A Case Study in Latin American Healthcare – Managed health care takes its place among the products of a global market
As appearing in Managed Healthcare, December 1998
This is part one in a two part series focusing on innovative primary care programs developed around the world. Part one sets the stage for understanding issues related to delivering healthcare services abroad with an emphasis on Latin America; Part two, appearing in an upcoming issue, continues the same analysis in North America, Europe and Asia.
Anyone who has traveled overseas recently can readily identify with the observation that products are being developed for a global marketplace. American franchises and American television are nearly ubiquitous in international circles. But the US has had its share of success and failures in this global marketplace; many failures can be tied to the fact that Americans have not taken the time to understand the unique cultural, political and economic dynamics outside their borders.
To facilitate a better understanding of healthcare’s role in the global marketplace, the American Association of Health Plans and Academy for International Health Studies created the Summit on International Managed Care Trends occurring this month in Miami. In this third meeting of administrators and policy makers from around the world, the question remains; what practical lessons can we learn from one another in managing global health? And are there creative programs that have achieved significant improvement in healthcare delivery that can be documented and exported to other regions of the world? The purpose of this article will be to highlight some of these programs in both developing and industrialized nations.
Although the term managed care may not be within the vernacular of foreign nations, it is certainly the objective of their health departments and political leaders. Whether the nation is industrialized or agricultural, with medical care based on a socialized or free enterprise system, the pressure to control healthcare expenditures is at the top of nearly every political agenda. But to induce change rapidly, many governments must import solutions from those countries that have already made the investment to bring similar change to their own constituency. And because effective primary care is the fastest way to control costs, technology-oriented solutions focused on primary care have the greatest chance of succeeding when preparing for deployment on a global scale.
Influencing change and improvement in healthcare delivery systems is difficult when there are many competing alternatives available, but it is near impossible when those alternatives are simply not an option due to insufficient resources and infrastructure. Several impediments to change and obstacles to growth still exist in the developing countries; these findings are now among the “lessons learned” of American business. But among more industrialized parts of the world, continued investment in primary care technologies offer great promise.
Although information technology expenditures in Latin America represent less than 5% of the world total, growth in information systems investment in the region has consistently been the highest in the world since 1985. The remainder of this article will focus on improvements sought in Latin America’s healthcare infrastructure, with future installments to focus on Europe, Asia and North America
Making it happen
Among the most obvious obstacles to improvement in developing countries is the lack of technology infrastructure upon which to build. Many primary care programs depend on adequate telecommunications infrastructure for transmission of patient data within a health enterprise or communication of basic health education into the household. In Latin America, telecommunications companies remain tightly controlled monopolies where regulations and tariffs inhibit the introduction of contemporary telecommunications applications for the healthcare setting, and penetration of telephones within the household is only 20% of that in North America. Funding for new programs in these countries is seldom adequate to sustain ongoing operations until programs can prove their cost effectiveness, and many programs simply collapse when initial funds are exhausted and not replenished. Even when technology investments are made, end-users and consumers often lack a comprehensive understanding of the potential of computer systems, causing the investments to fall short of expectations. And the natural evolution of technology suggests it can take some time before the investments made in technology infrastructure can truly make a significant, visible impact on a population served by it.
American companies often do not aid this situation when approaching the international market. Many new commercial health information products are introduced without a formal evaluation of their effectiveness or health impact. The availability of health information on the internet, the introduction of newer products before content validation and field testing, and the increasing use of health decision support applications raise concerns among practitioners about the accuracy, quality and verifiable health impact of information programs, both inside and outside the U.S. Social values, perception of illness, and client-provider interactions differ among different countries, inside the same country and between social classes. Even simple language issues remain an obstacle, with native and ethnic languages and dialects differing within countries much smaller in size than the U.S. Validation of medical content to local practices is important not only for the obvious differences that might exist in treatment patterns and options, but for political reasons as well. Local medical communities will quickly reject solutions that have not been rigorously tested before introduction.
Recognizing the role and importance of effective information systems in healthcare led the Pan American Health Organization (PAHO) to identify the further development and expansion of information systems capabilities as a priority area for this decade. Considerable work has since been devoted to the examination of technical, economic and cultural obstacles to technology deployment within the healthcare market of Latin America. These efforts resulted in the identification of those areas designated as most practical and effective in meeting the needs of healthcare administrators, practitioners and consumers, with the ultimate goal of enhancing the level of primary care offered within the region. In April 1998, the Pan American Health Organization and World Health Organization released the results of their study in the report titled “Information Systems and Information Technology in Health: Challenges and Solutions for Latin American and the Caribbean.”
