With over $500 billion USD in annual budget and more than 51.9 million affiliates, IMSS is one of the largest public health systems in the world. Its network spans 1,500+ hospitals, delivering nearly 9,000 surgeries and 34,000 emergency services every day. However, the institution faced critical challenges: reduced employer contributions, limited federal health budgets, and an urgent lack of cost transparency across disease types and hospital services.
In collaborating with Asher & Company, IMSS partnered with Pedro San Martin – Price, Profitability and Cost Management Principal, to modernize its cost management approach.
Key Challenges
- Absence of disease-specific cost models and transfer pricing
- No mechanism to measure real operational capacity
- Budgeting decisions lacked traceability and outcome linkage
- Aging legacy systems unable to support scalable analytics
A Strategic Approach: Long-Term Transformation with Profitability & Cost Management
The transformation began with the development of comprehensive cost structures across all accounting groups and clinical services. The goal: a system capable of budgeting based on real outcomes (PbR model) while also supporting economic and social benefit evaluations.
The team led a multi-year engagement that delivered:
- Clear visibility into real operating costs
- Traceability from accounting entries to patient-level outcomes
- New benchmarks for internal services and efficiency
- Tools for regulatory pricing and resource justification
In 2024, IMSS took a bold step forward by piloting Oracle EPCM Cloud, successfully migrating key models from legacy Oracle HPCM (Hyperion Profitability and Cost Management). These Proofs of Concept (POCs) validated the cloud-native architecture’s ability to scale, automate, and integrate with IMSS’s PeopleSoft ERP and other systems.
The support we received from Pedro and his team was key in setting-up the business case to justify future investments in Cost Management (PCM) – Paola Rosales – Finance & Budget Policies Leader
Why the Strategic Finance CoE Made the Difference
- Proven methodology for health-sector cost modeling
- Expertise in Oracle EPCM, data architecture, and benchmarking tools like Metify (legacy system)
- Cloud enablement with minimal disruption to operations
- Focus on long-term sustainability through cost-to-benefit alignment
Outcomes Delivered
- Pricing structures and relative weights for inter-hospital transfers
- Transparent costing of social, economic, and healthcare benefits
- Transfer pricing between internal units for resource accountability
- Improved decision-making for service specialization and budget allocation
The result? IMSS was able to create the business cased to pursue the investments toward an EPCM platform that will allow them to make data-driven decisions, support sustainable planning, and assure greater transparency in how its multi-billion-dollar budget serves the health of Mexico’s population.
Want to know how Asher & Company can support your healthcare organization to identify its real costs to make the right decisions ?
