Is health care the next sector to be tackled by structural reform?

Health care is a central developmental pillar that functions as an engine of social and economic growth for all countries. The correlation between a healthy population and strong economic growth is undeniable. However, according to the World Health Organisation, Mexico ranks 61st out of 191 countries for overall health efficiency. This is behind many nations with lower socio-economic rankings in other metrics, such as those in South-east Asia.  

Mexico ranks 51st out of 137 economies in the World Economic Forum’s global competitiveness index for 2017-18 and 15th in the world in terms of GDP, according to the IMF. Still, these indicators are not reflective of the country’s position on key health care issues. 

Regulation & Innovation 

Despite improvements in sector regulation, a more comprehensive update is still necessary to improve health outcomes. There is a relatively wide gap between Mexico’s current health care environment and its potential capability, especially given the country’s economic weight. This is due to a number of structural constraints that limit both industry competitiveness and the population’s ease of access to medical care. Hurdles also exist in the progress of innovative practices, such as clinical research.
The government states that current pharmacological policies seek to standardise practices with international norms, and have led to greater access of generic pharmaceuticals and increased innovation in recent years. However, the latter remains a long-term challenge for sector development. The objective for all actors going forward should be to improve the conditions that facilitate innovation and clinical research to produce high-value, innovative pharmaceuticals products domestically. Creating such an industry would translate into direct and indirect jobs, and generate another value-added supply chain for the economy.

Seeing as there are obstacles to innovation in the science professions in Mexico, stakeholder focus should be on implementing outcome-based public policy. The country currently focuses on inputs rather than outputs, and regulation can be rather arbitrary and inconsistent. The use of technology to improve patient experience and outcomes is critical, yet hurdles remain in ensuring that it is relevant and accessible. This presents difficulties, as the patient is not in the hospital next to a physician the majority of the time. Therefore, it is crucial that Mexico incorporates technological methods into patient treatment so that it becomes a central tenant of access to care. 

Reform

Compared to other sectors, there is little talk of health care in the business and political spheres. When discussions about health do take place, they are largely related to pharmaceuticals and medical devices, passing over the issues of social equality in health care and the economic impact of ill health. The sector should be focused not only on treating diseases, but also on having a healthy, productive population. While health care is due for reform measures, it is difficult to envisage this taking place effectively when the sector’s budget is only 5.8% of GDP. 

Reform is absolutely necessary, however, and must be placed at the centre of the government’s agenda. Health care is seen as one of the primary drivers of productivity and social improvement, but public health spending is insufficient at present. All actors, especially sector decision-makers, should pivot their strategy to seek better results, reallocate resources and optimise spending.

Public-Private Partnerships

The regulation of public-private partnerships (PPPs) is solid in Mexico. Hospitals built and operated under this framework can become a conduit to improving the country’s infrastructure and health management. However, there has only been one hospital delivered under the PPP scheme in the last six years.

It is challenging when each institution has its own objective in the PPP model, as these objectives do not always fully align. If goals are modified slightly, the model could be more successful and provide a solid base for a more integrated collaboration between the public and private spheres. There are a number of areas of opportunity where the private sector can improve outcomes, including niches such as disability care. Specialty health segments can benefit from collaborative programmes with a combination of institutional input, and even private infrastructural and technological support.

Outlook 

Although the state of a country’s health sector has relevance to almost all other economic areas, it is evident that efforts to bolster its capacity, effectiveness and efficiency have been limited in Mexico. If the country is to match the health outcomes of its OECD counterparts, a combination of funding and aligned goals from the public and private sector is fundamental. This must take place within a regulatory framework that encourages both innovation and cooperation.