APabnraeml ed The DNA of the diagnosis 2019 Annual publication | 2nd edition
AAbbrarmamededHHigighlhiglighthsts RevenRueevenue HealthHexepalethndeixtupreenditure DiagnDoisatgicnomsetidcicmineedmicianrekemtagrrkoestsgrreovsesnrueeve(Rn$u)e (R$) 16106.10b.1illiobnillion TotalThoetalthecaalrthe ecxapreenedxpituenrediture on suopnpsleumpepnletmareynhteaarylthealt 33.633.6 7.5 7–.95.0– 9.07.6 –79.6.6– 9.6 ProporPtiroonporfteioxnamof expaemnseexspenses billiobnillion billiobnillion billiobnillion 21.4%21.4%20.7%20.7%21.0%21.0% SupplSemupepnlteamryeHnteaarylthHeaSltUh S SUS AbramAebdramed 2016 2016 2017 2017 2018 2018 DiagnoDsitaicgtneosststic tests ParticipPaatriotincipation 8618.651m.5illmioinllion ParticipPaatirotincipofaAtiobnraomf Aedbrmamemedbemrsembers in the ninumthbeenruomf ebxearmofsepxearmfosrmpedrformed in SupipnleSmupepnlteamryeHnteaarlythHealth 7Ot2he%rs7Ot2he%rs 28%28% 44%44% 4804.880m.8illmioinllion in Braziinl Brazil Total ATborataml Aedbramed Other Other in assoinciaastseoscwiaithesAwbritahmAebdramed in Braziinl Brazil laboratloabrieosratories 9349.384m.8illmioinllion Exams Exams 56 56% % in SUSin SUS Sup- Sup- TAobtraalmATeodbtraalmedpHleeamltehntaHplleeamltehntal in in SuppleSmuepnptlaermy entary HealthHealth Jobs Jobs 2532.553t.h5othuosaunsdandThe diaTghneosdtiacgmnoesdtiiccinmeesdeictinoer wseacstorerswpaosnsreibslpeofonrsimblaeinfotarimninagintaining jobs in 2jo0b1s8i.n 2018. 111.51%.5%of healothfchaeraeltjhocbasrearjeoblinskaerde tlionkdeiadgtnoodstiaicgnmoesdticinmee.dicine. 56.5060.000AbrameAdbrcaommepdacnoiemspeamnpielsoyemovpelroy over peoplep. eople.
Revenue sources Healthh ffaacciliiltiiteiess Patients The associated companies attended 5.9Public% 13.3Out of po%cket The associted companies have: associated companies have: +50 million Health plan of patients in 2018 1,430457icmeangteinrse 80.3% 62% collection stations women Other sources represent less than 1%. 38% collectio1n.s4ta3tio0ns men 92 No show rate : 92execution 14.9% eccxeeenncttueetrrisson 224488 lablasbisn in hospittaallss Access Disallowance and average term Quality management Average monthly percentage 17.5% of disallowance: 4 of exams were 3.7% certificates accessed over on average per associate the internet Average payment period Average percentage 4% from health insurance operators of physicians with specialist titles of exams were 50 to 80 in associated companies not accessed days 89% Investments Equipment Satisfaction Total diagnostic imaging Net Promoter Score (NPS) in 2018 companies invested on average equipment in 2018 82.9% 12.1% 3,544 Negative manifestations of their gross revenue in 2018 of patients: Distribution of investments in 3.8% machines Service units and equipment
PAbanraeml ed The DNA of the diagnosis 2019 Revised edition
Summary 007 Administrative Council 008 letter to the reader 010 Abramed 1 018 Population and Demography 020 Population 024 Population projection 025 Demography 025 Population-ageing 029 Fertility, birth and mortality 031 Life expectancy at birth 032 Morbidity and Mortality 2 036 Economic environment 042 Economic activity 045 Job market 3 048 Health market: the private and the public 053 Supplementary health market structure in Brazil 053 Operators 057 Income, expenses and loss ratio 058 Average payment period 060 Health Promotion and prevention of diseases in supplementary health 062 Beneficiaries 065 Distribution by region 070 Coverage Rate 073 Coverage rate by age and gender 074 Medical demography 078 Total health expenditure 090 The role of diagnostic medicine and its participation in the care cycle
4 094 Brazilian market of diagnostic medicine 096 Health facilities 102 Health equipment 106 Doctors with expertise in diagnostic medicine 108 Job market in the diagnostic medicine sector 114 Tests needed for fast, accurate diagnosis - chronic noncommunicable diseases 118 Assistive production of diagnostic medicine 118 Supplementary Health 120 Unified Health System (SUS) 124 Rational use of diagnostic procedures: balancing benefit and risk for the patient 5 128 Diagnostic Medicine Market: Trends 133 Healthtechs: transforming access to health 134 Wearables 135 Artificial intelligence and analytics 136 Interoperability 137 Telemedicine 139 Competition and industry consolidation 140 New technologies for diagnostic imaging and laboratory tests h 6 142 Abramed Panel 146 Institutional Profile 158 Human resources 168 Welfare production 178 Service evaluation 183 Economic and Financial Performance 194 Corporate governance 200 Abramed Associates 248 Work methodology 251 Bibliography
Editors Claudia Cohn – Chairwoman of the Board of Directors | Abramed Priscila Franklim Martins – Executive Director | Abramed Abramed Council Ademar José de Oliveira Paes Junior | Clínica Imagem Claudia Cohn | Dasa Eliezer Silva | Sociedade Beneficiente Israelita Brasileira Albert Einstein Fernando Lopes Alberto | Grupo Fleury Leandro Figueira | Alliar Médicos à Frente Lídia Abdalia | Sabin Medicina Diagnóstica Content and Writing Álvaro Almeida | Abramed Project Direction Guilherme Ferri | MF Marketing & Business Advisors Graphic project Laika Design Photography Shutterstock Impression Meltingcolor Dados Internacionais de Catalogação na Publicação (CIP) Associação Brasileira de Medicina Diagnóstica. A849p Painel ABRAMED: o DNA do diagnóstico / Associação Brasileira de Medicina Diagnóstica. - São Paulo, SP: ABRAMED, 2019. 256 p. : 21 x 29,7 cm Inclui bibliografia 1. Clínica médica. 2. Diagnóstico. 3. Medicina interna. I. Título CDD 616 Elaborado por Maurício Amormino Júnior - CRB6/2422
