All About the Health Care System - Gustavo Petro's Reform - Medellin Advisors

All About the Health Care System – Gustavo Petro’s Reform

Reforma a la salud

All About The Health Care System - Gustavo Petro's Reform

On February 13, 2023, Gustavo Petro’s administration formally filed its national healthcare reform bill into Congress. In doing so, Petro is fulfilling one of his boldest promises made during the 2022 election campaign. As always though, there are two sides to the coin.

On one hand, supporters of the status quo claim that the country currently has one of the best health systems in Latin America. Conversely, there are many that welcome this change as one that was overdue. The government has challenged the status quo with claims that the current healthcare paradigm is both unequitable and unsustainable.

With the reform to the health system, Petro’s government intends to guarantee healthcare access to all citizens under equal conditions, even purporting to deliver a higher quality of service. In this article we will objectively analyze both points of view; join us in this special edition of the health reform

Concept national healthcare system colombia nw
Gustavo Petro's government aims to change the country's healthcare system

The government claims that healthcare in Colombia has been very lucrative for the private sector. This all stems from Law 100, ratified in 1993, which overhauled the entire health system in Colombia.

In essence, it introduced a system of national compulsory health insurance. As such, financial groups were created around the Empresas Promotoras de La Salud (EPS). EPS have received and managed a good part of the national health budget. This has generated corruption with money being diverted away from its intended destination. For example, insurance companies have not only benefited greatly from health care funds, but also behaved unscrupulously by creating financial holdings.

Petro therefore believes that today, healthcare has lost any trace of equity and evolved into an exploitative, lucrative business model. His goal is to make it a truly public service.

The president Petro has announced that through his reform, the new system will be preventive, predictive and universal. Furthermore, he purports to avoid the mismanagement of resources made by Colombians by permitting the state to exercise greater control of the contributions.

It is this same mismanagement which has in recent years led to the intervention and liquidation of hundreds of Empresas Promotoras de Salud (EPS).

Current Regulatory Framework for Health in Colombia

In theory, health is a human right recognized by Article 49 of the Colombian Constitution of 1991. As such, all people have the right to access quality health services, regardless of their economic, social or geographic condition. In Colombia, the health system is democratic and allows access by the entire population, regardless of age. Thus, all citizens are insurable. The EPSs do not apply waiting periods and limitations for coverage of any types of pathologies or pre-existing conditions.

Salud colombia
Health is recognized as a human right in Colombian legislation

Law 100 of 1993 created a complex, mixed system with public financing and private administration. At present, all working people are obliged to contribute a percentage of their monthly income for their financial support. 

On the other hand, people who do not have the economic resources to pay for medical services can access the service under a subsidized regime. In other words, they receive the medical service without paying, thanks to the money paid by the government and the affiliates of the contributory regime.

Congreso de la republica
The Congress of the Republic of Colombia will decide on the health system reform this year

There is even a statutory Law of 1751 of 2015 that broadly develops this right and its principles. But due to administrative difficulties and a poor control environment, the medical service does not work uniformly for all citizens and regions of the country.

Incidentally, the country’s rural areas, which are also some of the poorest, are where these shortcomings are felt the most.

The Plan Obligatorio de Salud (POS) Establishes The Medical Service Coverage for Colombians

One of the most outstanding achievements of the current health system is the Plan Obligatorio de Salud (POS). This establishes medical coverage for every inhabitant of the country. The POS is established and designed by the government but informed and guided by experts of the Ministerio de Salud y Protección Social. The POS defines the services and technologies that must be covered by the EPS. This plan covers all types of accidents, illnesses, including high-cost diseases such as: diabetes, hypertension, cancer, HIV, organ transplants, among others.

In Colombia, health care is protected regardless of age

There are services not covered by the Plan Obligatorio de Salud (NO POS), these are (not exhaustively): bariatric surgeries for obesity control, sex change surgeries, provision of wheelchairs, diapers, etc.

These services must be paid by the affiliates directly to the providers. Alternatively, the patient may have their service covered if able to demonstrate before the court (Tutelas) that their fundamental right to health has been violated.

In Colombia, this has proven to be a worthwhile endeavour as affiliates have often been able to access services not covered by the POS. The jurisprudence of the Constitutional Chamber and of the Judges of the Republic is reiterated. Where they have ordered the EPS and the government to pay for the services not covered. In the year 2022 these exceptional services generated an expense to the nation of 4.2 billions pesos (equivalent to $1,147,540,983 USD based on March 2023 exchange).

Money health systems
The nation pays annually more than 4.2 billion pesos for health services not covered by the Plan Obligatorio de Salud (No POS)

Copagos y cuotas moderadoras represents the percentage of money paid by affiliates to access POS benefits. These payments depend on the income range of each person; higher earners are required to make higher contributions.  The maximum of these amounts are also set by the government each year. Relatively, they are quite low when compared to the co-payments, deductibles and stop-losses that citizens of other countries in North America and Europe must pay to insurers and clinics. We can say that in Colombia, despite its difficulties, health-care is very affordable.

