Public private interactions in health:
Three Mexican examples
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Gustavo Nigenda López, PhD
Luz Maria Gonzalez
Michael Reich
Jose Arturo Ruiz
August, 2006.
Objective
• Describe the structure and
operation of three cases/models
of public private interaction in
health in Mexico; present main
research results; and discuss
implications for the Mexican
health care system.
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Mexican health care system structure
MEXICAN HEALTH CARE SYSTEM STRUCTURE
Sub-system
Financing
Social Security
Federal
government
(General
Taxation)
Employer
(Payroll
taxes)
Public Assistance
Employee
(Payroll
taxes)
Federal
government
General taxes
State
governme
nts and
recovery
fees
Private
Employer
Premium/
Direct
payment
Individu
al
Fee for
Service
Organization
Others
IMSS
Solidaridad
PEMEX
ISSSTE
Ministry of
Health
IMSS
Public clinics
Public Hospitals/Social Security
Public Clinic; Doctors under salary
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Pre-paid
care
Public Hospitals
Provision
Users
Private
Insuran
ce
Formal
sector
Families
of the
insured
Retired
Salaried doctors
Private Hospitals
Private clinics
Doctors paid by fee
for service
Poor
populations
Rural
communities
General population
High/Low income
Informal sector
Selfemployed
Source: PHR Plus,
USAID, ABC (2004)
Private care in Mexico
•
55% of health expenditure in Mexico is private
–
–
•
•
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52% is out-of-pocket expenditure
3% is through private insurance
Private expenditure is estimated through
household income-expenditure surveys
Public expenditure is estimated through
institutional budgeting and expenditure.
Resources in the private sub-system
•
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Clinics/Hospitals: 1-10 beds: 1974 (2001)
11-50 beds: 779 (2001)
50 & more: 69 (2001)
Total beds:
31,000 (2001) – 136,428 (Pu)
•
Doctors:
62,951 (1999) - 82,362 (Pu)
•
Nurses:
29,365 (1999) -
•
Surgery rooms: 2,520 (2001) – 2,805 (Pu)
•
Private insurance companies: 38 (2006)
99,752 (Pu)
Source: Ministry of Health of Mexico. www.salud.gob.mx
Asociación Mexicana de Instituciones de Seguros
Public-private interactions
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• In the literature on public-private
interactions, various terms are used,
including mix, collaboration, society,
and partnership, all of which suggest a
normative position. Given that these
studies are just beginning in Mexico,
we have decided to use the term
“interaction,” which is conceptually
broad and normatively limited.
Description of cases and objectives
Case 1. Ministry of Health of Jalisco contracting a network of private providers.
The Ministry of Health through the Decentralized Public Organism (OPD)
has contracted a network of primary care services (basic health teams)
and secondary care units (general hospitals) in geographical areas (rural y
urban) where no public network units are available. The objective is to
expand the coverage of health services.
Case 2. Opening of a private beds ward in a public hospital in Veracruz. This is a
tertiary care public hospital that sells hospital services to private users.
Users gain access by means of an institutional agreement between the
hospital and a social security institution or private insurance company.
They can also be referred by the public area of the hospital. The objective
is to create an alternative source of funds to strengthen the finances of the
public area.
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Case 3. Public hospital (General Hospital of Mexico) that sells ambulatory services
to private users. In this case the hospital sells diagnostic services and
specialized ambulatory treatment (e.g., chemiotherapy) to private users.
Users gain access through institutional agreements between the hospital
and social security institutions, private insurers, or other public hospitals.
The objective is to create an alternative source of funding to strengthen
the provision of services in the public area.