Administrative 07 Council “Good results in today’s “Abramed Panel shares competitive marketplace Diagnostic DNA to add are dependent on value to Brazilian health high management performance, and this system” is impossible to achieve Claudia Cohn without reliable industry data” Dasa Ademar José de Oliveira Paes Júnior “Decision-making Clínica Imagem without the necessary “The Abramed Panel foundation poses contributes to the a great risk to business planning of the country’s diagnostic organizations. The medicine companies. Abramed Panel brings We celebrate this new context that the best source helps elevate link of information for professionalism, the managers to plan and key to the health value execute their main chain” strategic actions” Fernando Lopes Alberto Eliezer Silva Grupo Fleury Sociedade Beneficente “The Abramed Panel is a reference as a source of Israelita Brasileira information, portrays the Albert Einstein impacts and relevance of the diagnostic “Knowledge that medicine sector for the makes us even more population’s health and the country’s economy” responsible for the Lidia Abdalla sustainability of the Sabin Medicina sector. There is no going Diagnóstica back, we can only move forward” Leandro Figueira Alliar Médicos à Frente
08 ABRAMED ABRAMED PANEL Letter to the reader When we talked about 2020, it felt like high unemployment and focus on presidential a distant time. Here we are in 2019, elections, we have experienced a period of surrounding this future almost as the controlled inflation. However, there was still present. We celebrate another edition suspicion about the pace of growth, even in the face of the Abramed Panel, which brings an of a slow and gradual recovery of economic activity. update on information about radiology Given this scenario, in 2018 the National Agency of and imaging diagnostic laboratories Supplementary Health (ANS) has recorded a slight and clinics, which reflect the diagnostic increase in the number of beneficiaries from health medicine industry in a consistent, care plans. standardized and representative way. Diagnostic medicine, which generates direct and Abramed - Brazilian Association of Diagnostic indirect jobs, has invested in quality and efficiency Medicine, created the publication “The DNA of as a compensation factor for the increase in costs, Diagnosis” to contribute to the healthcare market aiming at the sustainability of such a complex health in the search for transparency, efficiency with solid system. Health, the most desired asset by Brazilians, information used for analysis and decision making, enables the country with conditions on this journey based on real data, and always considering the of growth, maturation and increased productivity. evolution of the political and macroeconomic In this sector, with many actors and challenges, the scenarios, sectoral transformations and both diagnosis fulfills its protagonism as an important national and international trends. gear on this machine. After one of the biggest crises in Brazilian history,
“Diagnostic medicine, which 009 generates direct and indirect < jobs, has invested in quality and efficiency as a compensation factor for increasing costs, aiming at the sustainability of such a complex health system. ”de Análises Clínicas (SBAC), Colégio Brasileiro For a long time, investments and innovation have de Radiologia e Diagnóstico por Imagem (CBR), been present words in this market. Science and Sociedade Paulista de Radiologia (SPR), and all technology fly, creating exponential opportunities, entities representing the health market. as well as startups that provide more mobility, To honor health agents is to highlight the essence patient empowerment, disruption, transparency of our actions and constructive discussions with and evolution. In this way we look to the future each entity, not only with the responsibility to with high expectations of transformation. comply and evaluate regulatory health impacts, If two years ago we were talking about the need but also to form leaders with a collaborative for more confidence, in 2019 we can say that vision. the crisis boosted the rapprochement between We would like to thank our Council, which has the actors and gave us the chance to rethink always contributed assertively to the writing of this the system: pilots with different remuneration publication. To the Abramed team, our thanks for models; quality to add value to the patient their grit, vision, leadership and dedication. with appropriate outcome; interoperability that Great challenges still move us. With health, ensures rationalization with greater horizontal a country endeavors, grows and generates care, and others to come. wealth. Our purpose through this publication is The diagnostic area has contributed assertively to contribute to our associates, the market, and with the necessary discussions focused on the transform health in Brazil. real sustainability of the sector. Integration with scientific societies has become one of Abramed’s Good reading! pillars, as we believe in the knowledge generated at the Academy and focused on market practice. Therefore, we thank our partnerships with Sociedade Brasileira de Patologia Clínica e Medicina Laboratorial (SBPC/ML), Sociedade Brasileira de Patologia (SBP), Sociedade Brasileira PCrleasiuddenitaoCf Aobhranmed’s Administrative Council
010 ABRAMED ABRAMED PANEL Abramed Healing-based medicine goes through several stages, >> including mental and physical well-being in a patient’s journey. Seeking a cure means knowing about the disease and then seeking the most appropriate form of treatment.
