The Colombian health system would not currently have enough insurers with the financial capacity to absorb a massive liquidation of the intervened EPS, even in the case of Nueva EPS, the entity with the largest number of affiliates. This is one of the main conclusions of an analysis by FrontierView, which warns about the difficulties the Government would face in transferring millions of users without increasing pressure on the receiving entities and health service providers (IPS).
The scenario poses a dilemma for the Government of Abelardo De la Espriella. On September 4, during the Governors’ Summit, the president stated that EPS that are viable and guarantee good care could recover, while those that do not meet these conditions should be liquidated in an orderly manner.
That same day, the Minister of Health, Ana María Vesga, pointed out that the Government’s immediate priority is to stabilize the system and not liquidate it. According to FrontierView, the financial outlook of the insurers supports the need to prioritize stabilization, since almost no EPS currently has sufficient capacity to receive a massive migration of affiliates without compromising its own operation.
Non-intervened EPS also face financial problems
The analysis reviewed the situation of the eight largest non-intervened EPS in the country and found that three of them —Sanitas, Mutual Ser, and Savia Salud— do not meet any of the three minimum financial criteria required by the Superintendence of Health: minimum capital, adequate equity, and technical reserves.
The other entities analyzed —Compensar, Capital Salud, and Familiar de Colombia— meet only one of those three requirements. Even Sura and Salud Total, identified in the report as the non-intervened EPS with the best financial conditions and as the main candidates to receive affiliates from Nueva EPS, only meet two of the three criteria and show non-compliance in adequate equity.
The diagnosis coincides, according to FrontierView, with the most recent financial report from the Office of the Comptroller General of the Republic. According to that report, only Aliansalud, Salud Total, Salud Mía, and Sura currently meet the financial and solvency conditions required, among a total of 23 active insurers in Colombia.
For Santiago González Barrera, analyst for the Andean Region at FrontierView, this situation limits the possibilities of using mass transfers as a mechanism to solve the problems of the intervened EPS.
“Today there is not a single EPS —intervened or not— with enough capacity to absorb a massive migration of affiliates without risking its own solvency. That makes any liquidation a very high-risk exercise for the affiliates, the receiving EPS, and the IPS. It is far from being a solution,” he said.
Nine intervened EPS and few regional alternatives
The situation is even more complex among the nine EPS currently under intervention: Nueva EPS, Coosalud, Famisanar, Emssanar, Asmet Salud, EPS S.O.S., Capresoca, Proteger/Cajacopi, and Dusawaki.
According to the analysis, these entities collectively fail almost all indicators of minimum capital, adequate equity, and technical reserves required to operate. The only exception noted is Proteger/Cajacopi, which meets the minimum capital requirement.
FrontierView states that none of the nine EPS has the capacity to achieve independent financial recovery or guarantee quality care in the short or medium term, so their continuity would depend on state support.
Financial difficulties are compounded by a territorial problem. Several of the intervened EPS have presence in regions where alternatives for affiliates are limited. The report mentions Coosalud, Emssanar, Asmet Salud, Capresoca, and Dusawaki, with presence in areas such as the southwest of the country, the isolated east of Casanare, and the indigenous border between La Guajira and Cesar.
In those regions, a possible liquidation could leave affiliates without sufficient options to transfer to other insurers with effective presence in their territories.
Nueva EPS: affiliate transfer would have a limit
One of the main points of the analysis is the situation of Nueva EPS, which has 11.39 million affiliates. FrontierView points out that transferring users to EPS with better financial indicators would not be enough to substantially reduce pressure on the entity.
Sura and Salud Total appear as possible recipients because they meet the minimum capital and technical reserves requirements and operate in areas of the north and center-west of the country. However, the report warns that both have limited operational capacity.
Their “safe” expansion areas would be specific, while a significant portion of Nueva EPS affiliates are in regions where non-intervened EPS have no real presence.
For that reason, according to FrontierView, transfers would have to focus on the subsidized regime and certain geographic clusters, without reaching a volume sufficient to significantly relieve the financial pressure of Nueva EPS.
The analysis thus poses a contradiction for the liquidation strategy. If the Government wanted to decongest Nueva EPS through transfers, it would also have to resort to other intervened EPS as possible “bridge EPS” to receive affiliates in the most remote areas.
That would mean that, while trying to reduce Nueva EPS’s burden, some of the other intervened entities would have to remain operational to absorb part of that population.
The financial and fiscal problem
FrontierView also links the discussion about liquidations with the size of the accumulated deficit of the health system.
In May of this year, Acemi proposed diluting over four years, through percentages of 40%, 30%, 20%, and 10%, a shortfall of $34 trillion corresponding to system obligations between 2021 and 2025. However, the statement notes that more recent reports raise that figure to more than $58 trillion.
According to the analysis, this would imply that, to avoid fiscal overload, the financing period would also have to be extended.
The Government has ruled out presenting a health reform before Congress and has pointed to the recalculation of the Capitation Payment Unit (UPC) as one of the mechanisms available to rebalance the system’s resource flow. However, the statement notes that there is still no clarity on how the $10 trillion of the shock plan announced by De la Espriella will be financed.
According to FrontierView analysts, a structural solution would also require a tax reform and a long-term political commitment.
Liquidating an EPS can take years
Financial restrictions are compounded by the legal process involved in liquidating an EPS. According to the analysis, it is not an immediate administrative closure, as the legislation requires establishing a plan to pay the entity’s financial obligations.
The process, adds FrontierView, has historically taken years. A liquidation without sufficient backing to cover obligations could also generate uncertainty among IPS that have maintained their operation on credit, expecting to recover owed resources.
The report warns that this scenario could trigger a wave of insolvencies and service closures, worsening the care crisis.
“Liquidating an EPS solves nothing, it only transfers the problem to another that also lacks the capacity to receive it; moreover, the country cannot afford to liquidate anything: there is nowhere to reassign affiliates nor with what to pay what is already owed. With a debt of $58 trillion, this is not a problem solved by liquidating, but by financing,” González said.
He added: “A real financial plan, given the country’s fiscal capacity, is measured in years, not months.”
Thus, FrontierView’s diagnosis places the debate about the future of the intervened EPS in a double constraint: on one hand, the lack of insurers with sufficient financial and operational capacity to receive millions of affiliates; on the other, the magnitude of accumulated obligations and the time it would take to resolve them. In this scenario, user transfers and entity liquidation would face financial, territorial, and legal limits.
EDWIN CAICEDO
Environment and Health Journalist
@CaicedoUcros
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