most of scarce specialists available and also to help out medics in remote places
·         Wider range of activities performed by nurses and other health para-professional.

In Mexico, pharmacies with medical services attached have multiplied by more than 9 in the period 2003-2013, reaching around 13 thousand units. Their impact has been very relevant:  they attend 450 thousand people each day, compared with the 500 thousand attended by the main institutional social security service (the IMSS).[7]

Having said the above, universal health care has three dimensions:  one is the percentage of total population coverage, another is the percentage of the financial expense that is prepaid (and reduces out-of-pocket expenditures), and the third is the benefit package (number and type of treatments) that is included.  All three dimensions have been influenced by each country public policy.

 



 SOURCE:  “Global health 2035: a world converging within a generation”;  Lawrence H. Summers, et al; The Lancet, January 2014.

Private participation is a key component  in the region’s health systems; representing 51% of total expenditure on health in the case of Chile, 48% in the case of Mexico, 41% in the case of Peru, and 24% in the case of Colombia.[8]

And it will be increasingly important in a context where healthcare service needs  are growing and fiscal resources will continue to be scarce,  Competition among health purchasers (insurance companies) and among health providers (networks of healthcare facilities) is required in order to incentivize efficiency and quality upgrading and a more balanced risk management approach to treat health.

Compared to other health systems, those of the Pacific Alliance region are still lagging behind in several key areas.  In an aggregate measure, healthcare services as percentage of countries’ GDPs are smaller than the OECD average[9].  The same can be said regarding certain key operational indicators.

Indicator
OECD
Chile
Colombia
Mexico
Peru
Physicians per 1,000 inhabitants
3.2
1.6
1.5
2.2
1.1
Hospital beds per 1,000 inhabitants
4.9
2.2
1.5
1.6
1.5
SOURCE:  Lessons from Latin America: The early landscape of healthcare public-private partnerships. Healthcare public-private partnership series, No. 2; Llumpo, A., Downs, S., Montagu, D., Foong, S., Brashers, E., Feachem, R.; San Francisco: The Global Health Group, Global Health Sciences, University of California, San Francisco and PwC.-United States. First edition, November 2015.

Public-private partnerships (PPPs) have been seriously explored as one of the main instruments to promote private investment in the sector.  Mainly Mexico, and at some extent Chile and Peru have already experienced with it. In addition some innovative ways to leverage the PPPs philosophy have taken place; for example, in the case of the Mexican social insurance for workers at private companies (IMSS)[10], PPPs have focused in certain kind of facilities and treatments (through “service integrators”[11]).  In the period 2008-2015, annual average contracting has been of almost 800 million dollars, with a compound average growth rate of 15.7%.

 




 An evaluation of the PPP environment within the four member countries of Pacific Alliance is presented in the following chart:

 
 SOURCE: Lessons from Latin America: The early landscape of healthcare public-private partnerships. Healthcare public-private partnership series, No. 2; Llumpo, A., Downs, S., Montagu, D., Foong, S., Brashers, E., Feachem, R.; San Francisco: The Global Health Group, Global Health Sciences, University of California, San Francisco and PwC.-United States. First edition, November 2015.

Pharmaceutical industry, as well as medical devices[12] industry, are functionally part of the health sector.  Pharmaceutical industry includes patent drugs and generic drugs[13].  Both need a testing period with a representative sample of the population where it is pretended to be sold.  With more complex chronic diseases, drug testing is also more demanding.  And evidence is increasingly necessary to prove that a drug has the desired outcome.  This long and expensive process can now be facilitated by access to quality consumer data, through technology, like biometric sensors. 

Medicines are a big part of household health expenses.  Health public institutions are consolidating their purchases in order to bring prices down.

b)    Challenges

Universal health coverage is a moving target.  As soon as a certain stage is reached with a certain percentage of population and financial coverage, and a certain benefits package, then a superior stage can be imagined, until every inhabitant is fully financially covered for all illnesses and treatments.  The rhythm at which targets can be accomplished depend on financial constraints and institutional capabilities for change.  Realistically, no country has reached full effective coverage , nor it has assumed this ideal as its goal. 

