BRAZIL: AN OVERLOOK OF THE HEALTHCARE SYSTEM

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1 BRAZIL: AN OVERLOOK OF THE HEALTHCARE SYSTEM ICDK São Paulo Attaché: Anders Ødegaard June, 2014

2 WHY BRAZIL? A QUICK MARKET OVERVIEW Populations Compared Denmark: 5.6 million Brazil: 200 million ~ x 36 Areas Compared Denmark: 43,094 km2 Brazil: 8,547,400 km2 ~ x 200 Student Population Compared Denmark: 200,000 Brazil: 7,000,000 ~ x 35 GDP Compared (in USD) Denmark: 315 billion (2012) Brazil: 2253 billion (2012) ~ x 7.2 Patent Applications by Residents Denmark: 1,406 (2012) Brazil: 4,804 (2012) ~ x 3.5 Health Expenditures Compared (% of GDP) Denmark: 11.2 % (2012) Brazil: 9.3 % (2012) - well above BRIC average

3 HEALTHCARE EXPENDITURES TO COME FROM EMERGING MARKETS Rapid growth in the health care expenditures in emerging markets Forecast 2022: For every additional US$ 100 spent on health, US$ 50 will have been coming from emerging markets (World Economic Forum, 2014) Sources: World Economic Forum, World Bank, Business Monitor International, BCG (2014)

4 EMERGING MARKETS IN NEED OF INNOVATIVE SOLUTIONS IN HEALTH Emerging markets must leapfrog in the development of their health systems Following the path of developed countries would produce a system ill-suited to the reality of life in most emerging markets Emerging economies are generally less burdened by the legacies of the past and enjoy a greater degree of freedom to design efficient and cost-effective systems

5 BRAZILIAN HEALTHCARE SECTOR: AN ATTRACTIVE MARKET The largest economy and medical device market in Latin America The sector grew 8.6 % in 2012 alone. Various new hospital projects are on the way in the largest cities. Ranks as the fourth most attractive market in the Americas region, to commercialise a medical device The total revenue in the healthcare industry amounts to US$ 172 billion, equivalent to 9.3% of the GDP

6 BRAZIL S EXTRAORDINARY HIGH HEALTHCARE EXPENDITURES

7 OVERVIEW OF THE HEALTHCARE SECTOR IN BRAZIL

8 SWOT of Healthcare Market Strenghts Large population, the biggest Latin American medical market Private health insurance growth Reasonably comprehensive healthcare system in more developed areas Opportunities Implementation of the Mais Saúde programme Increasing demand for good quality healthcare Increasing demand for new healthcare technologies Regional markets development outside state capitals Weaknesses Threats Uneven healthcare provision Low per capita spending on medical products Weakening value of the real against the US dollar Certain bureaucratic procedures for research project and product approval is excessive

9 BACKGROUND The health state of Brazil s population is multifaceted. The country faces a mixture of health challenges: DEVELOPED COUNTRIES X DEVELOPING COUNTRIES Lifestyle-related illnesses Longer life expectancy Access to medical facilites and treatment on high level standard Poor sanitary conditions-related diseases Shorter life expectancy Lack of access to medical help and medicines

10 BACKGROUND: DEVELOPED COUNTRIES ISSUES Ageing population

11 BACKGROUND: DEVELOPING COUNTRIES ISSUES Geographical Distribution of Doctors Uneven Coverage Poorer and remote, rural states, are less successful in attracting health professionals 40% of expenditure in pharmaceuticals is accounted for by 15% of the population

12 HUMAN RESOURCES: SHORTAGE OF TRAINED MEDICAL PERSONNEL Reasons why it is difficult to hire a doctor: Remuneration Inadequate infrastructure Number of nurses per 1000 inhabitants, in OECD countries and Brazil (2001) Supply of professionals

