An extract from The Healthcare Law Review, 4th Edition
The current Brazilian healthcare framework was defined in 1988 upon enactment of the Federal Constitution. Brazil has developed a dynamic and complex health system based on the principle of access to health as a fundamental right of every person and a duty of the state. The state is responsible for organising a set of initiatives and services to ensure universal, unconditional and unpaid access to healthcare for all citizens. The role of the state encompasses not only taking actions for promotion, protection and recovery of health, but also putting social and economic policies in place to reduce illnesses or their aggravation.
The Unified Health System (SUS) is one of the biggest and most complex public health systems in the world. Jointly with the Federal Constitution, Law 8,080 of 1990 (known as the Organic Health Law) and Law 8,142 of 1990 emphasise the SUS principles and guidelines and set the funding standards for public health initiatives and services.
The SUS operates according to the following principles:
- universality: all citizens have the right of access to all public health services (or services contracted by the public administration);
- non-discrimination: access to all services is warranted to everyone without discrimination based on race, gender, economic condition, social status, sexual orientation, political views or any social or personal characteristics;
- equity: all citizens have equal rights (in terms of access to and use of services) and will be attended to according to their health needs; and
- comprehensiveness: public initiatives and services at distinct levels of complexity must cover all actions for the promotion, prevention, protection and recovery of health, including their biological, psychological and social dimensions.
The state's healthcare obligations are developed within the SUS by the Ministry of Health in the federal sphere and by the respective healthcare offices in the state and municipal spheres, on a basis of cooperative federalism. In general terms, the federal government sets national guidelines for health policy, the states coordinate their respective regional healthcare networks and municipalities plan out and implement health actions and services alongside other cities within the same region based on the population's needs.
Given this common authority, the bodies of the federation are jointly responsible for meeting healthcare demands and, in view of constitutional criteria of decentralisation and hierarchy, the judicial authority must direct compliance according to rules of division of powers and order the payment of compensation for those bearing the financial burden.
The National Health Committee (CNS), a joint committee established by Law 8,142 of 1990, is responsible for the strategy and control of public health policies and their economic and financial aspects, thus acting as the highest decision-making body of the SUS.
The Federal Constitution also allowed the private sector to develop healthcare actions and services. Private institutions may participate in the national health system (1) on an accessory basis, by providing input or services or else by engaging in healthcare management with their own resources, following public administration guidelines and on the basis of administrative contracts signed with public entities; and (2) on a supplementary basis, by offering health services through companies operating private health plans and insurance.
Philanthropic and non-profit organisations take precedence over other private entities in providing services for the SUS. However, if the services of those entities cannot be retained or are not enough to meet the SUS demand, the public administration may contract those services for the SUS with private entities for a profit.
Supplementary health is an economic sector served by a significant number of private health plan and insurance operators.
The National Regulatory Agency for Private Health Insurance and Plans (ANS), established by Law 9,961 of 2000, is the agency established by the Brazilian government under the Ministry of Health that operates nationwide to regulate, standardise, control and inspect the private health insurance and plan sector.
Law 10,185 of 2001 provides for the specialisation of insurance companies in private healthcare plans becoming subject to regulation and oversight by the ANS.
The regulatory framework for this sector is found in Law 9,656 of 1998, which contains the regulations on private health and insurance plans.
The National Health Surveillance Agency (ANVISA), created by Law 9,782 of 1999, is the authority primarily responsible for public health control over the production and marketing of designated products and services, including pharmaceutical products and medical devices.
The Ministry of Health, CNS, ANS and ANVISA are the government bodies primarily tasked with enforcement of healthcare laws and rules.
The SUS serves approximately 75 per cent of the Brazilian population. The remaining citizens (circa 47 million Brazilians) have a private healthcare plan. Private healthcare is the asset third most desired by non-beneficiaries, behind only education and home ownership, and largely as a result of shortcomings in public sector healthcare provision due to, among other factors, budgetary constraints and a shortage of skilled labour in the medical and dental areas, as well as the continental dimensions of the country. The process of 'exclusionary universalisation' established by the SUS has given a strong impulse to the private healthcare sector recently.