Before that, there is a lot of room for improvement in the quality front, to assure every individual the same level of service in the same benefits package, regardless of its employment status.  Also, co-financing is reasonable in certain cases of higher risk, and out-of-pocket expenses can be minimized through adequate supplementary insurance products.

The whole health system can gain in efficiency putting prevention and primary care at the center.  Prevention would focus on promoting healthy lifestyles while primary care would make an early detection of population at risk and of chronic diseases. Besides, the role of primary care would be not as an entrance door to specialist treatment, but as a real diagnostic and first treatment area, where a high percentage of visits would end satisfactorily, without going to the next level. These elements would impact meaningful cost reductions in the long term, and would be focused on outcomes, rather than on the volume of services.

“…prevention will be the deciding factor in containing costs.”
Carlos Abelleyra, Managing Director for Latin America at Aspen Labs.

A well-developed institutional framework is needed to foster competition between public and private purchasers of health services and among institutional providers of healthcare.  Health authority should have a strong regulatory role to guarantee a seamless access of individuals to the insurance company and the health care unit of their choice.  Quality supervision and information gathering and warehousing could be the responsibility of a new independent agency.[14]  This agency should give priority to the integration of a patients’ information system, based on the interconnection of Electronic Health Records (EHRs) that every health unit should have. This kind of information would allow a better planning and monitoring of health services.

“…change means empowering citizens so they can choose their general practitioners (and keep them, despite shifting labor conditions), from a range of public and private providers, and let this decision signal how institutions are to be allotted funds…”
Miguel Angel González Block, Founding member of the Pwc Mexico Thought Leadership Council[15]

For that to happen, regulation should be updated.  The Mexican health authority, for example, has sent to the Senate an initiative to reform the Constitution in order to strengthen the federal government’s regulatory capabilities throughout the national health system, including all public and private participants.

Health systems in the four member countries of Pacific Alliance have basic characteristics in common, but also important differences.  Chile’s health system seems the more advanced, since it has already merged the two public segments of contributory social insurance and subsidized social insurance, and since it has an older, more consolidated, private health insurance sector.  Along with the unification of public sector funds in one institution, Chile is also promoting payers’ freedom of choice, so demand from individuals can generate competence among health institutions and incentives to enhance services.  And a third element in Chile’s health design, is that it is making explicit the entitlement of population to specific essential services, including coverage of severe illnesses.  There is a lot of room for experience and best practices exchange among the countries within the Pacific Alliance framework.

The Pacific Alliance countries can be benefited by a comparison between their healthcare models, which are really different and have different regulations, to identify their advantages and disadvantages, so that they can learn from each other and share their experience. Maybe we would be able to synthetize a single one
              Ignacio Aramburu, Executive Vice President of finance and risk control, RIMAC Seguros

New operational and business models should be piloted and improved.  If they turn out to be successful, then they should be disseminated throughout the region.  Technology will be a clear driver in this regard, looking to increase service quality and reduce costs.

Financial strengthening of national health systems is an imperative.  Every country that has reached and maintained universal health coverage has resorted to some type of general taxes.  This is a clear area for experience and knowledge exchange among the Pacific Alliance countries and other exemplary nations.

Regarding PPPs, it is necessary to disseminate experience and knowledge obtained in projects implemented over the past few years, so as to converge in similar practices, contracts and criteria that can facilitate the participation of regional and global players, stimulate competition and achieve better projects in the future from the service and financial points of view.

A recent PwC review of healthcare public-private partnerships in Latin America concluded in some useful lessons learned:
 



 SOURCE: Lessons from Latin America: The early landscape of healthcare public-private partnerships. Healthcare public-private partnership series, No. 2; Llumpo, A., Downs, S., Montagu, D., Foong, S., Brashers, E., Feachem, R.; San Francisco: The Global Health Group, Global Health Sciences, University of California, San Francisco and PwC.-United States. First edition, November 2015.

Doctors and specialists across the Latin American region have a long history of professional exchange, information and research sharing, through entities like the Panamerican Health Organization (PAHO).  Health authorities also cooperate in regional campaigns and, special groups like the working group created by the health ministers of the Pacific Alliance region to address an agenda of common issues of interest.