011 “Promoting discussions with the diagnostic medicine sector for the benefit of society and for the balance and sustainability of the health system. ” Thus arose diagnostic medicine, permeating life solutions and proposals in the face of a new from its conception to the care of finitude in the scenario of regulations, business consolidation and journey of life. major changes in medicine in Brazil and worldwide. The multidisciplinary work that is contemplated in A story that makes us proud diagnostic medicine underpins what we deliver to The Brazilian Association of Diagnostic Medicine the doctor, who provides care to his patient and - Abramed is born. A representative entity that whom we support with uninterrupted consultative has been working since then contributing to the information at each stage of health care. federal, state and municipal government agencies; regulatory agencies; national and international For clinical analysis, pathological anatomy, genetics sectoral entities; medical and scientific and diagnostic imaging laboratories to contribute to communities; businessmen; health insurance the Brazilian healthcare system, it is essential that and plan operators; specialists from associated they focus on quality, follow the path of development, companies; investors; patient representatives; innovations and are supported by conditions, industry that produces inputs and equipment; regulatory infrastructure and management that allow beyond the various actors in the health chain. the sustainability of this market with the purpose of supporting doctor and patient. Abramed represents leading institutions in the < diagnostic medicine market, recognized for their Promoting discussion with the diagnostic high quality in service delivery, technological medicine sector for the benefit of society for innovation and known as a reference in market health system balance and sustainability were the management practices, governance, compliance factors that made, on July 14, 2010, companies and corporate responsibility. Its performance of different sizes and operating in different regions is managed by principles consistent with legal, of the country come together, aiming to generate technical and ethical standards.
012 ABRAMED ABRAMED PANEL The pillars of Abramed are: To be a model of excellence as representative entity of the diagnostic medicine sector. Acting objectively, with unity and impartiality in all matters related to Supplementary Health in Brazil. Influence the diagnostic market in the defense of ethical and transparent behavior.
013 Encourage dialogue and exchange of technical, scientific and management knowledge among members. Defend the interests of associates, always within ethical conduct and best compliance practices. Ensure focus on patient care. Represent the diagnostics segment before the government and regulatory agencies, establishing positive agendas with the scientific societies of the sector. <
014 ABRAMED ABRAMED PANEL
015 Ethics and Abramed < Understanding the literal meaning of the Greek ethos word, ethics means “custom,” the set of principles, moral values, and conduct of an individual or social group or society - it seems simple to understand when applied to any segment, including the health sector, in which all actors should use practices that provide full reach of care excellence and maximum patient safety. Achieving a strong commitment to transparency and integrity in a segment with complex and not always synergistic interactions, both from the public and private sectors, as well as unequal information between providers, funders, and users, requires the adoption of habits that keep companies engaged in accordance with laws, rules and regulations and, in particular, with the values propagated in the mission of the institutions and their associations. At the sector level, compliance practices in the diagnostic medicine segment contribute to a fairer and healthier market, with ethical and perennial companies, generating better results in health care. To this end, Abramed, committed to the ethical issues of all relationships involved in the health supply chain, has created important tools that contribute to the support and monitoring mechanism of compliance with practices primarily aimed at the patients’ interest and also keeping provocations around the theme in all forums.
016 ABRAMED ABRAMED PANEL Abramed Initiatives Ethics Committee In order to encourage the diagnostic medicine industry to adopt policies and procedures that ensure ethical and regulatory compliance, Abramed formed the Ethics Committee to direct and approve compliance policies and guidelines within the Association, as well as the investigation of possible reports of violations. Code of Conduct A document that guides, encourages and requires from its associates behaviors and practices that inspire all links in the chain, contributing directly so that health institutions take responsability in providing the best diagnostic information to their patients, thus elevating the quality of care delivery services. Abramed Regulation for Competition Practices Set of norms that clarify to the Association’s employees and their associates what can be discussed and how to deal with sectorial issues in the associative scope, including points that are not approachable, such as competitively sensitive information. Antitrust Regiment Rules to protect associates against competition law.
