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Opportunities and challenges in the Brazilian Healthcare System

By 3 de junho de 2014 Mercado

Texto originalmente produzido em Inglês. Para português, clique aqui.


If you are an aspiring healthcare entrepreneur or you are a business professional wanting to do business in healthcare in Brazil, there are important things that you should be aware of.

First of all, there is a public healthcare system, that covers around 75% of the Brazilian population and is completely free, although it has huge lines and is very hard to get to an specialist in most part of Brazil. However, most healthcare professionals in Brazil work part or full time in the public healthcare system and it is seem as a huge victory for the Brazilian population to have public healthcare access, although its low quality is among Brazilians most frequent complaints.

The private healthcare system, that takes care of approximately 24,7% of the population or 45 million people is regulated by the National Agency of Suplementar Health (ANS) and what a healthcare plan most cover is dictated by this agency. As a consequence, healthcare plans have clear rules to follow and it’s not possible for entrepreneurs to create plans based on a specific business opportunity. Different from the US, the drugs are not covered by the healthcare plan and  are bought out of pocket, what explains the sharp rise in generic medicine in Brazil.

What about the opportunities ?

Unlike many other countries, where large hospital chains dominate the healthcare sector, in Brazil there is only one private hospital chain, called Rede D’or and it is partnered with a investment bank, BTG Pactual. However, it’s not legal for foreigners to invest in health service providers, what prevent this hospital chain and others to go to the stock market, although many think that the law will change.

Where many corporations are finding opportunities to invest is in the management of healthcare services, managing hospitals and other healthcare facilities and receiving a fee from the government.

This opportunity has been seized specially for hospitals that are considered not for profit, but charge a lot of money from their patients and need to justify their philanthropic status to the government, such as Hospital Sírio Libanês and Hospital Albert Einstein.

One interesting case is Nefrocare, that manages dialysis services and has ten units of dialysis in São Paulo and Rio. Having the government as its clients, the chain has to be able to navigate well among political turmoil, in order to be successful in  its business.

For the digital health entrepreneurs, there are many opportunities, although it’s not easy to find who is going to pay for your service. The website MinhaVida, which is the leading health news portal in Brasil, had to survive in its early days, through its parent website Dieta e Saúde, that makes dieta online, being able only later to attract sponsors to its website. The company has been invested by Intel Capital and continues to invest in its digital growth.

What about the challenges ?

There is a lack of investment capital in Brazil and most entrepreneurs are bootstrapping their companies. When it comes to the digital knowledge, it’s hard to find talent that is willing to take the risk and join the company in an early stage, as they have so may job opportunities.

Despite that, there is a passion for innovation and there is a clear perception among the leading hospital CEOs that the digital revolution came to stay and is very important to work with innovative companies in order to solve old problems. Certainly, in Brazil and in Latin America, it’s very important to have a very strong network, because most business meetings come from a personal connection.

Conclusion

The healthcare expenses are growing in Brazil, there is an aging population and there is a need for new solutions. In this scenario, innovative healthcare companies can thrive, but it’s fundamental to understand adequately the culture and the business environment in Latin America to be successful.

healthcare-market-consultancy

Fernando Cembranelli

About Fernando Cembranelli

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