Priority Project Areas*
Recommended by the Inter American Development Bank “Informatics 2000” Health Task Force and the Pan American Health Organization (PAHO)
- Medical Call Centers
- Emergency Services Systems
- Interactive Health Promotion Applications
- Electronic Patient Health Record
- Epidemiological Reporting Systems
- Distance Education for Health Professionals
- Small Clinic and Hospital Management and Operation Systems
- Drugs, Cosmetics/Food Registration, Management and Control Systems
*Source: Proceedings from the Second Presidential Summit of the Americas, September 15, 1998
Redefining Primary Care
Healthcare institutions and commercial insurers are traditional drivers of integration in American markets, as creation of an Integrated Delivery System (IDS) remains an effective strategy to compete for revenues and market share. The same dynamic does not necessarily exist in foreign markets, where governments subsidize but tightly regulate the independence of providers and insurance programs. The fact that this model has produced similar problems with access and cost has led to the creation of a private market for health services within socialized medical systems. These newer markets represent opportunities for the creation of a competitive market that will offer greater choice while bringing needed improvements in the overall design of healthcare delivery systems.
In both Latin America and many parts of Europe it is the medical emergency transport and ambulance services that are important catalysts for this type of change (see the May, 1998 issue of Managed Healthcare for a review of the National Health Service’s restructuring of healthcare in the UK). These services rely on government funding and are heavily motivated to restructure operations in order to contend with inappropriate utilization and funding shortages. Because the medical emergency transport services are a visible example of the healthcare resources available within a community, they are particularly vulnerable to overutilization. And because these services are often the precursor to additional, expensive inpatient care, they are an important place to start in any effort at restructuring.
Back to Basics
U.S.-based Rural Metro Corporation is learning the basics of restructuring primary care services in Latin America through its acquisition of ECCO (Emergencias CardioCoronarios) in Argentina. Here, a traditional ambulance company has used its investments in infrastructure and understanding of primary care to become an IDS in its own right, employing physicians and operating clinics under capitated contracts with local labor unions. Rural Metro is learning important lessons in Latin American that can be applied to other markets where enhanced primary care services are needed.
ECCO services are offered as a voluntary membership program to individuals and labor unions within four major population centers in Argentina: Rosario, Cordoba, Tucuman and Buenos Aires. There are currently nearly 1,000,000 enrolled in the program. Municipal and corporate contracts exist in areas with high-density populations, such as the airport, train station, and soccer stadiums. ECCO provides beneficiaries with in-home physician care, primary care services within ECCO clinics, and life support and emergency transport to hospital facilities when indicated.
The company utilizes a prioritization system for each contact not unlike the emergency medical and “911” services in the U.S., but with a much greater emphasis on in-home care as an alternative to utilizing ambulances for transport to area emergency rooms. Callers are either instructed to wait for the arrival of in-home services, to visit one of the area “Consultorios,” (clinics), or to consult the advice of an ECCO medical advisor over the phone. All in-home visits are made by a physician who will arrive in a vehicle specifically designated for the level of urgency identified during the call (from advanced and basic life support ambulances to civilian automobiles with medical supplies). Only the most serious cases require transport to an area hospital, and with the availability of so many other options for primary care, transportation to the hospital occurs in only 4-5% of total cases.
Return of the House Call
ECCO’s creative use of physicians may raise eyebrows in the U.S., but no one can argue with the company’s success. Shortly after assuming a contract to serve approximately 40,000 employees of a food services union (“Gastronomicos”), ECCO demonstrated a 44% reduction in hospital visits. Indeed, the return of the house call is evident in the U.S. also, due to the availability of new technology that supports diagnostic testing and procedures, and improved reimbursement for physician home visits. The largest provider of physician home visits in the U.S. reports 65% average annual growth in visits for the past three years, according to David Lindberg, Vice President of Managed Care for Visiting Physicians Association, Southfield, MI.
ECCO at a glance
- Membership: 900,000 (approx.)
- Annual Revenue: $20 million
- Gross Operating Profit: 15%
- Number of Physicians: 620
- Number of Clinics & Stations: 26
- Client Satisfaction: 95%
- Rate of Complaints: 0.2% of contacts
- Disenrollment: 2% per year
- Growth in Membership: 5% per year
While ECCO has addressed the PAHO/WHO priority for comprehensive, cost effective emergency services, they plan to also add a medical call center program to enhance the quality of advice that can be provided over the phone, and to further reduce the need for onsite visits or emergency transport. They have launched an evaluation of medical call center systems and will soon approach the “make versus buy” decision once their specifications for the project are complete.
Will American corporations play a part in adding to the technological infrastructure at ECCO? “Now that we are a part of an American company we will most certainly want to evaluate the American technology solutions that can be offered to ECCO,” notes Dr. Guillermo Torres, ECCO’s Medical Director. “But we are also aware that while American solutions work well in the U.S., they do not always fit within our unique culture and operating philosophy. This is something we will have to evaluate very carefully.”
End of Lesson?
Although the Americans have a significant lead over other world regions in the establishment of a technology infrastructure, its clear that Americans can still learn valuable lessons on how to effectively develop and deploy medical and technology-oriented solutions within different healthcare delivery systems, including our own. In the next issue of Managed Healthcare, we will examine how developments in Europe, Asia, and North America are challenging conventional wisdom of how to deliver effective primary care, and how different cultures can impact the success or failure of American-born solutions.