Mexico's siren song shrouds shoal waters.

Culture, policies are challenges to tapping into enormous market

There's a siren song in the air luring health care providers south of the border, but there are shoal waters within the Mexican market that pose dangers for San Diego hospitals.

Some of the first American ventures into building and managing hospitals in Mexico have failed because there are unique cultural aspects and other intricacies to transferring American-quality health south of the border.

A two-day conference that begins Monday (July 18) in San Diego will address some of those complexities for American and Mexican experts and interest groups, such as investors, hospital operators, insurance companies, and medical equipment and pharmaceutical manufacturers.

Organized by the U.S. Trade and Development Agency and the Institute of the Americas at UCSD, the conference will provide a forum for business representatives to meet and set up joint ventures and other major projects in Mexico.

The conference also will present an analysis of the health care projects already in the pipeline for Mexico, and future trends in the industry.

Mexico's population has grown at an annual rate of between 2.3 percent and 2.8 percent in the last decade, and, according to the Ministry of Health statistics, there has been a 62 percent increase in the number of Mexicans eligible for public health services over the same period.

Mexico today faces important health care bottlenecks, as it grapples with the rising costs of, and demands for, universal health care.

Dr. Gillermo Soberon, president of the Mexican Foundation for Health and former minister of health, says that the Mexican government wishes to stimulate the role of the private sector to complement government-provided services when funding of expansion in the public sector is difficult.

But there are some areas where government economic conditions and policies will not allow immediate private investment, according to Dr. James Nelson, head of International Medical Associates, Inc., a health care facility development firm.

Nelson, who is also a neurologist at Scripps Memorial Hospital, has been in charge of Project Identification Mission, an extensive study on Mexico's medical care that is funded by the U.S. Trade and Development Agency.

One example of the kinds of roadblocks that inhibit the growth of the private health insurance industry and HMOs, Nelson said, is a government policy that forces employers to contribute to the government's social security system, rather than allow them to freely choose between that system and other private insurers.

Nelson argues that the growth of private health care is critically dependent on a change of policy in this area.

He also said there has not been a clear-cut answer about the government's policies regarding further expansion of the public health care system.

"The question is, will the government continue to utilize resources to expand its health care system, or will it instead allow the private medical sector to be the one to fill the voids in health care?

"The government could even subcontract with private facilities in a city where they do not provide certain services."

Still, Nelson's study for the U.S. Trade and Development Agency found that 25 percent of the 60 million people today covered by Mexican government health care systems -- more than 15 million people -- cross over frequently to private health care.

And, given the limitation of resources in the public health sector and the fast-growing demand, long delays in receiving certain types of care are a daily reality in public health care. Therefore, more and more people are approaching the private health care system, and as a result, also straining its capacity.

The expansion needs of the private sector's health care system in Mexico, said Nelson, open a flood of opportunities for hospitals, pharmaceutical firms and insurance companies.

Mexico is the 15th-largest medical equipment market in the world, with more than $500 million in U.S. equipment imported in 1993, despite the sluggish economy.

Under NAFTA, tariffs on U.S.-produced health care equipment have been eliminated on 50.3 percent of the market; another 36.2 percent will be eliminated over five years; and the additional 13.5 percent will be lifted over 10 years.

According to industry analysts, the potential exists for health care exports to double in the next five years as a result of the increasing purchasing power of the expanding Mexican private health care market.

Nelson, also chairman of Scripps Memorial International Medical Committee, said his research also shows that Mexico's private and public health sectors are in dire need, not only of advanced medical technology, but also of planning and computerized information systems, medical record technology, and clinical care systems tailored to the large market of small and medium hospitals.

He explained that, in the private sector, physicians are struggling with inadequate facilities and lack of advanced technical equipment that would allow them to provide the level of care for which they are trained.

"It is in the private sector where foreign investment, administrative methods and technical assistance are most needed. Hopefully, the emergence of the private medical insurance industry in Mexico -- which has already begun -- will further open the enormous potential for growth that exists," said Nelson.

U.S. ownership of Mexican hospitals is already beginning.

Columbia Health Care recently purchased a hospital in Queretaro, a medium-size city northeast of Mexico City.

And Humana Inc., a health care firm based in Kentucky, built and operated a major hospital in Mexico City. But Humana's operation of the hospital was unsuccessful, and the company ended up selling its shares.

Subsequently, the Humana Hospital became today's highly successful Hospital Angeles del Pedregal, which is even considering a major expansion and secondary facility.

The Humana experience has become a model for pitfalls and an example of the complexity of cross-cultural projects and the difficulties of transferring health care quality.

