Brazil

Aceso Global CEO Talks ACO Potential in Brazil

Building on Aceso Global’s recent policy working paper, Driving Value-Based Care: Accountable Care Organizations in Emerging Markets, CEO Maureen Lewis sat down with Andre Medici, Senior Economist for the World Bank, to give her perspective on the potential of ACOs in Brazil as a way to introduce the principles of value-based care. The interview, in Portuguese, was published on his personal blog Monitor de Saúde in May 2019, and can be accessed here: http://monitordesaude.blogspot.com/

The interview is reproduced in English below:

 

AM: Value-based Health Care (VHBC) is progressively disrupting health markets by creating space for improving quality, reduce costs and paying for performance and outcomes. How are ACOs contributing to this new view of the health market place?

ML: VBHC has stimulated quality in the US in terms of finding ways to incentivize and promote quality, and it has implicitly linked this agenda to a reform of the payment system to incentivize desired outcomes. VBHC is part of a larger movement sparked by the National Institute of Medicine reports: “To Err is Human” and “Crossing the Quality Chasm”. The Accountable Care Organizations (ACOs) are building on those objectives and offer a path to improved integrated and coordinated care that allow paying for value.

 ACOs create a partnership between payers and providers, making them accountable to each other within the organization. The structure of the ACO and the embedded incentives that lead to cost containment and higher quality of care include easily accessible primary care services for the defined patient population, prioritization of prevention, and chronic disease management that emphasizes integrated and coordinated care. Together, these initiatives reduce reliance on hospitalizations and emergency care that both improve quality of care for patients and control costs for providers. I have just completed a paper on the subject that provides some insights into ACOs.

 

AM: What are the basic features of the ACO model and how is this different from traditional secondary-level institutions?

ML: The integration of care delivery, financing, information systems, management and marketing set ACOs apart, and so do the incentives of their payment arrangements. Their integration allows joint decision making on how to structure and operate the organization, and it is built on data, efficiency and quality. Importantly, data are used to track clinical care, costs, productivity, patient satisfaction and other indicators of performance. Information technology and data availability at all levels of the ACO are key, as neither quality nor efficiency can be measured without adequate and appropriate data. Data at the point of care is particularly important to support physicians in their disease management and coordination of care functions.

 

AM: You mentioned that ACOs in US emerged from various angles, such as hospitals expanding outpatient services or health insurance engaging with providers. Could this process be replicated in developing countries such as Brazil? What are the preconditions to do this in Brazil’s SUS or in the health insurance market?

ML: ACOs offer an excellent alternative for fee-for-service dependent systems, but two elements are critical for an ACO: (1) information systems that produce relevant and regular data for monitoring at all levels of the organization, from nurses to physicians to hospital managers to diagnostic providers to clinical managers; and (2) incentives for performance, meaning the providers and managers are accountable for their activities, and receive rewards and/or penalties for meeting or not meeting, respectively, predetermined goals. Without data management, goals and accountabilities are not possible; and, without incentives, change is difficult if not impossible.

Brazil could easily adopt ACOs through various arrangements, for example: as part of a major hospital network; as a new service program built around physician practices; as a major laboratory service company joining with physician practices. Partnerships of players integral to delivering quality care are at the heart of ACOs and can be adapted to the interests of different kinds of investors and actors. Given the strong insurance market in Brazil, partnerships between payers and the above delivery groups could move the cost containment and quality agendas forward. But it implies new ways of doing business.

ACOs are ideal for public-private partnerships (PPPs), adapting the OSS model in São Paulo, for example, where non-profits have full responsibility for service delivery and management. These arrangements are used extensively in the US by Medicaid, the public insurer for the poor that contracts with private companies and non-profits to set up ACOs that serve that population segment. Data and incentives allow government to accompany and oversee progress. Cambridge Health Alliance, an ACO in Boston, is an example where the city has contracted with an ACO to deliver care to a defined population, and they have supported the development of IT, managers and indicators. It entails good management on the part of government, but it helps to shift provision to integrated care providers who have the tools and flexibility to be efficient and raise quality.

 

AM: In Brazil, the SUS created institutions such as the UPAS, with the objective to increase effectiveness of the health delivery by reducing unnecessary hospitalizations. Do you think that UPAS could be operated similarly to the ACOs in order to improve integrated care in the SUS?

ML: UPAS are a good idea, but they lack the incentives, flexibility, data and accountability that allow ACOs to function effectively. First, the simple lack of electronic health records (EHRs) that allow clinicians to serve patients across time and levels of care undermines the ability to provide integrated care. UPAS physicians and nurses lack the needed data about patients at the point of care. Second, UPAS do not face incentives to avoid the use of higher level care, and are not rewarded for keeping patients healthy and away from unneeded higher levels of care. Third, in places where patients can self-refer to hospitals – as is the case in much of Brazil – providers must make it easy for patients to access primary care. Our work in São Paulo with Consocial suggests that accessing UPAS is time consuming and protracted, leading frustrated patients to public hospitals or the private sector.

