Colombia's Healthcare Services Regulator Assumes Administrative Control of Health Insurance Providers

In this iPMI Global regional country guides article, international private medical insurance report author and market analyst Ian Youngman, takes a look news that Colombia's healthcare services regulator has assumed control of health insurance providers.

• In theory Colombia has universal healthcare but the system is creaking as the government attempts reform.
• There are several ways that locals can access healthcare depending on what they do.
• It is amazingly complex which is why the state is trying to reform the system.
• The bill proposed by the government would create a National Health System based on a social insurance model, financed by contributions from social security contributions that would go into a single public fund.
• The 2023 health reform proposal of the Petro government has sparked a heated debate, as the health insurance corporations and conservatives try to block it.
• Traditional political parties and the health insurance guilds are opposed to this proposal, seeing that they are the ones that designed Colombia’s current health system.
• For expats once they have a visa they are expected to sign up for healthcare by choosing one of several competing EPS organisations.
• Like many locals they access the healthcare system via Health Promoting Entities (Entidades Promotoras de Salud.
• EPS are intermediaries.
• The EPS currently collect compulsory monthly payments from employees and the government.
• This funding is used to contract health providers to care for beneficiaries.
• There are numerous EPS in the country that have fulfilled this role as financial intermediaries for over two decades.
• However, these EPS have recently become heavily indebted and accused of delaying payments to health providers.
• Several EPS have also gone bankrupt.
• The government has used the EPS’s financial instability as a justification for the health reform, which proposes that all spending should be centralised under a single public entity that would pay healthcare providers.
• The government has permitted the EPS to continue to exist in a new role, specifically providing auditing and billing services, supplying specialised technology and software, and acting as advisors to public authorities.
• The Colombian healthcare system operates through a publicly funded healthcare system that funnels payments through private insurance companies to private healthcare service providers, such as Auna. Over 80% of healthcare services in Colombia are delivered by these private healthcare service providers and are paid for by private insurance companies.

Reform is on hold

• Colombia’s President Gustavo Petro has sought to push a radical transformation of Colombia’s health system.
• After a protracted process in Congress that led to a Cabinet purge, senators shelved the bill, dealing a sizable blow to the nation’s president.
  But Petro is fghtng back by using all the executive’s legal and constitutional prerogatives to push his agenda healthcare reform.
• Executve action includes telling the regulator to take over failing EPS companies.
• This has sparked anger from the private health sector.
• The worry is that Petro will instruct the state not to pay money to EPS companies and force them one by one out of business

Takeover of EPS businesses

• Colombia's healthcare services regulator has assumed administrative control of certain health insurance providers to oversee compliance with their payment obligations and their financial and operating metrics.
• Colombian healthcare regulator, Superintendencia de Salud (SUPERSALUD) has assumed temporary control of three providers (EPSs) of general and mandatory health insurance plans in Colombia through an administrative intervention to oversee compliance with their payment obligations to healthcare service providers and with their financial and solvency requirements.
• These three EPSs are Sanitas EPS, a privately-owned insurance provider, Nueva EPS, a state-controlled insurance provider, and SOS EPS, a smaller regional insurance provider.
• The first two have been taken over for a year whlle the third will be dissolved.
• Nueva EPS is the largest EPS in Colombia with 10 million members.
• The Colombian government holds a 49.9% share in Nueva EPS through the finance ministry, while the rest is owned by private capital.
• Sanitas EPS is the second largest with 6 million members.
• EPS Sanitas is a part of health group Keralty SAS and its main shareholder is Spanish multimillionaire Joseba Grajales.
• Other EPS companies are at risk such as EPS Suramericana, a subsidiary of Grupo de Inversiones Suramericana SA, that admits it does not meet the government’s adequate equity indicator.
• Healthcare providers are worried that they may not be paid by the state or EPS companies.
• The state has threatened to cut EPS from the system and pay money directly to healthcare providers.
• A recent report accused 18 EPS providers of paying billions in fines, shareholder payments and other activities rather than paying healthcare providers.

Analysis

• Most expats buy supplementary cover that is effectively IPMI.
• Whether expats must buy EPS or can opt out is unclear and part of the debate on healthcare reform.
• The on-off reform could go on for years.
• The EPS system is broken and inefficient.
• So there could be opportunity for both PMI and IPMI.

About the Author

Ian Youngman is an independent writer and researcher specialising in insurance. He writes regularly for a variety of magazines, newsletters, and on-line services. He publishes a range of market reports, and undertakes research for companies. To read his latest report, International Health Insurance 2023, please click here, or visit the REPORTS section of iPMI Global.