Colombia: The crisis affecting the Health System is far from over

The controversial Law 100, set out in 1993, which established the base of the current health system and especially its financial provision, has suffered severe questioning recently, based on the recent intervention in Saludcoop, the biggest health administration company with a portfolio of approximately 4 million Colombians.

Indeed, the Colombian SuperIntendencia de Salud, the state body in charge of overseeing the private insurance sector that is the main reimbursement source of the Colombian Health System, intervened in private insurance company (Entidad Promotora de Salud, EPS) Saludcoop, accused after an investigation of alleged disastrous financial management and being unable to pay providers, debts and more importantly, meet its obligations to patients. In fact, the President of Saludcoop, Carlos Palacino, announced he will step down from the job whilst Superintendencia takes control of the assets and operation of the company, which will continue offering financial protection to its beneficiaries.

The Colombian Minister of Social Protection, Mauricio Santa Maria, has commented in an interview published by the local El Tiempo that actions are required to improve the current situation. Even though political opposition has highlighted the need for a complete change in the system, the current President Santos, coming from the same political ideology of the former President Uribe, is not willing to undergo deep changes. The Minister of Social Protection has said that an enhancement in terms of regulation and price control of certain drugs is important, in order to improve the financial status of EPSs and at the same time, reduce the huge rate of judicial intervention that the system is experiencing. The Minister pointed out that even though Law 100 has increased the access and fairness of the Health System in Colombia, there are some important actions that must be taken in order to increase the transparency and accountability of the system. He ruled out a complete change in the rules and criticised the opposition leaders for trying to take political advantage of this situation. The authority has described one of the big actions will be expansion and improvement of the role of SuperIntendencia de Salud, conducting the overseeing and accountability of the system. The public entity will have an increase in its budget (from 40 billion Colombian pesos/USD22 million to COP80 billion), more inspectors and better technical skills. In addition, he pointed out its aims will be concentrated into three main aspects: quality, flow of resources and opportunity of medical attention. In terms of drug pricing, it is worth noting that in 2006 there was enacted the freedom of pricing. What has been complicating things in the Colombian health system, according to the authorities, is the situation when EPS re-charge the Fosyga (national health fund) for drugs which have been indicated after a litigation process, between patients and  EPS. Every time that this situation happens, EPSs allegedly are charging the government more than the normal value of the drugs and in some instances carrying out fraudulent activities, such as charging for drugs for patients who are deceased.

Another big concern of the authorities is when EPSs charge the government for drugs or procedures which are not included in the Compulsory Health Plan, but have been indicated after a litigation process. The Minister has commented that the government is planning to control prices, setting out maximum prices by active pharmaceutical ingredient in the case of the so called re-charge process of EPSs.

Conclusions: The Colombian health system is facing one of its biggest crises after the intervention of Saludcoop. Even though the trigger which ignited the intervention by the Superintendencia de Salud is related to lack of accountability in terms of financial management and insolvency, it has been the opportunity to highlight all the problems that the liberal and privatised Colombian system is experiencing. In fact, the huge presence of justice and litigation as part of the system, given the fact that every time there is a inconsistency between the beneficiary and the EPS, the court ends up intervening, has sent the system into an spiral of overspending. The lack of regulation, overruled by the EPS, and the freedom that they have in terms of deciding where they want to conduct their business, has seen many of these companies investing in golf camps, housing sector and hedge funds abroad, diverting the attention of their core business and some of them failing in their financial obligations. The government is trying to send a message of tranquillity to the markets, however, it is likely that new EPSs are going to be regulated, which could increase the current levels of uncertainty.