Revolutionizing Healthcare in Mexico: Interview with Hector Valle - President, FunSalud, Mexico

Meeting highlights: 

• Strategic Healthcare Investment: Recent reforms are positioned to generate strong returns in Mexican healthcare. 
• Addressing Systemic Gaps: Targeted reforms aim to resolve critical shortages in healthcare staff, infrastructure, and essential supplies. 
• Private Sector Expansion: Growth in private providers is enhancing accessibility and filling service gaps in care. 
• Cost-Containment Strategies: Fixed-rate agreements between hospitals and insurers are helping stabilize private care costs. 
• Digital and Preventive Care Transformation: Transitioning to a digital-first healthcare system to streamline care and enhance prevention efforts. 
• Advancing Telemedicine Access: Expanding telemedicine to improve rural healthcare access across Mexico. 
• AI Empowerment for Physicians: FunSalud's training initiatives equip doctors with AI tools to improve diagnostics and patient care. 
• Innovative Funding for High-Cost Care: New financing models are under consideration for rare diseases and diabetes care. I would say: FUNSALUD, has been working on new proposals for Mexico to be able to fund rare diseases and diabetes care. 
• 2025 Priority Areas: A focused agenda to improve access, reduce surgical wait times, boost vaccination rates, enhance crisis preparedness, and support healthcare staff transitions. I would say 2025 Priority Areas: A focused agenda to improve access, reduce surgical wait times, boost vaccination rates, enhance crisis preparedness, and support healthcare staff transitions, as COFEPRIS continues to improve. 

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EF: Why is $1 invested in Mexican healthcare better invested than anywhere else? 

HV: Mexico is currently experiencing a pivotal moment in addressing the long-standing gaps in its healthcare system. There is a significant need to bridge these gaps, and I see a genuine commitment from the current government—led by President Claudia Sheinbaum and MoH Dr. Kershinovic—to find effective solutions. Over the past three decades, underinvestment in healthcare has resulted in shortages of medical professionals, limited infrastructure, and inadequate access to pharmaceuticals and medical devices. However, I am optimistic that this is beginning to change, with improvements likely to accelerate in the coming years. 

Reflecting on the history of our healthcare system, we have already seen disruptions, particularly in primary care. A few years ago Pharmacy-adjacent clinics were overwhelmed, which led to a shift of patients from the public system to private clinics and pharmacies, marking the first major disruption. Today, we are experiencing a second wave of change, as people increasingly choose private services for diagnostic tests and specialist consultations. This shift has spurred rapid growth in private healthcare providers, such as El Chopo, SaludDigna, and Laboratorios Médico Polanco. 

Looking ahead, I foresee a third major disruption on the horizon, with the rise of small clinics capable of performing same-day surgeries. These clinics will enable quick, in-and-out procedures, significantly impacting the system. Several hospital chains have already started expanding in this direction, which I believe will reshape healthcare delivery in Mexico. A prime example of this trend is Grupo Mac, which is currently undergoing significant expansion.  

Similarly, groups like Grupo Polar are making swift moves into the healthcare sector. Polar, an investment fund, is actively acquiring hospitals intending to develop a new chain, which is a promising opportunity for investors entering the Mexican market. This momentum signals two critical areas of focus: first, the need for substantial public sector investment to revitalize a system that has seen limited infrastructure upgrades over many years; without this, hospitals will struggle to meet growing demands. Second, the private sector is essential to fill the gaps that the public system cannot address, making this an opportune time for investment in Mexico. 

Additionally, I am observing a promising shift in private hospitals, where some are now implementing fixed-rate models with private insurers. Under this approach, hospitals agree on set rates for services provided to patients, which helps control inflationary pressures in private care costs. This new model is changing the traditional hospital dynamic; rather than merely renting space to physicians, hospitals are hiring them as staff, creating a more integrated and financially sustainable system. This shift is expected to slow cost increases, which is a critical improvement. 

The government’s strong focus on primary care and preventive measures, especially for conditions like diabetes and pre-diabetes affecting 40% of the population, is encouraging. This approach has the potential to bring positive changes not only in the short term but for the long-term health of Mexico’s healthcare system. 

When discussing prevention, I see two major benefits. First, it has a significant payback in terms of how we manage prevention efforts, especially between primary and secondary care levels. Broad preventive measures for the general population can sometimes lack cost efficiency. However, focusing on individuals identified in the early stages of a condition—helping them avoid progression to more advanced care levels—has a profound impact. It not only improves their quality of life and disease management but also reduces costs for the healthcare system. 

