How recruitment, regulation and recession have hit insurers in Brazil
Who carries out healthcare services may sound like something only providers have to worry about, but finding qualified medical staff who comply with regulations is also difficult for insurers.
Take Brazil. Despite new regulations bringing more flexibility to the labour market passing just a week ago, rules surrounding the types of providers people are allowed to contract continue to worry private health insurers, who cover 25% of all Brazilians.
Insurers in Brazil are in charge of contracting the healthcare providers offering services to their clients, mainly corporates – with many packages inclusive of homecare services. But a court ruling in 2014 limited the kind of homecare providers that insurers can select by imposing restrictions on the use of cooperatives (loose associations of medical and social care staff).
Cooperatives have traditionally supplied cheap and flexible labour for homecare providers. Employing your own staff (and making it redundant) is expensive in the country, in the healthcare sector and beyond. This regulation surrounding recruitment reduces the pool of providers insurers can choose from.
In Brazil, the problem is amplified because insurers are facing a drop of customers. Many people have lost their jobs over the past decade and private health plans tend to be dependent on employment. Insurers have usually considered homecare a potential option as a substitute for hospitals whenever possible. Since the court ruling, that is more difficult, and the situation is leaving insurers feeling squeezed. Until there is more clarity over the use of cooperatives, Brazilian insurers are likely to remain stuck between a rock and a hard place.
This shows how recruitment issues at the provider level can affect payers, too. It’s just particularly visible in Brazil, a regulation-heavy country reliant on private health plans for a quarter of its citizens facing an economic recession.
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