Basic characteristics (2005)
•
•
•
•
•
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183 people under contract
60 Health basic teams
7 hospitals
1.2 million USD
Coverage: 30,000 families
Case 1: Public financing – private provision of
services in primary and secondary units
Public financing
DPE State Ministry of Health
Contract: basic salary plus extra
payment according to
Contractingproductivity
Basic teams
Private provision
of services
Doctor
Nurse
Health promotor
Medical consultation, health promotion and prevention activities
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Demand
Low-income users
Case 1: Public financing – private provision of
services in primary and secondary units
Public financing
DPE of the State Ministry of Health
Contract: payment by
intervention
Health care units
Private provision
of services
General Hospitals
Specialty hospitals
Hospital and ambulatory package of services
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Demand
Low-income Users
Basic Health Teams Personnel
1. Personnel profile
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Category
Doctors
Nurses
Others
34.4%
31.3%
34.3%
Sex
Male
Female
30%
70%
Other remunerated activities
Yes
No
53%
47%
Length of time contracting with OPD
Servicios de Salud Jalisco
56.96%
36.56%
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6.45%
Un año o menos trabajando
con la OPD
2 a 4 años
No respondió
Most frequently confronted problems in the
provision of health services
100
90
19.35%
34.41%
80
70
60
50.54%
80.65%
59.14%
50
65.59%
49.46%
40
40.86%
30
20
10
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0
Yes
No
Lack of drugs
Lack of equipment
Inadequate
infrastructure
Excessive
demand
Opinions on the consequences of
public-private interaction
100
90
27.96%
80
70
60
72.04%
80.65%
59.14%
50
40
40.86%
30
94.62%
90.32%
20
10
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0
Yes
No
19.35%
5.38%
Both working
Reduces
for the benefit
costs to the
of the community population
Constitutes
a positive
network of
services
First step
towards
privatization
9.68%
Opening door
For abuse and
corruption
Description of cases and objectives
Case 1. Ministry of Health of Jalisco contracting a network of private providers.
The Ministry of Health through the Decentralized Public Organism (OPD)
has contracted a network of primary care services (basic health teams)
and secondary care units (general hospitals) in geographical areas (rural y
urban) where no public network units are available. The objective is to
expand the coverage of health services.
Case 2. Opening of a private beds ward in a public hospital in Veracruz. This is a
tertiary care public hospital that sells hospital services to private users.
Users gain access by means of an institutional agreement between the
hospital and a social security institution or private insurance company.
They can also be referred by a private physician. The objective is to
create an alternative source of funds to strengthen the finances of the
public area.
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Case 3. Public hospital (General Hospital of Mexico) that sells ambulatory services
to private users. In this case the hospital sells diagnostic services and
specialized ambulatory treatment (e.g., chemiotherapy) to private users.
Users gain access through institutional agreements between the hospital
and social security institutions, private insurers, or other public hospitals.
The objective is to create an alternative source of funding to strengthen
the provision of services in the public area.
Case 2: Public provision to private clientsStructure and sources of financing
Contracts: PEMEX, ISSSTE,
UV, private insurers
Private
Payroll paid by state
budget
Financing
Public
Users payment
Hotel services
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Private
payment
Laboratory,
cat scan, etc.
Recovery
fees
Case 2: Organizational arrangement for the
provision of services
Provision of Services
PUBLIC AREA
PRIVATE AREA
Private area
Public area
Hospital nurse
Hospital doctor
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Users
Public/
public
Hospital doctor/
Private doctor
Users
Public/
private
Users
Private/
private
Private
doctor
Study Results
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• Lack of transparency in the use of
resources
• Lack of technical definitions regarding
pricing and allocation of resources
• Unfair distribution of benefits for actors
involved (doctors most-benefited actor)
• Public and private patients with relative
benefits
• Subsidies may be moving from public
to private
Description of cases and objectives
Case 1. Ministry of Health of Jalisco contracting a network of private providers.
The Ministry of Health through the Decentralized Public Organism (OPD)
has contracted a network of primary care services (basic health teams)
and secondary care units (general hospitals) in geographical areas (rural y
urban) where no public network units are available. The objective is to
expand the coverage of health services.