 Conversely, the United States is known worldwide for its convoluted and expensive health-care system, with individuals and families often ending up in debt to cover health bills, even with private health insurance. In Colombia, the system works on an assistance basis, to avoid the financial ruin of families. If someone cannot pay, they are subsidized within the system.

Universal Coverage VS Contrasts in Quality

According to the Ministerio de Salud y Protección Social, as of January 2023, 99.4% of the country’s population was affiliated to some type of health service, whether public or private. At this point we can say that the country shows encouraging figures in terms of service insurance, since only 1.0% of the country’s population (621,797 people approx.) are not yet affiliated to a Empresas Promotora de Salud (EPS) or insurance company. It should be noted that in 1995, the service coverage was less than 30% of the population. So Colombia has made very impressive gains in this area. 

Today, every citizen or legal resident has access to health insurance only with their citizenship or foreigner’s ID card. Even some migrant group such as Venezuelans have been included in the health system, based on the right to health enshrined in the political constitution of this country. Colombia has achieved universal health coverage; all citizens are entitled to receive medical care. Colombia boasts  superior health care coverage to other countries in the region such as Mexico, Peru and Brazil.

Colombia health coverage
The Colombian health system has managed to insure 99% of the country's population

Life expectancy in Colombia has increased significantly in recent decades. According to the Departamento Nacional de Estadística y Planeación (DANE), in 2020, life expectancy at birth was 77.4 years for women and 71.9 years for men. This is similar to the life expectancy of countries such as México, Perú and Ecuador but is below that of developed countries, which hover around the 80 year mark. According to the Ministerio de Salud y Protección Social, the most prevalent diseases in Colombia are respiratory diseases, cardiovascular diseases, cancer, diabetes and diseases of the nervous system.

Salud eps reforma corcho monica uribe
Colombia maintains a medical system with multiple contrasts

In terms of the number of doctors and hospitals, Colombia has a relatively low number compared to other countries in the region, and much less lower in comparison with developed countries. According to the World Health Organization (WHO), Colombia has about 1.5 physicians per 1,000 inhabitants while countries such as the United States and Germany have more than 2.5 physicians per 1,000 inhabitants.

Eradicating Maternal and Infant Mortality Rates is one of The Pending Tasks of the colombian Health Care System

One of the more telling indicators of a nation’s healthcare quality are that of maternal and infant mortality rates. In 2022 Colombia reported a rate of 41 deaths per 100,000 births. Sadly in this country there are still people dying from malnutrition on a daily basis, a problem associated with high levels of poverty, but also with the deficiencies of the health system in detecting them. 

Mortalidad materno infantil colombia
Cerro Tusa is the world’s largest natural pyramid.

In terms of effective health coverage, Colombia still suffers with disparity. There are marked differences between large cities and remote/rural areas. In the rural fringes of the country there is a significant lack of resources, including a shortage of:

Doctors, healthcare centres, access to vaccines and drinking water. Thus it is clear that Colombia continues to be a country of great contrasts.

Wayuu kids
In remote areas of the country, the Colombian health system has not been able to prevent the deaths of children from malnutrition on a daily basis

The Pandemic Was a Trial by Fire That Shook the Colombian Medical System

Regarding pandemic management, Colombia suffered a significant number of confirmed cases of COVID-19 compared to other countries in the region, such as Argentina and Mexico. The mortality rate in Colombia is relatively low at 2.5%. Colombia’s healthcare was able to pass a litmus test, with successful results. Fortunately, a collapse of the system was avoided. Colombia has continued its vaccination campaign in the fight against the pandemic. Free immunization has resulted in more than 79 million doses administered to its population.

Coronavirus en colombia
The Colombian health system was able to control the COVID19 pandemic

It is evident that Colombia’s economic development has improved as a result of general health conditions. In 2016 the Government signed the Peace with the Fuerzas Armandas Revolucionarias de Colombia (FARC), putting an end to a bloody conflict that lasted more than 60 years. There are however, still other minority rebel groups with which the government of Gustavo Petro seeks to achieve total peace. In this way the authorities now have control of extensive territories that were previously held by this insurgent group and has sought to integrate them into the economic and social development of the nation. Peace allows the country to continue addressing various problems of underdevelopment more efficiently (one of which is to improve the health of the poor.)

What About Colombia's Health Budget?

