June 08, 2015

To Partner or Not to Partner: The Public-Private Question in Brazil

Innovations in Healthcare has been busy this year with ongoing research into the landscape of healthcare innovation in Latin America and the Caribbean. Last month, I had the opportunity to interview a wide variety of professionals engaged in healthcare innovation in Brazil. While you’ll have to wait until later this year for the findings of our Latin American Landscaping research, I can share a few quick thoughts on one of the most frequently discussed topics in Brazil: whether or not to partner with the government.

From the healthcare entrepreneur and investor’s perspective, the question of whether or not to partner directly with the government can be a challenging one. In a country where the vast majority of the population relies on Sistema Único de Saúde(SUS) (Brazil’s publicly funded healthcare system) for care delivery and payment, it can be challenging to make the case that you can ignore the government and still reach an impactful scale, especially if you are trying to serve low- and middle-income populations. But partnering with the government can be demanding, as both policies and administrations can change, leading to challenges on the entrepreneur and investor side in maintaining stable business models over time.

Some organizations such as Projecto CIES (Center of Education and Health Integration) – an organization that offers mobile clinics, such as trucks and vans supplied with medical equipment and trained healthcare professionals, to bring high quality specialized care to patients with limit access to healthcare—have fully embraced the government focused approach, and have succeeded in developing extensive ongoing partnerships that directly integrate into SUS. Others, such as IPIHD innovator dr. consulta – a model that integrates primary and secondary health services into one location, providing patients with access to services 25 times faster than public options, and with prices that are 70% to 90% lower than the private market — have opted to operate as a private model that remains accessible to lower income populations through efficiency-driven lowered costs. Still others are exploring a hybrid approach, which involves scaling through a combination of partnerships with the government and either direct to business or consumer product and service offerings.

It’s important to note that the many answers to this question ultimately have implications beyond an individual entrepreneur or investor’s strategy. At a macro level, without proper coordination and collaboration, a divide between the public and private sectors can lead to significant coordination of care issues for patients and providers alike, resulting in frustration, higher costs, and lower overall quality of care.

We’re looking forward to sharing many more of the insights from our research across Latin America and the Caribbean later this year, so be on the lookout!