 

AM: Could ACOs work as standalone institutions or do they need to be integrated into health networks to operate efficiently?

ML: ACOs either have an integrated network or access other providers on a contract basis to provide easy access for their patients. For example, an integrated care provider can contract with diagnostic centers, laboratories and hospitals for referral services for their patient population. The primary care providers coordinate care for their patients at all levels, so effectively the primary care providers integrate the services each individual patient needs.

 

AM: Given that the main incentive to create ACOs lies in changing the payment system, which new healthcare payment systems need to be implemented in Brazil, and what are the challenges and preconditions to implement them?

ML: Payment arrangements within ACOs can take virtually any form and ACOs lend themselves to a combination of payment arrangements. For example, fee-for-service can co-exist with capitation and bundled payments depending on the range of services being offered; alternatively, and most commonly, ACOs simply rely on capitation, but with payment tied to performance, namely cost containment and quality outcomes. Here again, the information system is key to provide data on key indicators. However, the significant payment innovation in ACOs are “shared savings”, where payers, managers and providers share in savings from the lower costs and enhanced quality of care that comes from focusing on primary care and reducing (over) use of hospital and emergency room services. This is a unique payment arrangement that underpins ACO incentives. These are easily adapted in Brazil – the challenge is the partnership that makes it happen and helping providers adapt to change, but these are challenges in the US as well.

 

AM: Brazil has seen lots of progress in both the SUS and ANS information systems. Are the current systems in Brazil enough to implement a VBHC culture in the Brazilian health systems (SUS and saúde suplementar)?  

ML: The situation is mixed. UNIMED BH has such information, as do some of the closed operadores in other major cities in saúde suplementar, but most do not. Those that do can build on that capacity, making the shift to the ACO model less onerous. SUS information systems are lagging behind. It requires investments but more importantly a platform that allows development of EHRs as well as information about the performance of providers and outcomes of care. SUS has neither, and many operadores lack them as well.

“It’s Complicated”: A Take on the Healthcare Industry in Brazil

Aceso Global CEO Maureen Lewis shares her take on the Brazilian healthcare system. See here for a link to the original article, which is reproduced below.

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What Makes Brazil’s Healthcare system so different? Prof. Maureen Lewis of FGV-EAESP shares her take on the unique mixed public and private health system in the country.

At a glance

Brazil, a country adored all over the world for its coffee, samba, football and Jiu-jitsu, is certainly not just another ‘BRIC’ in the wall. With a population of roughly 200 Million, the country is unique not only through its inclusion into the OECD club and economic tug-of-war between boom and recession, but also by its distinct Healthcare sector. Composed of around 6,800 public and private hospitals, 195,000 service units and almost 500,000 hospital beds (Industry Report, Healthcare: Brazil, The Economist Intelligence Unit, September 2014), the health sector counts for ~9% of Brazil’s GDP (2015), with a health expenditure per capita of almost USD 705 (OECD). Divided into private and public components, the healthcare system consists of everything ranging from small, low quality hospitals to world-class research hospitals.

To cover the costs incurred by the citizens at these units, the Federal, State and Municipal governments have put into place the Single Unified Health System (SUS), the funding for healthcare facilities is provided via the federal prospective reimbursement system, the AIH (Authorization for Hospital Admission). Moreover, there are 6 private high-complexity Centres of Excellence all over the country which provide free health care to the citizens in return for tax breaks from government.

Caught between private and public funding

Lately, a trend has been observed in the spending of the SUS – an increase in funds for public-owned facilities and a sharp decline in funds in privately owned hospitals. The SUS under-reimburses for care for non-public providers, leading to the closure of several philanthropic facilities. This has generated increased demand for private insurance for people to benefit from care at public hospitals.

Such divergence runs a risk of reducing engagement and support for improved healthcare performance by the growing middle and upper-class population who are increasingly relying on private insurers and providers.

As such, middle and upper-class citizens are benefiting from private insurance through their own pockets or those of their employers and at the same time paying for the SUS through taxation.

The economics of healthcare

What makes things even more interesting is that a rise in chronic conditions and diseases across Brazil has influenced a shift in the demand for hospitals towards more specialty care than general hospitalization. This is costing the average Brazilian more than the traditional remedies at hand. As suggested by a private sector report, a decline in the mortality rate can be seen for several diseases and illnesses credited to improved living conditions, rising levels of education and improved preventive measures. The same cannot be said for illnesses such as cancer, cardiovascular disease and perinatal disorders which seem to have replaced the more easily treated illnesses. This has, in a way, led to a sharp increase in the average costs to state for diagnosis and treatment.