Another notable initiative is the government’s new program aimed at providing in-home support for people aged 65 and older. This approach will help seniors manage their conditions more effectively and avoid hospitalization, which is a significant step forward. While the program presents considerable challenges in day-to-day execution, it reflects the government’s commitment to finding better ways to deliver care and improve health outcomes. 

EF: What does the ideal future look like? If you were to describe the perfect vision for the Mexican healthcare ecosystem, what would that look like?  

HV: I believe we need to focus on two critical areas: prevention and technology-driven transformation. Firstly, prioritizing prevention is essential. However, implementing a technology-first approach is the most important factor in driving change. 

We must be aggressive in transitioning to a digital-first healthcare system. This means creating a fully digital infrastructure where people can access and manage their health data seamlessly. With a digital system, we can develop electronic clinical data platforms that enable prioritization based on urgency and resource availability. Currently, the analog nature of our system lacks a prioritization mechanism, often leading to a "first come, first served" approach, regardless of the severity of patients' conditions. 

In a digital-first system, healthcare providers would be able to allocate resources more effectively, ensuring those with serious needs receive attention first. Additionally, leveraging technology for telemedicine is crucial. We must connect people in remote areas to healthcare without requiring them to travel long distances. For example, President Sheinbaum's vision of healthcare access within an hour of a patient's home is a significant challenge in states like Guerrero, Chiapas, and Oaxaca. 

Therefore, we need to accelerate the implementation of telemedicine beyond pilots and isolated examples. It is time to transition from merely discussing it to actually making it happen at scale. The healthcare system we need in Mexico should prioritize patient navigation, prevention, and digital transformation. A strong patient navigation framework is essential. Patients, regardless of location—whether in Guerrero or elsewhere—should have a clear path through the healthcare system. Local GPs or family doctors must be equipped to guide patients effectively, ensuring timely referrals to specialists as needed, which would speed up diagnosis and treatment and ultimately improve outcomes for patients. 

This approach will center healthcare around the population's needs and bring significant benefits in terms of health outcomes, while also helping to manage costs more efficiently. Currently, life expectancy at birth in Mexico has stagnated since 2000, while other countries like Japan and Spain continue to improve. If we do not make these changes, by 2030, the life expectancy gap could widen by up to 12 years or more compared to other developed countries—and between Oaxaca and Madrid, that gap could reach as high as 17 years. 

Therefore, creating a healthcare system that ensures fair, accessible, and high-quality care for everyone in Mexico is crucial. This vision of prevention, digital-first healthcare, and efficient patient navigation represents the three core pillars that will drive transformative change in our healthcare ecosystem. 

EF: What capabilities does Mexico need to develop to enable effective patient navigation and create a data-driven system that supports this journey? 

HV: AI is already part of our daily lives. The initial step is to help people understand its benefits and integrate it into their daily practices. Recently, we launched an AI in healthcare program called Diplomado en Salud for physicians, and their reactions have been remarkable. In just the first week, they began entering patient data and witnessing how AI insights could support their clinical decisions. 

When we showed them how AI could process patient records or assist in analyzing radiographic images, they were astonished by its potential. This highlights our need not only to acknowledge AI’s current usage but also to ask, “How can I leverage this more effectively every day?” 

While there is overarching guidance, like that from Minister David Kershenobich, who is driving the direction of AI in healthcare, much of the transformation will happen physician by physician, patient by patient. Educating patients on AI’s value and training doctors to utilize it fully will improve individual care and outcomes. Having strong advocates for AI, like Dr. Kersenovich, the Undersecretary Clark paves the way for integrating these new technologies across the system. 

We are at a promising moment in AI for healthcare, where its applications span from early diagnosis to patient care and operational efficiencies that will benefit the entire healthcare ecosystem. Starting from the individual level is key. If we focus on building from the ground up, we’re more likely to make progress. If we pause and insist on constructing the entire system all at once, we may never reach the goal. 

As I mentioned earlier, we need a healthcare system that is digital-first, which aligns with our broader goals around AI. For this transformation, fostering an AI culture is crucial, involving everyone from medical students to patients so that they are prepared to embrace these tools effectively. 

Every year, we conduct digital analyses of both patients and physicians to track this evolution. Interestingly, we are seeing impressive progress, especially among physicians, though there is a marked difference across specialties. For instance, psychiatrists are among the top adopters of telemedicine, whereas oncologists use it the least—likely due to the hands-on nature of their field. Observing these patterns across specialties provides valuable insights into how we can further integrate digital solutions and AI into various areas of healthcare. It is fascinating to see, through these analyses, how oncologists have evolved in response to patient needs. Oncology poses unique challenges, particularly because patients facing cancer are deeply invested in understanding their condition. Unlike temporary issues like the flu or digestive troubles, cancer patients often study their diagnosis extensively. They arrive with many questions and even challenge oncologists on the findings and treatment options, pushing for detailed information. This dynamic has likely driven oncologists to adapt more proactively, evolving both their approach to communication and their use of digital tools to better support and inform their patients. Patients increasingly turn to tools like ChatGPT to interpret test results, for example, and may even upload images or data for a preliminary AI interpretation.  

