With much of President Enrique Peña Nieto’s reform agenda taken up by sweeping changes to the energy, telecoms and education sectors, the Mexican health sector has rarely made front page news. But while structural reform was put on the political backburner, impressive strides have been made to tackle the rise of non-communicable diseases (NCDs), cut unnecessary costs and improve infrastructure. Faced with lower federal budgets, the country’s health care providers are increasingly looking to the private sector to boost efficiency. “In the coming years, the Mexican heath sector will be defined by three important trends,” Antonio Hurtado, medical director for IGSA Medical, a medical equipment provider, told OBG. “These trends are the expansion of universal health care, the shift towards preventative medicine and increasing interaction with the private sector.”
System
In Mexico an individual’s health care provider depends on their employer. Those working in the formal economy are covered by the Mexican Institute of Social Security (Instituto Mexicano de Seguridad Social, IMSS). Each month they pay 2.7% of their salary to IMSS, with their employer contributing 9.9% to 24.4% depending on salary size. IMSS receives additional funding from the federal government. In 2016 IMSS covered a total of 62m Mexicans, with a further 12m covered by IMSS Prospera, a programme that provides free-of-charge medical services to vulnerable sections of Mexican society.
The country’s public sector workforce of nearly 13m is covered by the Institute of Social Security and Services for Government Employees (Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado, ISSSTE). The country’s armed forces and employees of Petroleos Mexicanos (Pemex), the state oil firm, have their own insurers and accounted for just under 2m Mexicans in 2013, the last year in which numbers were disclosed. The provision of public health care to so many people across a vast country is significant. From 2013 to 2016 IMSS saw the number of individual services provided rise 10% over its 2009-12 figures. During the 2013-16 period it recorded 87.5m primary consultations, 20m specialist consultations, attended 21.1m emergencies, undertook 2500 transplants and printed 168m prescriptions.
Coverage
Mexico has achieved near universal health care coverage thanks to the introduction of the People’s Health Insurance Scheme (Seguro Popular de Salud, SPS) in 2004. The plan provides coverage to Mexicans in the informal economy or without employment, entitling them to treatment for 100% of conditions treated in health centres, 95% of conditions that require hospitalisation and 60% of high-speciality conditions. The SPS receives funding from both federal and state governments.
Thanks to the government’s push towards the formalisation of the economy, the number of patients enrolled in SPS fell from a peak of 57.3m in 2014 to 54.9m in 2016. “For many years the constitutional right to health care was treated as something to aspire to and governments developed programmes and strategies that hoped, one day, to meet the needs of the country’s population,” Dr Lourdes Motta Murguia, president of the Mexican Society of Public Health, a public health organisation, told OBG. “However, in 2011 there was a change to the ensuring that all Mexican citizens can access treatments from the most basic to the most specialised.”
Vital Statistics
Mexico has performed well in many health criteria. Between 1980 and 2014 life expectancy at birth increased from 66.6 years to 76.7, according to World Bank data. The mortality rate per 1000 births fell from 56.1 to 11.9 over the same period and 99% of births are attended by skilled medical personnel. Infectious diseases have also been brought under control.
According the World Health Organisation’s (WHO) “World Health Statistics 2016” report, the tuberculosis incidence is 24 in 100,000, there are 0.1 new cases of HIV per 1000 uninfected people and there were 0.2 cases of malaria for every 1000 people at risk. In the World Economic Forum’s “Global Competitiveness Report 2016” Mexico ranked first out of 138 countries for its low HIV prevalence and third for its low impact of malaria on business.
Non-Communicable
Over the last 50 years, however, Mexico has undergone a major demographic shift, presenting new challenges to public health care. In 1970 there were 2.7m Mexicans over the age of 70 and 14 workers for each pensioner. By 2010 the number of people over 70 reached 10.2m, with just four workers per retired person. The conditions that affect most Mexicans, and cost the system most money, are NCDs, of which the most common are cancer, diabetes, cardiovascular and chronic respiratory disease.
The probability of a Mexican between the ages of 30 and 70 dying from one of these four diseases is 15.7%. “Although they are decreasing we still suffer from illness and diseases linked to poverty, but at the same time we have an epidemic of diabetes, obesity, hypertension and other chronic conditions associated with more developed societies,” Motta told OBG. According to data from the Institute of Health Metrics, in 2015 diabetes, ischemic heart disease and chronic kidney diseases were the leading causes of disability-adjusted life years, a measure of disease burden, expressed as the number of years lost due to ill-health, disability or early death. A 2012 study found that 71% of Mexican were overweight and obese, the highest rate in the Americas, and over 15% of adults have diabetes, compared to an OECD average of 6.9%.
