Page 108 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 5: Internal Reconstruction of Companies

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Case Study Decentralizing mexico’s Health care facilities
edward echeverria
The earthquake of 1985 caused disproportionately heavy damage to Mexico’s health care
facilities because they were concentrated in the capital city center. The Ministry of Health’s
Centro Medico (3,000 beds) and the Central Hospitals of the Social Security Institute (IMSS,
2,600 beds)—which included important Mexico City hospitals—were virtually destroyed.
Immediately after the quake, plans to rebuild these health care facilities followed the
national strategy of decentralizing federal government functions to other states.
Health care reconstruction
The Government of Mexico (GOM) took an integrated approach to decentralization.
Financing and investments were coordinated at the federal level, planning and programs
at state and municipal levels. The World Bank had supported a policy of decentralization
since 1985, helping the GOM in projects aimed at achieving spatial decentralization
by developing alternative growth poles outside of Mexico City. The earthquake and
reconstruction provided an opportunity to execute this policy.

IMSS, the second most important health care provider in Mexico, serves 40 percent of the
population: workers covered by health insurance. In the last 20 years, IMSS has gained
extensive experience in the design, construction, and operation of health care facilities
throughout the country. IMSS’s technical design office, which had a deconcentration plan,
organized and managed the replacement of 2,000 beds destroyed by the earthquake. It
proposed to provide about 1,200 beds in six second-level” zonal hospitals to serve an
estimated 1.2 million people on the periphery of Metropolitan Mexico City. Each hospital
would provide ambulatory and hospital services, including gynecology, obstetrics,
pediatrics, general surgery, internal medicine, orthopedics, trauma, ENT (ear, nose and
throat), and ophthalmology. These zonal hospitals would take care of 95 percent of the
cases locally, eliminating the need to travel to the Centro Medico—which henceforth would
provide specialized ‘third-level” services, with only 300 beds. Before the earthquake, about
40 percent of IMSS hospital beds were in the city center, more than two hours from most of
the 7 to 10 million IMSS beneficiaries living in the metropolitan area.
The remaining 800 beds were to be built in five regional hospitals distributed countrywide
according to need. Some were new nursing units and health care facilities added to
existing hospitals so that the five regions—Ciudad Obregon, Vera Cruz, Leon, Puebla, and
Merida—could become fully autonomous in providing all types of health care. This would
reduce further the need to transfer second- and third-level-care patients for treatment in
Mexico City. These actions would improve the level of health services and make them
more accessible, at lower unit costs. Costs would continue to be recovered through user
and employer fees in accordance with established practices.
cost and schedules

Four of the hospitals on the periphery of Metropolitan Mexico were built on schedule
and operating in 1989. Problems in site acquisition delayed the other two. They had to be
relocated, which meant revising site and building plans. Their completion was scheduled
for September 1990. The five regional hospitals were completed, equipped, and operating
in 1989.

Procuring medical equipment (especially the CAT scan) required a long lead time. Bids
for more than US$44 million worth of equipment were finally opened in December
Contd...

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