“The [health] ministers in the AP region had a first meeting to select the subjects to discuss. Two important issues were identified:
·         Medicaments regulations, including sanitarian registries, prices, bioequivalence and bioavailability.
·         Quality in service, including harmonization of medical specialities and certification within the four countries.
It’s important to also analyse comparatively our attention models, not only from the service perspective but as risk management models too.
The implementation of the EHRs could be boosted through the Pacific Alliance by the exchange and discussion of standards, rankings, definition of minimum group of variables and systems interoperability.
Medical tourism could be promoted in the context of development of healthcare clusters. As an example, in Colombia, there are at least four cities with the necessary conditions to achieve this: Bogota, Cali, Barranquilla and Bucaramanga.
Given the configuration of the healthcare system of Colombia, applying a full PPP scheme (including medical services) is really difficult, but in could be relevant to renew or expand infrastructures.  High complexity public hospitals would be natural candidates for this.
We must differentiate the Pacific Alliance exchange process from others  we already have, for example, through the Pan American Health Organization (PAHO), the Mesoamerican Project (formerly known as Puebla-Panama Plan), and the agreements within the Andean area, to complement them, not to compete with them. One possibility would be to emphasize research and development.
Dr. Fernando Ruiz, Health Vice Minister, Colombian Government[16]

And cooperation should explore new possibilities.  High quality human resources are scarce.  The region can promote their best use strengthening research networks and specializing certain places in certain disciplines, in order to concentrate and make regional investment more productive.  The idea of health clusters should be explored, looking into each country’s comparative advantages.

c)    Strategic bets

Develop instruments to strengthen prevention and primary care as the center of national health systems.-  Health IT or eHealth  should pave the road for the new health paradigm based on prevention and primary care.  Also, qualified human resources are needed for family medicine, not as an initial stage in the physician’s career, but as a real life-long specialization.

MANAGEMENT SYSTEM FOR PRIMARY CARE UNITS
CASALUD is an innovative model that the Carlos Slim Institute for Health (ICSS)[17] designed and developed in order to re-engineer primary care for chronic diseases through a preventative focus that promotes continuous care of the patient from the moment they show signs of being at risk. It includes a comprehensive management system for primary medical units that included the electronic health register for patients and a set of apps for illnesses’ prevention and treatment, such as Diabe-diario, for the patient empowered treatment of diabetes (the burden of disease in the case of diabetes mellitus II has been estimated in 2.25% of Mexico’s GDP in 2013). It has a technological platform that ensures precise measurements and follows up with the patient.[18].

SPECIALIZED HUMAN RESOURCES FOR FAMILY MEDICINE
The shift to prevention and primary care has to be accompanied by the correlative development of qualified human resources.  The Ministry of Health in Colombia has set the target to prepare five thousand specialists in family medicine to attend the increasing demand of high quality primary care.  In its last review of the Mexican health system (January 2016), the OECD has recommended the design of a university specialty career to form the physicians that are will be increasingly needed to attend primary care units.


Develop an independent agency with the responsibility of quality supervision of health services and information gathering, warehousing and public accesability.-  Health coverage has to do with quality services.  If an individual is insured but the services he receives are not satisfactory, then he will look for other options.  If the institutional framework allows him to choose another health provider, he will look for one with a good track record. If a health unit is failing in what it should deliver, the authority should be able to take pertinent steps to correct it.  All of this needs information, and the best source of information is the patient himself.  So there needs to be a third-party independent entity, with no compromises with public or private health units, responsible for quality supervision and enforcement.  And to comply with this task, it has to gather information from operational units and patients themselves.

SOCIAL PROTECTION COMPREHENSIVE INFORMATION SYSTEM
Colombia is developing a data warehouse that is intended to bring together several databases that cover financing and health accounts, individuals’ health care needs, risk factors and service utilization, distribution and characteristics of insurers; and distribution and characteristics of providers, including indicators of quality and outcomes.  Once fully operational, SISPRO[19] will support health system monitoring and planning, as well as providing public access to key health system statistics and reports.

ITALIAN AGENCY AS A REFERENCE
OECD recommended to take the case of the National Agency for Regional Healthcare (AGENAS) in Italy as a good example of what a quality review independent agency should be.[20]

Develop and interconnect Electronic Health Records (EHRs).-  Advances in this regard are different in the four countries.  Chile has managed to integrate a national information system, that even allows patients to interact (to make appointments, for example) and consult their own data.  Mexico’s EHRs have evolved on an institutional basis issuing a norm to regulate the EHR, but extending usage and interoperability are still big pendings to act upon.  Exchange of experiences is necessary to enhance national efforts and define clear roadmaps. EHRs are a key piece in the development of a health national information system.

Promote healthcare service integrators development and better conditions for PPPs.-  The region has had experience with PPP health projects regarding the construction, equipment and general services of complete new hospitals.  And more projects are in the pipeline, that can learn from this past experience, and improve facilities, financial conditions and risks, and overall costs.  Exchange among the four countries can help to define similar contracts and tenders, to facilitate the participation –and increase competition- between global and regional players.  Also, health institutions have been contracting, as outsourcing or insourcing, certain services based on expensive and sophisticated equipment (like hemodialysis), in order to modernize their own equipment and make a better use of it (since the new facility would provide services to several health units).  These contractors are known as healthcare service integrators and have been operating in a very flexible way.  They can set up a new surgery room and provide general services and consumables, or they can also provide the physicians, nurses, etc.  Conceptually, this kind of arrangement is also a PPP, although its focus is more specific and the investment involved is usually smaller.  It generates savings for the contracting entity and, within an accountability framework, also quality service improvement.

Promote regional specialization through bioclusters development.-  Pacific Alliance member countries can increase their research resources and patent generation capabilities through an agreed concentration of certain health specialties in certain areas, according to each countries strengths, in order to take advantage of scarce very qualified human resources and make a more efficient use of scarce financial resources.  This concentration would benefit from a cluster-type organization, that can attract other important players to build a strong innovation ecosystem with a regional perspective.  It might makes sense, for example to intensify diabetes and heart research in Mexico; while Chile develops capabilities for cancer research; Colombia develops research in ophthalmology and plastic and reconstructive surgery; and Peru emphasizes respiratory diseases.  Telemedicine would be a useful instrument in this context, to disseminate region-wide the knowledge developed in these places.

Facilitate establishment of hospital regional chains and medical tourism.-  Within a health cluster it is only natural to establish healthcare units and some of these units could very well be designed to promote medical tourism.  Although establishment of regional hospital chains in not a priority for many national organizations, which prefer to attend their known local market, some others are clearly oriented towards patients from abroad.  Mexico and Colombia have location advantages with respect to the United States market, and their cost comparison is overwhelming. Mexico has 107 hospitals certified by the local authority and 10 certified by the Joint Commission International.  It is the second destiny worldwide with 1.1 million foreign patients in 2012 that generated 3.6 billion dollars income.[21] 

REGIONAL HOSPITAL CHAIN
Sanitas International has a network of hospitals and assistance.  Starting with sites in Colombia, Venezuela, Peru, Brazil and Mexico, they recently also moved to the United States with immigrant populations as their target group. Their model is that of complete care, including insurance, hospitals, specialized doctors, and cutting-edge applied technology.

 




MEDICAL TOURISM AND HOSPITAL ANGELES
Hospital Angeles (AHI) is the largest private provider of health care services in México.  It has 28 hospitals, with 15 thousand specialists, 2,554 rooms and 234 operating rooms. Mexico’s unique location makes most major cities easily reachable by air travel where a medical shuttle awaits to take patients to the Angeles complex. AHI offer patients English-fluent concierge services handling through their connections with US Hospital Angeles services, offering everything from medical consults, appointments and records transfer, as well as travel arrangements for patients and their families in comprehensive and affordable medical travel packages.

Develop technology applications to enhance health services.-  With prevention and adequate treatment of chronic non-communicable diseases in mind, a myriad of innovative entrepreneurs is developing all sorts of technological platforms to stimulate adoption of healthy lifestyles and to facilitate monitoring and real time responses when needed.  Many of these new apps are available through smart phones, and can offer very sophisticated services that link with internet of things in wearables like watches, clothes, shoes, etc.

