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Exploring The Role of New Developmentalism in Strengthening Healthcare Systems - The Brazilian Experience
Exploring The Role of New Developmentalism in Strengthening Healthcare Systems - The Brazilian Experience
Abstract: The healthcare sector, crucial for societal well-being and economic stability, relies
on Brazil's Unified Health System (SUS). However, SUS's effectiveness hinges on securing a
stable supply of crucial inputs. Brazil's healthcare sector, beyond its economic role,
contributes significantly to research and development. In recent decades, Brazil has faced
challenges in productive deconcentration, causing a mismatch between domestic supply and
demand. This has led to heightened fragility and import dependence, exacerbated during the
Covid-19 crisis. The pandemic highlighted the need for policies supporting local production,
especially within the Health Industrial Complex (CEIS), facing import dependency
challenges. The fragility in the production base affects healthcare accessibility during
international crises, causing shortages in essential products. The absence of domestic
production in high-tech healthcare items intensifies inequality and jeopardizes universal,
high-quality healthcare services. The CEIS, covering chemical, biotechnological, mechanical,
electronic, and materials domains, plays a central role in fortifying the healthcare supply
chain. This research aims to answer whether increasing local production within the CEIS can
reduce vulnerabilities in the Brazilian healthcare system.
1
PPGE/IE-UFRJ
INTRODUCTION
In the Latin American landscape, Brazil has emerged as a significant economic and
social force, shaping its trajectory under diverse influences, from national-developmentalism
to neoliberal principles. However, it was during the tenure of Luiz Inácio Lula da Silva
(2003-2010) that a new approach, known as New Developmentalism, gained prominence.
This perspective, guided by a more integrated vision of development, transcended the
dichotomy between neoliberalism and national-developmentalism, seeking to balance
economic growth with social inclusion.
Within this panorama, a fundamental question arises concerning the role of the health
sector as a vital element in constructing a more prosperous and equitable Brazil. Over the past
six decades, health in Brazil has witnessed a complex coexistence between the
decommodification of access and the commodification of supply, culminating in the
formation of the Health Industrial Economic Complex (CEIS). This complex is not only an
indicator of scientific and technological advances but has also established itself as a strategic
component for capital accumulation and national development.
Unlike its predecessors, New Developmentalism recognizes the need for an
interdisciplinary approach that goes beyond traditional economic indicators. In this
perspective, health ceases to be viewed merely as a result of economic growth to become a
driving force behind that growth. The health sector is understood as a fundamental right, the
development of which is inseparable from broader economic and social development. In this
context, the Lula government outlined policies that sought to integrate economic
development with the promotion of social well-being, transforming the health sector into a
strategic component of this vision.
The Unified Health System (SUS), created in the 1980s, became the institutional
expression of this integration. During Lula's government, there was significant consolidation
and improvement of SUS, reinforcing the principles of universality, equity,
comprehensiveness, and primary care. The Ministry of Health strengthened the federative
pact, encouraged social participation, and implemented innovative initiatives such as the
Brazil Smiling Program, SAMU, and the Popular Pharmacy Program. These were not
isolated measures but coordinated efforts to create a solid foundation for health in Brazil.
The CEIS, an integral part of this movement, emerged as a crucial domain in the third
technological revolution, characterized by biotechnology and new information and
communication technologies. However, the complexity of the health sector is not limited to
its technological dimension. The coexistence of contradictory movements, such as the
decommodification of access and the commodification of supply, highlights the need for a
more holistic approach. The dynamic interaction between economic, political, and social
processes has shaped modern healthcare systems, demonstrating that health and development
are intertwined in a virtuous relationship.
Continuing on this journey, this study aims to deepen the understanding of the health
sector's role in national development, highlighting not only its achievements but also
persistent challenges. The analysis will extend beyond national borders, exploring Brazil's
relevance in the global health context and examining how the COVID-19 pandemic has
exposed vulnerabilities in the healthcare system and the country's productive base.
Additionally, the importance of building a robust productive and technological base, trends in
the medical products industry, and production linkages impacting not only the health sector
but the entire economy will be addressed.
This study is not just a retrospective analysis but a reflection on how Brazil can shape
its future, using health as a catalyst for sustainable development and national autonomy. New
Developmentalism offers an integrated framework for this journey, inviting constant
reassessment of policies and practices to create a society where access to health is not just an
indicator of economic progress but a fundamental right that drives progress in all its
dimensions.
The fragility of the national productive and technological base in the health sector,
evidenced by the trade deficit and dependence on imports, compromises not only the ability
to meet the population's health demands but also the country's sovereignty and autonomy.
Therefore, the discussion about strengthening the production chain becomes highly relevant
in this context since strengthening local production and developing proprietary technology
are essential to reduce external dependence and ensure a more resilient and sustainable health
system. The pursuit of national autonomy and sovereignty thus involves investing in the
diversification and strengthening of the productive base, aiming to meet internal demands and
face challenges such as those brought by the COVID-19 crisis.
In this context, the CEIS aims to fill this gap not only by sustaining a research agenda
that addresses production and social and health well-being challenges but also by proposing
fundamental policies and tools to address these challenges through interconnections.