The health budget in Colombia, although having increased steadily in recent years, is still in deficit and represents only 7.2% of the country’s GDP. When comparing the investment to health in developed countries such as the United States 16%, Germany 11% and Canadá 10%, we see that the country falls short. The national budget does not allow for adequate development of  new health centers, scientific research etc. It is therefore cheaper for the system to focus on meeting the growing demand for services than to prevent the cause of disease.

Primera salud sabado
Colombia allocates 7.2% of GDP to the health system

The Health Law 100 of 1993 established that the EPSs would be the entities in charge of administering health care benefits to the affiliated population. In this way. The government transferred the heavy burden of Colombians’ health risk to private companies. According to this regulation, the Colombian government pays the EPSs an annual fee for each affiliate called Unidad de Pago por Capitación (UPC). This figure was adjusted in 2023 to COP 1,129,246 (approx. USD 286) for the contributory regime and COP 1,121,985 (approx. USD 249) for affiliates of the subsidized regime.

Gran transformacion sistema salud
Colombia has been increasing its health spending budget. But it is barely 7.2% of GDP

At the end of January 2023 there were 51,305,704 people affiliated to the health system. With these numbers the nation would deliver this year approximately for the administration of the health risk of its citizens to the EPS the astronomical sum of: 61,424,934,416,266 COP (Approx. 13,353,346,612 USD). This is not an insignificant amount, so it is not strange that a change in the rules of the game may affect the economic interests of the large insurance companies.

Presupuesto salud
EPSs receive billions of dollars from health care every year

EPS - From Health Promotion to the Creation of Holdings

Critics of the system say that the work of the EPSs is an unnecessary intermediary that does not contribute to the improvement of the medical service. In essence, it is the Instituciones Prestadoras del Servicio (IPS), clinics, medical care centres, hospitals and health professionals who must provide care to the final patient. Shortly after the most important EPSs in the country were created, they created subsidiary companies as service providers. Today most of the EPS have and control their own networks of final providers, such as: IPS and health care centres throughout the country, thus forming true holdings that are integrated into their own financial structure. In the end, EPSs direct patient demand to the same entities they control.

Petro's health care reform has sparked protests in some sectors that defend the current system

Government supporters claim that the EPS do not focus on preventing diseases and providing primary care to the population. But rather on attending and controlling demand, mitigating costs with related companies and imposing access barriers so as not to spend the billions they receive for this work. In addition, the EPSs are not accountable and have had no real state control of financial resources.


Some Reasons That Justify The Reform of the Colombian Health Care System

Health Minister Carolina Corcho argues that the country could save more than 6.6 billion pesos (approx. US$1.6 billion) annually by distributing the work of affiliation, risk management and payment to medical centres, since the IPSs are ultimately the ones that provide medical care to the affiliates.  The EPSs must become IPSs and these economic resources they receive can be invested into improving the system.

The government has promised that doctors will not be imported from Cuba, nor that health care in Colombia will be nationalized. In the new model, the EPS must become primary health care providers and take advantage of the capabilities they have developed over the years. It is then a matter of redistributing the functions of the EPSs and avoiding financial intermediation. 

Eps logos jpg
Most EPS do not meet financial solvency and service quality indicators.

To date, only 7 out of 25 EPSs meet the solvency and quality indicators which makes the current system unviable. The government cannot liquidate companies and transfer users to others. Because in the end it collapses the companies that are complying. In 2021 the Supersalud received more than 30 thousand complaints and tutelas (lawsuits) for violation of the right to health, which shows that there are failures in the provision of the service that must be corrected.

EPSs owe Billions to Clinics and Hospitals in Colombia

EPSs in Colombia have a significant debt with the country’s clinics and hospitals. This has led to a critical situation in the healthcare system. According to the Asociación Colombiana de Clinicas y Hospitales (ACHC), as of June 2021, the debt owed by EPSs to healthcare providers exceeded 9 billions Colombian pesos (about US$2.4 billion).


Nivel de deuda eps activas
EPSs have debts of billions of dollars with clinics and hospitals

The debts owed by the EPSs to Colombia’s clinics and hospitals are a direct consequence of the lack of adequate regulation and supervision of the country’s health sector. Many EPSs have been diverting the financial resources received for other purposes, such as the personal enrichment of their leaders. Instead of investing them in the improvement of health services for their insured.

The Corruption of Some EPS has Endangered the Health of Millions of Colombians

There are numerous cases of corruption in the Colombian health system that have shocked public opinion, some of the most famous being SaludCoopMedimas and Coomeva. These companies had irregular financial management and fraud to their affiliates resulting in intervention, liquidation and in some cases, criminal sanctions being imposed on their directors. According to a publication by the Superintendencia de Salud in Colombia in March 2021, the liquidated and active EPSs had debts totalling $49.1 billions Colombian pesos (equivalent to about $13.4 billion U.S. dollars at the current exchange rate).

