Brazilian healthcare debate becomes foreign vs. public investments

Last week, this blog covered the Brazilian healthcare debate over a new bill that would open up the industry to increased foreign investment. While there is an agreement among all parties that there is a need for private or public investment, one of the major sticking points is where that money should be coming from.

During a public hearing of the Committee on Economic Affairs, senators and panelists advocated for more public investment in the healthcare sector, expansion of the service network and improvement in management, regardless of the participation of foreign capital.

The first vice president of the Federal Council on Medicine (CFM), Carlos Vital, said that the State could allocate more budgetary resources. Currently the Brazilian government finances 44 percent of the entire healthcare sector and he argues that that number should be at least 70 percent. He compared it to the English government that finances 84 percent of the country’s total health spending.

Vital added that the while outsourcing and privatizing healthcare could help the system it would not solve the deficit in the sector. That is because public healthcare is responsible for three times the number of consultations, and private investments are two times higher than those made by the Federal Government, states and municipalities. He added that R$36 billion has been retained by the Ministry of Health in the last five years (R$9 billion in 2012 alone) due to lack of projects and mismanagement.

This battle seems to have a long way to go before it is resolved. The outcome of this will have major ripple effects that will affect numerous industries.