Read the Conversation
Meeting highlights:
- The increasing demand and costs due to population aging and the rising costs of health technologies is a global reality that is also observable in Brazil.
- Operators seek to rationalize costs to make access to private healthcare broader and more affordable.
- Institutional challenges include enhancing legal and regulatory security, as well as increasing public awareness of the true role of health plans.
- Professional experience of almost 30 years focused on expanding people's access to higher-quality healthcare in a middle-income country like Brazil.
- Significant progress after 5 years at FenaSaúde: convergence of the various links in the private healthcare sector on diagnoses and responses to industry challenges; and the importance of clarifying the mechanisms of supplemental health for Brazilian society.
- Final message: “It’s worth dedicating more efforts to ensure that more Brazilians have access to quality treatments at fair prices, with more and better coverage options."
EF: As the voice representative of private healthcare, what are the priorities of FenaSaúde for 2024?
VV: The pandemic caught the attention of all audiences regarding healthcare. It highlighted the enormous challenges that an aging population worldwide presents to healthcare systems. On the one hand, we'll have more people seeking care, while on the other hand, we'll face higher costs due to rising prices from new discoveries and technologies, especially medications. In this sense, from an institutional perspective, FenaSaúde continues to advocate for measures to expand access to quality healthcare provided by the Brazilian private system, which is even more crucial in a country where the public system faces serious fiscal limitations. Additionally, we have advocated for greater caution in regulatory measures, as well as in legal decisions involving supplemental health, to ensure that the sustainability of a sector that cares for more than 50 million people is not compromised. Not all recent measures have pushed the market forward; often, they push it backwards.
EF: Given the global increase in medical costs, ANS approved a 7% adjustment rate for private health insurance plans this year. How does this adjustment impact operational costs for healthcare providers, and what strategies can be implemented to develop a sustainable pricing model to combat medical inflation?
VV: It should be clarified that this percentage applies only to one type of plan, the individual plan, which represents 17% of the Brazilian market and it is subject to the limits set by the regulatory body. Most contracts are collective and have their adjustments determined by other models, particularly through direct negotiations between operators and large contracting companies. The rise in healthcare costs, as we know, is not an issue exclusive to Brazilian supplemental health. Our providers have been working to rationalize this escalation by seeking performance-based remuneration models rather than volume-based ones. The latter are still predominantly used and, worse, tend to foster inefficiencies. We have also launched a broad campaign against fraud in health plans, which is still not widely visible to the general population and even to users themselves. We have achieved significant results in changing behaviors and reducing waste, one of the major drains on the system's resources. Part of the market has also been pursuing business vertical integration as a way to achieve economies of scale and improve cost control.
EF: You come from the regulatory sector, where you implemented the generics law. What motivated you to move into the private healthcare and insurance sector?
VV: Although I have a background in engineering and law, my professional life has been almost entirely dedicated to healthcare. It has been nearly 30 years, beginning with my time at the Ministry of Health in the late 1990s. At that time, I became deeply involved in the implementation of generic medications in Brazil – which had just been regulated in our country. It is a highly inclusive policy that has generated over R$ 281 billion in savings for consumers over the past 24 years, according to figures from the association representing the laboratories, of which I was also an executive. My goals in the sector remain the same: to use my work in a middle-income country like ours to expand people’s access to higher-quality healthcare. Supplemental health, serving more than 50 million Brazilians, certainly fulfills this role.
EF: What are the three most important pillars for a sustainable private healthcare model in Brazil, and what role will technology play?
VV: Greater stability in regulations, cost rationalization, and raising public awareness about the true role of health plans. Unfortunately, both the public and decision-makers have a limited understanding of how supplemental health works, which is fundamentally based on insurance principles and, consequently, risk. In this context, predictability is essential for the correct pricing of the care we provide. Our challenge is to demonstrate that we work with limited budgets that need to deliver the maximum possible benefit to those who contract a plan. In this context, the evaluation and incorporation of new coverages must follow clear and objective cost-effectiveness criteria to ensure that the best choices are actually made. This involves examining international models and practices to ensure that new treatments, many costing millions of dollars, are adopted only if they offer significant therapeutic benefits compared to those already available. We haven’t always achieved this.
EF: What lessons have you learned during your 5 years at FenaSaúde?
VV: Over these five years, the convergence of the various links in the private healthcare service chain, which is extensive and diverse, regarding diagnoses, challenges, and responses to sector issues, has become more evident. I believe that FenaSaúde, as the representative of a segment that distributes the resources that essentially sustain Brazilian private healthcare, has played a positive role in achieving this alignment. This is already a significant advance. Another realization was the need to make our role more transparent to society, something that unfortunately is still poorly understood, which significantly complicates efforts to implement changes in the right direction. Operators are large distribution channels that enable the functioning of more than 120,000 healthcare establishments, the execution of over 1.9 billion procedures, and the work of more than 5 million people, including about 400,000 doctors. They allocate about 87% of their revenue to private healthcare service providers, including hospitals and laboratories. Education plays a crucial role. It may be hard to believe, but even today, many healthcare professionals, legislators, and judges do not understand how the healthcare system works, which impacts their decision-making. Finally, one of the major lessons came from the success of our anti-fraud initiative, a communication effort that reached about half of Brazilians, illuminating a topic that had previously been obscure. This awareness helps everyone, as these crimes drain resources from all who are enrolled in health plans in Brazil.
