Health plan rises above inflation with resumption of appointments and exams

Since the beginning of vaccination against Covid in Brazil, in the second half of January this year, photos of people with rolled-up shirtsleeves have sprouted on Instagram and Facebook, proudly holding the SUS (Unified Health System) card, happy for have been immunized against the new coronavirus.

But the joy with public health ends there. Today, having a private health plan is the third most important thing for Brazilians, after housing and education, according to a survey by the IESS (Institute for Supplementary Health Studies), released in June. Something accessible to less than a quarter of the population (23%), or 48.3 million people, according to the ANS (National Supplementary Health Agency), which regulates the sector.

The restriction stems from the nature of the business: most health plans in Brazil today are corporate groups (68%), that is, it is offered as a benefit to those who are employed. Another 13% are collective membership plans, contracted through unions and associations. Only 19% are individual or family – most plans are not interested in this category because the readjustment is dictated by the ANS.

This year, beneficiaries of corporate health plans will experience an increase of 11% in the cost of the service, as one of the consequences of the pandemic. Next year, the pain in the pocket will be even greater: the readjustment should stay at 13%, including inflation, according to Mercer Marsh Benefits consultancy.

“In 2020, consultations, preventive exams and elective surgeries were postponed for fear of contamination, but in 2021, the reality is the opposite, everyone is coming back”, says Fernanda Rodrigues, sector analyst at Lafis Consultoria. “This puts a strong pressure on the costs of the industry, which also had to face a higher number of admissions for Covid this year compared to 2020.”

According to FenaSaúde (National Supplementary Health Federation), which brings together the largest health plan operators in the country, in July 2020, for every 100,000 beneficiaries, there were 60 hospitalized patients.

“In April of this year, the number almost doubled to 114”, says Vera Valente, director of FenaSaúde. “Next year will reflect the increase in costs this year, as well as the greater frequency of use”, she says, who also points out the “absurd” increase in medical supplies, such as gloves, masks and aprons, which far exceeds the inflation.

In 2020, according to data pointed out in a report by Lafis, the sector had revenues of R$ 227.5 billion, an increase of 5% in the annual comparison, motivated precisely by the postponement of medical procedures, on account of Covid. Operators pass about 85% of this total to service providers (hospitals, clinics and specialists), according to FenaSaúde.

In corporate health plans, there are two ways of sharing costs with users: by co-payment (74%), in which the beneficiary pays a part of the service when using, and by average discount, when a fixed amount is deducted every month from the payroll.

“The share of co-participation has been growing over the last few years, because it is a way to increase the user’s awareness: he will not do any test to do, he will only do what he really needs”, says Mariana Dias Lucon, director of the consultancy Mercer Marsh Benefits.

According to the consultancy, the total cost of the health plan this year per employee is R$ 427.09. “The health plan represents 13.95% of the payroll, it is the second largest source of cost for employer companies, after salary”, she says, who also sees the frequency of use of health plans increasing this year by account of the treatment of the sequelae of those who contracted Covid.

To close the bill, supplementary health companies have been increasing the pace of mergers and acquisitions in an attempt to reduce costs. In this sense, one of the trends is the verticalization of the business: the operator will also have a hospital and exam and diagnostic clinics.

It is the strategy used by the second and third largest companies in the sector, GNDI (Grupo NotreDame Intermédica) and Hapvida, respectively. The two announced in February a merger, which is still under analysis by the Administrative Council for Economic Defense (Cade).

“The sector is still very fragmented and the pace of mergers and acquisitions should be even faster, if it weren’t for the moment of economic and political instability that the country is facing”, says José Cechin, superintendent of IESS. The institution, as well as FenaSaúde, linked to the operators, defend the revision of the sector’s legal framework, since the legislation is already 23 years old.

“The ANS pricing rule needs to be changed,” says Cechin. In individual plans, the agency limits the percentage of adjustment of monthly fees. This year, for example, it indicated a negative readjustment of 8%, that is, individual plans had to lower prices.

“How can a trader be interested in a market like this?” asks Cechin. “Health care costs grew more than inflation and, instead of passing it on to the consumer, the plan lowers the monthly fee”.

In the case of collective health plans, ANS only monitors the adjustments, which are negotiated directly between the operator and the company or union.

But for Cechin, the main reason for the ANS to review the pricing rule is the aging of the population. Health spending on the elderly is subsidized in part of what is charged to the youngest, he says – but, at a time when the average age group rises, the bill doesn’t close.

Vera Valente, from FenaSaúde, agrees. “A general review of law 9656/98, which regulates health plans, is needed, a special commission in the Chamber of Deputies is discussing the matter,” she says.

Today, the legislation defines a minimum and mandatory list of exams, consultations, surgeries and other procedures that a health plan must offer. FenaSaúde proposes that operators can offer plans that are more segmented and, consequently, cheaper.

“Most beneficiaries use the plan only for consultations and examinations, but operators are required to offer at least outpatient care,” he says. “If the user only pays for what he uses, the plan would be more advantageous for him and the operators could serve a much larger percentage of the population”, he says.

Mariana Dias, from Mercer, recalls that ANS includes, every two years, new procedures in the list of mandatory minimum services to be provided by operators, which contributes to increasing prices.

“In addition, the high cost of healthcare involves drugs quoted in dollars and more technology used in the provision of services, such as robots that perform surgeries or the most sophisticated devices for clinical examinations”, he says.