It’s often said that “the only constant in life is change,” which is certainly true for the Latin American healthcare landscape heading into 2025 and beyond. Emerging markets are undergoing a profound transformation, driven by a combination of technological innovation, demographic shifts, economic development, and policy reforms.

As we look toward 2025, several key trends are shaping the future of healthcare in these regions, offering both challenges and opportunities for medical device manufacturers and other stakeholders across the industry. Understanding these trends is crucial for anyone involved in the global healthcare ecosystem.

In this forecast, we’ll review some of the developing trends in the healthcare market, followed by global economic shifts that will have a significant impact on the macro healthcare context. Finally, we’ll analyze all the impact of these trends, so you’ll know how to plan your business strategy for success in 2025 and beyond. First, let’s look at how healthcare is changing.

DEVELOPING TRENDS IN HEALTHCARE

Device manufacturers know that healthcare is constantly in flux due to changes in population health, emerging technologies, and shifting regulations. As healthcare settles into the post-COVID normal, 2025 is no different regarding these changes. We’ve identified a few trends to keep an eye on for this year and beyond.

1. Expansion of Digital Health Solutions

One of the most significant trends in emerging markets is the rapid adoption of digital health technologies. Telemedicine, electronic health records (EHR), mobile health apps, and wearable devices are increasingly becoming part of the healthcare infrastructure. The growing availability of mobile phones, combined with improving internet access, is enabling patients in remote areas to connect with healthcare providers, access medical information, and manage their health more effectively.

By 2025, we predict that telemedicine will become more mainstream, particularly for non-emergency consultations, diagnostics, and follow-up care. In regions with limited healthcare infrastructure, telemedicine bridges the gap by providing specialized care that would otherwise be unavailable. Policy reforms that drive healthcare efficiency through technology adoption (such as EHR) will become more prevalent, opening a gateway to broader technology penetration in the years to come, particularly as it pertains to the public sector. Additionally, mobile health applications are helping individuals monitor chronic conditions like diabetes, hypertension, and cardiovascular diseases, while wearable devices are aiding in real-time health tracking.

The adoption of these digital health solutions also creates new opportunities for medical device manufacturers to innovate. From diagnostic tools that integrate with mobile phones to AI-powered devices that enable remote monitoring, the potential for growth in digital health is enormous. Moreover, the use of artificial intelligence (AI) and machine learning in diagnostics is poised to further enhance the accessibility and accuracy of healthcare in emerging markets.

2. Increased Focus on Preventive Healthcare

Emerging markets are shifting from reactive to proactive healthcare models, emphasizing disease prevention and health promotion over the treatment of illness. This paradigm shift is partly driven by the rising burden of chronic diseases such as diabetes, heart disease, and respiratory conditions. As lifestyles become more sedentary and dietary habits change, these diseases are becoming more prevalent, placing significant pressure on healthcare systems that are often ill-equipped to handle the long-term care these conditions require.

Governments and private healthcare providers are recognizing the need to invest in preventive care initiatives, including screenings, vaccinations, and health education. Medical device manufacturers are playing a pivotal role in this transformation by developing more accessible diagnostic tools for early disease detection and monitoring. Portable diagnostic devices, such as handheld ultrasound machines and portable ECG monitors, are increasingly being used in both urban and rural areas to detect health issues before they become critical.

Additionally, wearable devices that track physical activity, nutrition, sleep patterns, and vital signs are becoming an essential part of the preventive healthcare toolkit. These devices enable individuals to take ownership of their health while providing healthcare providers with valuable data to monitor patients’ well-being over time.

3. The Need for Solutions to Treat the Aging Population

The demographic profile of emerging markets is undergoing a dramatic shift, with many countries experiencing rapid urbanization and an aging population. By 2025, the number of people aged 60 and above is expected to grow significantly, with the United Nations projecting that the elderly population in developing nations will double by 2050.

This aging demographic is contributing to a rise in chronic diseases such as arthritis, dementia, and age-related cardiovascular conditions. As these conditions often require long-term management, there is an increased demand for medical devices that can provide ongoing care, including home care devices, diagnostic tools, and rehabilitation technologies.

Additionally, the need for assisted living devices, such as mobility aids, hearing aids, and fall-detection systems, will rise as older adults seek to maintain independence while managing their health. Medical device manufacturers will need to adapt their offerings to meet the specific needs of older populations, creating products that are intuitive, user-friendly, and capable of improving quality of life.

4. Rise of Public-Private Partnerships

Governments in emerging markets are increasingly looking to public-private partnerships (PPPs) as a means to improve healthcare delivery. With limited public-sector funding and an expanding healthcare demand, countries in emerging markets are leveraging the expertise and innovation of private companies to enhance healthcare infrastructure, including medical devices and technologies.

By 2025, PPPs are expected to become even more widespread in healthcare. These collaborations allow for the pooling of resources, expertise, and technologies to deliver better healthcare services at a lower cost. For example, public hospitals may partner with medical device manufacturers to bring advanced diagnostic tools into local facilities, while private companies may contribute expertise in training healthcare workers and implementing digital health solutions.

This trend is particularly evident in the rollout of advanced medical devices in low-resource settings. Through PPPs, medical device companies can offer innovative solutions while ensuring affordability and accessibility. Additionally, governments are increasingly creating favorable regulatory environments to encourage foreign investment in local healthcare markets.

5. Expansion of Health Insurance and Financing Models

 As economies in emerging markets continue to grow, we are seeing a related increase in demand for more robust healthcare financing models. In many emerging markets, access to quality healthcare has historically been limited by the ability to pay out of pocket. However, with growing middle-class populations and expanding health insurance coverage, more individuals are gaining access to medical services.

By 2025, it is expected that health insurance penetration will increase significantly, with governments and private insurers offering more affordable and inclusive coverage options. This shift will improve access to healthcare services and create a larger market for medical devices, as more people will be able to afford advanced diagnostic tools, surgeries, and treatments.

Furthermore, new financing models such as microinsurance and pay-as-you-go plans are gaining traction, providing more flexible payment options for individuals in lower-income brackets. These models will make healthcare more accessible and encourage the adoption of advanced medical technologies that were previously out of reach for large portions of the population.

THE GLOBAL ECONOMY’S IMPACT ON HEALTHCARE

Just as more specific changes to healthcare technologies, regulations, and medical conditions are driving the emerging trends in the industry, so are larger global economic patterns. For example, worldwide issues related to the supply chain, currency strength, and foreign competitors will play a pivotal role in how device manufacturers will want to strategize for serving emerging markets in the years ahead.

1. Supply Chain Disruptions

The COVID-19 pandemic demonstrated how integrated supply chains are and how reliant the healthcare ecosystem is on a global network of suppliers. With increasingly protective policies from the world’s largest economies now in place, a lack of leadership for global harmonization and trade facilitation has been the unfortunate result.

While campaigning for re-election and promoting the “America First” vision, one of the central proposals in President Trump’s 2024 campaign was the prospect of increasing tariffs on imported goods. While Trump’s tariffs will deal a blow to Chinese exports — which Americans will ultimately pay for through higher prices — the impact will be felt on a much broader scale, causing disruptions within the global supply chain.

A rewiring of trade flows (which is already being discussed) will increase costs for businesses and consumers worldwide.

2. The Continuing Strength of the Dollar

The American economy will continue to be fueled by consumption for the foreseeable future. The combination of higher deficits, inflationary pressures, and a smaller workforce will further strengthen the dollar. U.S. tariffs, higher interest rates, and a rising dollar will stint a global economy already suffering from lackluster growth.

