Correspondence

Correction

Managed Care in Latin America

N Engl J Med 1999; 340:1922-1923June 17, 1999

Article

To the Editor:

The Health Policy Report entitled “The Exportation of Managed Care to Latin America” (April 8 issue)1 contains numerous grossly inaccurate references to the Principal Financial Group and its Latin American operations, which are damaging to our reputation as an admired financial-services provider, both in the United States and in Latin America. In fact, on the basis of these gross inaccuracies, my colleagues and I believe the authors may have mistaken the Principal Financial Group for another company. This is very disappointing: the Journal is a credible publication, but the authors made several egregious mistakes. For example, we are not, nor have we ever been, a managed-care player in Latin America. I would also like to call attention to five other errors.

First, we do not currently operate in Brazil, and we never have. The reference to our relationship with Saúde Bradesco is completely false — in fact, Saúde Bradesco is a partner of Prudential, not Principal Financial Group.

Second, we have never entered into a joint venture in Argentina with a large insurance company to offer managed-care products, as the article states.

Third, it is not true that Principal Financial Group was involved in a joint venture to develop a managed-care operation with a major Chilean bank. Principal Financial Group entered Chile in 1995 through a joint venture with BanMédica (a holding company, the largest business of which is health insurance), but Principal Financial Group was never involved in its managed-care operation. We operate a life and annuity business in Chile.

Chile is the only country where we offer any health insurance coverage in Latin America, and it is major medical or comprehensive coverage; we are not a health maintenance organization. Medical business provides less than 5 percent of our total revenue in Chile and serves as a complement to our life and annuity coverage.

Fourth, in Mexico, Principal Financial Group has one life insurance company with several locations; we do not have control over several life insurance companies. We have no plans to diversify into managed care in Mexico, as the article states.

Finally, Principal Financial Group once had a relationship with Qualitas Médica in Argentina (we divested our interest in 1998). We were a minority investor (with a 30 percent interest), and we were a passive partner — with no management control over decisions or the operation of the company. We currently offer no health care coverage in Argentina, only life insurance products.

Luis Valdes
Principal International, Des Moines, IA 50392-0150

1 References

1. 1

   Stocker K, Waitzkin H, Iriart C. The exportation of managed care to Latin America. N Engl J Med 1999;340:1131-1136
   Full Text | Web of Science | Medline

Author/Editor Response

The authors reply:

To the Editor: We welcome Mr. Valdes's corrections of our misinterpretations of information from Principal Financial Group's annual reports, Web page, and published interviews by corporate officials. However, we disagree with his statement, “We are not, nor have we ever been, a managed-care player in Latin America.”

Mr. Valdes acknowledges Principal Financial Group's investment in Qualitas Médica, a managed-care organization in Argentina. Our Argentine colleagues have learned that Principal Financial Group divested its interest in Qualitas in December 1998, after our article had been submitted for publication. Regarding Principal Financial Group's “passive” role in Qualitas Médica, this arrangement was a typical “joint venture,” in which a 30 percent investment led to subsequent earnings, through a reliance on the local partner's infrastructure. In 1997, Principal described the relationship as an active one: “Principal International, S.A. offers medical and Health Maintenance Organization (HMO) products through an arrangement with Qualitas Médica.”1

Principal Financial Group has maintained investments in several Brazilian companies. One of the companies, Banco Itaú, held an interest in Saúde Bradesco, a large HMO, which is a partner with Prudential and which entered into a joint venture with an Argentine insurance company, La Buenos Aires. We appreciate Mr. Valdes's clarification that Principal Financial Group was not a direct partner in this managed-care investment.

In Chile, Principal Financial Group's large investment in the BanMédica joint venture that Mr. Valdes cites is widely perceived as being connected with BanMédica ISAPRE (Instituciones de Salud Previsional), one of Chile's largest managed-care organizations.2 It is important to learn that Principal Financial Group does not view this investment as being related to BanMédica's managed-care operations.

In interviews, the former vice-president of Principal International seemed to compare its Mexican opportunities with Principal's investments in Argentina.3,4 These comments led us to believe that Principal intended to diversify into managed care as Mexico's social-security system became privatized. Mr. Valdes makes it clear that Principal currently does not have this intention.

Elsewhere in the article, we incorrectly attributed a statement on the association between market saturation and exportation of managed care to the president of the Association of Latin American Pre-paid Health Plans. In fact, the statement was made by the president of the Academy for International Health Studies.5 We regret the error.

Howard Waitzkin, M.D., Ph.D.
Celia Iriart, Ph.D.
University of New Mexico, Albuquerque, NM 87131

5 References

1. 1

   Principal Financial Group. (See http://www.principal.com, as updated April 2, 1997.) (Also available from NAPS, c/o Microfiche Publications, 248 Hempstead Tpke., West Hempstead, NY 11552.)
   

2. 2

   Estrada A, Barilari E, Sepúlveda J, Soto M. Atención gerenciada en Chile: informe final. Santiago, Chile: Centro de Investigación y Capacitación en Salud, 1998.
   

3. 3

   Schwartz S. Discovering the Americas. Insur Technol 1995;20:36-40
   

4. 4

   Burger K. Starting from scratch in Argentina. Insur Technol 1994;19:64-64
   

5. 5

   Lewis JC. Latin American managed care partnering opportunities. Presented at the Eighth Congress of the Association of Latin American Pre-paid Health Plans (ALAMI), São Paulo, Brazil, November 8, 1996.