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The coexistence of public and private healthcare sectors and the impact caused by overloaded hospital beds: the effects of Covid

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Théra van Swaay De Marchi

Pinheiro Neto Advogados, São Paulo



Maria Silvia Loureiro de Andrade Marques

Pinheiro Neto Advogados, São Paulo



The Brazilian health system framework was devised by the Federal Constitution enacted in 1988 and comprises two subsectors:

  • the public subsector represented by the Unified Health System (SUS), one of the world’s biggest and most complex public health systems, by which services are funded and provided by the state at federal, state,and municipal levels, including health services to the military; and
  • the private subsector, which can act in
    • a complementary way, when private entities team up with the public health subsector through public contracts or agreements with the SUS to meet specific needs, following the principles and guidelines of the public administration; or
    • a supplementary way, by offering health services in the market through companies operating private health insurance and plans.

Based on this concept of universal and unrestricted access to comprehensive health services funded by the state, the SUS serves approximately 75 per cent of the Brazilian population. The remaining citizens (circa 47 million Brazilians) have a private healthcare plan based on out-of-pocket spending or subsidy by companies (employers’ healthcare spending).[1]

The coexistence of public and private interdependent subsystems and the universal character of the SUS end up blurring the line between them, which leads to a disparate and uncoordinated health system. Reassessing public-private relations and restructuring the financial subsidy have long been a pressing issue to overcome the challenges faced by the Brazilian health system.[2] The Covid-19 pandemic has brought this discussion to the fore again in view of the current search for available hospital beds and medical services/devices to treat affected patients.

On 6 February 2020, Law 13,979 created a legal framework to deal with the public health emergency of international concern resulting from the Covid-19 pandemic. The Law  specifically addresses the administrative requisition,[3] a legal mechanism already ruled by Article 5, XXV of Federal Constitution and by Article 15, XIII of Law 8,080 of 1990 (known as the Organic Health Law, which regulates the SUS).

Administrative requisition is an extreme form of state intervention in private property in that it allows the executive branch, unilaterally and without the need for mediation by the judiciary branch, to make prompt and compulsory use of private goods and services with payment of compensation to the affected private entity. It is an exceptional (ultima ratio) measure in the face of imminent public danger and must be duly grounded by the requisitioning authority.

In view of the warning flags across the country that the SUS alone would be unable to cope with the pandemic, and considering the lower demand for private hospital beds due to a reduction in elective procedures, the National Health Council (CNS)[4] released Recommendation 26 to the Ministry of Health, state and municipal health offices on 22 April, recommending the requisition of private hospital beds if necessary, as well as the adoption of access protocols according to the public health priorities established on a case-by-case basis in light of Law 13,979.

After the recommendation by the CNS, entities representing the supplementary health sector questioned the adoption of a ‘single regulation queue’ for public and private hospital beds assigned to Covid-19 treatment. Alternatively, they proposed the hiring of private hospital beds through public calls, the activation of idle hospital beds, and the construction of field hospitals.

In a scenario of growing Covid-19 cases and claims revolving around the administrative requisition of private hospital beds to make up for the overburdened public health system,[5] the National Council of Justice (CNJ)[6]issued Technical Note 24 on 12 May to assist in the management of the Covid-19 pandemic and of preventing judicialisation of health disputes.

CNJ recommended caution in the use of private beds by the public network, emphasising that the coexistence of public and private sectors is one of the pillars of the SUS sustainability.

The CNJ stated, however, that ‘if the SUS runs short of hospital beds and the private healthcare network is unwilling to execute a public contract with the SUS manager, then [private] hospital beds should be requisitioned under Law 13,979 of 2020 and Decree 10,283 of 2020’, emphasising the correct governance and strategic management of resources.

In parallel, on 27 May, the Board of the National Regulatory Agency for the Private Health System (ANS) met virtually to discuss, among other issues, the institutional and formal stand to be taken by the ANS with regard to the CNS Recommendation, concluding that assignment of private hospital beds should be negotiated with the private network and at local level, taking into account the availability of public and private hospital beds. According to the ANS, requisitioning private beds on non-negotiated terms – such as via administrative requisition – could disrupt the healthcare network as a whole, with harmful effects to the private sector.

The ANS also underscored that administrative requisitioning of private health equipment or establishments without observing the operational limits to maintain supplementary healthcare services poses a systemic risk to the entire production chain of the private health sector. A possible interruption of the carriers’ funding through the fees paid by their beneficiaries to have access to the private health system also mean a solvency risk to hospital and other service providers.

In conclusion, the ANS held that the measures proposed by the CNS would entail a sweeping redesign of the Brazilian health system, demanding an integrated action between the public and private systems during the pandemic period, such being highly complex and to be evaluated in a broader and concerted manner.

Brazil is living through uncertain times, with the curve of Covid-19 cases still going upward and the public health system on the verge of collapsing in some regions. However, this exceptional and unprecedented situation will hopefully lead the public authorities to discuss the interaction and interrelation between the public and private health systems to ensure a more effective and comprehensive management of healthcare in Brazil, dealing with the problems and challenges that the country has faced since the restructuring of its health system.

[1] De Marchi, Théra van Swaay. Marques, Maria Silvia.‘Brazil’ in: ELLSON, Sarah (ed.). The Healthcare Law Review. 3.ed.London: Law Business Research, 2019. p. 1-11.

[2] ALMEIDA, Celia et al. ‘The Brazilian health system: history, advances, and challenges’. The Lancet, v. 377, May 2011. p. 1784-1785. See www.thelancet.com/journals/lancet/Article/PIIS0140-6736(11)60054-8/fulltext(Accessed 29 May 2020).

      [3] “Article 3. To deal with the public health emergency of international importance resulting from the coronavirus, the authorities may adopt, within the scope of their competences, among others, the following measures: [...] I – requisition of goods and services from natural and legal entities, in which case the subsequent payment of fair compensation will be guaranteed. [...] The measures provided for in this article can only be determined based on scientific evidence and analyzes of strategic health information and must be limited in time and space to the minimum preservation of public health.[…]§7 The measures provided for this article may be adopted:

  1.  by the Ministry of Health;
  2. by the local health managers, provided they are authorized by the Ministry of Health, in the cases provided for items I, II, V, VI and VII of the caputof this article; or
  3. by the local health managers, in the hypothesis of items II, IV and VII of the caput of this article.”

[4] The National Health Committee (CNS), a joint committee established by Law 8,142 of 1990, is responsible for the strategy and control of public health policies and their economic and financial aspects, thus acting as the highest decision-making body of the SUS.

[5] It is important to mention the Arguição de Descumprimento de Preceito Fundamental671 (ADPF 671) filed by the Socialism and Freedom Party (PSOL), the Ação Direta de Inconstitucionalidade(ADI 6362) filed by Confederação Nacional de Saúde (CNSaúde), among others.

[6] The National Council of Justice (CNJ) is a body of the judiciary nranch with headquarters in Brasília/DF acting throughout the national territory to improve the work of the Brazilian judicial system. It was created by Constitutional Amendment 45 of 2004 and installed on 14 June 2005 pursuant to Article 103 of the Brazilian Federal Constitution.