With over 80% of medical devices sold in emerging markets coming from imports, a strong dollar will make local sales (in domestic currency) more challenging. Margins throughout the distribution chain will be squeezed to move products. Market size will grow in local currency, decrease in U.S. dollar terms, and remain stable (at best) in volume. Market share will look much different in value than in volume.

Most leading global medical device manufacturers are from North America and Europe and report their global performance in U.S. dollars or Euros. For companies reporting in U.S. dollars, attaining sales goals will become more difficult. Pressure will increase to reach targets across all markets.

Emerging markets will face headwinds due to the continued strong dollar, and developed economies will feel the impact of rising costs due to supply chain disruptions and tariffs. Meanwhile, Asian manufacturers will take advantage of the disruption to further increase their foothold in Latin America, Asia, and Africa with competitively priced products.

3. The Growing Role of China

In the years ahead, emerging markets will face significant challenges. Among these are the challenges arising from China’s economic troubles, the ongoing U.S.-China trade tensions, and the broader global economic fragmentation.

China’s overproduction in key industries like electric vehicles, solar panels, and electronics, combined with its deepening property crisis, has created an oversupply of cheap goods. As the U.S. under President Donald Trump imposes tariffs to address what it perceives as unfair practices, many developing countries face the dual threat of Chinese overcapacity flooding their markets and being caught in retaliatory trade wars. Nations like Mexico, Brazil, Indonesia, and South Africa are particularly vulnerable, as they balance the need to protect domestic industries while managing the repercussions of higher consumer prices and slower economic growth.

For medical device manufacturers in emerging markets, this dynamic poses several risks. As Chinese manufacturers flood markets with subsidized products, local companies could struggle to compete, particularly in sectors where China has an established production base. Moreover, the rising trade barriers and tariff-induced price hikes could increase the cost of imported materials and components for medical device manufacturers, raising production costs and potentially stalling innovation.

The heightened policy uncertainty, coupled with a stronger U.S. dollar and higher interest rates, would further constrain the ability of emerging market countries to invest in their healthcare systems and manufacturing capabilities. Companies may face challenges in maintaining supply chains, as tariffs and trade disputes disrupt access to vital raw materials and finished goods.

On the other hand, some emerging markets may find opportunities as global supply chains shift away from China due to trade tensions. Nations like Vietnam and India could see increased foreign investment in their manufacturing sectors, including medical devices, as companies seek alternatives to Chinese production. However, the risks of economic fragmentation, higher costs, and a weakened global investment climate remain significant.

Medical device manufacturers in these regions may need to adapt to changing market conditions by diversifying supply chains, investing in local production capabilities, and navigating new trade barriers. Ultimately, the global economy’s fragmentation, driven by U.S.-China tensions, will create long-term challenges for medical device manufacturers in emerging markets, limiting their growth potential and increasing operational costs.

4. Tensions South of the Border

Growing tensions will continue for U.S.-Mexico relations, particularly as President Trump threatens significant tariffs on Mexican imports in response to issues like migration and fentanyl trafficking. These threats are expected to escalate in 2025, with potential 25% tariffs on all Mexican goods and a 100% tariff on cars due to the high Chinese involvement in Mexican vehicles. The U.S.-Mexico-Canada Agreement (USMCA) will also become a focal point of contention, with Mexico facing a more challenging negotiation environment under Trump’s administration, especially as Canada may seek to negotiate separately.

Additionally, Mexico’s internal political instability, driven by sweeping constitutional changes and a weakened judiciary, will complicate its ability to respond to these external pressures effectively.

For medical device manufacturers in Mexico, this geopolitical and economic turbulence poses significant risks. The potential tariffs on Mexican goods could affect the cost structure and competitiveness of medical devices made in Mexico, particularly if supply chains are disrupted. Rising tariffs and trade barriers would increase production costs and could make Mexican-made medical devices less competitive in global markets, including the United States, which is a key trading partner.

Moreover, the growing investor uncertainty driven by political changes in Mexico, such as the weakening of judicial independence and challenges to the business environment, could deter foreign investment in the country’s healthcare sector, potentially limiting the development and expansion of medical device manufacturing.

Despite these challenges, Mexico remains well-positioned for long-term success, benefiting from favorable demographics and a low-cost labor force, which could make it an attractive location for nearshoring manufacturing. Medical device manufacturers may find opportunities to shift production to Mexico as companies look to relocate supply chains closer to the U.S. due to rising costs in China and tensions between the world’s two largest economies.

However, the short-term instability caused by political reforms, fiscal deficits, and a more adversarial trade environment with the U.S. could create significant hurdles. Manufacturers may need to navigate these uncertainties carefully, balancing the benefits of Mexico’s manufacturing advantages with the risks posed by political, economic, and trade tensions in 2025.

How Manufacturers Can Respond to These Trends

As we enter 2025 and beyond, emerging markets will continue to be at the forefront of healthcare adaptation. The trends outlined above are not just reshaping healthcare systems; they are opening exciting opportunities for medical device manufacturers to provide solutions that address the unique challenges of these regions. From digital health solutions to the rising demand for preventive care and chronic disease management, the future of healthcare in emerging markets is bright — and the companies that can adapt to these trends will play a crucial role in shaping that future.

Of course, with these opportunities come great challenges from shifting currents in the global economy. The continued prominence of China and other Asian companies in the market, the economic hurdles of the new U.S. administration, and the lingering supply chain issues will have an impact on sales throughout Latin America and other emerging markets.

The companies that are best positioned for success are those who are aware of these potential risks and have contingency plans in place to turn them into business advantages rather than liabilities. For example, China may face some challenges in the years ahead due to potential tariffs or trade disputes that could offer advantages to manufacturers in other regions. Manufacturers will need to be agile to navigate the choppy waters ahead, but there’s no question that great opportunities exist as healthcare needs and access explode across the region in the coming years.

The next decade promises to be a period of remarkable change, one where emerging markets take significant steps toward improving health outcomes for millions of people. For those in the medical device industry, it is an opportunity to be part of this transformation, driving innovation and making healthcare more accessible, affordable, and effective for populations in need.

Next Steps

Contact GHI to learn more about healthcare trends and their potential impact on the medical device and equipment industry in Latin America. Our team of researchers can provide the strategic analysis you need to gain valuable insights to support strategic decision-making in your industry.

We have analyzed the possible changes that could transform the global healthcare landscape in 2024. As a result, we now have a better understanding of the current economic conditions in Latin America. Let’s examine the factors that will continue to drive change in the healthcare industry this year.

1. Artificial Intelligence

With the public release of ChatGPT in mid-2023, artificial intelligence (AI) grabbed the headlines and hasn’t let up since. In reality, the impact of AI has thus far been largely underwhelming, with most businesses struggling to understand where and how AI will play a role in their sector. On the other hand, the healthcare sector appears poised to be a significant driver in AI as a field at the forefront of disruptive change.

On the innovation side of the spectrum, AI-enabled research has the potential to accelerate discoveries and testing, increasing the speed at which products get to market. Pharmaceutical manufacturers, medical device corporations, and diagnostics firms are among the largest beneficiaries of innovation-based AI.

Pharma players may see a much-needed rejuvenation of their pipelines as some of their best-selling drugs begin losing their patents. Medical device manufacturers – who often associate themselves more with technology firms than with traditional pharma – may cycle through innovation and design at a faster pace to deliver higher value to their stakeholders. Diagnostics firms, including imaging diagnostics, have the potential to incorporate AI within their systems, resulting in quicker and more accurate analysis of test results.

