Healig Mexican Healthcare

A report from the Economist Intelligence Unit

Healing Mexican healthcareStakeholder collaboration is the cure

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Healing Mexican healthcare: Stakeholder collaboration is the cure

entities. In practice, this has not always happened. Greater willingness to share resources and

responsibility would go a long way toward improving the poor and inconsistent quality and long wait times at many public healthcare entities. These de ciencies have led some patients to use private services, increasing their out-of-pocket expenses. (More than 90% of private healthcare spendingabout 45% of all spending on healthcare in Mexicois paid at point of delivery, according to The Economist Intelligence Unit [EIU]). Poorer Mexicans, who cant afford private fees, are forced to accept poor quality care or

abandon treatment altogether. Bad bedside manner at public centres exacerbates a Mexican tendency to put their fate in the hands of God rather than physicians.

The government has its work cut out for it. In the most recent report issued by the OECD, healthcare spending in Mexico represented 6.2% of GDP, three percentage points behind the OECD average. Mexico is almost at the bottom in the OECD rankings, only Turkey is lower. Average government spending per person approximates US$916.00, also well below the OECD average of US$3,268.00.

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Bridging the gap amongst the stakeholders in Mexicos healthcare system

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Changing demographic patternsalong with scal constraintsadd their own set of complications. According to the EIU, Mexico has a young population: nearly 30% were 14 years or under in 2011. Nevertheless, the demand for healthcare will surge over the next ve years as the countrys population ages. By 2016, 7.5% of the population will be 65 years or older. About 30% of Mexicans are now obese owed in part to sedentary lifestyles, an American-style fast-food and large-quantity culture and a general fondness of chubbiness. Diabetes and heart disease are not the only problems; add high cholesterol and hypertension to the list. The detailed and precise care required for these chronic diseases places signi cant burdens on the system.

Recognising this super-sized challenge, the governments National Development Plan for 2013 to 2018 has called for greater collaboration among public health entities. New initiatives will allow patients to access any and all facilities irrespective of whether they are a part of the IMSS (Mexican Social Security Institution), ISSSTE (state workers insurance program), Seguro Popular or any other healthcare provider. It also calls for greater collaboration with the private sector.

The message of collaboration is nally spreading, albeit slowly. A few players in Mexicos healthcare system are taking small yet important steps to create a more patient-focused healthcare system. In some instances, NGOs are the glue that binds the different stakeholders together.

Consider Luis Adrian Quiroz, a fellow with Ashoka, a global organisation that invests in social entrepreneurs. A few years ago, when Mr Quiroz went to Mexico Citys Hospital General de la Raza, an entity of the IMSS, for his HIV medication, he was told: We cant help you because the medication is not available. To nd out why, he started seeking answers and asking for cooperation among all of stakeholders in the supply chainfrom the laboratory producing the medication to the distributors, to the IMSS purchasing department and, nally, to the pharmacies.

Mr Quiroz discovered that the medication was available, just lost in the system. Sadly, he

remarks, It is often a case of human error, the box of medication is sitting in the pharmacy but has not yet been opened or has been misplaced by the employees. He then decided to become an agent of change, establishing the NGO Derecho Habientes Viviendo con VIH del IMSS (DVVIMSS), or IMSS Af liates Living with HIV.

DVVIMSS has developed a tracking and communications system shared by the different stakeholders in Mexicos healthcare system to ensure timely delivery of medications to all 26,000 HIV-positive individuals registered with IMSS. Working with local IMSS state medical institutions, DVVIMSS created a database to register all HIV patients location, hospital, physician and required medications. Now, when patients are told that the medication is not available, they can send DVVIMSS a copy of the prescription and it works to uncover the medicines location and speed delivery to the patient. Success depends on the NGOs tracking system and the willingness of the different entities within supply chain to communicate and cooperate.

DVVIMSS serves as a model for other NGOs in Mexico and also forms part of a larger network of NGOs that are working to build collaboration amongst themselves and with private and public health entities. Red de Acceso (Access Network) includes a variety of NGOs that help patients with a variety of illnessesincluding cancer, cystic brosis, haemophilia, multiple sclerosis, hypertension and diabetes.

Timely access to medication is critical but not enough to ensure proper care and treatment. The patient experience is extremely important. Thus, many providers are adopting business models that ensure cost-effective, affordable patient-centred care. With nancial backing from the World Banks International Finance Corporate (IFC), Hospitaria recently built a 50-bed hospital north of Monterrey that caters to low- and middle-income families. The new energy-ef cient hospital is the rst green hospital in Mexico, and it is focused on providing affordable, quality care. According to the CEO of Hospitaria, Mauricio Garcia, with new technology and construction, we can offer our services at 30-



40% less than some of the older hospitals.More small- and mid-sized hospitals (50-100

beds) are being built, and many collaborate via the Mexican Hospital Consortium (Consorcio Mexicano de HospitalesCMH), which brings together 27 hospitals spread throughout Mexico. Initially, CMHs collaboration focused on information sharing about cost structures and management practices. Last year, however, CMH developed a platform to promote the joint purchase of medical equipment and medicines to secure greater discounts.