The diagram below provides a summary of these connections. In short, the need for a
profound change in Brazil's economic structure is being emphasized through a process that
strengthens national innovation, the productive base, and aligns its offering with social health
demands. That is, it is an alternative vision of the relationship between health and
development. The challenge of the contemporary Sanitary Reform is to combine SUS
principles, such as universalization and equity, with the transformation of the country's
productive and scientific base. The CEIS plays a strategic role in the reconstruction of the
national economy. (GADELHA, 2021)
Figure 1 - The Bases and Systemic Interactions of the CEIS
However, the increase in the trade deficit in recent years reveals the loss of
competitiveness in the industry, especially in higher technological intensity products. The
dependence on imported inputs, reaching 50% in some segments, and the 24% trade deficit of
the Health Industrial Complex (CEIS) highlight technological lag. These challenges indicate
the need for innovative strategies and institutional improvement to strengthen the position of
the medical products industry in the global scenario (GADELHA, 2012).
Finally, the global medical equipment market has experienced significant growth,
especially in emerging countries, due to demographic and epidemiological changes. This
suggests opportunities for the health sector, but challenges persist, requiring continuous
efforts to improve innovation and competitiveness in the Brazilian medical products industry
(ROSSI; TEIXEIRA; DAVID, 2022).
In this context, the medical-hospital equipment sector encompasses various categories
such as furniture, electromedical equipment, surgical instruments, physiotherapeutic
equipment, and hospitality. Electromedical equipment, including electro electronic-based
devices, is highlighted for its high technological intensity, ranging from cardiac pacemakers
to monitoring equipment (GUTIERREZ;ALEXANDRE; 2004, 2004; PIMENTEL et al.,
2013).
In this sector, technological heterogeneity is evident, with segmented competition in
areas such as intensive care, neonatology, and surgical equipment. Large companies often
seek the integration of different technologies, while smaller companies occupy specific
niches in the market. In Brazil, the medical-hospital equipment segment represented 46% of
the industry in 2012, with a diverse production park of about two hundred companies.
Exports from this segment showed growth, but the country still faced a trade deficit in 2013
(EDUARDO; OLIVEIRA, 2017).
The dynamism of the sector is evidenced by meeting domestic demand, sustainable
exports, and higher technological content. Population aging, preventive medicine,
telemedicine, and home care are identified as future trends that will impact the medical
equipment industry. The incorporation of new technologies, such as chemical sensors,
biosensors, telemedicine, and automation, is highlighted. Robotic surgery, device
miniaturization, and the convergence of various knowledge areas, including ICTs,
nanotechnology, and engineering, are pointed out as areas of potential development.
Pressures to reduce costs and increased demand for preventive services drive innovation in
the medical equipment sector (GADELHA, 2022).
After defining the total health vectors for the period 2010-2019, taking into account
the participation of the public health vector, some demand shock exercises are carried out for
the total health investment vectors, both national and imported.
Source: Own elaboration based on data from Miguez and Freitas (2021)
From the preliminary analysis of the data, it was noticed that the year 2013
experienced a sharp increase in the imports of capital goods in the health sector (Figure 1).
From this year onwards, the demand shock of the national and total health sectors lost the
ability to drive the production chain through direct and indirect effects. Table 1 reinforces the
argument that the decline in the national share of production of capital goods for the health
sector had a negative impact on the capacity of demand shocks in the sector to drive the
economy.
Table 2 - Health Investment Sector Demand Shocks and Their Effects on National
Production
The first variable (variation in the effect of the shock of total health year by year)
shows us that, in addition to experiencing a constant decline since 2010, intensifying in 2013,
the variation in the increase in production as a result of the shock became negative in 2015. In
other words, there was a reduction in the potential for stimulating the economy through the
vector of health Investment.
Regarding products directly related to the Health sector, it is observed that, in general,
there was a reduction in the impact of the national shock from 2014 onwards, the year in
which the Brasil Maior Plan was also concluded. However, the product with the highest
Investment, having the greatest capacity to drive the production chain, as well as innovation
potential and the creation of technological content—measuring, testing, and control
equipment, optical and electromedical—is also the one that suffers the most from a
significant increase in imports (Table 3).
Finally, new vectors of health capital goods of national, imported, and total supply
were developed, but with a change of 50% of the imported content to the vector of local
production. The data presented in Table 4 provide a summary of the results obtained from this
simulation.
It is initially noticed that there is a greater increase of about 17% in the production of
the entire economy as a consequence of an increase in the share of capital goods produced
nationally, suggesting the high relevance of local production. Furthermore, it is observed that
when compared to the initial situation with the data from Miguez and Freitas (2021), there is
a significant increase in production over time.
Overall, regardless of the participation of national production in the total production
of capital goods, the years from 2014 onwards showed little productive dynamism, at least in
terms of the ability of the health sector to drive the economy.
FINAL CONSIDERATIONS: TOWARDS A SUSTAINABLE AND AUTONOMOUS
HEALTH
The panorama of the health sector in Brazil reflects not only the complexities of the
interaction between health and development but also the opportunities to shape a more
sustainable and autonomous future. New Developmentalism, as an integrated approach,
offers a vision that goes beyond mere economic growth, incorporating social and
technological dimensions.
The CEIS, as an expression of this vision, represents a strategic response to
contemporary challenges. The pursuit of a solid productive and technological base, anchored
in innovation, is crucial to address not only domestic health demands but also to position
Brazil as a relevant player in the global health scenario. Productive deepening, the promotion
of research and development, and effective coordination among the various elements of the
system are essential steps to build a sustainable and autonomous health, integrated into the
broader project of national development.
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