AI’s most significant contributions to the healthcare sector will be related to pace and access. In both diagnosis and treatment, time is critical to treating health concerns. AI has the potential to accelerate the pace at which the industry operates and increase the well-being of millions of people around the globe.

Simultaneously, AI can potentially increase access to care, thus furthering healthcare equity. Faster diagnostics means greater utilization of resources, which can translate to reduced operating costs. Private sector providers will likely be early adopters of AI within their workflows to make their processes more efficient. Meanwhile, public sector providers will be able to dramatically increase access to care, particularly in emerging markets where ~70% of the population is treated by public funding.  From innovation to outcomes to diagnostics and treatments, AI has the potential to shorten the patient journey and deliver tangible improvements to the efficiency and efficacy of healthcare systems around the world.

Generative AI, a sub-specialty of the AI field focused on creating content with human-like results, will have an additional impact on the healthcare sector. Generative AI will play a central role in developing interfaces, including front-office software (CRM, marketing, outreach), back-office software (electronic health records, patient interoperability), and event patient platforms to schedule appointments, set reminders, and the like. The healthcare sector will become increasingly dynamic in the coming years, leading to exciting new products and solutions within an innovation-based AI investment super-cycle.

AI does have some potential drawbacks, of course. As AI requires tremendous data inputs, players in the healthcare field will require massive amounts of real-world data to run their models. De-sensitized patient-level information will become the fuel for these models.

The development and implementation of AI come with other risks, as well. Skewed or inaccurate data can lead to harmful or potentially fatal results. On a less extreme scale, AI could also potentially reinforce gender, racial, and other biases. The production of incorrect materials and falsehoods could harm patients, caregivers, or other healthcare stakeholders, reduce trust in AI itself, and further limit potential developments.

From the technology companies that develop AI to the businesses that integrate AI solutions in their medical products, down to the caregivers, providers, payers, and ultimately patients, AI has the potential to overhaul how the industry operates in the years ahead.

2. Demographics

Few trends are as unstoppable as demographics. This is true in all economic sectors, but its impact is particularly acute in healthcare. The escalating share of household expenditures dedicated to healthcare services poses a growing financial strain on many countries. To reverse this trend, it becomes imperative to achieve improved health outcomes with a reduced cost of care. Within the healthcare sector, this entails transitioning from the conventional method of symptom management to addressing root causes. It also requires a shift from disease treatment to preventive measures.

Obesity. The obesity epidemic and an aging population are at the center of the healthcare burden. Latin America continues to experience an increase in the prevalence of obesity in children and adults that exceeds the global average.

The impact of obesity on healthcare systems is well-documented. It’s linked to a wide variety of serious health issues, such as high blood pressure, heart disease, diabetes, and high cholesterol. It’s also responsible for around 2.8 million deaths per year in the region. “In the last 50 years, overweight and obesity rates tripled, affecting 62.5% of the population in the region,” said Dr. Jarbas Barbosa, PAHO Director.

Aging. In Latin America, the percentage of the population age 65 and over grew from 7.0% in 2010 to 9.4% in 2023 and is expected to surpass 10.0% by 2026. This 65+ age group is growing by over 2 million annually and is expected to reach 70 million people by 2026. On average, healthcare costs associated with a person over 65 are three times greater than spending for persons under 65. Considering that, you can see what a critical demographic factor aging can be.

Adjusting to changing demographics. Public healthcare systems treat nearly 70% of the population in Latin America and represent the most significant opportunity to increase efficiency to service demand. However, we expect government stakeholders to maintain a reactionary stance on healthcare as they continue to view systems as a cost rather than an investment in economic productivity and workforce wellness. As long as this is the case, only limited incremental changes driven by individual initiatives will be seen. What is needed are transformative changes that adopt a long-term view of healthcare.

In parallel, we anticipate growing demand for private sector solutions, where most service-based innovations will occur. While a majority of the demand will come from domestic needs, certain countries such as Mexico, Costa Rica, and Panama are well prepared to cater to international demand, particularly from the United States, where healthcare costs continue to soar with only marginal improvements in outcomes.

Gains in operational efficiencies:

• Increase in ambulatory and short-stay surgeries
• Reduction of patient stays within hospitals
• Interoperability
• Homecare

Innovative leadership

• Robotic surgery systems
• Adoption of international best practices

3. G2 tensions

Tensions between the world’s two economic powerhouses (the United States and China) continue to intensify, with technology and, more recently, AI as centerpieces for concern. This has resulted in a reverse flood of onshoring jobs for the United States and initiated a wave of nearshoring opportunities across Latin America.

Uneasiness over China’s policies and regulations toward foreign companies are among critical concerns for foreign businesses in the country. The nearshoring trend is expected to continue as tensions have chipped away at the confidence of U.S. businesses operating in China.

Mexico has been the biggest beneficiary of nearshoring, with exports to the United States growing steadily since early 2022. Costa Rica is another country benefiting from this trend, with its strong export manufacturing base and pro-business culture. In addition to being FDI magnets, Mexico and Costa Rica have strong healthcare sector manufacturing expertise. Meanwhile, manufacturing in China appears to have continuous and sustained appeal for companies looking to gain access to the Chinese market (more so than as a global production base).

4. Armed conflicts and social unrest

Lastly, in light of the ongoing war in Ukraine, the start of the Israeli war in October 2023, and other armed conflicts worldwide, nearly 40% of business executives consider geopolitical tensions a primary concern going into 2024. These concerns rank even higher than common economic issues such as interest rates, the risks of recession, and inflation.

While armed conflicts cause terrible humanitarian and health crises in their regions, history demonstrates a limited spillover effect for the global healthcare sector. National politics and the domestic economy more closely influence the medical sector and healthcare economics.

Of more significant concern in Latin America is the rise of authoritarianism. The continuous and systematic deterioration of democracy across Latin America over the past decade has created the potential for heightened social unrest moving forward. “Democracy in several countries is in critical condition, while others no longer have democracy,” reports Latinobarómetro in their 2023 annual report.

While democracy still stands as the preferred form of government in Latin America, the region shows increased enthusiasm for authoritarian governments and, perhaps more concerning, apathy toward their political leaders. It is alarming to see a deterioration in the support for democracy in countries such as Chile, Mexico, and Costa Rica. Substantial shifts in political ideals will likely result in heightened social tensions and unrest in 2024 and 2025.

Next Steps

Contact GHI to learn about more emerging trends in healthcare and how your sales and marketing team can plan ahead and uncover opportunities within Latin America’s medical device and equipment sector.

In 2024, the global healthcare landscape appears to be poised for several transformative changes. The primary drivers of these changes are technological advancements, evolving patient expectations, and a renewed focus on public health. Here’s an overview of what you can expect in the year ahead.

The current state of LatAm healthcare

In a region where 70% of the population is reliant on the public sector for healthcare, economic context is critical to understanding the state and evolution of health services. First, it’s important to realize that it’s a region of tremendous growth potential.

Latin America posted 2.3% GDP growth in 2023, outpacing the growth of most developed economies. The region is poised for a similar year not only in 2024 but beyond, as well. This will likely be driven by the wave of nearshoring and the pent-up demand for natural resources, specifically the copper and lithium used in the production of electric vehicles (EVs).

