Argentina: the challenges of the health sector in 2024

Argentina is experiencing an acute economic crisis and there is no sector in the country that has not felt the impact of this reality. To understand the seriousness of the situation, it is worth considering some data.

For example, between April and May of this year alone, Argentines saw the annual rate of inflation Move between 250% and 300%. In addition, the first quarter of 2024 was a combination of ups and downs. That's because, for the first time since 2008, the country was able to raise more than it spent. On the other hand, the Gross Domestic Product (GDP) tumbled 5%.

In the analysis of economists interviewed by G1, for example, the general perception is that “the exchange rate remains unstable, the growth of reserves is not fast enough, and public debt remains a ghost for the economic team”, as stated In this matter.

In practice, all of this means that the level of poverty in society has reached new levels and, before it improves, the picture must get worse, as the current president, Javier Milei (La Libertad Avanza), said during his inauguration in 2023.

But how does the health sector stand in the middle of all this?

Macroeconomics vs Health

The Covid-19 pandemic profoundly impacted the health sector and the global economy, but the consequences in Argentina were slightly more severe and its effects are still being felt significantly today.

According to Omar Lopez Mato, ophthalmologist and medical director of Institute of Vision, in Buenos Aires: “in Argentina, the poverty level increased by 50%. In other words, half of Argentines became poor in recent years, while in the 1970s this percentage was less than 5%,” says Lopez Mato.

In the health market, the consequences of this economic framework have resonated with higher costs with labor, supply chain and medicines. However, although there are several issues, there is one that currently stands out: compensation.

The search for better salaries

With regard to labor, the decrease in purchasing power meant that the first half of this year was marked by wage conflicts between health professionals and institutions.

In May, the situation culminated in strikes and protests. According to the news portal The Chronicler, the unions of the Federation of Argentine Health Workers' Associations (FATSA) spent three days protesting and absenting from their shifts at clinics and hospitals, with the objective of boosting wage negotiations.

In this sense, the ophthalmologist reinforces the issue of the discrepancy between the cost of medical appointments and the amounts received by doctors. “In Argentina, an ophthalmological consultation, for example, costs around 2 to 10 dollars (something in the range of 10 and 54 reais), while in Brazil it reaches 20 dollars (108 reais) and in Uruguay 25 dollars (136 reais)”, compares Lopez Mato. However, low salaries do not only affect this specialty.

In general, the payment for the service provided by doctors and nurses in the country is very low. According to the portal Rio Negro, which reports about the province of the same name, many professionals are leaving public health institutions to try to obtain better compensation within the private system.

In a public hospital, a nurse receives about 750,000 pesos (about R$4,200), while a surgeon receives starting at 900,000 (about 5,040 reais). In parallel, the private system offers less stability, in addition to requiring professionals to adapt to the tax collection and payment regime. Even so, the amounts receivable are significantly higher.

However, the possibility of higher earnings is influenced by the supply and demand ratio of each specialty, together with the number of consultations and procedures carried out, among others.

After the wage conflicts at the beginning of the year, a new compensation ceiling was approved in June. Therefore, the average salary (converted from Argentine pesos to real) of some categories of health institution professionals is:

• Biochemists, nutritionists and pharmacists: R$ 4,637.85
• Obstetrics and instrumentation: R$ 4,217.75
• Surgical nurses and sterilization personnel: R$ 4,032.91
• X-ray technical assistant: R$ 4,032.91
• Nurse or outpatient clinics: R$ 3,921.99
• Staff specialized in intensive care, coronary care unit, nursery, speech therapy and artificial kidney: R$ 3,921.99
• Personnel assigned to care for mental and nervous patients: R$ 3,921.99
• Technical team for hemotherapy, physiotherapy, pathological anatomy and laboratory: R$ 3,749.47
• Laboratory assistant for radiology, physiotherapy, hemotherapy, pathological anatomy and clinical analysis: R$ 3,749.47

Even so, some institutions saw a large decrease in employees. This is because, in addition to the professionals going to the private network, many are carrying out other activities, which sometimes generate the same compensation, but require fewer hours of work per week.

Supply chain and medicines

Meanwhile, keeping the supply chain running has been another major challenge for health, especially for private health.

Shortly before Javier Milei took over the country's leadership, many inputs saw a 200% to 400% increase in price, due to inflation. This scenario, added to the wage issue, placed private companies in a delicate situation, causing monthly fees to increase by 40%.

With regard to medicines, in April of this year, the president of Argentina also pressured private health companies to reduce the price of medicines, since the prices had varied by 90% from December to March. Of the 14% of the Argentine population that uses prepaid healthcare, the elderly felt the most about the increases. That's because many lost part of their income due to cuts in retirements, in addition to the low readjustment rate, which rose only 27%.

Given the extent of the health market crisis, the Chamber of Medical Diagnostic Institutions (CADIME) had already brought some proposals to reform the health system to the candidates in the last election. For the reform, the idea would be to slow down the consolidation of oligopolies, so that small and medium-sized companies are not further harmed - since the end of them would represent an even higher rate of unemployment.

Other costs for institutions

Among other costs, ophthalmologist Omar Lopez Mato also points out that financial difficulties have been aggravated by legal requirements related to the care of people with disabilities. “Here in Argentina, Social Works (OS) and prepaid must cover the costs related to assistance for the disabled, which creates a significant additional financial burden,” says the expert, highlighting the difference compared to other countries where the State assumes this burden.

Still in the view of the medical director of Institute of Vision, another point that requires attention from the Argentine health sector is the administration of clinics, because it is common for them to be managed by family members without medical training. With economists and other managers in control of these institutions, negotiating with these companies is difficult.

Regarding the specialty with which he works, Omar also cites as a challenge regulation of the ophthalmologist profession. This is because there is a lack of clear criteria for the certification of specialists in the country, which creates uncertainties regarding the qualification of professionals. “We want to create a single criterion for those who can call themselves an ophthalmologist and certify surgeons, to guarantee the quality of care,” says the doctor, stressing the need for stricter guidelines.

The future of the healthcare market in Argentina

In a comparison between Brazil and Argentina, Lopez Mato notes that while in Brazil there are good opportunities for consolidation in the Brazilian market — where investment funds have made large acquisitions to create large networks of clinics — in Argentina, the market is very concentrated in Buenos Aires, which limits the sector's potential for expansion and efficiency.

The economic crisis also affected investments in technology in the health area. Although ophthalmology is one of the most competitive specialties in Argentina, Lopez Mato points out that the investments necessary to maintain this standard are becoming unfeasible. “To set up an ophthalmology office, it is necessary to invest between 30 and 40 thousand dollars in equipment, something that other medical specialties do not require,” she explains.

Finally, despite all these difficulties, Lopez Mato believes that there is great potential in the Argentine health sector, but warns that, before advancing new technologies, it is necessary to resolve structural and economic issues that limit the growth and efficiency of the health system in the country.