Despite the obstacles imposed by the Bolsonaro administration, the nation almost unanimously saw as a success the way the Brazilian Unified Health System (SUS) tackled the Covid-19 pandemic. However, the rapid aging of the population and the rising costs of treating chronic diseases with more modern and expensive medicines and equipment will require a significant increase in three-part health financing, mainly with more funds from the federal government, which has limited its involvement and overloaded the states and municipalities.
Public spending priorities must be rethought, and the spending cap rule has to be reviewed to address the allocation of more funds to SUS, but that is not enough. The Brazilian economy will need to grow more vigorously and sustainably in the coming years—conditions that must also be met to collect more taxes to fund the system.
Health expenditures will also need to become more efficient to prevent funds from being drained and lost, and the coordination between SUS, private health-care coverage (health plans), and private providers, including philanthropic entities, has to improve. Those were the main takeaways of this hybrid debate (in-person and online) held by the FHC Foundation, which had two panels and lasted an entire morning.
SUS is the best Brazilian social policy
“SUS is the best Brazilian social policy in the last 30 years. Before the 1988 Constitution laid the foundations for its creation, more than 60% of the Brazilian population lived without social assistance. SUS brought strong growth in access to basic health care, primary care, and family health care, which was reflected in indicators such as the infant mortality rate, which has reduced four times over in Brazil since the end of the 1980s,” said economist André Cezar Medici, a retired World Bank employee with more than 30 years of experience in strategic planning in the health care area.
“We are at a crossroads because the Brazilian population is aging, and health care financing needs are going to greatly increase. Given the existing fiscal restrictions, will we decide to prioritize public health? If federal investment continues to be blocked, more and more will fall on the states and municipalities, and that tension will explode later on. The country’s economy needs to grow again to cope with the demographic component, and it will be necessary to allocate a much larger percentage of the GDP through tax collection to finance SUS,” said Adjunct Professor Rudi Rocha (FGV EAESP), head of research of the Institute of Health Policy Studies (IEPS).
“I disagree with the catastrophic view that expenses must undergo exponential growth in the face of an aging population and chronic diseases. I believe scientific and technological advances can help reduce costs and increase the system’s efficiency. Telemedicine is one example of such an advance, which allows consultations and even physical examinations from afar. I have a more optimistic view of solving problems through innovation,” said physician Erno Harzheim, former National Secretary of Primary Health Care at the Ministry of Health (2019-2020) and former Secretary of Health for Porto Alegre.
“To secure the funds that SUS requires there must be a review of the spending cap, which is regressive and has been demoralized by the current administration. We are committed to making headroom for expanding funds designated for social policies, such as health care, education, science & technology, and income transfer programs, as well as investing in infrastructure that generates jobs and contributes to economic growth,” said Senator Humberto Costa, former Minister of Health (2003-2005) and President-Elect Lula's current government program coordinator for health care.
“Partly due to the pandemic, today, the SUS’s importance is unanimously supported by the left, right, and the center. This high consensus on the need for a strong health care system that can give the entire population quality service is an opportunity for us to lay the major structuring issues on the table and, together, ensure that they become concrete policies,” said Nésio Fernandes, Espírito Santo State Secretary of Health and President of Brazil’s National Council of Health Secretaries (CONASS).
“Given the size and complexity of Brazil, we need the public and the private systems to complement one another. That was made all too clear during the Covid-19 pandemic, when private health care treated 25% of the population, relieving SUS from having to care for 50 million ill Brazilians at the cost of more than BRL 30 billion,” said Vera Valente, executive director at the Brazilian Federation for Private Health Insurance (FenaSaúde), a former staff member at the Ministry of Health and ANVISA (Brazilian Regulatory Health Agency), where she was responsible for implementing the generic drug policy in Brazil.
Public health care spending should reach 6% of Brazil’s GDP
André Medici compared the percentage of total public health care spending in four countries: Brazil was in last place, behind Canada (where 70% of health care spending falls on the Canadian Government), Peru (63%), and the United States (51%), whereas, in Brazil it’s 41%. Almost 60% of Brazil’s health care expenditures stem from health plans, expenses incurred by families, and other sources. However, SUS serves 75% of the Brazilian population, while private health-care providers serve 25%.