Emerging trends

Along with this growth potential, we anticipate several changes, both technological and societal, driving the future of healthcare in the region. These are a few areas to potentially capitalize on in the coming year:

• The AI boom. Artificial intelligence (AI) will play a growing role in all sectors of the healthcare space, including innovation, product development, clinical research, testing, diagnostics, implementation, and patient interfaces. These advances will likely be adopted at a varying pace throughout Latin America, depending on demographic characteristics such as the nature of the sector, the type of institution, and the level of sophistication. Healthcare access and equity remain ideals that AI may seek to address, but only on the coattails of lucrative achievements.
• Demographic forces. The unstoppable force of demographics will play a central role in shaping demand for healthcare services over the next decade. From the obesity epidemic to the aging population, the most innovative healthcare solutions will come from private providers.
• Shifting global influences. Global factors such as G2 tensions, armed conflicts, and social unrest will continue to shape the socio-political context. As the world grapples with evolving health challenges, the healthcare outlook in 2024 reflects a dynamic landscape marked by innovation, inclusivity, and a commitment to improving overall population health.

The big-picture view

Before diving into the specifics of the year ahead, it helps to have a greater understanding of Latin America and where it stands with other world economic and healthcare markets.

Economic and social aspects

• GDP: US$ 3.1 T
• GDP growth:3%
• Population: 667 M people
• Urbanization: >80%
• Natural resources: 23% of forests, 30% of fresh water, and 25% of arable land worldwide
• Metals & minerals: 58% of lithium reserves and 41% of copper reserves worldwide

Healthcare

• Hospitals: >20,000
• Operating rooms: >53,000
• Hospital beds: >1.2 M
• Uniqueness: Hospitals in Latin America are smaller than their counterparts in the United States or Europe, resulting in the need to be adaptable in medical offerings, financing, and distribution.
• Regional differences: Healthcare systems (and their sophistication) vary by country, with public and private systems operating in parallel.

Economic outlook

Since the start of the COVID-19 pandemic, each year has been marked by a key event that has shaped most of our lives in the West.

Moments that marked the year

• 2020: COVID lockdowns and uncertainty.
• 2021: Global vaccinations and working from home.
• 2022: The world opens up again, leading to both stimulus and inflation.
• 2023: A gradual return to fundamentals.
• 2024: Slow and stable growth as we build toward 2025.

Despite widespread recession fears going into 2023, the year was surprisingly robust. It surpassed expectations and exceeded anticipated performance as global GDP grew 3.0%.

In general, Latin America’s economic performance in 2023 was better than expected. The region demonstrated 2.3% GDP growth during the period. While this underperformed the global average, it outperformed developed economies such as the United States and Europe.

The inflationary spiral of 2021-2022 also slowed during 2023, with nearly every country showing lower inflation than the previous year. Argentina remains an outlier to this trend, unfortunately, and its economic crisis continues. (Refer to this article for more insight on Argentina)

As the risk of recession fades and inflation drops, the Federal Reserve projects three rate cuts in 2024. Simultaneously, demand for products and services remains high and employment remains strong, bolstering consumption. Healthcare remains a critical sector with vast transformative development prospects, whether this be through the development of AI solutions or innovations to meet demographic burdens.

A return to normalcy

On a corporate level, 2023 will be remembered as the “return to fundamentals” as corporations reset their operations and sought to normalize their activities in the aftermath of the COVID crisis and the massive fiscal and monetary stimulus measures that ensued. Rising financial costs became a burden for both early-stage medical firms and leveraged balance sheets. This impacted the ability to spend on additional market expansion and regularize M&A activity.

The “COVID bonus” came to an end as personal protective equipment (PPE) manufacturers, pandemic vaccine makers, and telehealth providers experienced a rapid slowdown in their activities. We expect to see a continued normalization of growth in 2024 and into 2025, with an overall improvement in balance sheets. Commodity price performance could be mixed but generally supportive for the region.

Nation-by-nation outlook

Going into 2024, Latin America’s growth is forecast at 2.3%, on par with 2023. Regional differences will present unique opportunities within each country, which may require the adoption of a country-level strategy.

• Argentina: Expect a possible rebound from the economic contraction of 2023. The shock therapy of the Milei government may result in more “open market” opportunities, but it may also result in large sacrifices and economic hardship. The situation remains fluid, and the outlook is uncertain, warranting continued and diligent monitoring of the market.
• Brazil: As the largest economy in Latin America, representing 33% of the regional GDP, you can expect slow economic performance in 2024. GDP growth is expected to be below 2%. The legislative focus seems to remain on structural reforms and ongoing debates over the fiscal balance.
• Chile: A strong demand for natural resources will continue to support economic growth. Most notable among these resources are copper, which is used for sustaining the grids that electrical vehicles (EVs) use to charge, and lithium, a central component in EV batteries.
• Colombia: Unfortunately, Colombia is expected to face a cloud of policy uncertainty in 2024.
• Mexico: As the second-largest economy in Latin America and a premier trading partner with the United States, Mexico will continue to benefit from nearshoring trends. Elections in 2024 will likely help loosen fiscal purse strings.
• Panama: As a solid economy with a sophisticated healthcare sector, Panama remains a niche market for medical equipment and device manufacturers.
• Peru: After Chile, Peru is the world’s second-largest copper producer. The nation will benefit from heightened international demand as EVs continue to expand their presence.

Inflation and average consumer prices
Percent change

Source: IMF, World Economic Outlook.

GDP growth
Percent change

Source: IMF, World Economic Outlook, Citibank.

What to expect for the year ahead

• Growth optimism. Anticipate moderate growth for the initial part of 2024, with a sense of renewed invigoration toward the latter part of the year and into 2025.
• Rising profits. Corporate profits should rise 5% from 2023 to 2024 and again 7% from 2024 to 2025.
• Varied opportunities. Latin America will offer sustained growth perspectives in 2024, with unique opportunities in each country.
• Economic strength. Global economic growth will strengthen in 2025.

Next Steps

Contact GHI to learn more about emerging trends in healthcare for the year ahead and how your sales and marketing team can plan ahead and uncover opportunities within Latin America’s medical device and equipment sector.

Your hospital has consistently been ranked as one of the best equipped in the country. What are some of the main types of medical equipment your hospital needs to buy or replace on a regular basis?

The Bolivarian University Clinic provides health services at all care levels, with particular emphasis on medium and high-complexity care in most of the specialties for the entire population of Medellín, Antioquia, and the country, with a special focus on maternal and pediatric care. It provides outpatient and inpatient services in the various clinical and surgical specialties, including most notably the Adult Intensive Care Unit (ICU), the Maternal and Pediatric Unit, and all the diagnostic support services. We have a plan for renewing our biomedical technology, aimed at maintaining the conditions of safety and the supply of high-complexity care for both mother and child. So the equipment that we need to upgrade the most relates to critical neonatal care (incubators, ventilators, warming blankets, radiant-heat cribs), but also equipment related to diagnostic imaging, from basic systems like conventional portable X-ray machines, to additional technology such as C-arm image intensifiers.

Is there any medical device in particular with special technology or innovations that the hospital has recently bought or plans to buy?

It upgraded the Phillips-made CT scanner, which is a 128-slice unit that expands our capacity to perform a higher volume of CT scans. There are plans to upgrade radiant-heat cribs and incubators, and to purchase a fixed X-ray unit and an MRI scanner. Additionally, in partnership with suppliers, it plans to purchase a pediatric (neonatal) dialysis machine.

What are the main factors that lead a renowned institution such as the Bolivarian University Clinic to buy new equipment?

The main reason is to provide our patients safe services with comprehensive care. Also, to provide timely services and expand the portfolio of services in accordance with the health needs of the population we serve.

What kinds of health challenges is the Bolivarian University Clinic facing right now?

