The operating deficit in the health sector is about R$1.7 billion

In 2022, private health plans ended the year with an operating deficit of R$11 billion. It is a number in which no one can be mistaken, and in its composition are included an innumerable number of subjects which deserve, each, a detailed study, because they are all individually related, and lead, added, to a question, the answer of which can be dramatic: Are the plans Is the sanitary facilities of the current design applicable? Let’s not forget that it is based on a very bad code.

A superficial reading of the results for private health plans in the first half of the year can lead to a misleading answer. According to the National Private Health Agency (ANS), in the first six months of 2023, the plans generated a profit of R$968 million. Compared to the consolidated number of the previous year, the result will be good, but if the accounts are opened, we will see that it is not good, and that the positive result is due to the specificity of the products in the insurance sector.

With the ability to invest large sums of money in public securities as a result of their invoices and use them to build up the loan for business continuity, these companies achieve positive financial results which in addition to the result of the acceptance account, the number of the last line of the balance sheet can be converted from loss to profit.

A careful reading of the sector’s performance will show that the operating deficit is still high, around R$1.7 billion. In other words, the revenue from the operation does not support the company’s direct costs, and if interest rates fall, the result can again be negative.

It is clear that the average performance of the sector is not consistent with the result of the analysis of the operators individually. According to ANS, in Brazil there are a total of 920 operators, of which 680 are medical assistance schemes and 240 are dental professionals.

It is important to note that larger operators, since they have more revenue, tend to have a more expressive financial result, which improves their performance.

The good news is that, last May, the sector broke the record for covered beneficiaries, with a total of 50.7 million people. It is the highest number since the start of the historic series, the second month in a row for patron growth and the second month in a row that the participant record has been broken. Previously, the best result was in November 2014, with 50.5 million beneficiaries.

At the moment, there is no sign of a trend reversal, but currently 25% of the Brazilian population is already included in the system. Therefore, depending on income and employment, the maximum potential beneficiaries that the current design of private health plans will serve is close. On the other hand, the expenses are not limited. Either the system needs to be revised, or the Brazilians’ dream of a third consumer may have its days numbered.