Case 2. Opening of a private beds ward in a public hospital in Veracruz. This is a
tertiary care public hospital that sells hospital services to private users.
Users gain access by means of an institutional agreement between the
hospital and a social security institution or private insurance company.
They can also be referred by the public area of the hospital. The objective
is to create an alternative source of funds to strengthen the finances of the
public area.
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Case 3. Public hospital (General Hospital of Mexico) that sells ambulatory services
to private users. In this case the hospital sells diagnostic services and
specialized ambulatory treatment (e.g., chemiotherapy) to private users.
Users gain access through institutional agreements between the hospital
and social security institutions, private insurers, or other public hospitals.
The objective is to create an alternative source of funding to strengthen
the provision of services in the public area.
Case 3: Public provision of ambulatory services
to private clients. Financing
Federal
budget
Own
resources
Financing
Recovery
fees (public
area)
Donations
(public &
private)
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Contracts:
PEMEX,
ISSSTE,
private
hospitals
etc.
Payment by
private
patients
without
contract
Case 3: Provision of services
Provision of
services
“Noninsured
population”
with or
without
referral
Private users
under contract
agreement or
not
Public
Private
X-ray, cat
scan,
mastography,
audiology
All services
including
hospital
services
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Doctors,
nurses and
technicians
Costs cobalt 60 treatment
Cost per session
Concepts
Treatment cost
Paliative
Curative
Average number of sessions by type of
treatment
10
30
1,473.09
3,839.43
1,794.75
5,057.94
2,770.17
7,806.84
First time
Subsequent
Personnel
Current
Capital
Total direct
costs
Total indirect
Costs
289.92
163.16
251.83
118.32
163.16
251.83
704.91
533.31
6,048.01
16,734.22
71.58
71.58
787.40
2,219.03
Grand total
776.49
604.89
6,835.41
18,953.25
1 USD = 11 Mexican pesos
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Maximum price charged by HGM to private patients
for a first-time session = 650 pesos.
Benefits and risks
Case
Case 1.
Case 2.
Benefits
Risks
Coverage increase
•
High levels of users’
satisfaction in both areas
•
Increase in access to
services for poor
populations
•
•
•
•
Case 3.
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More resources for the
public area
Efficient utilization of
technological capacities
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•
•
Dissatisfaction of private providers
because of fees and the delay in the
payment of services
Lack of evaluation of the model’s
performance
There is no costing system
Additional payment for doctors but no
extra payment for other categories of
personnel that provide services in the
private area
Lack of accreditation of private doctors
who send their patients to the hospital
Differences in the quality of care
There is no costing system
Differences in quality of care between
public and private area (waiting times)
No strategic evaluation of the model
Challenges
To carry out new studies that provide empirical evidence about these
types of PPI in such a way that contributes to the understanding of
the phenomenon, the identification of its achievements and
obstacles, and its capacity to improve access to health services,
particularly to poor populations.
To systematize various PPI experiences in order to provide evidence
to decision-makers that could lead to the development of regulatory
frameworks used to strengthen the performance of the country’s
health care system.
To revise regulatory mechanisms, both at federal and state levels, in
order to guarantee the achievement of the objective of mutual benefit
(between public and private agencies) and to make PPI a viable
option for the financing and provision of health services.
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To learn from lessons provided by specific experiences of PPI and
evaluate the benefits that the participation of the private sector could
generate within the Mexican health care system.
Final considerations
It is possible to establish public private interactions yielding positive
consequences
Public private interaction requires a solid technical foundation to be
in place in order to achieve proposed objectives.
Costing systems should be used to estimate the value of services
and establish the prices that should be used by public institutions to
sell services; otherwise subsides could move in unintended directions.
Increase in patient access and satisfaction levels are important but
not definitive in considering that a PPI model is producing benefits.
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Regulatory frameworks should be developed and applied by state
and federal Ministries of Health to guarantee that the model is
appropriate both technically and financially.
• Many thanks
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