I OVERVIEW

Mexico has a population of approximately 110 million individuals, 75 per cent of which may be considered as urban population, and whose life expectancy has increased from 34 years in 1930 to 76 years in 2016.

This fact, among others, leads to specific risks and health requirements prevalent in urban populations, which are subject to non-transmittable sicknesses, maladies and accidents, rather than infectious and undernourishment maladies that are more common to rural communities, which have less access to basic infrastructure and services.

This situation means a great challenge to the Mexican government in terms of rendering and regulating health services for an older population.

The Mexican government has acknowledged in several official documents the relevance of health as a fundamental human right and the obligation of the state to provide extensive healthcare to all individuals in the country – a situation that is, in reality, far from the official position of the authorities.

The Mexican Federal Constitution (the Constitution) establishes health as a fundamental right and provides the basis for the government to enact provisions regarding, inter alia, health services and medical attention.

The main law regulating these matters is the Mexican General Health Law (the Health Law) and its diverse Regulations, which establish health services as a matter of public policy and interest subject to sanitary control.

Under these provisions, the authorities in charge of health and medical-related services include the President of Mexico, the General Health Board, the Ministry of Health (MH) and state governments, among others.

The MH, through the Federal Commission for the Protection against Sanitary Risks (COFEPRIS), has the broadest jurisdiction regarding the control and supervision of these services and activities.

The Constitution also provides the Executive Branch with the authority to issue regulations that clarify or specify the content of existing laws passed before Congress, which in the specific case of health-related services include the Regulations For Medical Services Rendering (the Services Regulations), the Regulations in Health Research Matters and the Regulations in Publicity Matters (the Publicity Regulations), as well as those provisions governing the National Institute of Social Security (IMSS), the Social Security Institute for Governmental Employees (ISSSTE), the Public Administration Organic Law and a considerable number of other legal provisions.

In addition, medical and health-related services are also subject to Mexican Official Standards (NOMs), which are administrative guidelines establishing technical specifications and characteristics, among other requirements applicable to the premises, systems, activities, methods, etc.

Provisions governing these services also include official communications and guidelines issued by the health authorities, which may or may not be published in the Federal Official Gazette.

II THE HEALTHCARE ECONOMY

i General

Health services can be classified into two main sectors: public and private.

Within the public sector, the most relevant health institutions are IMSS and ISSSTE, together with the Mexican Armed Forces (SEDENA) and the Navy (SEMAR) medical services and facilities, the MH hospitals and clinics, and local state authorities.

The private sector includes hospitals and clinics, independent services providers, private and independent medical personnel and health professionals, and to some extent, insurance companies.

The population groups entitled to medical and health services may be divided into three main groups:

  • a formally employed workers and their families;
  • b self-employed individuals, private practitioners, informal employees, unemployed individuals and other individuals not considered as part of the formal employment group subject to social security; and
  • c individuals choosing to use independent health services.

The first group, whether belonging to the public or private sector, are entitled to social security services. These services currently cover a considerable percentage of the Mexican population.

The second group has traditionally been dependent on health services directly provided by the MH on a public assistance and welfare basis, as well as services rendered under the Popular Insurance Programme (PIP). The latter is a programme developed to render health services for specific maladies to those who are not part of the first group.

The last group will normally use private medical insurance and health services through direct payment, without depending on the state’s social security structures.

ii The role of health insurance

Insurance is compulsory to users of healthcare services who are employees, since employees, together with their employers, must contribute certain amounts to the public institutions that render health services (IMSS or the National Workers Housing Fund Institute (INFONAVIT)).

Health services generally provided by the IMSS and INFONAVIT include:

    • a health and maternity insurance;
    • b work risk insurance;
    • c retirement and old age insurance;
    • d social welfare; and
    • e other health-related insurance.

Individuals not considered as ‘workers’ for purposes of compulsory insurance may voluntarily request an affiliation to the IMSS that may provide them with part of health and maternity insurance.

Individuals not enrolled in the above institutions may be subject to the PIP, which provides only specific health-related services (including some surgical procedures) and the corresponding drugs and medicines required by patients.

