Health Policy 81 (2007) 242–257 An analysis of the supplementary health sector in Brazil Elton Fernandes a,∗ , Heloisa M´ arcia Pires b , An´ ıbal Alberto Vilcapoma Ignacio a , L´ ea Maria Dantas Sampaio a a Federal University of Rio de Janeiro, COPPE Production Engineering Program, Rio de Janeiro, Brazil b Federal University of Rio de Janeiro, FACC Department of Administration, Rio de Janeiro, Brazil Abstract This paper addresses the efficiency of the Brazilian supplementary health sector. Analysis is carried out on the distribution of income in Brazil and the supplementary health sector in terms of geographical distribution of the users, operators and user health plans. Data envelopment analysis was used to assess the financial efficiency of companies operating in the sector. The results reveal inefficient financial performance of operators. The paper argues that a minimum level of service provided by the public health system is not achieved. The evidence reveals a major discrepancy between the government’s neoliberal concept for the sector and the focus of the operators. The coverage which is incompatible with income distribution in Brazil and the low level of public investment per person result in the creation of companies which are not focused on the real purpose of the supplementary health system. © 2006 Elsevier Ireland Ltd. All rights reserved. Keywords: Brazilian health system; Supplementary health sector; Financial performance; Policy; Equity 1. Introduction The universal objective of the entire health sys- tem is to improve people’s health and lengthen life expectancy. The other objectives are determined by the set of values prevailing in each society [1]. This paper considers three concepts of fundamental importance to any health sector: the first of which is equity, which defines the system’s fundamental structure according to society’s values; the second is efficacy, related to achieving the objective attributed to the system in ∗ Corresponding author. Tel.: +55 21 25627044; fax: +55 21 25627044. E-mail address: elton@pep.ufrj.br (E. Fernandes). accordance with society’s vision, i.e., the government’s strategic plan for the health sector; and the third is effi- ciency, concerning the best way to achieve the intended objective. The concept of equity is important for understand- ing the organizational context of health systems in different countries. According to [1], equity is linked to justice. However, this concept is determined by the social values of a group of individuals or the govern- ment. Two approaches may be considered to analyse equity in the health system, namely: the egalitarian and neoliberal approaches. The egalitarian approach aims to distribute resources in order to provide equal wel- fare to all. Under this approach, the health sector is financed by the government and based upon the prin- 0168-8510/$ – see front matter © 2006 Elsevier Ireland Ltd. All rights reserved. doi:10.1016/j.healthpol.2006.06.001