A big challenge facing smaller players in Mexicos healthcare system is the extremely high cost of operating equipment and medications. As one hospital operator in the CMH consortium explains, Most hospitals around the world medicate by the pill, the unit. The hospital buys in bulk and then administers the medication. In Mexico, however, the pharmaceutical companies only sell by the box. But, if you try to give a patient a pill from an opened box, the patient often refuses and wants to see a new box. As a result, the hospital ends up discarding the remaining pills. Mexico has no law requiring pharmaceutical companies to sell by the box rather than in bulk. It is simply an industry practiceone that puts a burden on smaller healthcare players that do not have the negotiating clout of larger entities. More collaboration across the healthcare system is needed to give the smaller hospitals greater power to force change in such inef cient practices.

Self-interest and an inef cient nancing structure are the biggest obstacles to increased collaboration. Organisations are too focused on meeting their immediate needs and have little incentive to follow policy guidelines. Our goal is to get all players in the sector together at the same table, says Economic Research Coordinator Hector Arreola, at the non-pro t Fundacion Mexicana para la Salud (Funsalud). Laws in Mexico permit and even encourage collaboration, but their application has proven challenging. This is true, in part, because Mexicos healthcare sector lacks a central nancing scheme that manages and distributes resources to different healthcare entities. At

present, each public institution manages its own nancing and services, leading to excessive waste and broad variations in the quality of care.

The 2003 healthcare reform, which ushered in Seguro Popular, explicitly endorses collaboration among public entities, such as IMSS and ISSSTE, with the Seguro Popular, but the former tend to jealously guard and reserve their services for patients enrolled in their systems. Seguro Popular also envisions passing the buck to the private sector. While theres upside for companies, the track record so far has been patchy. A few clinics in the state of Nuevo Leon formed an alliance with the Seguro Popular, but slow payment for services rendered have forced the clinics to go their own way. Limited supervision of where and how Seguro Popular resources are spent is another issue. For some social entrepreneurs like Mr Quiroz with DVVIMSS, the problems represent an opportunity for greater civic and NGO participation. Mexicos information and transparency laws enable us to take action and play a role in ensuring that resources are properly managed and allocated. Whats needed are more civic and NGO groups to rise to the challenge, he argues.

The social and economic impact of increased collaboration and better resource management could change the face of healthcare in Mexico. During postgraduate work at MIT and Harvard, Ashoka fellow Javier Lozano examined how diabetes care for low-and middle-income patients required the attention and support of different specialists. He found that long waiting times, inadequate care and high out-of-pocket expenses led many patients, particularly those in poorer or marginal communities, to abandon treatment. Less than 10% of Mexicans with diabetes have access to specialized and comprehensive care, he laments. To help remedy this situation, Mr Lozano launched the somewhat ironically named Clinicas del Azucar (Sugar Clinic). He opened the rst clinic in Monterrey, Nuevo Leon, where patients, mostly Type II, adult onset, receive all services to detect and manage diabetes. Services range from diagnosis and lab tests to consultations and basic medications, all for a reasonable annual fee

The social and economic impact of increased collaboration and better resource management could change the face of healthcare in Mexico.



(between US$70 and US$260). This amounts to a cost reduction of 70% for patients and an 80% reduction in time devoted to treatment. Its quick success has led to collaboration with the local state government of Nuevo Leon, which wants Clinicas del Azucar to replicate the one-stop-shop strategy throughout the state. Clinicas del Azucar is also cooperating with Seguro Popular on how the strategy might be incorporated into the universal insurance plan.

All stakeholders in the healthcare system share one common denominator: the patient. That focus is often lost, explains Armando Laborde, director of Ashoka for Mexico and Central America. Social entrepreneurs and NGOs are playing an instru-mental role in building bridges between the

population and the varied healthcare providers, he continued.

Other players, including providers, pharmaceutical companies and government insurance agencies, have heard the call to action and are beginning to work toward better cooperation. They have begun to recognise that corporate boundaries are a thing of the past. In these increasingly competitive, resource-constrained times, a new mandate has arisen: to share assets, knowledge and best practices to lessen overhead, redundant work, delays and insuf cient inventory. Small steps towards stakeholder collaboration represent giant leaps in bringing better quality, lower cost and time-ef cient care to Mexicans.



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Healig Mexican Healthcare