The part of the population not covered by any of the above programmes or medical protection may receive some health services from federal or local agencies, however, these are mainly emergency and basic services.

In case of individuals covered by private insurance, they will be subject to the benefits and coverage contracted and agreed with the insurance company, which may be considerably diverse and varied.

iii Funding and payment for specific services

Health services rendered by the above institutions are financed through the ‘social security contributions’ paid by the employer and the employee.

In case of individuals covered by ISSSTE, SEDENA and SEMAR, the employer would be the government itself, whereas in case of private individuals and entities having workers, part of the contribution is paid by the employer and part by the employee.

Other health services may be funded by direct budget from the federal or local governments and through payment of ‘fees’ collected from the users of such services.

In case of private parties rendering these services, funding is obtained either through direct charging of services or through payment by insurance companies in the percentages and based on the coverage agreed with the health services user.

Public health coverage does not include any and all kinds of procedures, but rather, only those concepts formally considered within the specific coverage of such institutions. Concepts such as ‘wellness’ and ‘alternative health therapies’ are outside the scope of the services rendered by these institutions. Although these concepts are not formally forbidden, in most cases, they are not recognised, nor do they receive public approval or coverage.

III PRIMARY / FAMILY MEDICINE, HOSPITALS AND SOCIAL CARE

In Mexico, there are approximately 25,000 premises registered to provide health services, of which, approximately 4,500 are hospitals (1,200 corresponding to public institutions and 3,200 to the private sector).

Access to health services in private hospitals and institutions is subject to the contractual obligations established by the parties giving and receiving such services, with the competent governmental agencies only responsible for regulating the premises, and the characteristics and quality of the services.

Exceptions to the above may be made in very rare cases of disaster situations or medical emergencies. However, such situations must be formally established by the governmental entities.

In case of public health institutions, receiving the necessary health services may be a cumbersome and time-consuming process.

Except for the SEDENA and SEMAR services, most public agencies require preliminary medical review at the hospital or clinic corresponding to such individual’s registered domicile.

Based on such prior review, a general doctor will determine whether the patient requires further analysis by a specialist, or specific analysis and procedures, or whether he or she can provide the applicable treatment and medicines.

If necessary, the patient will be required to schedule the visits to the specialist doctors as well as the laboratory or analysis procedures needed, which may take up to a couple of months to complete.

This system may be extremely inefficient and time-consuming, resulting in an untimely rendering of the required treatment and medicines, which ultimately has a direct impact on the patient’s health, however, owing to the lack of proper infrastructure and equipment, it is not possible to render the required services in all health premises operated by public institutions, being in cases necessary for the patient to receive such specialist services in premises located in other states or even only in Mexico City.

Public institutions professionals are restricted in the scope of their activities by three main legal bodies, which are: the Health Law, the Services Regulations and the Professional Practice Law. However, these are also further clarified through internal regulations, procedures and structures implemented by each specific institution.

It should be noted that public and private health institutions are heavily regulated, by being only authorised to carry out the specific services and procedures included in the corresponding licences and authorisations, thus not being possible, for example, to carry out clinical analysis at premises lacking the specific authorisation.

These authorisations and licences depend on the available infrastructure and certification of processes formally requested before COFEPRIS or other competent authorities.

Among the relevant regulated activities are nursing services, general medical services, surgery procedures, medical procedures involving radiation sources, health services entailing investigation, psychiatric-related services, dental services, medical consultation, laboratory and medical samples, and organ and tissue preservation.

The specific technical requirements and conditions for the rendering of these services are generally set forth in NOMs rather than in Laws or Regulations, and may be of a very varied nature.

In case of clinical records and information obtained during the course of these services, special provisions exist – the same that are included in NOM-004-SSA3-2012 – which are subject to particular provisions regarding confidentiality and privacy protection provisions, many of which, in practice, are unlikely to be enforced by virtue of the lack of the necessary infrastructure.