The line between public and private healthcare services has always been somewhat blurred, with their coexistence resulting sometimes in overlapping and inefficiencies. Users may resort to either side of the system depending on their actual needs or financial resources. Although disparate and uncoordinated, these two sectors are interdependent. They do not exclude or replace each other, given the universal character of the SUS. However, the medical records for the same user are not shared between the public and private sectors, which creates inefficiencies in the health system.
This year, the covid-19 pandemic has brought up discussions about the coexistence and need for interconnection between these two subsystems, especially considering the high possibility of hospital overload, understaffing, shortage of medical services and equipment, lack of sufficient data integration between public and private systems to manage the public health crisis and its developments, and revealing how significant and urgent this topic is for better and more effective management of healthcare in Brazil.
Patients regularly choose between the SUS and the private healthcare sector after considering their medical condition, treatment complexity, and proximity of available facilities, among other factors. Under Article 32 of Law 9,656 of 1998, private healthcare providers must reimburse the SUS for the public treatment costs of those covered by a private healthcare plan.
The Brazilian health system has also been affected by other global dilemmas. As identified by Willis Towers Watson, the population will age in the next decades at a faster rate, putting more pressure on the already overburdened healthcare system. Unnecessary treatments, the incorporation of costly new technologies, the expansion of mandatory procedures to be covered by private health providers and judicial decisions obliging the state and private operators to cover unanticipated medical treatments are also key factors tipping the scale unfavourably for the Brazilian health system.
The healthcare economyi General
The SUS struggles to overcome obstacles to provide the right established in the Federal Constitution of a healthcare system that is 'free and available to all', with one of the most difficult obstacles being cost. Serving more than 200 million people, 80 per cent of whom are fully dependent on its services and resources, the SUS is heavily reliant on state funding.
As for funding of the public system, Law 8,142 of 1990 provides for the intergovernmental transfer of financial resources. Constitutional Amendment No. 29 aims to ensure the funding of public health initiatives and services by establishing minimum resources to be provided by the three spheres of government. Funding for the SUS comes from tax revenues and social contributions from the federal, state and municipal budgets.
According to a study carried out by the Federal Council of Medicine (CFM) in November 2018, the amount of funding remains below international standards and is insufficient to cope with the growing demands of the population, driven by changes in socioeconomic and epidemiological profiles. The fiscal austerity policies implemented by the government a few years ago have aggravated the problem by freezing health service expenses for the next 20 years.
Brazil allocates only 3.8 per cent of its gross domestic product to the public health system, a very low percentage compared to other countries (e.g., Portugal 6.2 per cent, United Kingdom 7.6 per cent, and France 9 per cent). The SUS funding mechanisms have not been adequate to the task of securing sufficient financial resources for the public system.ii The role of health insurance
Given the shortcomings in the public service, the purchase of private health insurance, albeit not mandatory, appears an attractive alternative. In March 2019, the ANS reported the existence of approximately 47 million private plan beneficiaries.
Corporate health insurance plans serve the vast majority of these beneficiaries. Employers are the main source of funding for private healthcare participants, which offer health services – directly or indirectly (through full or partial funding) and through health plans managed by an operator or insurer – to their employees, who in turn represent approximately 70 per cent of private health plan beneficiaries.
Families and individuals also play a relevant role in the private health sector by financing directly the services rendered by healthcare service operators and providers or by acquiring medicines or medical devices.
Public and private systems coexist not only for funding and management, but also in the offer and use of health services. There is direct and indirect public subsidy for health plans, ranging from tax exemptions for operators, providers and clients of health plans (whether individuals or corporations) to the purchase of private plans for public servants and reimbursements paid to the SUS (when a beneficiary of a private health plan uses public services covered by the private healthcare plan). In 2019, the ANS made a record transfer of 1.15 billion reais to the SUS.iii Funding and payment for specific services
The National Commission for Incorporation of Technologies (CONITEC) advises the Ministry of Health on incorporation, exclusion or alteration of health technologies by the SUS, as well as on the creation or alteration of clinical protocols and therapeutic guidelines. In this context, legislation sets a period of 180 days (extendable for 90 days) for decision-making through a healthcare technology assessment, which includes evidence-based analysis and takes into account such aspects as efficacy, accuracy, effectiveness, safety of the technology and even its impact – not only from a financial perspective, but also from a social, organisational, ethical and legal point of view. CONITEC also undertakes economic evaluations of benefits and cost comparisons with existing technologies.
