December 11, 2020 | 9:13 am
By: Verónica García de León *
Our capacity for wonder is less the more exposed we are to bad news. But recently, a piece of data exceeded my threshold of surprise and concern: the private medical inflation index, that is, the increase in the cost of hospitals, medicines, treatments and consultations.
This year that indicator will close with a rise of 17% and for the next year 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 directly impacts 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 general inflation level, 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, since many medical supplies 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 major medical expenses exceed that level, since they had to be taken to intensive care where the average cost is 920 thousand pesos.
Who loses from 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 due to the insufficiency and poor quality of public services, in addition to the fact that 17 of every 100 Mexicans are not affiliated with any public health institution. That 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 from Covid in a public hospital is 10% compared to 5% in a private one, according to AMIS. Which one would you choose?
Another important impact of medical inflation is in the insurance of major medical expenses that 11 million Mexicans have. According to Daniel Blande, director of AXA, an affectation is inevitable. “We have to pass on such important increases in health services to our policyholders through an increase in premiums,” he told me in an interview. They could be forecast to rise to double digits next year.
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 imply higher costs and lower utility, because although they can raise their premiums, they cannot do it in the same moment. proportion.
For Blande it is essential to control medical inflation and for this he suggests that there be some body that regulates the private health system, that there be “a Health Profeco”, he says. Also, make it more transparent in the rates it handles, open to the public how much its treatments are worth and how prices evolve. It also suggests that the most common conditions have a maximum price.
Whichever way you control medical inflation right now should be a priority. And while that happens, it would not be a bad thing for hospitals and insurers to punish their profit margins more for the benefit of the population, or for the government to allow an additional deduction for out-of-pocket expenses in private medicine, since in the end, it complements the services public health.
* Verónica García de León is a journalist specialized in economics and finance. You are interested in explaining and analyzing economic issues with social impact. He studied the specialty of Dissemination of the Economy and won the IE Business School Award for Economic Journalism. She was editorial director of Fortune en Español.
Twitter: @vgarciadeleon
This text is an opinion blog. Its content is the responsibility of the author and does not necessarily represent the position of the CEO.
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