The implementation of the Seguro Popular in 2004 established the right to healthcare for all Mexicans. Prior to this coverage was reserved only to those employed by the government, the formal sector, or individuals wealthy enough to afford private healthcare. This left out more than 50 million Mexicans who were either self-employed, unemployed, or working in the large informal sector. Since the introduction of the Seguro Popular increasing swathes of the country have gradually received basic healthcare coverage and today the program provides 51.3 million Mexicans basic healthcare, hospital care, and preventive medicine. More recently a set of medical services especially for infants and newborn babies, including new vaccines, was added through the Medical Insurance for a New Generation initiative.
The system is financed by the federal government in collaboration with the state governments as well as with contributions from the users. One of the main goals is to provide access to treatments that would otherwise impoverish the user. According to reports released by international consultancy PWC the Seguro Popular has on average reduced these catastrophic expenses by 36.8% in general and by 51.7% for households that required hospitalization services. The government has vowed to increase spending on health care from 7% to 10% of total expenditure, in order to maintain and further improve the level of healthcare in Mexico and that of the Seguro Popular. Since the introduction of the Seguro Popular life expectancy at birth has risen to 75.4 years, which is similar to life expectancy in the US. Infant mortality was reduced from 18.2 to 14.1 and the percentage of communicable diseases fell from 15.4% to 10.8%. The Seguro Popular is a major step forward in Mexico’s development but it also provides the healthcare sector with a huge challenge because the population with access to healthcare system nearly doubled in less than ten years.
The first challenge for the federal and state government was to improve the medical infrastructure to accompany the now rapidly rising demand for healthcare. To achieve this, the government spent over US$ 5.3 billion in the last decade to build, expand, and refurbish more than 2750 hospitals, clinics, and other primary points of healthcare. Infrastructure however was only the first step, and the right qualified medical personnel, and timely and qualitative healthcare have also been essential. Most state hospitals are still understaffed leading to average waiting times of 90 minutes before a patient arriving at a hospital receives help. This is especially a problem in remote and rural locations because most medical specialists are concentrated in the urbanized areas of the country. Large challenges remain for the government as well as universities and other educators to train enough and skilled medical staff to ensure healthcare for all Mexicans. Although it seems like Mexico is on the right path because the country ranked fifth in the number of medical graduates per 100.000 people of all OECD countries in 2012, efficient allocation of these graduates still remains a challenge.
The second challenge is supplying the demand for medicines. The budget of the Seguro Popular is low at only US$ 200 per person each year, and most medicines are paid on an out-of-pocket basis, which leads to a large demand for cheap effective drugs. Although out-of-pocket expenses have been reduced to from 53% to 45% since the introduction of the Seguro Popular they are still much higher than the OECD average of 18.5%. Supplying this demand provides huge opportunities for the big pharmaceuticals in diversifying their portfolios with generics and supplying the market with cost-effective drugs. A further challenge is the distribution of medical equipment and medicines to remote rural locations in Mexico, not only because these locations are hard to reach but because the distribution of medical equipment and medicines is strictly regulated and requires the implementation of effective environmental controls during distribution. Security unfortunately remains a common a concern, with the trucks’ precious cargo the target of hijackers. With the advent of the Seguro Popular the number of deliveries and locations has greatly increased, which has in turn only increased the challenge of timely and effective distribution.
The largest challenge however is taking the next step in developing true universal healthcare in Mexico. Whilst the Seguro Popular has pushed the industry into a new phase, it was only the first step in modernising the country’s healthcare system. Large differences remain between hospitals throughout the country because of a lack of industry standards and skilled medical personnel. Similar differences remain between the different insurance types, and quality and waiting times differ largely between those employed by the government (ISSSTE), those employed in the formal sector (IMSS), and the Seguro Popular. To tackle the challenge of providing every Mexican with solid healthcare, the industry has to converge from being fragmented to integrated, so that the public and private sectors effectively cooperate with the government, regulators, and researchers to reach the highest industry standards nationwide.
Although challenges remain for the Mexican healthcare system, the level of healthcare has significantly increased during the last decade with the introduction of the Seguro Popular and many opportunities have been created. A huge new market for cheap generic drugs has been developed and the market for medical equipment and distribution is growing steadily. Not only has the creation of the Seguro Popular helped Mexican’s access quality healthcare, it has also helped propel the economic weight of the sector as a whole for the benefit of the country’s global investment attractiveness.