But not all of this cost expense can be attributed to the change in disease complexity. An argument can be made towards the heavy investments that Brazil is making in technology in healthcare. Interestingly, Brazil has more MRIs and CT Scanners than several of the developed countries such as the UK and almost three times more than Mexico.

Another factor that can be attributed is the demographic of the private insurance enrolees. It is seen that that over 45% of the age groups that use this type of insurance hail from either the under 18 or the over 59 categories, both of which are generally non-performing categories that are highly susceptible to illnesses. The increase in life expectancy rates of the country is ironically, only adding to its woes.

In the face of these high costs and expenditure, it has been imperative for the Brazilian healthcare industry to keep its revenues high. But the recent trends discussed above have led to a reduction in hospitalisations, pushing the healthcare industry towards a risk of loss. Loss ratios have been increasing substantially over the past few years. To gain control over spending and to improve the overall efficiency of the healthcare industry, financing seems to pose a challenge for the Brazilian administration for the years to come.

Complex problems – simpler fixes

The picture is clear. Despite having made efforts to establish a single healthcare system, Brazil’s can at best be described as mixed and fragmented. The government funded SUS finances less than half of all healthcare, with the balance being covered by private insurers and through self payment.

Despite financial malpractices and several other irregularities associated with it, the AIH remains the preferred method of hospital payment, which suggests the need for drastically improving and optimizing its application. In the same vein, amends need to be made towards the cross disparity between public and private sectors of insurance and healthcare providers to ensure that the services are rightly paid for.

The imbalance between inflation rates will eventually become an issue for insurers and the insured, the implications of which could inflict damage to the image and economic health of private hospitals.

A part of the solution could be to close low-volume, high-cost small hospitals. Brazil should further focus on improving management, efficiency and added value, and also adhere to protocols in order to boost productivity and enhance quality. Stricter accreditation norms and keen oversight could help identify waste and promote improved performance, which in turn could lower costs.

Finally, the consumers and patients should be given bigger roles to play in order to facilitate improved hospital function and network performance as part of the country’s agenda for the future. It cannot be denied that the healthcare system is going through a rough patch, but it is certainly worth saving. As the saying goes – it’s always darkest before dawn.

Innovations for Sustainable Healthcare in Brazil: Value-based Care

This presentation explores the challenges facing the Brazilian healthcare sector in terms of quality, efficiency and outcomes. It draws from the US experience with value-based care to highlight possible directions for innovation in Brazil, with a focus on integrated care, alternative payment mechanisms and new roles for information technology. Aceso Global CEO Maureen Lewis delivered this presentation at the seminary Dasa/Valor Econômico in São Paulo, Brazil, in November 2018.

DOWNLOAD THE PRESENTATION HERE (IN PORTUGUESE)

Innovations in Brazil’s Private Health Sector

This presentation discusses innovations in the Brazilian private healthcare sector. It covers private health insurance and providers, as well as some of the major innovators operating in Brazil’s private healthcare market today. More specifically, the presentation dives into innovative delivery models championed by the private sector, while also exploring challenges, such as issues of poor quality and performance of unaccredited private providers. It concludes with recommendations for raising quality and efficiency. Aceso Global CEO Maureen Lewis gave this presentation at the HSR Conference in Liverpool, UK, in November 2018.

DOWNLOAD THE PRESENTATION HERE

Sustainability of Global Fund Supported Programs: Brazil Country Case Study

This report summarizes the policies, programs and levels of investment in malaria, tuberculosis and HIV/AIDS in Brazil, linking these to broader Brazilian healthcare initiatives and to both general and specific investments. It provides the background necessary to understanding the contribution of the Global Fund, and the country’s transition away from that support once funding for malaria and tuberculosis ended. Brazil’s strong commitment to health, early establishment of excellence, its depth of technical expertise, and its ability to implement complex health programs has translated into a level of independence that relies on outside support for only part of its agenda. That in turn facilitates adapting to declining external transfers, and an understanding that transition means establishing functioning and funded institutions.

DOWNLOAD THE FULL REPORT HERE

Hospital Performance in Brazil: The Search for Excellence

This book combines a comprehensive overview of the Brazilian hospital sector with in-depth analyses of the key elements of interest in promoting and ensuring excellence in hospital performance. The book offers specific recommendations that go to the heart of the problem, weighing in context on implementation and specifically highlighting the need to strengthen governance arrangements, improve accountability, and sharpen resource management.

La Forgia, G. and B. Couttolenc. 2008. Hospital Performance in Brazil: The Search for Excellence. Washington, DC: World Bank.

 (published in English and Portuguese)

 

DOWNLOAD THE FULL BOOK HERE