Healthcare in Brazil is delivered by public and private providers. The public system, known as SUS, is responsible for delivering free healthcare to the whole population (approximately 207 million). The Brazilian private insurance sector is also representative, covering approximately 23 percent of the population, usually the most affluent.

The period of economic growth previous to 2015 established the country as an important emerging economy. Together with job creation and increasing economic power, enrollment to private health plans increased by more than 1 million per year over the last decade. However, the economic crises that has affected Brazil since 2015 has significantly shaken the whole country, and deeply impacted the delivery of medical care, in the public and private settings. In this piece we will analyze which major events impacted the public healthcare sector, and what is to be expected in 2017 and beyond.

 

  • Enrollment in private health plans in decline

Enrollment in private health plans is mostly made through employers’ plans, and it should not come as a surprise that as unemployment increased from below 7 percent in 2015 to 12 percent in 2017, enrollment in private healthcare plans also decreased. According to data from the National Agency for Supplementary Health, as of January 2017, the private sector covered 47.6 million enrollees, a significant decrease since peaking in December 2014 with 50.4 million; loss of enrollment means loss of access to better services (coverage of treatments, and specialized and non-specialized healthcare) than those offered by the SUS.

When enrollment through the employer is lost, Brazilians face several options – migrate to the SUS, pay out of pocket when they require medical attention, or enroll in individual health plans. Considering the differences in the quality of care between the public and private settings, those who can afford it remain connected to the private sector. However, individual health plans are rare and frequently very expensive, limiting their options. Decrease in enrollment has opened the door to new initiatives; popular clinics allow easy access to private doctors, at a lower cost, but patients who require treatment for serious diseases still have to resort to the SUS, and the government is considering the creation of popular health plans, which would allow access to the private setting at a lower cost, but also with a lower coverage than that currently defined by law.

 

  • Influx of new patients and budget cuts test SUS’ resilience

Since its inception, the SUS has struggled to meet the demand for its services, which are sought especially by the less affluent. Despite significant investments, patients still have to wait several months to meet a physician, and the coverage and availability of medicines is often limited or nonexistent. The capacity of the SUS is currently being challenged by the influx of millions of Brazilians who lost enrollment to private health plans, many of them undergoing treatments.

The chronic underfunding of the system has recently been worsened by budget availability. In the past two years, the health budget was cut in multiple occasions, affecting important health programs. Likewise, regulations changing the funding mechanism were also introduced, shifting the origin of funding from government income to a percentage of the net revenue. In December 2016, in what was described as a significant blow to the SUS, the new government introduced Constitutional Amendment No. 95, which limited budget increases to the same percentage of the previous year consumer price index variation. In practical terms, the health budget will be frozen for the next 10 years, with yearly reviews for the following 10 years.

 

  • What to expect in 2017 and beyond regarding public healthcare?

With forecasts predicting a small chance of growth, Brazil is expected to exit recession in 2017. However, the storm that affected the country left it in crumbles, and Brazil will face significant challenges to move forward.

In Brazil, health is a right granted by the constitution, and the government is expected to provide adequate healthcare to the population. However, that very same right also presents a significant challenge, especially in a period where cost containment is key, budget is limited, and the demand for attention at the SUS is in increase. The impact of cost containment will have implications at several levels, including:

  1. Coverage decisions can become more stringent than before. Although Brazil performs HTA to decide coverage for drugs by the SUS, it does not use an ICER for decision making. As a result, the prices negotiated between CONITEC-manufacturers or proposed by manufacturers are frequently the deciding factor. Limited budget availability and growing demand will likely increase focus on cost-effectiveness and, raise expectations for increased discounts.
  2. Decreased access through judicial actions. In the absence of coverage or difficulties in accessing medicines, Brazilians have frequently resorted to judicial actions for access. While these actions allow access to drugs for multiple therapeutic areas, particularly oncology and rare diseases, they are also responsible for expenses in the order of hundreds of millions of dollars. Several measures of control were put in place in 2016, and it is expected that access to medicines through judicial orders experiences a significant decrease.
  3. Access to medicines not covered by the SUS at affluent States and Institutions will continue to decrease. While the RENAME formulary lists drugs of mandatory coverage by the SUS, that does not invalidate that States or Institutions with higher budgets can offer additional medicines. A common practice until the crisis started, many of them have started limiting the medicines they offer to those determined by the SUS. This limitation will likely continue, or worsen in the next years, further restricting patients’ access to medicines.

The next years will not be easy for Brazil and for companies operating in the institutional and private pharmaceutical markets. While the economic situation has left scars spread all over the healthcare system, it also presents a good opportunity for the system to optimize processes and reinvent itself. However, that will not be an easy task and definitely not without pains.

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