017 Compliance Booklet Good Practice Guide for the Diagnostic Medicine Industry The institution’s most recent initiative, the booklet was developed so that associates and other companies in the diagnostic medicine sector have simplified and objective information about the process of creating a compliance program, where to start and what points to work on. Reporting Channel Exclusive channel (www.canaldedenuncia.com.br/ abramed) for safe and anonymous communication of actions that violate Abramed’s Code of Conduct and best practices, or applicable law. These complaints are evaluated by the Ethics Committee for review and referral deliberation, which may include guidance to the associate, or even, in more serious cases, punitive measures, and partnering with specialized entities. Governance, Ethics and Compliance Working Group Formed by members of the associated companies, the < group aims to discuss and evaluate the development of actions aiming at the dissemination and training on codes, rules and ethical issues on the diagnostic medicine sector.
1Population and Demography
020 1ABRAMED POPULATION AND DEMOGRAPHY PANEL Population In 2018, the Brazilian population was estimated at theast, while 27.2% are in the 1,794 municipalities of 208 million1 inhabitants. Although this is an expressive the Northeast. number, it is interesting to observe it in some aspects, especially regarding the distribution of the resident po- Together, the two regions concentrate more than >> pulation, considering the 5,570 municipalities of the two thirds of the population, while the other regions, country. In this sense, it is noted that 42.1% of the South, North and Midwest concentrate 30.7% of population lives in the 1,668 municipalities of the Sou- the Brazilian population. Table 01 Distribution of resident population and municipalities by region (quantity and percentage distribution - 2018) Source IBGE. Directorate of Surveys - DPE - Department of Population and Social Indicators - COPIS. Abramed Elaboration. Note: 1Estimates of resident population in Brazilian municipalities with reference date on July 1st, 2018. Region Population1 % % accumulated Municipalities % % accumulated North 18,182,253 8.7 8.7 450 8.1 8.1 Northeast 56,760,780 27.2 35.9 1,794 32.2 40.3 Southeast 87,711,946 42.1 78.0 1,668 29.9 70.2 South 29,754,036 14.3 92.3 1,191 21.4 91.6 Midwest 16,085,885 7.7 100.0 467 8.4 100.0 Brazil - 5,570 100 - 208,494,900 100 1 IBGE – Instituto Brasileiro de Geografia e Estatística. NOTE 1 Estimates of resident population in Brazilian municipalities with reference date on July 1st, 2018.
021 It is important to highlight that in 2018, just over half of the Brazilian >> population (57.0% or 118.9 million inhabitants) lived in only 5.7% of the municipalities (317) with more than 100 thousand inhabitants. The municipalities with more than 500 thousand inhabitants (46) concentrate 31.2% of the country’s population (64.9 million inhabitants). In these more populous, rich and urbanized regions, there is an important presence of doctors and health facilities. On the other hand, most Brazilian municipalities (68.4%) have up to 20 thousand inhabitants and only 15.4% of the country’s population (32.1 million inhabitants). The following map shows in the darkest areas the municipalities with up to 20 thousand inhabitants. Map 01 Municipalities with up to 20 thousand inhabitants (dark areas of the map - Brazil - 2018) Source: IBGE. Directorate of Surveys - DPE - Department of Population and Social Indicators - COPIS. Abramed Elaboration. Note: 1Estimates of resident population in Brazilian municipalities with reference date on July 1st, 2018. Municipalities Up to 20 thousand – 3,808 (68.4%) More than 20 thousand – 1,762 (31.6%) NOTE 1 Estimates of resident population in Brazilian municipalities with reference date on July 1st, 2018.
022 1ABRAMED POPULATION AND DEMOGRAPHY PANEL Table 02 Distribution of resident population and municipalities by population range (amount and percentage distribution - 2018) Source: IBGE. Directorate of Surveys - DPE - Department of Populatioin and Social Indicators - COPIS. Elaboração Abramed. Note: 1Estimates of resident population in Brazilian municipalities with reference date on July 1st, 2018. Inhabitants Population1 % % accumulated Municipalities % % accumulated Up to 5,000 4,234,044 2.0 2.0 1,257 22.6 22.6 From 5,000 8,585,515 4.1 6.1 1,203 21.6 44.2 to 10,000 19,290,479 9.3 15.4 1,348 24.2 68.4 From 10,001 to 20,000 33,391,579 16.0 31.4 1,096 19.7 88.0 From 20,001 24,092,419 11.6 43.0 349 6.3 94.3 to 50,000 53,904,350 25.9 68.8 271 4.9 99.2 From 50,001 to 100,000 64,996,514 31.2 100.0 46 0.8 100.0 208,494,900 100 - 5,570 100 - From 100,001 to 500,000 More than 500,000 Total NOTE 1 Estimates of resident population in Brazilian municipalities with reference date on July 1st, 2018.
023 Map 02 Distribution of resident population by municipality and region (amount - Brazil - 2018) Source: IBGE. Directorate of Surveys - DPE - Department of Population and Social Indicators - COPIS. Abramed Elaboration. Note: 1Estimates of resident population in Brazilian municipalities with reference date on July 1st, 2018. Inhabitants - % of municipalities < Up to 5,000 – 22.6% From 5,001 to 10,000 – 21.6% From 10,001 to 20,000 – 24.2% From 20,001 to 50,000 – 19.7% From 50,001 to 100,000 – 6.3% From 100,001 to 500,000 – 4.9% From 500,001 to 12 million – 0.8% NOTE 1 Estimates of resident population in Brazilian municipalities with reference date on July 1st, 2018.
024 1ABRAMED POPULATION AND DEMOGRAPHY PANEL Population projection Data from the Brazilian Institute of Geography and < Estatistics (IBGE) show that population growth has slowed down and each year the population grows less. It is estimated that the population will increase over the next 29 years, until 2047, when it should reach 233 million. From 2048 on there will be a decline and by 2060 it will reach 228 million. This phenomenon will bring profound social and economic transformations. The reasons and impacts of this phenomenon in the diagnostic medicine sector will be detailed during the Abramed Panel. Graph 01 Population projection (Brazil 2010 – 2060) Source: IBGE/Directorate of Surveys. Department of Population Social Indicators. Gerência de Estudos e Análises da Dinâmica Demográfica. Abramed Elaboration. 208 233 228 million million million 200 150 100 50 2010 2020 2030 2040 2050 2060 Total Women Men
025 Demography Population-ageing Accelerated aging >> The number of people over 60 will rise from around 28.0 million in 2018 to 64.2 million in 2048, an increase of 129.4%. The proportion of older people, which is currently about 13% of the population, will rise to 28%. One of the main consequences of this process is the change in the morbidity and utilization profile of health services. The elderly population is often affected by chronic diseases, which demands a specific consumption of outpatient and hospital procedures. According to IBGE, chronic diseases affect three out of four elderly people in Brazil2. Population aging in Brazil, as in many developed countries, has a trend that shows no signs of reversal. However, the speed of this process in the country stands out. While France took about 115 years to double the proportion of older people, Brazil did the same in 19 years. In spite of having a demographic profile similar to that of developed countries, the infrastructure and health services available are often insufficient to meet the health demands of demographic and epidemiological transformations. 2 Sociodemographic and Health Indicators in Brazil 2009.
026 1ABRAMED POPULATION AND DEMOGRAPHY PANEL Graph 02 Population distribution by sex, in age group (2018 - 2048) Values in million 2018 2048 MEN AGE ∆ (2018|2048) 90 + 129.4% 240 / 1,052 85 a 89 -0.2% 436 / 1,619 80 a 84 -18.5% 882 / 2,764 75 a 79 1,440 / 3,885 70 a 74 2,195 / 5,183 65 a 69 3,103 / 6,517 60 a 64 4,077 / 7,331 55 a 59 5,060 / 7,629 50 a 54 5,878 / 8,025 45 a 49 6,402 / 7,832 40 a 44 7,214 / 7,365 35 a 39 8,148 / 7,155 30 a 34 8,555 / 7,349 25 a 29 8,512 / 7,307 20 a 24 8,716 / 7,036 15 a 19 8,364 / 6,731 10 a 14 7,752 / 6,445 05 a 09 7,432 / 6,206 7,565 / 6,021 0 a 04
027 2018 2048 Source: IBGE/Directorate of Surveys. Department of Population and Social Indicators. Gerência de Estudos e Análises da Dinâmica Demográfica. Abramed Elaboration. WOMAN TOTAL 2018 2048 492 / 2,277 730 / 2,679 732 3,328 1,310 / 3,990 1,166 4,298 1,937 / 5,089 2,192 6,754 2,744 / 6,324 3,376 8,974 3,720 / 7,516 4,939 11,506 4,721 / 8,053 6,824 14,033 5,686 / 8,104 8,797 15,384 6,416 / 8,273 10,746 15,732 6,880 / 7,878 12,294 16,298 7,665 / 7,304 13,281 15,711 8,514 / 7,021 14,879 14,669 8,741 / 7,155 16,662 14,176 8,556 / 7,067 17,297 14,504 8,578 / 6,762 17,069 14,374 8,076 / 6,437 17,295 13,799 7,430 / 6,151 16,440 13,168 7,105 / 5,920 15,182 12,596 7,222 / 5,0741 14,538 12,125 14,788 11,762 208,495 233,190 <
028 1ABRAMED POPULATION AND DEMOGRAPHY PANEL “The demographic transition process in Brazil is associated, among other factors, with the reduction in birth rates and fertility. ”
029 Fertility and birth Fewer children per woman >> The demographic transition process in Brazil is associated, among other factors, with the reduction in birth rates and fertility. Together, changes in these variables account for the formation of a new demographic pattern in Brazil, with changes in the age structure of society and the demand for health services. In this process, we highlight the reduction in the fertility rate (average number of children per woman) observed in recent decades, from 2.323 in 1991 to 1.80 in 2018. This reduction significantly affects the age structure, regardless of the level of mortality rates, leading to a faster aging of the population, with the increasing proportion of the elderly. Table 03 Estimated and projected fertility rates (Brazil 2000/2060) Source: IBGE. Directorate of Surveys. Department of Population and Social Indicators. Abramed Elaboration. Estimated Projected 2000 2010 2015 2018 2020 2030 2040 2050 2060 Brazil 2.32 1.75 1.80 1.77 1.76 1.72 1.69 1.67 1.66 North 3.14 2.21 2.11 2.03 2.00 1.88 1.83 1.81 1.80 Northeast 2.59 1.82 1.78 1.75 1.73 1.69 1.67 1.66 1.66 Southeast 2.07 1.63 1.73 1.70 1.70 1.68 1.65 1.63 1.61 South 2.15 1.63 1.77 1.74 1.74 1.72 1.71 1.69 1.68 Midwest 2.16 1.77 1.90 1.87 1.85 1.80 1.75 1.69 1.63 3 Source: Instituto Brasileiro de Geografia e Estatística (IBGE).