13 STRUCTURE OF THE BRAZILIAN HEALTHCARE SECTOR A TWO-TIER SYSTEM: PUBLIC X PRIVATE

14 STRUCTURE OF THE BRAZILIAN HEALTHCARE SECTOR Although the private sector is growíng a lot, only 27% of the population can afford for private services. Still, the expenditure in the private sector is higher than the expenditure in the public one. Comparison of expenditure in the healthcare sector in Brazil : Public X Private ( ) The investment per capita is very uneven in the private and public sectors

15 FINANCIAL FLOW OF THE HEALTHCARE SYSTEM IN BRAZIL

16 THE PUBLIC HEALTHCARE SECTOR Percentage of public expenditure in relation to total investment in healthcare (2011)

17 THE PUBLIC HEALTHCARE SECTOR: EXPENDITURE ON THE THREE LEVELS The public healthcare sector is increasingly decentralised The main growth in health expenditure comes from local entities at state and municipal levels

18 THE PUBLIC HEALTHCARE SECTOR: DIVISION OF RESPONSIBILITIES High number of regulatory bodies at all levels Too many players Federal: Ministry of Health, National Health Council, ANVISA and ANS State: State Health Secretariats Municipal: Municipal Health Secretariats, COVISA Challenge: Non- transparent system!

19 THE PUBLIC HEALTHCARE SECTOR: PURCHASING PROCESS Purchases in the public healthcare sector have to undergo a bidding process, in which the lowest bid wins the contract to supply the equipment Processes are made according to hospitals demands Companies need to have a Concerning new products, it is necessary to create a demand close relation with the scientific community, doctors and professionals in the sector

20 THE LEGO EDUCATION STORY

21 THE PRIVATE SECTOR: KEY PLAYERS The private sector is more fragmented, involving many small players The main financing source are the private insurance companies, which pay to cater for their clients, whenever hospital or clinic services are needed.

22 THE PRIVATE SECTOR: PURCHASING PROCESS Does not involve a bidding process; Consists of presenting the product to the product business unit of the institution; Normally, private hospitals have a Product Manager or a Purchase Department, responsible for presenting the demands of the hospital in terms of new acquisitions. Even more than in public hospitals, the purchase process in the private sector rely on the relation with suppliers; The sales force from companies is very active and keeps a close contact with the doctors.

23 RESEARCH Dramatic growth in academic activity (approx. 200% increase from 2001 to 2011) The amount of research projects conducted in Brazil has grown since the approval of the Patent Act, in 1996

24 ICT IN HEALTH Rising expenditures and demand for better services has led to an increased focus on a number of applied information technology solutions in Brazilian health care, especially technologies enabling a reduction of cost through systems and service innovation, telecare/telemedicine and automation. Brazil has for a number of years been a leading country in the elaboration of international regulations and procedures in health software certification and architecture of electronic health reports (ISO TC 215 committee). The Brazilian Innovation Agency FINEP - manages a special program called Inova Saúde which offers funding mechanisms targeted to foster RD&I in the health sector in Brazil.

25 ICT IN HEALTH The federal government has launched several measures to encourage computerisation in the health sector Creation of: - the Information and Informatics Committee on Health; - the Information Standardization on Supplementary Health Committee. - Development of the National Policy for Information and Informatics on Health; - IT Plan.

26 SUMMARIZING The private sector is on its rise but don t overlook opportunities in the public sector either Show the health economics in your solutions. The sector is under pressure and innovation is top-ofmind as tool to help reduce cost and increase welfare Getting to know the people and creating your network is everything from researcher to purchaser or medical doctor Look for blue oceans within your niche think Lego Story

27 CONTACT INFORMATION: ICDK SÃO PAULO Eva Bisgaard Pedersen Consul & Head of Innovation Centre Denmark Royal Danish Consulate General, São Paulo Tel.: +55 (11) Mob.: Mail: Anders Ødegaard Christiansen Innovation Attaché Tel.: +55 (11) Mob.: +55 (11) Mail: