BTN News: The Colombian healthcare sector is grappling with an unprecedented financial crisis, the worst in three decades, with experts warning that the situation is far from improving. The National Association of Financial Institutions (Anif) has pegged the deficit across the entire healthcare value chain at a staggering 9.6 trillion pesos. In response to the mounting pressure, the Ministry of Health implemented Decree 489 of 2024, enabling the Administrator of the Resources of the System (Adres) to directly transfer 44.8 trillion pesos over the past six months to hospitals, clinics, and other healthcare service providers. While this intervention, part of an overhaul in the direct transfer mechanism in the contributory regime, initially seems like a lifeline, concerns persist among key industry stakeholders about its effectiveness in addressing the deep-rooted financial issues plaguing the system.
Despite an 88.82% increase in direct transfers to Health Service Providers (IPS) compared to the same period in 2023, the Colombian Association of Hospitals and Clinics (ACHC) has again urged the government to revisit and refine this direct transfer mechanism. In a letter addressed to Health Minister Guillermo Alfonso Jaramillo, the ACHC stressed that while direct transfers are a step in the right direction, they are insufficient in their current form. The association highlighted that due to the vertical integration within the healthcare system, independent IPS—both public and private—are not receiving the full amount owed to them, particularly those with less direct relationships with Health Promoting Entities (EPS).
The ACHC’s latest plea, the third of its kind, emphasizes that the current direct transfer process, while beneficial, needs strict oversight to ensure that at least 80% of the Capitation Payment Unit (UPC) is paid out, with the goal of reaching as close to 100% as possible. The association calls on the government to ensure that EPS do not treat the 80% threshold as a ceiling but as a minimum requirement. The letter underscores the critical importance of timely and full payments to maintain the operational stability of healthcare providers, many of whom operate with minimal reserves.
The financial strain on healthcare providers is further exacerbated by the fact that a significant portion of the direct transfers is concentrated among entities with vertical integration, which are often directly affiliated with EPS. According to data published by Adres, the top beneficiaries of direct transfers include organizations like the Colombian Family Subsidy Fund Colsubsidio, the Family Compensation Fund Cafam, ClÃnica Colsanitas S.A., Cruz Verde Pharmacies, Audifarma, the National Cancer Institute, and Suramericana Health Services IPS, all of which have some level of connection with EPS.
The ACHC has expressed concern that the current direct transfer mechanism disproportionately favors entities with vertical integration, leaving independent providers at a disadvantage. The association has called for a review of the compliance with the 20% limit on contracts and relationships between EPS and their vertically integrated partners, as stipulated in Law 1122 of 2007. This law was intended to prevent excessive concentration of resources within a few entities, but the ACHC argues that the current system still allows for significant disparities in the distribution of funds.
Another pressing issue raised by the ACHC is the inadequate funding through Maximum Budgets—state-determined amounts meant to cover essential health services and technologies not included in the Benefits Plan. Over the past five years, 19.8 trillion pesos have been allocated to EPS under this scheme, yet only 57 billion pesos, a mere 0.4% of the total, have been disbursed through the direct transfer mechanism. The association notes that in July, out of 12 EPS, only four authorized direct transfers, and most of these did not meet the 80% threshold mandated by regulations.
The ACHC’s letter also calls for the National Superintendency of Health to enforce stricter measures on EPS under intervention to ensure timely payments to healthcare providers. The association warns that the failure to address these financial issues could lead to the collapse of essential health services, particularly in regions where EPS under intervention cover a significant portion of the population.
The ACHC’s concerns are amplified by the fact that many EPS, particularly those under government intervention, have failed to take the necessary actions to stabilize their finances. The association points out that the ongoing imbalances in financial relations, improper payment practices, and the concentration of resources within vertically integrated networks continue to undermine the financial health of independent providers.
Despite the timely payments by Adres, which were facilitated by the direct transfer mechanism, the ACHC insists that these measures alone are not enough. The association urges the government to consider its proposals and address the systemic issues that continue to threaten the viability of Colombia’s healthcare system.
As the Colombian healthcare system teeters on the brink of financial collapse, the ACHC’s calls for action highlight the need for comprehensive reforms. Without these, the direct transfer mechanism, while beneficial, may only serve as a temporary fix to a much deeper problem. The healthcare sector, already strained by years of underfunding and mismanagement, cannot afford to wait any longer for meaningful change. The government must act swiftly to ensure that the funds allocated to the healthcare system are distributed fairly and effectively, ensuring the sustainability of services for all Colombians.