SOHIN is a Pioneer in Latin America, in addressing comprehensively chronic – degenerative diseases, through their CONCIERGE specialized service, which supported by its top technology, accompany the patient and its family and guarantees a deeply personalized attention that includes patient’s genetic information. This technology, includes three dimensions: genetic diagnosis, the clinic information, CRM and its transactional features and the mobile tools for the patient and the corresponding medic.
We are concerned by the global increase in chronic-degenerative diseases related deaths, which represents a huge challenge to the healthcare systems and risks country’s productivity. Our value proposition seeks to transform this patients’ service models so they can improve their quality of life and optimize the resources for their care, to therefore increase population’s access to healthcare
SOHIN is a Mexican company, that also started operating in Colombia this year, and we plan to continue our international expansion to Chile and the US.
Even though there are breakthroughs in the region to facilitate doing business, there is still much to do to boost the development of businesses and job creation among entrepreneurs. Traditionally, big benefits, as tax incentives, are destined to big corporations and that widens the gap and unevens the game rules for minor businesses.
Specifically in the health sector, the equalisation in regulatory norms, could revolutionize and maximize the market, they would benefit the population with better prices and homologated quality conditions.”
Juana Ramírez, C.E.O. of SOHIN[22]

Facilitate regional research for patent and generic drugs to speed up their approval and marketing process.-  Universities and health authorities in the four countries can help the pharmaceutical industry to comply with the required regional research to demonstrate the usefulness and harmlessness of their products within their defined sample populations.  Countries have much to win in this, since a shorter period would mean less cost and, hence, a reduced price to user patients.

Harmonize technical rules and standards of medical devices within the region, to facilitate trade and generate scale economies for industrial producers.-  Industry chambers from the four countries have been discussing for several years now, in the framework of Pacific Alliance, how to harmonize rules and standards of a wide variety of products, with the goal of integrating a complementary protocol that could be part of the Additional Protocol already agreed by the member countries.  Discussions have been intense but very productive, since the industry representatives have visualized many win-win situations that will reflect in cost reduction, bigger market, and improved customer experience.


Certify pharmacies that offer medical services next door.-  In Mexico, pharmacies with medical offices established as a separate entity but just next door, have demonstrated their ability to provide convenient access and service, lessening the stress on traditional health care facilities. Trust and adequate quality supervision from the sanitary authority of  the clinicians at the pharmacies next door is critical for larger adoption. Self-regulation and adequate internal controls of medical offices, with adequate Electrionic Health Record (EHR) support  would also help win the trust of the potential patients, resulting in the clinicians gaining good level of acceptance. If this model achieves linking itself to a network of hospitals and insurance companies, there would be a winning formula difficult to stop with health benefits that the population is eager to receive.  This model is extending to the other three Pacific Alliance countries, in part through the purchase of pharmacy chains that Mexican groups are doing.

More than 13 thousand such pharmacies operate nowadays in Mexico.  And they attend daily almost as much patients as the major health institution (455 thousand vs 500 thousand), the IMSS.[23]

CERTIFICATION OF DOCTORS AT FARMACIAS BENAVIDES
Farmacias Benavides in Mexico is following this path of self-regulation and third-party certification, to demonstrate their will to enhance their medical services. One of the key challenges for these establishments is to adequately regulate their activities and their professional and demand implementation of quality medical care that Farmacias Benavides has looked to address through self-regulatory mechanism. This form of pharmacies typically serve between 15-80 patients in a single day, depending on the pharmacy capacity, location and population density in the area. As these pharmacies gain recognition and credibility, it would lead to larger number of patient walk-in.

Take advantage of shared logistics and management to reduce costs in the supply chain.-  Finding a quality distributor in Latin American countries is one of the biggest challenges in the selling of products. The medical device distribution industry is highly fragmented with hundreds of small distribution companies. International device companies often rely on distributors to play a more strategic role with provision of commercial infrastructure. However, trusting external distributor to price, position, and market your device is critical for success in Latin America.

Pharmacies and Medical Device players in the Pacific Alliance have typically relied on specialized distributors for transportation of pharmaceuticals  and devices which has been more expensive mode of distribution; thus adding to the cost pressure of the companies. Aggregation of transportation requirement across pharma, medical samples and devices would provide scale benefits to aggregators while ensuring high customer service level and better visibility of the supply chain.

