Introduction
The private hospital sector in Mexico has reached a clear consensus: the current care model, based on fee-for-service, is unsustainable. This conclusion echoed strongly at the Congress of the National Association of Private Hospitals (ANHP), where hospital directors agreed that focusing on the volume of procedures rather than quality outcomes is insustainable.
The Current Healthcare Landscape in Mexico
In a country where 90% of hospitals have fewer than 50 beds and out-of-pocket payments account for half of healthcare spending, transitioning to a Value-Based Management (VBM) model that prioritizes quality, patient experience, and economic efficiency through measurable indicators is urgent.
Challenges in the Mexican Private Healthcare Sector
Guillermo Torre Amione, rector of TecSalud and moderator of the panel, posed a critical question to his colleagues: how can a fragmented system, where all parties are dissatisfied and distrustful of each other, be transformed to reward value?
Torre painted a challenging picture for Mexico’s private medicine. Hospitals are small, averaging 30 beds, and out-of-pocket payments dominate, with only 10-12 million Mexicans having medical insurance. Doctors, perceiving themselves as “lords and masters” of care, operate with autonomy, making collaboration difficult. This setup creates misaligned incentives: hospitals aim to maximize procedure income, insurers face rising costs, patients, especially older adults, struggle with annual premiums of 300,000-400,000 pesos, and doctors constantly complain about insurers. This widespread dissatisfaction reflects a “broken” system that cannot continue without profound transformation.
The Current Model vs. Value-Based Management (VBM)
The existing pay-per-service model encourages volume over quality. For instance, more ICU days or additional procedures like radiology or stents generate higher income but don’t necessarily improve patient health outcomes. Conversely, VBM proposes measuring and rewarding the quality of results, disease prevention, and efficient chronic disease management.
The public sector, controlling doctors, hospitals, and funding, could implement VBM more easily. However, the private sector’s fragmentation, low insurance penetration, and individualistic medical culture complicate the transition. The central question is: how can hospitals, doctors, and insurers collaborate to align incentives and prioritize quality in a distrustful environment?
Proposed Solutions
The panel suggested solutions. José María Zubiría, general director of Centro Médico ABC, proposed breaking down the problem into three areas: quality, patient experience, and costs.
- Quality: Transparent quality indicators are needed, which are already being developed to compare hospital performance.
- Patient Experience: Enhanced integration is required, especially during admission and discharge, among all parties.
- Costs: Standardizing frequent procedures, like 30 identified by ABC (pediatric cardiopathies, orthopedics, deliveries), has allowed setting prices in 80-85% of cases with some insurers, though not including physician fees. Reducing variability, such as surgical times ranging from 1.5 to 4 hours, is crucial to decrease uncertainty.
VBM originated in the U.S. in the 1990s, aiming to reward prevention, efficient chronic disease management, and population health indicators. In Mexico, with only 10-12 million people having major medical insurance and a doctor-as-“lord” culture, adopting VBM is challenging yet necessary. Roberto Bonilla from Grupo Dalinde San Angel Inn emphasized that VBM is a “fundamental necessity” for the hospital industry’s viability in Mexico, given insurance dependence is “killing” the system.
Jesús Ruiz López from Grupo Ángeles Health System defended the warmth of the Mexican model, where doctors maintain close relationships with patients, and proposed integrating it into a sustainable system measuring quality indicators.
Jorge Azpiri highlighted TecSalud’s decade-long effort to align doctors and hospitals in collaborative institutes, acknowledging the difficulty of changing a doctor-centric culture. He also advocated for strengthening primary care to prevent diseases and reduce costs, a successful approach in countries like England.
The Hospital Español Case Study
Hospital Español’s model, described by its director José Testas Antón, offers a mutuality system with 16,000 members paying affordable fees (under 30,000 pesos annually) for comprehensive care from base doctors. This system allows close patient monitoring and satisfaction but requires significant adjustments to be scalable. The panel noted that fragmentation and opposing interests between hospitals (healthcare businesses) and insurers (financial entities) hinder replicating these models for the 12 million insured.
Torre Amione suggested that the solution might start with closed products for 2-3 key diagnoses, with fixed prices sharing risks and rewarding quality.
Conclusion
Though challenges remain, the current crisis presents an opportunity for innovation. VBM requires collaboration, transparency, and a willingness to change. The ANHP Congress demonstrated that Mexico can learn from its own examples and international experiences to build a quality-prioritizing, sustainable private healthcare system, leaving behind an exhausted model that no longer serves.