The main challenge is the demographic transition and morbidity profile of the patients. Other challenges include having assertive information strategies in health care given the demand from more informed patients seeking the best health alternatives for their treatment; the efficient use of resources and technologies; working in integrated health care networks in a coordinated way; achieving the interoperability of biomedical technologies with information systems so that administrative and clinical staff have the information to make decisions; and making the clinic socially, environmentally, and financially sustainable.

Does the hospital have plans for expansions, renovations, or new units?

Yes, we are planning an outpatient care unit, with basic imaging services, sample taking, and minor-procedure rooms.

What types of equipment, devices, or resources do you think Colombian hospitals will need more of and/or will become more necessary in the next few years?

All the equipment related to the treatment of chronic, neurological, urological, musculoskeletal, and neurodegenerative diseases, and also equipment related to interoperability with information systems and the use of artificial intelligence as an aid for clinical and administrative decision making.

Is there any new initiative with respect to patient care at the hospital that you could share with us?

Yes, service models and patterns of practice based on clinical conditions, and a model of care based on the management of obstetric clinical risk through telemonitoring.

What other health problems or challenges have you recently noticed now that the pandemic has generally receded?

The increased mental illness caseload and the exacerbation of chronic diseases are significant, as are the growing needs and expectations of the patient, family, and health team in the context of finite resources. Another challenge is the empowerment of the patient for self-health care and the incorporation of healthy lifestyles and well-being of the population with or without health risks. In addition, there is detection and intervention of individual health risks with the use of all the new technologies, which entails shifting from a model of general care to one of specialist care. Lastly, there are data-based health services, using the exchange of data among applications, medical records, and systems of care, enabling institutions to overcome the barriers in order to put together solutions based on clinical information.

About the Bolivarian University Clinic

Located in Colombia, the Bolivarian University Clinic is a medium and high complexity health institution with high quality accreditation and certified as a University Hospital.

By Guillaume Corpart

According to MedTech Outlook: Latin America 2023, the penetration of specialized medical equipment in Latin America’s hospitals remains a niche opportunity requiring a specific and targeted approach. Robotic surgery systems (RSS) and Linear accelerators (LINACs) are amongst the scarcest equipment, present in 1% of hospitals across the region. Other specialized medical equipment, such as C-arms, are present in 12% of hospitals in Latin America.

Beyond the modest penetration of specialized medical equipment, the market outlook in Latin America remains robust:

• The surgical robotics market is set to grow with a CAGR of 10.6% between 2021 and 2028
• The CT scanner market is projected to grow by 4.7% between 2022 and 2027
• The C-arms market is forecast to grow by 3.2% between 2022 and 2027
• The mammography market is set to grow by 6.9% between 2022 and 2027

Growth Drivers

One reason for these robust growth projections is the critical role that Latin America’s leading hospitals play. In the region’s largest markets – Brazil, Mexico, Colombia, Argentina, and Chile – certain hospitals stand out by their level of care and their acquisition of sophisticated medical equipment used to diagnose and treat complex conditions.

In our recent report, MedTech Outlook: Latin America 2023, we included a list of the top 10 MedTech leaders in several key markets:

• Argentina
• Brazil
• Central America
• Chile
• Colombia
• Mexico
• Peru

We designated these hospitals as technology leaders due to their currently reported amounts of leading equipment types, such as:

• Angiography machines
• C-arms
• CT scanners
• Gamma cameras
• Linear accelerators
• MRI machines
• Positron Emission tomography (PET) systems
• Radiotherapy machines
• Robotic surgery systems

Below we break down the major tech leaders in these key markets.

To identify the tech leaders in Argentina, as well as 1,000 other strategic data points about Latin America’s medical equipment market, click here to purchase the MedTech Outlook: Latin America 2023 report.

To identify the tech leaders in Brazil, as well as 1,000 other strategic data points about Latin America’s medical equipment market, click here to purchase the MedTech Outlook: Latin America 2023 report.

To identify the tech leaders in Central America, as well as 1,000 other strategic data points about Latin America’s medical equipment market, click here to purchase the MedTech Outlook: Latin America 2023 report.

To identify the tech leaders in Chile, as well as 1,000 other strategic data points about Latin America’s medical equipment market, click here to purchase the MedTech Outlook: Latin America 2023 report.

To identify the tech leaders in Colombia, as well as 1,000 other strategic data points about Latin America’s medical equipment market, click here to purchase the MedTech Outlook: Latin America 2023 report.

To identify the tech leaders in Mexico, as well as 1,000 other strategic data points about Latin America’s medical equipment market, click here to purchase the MedTech Outlook: Latin America 2023 report.

To identify the tech leaders in Peru, as well as 1,000 other strategic data points about Latin America’s medical equipment market, click here to purchase the MedTech Outlook: Latin America 2023 report.

What’s Next for the Medical Equipment Market in Latin America?

The pandemic has obliged medical equipment and medical device manufacturers to continuously monitor and track the market to detect early warnings that could result either in risks or opportunities. Market segmentation is critical in helping medical equipment and medical device manufacturers better assess their markets and craft distribution strategies to reach specific clients. Segmentation based on hospital demographics is one of several paths that can be explored.

Monitoring of the evolution of market size, either in number of units or value, is also critical to detect shifts and trends in the market. As the pandemic has proven, monitoring market share is the only true metric of success for leading established medical equipment and medical device manufacturers

Next Steps

Contact GHI if you want to know more about how we can help you gain a greater understanding of Latin America’s medical equipment market via our different market intelligence solutions.

Glimpses of this could be seen in one of the latest CES editions in Las Vegas, when Japanese housing construction group Sekisui House showed its new “Platform House Concept” that allows seniors to live independently while being monitored to detect illnesses or health issues. Developed with scientists from the Massachusetts Institute of Technology (MIT), Sekisui House uses ceiling sensors to check a person’s heartbeat. If the person has a heart attack, the house will call for help and open the doors after verifying that an emergency team has arrived.

Another Japanese startup presented its “e-skin” pajamas, designed to monitor the vital signs of seniors discreetly using artificial intelligence. They look like normal pajamas, but the sensors analyze vital signs and sleep conditions, and detect falls.

Another portable device for seniors is a wristwatch monitor from US company CarePredict that can allow their loved ones to track activities such as food and sleep before their vital signs indicate problems.

Population aging is a demographic trend affecting both Europe and Latin America, and has a significant impact on a country’s health expenditure. As the proportion of elderly people increases in a population, demand for health care and long-term care services increases.

The figures reflect the demographic situation in Europe and Latin America, where population aging is a reality and poses challenges and opportunities in health care, senior care, and other services related to active and healthy aging:

• According to the European Commission, roughly 30% of the European population will be 65 years or older by 2050.
• In some European countries, the proportion of people over the age of 65 is even higher. For example, in Italy and Germany, it is estimated that more than 20% of the population is already 65 or older.
• Life expectancy in Europe has also risen. According to the World Health Organization (WHO), life expectancy at birth in the European region is approximately 81 years.
• The Economic Commission for Latin America and the Caribbean (ECLAC) projects that the proportion of people over 60 in Latin America and the Caribbean will reach 25% of the total population by the year 2050.
• Some Latin American countries are experiencing rapid population aging. For example, in Chile and Uruguay, it is estimated that more than 20% of the population is already aged 60 or older.
• Life expectancy in Latin America has also risen in recent decades. According to the WHO, life expectancy at birth in the region varies between countries, but generally stands at around 75–80 years.

How population aging affects health expenditure

Population aging brings with it an increase in health costs, representing a challenge for health systems and public policy. This is why countries are adopting appropriate strategies and policies to address these challenges in order to ensure financial sustainability and quality of health care for the elderly population.