Response
To tackle the problem of NCDs a different approach to health care will be required. One strategy contained in the National Agreement for Healthy Nutrition (Acuerdo Nacional para la Salud Alimentaria, ANSA) has been to implement a “sin tax” on sugary drinks, which account for an estimated 70% of added-sugar in Mexican diets.
Introduced at the start of 2015 at a rate of MXN1 ($0.06) per litre, the ANSA-backed tax showed positive results, with sugared drinks sales falling 5.5% in 2015 and a further 9.7% over the course of 2016. In addition the government has introduced front-of-pack nutritional labelling for foods and tightened regulations on advertisements targeting children.
Until recently, however, the health care system has lacked a coherent approach to preventative health care. “There is a consensus amongst experts dealing with the obesity and diabetes issue in Mexico that the correct provision of primary care could lead to long-term savings for the health sector,” Motta told OBG. “There are a number of people in the country who do not realise they have diabetes. If we can identify them at a stage of pre-diabetes, when blood sugar levels are high but the disease hasn’t set in, we can intervene to make lifestyle changes that will prevent its onset.”
The single largest project in this area is the CASALUD programme established in 2008 by the Carlos Slim Foundation. Diabetes has historically been treated by primary health clinics, which puts a strain on resources. CASALUD approaches the problem by providing the technology needed for mobile community screenings that measure weight, height, waist circumference, blood pressure and glucose levels on site. The information for each patient is logged on a database, allowing for continuous monitoring, and other software packages allow for the continuous monitoring of pharmaceutical supplies at primary health clinics and training courses for carers.
A further pillar or the scheme, aimed to boost patient engagement and awareness of how to prevent and manage chronic disease is under development. The programme, which has been rolled out to over 12,500 health care units across the country, has won international plaudits for its innovative approach to prevention, and in November 2016 CASALUD was recognised as a Model of Excellence by the World Innovation Health Summit, which was organised by Qatar Foundation. “The government’s relatively new focus on preventative medicine represents a significant opportunity to diversify the country’s health care strategy,” Javier Sánchez Muñoz, director-general of IGSA Medical Services, told OBG. “Although some still believe solely on treatment, the benefits for the entire health care ecosystem of early detection of certain illnesses are hard to overemphasise.”
Yet, much remains to be done. While Mexico’s headline obesity rate makes it a focus of preventative care, programmes for other NCDs have yet to be developed. “There is no national plan to tackle cancer,” Motta told OBG. “Patients arrive at clinics when their condition is already very advanced. They do not realise that they have the option of screening and genetic analysis to ensure an early diagnosis and intervention.”
In the coming years the public health sector’s capacity to wheel out new programmes could be tested. “Prevention is certainly a hot topic among policy makers at the moment, especially amongst government entities and supranational organisations,” Pablo Escandón Cusi, chairman and CEO of Nadro, a pharmaceutical distributor told OBG. “However, in countries with limited institutional capacity it is comparatively costly and many factors need to be present for it to yield noticeable, positive results.”
Budget
In total, the Mexican health care sector accounts for 6.2% of GDP compared to 8.9% on average in the rest of the OECD. However, 45% of that figure comes from out-of-pocket payments. Public sector investment in health care rose from 2.4% of GDP to 3.2% of GDP between 2003 and 2013. In addition 10% of expenditure goes towards administrative costs — a comparatively high figure. “Essentially, Mexico spends too little on health care and spends its limited resources poorly” concludes an October 2016 report by Manatt Phelps & Phillips, a US law firm.
The onus, therefore, is on the government to do more with less. In September 2016 the government announced that the federal health care budget would be cut by 0.9% to MXN536bn ($32.3bn), with IMSS and ISSSTE receiving 48% and 10% of funding, respectively. “Perhaps the greatest challenge facing the Mexican health care system is funding,” Escandón told OBG. “There are minimal resources for such a large population and even smaller tasks are a drain on the system. The two main challenges are problems with efficiency and a lack of private investment. At least MXN56bn ($3.4bn) of annual investment in existing assets and infrastructure is needed to increase capacity and bring Mexico in line with other OECD countries by 2030.”
Efficiency Gains
The good news for the Mexican health sector is that efficiency gains are already being made through a targeted cost-cutting plan. Since 2007 IMSS has eaten into the financial reserves held in the federal spending budget (Presupuesto de Egresos de la Federación, PEF). That year IMSS accessed MXN195m ($11.8m) to cope with the rising cost of care, but by 2012 a total of MXN22.8bn ($1.4bn) was channelled to the health care provider. In 2013, however, IMSS implemented a new financial discipline programme and the use of reserves dropped rapidly. In 2016 it did not tap any PEF reserves, saving over $15bn, although it forecasts to use MXN12.7bn ($765.4m) of reserves in 2017.