IV THE LICENSING OF HEALTHCARE PROVIDERS AND PROFESSIONALS

i Regulators

The federal government, through the MH and COFEPRIS, is in charge of the implementation, coordination, verification and control of all human health-related matters.

Among the MH activities is strategic planning of the health services, health priorities determination, coordination with different governmental bodies, health attention regulation and supervision, and evaluation of services, programmes, policies and systems, etc.

COFEPRIS is the specific authority in charge of regulating and controlling any sanitary or health risks, including those related to premises, services, activities, tissue disposal, organ transplants, etc., as well as issuing the necessary licences, authorisations or certifications required for rendering health-related services.

In certain cases, these authorisation or certification activities may be executed together with other governmental bodies, non-governmental organisations, educative institutions and civil organisations, etc.

These services regulation include mechanisms and structures to certify education centres imparting medical, nursing, therapy, rehabilitation and other health-related education.

Certification of health professionals is controlled by the education institutions providing this knowledge, as well as the Public Education Ministry through its General Professional Practices Directorate.

As a general rule, health professionals must have a degree issued by a recognised education centre, and a federal professional practice licence issued by the Directorate. Additional certifications may be issued by specialised organisations coordinated by the National Academy of Medicine and the Mexican Surgery Academy.

Most of the approximately 80 medical schools in Mexico are associated with the National Association of Medicine Universities and Schools, and around half of them are recognised by the Mexican Counsel for Medical Education Certification, institutions that, although not authorities by themselves, are recognised as institutions that may validly certify the quality of medical education.

Likewise, nursing and related practices certification is in charge of the Mexican Counsel for the Certification of Infirmary.

In case of institutions, the operating licences and authorisations are governed by COFEPRIS based on the specific provisions of the Health Law and applicable NOMs.

Premises certification and authorisation will require the due compliance with technical and formal requirements established by NOMs and the internal criteria and requirements set forth by COFEPRIS.

ii Institutional healthcare providers

Under Article 34 of the Health Law, rendering of health-related services requires a licence or authorisation depending on the type of services rendered or premises operated. In other cases, such as private practice and consultation premises, it is only necessary to file a premises operation notice.

Generally, formal licences and authorisations are required for premises where some sort of technical activity is rendered, for example, analysis laboratories, rehabilitation centres, premises where surgical procedures are rendered and premises where x-ray or similar technologies are operated.

Possibly some of the most complex authorisations and heavily regulated services are those related to cosmetic and other kinds of procedures not necessarily related with maladies or sicknesses, but that represent a clear health risk for individuals receiving these services.

Although the authorisation and licensing processes for specific premises operation are apparently straightforward and clear, in practice, a considerable number of issues are left to the governmental official criteria, a situation that may practically complicate securing the necessary licences and authorisations, as well as raising the possibility of corruption acts.

The general rule is that these licences and authorisations may be secured through the filing of the corresponding application, payment of federal (or local) governmental fees and evidence of due compliance with the technical and formal requirements, together with possible inspections and on-site visits.

Licences and authorisations may be revoked or suspended by the health authorities in case the corresponding requirements cease to be met during the course of the operation of such premises or it is determined that the operation of such premises may represent a sanitary risk for the population.

These revocation or suspension procedures are subject in all cases to the formal requirements for verification procedures set forth by the Health Law and its Regulations, and Federal Law on Administrative Procedures, which in essence implies the formal serving of a notice stating the review, scope of the review, authorised officials, preliminary determinations, preliminary arguments and evidence in charge of the visited party and a final resolution by the authority.

Any party affected by an unfavourable resolution issued by the competent health authorities may file, as a general rule, an administrative appeal before the same authority that carries out the determination or a nullity petition before the Administrative Justice Court. In very specific cases involving direct constitutional provisions, it is possible to file a constitutional remedy or amparo petition.

These alternatives present specific challenges and requirements and their filing will greatly depend on the nature of the resolution, imposition of fines and penalties, and particular issues of the resolution.

Lack of securing the applicable licence or authorisation or filing the corresponding notices may, under the Health Law Articles 373, 375, 419, 420, et al, derive fines and penalties ranging from temporary and definitive closure of premises and fines ranging from approximately US$8,000 to US$25,000.