In terms of private healthcare, the scope of coverage – including transplants and highly complex procedures – is defined by the ANS, which also sets the corresponding rules of use. Every two years, the List of Healthcare Procedures and Events (the ANS List) is revised and updated and, from then on, all procedures and treatments qualifying for compulsory coverage by private health plans are made public, without prejudice to any additional coverage stipulated in private health contracts.
The extent of care coverage by public and private health systems has always been disputed in Brazilian courts, particularly the coverage of high-cost drugs and procedures not offered by public and private health systems and the off-label use of medical products or treatments (i.e., those used in the treatment of conditions for which the use of those products or treatments is not authorised by the government agency and accordingly is not indicated in the product labelling).
In 2019, the Superior Court of Justice (STJ) rendered landmark decisions on this matter, with the following being worthy of note:
Recurso Especial (REsp) 1.733.013/SP – the STJ held that the current ANS List set out in Normative Ruling 428 of 2017 is exhaustive in terms of minimum coverage for health plan operators, thus preserving the economic-financial balance of the supplementary health system (given the domino effect of such decision on other similar claims) and the legal certainty to contractual relationships. According to the reporting judge, the idea of a non-exhaustive list, despite some court precedents in this sense, goes against the legal provision dealing with basic reference plans and the possibility of contracting other coverages, and ends up restricting free competition by establishing 'the broadest, indiscriminate and most complete coverage by health plans and insurance'.
REsp 1.361.182/SP – the Second Panel of the STJ discussed the statute of limitations applying to the intended revision of a contractual clause providing for adjustment of health plan fees and refund of allegedly overpaid sums. The judges signalled that 'in terms of health plan or insurance contracts, a claim arising from declaration of nullity of a price adjustment clause becomes time-barred in 20 years (Article 177 of the Civil Code of 1916), or in three years (Article 206, paragraph 3, IV of the CC/2002), subject to the transition rule set out in Article 2028 of CC/2002'.
The STJ has also established leading cases set to be ruled in 2020, such as (1) REsp 1.715.798/RS on the validity of a contractual clause for collective plans providing for adjustment of monthly fees by age brackets, in addition to the burden of proof concerning the actuarial basis for the adjustment (Theme 1,016), and (2) REsp 1.818.487/SP, REsp 1.816.482/SP and REsp 1.829.862/SP dealing with the definition of assistance and funding conditions to be maintained for inactive beneficiaries (retired employees) under Article 31 of Law 9,656 of 1998 (Theme 1,034), among others.
Those recent precedents illustrate the trend for the Brazilian higher courts to look favourably on the limits and standards established by the state and its existing regulations in providing health services to citizens.
Primary/family medicine, hospitals and social care
The Federal Constitution determines that public health initiatives and services should together create a regionalised and hierarchical network. Following this guideline, health regions were created, which are, in brief, territorial administrative and sanitary divisions that allow the population access to treatment most suited to local needs. Under Decree 7,508 of 2011, these health regions should contain at least primary care, urgent and emergency care services, psychosocial care, specialised outpatient and hospital care and health surveillance.
In 2017, the federal government instituted the National Primary Care Policy to expand clinical care and focus on primary care, while avoiding unnecessary medical appointments or procedures.
The National Primary Care Policy adopts the same principles as the SUS (universality, non-discrimination, equity, comprehensiveness) and should be the preferred reference entry point in relation to public health services.
Following the same public sector rationale, the ANS issued Normative Ruling 440 of 2018 establishing the Programme for Certification of Good Healthcare Practices of Private Healthcare Plan Operators (APS), which is a voluntary process to evaluate the adequacy of preset technical criteria for specific healthcare networks or of operators' specific care lines, with the evaluation being carried out by health accreditation entities recognised by the ANS.
The APS certification proposes a model for reorganisation of the gateway based on primary healthcare, to induce change in the gateway and in the remuneration model for value generation. Based on the main structuring pillars for primary healthcare as provided in national and international scientific literature, the programme focuses on reception, patient care, coordination and integral care, recognition of the heterogeneity of demands, centrality in the family and community orientation.