Specialised logistics companies have gradually entered the healthcare industry as they have witnessed potential market for its development. The challenge in the logistics and supply chain remains around visibility and responsiveness to change their models in line with market needs.

FEMSA is a diversified industrial and commercial group in Mexico. It has a large fleet of trucks that deliver bottled beverages to a very large network of small stores and its own chain of convenience stores.  The group has recently acquired  several medium size pharmacies chains and is starting to use its trucks to distribute medicines to both networks.




[1] “Global health 2035: a world converging within a generation”;  Lawrence H. Summers, et al; The Lancet, January 2014.
[2] “Economists’ declaration on universal health coverage;  Lawrence H. Summers, et al; September 2015;  The Lancet.
[3] Coauthors of a series published in The Lancet, titled Universal health coverage in Latin America, part two:  overcoming social segregation in healthcare;  published online on October 16, 2014.
[4] Within the OECD, administrative expenditure as percentage of total expenditure on health in the case of Mexico is the highest, with almost 9%.
[5] Out-of-pocket expenses are those monetary expenditures that the patient has to do in order to receive medical attention when he needs it, whether he has or not health insurance.  Basically, this kind of expense is done when the patient is not insured or is not satisfied with the quality of service he has.
[6] Which includes:  electronic health records (EHRs), telemedicine, e-learning, mobile health (m-health) and standardization and interoperability issues.  M-health has to do with surveillance, monitoring and distance medical care.
[7] Article in the newspaper El Financiero, “Consultorios de farmacias acechan servicios del IMSS”, 27 de julio de 2014.
[8] Lessons from Latin America: The early landscape of healthcare public-private partnerships. Healthcare public-private partnership series, No. 2; Llumpo, A., Downs, S., Montagu, D., Foong, S., Brashers, E., Feachem, R.; San Francisco: The Global Health Group, Global Health Sciences, University of California, San Francisco and PwC.-United States. First edition, November 2015.
[9] OECD average of healthcare share in GDP is around 10%, while in Chile it is 7.7%, in Colombia 6.8%, in Mexico 6.2%, and in Peru 5.3%, according to ECLAC’s database CEPALSTAT, in 2013.
[10] Instituto Mexicano del Seguro Social
[11] Integration refers to products and services offered to a particular entity, where technological and human components, as well as consumables and distribution-storage-dispensing processes are performed by a professional third party at an established price according to the type of service or procedure.
[12] According to the International Medical Device Regulators Forum (IMDRF), `medical device' means any instrument, apparatus, implement, machine, appliance, implant, in vitro reagent or calibrator, software, material or other similar or related article:
a) intended by the manufacturer to be used, alone or in combination, for human beings for one or more of the specific purpose(s) of:
· diagnosis, prevention, monitoring, treatment or alleviation of disease,
· diagnosis, monitoring, treatment, alleviation of or compensation for an injury,
· investigation, replacement, modification, or support of the anatomy or of a physiological process,
· supporting or sustaining life,
· control of conception,
· disinfection of medical devices,
· providing information for medical or diagnostic purposes by means of in vitro examination of specimens derived from the human body; and
b) which does not achieve its primary intended action in or on the human body by pharmacological, immunological or metabolic means, but which may be assisted in its intended function by such means.
[13] According to the FDA, a generic drug is a drug product that is comparable to a brand/reference listed drug product in dosage form, strength, quality and performance characteristics, and intended use.  It can be marketed after the brand drug’s patent has expired.
[14] As proposed by the Mexican health authorities and suggested by the OECD.
[15] Prologue to the publication Megashifts, a driver to the healthcare sector: doing business in Mexico; PwC Mexico, 2013.
[16] Interview held on December 23, 2015.
[17] Instituto Carlos Slim para la Salud.
[18] Converging health and business – PwC Mexico
[19] Sistema Integral de Información de la Protección Social.
[20] Mexico Health System Review 2016, OECD.
[21] Turismo de Salud; Health Ministry and ProMéxico, 2014.
[22] Interview celebrated on March 16, 2016.
[23] “Consultorios de farmacias acechan servicios del IMSS”;  in El Financiero, July 27, 2014.