In some cases, operation and providing services without the proper or required licences and authorisations may also represent a criminal offence subject to criminal procedures under the Federal Criminal Code.

iii Healthcare professionals

Health and medical professionals’ authorisation and licensing are subject, in principle, to the issuance of the corresponding degrees or titles by duly authorised education institutions or third parties recognised by the MH and COFEPRIS as entitled to certificate professional capability in health-related matters.

Under Article 79 of the Health Law, exercise of professional activities related to medicine, dentistry, biology, bacteriology, infirmary, social work, chemistry, psychology, nutrition, pathology and other related professions require a degree recognised by the education authorities and duly registered with the latter when health or medical-related activities are carried out by such individuals.

In this same connection, technical and auxiliary activities that require specific knowledge related to medical attention, dentistry, clinical laboratory, infirmary, physical therapy and rehabilitation, prosthesis, orthopedics, biostatistics, pharmacist, etc., require a degree issued by a recognised institution.

Individuals carrying out these activities without the proper certifications or degrees may be subject to fines and imprisonment under Article 250 of the Federal Criminal Code.

Under the Mexican statute, it is not necessary that these individuals have professional or malpractice insurance. However, based on recent developments regarding damages arising from negligence and malpractice, this kind of insurance is being more commonly implemented and contracted.

Some healthcare-related services may be carried out by non-professional individuals, on the general condition that they do not appear or present themselves as being professionals. In addition, some specific exceptions are applicable, as could be traditional medicine and similar practices.

V NEGLIGENCE LIABILITY

i Overview

Under Mexican law, there is no specific procedure or system for the compensation of possible injuries or damage arising from the improper or incorrect medical services and procedures.

Individuals affected or harmed by a medical procedure or service may file a lawsuit (ordinary civil procedure) to request the compensation of damages.

Until recently, only direct damages could be requested, however, recent jurisprudential criteria have opened the possibility for affected parties to file for punitive and consequential damages, as well as moral damages arising from medical negligence and malpractice.

In 1996, the National Commission for Medical Arbitration was created, whose main purpose is to solve in an amicable manner controversies between medical services suppliers and patients in an instance prior to judicial procedures. However, from a practical perspective this instance is generally ignored or non-efficient to achieve such agreements.

From a criminal perspective, medical negligence may derive in diverse criminal offences, ranging from physical harm all the way to murder.

ii Notable cases

Because of social media and technology, a significant number of cases regarding medical negligence and malpractice in public health institutions have recently been brought to public attention, and have been analysed by institutions responsible for protecting human rights through the applicable mechanisms (the Federal and Local Human Rights Ombudsman).

These cases include the denial of services for childbirth to individuals not formally registered with IMSS or other institutions, the denial of health services to the indigenous population or poor or homeless individuals, incorrect limb amputations, incorrect organ removal and violation of privacy of patients through exposure on social networks.

Although health professionals involved in these situations have argued that in most cases there is no malpractice or negligence, the fact is that there is a greater awareness of these situations and a greater interest by the public and diverse governmental institutions to better control or even eradicate and provide assurances of non-repetition and satisfaction in these situations.

Although these situations have been politicised, in most cases it has been determined that there exists an authentic malpractice or negligence by many health professionals in public institutions.

Likewise, there exists a trend that actually permits punitive and moral damages to be granted to the victims of these situations, as well as direct punishment of the individuals carrying out such malpractice or negligence, together with the institution.

On the other hand, doctors and other health professionals have carried out a series of demonstrations and complaints regarding the poor or limited technical and logistics situation prevailing in several governmental health institutions, including lack of personnel and equipment, lack of formal processes, political involvement in health services matters, lack of opportunities, and extremely low wages and salaries.

VI OWNERSHIP OF HEALTHCARE BUSINESSES

Ownership of a healthcare business is not restricted to a specific kind of legal entity or individuals holding determined degrees or similar qualifications, nationality, financial viability, etc.

