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.
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.
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.
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: 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.
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%.
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:
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.
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.”
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
[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.
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