A report from the Economist Intelligence Unit

Healing
Mexican
healthcare
Stakeholder
collaboration
is the cure
Sponsored by

Healing Mexican healthcare: Stakeholder collaboration is the cure

Healing Mexican healthcare:

Stakeholder collaboration is the cure

Maana doesnt gure into the Mexican presidents vocabulary. Siesta time
in congress ended when the PRIs Enrique Pea Nieto took ofce in December
2012. In his rst six months and at a furious pace, Mr Pea carried out
unprecedented reforms across key sectors, including energy, telecommunications, nance, labour and education. All reforms were intended to
make Mexican industry more competitive and, generally, leaner and meaner.
One area that the president hasnt tackled is anything but leanhealthcare.
Improving
Mexican
healthcare will
require a
concerted effort
amongst disparate
players in a
complex,
fragmented
system.

Expanding waistlines (averaging 91.1cm or 35.9

inches) are leading to unprecedented levels of
diabetesestimated at more than 10m people, or
almost a sixth of the adult population, according to
the Mexican Diabetes Federation. Along with heart
disease, it is one of the top causes of death in the
country. Yet, less widespread causes like HIV or
catastrophic deaths associated with trafc
accidents and violent crime garner far more media
attention. The government and other stakeholders
of the countrys healthcare system are awakening
to the need to work together to raise awareness,
encourage prevention and ensure proper
treatmentbefore even more Mexicans eat
themselves to death.
Improving Mexican healthcare, however, will
require a concerted effort amongst disparate
players in a complex, fragmented system. The
Mexican healthcare system comprises many
different providers working in their respective silos
The Economist Intelligence Unit Limited 2013

to administer insurance, medication and

treatment. They are not particularly good at
communicating with one another or in
collaborating efciently. But today, broad
transformations in Mexicos healthcare sector are
helping these providers create a more patientfocused system in which all key stakeholders work
towards optimal coverage and care.
Fortunately, Mexicans of all shapes and sizes
now have access to care in one form or another.
The countrys universal health insurance program,
Seguro Popular, launched in 2004, provides
healthcare to more than 49m underprivileged
Mexicans. Many of the programs participants work
in Mexicos vast informal sector. Seguro Popular
was the governments attempt to encourage
healthcare stakeholders to provide these
patientswho disproportionally suffer from
chronic disease associated with obesitywith
access to quality public and private healthcare

Healing Mexican healthcare: Stakeholder collaboration is the cure

Bridging the gap amongst the stakeholders in Mexicos healthcare system

Technology

Lack of
communication
GAP

Medical/
Healthcare
Services

Insurance
players

Academic
Institutions/
Universities

Drugs
manufacturers

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 deciencies 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
The Economist Intelligence Unit Limited 2013

NGOs

Devices
manufacturers

Who can
help me?

Medical &
Healthcare
Professionals

Pharmacy
Retailers/
Channels

Based on BacherZoppi, 2013. Images: Shutterstck.com

Patient

Government

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.

Healing Mexican healthcare: Stakeholder collaboration is the cure

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 largequantity 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
signicant 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 chain
from 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

The Economist Intelligence Unit Limited 2013

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
Afliates 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-efcient 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-

Healing Mexican healthcare: Stakeholder collaboration is the cure

The social and

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

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 inefcient practices.
Self-interest and an inefcient 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-prot 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

The Economist Intelligence Unit Limited 2013

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

Healing Mexican healthcare: Stakeholder collaboration is the cure

(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 instrumental role in building bridges between the

The Economist Intelligence Unit Limited 2013

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, resourceconstrained times, a new mandate has arisen: to
share assets, knowledge and best practices to
lessen overhead, redundant work, delays and
insufcient inventory. Small steps towards
stakeholder collaboration represent giant leaps in
bringing better quality, lower cost and timeefcient care to Mexicans.

Healing Mexican healthcare: Stakeholder collaboration is the cure

Whilst every effort has been taken to verify the accuracy of this
information, neither The Economist Intelligence Unit Ltd. nor the
sponsor of this report can accept any responsibility or liability
for reliance by any person on this white paper or any of the

Cover: Shutterstock

information, opinions or conclusions set out in the white paper.

The Economist Intelligence Unit Limited 2013

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