The ownership of the business itself is not restricted or regulated, however, as above, the technical characteristics and conditions of the premises where services are rendered, as well as the technical qualifications of the individuals rendering the services, are subject to certain conditions and requirements.

It should even be noted that the possibility exists for health professionals holding titles and degrees in other countries to render these services in Mexico, a situation that may more often be seen in cases of, for example, cosmetic procedures, with ‘medical tourism’ a booming industry in some parts of the country.

VII COMMISSIONING AND PROCUREMENT

Procurement of health services is generally carried out by governmental entities rendering the services directly or indirectly. The procurement and, when it occurs, the bidding procedure are carried out directly by the entity or institution requiring the services.

These processes may be on a federal, local or, in some cases, municipal basis, the most relevant provisions being those included in the Federal Law on Acquisitions, Leasing and Services of the Public Sector.

Under this Law, participants in a public procurement or bidding procedure will require to file a technical and an economic proposal that will be analysed and, as the case may be, awarded.

Under this Law, kinds of public procurement may be diverse, including national and international goods and services procurement procedures.

In some very isolated cases there may be restricted procedures of three or more specific suppliers, however, the requesting entity must duly evidence the need for such limited number of participants.

Finally, in some specific cases, among which are national security and emergency, the governmental agencies may carry out a direct assignment of the services procurement.

It is worth noting that in case of national services procurement processes, legal entities resident in countries with which Mexico has entered into a free trade agreement may participate and be considered as a domestic supplier, if the corresponding agreement has specific clauses in this regard.

Likewise, it is possible that as of the entry into force of the new national anti-corruption system and provisions (June 2017) new requirements in this regard will be included in the clauses and conditions for public procurements and biddings.

This will be particularly sensitive to entities rendering services to public health institutions in Mexico as a result of the amount of services required and the necessary controls for this type of services rendering that, in practice, may be required.

VIII MARKETING AND PROMOTION OF SERVICES

The rules regulating the advertising of health-related services are far less restrictive than those regulating the advertising of pharmaceutical products and medical devices, however, this marketing and promotion must meet specific requirements and controls established in the Publicity Regulations.

The concept of ‘publicity’ for health-related matters included in the above Regulations is defined as any activity that includes all creation, planning, playing and broadcasting processes of advertisements in communications media with the purpose of promoting the sale or consumption of products or services.

Under the Health Law, there is a difference between publicity intended for health professionals and for the public at large.

The first refers to information regarding characteristics of services, procedures and scientific information used for publicity or promotional purposes but restricted to specialised media given to health professionals.

The second is more restrictive and, in general, requires specific licences and authorisations prior to the actual broadcasting or publication of such publicity.

Although the existing provisions are specifically applicable to goods and products rather than services, the general principles regarding the availability of scientific information and hard data sustaining the claims included in this publicity are applicable to that related to services as well.

Because of obesity currently being a major health concern in Mexico, particular attention is paid by the health authorities to services related to aesthetic procedures, reduction of body size, amendments or modifications to body parts and cosmetic surgery.

IX FUTURE OUTLOOK AND NEW OPPORTUNITIES

Health is a major concern for the Mexican government, and not only because of the number of individuals in the country and costs associated with it.

Owing to the lack of the necessary human and economic resources, the Mexican government has implemented diverse programmes intended to provide the greatest possible number of services to the greatest amount of the population under the most cost-efficient structures.

A considerable number of the challenges faced by health services will greatly depend on the existence of the necessary funding and efficient expense by the authorities’ reason why new technologies have been implemented and recognised by the authorities from a legal or practical perspective.

Many of these have as a main purpose the possibility of rendering services to the most isolated and poorest communities in the country. In connection with this, we expect new procedures and use of technology to be recognised by the authorities as well as regulated (for good or bad) in the short term.

The use of many of these technologies is part of the ‘National Digital Strategy’ implemented by the Executive Branch since 2014, which intends to have more agile procedures through the use of technology and remote access.

