After months of debate, the final significant piece of a legislative health reform process that began in January was approved by the Colombian Senate late on Wednesday.
The most recent and controversial legislation was proposed by the administration of President Juan Manuel Santos, who has lobbied hard for its approval. But its passage through the Senate has not been easy, with critics claiming that it fails to fix the overarching problems facing the health system and that the deliberation process was rushed by an administration looking to score political points ahead of national elections next March.
Should the House approve the Senate bill, the new legislation will join the larger statutory health reform passed earlier this summer currently under review by the Constitutional Court.
Fixing the private health insurers: EPSs
The biggest issue decided in the latest reform bill is the fate of Colombia’s intermediary service managers, or EPSs.
The EPSs are private companies that manage public health funds for individual treatment. Colombians choose which EPS they wish to represent them, giving the company power to allocate resources for treatment and choose services on their behalf.
In theory, the EPS acts as an intermediary, keeping down overall costs by giving individual Colombians greater leverage in the health market.
In practice, the EPSs have engaged in widely unethical practices, creating bureaucratic barriers for treatments, withholding payments, and investing funds in areas not related to health care.
In an interview with Colombia Reports, health expert David Bardey explained that the problem is one of incentives.
“The EPSs have two functions,” said Bardey, who teaches healthcare economics at Los Andes University. “To serve as intelligent purchasers of treatment, and to provide a high quality of service. But the way the system is designed, they only have reason to do the former.”
Because the EPSs receive government funds up front and independently of any services they approve for patients, said Bardey, “They are incentivized to spend as little money as possible, regardless of what that means in terms of treatment for patients.”
Various large-scale embezzlement scandals surrounding the EPS system have led many to call for the elimination of the intermediary model altogether. Ultimately, the reform bill kept the intermediary function, but took away the agencies’ total control of finances. According to Professor Bardey, that is for the best.
“The EPSs have been involved in so many dirty practices that the immediate reaction is to remove them entirely,” he said. “But that ignores the fact that they were doing a very good job at keeping down prices. That’s not to say I approve of some of the methods they used to do that, but that is as much the fault of the system and its design as it was of the EPSs themselves.”
According to Bardey, getting rid of the EPSs would not save the 10% of costs that go toward their services, as some congressmen have suggested; instead, “it would remove the only pressure holding down costs.”
Bardey has been working with the government to design a series of alternative incentives that would link the payments the EPSs — now called “Health Managers” under the new bill — receive to the quality of care they negotiate for their clients. Losses and gains would work on a sliding scale tying payments to treatment efficacy and overall client wellbeing. The exact measures that would be used to determine those factors has yet to be worked out, he said, and was not laid out in the bill itself.
Previously, the EPSs were able to prohibit clients from using certain service centers, and steer them towards others, many of which were owned by the very same EPSs.
Under the new system, any EPS wishing to become a “Health Manager” must agree to allow clients to use any service centers, unless the service desired is a non-emergency, general maintenance procedure like a regular checkup, in which case the Health Manager will be allowed to specify the service center.
As part of its intermediary reform, the bill establishes a single government pool, called “Salud Mia” (My Health), that acts as a distribution center for the over $30 billion the government budgets for annual healthcare costs.
Presumably under a guiding system like the one Bardey described, Salud Mia will make payments only after treatment has been approved, ensuring some level of government oversight over its own funds.
However, the vagueness surrounding the entity and its specific role has garnered criticism from congressmen like Democratic Pole Senator Jorge Robledo, who told the Colombian press Wednesday that Salud Mia only “doubles our dose of outsourcing” and encourages corruption by pooling so many resources into a body whose regulations have yet to be strictly delineated.
In perhaps its most controversial section, the new bill gives mayors and governors the ability to appoint upper-level hospital staff, including hospital directors.
The clause is purportedly designed to give the government more control over treatment centers, but opposition leaders say it will lead to the inevitable politicization of health care.
Senator Luis Carlos Avellaneda, for one, said the measure “opens the door to cronyism and politicking, and of course corruption.”
Interview with David Bardey
Senado aprobo proyecto de reforma a la Salud (El Colombiano)