030 1ABRAMED POPULATION AND DEMOGRAPHY PANEL Reduction in fertility levels is associated with several factors. Among < them, family planning and the increased use of contraceptive methods. These measures invariably lead to a reduction in the birth rate, which will decrease from 15.08 live births in 2010 to 9.29 in 20604. On the other hand, there is a tendency to increase the mortality rate from 2023. This increase is due to the change in age structure, with the shift in the burden of morbidity and mortality from younger to older groups and, consequently, the increase in deaths caused by chronic degenerative diseases that affect this population. Graph 03 Birth5 and mortality6 rates (Brazil 2010 -2060) in % Source: IBGE/Directorate of Surveys. Department of Population and Social Indicators. Gerência de Estudos e Análises da Dinâmica Demográfica. Abramed Elaboration. 15.08 12.51 6.36 9.29 2010 2020 2030 2040 2050 2060 Natality Mortality 4 IBGE - Population projection by sex and age - Implicit indicators in the projection - 2010/2060. 5 Gross Birth Rate (TBN): Number of live births, per thousand inhabitants, in the population residing in a given geographic space, in the year considered. 6 Gross Mortality Rate (TBM): Total number of deaths, per thousand inhabitants, in the population residing in a given geographic space, in the year considered.
031 Life expectancy at birth Life expectancy at birth increased by about 30 of diseases. In 2018, life expectancy at birth was < years between 1940 and 2018. The increase in life approximately 76.3 years in Brazil, according to IBGE expectancy will have major impacts on the structure data. In 1940, the population’s life expectancy was of health services in Brazil, with emphasis on the 45.5 years: 42.9 for men and 48.3 for women. development of new diagnostic techniques in order to achieve greater precision and early detection Graph 04 Life expectancy at birth (Brazil 1940/2018) Source: IBGE/Directorate of Surveys. Department of Population and Social Indicators. Gerência de Estudos e Análises da DinâmicaDemográfica e Tábua completa de mortalidade para o Brasil – 2017. Abramed Elaboration. Total Women Men Expectancy in years 80 79.8 76.3 72.7 70 60 50 48.3 45.5 40 42.9 1950 1960 1970 1980 1991 2000 2010 2016 2017 2018 1940 5.40 5.50 5.80 6.20 6.10 7.70 7.90 7.40 7.14 7.10 7.06 Gender difference (in years)
032 1ABRAMED POPULATION AND DEMOGRAPHY PANEL Morbidity and mortality Brazil has experienced intense changes in its indicates the increase due to diseases associated population structure and in the pattern of morbidity with the aging population. and mortality in recent decades, with changes in the composition of mortality by cause groups. Between The first study of disease burden for the Brazilian >> 1940 and 1960, Brazil halved its gross mortality rate, population, conducted in 1998, revealed that chronic falling from 20.9 to 9.8 deaths per 1,000 inhabitants. noncommunicable diseases (NCDs) accounted for The analysis of the main causes of death in Brazil the largest share of the disease burden in the country, Table 04 Deaths by ICD-10 chapter7 (Brazil 2007-2017) Source: MS/SVS/CGIAE - Information System on Mortality - SIM. Abramed Elaboration. ICD-10 Chapter 2007 Rank ∆ (%) ∆ (quantity) 2017 2017 2007/2017 2007/2017 Circulatory System Diseases Neoplasms (tumors) 308,466 358,882 1º 16.3% 50,416 161,491 221,821 2º 37.4% 60,330 External causes of morbidity and mortality 131,032 158,657 3º 21.1% 27,625 Respiratory Tract Diseases 104,498 155,620 4º 48.9% 51,122 61,860 79,662 5º 28.8% 17,802 Nutritional and metabolic endocrine disorders 80,244 71,822 6º -10.5% Symptons, signs and abnormal findings in clinical 53,724 66,052 7º 22.9% 8,422 and laboratory examinations 45,945 54,874 8º 19.4% 12,328 Digestive system diseases 8,929 Some infectious and parasitic diseases Diseases of the genitourinary tract 18,301 40,470 9º 121.1% 22,169 Nervous system disorders 20,413 38,786 10º 90.0% 18,373 21,458 11º -20.2% Some conditions originating in the perinatal period 26,898 12,858 12º 17.4% 5,440 Mental and behavioral disorders 10,948 10,995 13º 7.1% 1,910 14º 15.8% Congenital malformation, deformity and chromosomal anomalies 10,262 6,622 15º 733 6,100 16º 146.5% 903 Blood diseases, haematopoietic organs and immune disorders 5,719 5,912 56.0% 3,625 17º 2,123 Skin and subcutaneous tissue disorders 2,475 1,874 18º 16.0% 179 19º 51.7% 259 Diseases of the muscoeskeletal system and connective tissue 3,789 19 -26.9% 61 7 Pregnancy, childbirth and the puerperium 1,615 Ear and mastoid epophysis diseases 118 Eye diseases 26
034 1ABRAMED POPULATION AND DEMOGRAPHY PANEL