According to the Brazilian Institute of Geography and Statistics (IBGE), final consumption expenditures on health care in Brazil totaled BRL 711.4 billion in 2019. That was 9.6% of the country's GDP that year. Government consumption expenditures (including Federal, state and municipal) on health care totaled BRL 283.6 billion, 3.8% of the GDP. Health plans, families, and non-profit institutions accounted for most of those expenses: BRL 427.8 billion, corresponding to 5.8% of GDP.
According to an article published by the IBGE News Agency in 2022 (consolidating the information above), the participation of health plans, families, and non-profit institutions in health care expenditures has been growing since 2011. Meanwhile, that of the government, which had grown from 2013 to 2016, remained stable after dropping in 2017.
André Medici, Rudi Rocha, Humberto Costa, and Nésio Fernandes proposed that the Brazilian Government gradually increase its SUS-financing share to at least 6% of the GDP over the next few years. “We need to increase total annual health care spending to BRL 1 trillion to take on demographic aging. The Federal Government has to increase its share to the level of matching private spending,” warned the FGV EAESP professor.
According to Medici, the federal government currently allocates around BRL 160 billion to SUS but should increase that expenditure to no less than BRL 260 billion annually.
For the speakers, those additional funds must be guaranteed with an adequate prioritization of the public budget, especially the federal budget, by implementing reforms, eliminating subsidies, and ending the so-called secret budget, which blocked more than BRL 10 billion in health care funding to meet demands set by parliamentary amendments.
However, numerous guests stated that the spending cap rule would need reviewing, stipulating that the federal government’s total spending cannot exceed the previous year plus the inflation rate. “If we only apply the inflation rate from the previous year for health care spending, in a generation, we will reach a public spending of just 20% of total health care spending, equivalent to that of the poorest African nations,” said Rocha.
Even if the next administration changes the spending cap rule, replacing it with another mechanism to control public spending, the health care numbers just won't add up if the Brazilian economy does not pick up and grow in the coming years, increasing GDP and the taxes collected.
Making the Unified Health System more efficient
“Increased public funding is desirable, but there is no point in increasing funding without stopping the drains,” said Erno Harzheim, who defended creating a unified system for scheduling consultations, exams, and hospitalizations. “You can't manage the system if you don't have a single-file line. That’s what we did in Porto Alegre, and we eliminated the waiting list,” said the former Municipal Secretary of Health from Rio Grande do Sul.
He also criticized health plan reimbursements in the income tax, which would represent approximately BRL 18 billion in annual tax breaks. “Why should I, who has the privilege of having health insurance and receiving better service than the rest of the population, be entitled to a government subsidy? I want private health care to contribute to SUS, but I no longer want it to have government subsidies. Clearly, that must be implemented gradually not to scare away anyone,” he said.
Humberto Costa also favored revising the reduction in expenses with health care plans in the income tax, but said taxpayers needed to be compensated by expanding the supply of free medication through programs such as Farmácia Popular.
Rudi Rocha proposed advancing the regionalization of health care so that nearby municipalities work in coordination by adding human and financial resources and physical and technological infrastructures. “That is the way forward, but the problem is that the health care region’s figures are still not properly regulated,” said the FGV researcher.
Vera Valente defended the expansion of telemedicine, interoperability/electronic medical records, and the possibility for operators to market outpatient health care plans—with the right to consultations and exams but not to hospitalizations and treatments—at a lower cost than a full-coverage plan. “The law created this segment, but it stuck treatments in there, which is not cheap. That additional cost means that outpatient plans, which could be much more affordable, are not marketed, leaving many people outside of private health care,” she explained.
“Integrating network processes and concentrating investments in larger hospitals is a must,” said Medici, who also suggested expanding access to medicines for chronic and rare diseases through SUS and prioritizing the delivery of services on epidemiological bases. “SUS priorities must be mastered around epidemiology,” said the expert.
“We do not need to subject SUS to a historical revision or revise its constitutional framework. The fundamental thing is to recompose the federalism of cooperation. In the midst of a pandemic, we are experiencing the worst institutional conflict in history concerning the execution of a social policy as fundamental as public health care. It is time to end this period of belligerence and return to working together for the health of Brazilians,” said Nésio Fernandes, Chairman of CONASS.
Watch the full debate (in Portuguese).
Otávio Dias is the content editor at Fundação FHC. He is a political and international affairs journalist, a former correspondent for Folha de São Paulo in London, and former editor of the estadao.com.br website.
Portuguese to English translation by Melissa Harkin & Todd Harkin (Harkin Translations).