How Brazil can make healthcare more efficient

“We need to encourage people to work together, starting from the youngest members of the sector. Innovation is key, but so is the need for a change of culture,” Giovanni Guido Cerri, dean of the University of São Paulo Medical School, told the audience of government and corporate executives at “Driving Innovation in Healthcare”, a high-level event programmed by The Economist and sponsored by GE on October 30 in São Paulo.

Speakers at the event repeatedly drew attention to a burning issue at the heart of both the public healthcare system and the private healthcare sector, namely a highly fragmented healthcare value chain along which all actors need to connect and cooperate more effectively.

In the public sector, lack of integration hinders effective cooperation between different levels of government, notably between the municipal, state and federal levels of government—each of which shoulders varying levels of responsibility for healthcare. Part of the problem lies in a bewildering array of systems for contracts, payments and purchases used by different departments and regions, as well as blurred lines of responsibility between government strata.

Brazil’s push towards local primary care, which has expanded healthcare coverage to 56.4% of the population , for example, has been burdensome for smaller municipalities that lack the infrastructure, personnel and resources to manage services in an efficient, integrated manner. The solution lies in innovative management technologies, says Daurio Speranzini, chief executive of GE Health Care in Latin America, including contract and payment models, as well as integrated referral and data-sharing systems, with parallel training to provide users the skills to interpret data and anticipate trends.

Actors will also need better coordination and communication in the area of public-private partnerships. This is all the more important as the national healthcare system is increasingly relying on private actors to deliver more  healthcare services and marry the ever-growing demands of the public system with the financial power of the private sector. With contracts of up to 35 years, supporters argue that PPPs are a long-term solution to the system’s “connectivity” problems and would also reduce inefficiencies and costs.

“It’s vital to maintain a close relationship with the private partner,” says Washington Couto, secretary of health for the state of Bahia, noting that the initial reluctance about PPPs among local governments and investors has been trumped by Bahia’s successes and the open, connected way in which the projects were and are conducted. “We have implemented innovative systems to ensure that PPP payments and dialogue between all parties continue to flow. You can’t do business without these two things.”

A small but steady stream of new PPPs is now lending the process more credibility: The Bahia government has signed off on two further PPP projects—including a new hospital and a network of 12 imaging centres; in addition, nine other major healthcare facility contracts have been signed across Brazil. Three of these facilities are already in operation, according to Radar PPP.

Along with the establishment of guarantee funds for PPPs, bundling contracts together can help deliver tailor-made projects while providing both universal management systems and savings to the government—which can retain oversight and monitor performance closely to ensure that contractually binding targets are met. With that in mind, São Paulo recently finalised a $2bn PPP contract to build, equip and run three hospitals in the state .

Nonprofit PPPs have also taken off in recent years, connecting the SUS with so-called social organisations (OSs), which include NGOs and leading private hospitals. “One of the critical success points of the OSs in São Paulo was the innovative IT system and the innovation in contractual management between the government and private sector,” said Ana Maria Malik, professor of health at the Fundação Getúlio Vargas.

Some delegates, including Ms Malik, noted that PPPs were still in their infancy, making it too early to hail the partnerships as an outright success; others already see PPPs as a bridge to a more efficient, higher-quality health service—and a vital link to investment, both domestic and foreign, that the system sorely needs.

Keen to forge wider connections and with the most experience in health PPPs in Brazil, Mr Couto said that Bahia was now pioneering an innovative intergovernmental network to exchange information and “perfect PPPs models to guarantee success” for future projects.

Panellists also noted the importance of bringing together different members of the wider healthcare community—from the medical industry and investors to students and researchers—and fostering a new culture of being part of a holistic health system from the outset of their careers. This will be particularly important when it comes to doctors and nurses—many of whom leave rural areas at the expense of the population there.

“A change in culture is necessary to get researchers, industry and investors working together. [Research foundation] FAPESP and a number of companies are interested in making this bridge … but stronger financial incentives are required,” said Mr Cerri. Formal partnerships are also needed between universities and private companies to develop and create innovative products and solutions tailor-made to the local market, he argued.

Linking actors across the healthcare value chain will help improve the efficiency of Brazil’s healthcare system, with technology is destined to play a major role in these improvements—opening up opportunities for investors. As Mr Speranzini puts it: “Brazil’s health system is highly fragmented and needs to be connected, but before we leap ‘outside the box’ with innovation, there are plenty of innovative things still inside it that can cut costs and waste through improved management.”

Published in collaboration with GE Look Ahead

Author: Ben Tavener writes for GE Look Ahead.

Image: Nurses carry a patient at a public hospital in Recife City. REUTERS/Ricardo Moraes