The bankruptcy of some EPSs has affected millions of colombians

Health fund fraud in Colombia has reached limits worthy of the famous Ripley’s Believe It or Not show! The money stolen by the directors of the liquidated EPS SaludCoop went to countries such as Dubai, Panamá, Dominican Republic, Singapore and México. The Fiscalia General de La Nación, has identified hundreds of cases of fraud to illegitimately appropriate money from the health of Colombians where they also operated in addition to EPS, health centers, public officials and individuals. Some of the most frequent cases are the falsification of invoices and medical records to charge for high-cost treatments, cost overruns in medicines, charging for services of deceased persons, among others. 

Since the enactment of Law 100 in Colombia, several EPSs have been liquidated in the country. According to the Ministerio de Salud y Protección, as of September 2021 a total of 14 EPSs have been liquidated in Colombia.

Why is the Colombian Government Intervening and Liquidating EPS?

The Colombian government intervenes and liquidates health care providers (EPS) in cases where they do not comply standards established by law to provide health care services. The Superintendencia de Salud is the entity in charge of supervising and controlling the operation of EPSs in Colombia and taking measures in case of non-compliance.

Gustavo petro and health systems
The government must oversee the adequate provision of medical care in Colombia

Some Reasons Why the Government Intervenes and Liquidates EPSs

Non-compliance with financial obligations: EPSs must properly manage the financial resources received to provide health services to their affiliates. If EPSs do not comply with their financial obligations, such as by paying debts to IPS and not guaranteeing access to health services, they may be intervened and liquidated.

Failure to comply with legal and regulatory requirements: EPSs must comply with the rules and requirements established by law and regulators of the health sector in Colombia. If EPSs do not comply with these requirements, they may be intervened and liquidated.

Failure to provide quality services: EPSs must guarantee that the health services provided to their affiliates are of quality and comply with the standards established by law. If EPSs do not provide quality services, they may be intervened and liquidated.

Eps en colombia
Despite these efforts, there are many complaints from users of the EPS medical services

What are the Changes Proposed by Gustavo Petro's Government for Healthcare in Colombia?

Creation of a universal health care system: Petro has proposed the creation of a universal health care system that guarantees access to quality health services to all people, regardless of their ability to pay.

Strengthening the public health system: Petro has stated that it is necessary to strengthen the public health system in Colombia by increasing investment in infrastructure, personnel and technology to improve the quality of services.

Drug price control: Petro has proposed drug price controls to ensure that patients have access to affordable treatments and to avoid monopoly practices by large pharmaceutical companies.

Ley de salud para la vida
Gustavo Petro's Ley de Salud para La Vida bill is already before the Colombian Congress.

Implementation of a primary health care model: Petro has proposed the implementation of a primary health care model that promotes prevention and early diagnosis of diseases, rather than focusing on the treatment of advanced diseases.

Strengthening mental health: Petro has noted the importance of strengthening mental health services in Colombia to ensure that people can access quality services to treat illnesses such as depression and anxiety.

Conclusions of Gustavo Petro's Health Reform Bill

New bodies will be created to strengthen the system, including: Consejo Nacional de la Salud, Consejos Territoriales, Centros de Atención Primaria en Salud (CAPS), Redes Integrales de Servicios de Salud (RISS) y Equipos Básicos de Salud, among others. In this way, the government intends to improve the articulation of the system in order to decentralize and bring the service closer to citizens throughout the country.

  • The competencies of the Ministerio de Salud y Protección Social, Superintendencia Nacional de Salud, Entidad Administradora de los Recursos del Sistema de Salud, ADRES.  For the control of health money are strengthened. This will assume the functions of the EPS, avoiding financial intermediation and risks of corruption and diversion of funds.
  • A special labor regime is created for health professionals to avoid job insecurity and improve their living conditions and development. The government will promote specialization to reduce the deficit of doctors and the emigration of health personnel.
  • The Colombian health system will have a Single Integrated Information System for citizens, in order to carry out an adequate medical follow-up of citizens. The government will seek to improve effective access, through prevention and timely treatment to the population, aiming to reduce morbidity and maternal and infant mortality rates. Early diagnosis will reduce costs and risks associated with deficient services.
The Health Reform presented by the government has generated protests in some sectors

Although it is too early to know the results of the new Colombian health system law. Now even the opponents themselves recognize the flaws in the service. What few understand now is: how will the new system work in practice? This Bill will have to pass eight debates to be approved by the Congress of the Republic. Therefore, the government must conciliate with the opposition and opposing sectors, so that this project becomes a reality this year. 

There is no doubt that the Colombian health system needs profound changes in order to move forward. It is evident that the current model has been in crisis for several years. Therefore, it is necessary to make changes to guarantee the right to health of all people in this country.

Questions, comments? Contact me today and I will be happy to discuss any of these issues further with you. 

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