The effects of population aging on the health sector are as follows:

• Higher prevalence of chronic diseases. With population aging there is an increase in the prevalence of chronic diseases such as cardiovascular diseases, diabetes, respiratory diseases, and musculoskeletal disorders. These diseases usually require long-term management and treatment, which increases health care costs.
• Higher demand for health care services. As people age they are more likely to require health care and long-term care. This includes regular medical visits, hospitalizations, medication, physical and occupational therapies, and other related services. The increased demand for these services means increased health expenditure.
• Senior care. Population aging is also accompanied by an increase in the need for senior care, whether through nursing homes, home care, or care provided by relatives. Senior care may be expensive, particularly in situations requiring specialized and long-term treatment.
• Pressure on health systems and social security systems. Population aging puts pressure on a country’s health and social security systems. Extra resources are needed to ensure adequate and sustainable care for the elderly population. This may include aspects such as infrastructure investment, personnel training, and preventative health care and health promotion programs.

Home care, a growth field

The home health care market has seen significant growth worldwide as a result of population aging and the demand for in-home health care services. What follows is an overview of the size of the home health care market globally, in Europe, and in Latin America:

The market size may vary among the different countries in Europe and Latin America, depending on factors such as demographics, health care infrastructure, and the availability of specific services in each region.

Rising demand for home health care services and products

As mentioned earlier, home health care is a growth area offering a range of business opportunities. These include:

• Home nursing services. It is possible to start a business offering home nursing services, where a team of trained nurses provides basic health care, such as administering medication, changing dressings and monitoring vital signs, and preventative care.
• Specialized medical care. If you are a physician or have access to a team of healthcare professionals, you can offer specialized medical care services in the home. This may include medical consultations, chronic disease monitoring, palliative care, and physical or occupational therapy.
• Medical supplies and equipment. You can set up an online store or a brick-and-mortar establishment to offer the medical supplies and equipment needed for home care, such as hospital beds, wheelchairs, canes, wound care products, and others.
• Technology and mobile apps. Developing mobile applications or technology platforms that help communication between patients and health care providers may be an interesting business opportunity. These applications can facilitate appointment scheduling, treatment monitoring, medication management, and other useful features.
• Senior care. Population aging fuels demand for home health care services for senior citizens. Services of personalized care, companionship, help with daily activities, medication administration, and basic health care for seniors who would rather remain in their homes than move to a nursing home are in increasing demand.
• Medical transportation services. Many people with mobility issues need medical transportation to get to their medical appointments, or else receive treatment at home. There is demand for medical transportation services that allow patients to travel in safety and comfort, in vehicles equipped to meet their specific medical needs.

Health care payers in Latin America

In Latin American health systems, payers of home health care may vary depending on the country and the specific health system concerned. This means that access to home health care coverage may also vary in Latin America because of the differences in the health systems and the resources available in each country. Some countries have more developed programs and a higher degree of coverage, while health care in others is limited or inaccessible for certain groups of the population.

Potential payers for home health care in the region include:

Five technologies that are changing home health care

Lastly, home health care benefits from a wide range of technologies that help deliver quality health care services and improve communication between patients and care providers. These technologies contribute to improving the quality of home health care, facilitating patient health monitoring, and allowing effective communication between patients and health care providers, including remotely.

Technologies that are now common in home health care include:

1. Telemedicine. Telemedicine facilitates remote medical consultation through communication technologies such as video calls and mobile apps. Patients may have virtual consultations with doctors and receive diagnoses, follow-up treatment, and medical recommendations without having to travel to a health center.
2. Portable medical devices. Portable medical devices like blood glucose meters, blood pressure monitors, pulse oximeters, and physical activity monitors let patients monitor their health conditions at home and share the data with their physicians. These devices provide real-time information and allow for more accurate monitoring of patient health.
3. Mobile health apps. There are numerous mobile applications designed specifically for home health monitoring and management. These apps allow patients to record medical information, track medications, set reminders, monitor vital signs, and access health and education resources.
4. Medical data management platforms. These platforms allow patient medical data to be stored and accessed securely, facilitating collaboration among health care professionals and coordinated medical care. Data management platforms may also include features such as appointment reminders, electronic medical records, and medication tracking.
5. Home automation and virtual assistants. Domotic (home automation) technology such as movement sensors, video surveillance cameras, and emergency phone call systems can help monitor patient safety and well-being in the home. Virtual assistants are also used to provide medical information, set medication reminders, and schedule appointments.

Next steps

Contact GHI to learn about the personalized market analysis and research we offer on health care in Latin America, and more. GHI can help your business understand the market better as a whole or in a key segment of a specific country.

TM has been a topic of debate in the big international health forums since 2003, and some large strides have been made since those opening conversations. However, data show that we still have a huge opportunity to develop this sector of the industry that will form part of primary health care in the near future. To point to one successful case, according to a report by the Pan American Health Organization (PAHO), Brazil’s Telessaúde Brasil program, whose goal is to offer primary health-care professionals a second opinion, using electronic consultations or electronic referrals, has demonstrated that one out of two patients offered electronic consultations does not get referred to other services. Its reports show that, on average, 60% of electronic consultations led to a change in the originally planned approach, thereby reducing costs, especially with treatment outside the home, resulting in a higher case-resolution rate.

Since 2015, at Global Health Intelligence (GHI) we have been using our proprietary HospiScope database, which gathers information about the installed base equipment in hospitals in 17 Latin American countries. HospiScope has allowed us to do a variety of analyses on the development of demographic indicators, hospital equipment, beds, clinical specialties, medical personnel, information systems, type of care, and other key areas. As a result of the pandemic, we began gathering data on TM, which we have sorted into four main categories:

1. Participation in TM, when the hospital has a telemedicine program
2. A TM center, when there is a dedicated center with specialists to which the hospitals can connect, such as centers of excellence in other fields
3. Medical monitoring (spoke TM), when the hospital has a system connected to the service provided by the TM center where the specialists are located
4. International TM, when the hospital is involved in international TM

Our analysis, which is based on the strategic data we have gathered over the years, was based on data from hospitals in 17 Latin American countries that was compiled between 2018 and 2021.

Roughly 15% of the hospitals included in our analysis have a TM program; 9% are connected to a TM center; just 6% provide that service to patients through a medical monitoring system, and 1% are part of international TM. These data remained stable between 2020 and 2021.

Analyzing the data from hospitals with a TM program, the percentage of these relative to the total amount of hospitals in the region varies between 11% and 19%, leaving a large opportunity for the development of this service. Zooming in on the most relevant data, Colombia has the most development in the service, while Chile is the only country to have made a strategic investment in infrastructure, installed capacity, and specialist telehealth personnel, distinguishing itself from the other countries in the region.

In terms of connectedness to TM centers, 38% of hospitals have this service in Colombia. However, Argentina, which comes next in the ranking, has just a 9% share, showing that there is significant opportunity for investment in this service too. The situation is similar for medical monitoring. In Colombia, 65% of hospitals have the service, followed by Chile with just 9%, then Argentina, Mexico and others, respectively with 3%.

Lastly, we see significant opportunity in terms of international TM, where the total percentage share among hospitals is 1%. Colombia leads the region in this category with 8% penetration, followed by Chile at 1%, and Argentina and Mexico, with 0%, respectively.

TM is a service that is here to stay, and the data show there is a development opportunity, in terms of both infrastructure and service, that needs attention.

Contact us to find out more how our team can conduct a market study for the Latin American country of your choice so you can gain a greater understanding of telemedicine penetration and where the strongest opportunities lie.