035 “In 2017, all NCDs accounted for about 62.2% of deaths, followed by external causes 12.1% and infectious causes 4.2%. ” Some studies seek to estimate direct cancer spending in < Brazil. In a survey conducted with data from the Ministry of Health9, it is estimated that the economic cost of cancer in the Unified Health System (SUS) reached R$1.1 billion in 2005. This amount takes into account the expenses with surgery, chemotherapy and radiotherapy, except for prevention and promotion costs. Almost a decade later, the cost was estimated at $2.5 billion in 2014. Another study by the National Cancer Institute (INCA) found that the direct economic costs of cancer in Brazil exceeded $1.6 billion, in 2009, to R$3.3 billion in 2015. According to the Federal Court of Auditors10 operational audit report, the Apacs11 analysis processed in 2010 revealed that 60.5% of patients were diagnosed at advanced stages 3 and 4. Also according to the report, the most serious situation was observed in bronchial and lung neoplasms, which reached 87.9% of cases with staging 3 and 4. 9 https://www.femama.org.br/2018/br/noticia/custo-do-cancer-mui- to-alem-do-preco-a-necessidade-de-considerar-o-impacto-de-novas-tecnolo- gias-na-vida-dos-pacientes. Acesso em 15/7/2019. 10 Política Nacional de Atenção Oncológica / Tribunal de Contas da União; Relator Ministro José Jorge. – Brasília: TCU, Secretaria de Fiscalização e Avaliação de Programas de Governo, 2011. 11 Authorization for outpatient procedures at SUS.
038 2ABRAMED ECONOMIC ENVIRONMENT PANEL Economic environment The year of 2017 established the beginning of “ Economic the recovery of Brazilian economic activity after the recession period observed in the 2015-2016 growth depends biennium. With the improved performance of the on addressing agricultural sector, Gross Domestic Product (GDP) grew by 1.1%, according to IBGE data. However, the various structural apparent recovery did not materialize in a sustainable and productivity growth cycle and, in 2018, the economy repeated the same growth rate: 1.1%, driven mainly by the service obstacles sector. ” The evolution of this growth rate depends on >> the solution of several obstacles to the country’s development. Among them, stand out: the structural problems, considering the tax system, the business environment and especially the public finances, with emphasizes on the Social Security reform. In the short term, without the solution of these obstacles, the country will hardly grow again in a sustainable way.
039 < In this scenario, the uncertainty about the pace of expansion of economic activity combined with poor labor market performance and the decline on the household incomes, is expected to slow the recovery of various market-related sectors of the economy, especially regarding to the number of health insurance operators and health insurance beneficiaries. The apparent depletion of the growth rate of the supplementary health market is strongly associated with the weak performance of economic activity. The following graphs indicate market expectations according to the Central Bank < Focus report, considering GDP, exchange rate, CPI12 and Selic rate. It is noted that the expectations of the growth rate of economic activity have been deteriorating since the first quarter of 2019. The same occurred with the inflation and CPI projections. 12 Consumer price index
040 2ABRAMED ECONOMIC ENVIRONMENT PANEL Graph 06 Market projections - GDP, exchange rate, CPI and Selic (Focus Central Bank Report) GDP (% growth) 3.0 2.5 2.0 1.5 1.0 0.5 CPI (%) 4.4 4.2 4.0 3.8 3.6 3.4 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
041 Source: Banco Central do Brasil – Relatório Focus – 5/8/2019. Exchange Tax - End of Period (R$/US$) 3.95 3.90 3.85 3.80 3.75 3.70 3.65 Target Selic Tax - end of period (% per year) 9 8 7 6 5 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 2019 2020 2021 2022 <
042 2ABRAMED ECONOMIC ENVIRONMENT PANEL Economic activity Gross Domestic Product (GDP) Performance The Brazilian economy grew 1.1% in 2017 and 2018, after two years of retraction: 3.5% in 2015, and 3.3% in 2016. In 2017, there was a strong influence of the agricultural sector, which grew 12.5%, faced with 0.1% the following year. In contrast, the industrial sector, which fell by 0.5% in 2017, grew by 0.6% in 2018, while services accelerated from 0.5% to 1.3% and boosted growth in the period. Although positive, the results of recent years have fallen well short of expectations and the current pace of recovery is slower than in previous episodes. >> Gráfico 07 GDP evolution (estimated 2011/2019) in %. Source: IBGE, Directorate of Surveys, Department of Population and Social Indicators. Abramed Elaboration. 4.0 1.1 1.1 1.4 3.0 1.9 0.5 -3.5 -3.3 2011 2012 2013 2014 2015 2016 2017 2018 2019
