Access to healthcare

Théra van Swaay De Marchi

Pinheiro Neto Advogados, São Paulo

tdemarchi@pn.com.br 

Luciana Mayumi Sakamoto

Pinheiro Neto Advogados, São Paulo

lsakamoto@pn.com.br

Introduction

Since the outbreak of the Covid-19 pandemic in 2020, discussions on access to healthcare have taken place around the world. Healthcare systems were also thrust into the limelight regarding their sufficiency, efficiency and even model, that is whether a public, private or hybrid system would best suit societal needs and challenges.

The fear of being deprived of access to healthcare versus the difficulty in affording a private healthcare plan was quite challenging for many families during the pandemic. At any rate, the pandemic strengthened the willingness of Brazilians to have a healthcare plan, after the desire of having their own home and private education, according to a survey of the Institute of Private Health Studies (IESS).[1]

Private health figures in Brazil

Currently, the Brazilian population (around 217 million inhabitants) has access to healthcare through the Unified Health System (SUS) or else through private healthcare plans, which are in turn taken out directly or obtained through formal employment and/or via associations. In December 2022, 50.5 million inhabitants reportedly had access to healthcare plans, that is 23 per cent of the population.[2]

In Brazil, there are three types of healthcare plans: (i) individual plans, which are taken out by individuals directly; (ii) collective corporate plans, which are taken out by companies and offered to their employees; and (iii) collective adherence-based plans, for which a membership association, trade association or industry-based association must exist. Individual plans are heavily regulated and, as such, scarce in the Brazilian market today.

Out of the 23 per cent of the population who are private health beneficiaries, more than 80 per cent of them have access to plans through their employer, so variance in the number of beneficiaries is directly related to employment. It can thus be seen that the highest variance during the pandemic took place in collective corporate plans (due to layoffs during the period).

Given the geographic dimensions of Brazil and the country’s social inequality itself, another interesting fact is the coverage rate of healthcare plans in the country, with a striking concentration of beneficiaries in the Southeast, Center-West and Southern regions of Brazil, especially the states of Espírito Santo, Rio de Janeiro and São Paulo.[3]

Another aspect that contributes to the willingness of Brazilians to count on a private healthcare plan is the quality of the healthcare services, which generally tends to be higher than the services provided by the SUS. This is because the SUS struggles with budgetary, staffing and even management constraints, which makes it difficult for the SUS to provide a satisfactory service to 217 million citizens, thus showing low efficiency rates. The rate of hospital beds available in the SUS, for instance, is far lower when compared to the private sector,[4] not to mention technological investments.

Challenges of access to health – cost

There is clearly an enormous potential for growth of private health in Brazil, as 77 per cent of the population have no access to healthcare plans and, as such, depend almost exclusively on the SUS. Therefore, access to health in Brazil is directly linked to the purchasing power of Brazilians.

However, the opposite will occur if healthcare plans become unaffordable to Brazilians in general. This sector is driven by the motto ‘health is priceless’. But health has a price (and a rather expensive one at that), which is heavily dependent on good administrative, labour and financial management practices to hold costs and waste in check.

The technological developments in medicine are likely to increase costs but, if well used, technology also helps reduce these same costs. Artificial intelligence will also play a key role in the evolution of the health system and in the overcoming of the biggest challenges in this sector, including the cost of health.

Several healthtechs have attested to this trend by optimising internal healthcare procedures, promoting greater data integration, improving the quality of healthcare services, making intelligent use of data, and developing health promotion and disease prevention solutions, among other initiatives. However, this is a process of gradual evolution towards transforming the traditional healthcare supply model (albeit one with significant breakthroughs during the pandemic).

Within the context of the motto ‘health is priceless’, there is yet another challenge arising from Brazil’s culture of consumer protection, which, if excessive, puts a dent in successful management of healthcare costs, with a negative bearing on the financial capacity of healthcare plans and, by extension, on healthcare plan prices themselves.