As such, below we combine data from GHI’s resources (primarily HospiScope) and outside sources to highlight some healthcare sectors in Brazil that should have strong growth potential in 2021 and beyond.

#1 Diagnostic Imaging Equipment

The Brazilian market for diagnostic imaging equipment (X-ray machines, MRI machines, CT scanners, ultrasound machines, thermography, photoacoustic imaging, echocardiography and nuclear medicine) has a projected CAGR of 5.75% between 2019 and 2026, according to Data M Intelligence.

GHI’s HospiRank 2020 report has more conservative projections for imaging equipment in Brazilian hospitals, including:

• CT Scanners: 2% CAGR, 2019-2023         
• Ultrasound machines: 6% CAGR, 2019-2023
• X-ray machines: 2% CAGR, 2019-2023

#2 Basic Equipment

Based on tracking the Brazilian hospital market for nearly a decade, GHI’s HospiRank 2020 report projects significant growth for certain types of basic medical equipment in Brazil, such as:

• Ventilators: 9% CAGR, 2019-2023
• EKG machines: 7% CAGR, 2019-2023
• Infusion pumps: 6% CAGR, 2019-2023

#3 Healthcare Startups

According to the consulting firm Distrito, the number of healthcare startups in Brazil grew by 118% between 2018 and 2020, from 248 to 542. These startups provide a variety of services, including electronic medical records, telemedicine, medical devices, access to information, marketplaces and AI/Big Data. More information on this can be found in Distrito’s HealthTech Report 2020, found here.

#4 Telemedicine

A recent article in Exame highlighted the growth of telemedicine in Brazil in 2020, which, not surprisingly, was spurred by the COVID-19 crisis. The article included the example of the telemedicine startup Conexa, which reported to Exame that it went from treating 50 patients a day before the crisis to 15,000 per day. Exame indicates that the Brazilian user population for telemedicine increased from 150,000 in January 2020 to 3.5 million, though it does not cite a specific source for this data. Exame also states that, according to data it has compiled (though it does not specify the data sources or methodology), at least 1.7 million telemedicine consultations have been performed in Brazil this year.  Without direct sources and methodological information, we should be cautious in weighing these figures. On the other hand, the devastation wrought by COVID-19 thus far in Brazil (6.4 million cases and 174,515 deaths as of December 3, 2020) would suggest that telemedicine should definitely expand in 2021 as the country struggles to control the pandemic as best as it can.

#5 Renal Dialysis Equipment

According to Data M Intelligence, the renal dialysis market in Brazil is expected to grow with a CAGR of 5.8% between 2020 and 2027. While GHI does not track all types of renal dialysis machines in Latin American hospitals, the company’s HospiRank 2020 report indicates that hemodialysis machines will grow by 4% in Brazilian hospitals in 2021 and have a CAGR of 3% between 2019 and 2023.

Go Deeper to Drive Your Decisions

While these numbers are helpful at a basic level, a much more thorough dive into the Brazilian market is what will help medical devices/equipment companies make decisions about product launches, calculating demand, areas of investment and more. GHI can quickly fill your company’s gaps in business or market intelligence in a variety of ways, including:

HospiScope, the database tracking hospital demographics for Brazil

Surgiscope, the surgical procedures database that covers Brazil

The COVID-19 Datapack

Surgery Status Reports

LatAm Brand Tracking (contact us directly for more information about this service)

We can also conduct a custom study that will give your team the specific answers it needs to refine its planning and vastly improve your possibilities for success in 2021.

Contact us to find out more.

Demographics

If there is a bright spot in this otherwise gloomy picture, it is that Latin America’s still youthful population may be less susceptible to the dangerous side effects of COVID-19. Based on data emerging from Europe, we now know that the average age of the COVID deceased was well over 75 years old, the majority of which had at least one of the following chronic illnesses: diabetes, high blood pressure or heart disease.

Latin America has roughly half the population over 65 years of age versus Europe and one-third the proportion of elderly over 75 years of age. However, Latin Americans are not healthy by global standards. High levels of obesity in Latin America have led to above-average levels of diabetes and heart disease. Based on demographics alone, Latin America will fare better than Europe or the US in weathering the death count of COVID-19, even while LAC’s underfunded healthcare infrastructure will struggle to cope with COVID hospitalization.

Healthcare Infrastructure

Forecasting the spread and impact of COVID-19 remains an inexact science, particularly in regions like Latin America where the first cases emerged only a few weeks ago. But some predictability is forming around growth rates and social distancing actions taken by society at large. For Latin America, the healthcare crisis will soon be acutely felt in its Intensive Care Units (ICUs) where the most serious 2%) of cases are treated for up to three weeks at a time. Chile, Brazil, and Mexico will suffer the most from their shortage of ICUs. In Colombia, where most cases are and may remain concentrated in Bogotá, there will also be terrible shortages.

By acting sooner than others, Peru and especially Argentina should fare better in handling the surge in critical cases of COVID-19. However, nowhere in Latin America is equipped like European or East Asian countries to absorb the shock to their health systems.

A useful country for Latin American health officials to study is Iran. Its per-capita income levels match those of more affluent Latin American countries. Its health system is similarly equipped and its population is similarly structured and its demographics mirror those of Latin America. Iran reached its 100^th case three and a half weeks ahead of Brazil, the first country in LAC to cross the foreboding threshold.

The Economic Impact

Latin American governments face the same heartbreaking trade-off decisions as other countries around the world where the COVID-19 virus has spread: sacrifice the lives of your population’s most vulnerable or sacrifice your economy. Many OECD countries can delay or even mitigate such a trade-off by unleashing massive fiscal spending and monetary policy easing (printing money). Latin America has much less latitude. 

Although Latin American governments carry smaller debt loads than the US, Europe or China, their borrowing costs are much higher and international markets are wary of lending money in this environment. Latin American companies who try to raise capital in local equity markets tend to suffer greater share price devaluation as investors flee to US money markets, hurting not only equity pricing but also national F/X levels. Latin America’s generally well managed Central Banks can only do so much to lower interest rates, given the negative impact on their currencies, which drives up living costs. 

With anywhere from 30-60% of working Latin Americans employed informally, there is no legal or economic recourse for many if they are forced to stop working. 

The only country in Latin America with any fiscal slack is Chile, thanks to its copper-financed, rainy-day fund. But even if Chile were to spend the entire fund, it could only keep a stopped economy financed for a couple of months. 

Lock-down policies do save lives but Latin American governments simply cannot shut down their economies for more than four weeks without risking massive unemployment and the devastating consequences that come with it, including soaring crime, malnutrition, and social unrest. 

The IMF, the World Bank, the IDB and other multilateral lenders will provide support to Latin America but, with the exception of the IMF, those institutions may take weeks to release funds. Latin American countries need fiscal assistance today to beef up their intensive care infrastructure as well as provide fiscal relief to their economies and support for national banking systems deprived of capital.

The countries best poised to help themselves both fiscally and monetarily are Chile, Colombia, Peru and Mexico, followed by Brazil. Venezuela, Ecuador and Argentina look particularly vulnerable right now. Private lenders are loath to touch any of the three and multilaterals struggle to obtain reliable data with which they can structure a loan. 

Social Resilience

Beyond testing Latin America’s inadequate healthcare infrastructure and fragile economies, of great concern is how its divided societies will weather the economic storm ahead. Home to the world’s most unequal wealth distribution, Latin American societies have been kept together by a unique blend of faith, family support, populist and nativist politics. But social unrest in 2019 revealed how tenuous is the thread holding many Latin American societies together. With little or no social safety net, unemployment can quickly lead to society wide anger and desperation. 

