December 11, 2020 | 9:13 am
By: Verónica García de León *
Our capacity for wonder diminishes the more we are exposed to bad news. But recently, a piece of data crossed my threshold of surprise and concern: the private medical inflation index, that is, the rise in the cost of hospitals, drugs, treatments and consultations.
This year the indicator closes with an increase of 17% and for next year it is expected to be 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 summary figures reflect higher prices for private health services, which directly impact our wallets, 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 was 3.3% year-on-year in November.
Gabriela Ruiz explained to me that part of the increase in the cost of private medicine is explained by an increase in the exchange rate from 2019, as 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 affect if the average cost of hospital care for COVID-19 is 390 thousand pesos. And not only that, more than 60% of hospital cases with insurance for major medical expenses exceed that level, as they had to be taken to intensive care where the average cost is 920 thousand pesos.
Who Loses to Medical Inflation?
Such an aggressive rise in the price of medical services is in itself a concern in a country like Mexico, where the population is forced to resort to private medicine due to the inadequacy and poor quality of public services, in addition to the fact that 17 out of every 100 Mexicans are not affiliated with any public health facility. That explains why the out-of-pocket expenditure on this matter in Mexico is one of the highest in the world.
In all fairness, there are many reasons for choosing private medicine, but for now it is enough to know that Covid’s death rate in a public hospital is 10% according to AMIS, compared to 5% in a private hospital. Which would you choose?
Another important effect of medical inflation is the insurance of large medical costs incurred by 11 million Mexicans. Daniel Blande, director of AXA, says affection is inevitable. “We need to pass such significant health service increases to our policyholders through premium increases,” he told me in an interview. They could be predicted to rise to double digits next year.
Ultimately, insurers pay for their clients’ hospitalization and treatment in the event of an accident or illness, and higher prices for services imply higher costs and lower utility because while they can increase their premiums, they cannot do so in the same way. moment. proportion.
For Blande it is essential to keep medical inflation in check and so he suggests that there is some body that regulates the private health system, that there is “a Health Profeco,” he says. In addition, make it more transparent in the rates it charges, open to the public how much its treatments are worth and how prices evolve. It also suggests that the most common terms have a maximum price.
Whichever way you control it at the moment, medical inflation should be a priority. And while that happens, it wouldn’t be a bad thing for hospitals and insurers to penalize their profit margins more on behalf of the population, or for the government to allow an additional deduction for out-of-pocket expenses in private medicine, since it ultimately complements the services. Public health.
* Verónica García de León is a journalist specializing in economics and finance. You are interested in explaining and analyzing economic issues with social impact. He studied the Dissemination of Economics specialty and won the IE Business School Award for Economic Journalism. She was editor 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.