Two of the biggest sources of savings have been the implementation of consolidated purchasing and the contracting of integrated services. These have helped to address long standing inefficiencies In 2016 the use of consolidated purchasing for drugs and equipment saved public health care providers a combined MXN2.5bn ($150.7m) in 2016 and savings for 2017 are estimated to be MXN3.5bn ($210.9m). Over the course of President Peña Nieto’s term total savings have amounted to MXN14bn ($843.8m).
Meanwhile, the government’s decision to license batches of generic versions of drugs outside of patents has increased the number of players in the pharmaceutical market, driving competition and pushing down prices (see analysis). “The government’s generics policy has allowed the health sector to reduce its pharmaceutical bill by 61%,” Aldo Verver Y Vargas Duarte, deputy director of the Federal Commission for the Protection Against Sanitary Risk (Comisión Federal para la Protección contra Riesgos Sanitarios, COFEPRIS), the sector regulator, told OBG. “Combined with the consolidated buying policy, the savings made can be spent in other areas which need funding.”
The savings from contracting services such as dialysis, blood banks and laboratory work have been even greater. Over the last four years the system has saved MXN5.9bn ($355.6m) by contracting dialysis procedures to private clinics. In addition, over the last three years, the contracting of private clinics has saved MXN1.86b ($112.1m) in clinical laboratory work, MXN1.94bn ($116.9m) in minimally invasive surgeries and MXN699m ($42.1m) in blood banks. Other plans have long-term horizons. IMSS has introduced a delayed retirement incentive scheme that rewards doctors and nurses with cash incentives of MXN850,000 ($51,229) and MXN650,000 ($39,175), respectively, in return for delaying retirement by five years. The scheme is expected to save the provider MXN20.2bn ($1.2bn) over the coming 15 years.
Rising Revenues
The cost-cutting process has been matched by a welcome rise in revenues at IMSS. In 2012 the system received payments of MXN192bn ($11.6bn) but over the course of 2016 this figure had grown to MXN262bn ($15.8bn), a 37% increase over four years. The main driver of this trend is the continued growth of labour in the formal economy, evidenced by IMSS’s growing numbers of insured workers, although the simplification of the administrative process and a new auditing process are also credited with raising revenues by IMSS.
Cutting Red Tape
A second pillar of IMSS strategy for the coming years is the reduction of red tape through the simplification of bureaucratic processes for its patients. “We’ve never had as much money for health and yet we have never had so many problems responding to the demand for health services,” Motta told OBG. “We need to guarantee funding finds its way to quality services, cutting administrative costs and ensuring that those administrators that remain are well paid and well trained.” In 2012 every IMSS procedure had to be attended in person. In 2016 18 of the 23 processes and procedures linked to affiliation and payment to IMSS could be completed online and 51m members filed their paperwork online without the need to attend an IMSS office in person.
Improving Services
IMSS has also put in place a number of programmes designed to improve the quality of service at its hospitals. The Unifila initiative allows patients without an appointment to receive attention at the first available family medicine unit (unidad de medicina familiar, UMF). A bed management programme has also successfully reduced the vacant-to-occupied turnaround from an average of 22 hours to under eight hours. By 2017, 82.4% of the 154 IMSS hospitals had implemented the programme. In Mexico City a new programme was rolled out in the city’s 48 UMFs and 12 regional hospitals to improve management and storage of medicines. When a medicine is out of stock at a UMF, the patient automatically receives an electronic prescription that can be redeemed at any of 60 IMSS pharmacies. As a result of the scheme, the percentage of redeemed prescriptions rose from 97.5% to 99.8% PORTABILITY: However, the biggest obstacle to the boosting efficiency in the public health sector is the structure of the system itself, which offers little opportunity for patients of one social security system to be treated in another. The quality of services, treatments and waiting times in IMSS, ISSSTE, SPS and the other providers can vary significantly. Some Mexicans have more than one coverage, if, for example, they work in the public sector but are covered as well by their spouse’s IMSS plan, and can chose between services, but for the majority the lack of portability can involve significant challenges.
A patient may, for example, live close by to an IMSS hospital with excellent dialysis services but, due to their employment status, they may have to travel across the city to a separate — and possibly overcrowded — clinic. When people change jobs, switching between the public and private sector, this lack of portability also hinders the continuity of care. They must access new hospitals, receive treatment from new doctors and often the patient history documents are not adequately transferred between systems.