Latin American and Caribbean nations count among them some of the most dangerous jurisdictions on earth. Many are concerned that the region’s already high levels of homicide and domestic violence will grow worse in the face of widespread economic strife.

Economic Rebound

How quickly Latin American economies can rebound from the crisis ahead will largely depend upon how quickly they can re-engage with the global economy. Without the ability to finance its own growth, Latin America will rely, as it always has, upon foreign capital and customers to pull itself out of recession. Exports, tourism, foreign direct investment and imported capital are the leading instruments of recovery. 

The most favored exports throughout and beyond the crisis will be agri-food products whose demand will suffer the least. Latin America produces 16% of world food exports. 

China is expected to be the first major economy to recover from COVID-19 and has already announced ambitious infrastructure plans to put its people back to work. Publicly funded infrastructure may also gain favor as phase II fiscal stimulus in Europe and the US (at the very least to beef up healthcare capacity). These efforts will boost demand for industrial metals, a leading source of export revenue for Brazil, Chile, Peru, Mexico. Gold prices have already begun to rise, and may provide a needed boost in the midst of the crisis for Peru, Colombia, Guyana, Dominican Republic, and Brazil.

For manufacturer assemblers in Mexico, Central America and parts of South America who rely upon imported components and key equipment, the trade and supply chain disruption caused by COVID-19 will take its toll. If a car is missing one or two vital parts, it cannot be shipped and the factory comes to a halt. This is the dilemma facing assemblers across the globe. Mexico is particularly vulnerable to supply-chain disruption, and the fact that many of the value-added products made there will suffer a drop in demand during the crisis – car sales in China, for example, dropped over 80% in February, 2020.

But the most vulnerable will be economies that rely upon international tourism. Most countries have shut their borders to international travelers and will be reticent to open them quickly without adequate testing infrastructure to ensure that the virus is not re-introduced. Furthermore, tourists themselves will be gun shy about traveling abroad. Analysts predict that it will take up to three years for international travel volumes, particularly holiday travel, to resume to pre-epidemic levels.

Please contact us if you’d like the latest numbers on the capacity of Latin American hospitals, their equipment counts including ventilators and more. We’re the only company in the world tracking hospital equipment figures for Latin America and our data was most recently verified in late 2019.

Our data can be useful for public health authorities, hospitals, insurance companies and manufacturers of medical equipment and devices that serve Latin America.

You can get a sense of the depth of the data we offer by reviewing our HospiRank report, our Analysis section, case studies and 2019 whitepaper on 5 mega-trends in Latin American healthcare.

The Good

Latin America seems like an ideal target market for medical equipment/devices manufacturers. It’s home to more than 22,000 hospitals—nearly a quarter (24%) of the world’s total. However, LatAm hospitals are small, with an average of 45 beds versus a US average of 160. Smaller hospitals can’t afford large capital equipment so the vast majority of LatAm hospitals are ill-equipped for modern procedures.

Even with these built-in hindrances to demand, in 2019 we still saw imports of medical devices and equipment go up in several markets. Imports are a close proxy to sales, since imported devices are brought in to be sold or are presold, instead of being imported for inventory. (Note: import numbers cover not only equipment but also parts, since hospitals often repair their existing installed base instead of buying whole new machines.)

In 2019, Mexico posted strong increases in the import of various equipment, device and parts:

• >80% increase of computed tomography machines and parts
• >75% increase of heart valves
• >75% increase of ultrasound machines/parts
• 27% increase of electrocardiograph machines/parts
• 8% increase of pacemakers
• 5% increase of MRI machines/parts

From 2014-2019, Mexico volumes (quantities) grew at a CAGR of 12%. In Mexico, we’re seeing a generalized margin compression of 22% (weighted average), which stems from President López Obrador’s policies to reduce healthcare expenditure by consolidating tenders and inviting more foreign competition.

Other markets also posted gains in volume:

• Colombia posted increases in eight categories of medical equipment/parts, most notably with a 38% uptick with CT scanners & parts and 29% growth with ultrasound machines & parts

• Argentina showed increases in six categories, with the biggest growth in MRI machines & parts (9.7%)

• Ecuador grew in seven categories, mostly in double digits, including a 59% uptick in CT scanners & parts and a 39% increase in ultrasound machines & parts

The Bad

Not all markets posted growth in imports during 2019, most notably Brazil, where we saw:

• 49% decrease of electrocardiographs
• 37% decrease of computed tomography equipment
• 22% decrease of X-ray machines
• 9% decrease of heart valves
• 5% decrease of ultrasound machines
• 2% decrease of MRI equipment

These numbers highlight decreases in quantities of these equipment types, with decreases also in the value of said equipment.

Overall, the value of medical equipment brought into Brazil in 2019 decreased by 4% and the quantities of this equipment went down by 2%.

While Chile showed impressive growth with CT scanners & parts (80%) and pacemakers (32%), 2019 also showed drops in a number of other categories, including EKG machines (46%), heart valves (30%), MRI machines (21%) and radiography/radiotherapy equipment (19%). Overall, Chile posted a 37% decrease in the quantities of medical equipment brought into the country, despite a solid growth in value (4.4%). The weakening of the Chilean peso, triggered by political unrest in Q4, likely suspending the imports of equipment and materials that were adequately stocked in Chile.

Peru, one of our favorite growth markets for the past few years, showed a contraction in 2019, posting negative results that arguably outweigh the positives, including drops in quantities imported of radiotherapy/radiography equipment (74%), artificial joints (33%), ultrasound machines (27%), CT scanners (26%), MRI machines (18%), EKG machines (5%) and heart valves (2%). The political quagmire in Peru, especially in Q4 2019 when congress was dismissed, likely played a role in the downturn in demand.

Budget cuts are likely driving these decreases. Approximately 44% of hospitals in Latin America are public or mixed and therefore depend on government funding, and many Latin American countries are still struggling to reduce fiscal deficits.

Budget challenges ill-prepare governments to tackle the enormous healthcare challenges ahead led by increases in: obesity, non-communicable diseases (like diabetes and heart disease) and aging populations, all of which will dramatically impact healthcare systems over the next thirty years (starting now). By mid-century, it’s projected that 214 million people (nearly 1/3 of the population) in Latin America will be over 60 years old, resulting in shifting needs from a healthcare standpoint, particularly focused on chronic ailments.

The Ugly

As difficult as 2019 proved to be, the decade ahead will really challenge Latin American health systems. The cost of healthcare as a % of GDP will grow by close to 30% over the next decade but few Latin American governments have a plan, much less the funds to tackle this challenge. Public healthcare in Latin America remains woefully inefficient. Bloomberg’s most recently published healthcare efficiency ranking ranked Brazil, Colombia, Venezuela and the Dominican Republic on the low end of its scale. This means there is room for cost reductions by i) changing how healthcare is managed and ii) allowing disruption to enter the sector through the private sector.

Public hospitals and their government bosses will continue to squeeze the profits of suppliers, as the AMLO administration in Mexico has proven can be done. Unfortunately, that is a short-term solution that shifts public hospitals to rely on less innovative, cheaper suppliers who may be less likely to install the kinds of game-changing technology that hospitals must invest in to disrupt their inefficient ways.

In other words, business as usual in Latin America is drawing to an end. The public market demands lower price equipment and devices and is willing to sacrifice quality to get there. The private sector requires disruptive new approaches to cut costs and massify their service capabilities as private clinics fill the gaps left by a fiscally cornered public sector. Change is often ugly in the short term but opens opportunities in the longer term. That is where Latin America’s health sector finds itself today.