Business Monitor International

Understanding Mexico's Regional Healthcare Markets

Published 23 April 2014

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Understanding Mexico's Regional Healthcare Markets

BMI View: On the back of a strong macroeconomic outlook for Mexico, we expect the country's healthcare service s in both the public and private sectors to improve. However, persistent shortcomings in the allocation of healthcare funds at state level and the uneven distribution of healthcare resources in the country remain major issues . In this report, w e analyse how economic, demographic and other factors shape the provision of healthcare across the country , and highlight the opportunities and risks in the development of Mexico's healthcare sector.

As one of the most developed countries in Latin America, Mexico's healthcare expenditure is relatively low in comparison with its regional peers in terms of per capita spending and as a percentage of GDP. However, healthcare in Mexico has improved significantly in recent years. Launched in 2003, its national health insurance programme, Seguro Popular, provides health insurance coverage for those who were not already covered by another programme. Since the launch of the programme, Seguro Popular has improved access to healthcare services and reduced the prevalence of catastrophic, impoverishing healthcare expenditure - especially for the low income group.

Although the programme guarantees access to over 250 medical interventions, including all services provided in ambulatory clinics and general hospitals, currently its budget for each patient is only around USD200 per year. BMI believes the country's below-average healthcare as a percentage of GDP (6.0%, compared with around 20% in more developed markets) leaves significant growth opportunities for both public and private healthcare providers. On the back of promising macroeconomic growth prospects and regular improvements to the Seguro Popular programme, public healthcare expenditure in Mexico is set to increase steadily.

We note that persistent shortcomings remain in the allocation of healthcare funds at state level. A key weakness of Seguro Popular...

A combination of healthy macroeconomic growth prospects and the expansion of the state funded Seguro Popular health insurance scheme mean that Mexico's healthcare market has considerable growth potential. We forecast that healthcare spending will increase from MXN965.46bn (US$73.31bn) in 2012 to MXN1,418.09bn (US$119.17bn) in 2017, representing a CAGR of 8.2% in local currency and 10.2% in dollars.

But this forecast conceals regional variations in growth prospects. Factors such as demographics, rural/urban splits, economic prosperity, affiliation to health insurance schemes and medical tourism vary between regions, and help determine where opportunities, and risks, lie in Mexico's regional healthcare market.

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