In 2013 President Peña Nieto announced a structural reform of the health system aimed at enhancing cooperation between public health providers to promote greater portability and the efficient use of national infrastructure and resources. The reform included provisions to strengthen the regulatory role of the Ministry of Health (MoH) and develop a shared patient data system between all providers. However, the slowdown in economic growth brought about, in part, by the fall in commodity prices that began in 2014 has limited the government’s capacity for systemic change with the energy and telecoms sectors the focus of political capital for reform. Nevertheless, progress in cooperation between providers have been made. “Although the government’s reform has been slowed, that does not mean there haven’t been advances,” Motta told OBG. “We have a problem with child mortality and we failed to meet the Millennium Development Goals. The health care providers have since signed an agreement stating that, in the case of a pregnant woman arriving at a hospital, she must be treated there irrespective of her affiliation.”
A commission has also been established to supervise standards of public and private health services. “An important question for portability is to generate services that are homogeneous in their quality,” Motta told OBG. Since 2010 the MoH has been working towards the implementation of an electronic health records for Mexican citizens but progress has so far been sporadic. In the OECD’s January 2017 report “New Health Technologies: Managing Access, Value and Sustainability” Mexico’s electronic medical chart scored just three out of nine. The report went on to say there had been insufficient investment in connectivity, with just 35% of primary health care clinics connected to the system.
Private Sector
In the OECD’s “Review of Health Care Systems 2016” report, the need for greater portability between providers is restated adding that a system of “people-centred health care would prioritise responsive and accountable services, strongly oriented toward preventive and primary care, which make effective use of both the public and private sectors.” Although 6% of Mexicans have private health insurance, often included as a perk for multinational workers, demand for private health care services remains high, mainly due a lack of satisfaction with public services. Around 45% of total health care spending in Mexico is out of pocket, one of the highest rates in the OECD, and there are 28.6 privately owned for-profit hospitals per 1m inhabitants, compared to 11.4 publicly owned, although the latter tend to be larger.
A number of private chains including Grupo Á ngeles, Médica Sur, Hospitales ABC and Star Médica have expanded across the country and have been at the forefront of efforts to make Mexico one of the world’s leading medical tourism destinations (see Tourism chapter). Other potential targets for private investment centre around research and development including clinical trials for pharmaceutical and medical devices and the establishment of research partnerships with Mexico’s respected academic institutions (see Research & Innovation chapter).
In addition, the increased contracting of integrated services creates new opportunities for private clinics and the growth of the private-public partnership (PPP) model for the expansion of hospital infrastructure opens the door for construction and health management firms. “Until recently, the health care sector in Mexico has been controlled by relatively few actors,” IGSA’s Sánchez told OBG. “However, major changes are under way, from the professionalisation of services, the introduction of new technology and electronic reconversion of hospitals to the introduction of new financing mechanisms such as PPPs.”
Certification
Unlike public hospitals, private clinics are not legally bound to purchase new equipment, but they must have certification to work with public health patients. “The quality of service and facilities in private hospitals is very heterogeneous,” Motta told OBG. “We have excellent private hospitals with the best doctors but there are others which operate without the correct licenses.” Certifications for hospitals and health facilities are awarded by the General Health Council, while nine hospitals focussed on health tourism have achieved Joint Commission International certification.
Pharmaceuticals
Mexico has a large and vibrant pharmaceutical industry. Most of the major international firms have a presence in the country and there are over 300 drug manufacturers in the country as a result of the rapid growth of the generic drug market in recent years. The sector is bolstered by a dynamic and efficient regulatory agency, COFEPRIS, that has sought to stimulate the growth of the industry. “One principal at the centre of health government health policy is competitiveness,” Julio Sánchez y Tépoz, health commissioner of COFEPRIS, told OBG. “For the past 10 years the health care authorities have mainly been focused on the population’s well being, which was an obstacle to growth. However, today we care for health but also care for business and providing a competitive environment for both national and international players in the marketplace.” In recent years, sales of over-the-counter drugs have been boosted by proliferation of pharmacies with doctors on the premises to issue prescriptions. Over 56,000 doctors are employed under this arrangement, accounting for around 30% of prescriptions in the country.
Outlook
There is much to be celebrated for the Mexican health care system, which is moving in towards its goal of providing all citizens, regardless of wealth or employment, access to high levels of care. In the last three years, movements to increase coordination between health providers, cut costs and improve services are also to be commended. However, the inherent inefficiencies of the fractured public system and the bureaucratic wastage that accompanies it are a continual obstacle to providing the best possible service. As with other sectors, such as education, there is a strong undercurrent of public opposition to the privatisation of the health service and in March 2016 there were doctors marches in 70 cities to demand improvements to working conditions.
Nevertheless, the private sector already plays a crucial role in the provision of health care in Mexico and its role is likely to expand in the future. A great deal will depend on the general elections, which are scheduled to be held in 2018 to determine the direction of a much-needed structural reform to the sector.
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