One Step Away From the Abyss? Analysis of the Supplementary Health System in Brazil

OBJECTIVES: The Supplementary Health System (SHS) has more than 700 Health Maintenance Organizations (HMOs) and offers health plans to more than 26% of the Brazilian population. This work joins the growing discussion that the SHS is “one step away from the abyss” and that this sector may not be economically sustainable in the medium and long term. The objective is to evaluate the historical operational result by correlating the research findings with the different SHS business models that involve Self-Management (SM), Group Medicine (GM), Medical Cooperative (MC), Health Insurance Company (HIC), and Philanthropy (PH).

METHODS: This descriptive and exploratory research used secondary data from various sources and was subjected to quantitative analysis methods using Microsoft Excel 365 and SPSS version 21. The sample comprised 185,213 cases divided between 665 different HMOs between 2017 and 2021.

RESULTS: The data confirm the process of demographic transition with a higher percentage of older adults in the SHS, which directly impacts the demand for health services. There is a predominance of beneficiaries in GM (39.9%) and MC (37.74%) and a tendency towards market concentration. Overall, 26% of the amount paid to the SHS is not converted into a benefit for the consumer but serves to pay non-assistance expenses. Historically, SHS's profitability result was broken by a negative operating result in 2021. MC's ability to seek more significant revenue from consideration and other operating income combined with the expense reduction process contributed to a better financial result in 2020 and a lower financial deficit in 2021. On the other hand, only SM demonstrated a potential economy of scale.

CONCLUSIONS: This work corroborates the opinion of experts in the field who consider that SHS is experiencing one of the worst crises in recent decades, and the path to resuming sustainable growth requires profound changes in the sector.