Why Brazil is following in America’s footsteps

Donald Trump isn’t the only president on the other side of the Atlantic to turn a nation’s political landscape on its head. Brazil’s new populist president, Jair Bolsonaro, shocked pundits the world over by bagging the presidency – and showed the world he can be as vitriolic as his US counterpart, too.

But the business world likes him. Brazil’s stock market Bovespa rose 3.7% on seeing Bolsonaro’s lead in the polls, its largest one-day surge since 2016. Private healthcare executives are just as enthusiastic about a Bolsonaro-led government, as the president has aligned himself with a pro-market finance minister who wouldn’t touch the private sector even if it screamed for regulation. This is all good news for private healthcare:

I think if the government were to interfere with the private sector, we would be in trouble,” says Wilson Olivieri, former CFO at Brazilian insurer Qualicorp. 

“It is already moving towards the direction of a DRG payment system, which is what America has. It remunerates providers based on Diagnostic Related Groups (DRGs), instead of fee-for-service.

“DRGs incentivise efficiency by setting treatment prices based on diagnoses. If a doctor is paid R$100 for diabetes treatment, for instance, but the patient in question only costs them R$50, they will have made R$50. Conversely, if the patients ends up costing them R$200, they will have made a loss. Such a system would also make medical plans more accessible by reducing their cost.”

It seems both Brazil’s politics and private healthcare system are moving towards US-style models of their own accord. Whether the former is good news remains to be seen, and Bolsonaro has yet to appoint a health minister, so we lack a clear idea of where private healthcare will go.

It is interesting that Bolsonaro’s plans for healthcare remain obscure, as the average Brazilian places great importance on securing a good medical plan. But judging by the incumbent’s speeches, he looks set to let the private sector follow its own course, so his government’s attitude to healthcare should be no different.

Marcelo Fonseca, board member at Brazilian post-acute specialist Dal Ben, told Healthcare Nova what opening up the market and letting it get down to business can achieve: “25% of Brazil’s population use private healthcare. And with the economy in a better state, there would be more investment, therefore more jobs, and those who don’t have health insurance would be more able to spend out-of-pocket.”

“For businesses like Dal Ben, higher availability of capital and larger investments would enable us to expand and build new clinics.”

If you listen to his critics, they will say Bolsonaro is at best brusque – but even those critics would have to concede his success should mean a boost for the private market.

 

We would welcome your thoughts on this story. Email your views to Anaïs Charles or call 0207 183 3779.