| In the northeastern Brazilian city of Fortaleza, in 1979, an oncologist named Candido Pinheiro Koren de Lima opened a clinic. After 44 years, through rapid acquisition and expansion, that clinic is now Hapvida, one of Brazil's biggest health-care companies — and until recently, one of its most successful. Brazil has universal health care, and about three-quarters of the population uses it exclusively. But many people supplement their publicly funded care with private providers, especially for complex procedures or higher-end services.
And in Brazil, private health care has been through intense consolidation in the past decade, just as it has in the US and China. Hapvida completed its biggest deal yet last year, swallowing up Intermedica for more than $7 billion to form a vertically integrated giant of hospitals and insurance. On its website, the company boasts of fully digital patient charts and apps for booking appointments and reviewing lab results — the advantages that size can provide. But that's where the rosy part of this story ends. With the economy flagging and credit tightening, Hapvida has sunk on the stock market this year and caused enough concern for debt investors that the Pinheiro family agreed to inject $242 million through a real estate deal, in addition to taking part in a share sale. Absorbing Intermedica has proven to be a strain on profits, while competition from other firms remains on the rise. Inflation and the lingering aftereffects of Covid are also taking a toll. Hapvida's market value has fallen to less than $4 billion from a peak of $19 billion two years ago.
This has put Hapvida — and Brazil — at the center of the age-old debate about whether health care is a basic human right, provided by the government, or a competitive business that rewards patients with investment, service and innovation. Executives at Hapvida have said they're confident they can work through the challenges the company now faces. One way they are doing that is raising prices for patients, who are already contending with stubborn inflation. Health and personal care prices have consistently risen above Brazil's broader consumer price index for the past year.
Meanwhile, like many of Latin America's leftist leaders, President Luiz Inacio Lula da Silva aims to invest more in the public health system, potentially creating stiffer competition with the for-profit sector. And since private insurers get much of their coverage through deals with employers, an economic slowdown and resulting job losses could hurt enrollment and send more people to government-funded hospitals. For Hapvida, getting back on track may require it to show Brazilians who already have free health care that, sometimes, it's worth paying for. — Crayton Harrison | 
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