Peru preparing to take its healthcare the next step forward

With Peru's economy presently growing at a rapid pace, the South American country has decided the time is right to take on development of a broader healthcare system that can deliver care to those who need it most. Peru's healthcare system is lagging behind most of the rest of Latin America, especially Argentina, Brazil, and Chile.

Peru's efforts in this sector have been formally underway since the beginning of 2014. Milliman was enlisted to provide actuarial expertise. The 25-person team assembled for the project included Peruvian government stakeholders and regulators, physicians and economists specializing in public health, and information technology experts. The project was funded in part by USAID and the Inter-American Development Bank.

Milliman's role involved providing feedback on the team's work plan, putting together a checklist to help verify that team members evaluated the project as thoroughly as possible, and participating in a three-day visit to conduct a workshop and train the Peruvian team on actuarial methodologies, best practices for establishing health provider networks, quality considerations, and issues to monitor closely for the final report. The project included a meeting with the Ministry of Health to discuss potential shortcomings of the current approach and ideas on how to address them.

They don't have very many actuaries in the region and an explanation of what an actuary was had to be provided. To illustrate the problem, a life actuary was hired at one point by two companies to produce rates for the private health market because he was the only actuary there. Regulators rejected his rates, claiming that they were anti-competitive. In fact, the rates for the two companies were based on identical assumptions. But it was the only actuary they had available.

It was something of an odd deficiency in some ways, given the high levels of education and skill otherwise found on the Peruvian team. Many held advanced degrees from world-class institutions and were highly skilled people, adding to the surprise over how limited the actuarial resources were there.

The Peruvian team was also highly interested in the status of the Affordable Care Act and the ongoing healthcare reforms in the United States. The Peruvian health system is still evolving, but the country also has a mix of private and public health systems. In many ways, like much of Latin America, the U.S. system is seen as a successful model to emulate.

The team is hoping to produce a framework and 10-year budget for a comprehensive healthcare program that will serve the populations living in extreme poverty in rural regions of Peru.