In Brazil, healthcare plan operators are required to abide by the List of Healthcare Procedures and Events (the List) issued by the National Private Health Agency (ANS), setting the minimum coverage to be provided by healthcare plan operators (without prejudice to supply additional coverage). It so happens that, for some years now, the Brazilian courts have ruled favourably to coverage of unlisted procedures, treatments and/or medicines, bringing legal and financial uncertainty to this subject.

Faced with the increase in rare diseases, new technologies, high-complexity treatments and the need for high-cost drugs, the demand of beneficiaries for coverage of unlisted medications and treatments has soared, taking this matter to the courts. In June 2022, the Superior Court of Justice (STJ) held that the List is exhaustive, that is healthcare plan operators are not required to cover any procedure not expressly set out in the List, except under some extraordinary circumstances.

In light of ensuing community outrage over this decision, the National Congress was called on to amend the Healthcare Plans Law (Law No. 9,656 of 1998) by establishing that the List is non-exhaustive and, as such, healthcare plan operators should cover any prescribed treatment if there is scientific evidence of its effectiveness or upon recommendation of the National Commission for Incorporation of Technologies in the SUS (CONITEC) or another internationally renowned health technology assessment body. This decision is pending presidential approval.

This stalemate has taken its toll on healthcare plan prices in that it impairs adequate actuarial calculation due to the unpredictability of procedures, medicines and/or treatments to be actually covered, also leading to a sharp increase in annual price adjustments.

This overwhelming pro-consumer approach without due regard for its economic implications runs counter to the efforts to make healthcare more accessible as healthcare plans become increasingly affordable for more privileged consumers only (while pushing the less privileged citizens to the already strained SUS).

New healthcare access opportunities

Despite its challenges, the Brazilian healthcare market is very dynamic and competitive, either with the emergence of new players or with new opportunities to expand access to healthcare.

In response to the high cost of healthcare plans, products have emerged in the Brazilian market for the provision of healthcare services at more affordable prices. These products should not be confused with healthcare plans in that they basically offer medical appointments and exams.

As no hospital coverage is included (due to the greater complexity and unpredictability of the care being necessary in this context), the target audience of these products is more limited. Nevertheless, these products are indeed appealing to a certain level of consumers by offering access to a higher quality, faster and more efficient service compared to the SUS.

Faced with the significant cost-related barriers to private healthcare expansion, in January 2022, the Ministry of Health announced the intention to launch Open Health, an environment that would enable the exchange of information between patients, healthcare plan operators and service providers. The purpose of Open Health is to integrate patient health information and foster competition among operators, reducing transaction costs and allowing the offer of products that better meet client needs.

Open Health has drawn on Open Banking, by which financial institutions are allowed access to personal data from (potential) clients in the platforms of other institutions aimed at encouraging innovation and promoting competition via more customised products. This is not that straightforward in the health industry, though, as the massive exchange of sensitive health data – which requires compliance with the General Data Protection Law (Law No. 13,709 of 2018) – on current and potential clients stirs concerns about ‘cherry-picking’ by operators.

The Ministry of Health and the ANS are still working on the Open Health concept, which already indicates new opportunities for access to private health products and services.

At the same time, ANS, as the regulatory agency, is constantly investing in improvement of the regulatory environment to foster greater transparency, increased service quality, greater competition among healthcare plan operators and, by extension, greater access to the private healthcare system.

Conclusion

The Brazilian healthcare system’s hybrid model provides the population with access to both public and private healthcare, with the latter being renowned for delivering higher quality services compared to the SUS. However, healthcare plans are still affordable for only 23 per cent of the population, with more than 80 per cent of this group having access to private health products only because they are in formal employment.

It is thus possible to conclude that the expansion of the access to private healthcare plans is directly related to costs, which is the biggest challenge in this sector. Several solutions have been considered in this regard, with one single objective in common: to improve the operators' internal flows and processes to avoid waste and unnecessary costs, as well as to establish new health management standards with greater focus on preventive care than on management of claims.