According to Nelson, Humana Inc. brought from the United States all of its senior managers -- including the head nurses. This high-performance team did not speak Spanish and was completely ignorant of Mexican culture and customs.

"They were unable to perform once in Mexico because they could not bridge the health care-style gap between the two cultures," Nelson said.

"They could not provide quality services to a clientele they did not understand; neither could they supervise efficiently their Mexican employees, with whom they could not communicate," said Nelson, who has spent more than 1,000 hours in Mexico's hospitals, talking to physicians, nurses and technicians.

"All aspects of U.S. health, technology, maintenance programs and community involvement can be introduced into Mexico, but only if they are adapted carefully to local culture and customs," he said. "Respect for Mexican culture is a must, if one wants to succeed in that country."

For example, ScrippsHealth in San Diego is about to embark in the building and management of a $25 million, 80 to 120-bed hospital in Aquascalientes, a city of 800,000, with an additional 3.5 million people in a 100-mile radius.

A group of citizens formed a corporation, Fundacion de Mexico, four years ago, and contracted with Scripps for assistance. This hospital will be one of the first non-profit, open-staff, community-owned facilities in the country.

But because it is a first, the project is already running into some problems precisely because of the novelty of its concepts to the local culture.

However, ScrippsHealth is studying how to adapt itself, its management and its operation to the Mexican mentality and customs, without letting some level of quality slip between the cultural cracks.

Steven Goe, vice president of International Markets of ScrippsHealth, said it has been hard to raise the money that was expected to come from donations. He says that Mexicans are not accustomed to U.S.-style philanthropy.

"They are used to giving to the church, but have never heard of a non-profit private hospital," Goe said.

Banco Mexicano is loaning $10 million, and the remaining $10 million is supposed to come from fund-raising.

The site was donated by a family, but only $2 million has been pledged in donations.

Goe also says that Scripps of Aquascalientes will be run by one of many Mexican doctors who has been trained in the United States; someone who knows what U.S. quality expectations are and, at the same time, also knows what the Mexican cultural expectations are.

This person will be charged with making the two sets of expectations complementary, Goe said.

"We will provide the money to reward quality service and educate the staff so they have the skills to perform at the level required by U.S. quality standards of care," he said.

According to Nelson's research, one of the major problems in Mexico is the lack of well-trained nurses and other paramedical personnel.

The nursing profession has very few highly skilled nurses in sub-specialty areas such as intensive care, cardia-care and the like. The salaries of nurses are in the range of $350 a month or less, giving them little incentive to spend more time in school to specialize.

Most nurses are graduates of secondary school or high school, who were unable to go to a university. Hence, the Aquascalientes hospital will have to train nurses to specialize at its expense.

A similar situation exists in the technical field. There are very few well-trained physical therapists, cardiology technicians, dialysis technicians and so on.

Goe says that Scripps of Aquascalientes will bring its nurses to San Diego to train for three-to-six months before the facility opens, and then Scripps La Jolla will send bicultural-bilingual nurses to help adapt the U.S. methods to the Mexican operation, and provide some more training on site.

ScrippsHealth has applied for a $2 million grant to open a nursing and health professionals school in Mexico that would also provide advanced specialized training for technical personnel.

U.S. administrative personnel will also require training to help them meet cultural expectations.

Nelson said Mexicans are used to personal care.

"The whole family of each patient is usually involved in the health care process," he said, "and so the facility has to provide a full range of services for the families of patients, such as cafeterias, larger waiting areas, large rooms, flexible visiting rules, and a big central chapel for prayer and other religious services."

Added Goe: "We are planning to have a sofa bed in each room because it is customary for a relative of the patient to be present 24 hours a day.

"We have to allow the significant other of the patient to partake in care giving. That's the custom."

Nelson warns that U.S. hospitals cannot come to Mexico with superior knowledge and know-how, without bringing empathy for patients, intense cultural sensitivity, and some investment capital to show commitment to being a partner.

"It all came together in my mind when I was watching Dr. (Antonio) Hurtado in the main lobby (of the Hospital de los Angeles)," Nelson said.

He recalled watching Hurtado, the hospital vice president, "greeting patients and workers personally. ... He does a greeting round every day."

Building a relationship with patients and their families is part and parcel of providing quality care in Mexico.

"The family requires a lot of constant explaining of what is going on with their sick family member and what the future may bring," said Nelson, adding that a personal touch is also required with employees to run the facility smoothly.

Nelson believes that, with empathy, it is possible to transfer U.S. quality care to Mexico, where there is great enthusiasm to raise the standards of health care services and adapt U.S. methods and style.

Crevoshay is a free-lance writer based in San Diego and a writer for Mexico's business daily, El Financiero.