EF: This trend of AI-savvy patients raises questions about leadership in adopting AI within healthcare. Who holds the primary responsibility to educate physicians about AI tools? 

HV: Funsalud. In my view, this integration is a shared effort. Minister Kersenovich, with his guidance and leadership, will be crucial in setting the direction, and institutions like Funsalud will implement parts of the plan. However, it is also up to each individual within the healthcare ecosystem—physicians, patients, and supporting institutions—to play their role. Often, user adoption precedes regulation, as we have seen with fintech in Africa, where users drove innovation that later prompted regulatory action. 

Physicians, in particular, play a critical role in helping patients navigate these new technologies. By recommending apps or tools that support health monitoring, doctors can help patients become active participants in their own care, familiarizing them with AI and digital health solutions. So, while the system carries a large part of the responsibility, individual engagement is equally essential to drive AI adoption and innovation in healthcare. 

EF: What is the progress of the implementation of your project focused on high-cost treatments and complex diseases? 

HV: Some major pharmaceutical companies are now focusing on areas of healthcare where treatment costs are extremely high. While the benefits of these treatments are evident, the financial burden—whether for individuals, the government, or society—is substantial. I have discussed this issue with several Ministers of Health over the years, including conversations with David, Dr. Alcocer, Dr. Narro, and others. They face a significant challenge, as the Ministry often lacks the necessary funds to cover these high-cost treatments. 

At one point, we shifted our discussions from the Ministers of Health to the Ministers of Finance. This allowed us to bring together former finance ministers and previous heads of IMSS to explore sustainable solutions for funding these treatments. The idea was to move beyond empty promises to patients and instead find practical ways to fund these treatments. We have even explored models similar to disaster relief funding—like Mexico's hurricane insurance—as a potential framework for financing these healthcare needs. 

Our discussions now are leaning toward insurance systems that can help with high-cost areas, such as orphan or rare diseases. This approach also aligns with the upcoming shift in the public health landscape, particularly as GLP-1 products and other innovative treatments become more prominent in Mexico. With 40% of the population facing diabetes or pre-diabetes, the question becomes: how will we provide medications for potentially 60 million people? From a public health perspective, there is a strong case for making these treatments accessible. However, that raises another critical challenge: how will we fund this? 

This is why FUNSALUD has adjusted its approach, moving beyond sole reliance on the Ministry of Health due to budgetary constraints. While we continue to collaborate closely with the Ministry of Health and other health institutions, we are now also working with the Ministry of Finance to explore innovative financing solutions. By the end of this year or into 2025, we hope to bring new ideas to the table that go beyond traditional funding paths. This fresh approach is essential not only for addressing rare diseases and complex conditions but also to tackle the growing wave of diabetes and obesity in Mexico, as new treatment options enter the market. 

Regarding GLP-1, the initial results look impressive. We're at a point where it's still early in the widespread use of these products across a broad population. Time will reveal more, but I believe the outlook is promising. 

EF: What do you see as the key priorities on the agenda for 2025, and what areas should executives focus on? 

HV: As we approach 2025, there are five critical issues we need to address immediately. First, we must improve the process by which Mexico purchases medicines and conducts tenders to ensure the timely availability of both products and medical devices. 

Second, there are many individuals who have been waiting for surgeries for 6 to 10 months. We need to enhance collaboration between the public and private sectors to close this gap and expedite access to surgical procedures. 

Another priority is reviving vaccination rates. It is essential to bring vaccination levels back up quickly. While we have already initiated a vaccination campaign, we need to see figures returning to prior levels, at least in terms of trends, throughout 2025. 

Additionally, we need to evaluate how well our system is prepared for future pandemics or natural disasters, ensuring we are ready for any potential crises in the coming years. It is also important to make sure that healthcare professionals and staff are satisfied during the transition between state institutions and IMSS. We need to manage this change carefully to maintain morale. 

Lastly, we must focus on COFEPRIS and the timely delivery of essential healthcare services. If we can effectively address these five priorities in 2025, I believe there will be significant support for Dr. Kersenovich and his team. However, failing to do so could lead to challenges, as expectations are high, and there is strong support for positive change.