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Qualicorp >Healthcare Growth in Brazil
Healthcare Growth in Brazil
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Demand for private health plans in Brazil is growing rapidly in response to several factors, including a favorable macroeconomic environment, strong and steady job creation, increasing consumer purchasing power, an aging population and a history of limited quality of and access to public health services. Such demand, combined with a history of restricted access to individual or family health plans (mainly due to price, quality and availability issues), led to a sharp increase in the Beneficiary base in recent years.
According to the ANS, participation in private health plans in Brazil has increased approximately 58% since the year 2000 to include more than 49.2 million people in 2013; however, as of June 30, 2013, only 24.5% of Brazilians participated in private health plans.
The private healthcare market in Brazil is regulated by the ANS, which has separate regulations for group health plans (including corporate and affinity group health plans) and individual or family health plans. Individual plans face far greater regulatory scrutiny and Health Plan Operators are much more restricted in their ability to increase premiums. As a consequence, it has become increasingly difficult for a large percentage of the Brazilian population, primarily those who do not have health coverage through their employer, to access or afford private healthcare. Health plans in the Affinity segment are classified as group health plans by the ANS, primarily because the professional association, or its representative, is expected to be able to serve as an advocate on behalf of the individual beneficiaries in negotiations with the Health Plan Operator.
Effective July 2009, the first specific regulation addressing the market in the Affinity segment and healthcare benefit administrators was passed by the ANS. The regulation adopted strict standards to define the types of legal entities able and eligible to contract the plans by adhesion for professional associations. In addition, the regulation determined that administrative services related to health plans provided through such associations should necessarily be provided to the beneficiaries either by the association itself (if the resources, infrastructure and necessary capabilities are available in-house) or by a benefit administrator, such as itself. The Company believes that the new regulatory framework leads to affinity group health plans as the preferred option for individuals without employer-sponsored private healthcare coverage to access the private healthcare system and stimulates the development of the benefit administration market while improving the Company’s competitive positioning. Additionally, by making private health plans more accessible to the public, we also believe that the regulation will help alleviate the burden on the public health system.