Private healthcare: without union there is no solution

A private healthcare Brazil is currently facing one of its most acute crises.

The Covid-19 pandemic left behind a system in frank imbalancewhose healthcare costs grow rapidly, without operational revenues being able to keep up.

The difficulties begin with health plan and insurance providers and spread throughout the service provision chain, such as hospitals and diagnostic medicine laboratories.

The approximately 700 private medical and hospital health plan operators operating in the country are the gateway to a gigantic system, dedicated to taking care of 50.8 million people.

They are the ones who pay providers for the care provided to patients, passing on almost 90% of what they receive from their members in the form of monthly fees: 83% of the revenues of the main private hospitals and 61% of that of laboratories come from transfers made by the plans.

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It turns out that health plans experience their most difficult time since the sector became regulated in the country, 25 years ago.

Since the beginning of 2021, therefore for more than two years, they have been living with a harsh reality, with their accounts persistently in the red. The total expenses for the treatment of its beneficiaries have been far exceeding the revenue that members pay as monthly fees for the contracted plans: there are already R$18.7 billion in accumulated operating losses.

In such a situation, measures that protect operators’ cash flow are necessary, or rather, mandatory, for the benefit of the entire private health service provision chain.

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This is what the plans have done, for example, by examining expenses that may be inappropriate or overpriced and acting to improve resource management. And, also, by devoting enormous efforts to combating fraud and reducing waste, in a crusade that, fortunately, is beginning to involve more layers of society.

According to different estimates, such losses could be equivalent to around 10% of total supplementary health revenues.

The truth is that we are experiencing yet another symptom of a greater and more widespread fever, which has long been highlighted by Fenasaúde, an entity representing the main groups of health plan operators in the country: the pronounced, excessive and sometimes abusive rise in healthcare costs.

All links in the chain lose from this escalation. Except one: suppliers of inputs and medicines, which are increasingly expensive. This is a problem that should deserve the attention of the entire Brazilian health system, starting with the Ministry of Health.

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To a large extent, the situation of health plans has deteriorated in recent times due to changes in rules that did not take into account their respective financial impacts.

This happened within the scope of the Legislative, Executive and Judiciary, but also due to measures determined by the sector’s regulatory body, the National Supplementary Health Agency – for example, the incorporation of new and very expensive medicines and the end of session limits for certain types of therapies.

It is always good to remember that supplementary health allowed the realization of 1.8 billion procedures in 2022, with coverage of more than R$200 billion in healthcare expenses incurred in around 129 thousand healthcare establishments.

We generate around 3% of GDP and constitute one of the main employers in the country, with almost 5 million employees, of which 420 thousand are doctors who serve the private sector exclusively or sharing their time with the SUS.

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It is the survival of this entire assistance network that is now at risk.

When the callouses tighten, like now, everyone wants your mush first. This is what we have seen, for example, in some private hospitals. But we won’t get to a better place if we act like this, divided.

Brazilian private health will only be saved if we seek joint solutions, that mobilize and involve everyone.

To begin with, the answers include changing the way providers are paid, demanding results from them in the form of better clinical outcomes for patients, and establishing more comprehensive controls and inspections that cover all links in the chain. Today, only operators are subject to regulatory scrutiny.

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A joint reflection by society, with special attention from government spheres, on the urgency and seriousness of the situation is crucial.

Special caution should be directed to the discussion of the new legislation which will regulate the plans, replacing law no. 9,656/1998, currently being processed in the Chamber of Deputies without due discussion at the time.

False steps could lead to the end of private healthcare in the country as we know it today, with damaging effects also on public health, which, without conditions and without a budget, would have to absorb a huge additional demand.

More than ever, the time is for unity, not division.

* Vera Valente, executive director of the National Federation of Supplementary Health (FenaSaúde)