Institute Report
Unlocking the Economic Potential of the Health Sector in Latin America
Collaborative Win-Win Approaches for Sustainability
Apr 27, 2018

About the Report

This report provides an in-depth discussion of healthcare sustainability challenges in Latin America, with a focus on Mexico and Colombia. Based on in-depth interviews of past and current government leaders, various win-win policy approaches involving the government and the private sector are explored, along with the ability of each approach to meet identified national healthcare sustainability challenges and support financially sustainable systems in Latin America.

Report Summary

Healthcare spending is often viewed as a necessary burden on government and private spending—something that must be managed carefully and whose growth must be restrained. However, healthcare spending also represents part of a country’s gross domestic product (GDP) and contributes to economic growth like any other sector. One can therefore view healthcare as a strategic sector whose growth and efficiency should be encouraged and where win-win approaches to promote healthcare sustainably through investment and GDP growth can be explored.

While access to healthcare has significantly increased in the last half-century in Latin American countries, these countries still face healthcare sustainability challenges. This report examines various global policy approaches that seek to achieve sustainability by improving efficiency or delivering economic growth and which involve partnerships between government and the private sector. In addition, the report prioritizes a set of approaches based on their likely impact and replicability in Latin America, and further assesses their relevance to meet specific sustainability challenges in Mexico and Colombia—two of the largest Latin American economies—based on in-depth interviews of past and current government leaders in health and finance. These approaches, which offer to increase growth and financial sustainability of the health system, can be used to inform future policies and programs in Colombia and Mexico, and can also be helpful for other countries in the region. Health industry and government officials working to make their countries’ health systems more sustainable and accessible may be able to leverage these approaches to harness the role of the health sector as a potential engine of GDP growth.

Key Findings

Over the past quarter-century, Latin America has made great strides in healthcare coverage

  • Argentina, Brazil, Colombia and Mexico have made meaningful progress towards providing universal health coverage (UHC) by increasing access to healthcare services, reducing inequalities and increasing public spending in healthcare. 
  • Both Colombia and Mexico have established UHC: Colombia in 1993 with Law 100 and a 2015 statutory law that established health as a fundamental right, and Mexico in 2003 with Seguro Popular.
  • Governments have made efforts to manage the resultant rise in healthcare use and costs and attain financial sustainability, but some countries remain behind the Organisation for Economic Co-Operation and Development (OECD) average in health expenditure as a percentage of GDP.

Mexico and Colombia face both shared and distinct healthcare challenges

 

  • Both Mexico and Colombia face constrained or reduced healthcare budgets in the face of increasing demand for healthcare services and technologies. 
  • The two also face a challenge around health expenditure growth. Currently, health expenditure as a percentage of GDP is 6.2% in Colombia and 5.9% in Mexico compared to an OECD average of 9.1%. It is expected that health expenditure as a percentage of GDP will need to grow to at least 8% to meet the demands of the population in Colombia, and to a similar level within Mexico.
  • Strategies to achieve sustainable healthcare systems include growing GDP and improving allocative efficiency; both of which can be explored to address challenges in Latin America.

GDP growth strategies offer opportunities for public and private actors to partner, innovate and implement win-win approaches

  • Across Mexico and Colombia, the GDP growth approaches – technology transfers and local partnerships within the private sector and innovative contracting and reimbursement models – are perceived to have a high level of economic impact and feasibility/replicability for both countries.
  • An allocative efficiency approach, integrated healthcare model, met seven of eight key challenges identified for Mexico and Colombia, and is one of the most widely supported strategies among stakeholders interviewed. Its feasibility/ replicability for Colombia is assessed as high for Colombia but low for Mexico.
  • Health industry and government officials working to make their country’s health system more sustainable and accessible may be able to leverage win-win GDP growth approaches to harness the role of the health sector as a potential engine of growth.
  • Although public-private cooperation supports sustainability strategies, a troubled past relationship between the pharmaceutical industry and governments will need to be overcome to reach a common goal of a sustainable healthcare system.
Contact Us