043 In this context, the supplementary health market, which had < experienced more than 10 uninterrupted years of expansion in the number of beneficiaries, was impacted by the performance of economic activity and more than 3 million people lost their health plan between 2014 and 2018. Although negative, the change in the number of beneficiaries was smaller than the fall in GDP. However, the recovery of the sector still depends on the resumption of the labor market and the reduction of uncertainties that hinder corporate investment decisions and household consumption. The number of beneficiaries of private health plans is an essential indicator to understand relevant aspects of the health system, considering the significant participation in financing health expenditures. Graph 08 GDP and number of beneficiaries of health care plans variation (Twelve-month cumulative rate - Dec13/Mar19) Source: Sistema de informações de beneficiários - SIB/ANS/MS-Tabnet - From 6/4/19. Quarterly national accounts: Volume and Current Value Indicators - IBGE - january/march 2017. Abramed Elaboration. 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% 0.5% 1.9% 1.1% 1.1% 0.3% -1.0% -3.5% -2.5% -3.3% -3.3% dec 14 / dec 13 mar 15 / mar 14 jun 15 / jun 14 sept 15 / sept 14 dec 15 / dec 14 mar 16 / mar 15 jun 16 / jun15 sept 16 / sept15 dez 16 / dez 15 mar 17 / mar 16 jun 17 / jun 16 sept 17 / sept 16 dec 17 / dec 16 mar 18 / mar 17 jun 18 / jun 17 sept 18 / sept 17 dec 18 / dec 17 mar 19 / mar 18 GDP Beneficiaries of health care plans
044 2ABRAMED ECONOMIC ENVIRONMENT PANEL
045 Job Market The labor market shows a moderate recovery path, “The unemployment reflecting the performance of economic activity in rate remains high. the last two years. For the yearly comparison, the ” unemployment rate went from 13.1% in 2017 to 12.5% >> in the quarter ended December 2018. However, despite the improvement, the unemployment rate remains high compared to previous years. During this period, the unemployed population reached over 13,177 million, according to the Pesquisa Nacional por Amostra de Domicílios Contínua (Pnad Contínua), released by the IBGE. Graph 09Unemployment rate (%) Unemployment rate of people with 14 years of age and over (2012/2019) Source: IBGE - Pesquisa Nacional por Amostra de Domicílios Contínua. Abramed Elaboration. 14 13.7 13.1 12.5 12 10 8 6 4 2 - 2012 2013 2014 2015 2016 2017 2018 2019
046 2ABRAMED ECONOMIC ENVIRONMENT PANEL Notwithstanding the modest reduction in the >> unemployment rate, the number of employees with a formal contract in the private sector stands out after four years of decline. Continuous PNAD showed that the country had 33,136 million people with a formal contract at the end of April 2019, compared to 32,655 million in the same period of 2018. During this period, 481,000 formal jobs were created. Even in the face of this advance, hiring without a formal contract continues at a faster pace, reaching 11,217 million compared to 10,849 million, on the same basis of comparison, with a positive balance of 368 thousand hires. It is important to highlight that in this type of hiring, the same benefits of employment with a formal contract are not usually offered and the monthly work income is 37.2% lower, on average R$1.364,00. Graph 10 Persons 14 years of age and over, employed in the private sector - with or without a formal employment contract (excluding domestic workers - in thousands) Source: IBGE - Pesquisa Nacional por Amostra de Domicílios Contínua. Abramed Elaboration. 37,000 12,000 36,000 11,000 3,5000 10,000 34,000 9,000 33,000 32,000 8,000 2012 2013 2014 2015 2016 2017 2018 2019 With formal employment contract Without formal employment contract
047 Data from the Cadastro Geral de Emprego e Desemprego (Caged) also point to a < favorable scenario, characterized by the generation of approximately 540 thousand new vacancies with a formal contract in 2018, and 165 thousand in the first quarter of 2019. The main sectors responsible for the increase in number of jobs are the most labor-intensive: services and manufacturing industry. Graph 11 Balance of formal employment by quarter (2014/2019) Source: IBGE, Directorate of Surveys, Department of Population and Social Indicators. Abramed Elaboration.. Employment Balance (Series with Adjustments)600,000 399.737 400,000 -12,587 -303,129200,000 -39,040- 243,216 -200,000 164,256 -400,000 -600,000 -800,000 -1,000,000 2014 2015 2016 2017 2018 2019 Q1 Q2 Q3 Q4
048 3ABRAMED HEALTH MARKET: THE PRIVATE AND THE PUBLIC PANEL
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APabnraeml ed The DNA of the diagnosis 2019 Annual publication | 2nd edition