December 11, 2020 | 09:13
By: Verónica García de León *
Our capacity for surprise is less the more exposed we are to the bad news. But recently one fact exceeded my threshold of surprise and concern: the index of private medical inflation, that is, the rising cost of hospitals, medicines, treatments and consultations.
This year this indicator will close with a rise of 17% and for the next the forecast is 16%. The first information comes from Gabriela Ruiz, Deputy Director of Benefits at Mercer Marsh Benefits Mexico, and the second was mentioned by Daniel Bandle, CEO of AXA Mexico.
The figures in summary reflect higher prices for private health services, which has a direct impact on our pockets, and more in a context of unemployment and more infections. To better understand the magnitude of the problem, it must be said that the level of medical inflation is more than five times higher than the level of general inflation, which in November was 3.3% at an annual rate.
Gabriela Ruiz explained to me that part of the increase in the costs of private medicine is explained by an increase in the exchange rate compared to 2019, as many medical inputs are priced in dollars. But it also has to do with the health emergency.
And yes, the rise in medical inflation this year contrasts with that of 2018 and 2019, of 13 and 14% respectively, when the new coronavirus was not yet known. And how would it not impact if the average cost of hospital care for COVID-19 is 390 thousand pesos. And not only that, more than 60% of hospitalized cases with insurance for higher medical expenses exceed this level, as they had to be taken to intensive care where the average cost is 920 thousand pesos.
Who loses with medical inflation?
Such an aggressive increase in the price of medical services is worrying in itself in a country like Mexico, where the population is forced to resort to private medicine for the insufficiency and poor quality of public services, in addition to 17 out of 100 Mexicans are not affiliated with any public health institution. This explains why out-of-pocket spending on this issue, in Mexico, is one of the highest in the world.
Honestly, there are many reasons to opt for private medicine, but for now it is enough to know that the fatality for Covid in a public hospital is 10% compared to 5% in a private one, according to AMIS. Which would you choose?
Another major impact of medical inflation is on the insurance of large medical expenses that 11 million Mexicans have. According to Daniel Blande, director of AXA, an impact is inevitable. “We need to pass on such significant increases in health services to our policyholders through an increase in premiums,” he told me in an interview. It could be predicted that next year they will increase to double digits.
In the end, insurers pay for the hospitalization and treatment of their clients in the event of an accident or illness, and higher prices for services mean higher costs and less utility, because while they can raise their premiums, they cannot do so. -at the same time. proportion.
For Blande it is essential to control medical inflation and for this he suggests that there should be some body that regulates the private health system, that there should be “a Health Profeco”, he says. In addition, to be more transparent in the rates it handles, open to the public how much their treatments are worth and how prices evolve. It also suggests that the most common conditions have a maximum price.
Whatever way you control medical inflation right now should be a priority. And while this is happening, it would not be bad for hospitals and insurers to further punish their profit margins for the benefit of the population, or for the government to allow an additional deduction for out-of-pocket expenses in private medicine, as in the end, it complements public health services.
* Verónica García de León is a journalist specializing in economics and finance. You are interested in explaining and analyzing economic issues with social impact. He studied Economics and won the IE Business School Award for Economic Journalism. She was editorial director of Fortune in Spanish.
replay: @vgarciadeleon
This text is an opinion block. Its content is the responsibility of the author and does not necessarily represent the position of CEO.