Welcome to the Black Hole of Claims: Hospital and Professional Billing in Mexico and Brazil

Ignacio took to the podium to provide his perspective on how health markets operate in Mexico and Brazil. He began by saying that he believes the industry was vulnerable to abuse, fraud and administrative malpractice but also noted that it was something that was certainly not limited to Latin America.

He said that Brazil and Mexico accounted for 40 per cent of the region’s population but the percentage of GDP over health was significantly lower in those countries when compared to first world markets, leading to higher prices and lower infrastructure standards. Both countries have a two-tier health system: a public and a private one, with the private system supported entirely by private healthcare facilities, usually with better infrastructure than those in the public sector. Ignacio said that Brazil had 51 million insureds or 25 per cent of the population, while Mexico had 31 million insureds or 26 per cent of the population.

He then broached what he called the ‘gringo paradigm’ and raised the question, ‘Are there different charge masters for local private patients and international patients?’ Ignacio said that this was undoubtedly so but added that the issue was too broad to address in general terms. He divided it into three main groups. “In large urban areas, it is a mostly predictable scenario and, with certain exceptions, charge masters are equal for locals and foreigners. Likewise, JCI-accredited institutions are predictable as they are regulated to international standards. However, in areas with a large concentration of tourists it is less predictable and charges are primarily fixed for the international insurance pocket.”
Ignacio also raised the issue of the hostage effect – can a patient be held hostage for a pre-discharge settlement? “In Latin America, as opposed to the US and Western Europe, an accepted LOA or advanced payment has to be in place for the patient to be discharged freely. It is likely that the patient will not be admitted if either of these are not prearranged and that the patient won’t be able to egress the hospital if either fall through,” he said.

Regarding stories of hospitals retaining a patient’s passport until payment is made, he said this does happen in more touristy areas but it is not practiced in reputable institutions. “The way to offset this situation is to seek legal advice and contact consular representations immediately,” he advised. Turning to trends in medical costs, Ignacio said that average medical inflation was running at 10 per cent. He also added that currency devaluation had a significant impact on the cost of imported medical supplies and machinery. “The private hospital segment has modernized medical equipment, all of which is imported, as well as the medical facilities. The result has been increased costs.”

In conclusion, he said the two countries represented numerous scenarios in terms of their pricing structure and that no one claim is comparable to others. “Although we may find speculation and overpricing, the element of bad faith has decreased in Latin America, and rules are now more aligned with regulated markets. It is highly probable that expat and travel activity may grow throughout Latin America, so it is time to start delineating strategies to manage your admissions in the region,” he said.

ITIC – Americas – International Travel & Health Insurance Conference.

San Diego, Feb 27 – March 1, 2016

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