For instance, COFEPRIS has developed various online projects that will allegedly permit up to one-third of the different procedures followed before them to be electronically filed rather than under traditional formal written procedures. Because of the nature of the information that some of these procedures require, special attention has been provided to the data privacy and security of these systems by the competent authorities.

One of the most relevant issues for 2017 is the potential implementation of new provisions regulating telemedicine services. Under the Health Law and specific NOMs, health service providers may use ‘Practical Clinical Guides and electronic media’ to support their activities.

This has permitted the issuance of a NOM draft to regulate health services through electronic media, and including topics such as data protection and confidentiality, professional liability of health service providers; however, very relevant issues such as specific requirements for online medical advice at premises having no physical presence of health professionals (home, offices, etc.) or international services have not yet been considered.

The main purpose of these provisions is to support complete and economic health coverage, particularly to isolated communities and high-poverty areas.

As a consequence of the aforementioned new anti-corruption laws, the business structures implemented by most companies engaged in governmental sales and services rendering will require substantive review and the implementation of new mechanisms. Since a considerable number of services may be outsourced or procured from private entities, this will be of particular relevance to the health services industry, especially when providing services directly or indirectly to governmental entities or other entities subject to these kinds of controls.

On the other hand, one of the most relevant issues in connection with health in Mexico is the epidemic of obesity affecting the population, and particularly the urban and child population.

In accordance with the OECD ‘Fit Not Fat’ publication, Mexico is the member with the second-greatest number of obese individuals. Three out of 10 individuals are considered obese, and almost seven out of 10 are overweight, with one out of three children in the country being either obese or overweight.

Diabetes is one of the most common and direct consequences of obesity, and has a constant and very fast growth in Mexico, representing one of the largest health costs for the Mexican authorities. Close to 10 per cent of the Mexican population has some degree of diabetes, one of the greatest percentages in OECD countries.

According to the MH data, in 2013, 55,992 people died from type-2 diabetes, and during the same period, 148,681 died from cardiovascular diseases. The above developments are a consequence of concerns regarding obesity, lack of access and inequality, among others, and aim at improving the health of the population through improvements in the regulation of the health services industry. This is possibly the greatest challenge in health matters for the authorities during the years to come.

In connection with infectious disease and maladies, the most urgent threats according to the Pan American Health Organization are infectious diseases such as dengue and zika, which are still present in Mexico because of its geography, vast regions for mosquito reproduction, lack of health services and absence of preventive actions.

During 2016, 19,510 cases of dengue, followed by 19 deaths, were confirmed, and in the case of zika, of particular concern has been the risks for pregnant women owing to the possibility of microcephaly in babies. The number of pregnant women formally registered as having this malady during 2016 was 3669.

The reported number of chikungunya cases was 722 during 2016, according to Pan American Health Organization.

Mexico has, in accordance with the OECD, a significant inequality and lack of access to the health system, which together with inadequate preventive actions has led to the lowest life expectancy of all OECD countries.

X CONCLUSIONS

Health is one of the most relevant human rights contemplated in the Mexican legal statute and is a very relevant cost and matter of public policy for the government to consider.

From a strict legal perspective, a very detailed and robust regulatory regime has been implemented in connection with the rendering of services that may affect health and well-being in any manner; however, from a practical perspective, very relevant constraints exist for the authorities in relation to the human and monetary resources required to correctly implement and enforce these provisions.

Corruption is a major issue when dealing with authorisations, licences and similar issues in connection with health services because of the position of the authorities, and in many cases, the lack of public information regarding the position or rules of application of the applicable provisions by the authorities.

Obesity and diabetes represent some of the most relevant health concerns and thus are a primary focus of the Mexican health authorities from the direct and indirect perspective. Services and processes related with these maladies tend to be particularly focused on by the authorities, although with a more punitive perspective than a preventive perspective.

The formal authorisation of certain substances, such as THC and plant derivatives, to be used as recognised medicines or legal drugs will probably represent an important challenge for the authorities in connection with their therapeutic use and rendering of services related to the use of such products.

1 José Alberto Campos-Vargas is a partner at Sánchez Devanny.