Thursday, March 30, 2017

Coomeva, U.S.-Based Christus Charting New Course for Medical Insurance, Coverage

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On the heels of finalizing a US$50 million strategic investment deal with U.S.-based Christus Health last month, Colombian health insurer and clinic operator Coomeva is moving to rationalize its service network and shore-up its financially troubled “Coomeva EPS” subsidiary.

On a related front, Coomeva’s separate pre-paid health services subsidiary (Coomeva Medicina Prepagada) continues to stand-out among its Colombian insurance competitors in offering pre-paid medical insurance to seniors up-to-85-years-old (see interview, below), including a growing number of expats now living in Colombia.

On the cost-rationalization front, Coomeva recently petitioned Colombia’s Health Superintendent (Superintendencia de Salud) for permission to terminate its EPS ("empresas promotores de salud") coverage for some 313,000 users in 236 municipalities where that system isn’t economically viable, according to a report from the Medellin-based newspaper, El Colombiano.

Meanwhile, Coomeva EPS also recently revealed that it has accumulated the “scandalous sum of COP$850 billion [US$289 million]” in unpaid reimbursement for health services that fall outside of the national government’s “plan obligatorio de salud” (POS) mandatory health services, as reported in Colombian business newspaper, La Republica.

Colombia’s national public health system has been running deeply in the red for years, with billions of dollars of unpaid bills to hospitals, clinics and health insurers -- all thanks to an excess of spending, populist court and political decisions, some questionable hospital and insurance-company management decisions, and a shortage of tax revenues earmarked for subsidizing millions of Colombians that pay little or nothing for health insurance.

However, a partial cure to this financial crisis is now on the horizon thanks to a proposed COP$200/liter (US$0.06/liter) special tax on sugary beverages -- a measure backed by Colombia’s Health Minister Alejandro Gaviria, but opposed by trade associations that represent small grocers.

Christus Deal Impact

According to Coomeva, the new alliance with Christus Health means that Christus will take a 50% stake in Coomeva’s “Sinergia Salud” clinic network plus a 10% stake in Coomeva Medicina Prepagada. In addition, the Coomeva EPS subsidiary will get a financial credit from Christus that can be converted into stock in the new alliance.

Christus Health – formed in 1999 – operates 50 clinics and hospitals plus 175 outpatient facilities in the U.S., Mexico and Chile, with some 30,000 employees and contractors. The company reported US$4.6 billion in revenues last year.

Meanwhile, Coomeva EPS reported having 3 million customer affiliates and 5,000 employees in Colombia, while Coomeva Medicina Prepagada had 350,000 customer affiliates. Coomeva also has a banking subsidiary in Colombia.

Prepaid Medicine Q&A

Asked to elaborate on its prepaid medical services offering, Coomeva told Medellin Herald the following in a question-and-answer format:

Medellin Herald: Is it indeed the case that Coomeva Medicina Prepagada is the only such prepaid plan in Colombia that accepts persons that are 60 years and older?

Coomeva: Coomeva Medicina Prepagada has a wide portfolio of insurance products [including prepaid medicine] that permit the Colombian population to obtain different health programs for those up-to-85-years-old.

Medellin Herald: It’s widely known that older people on average tend to have more medical problems than younger people, so it’s understandable that many insurance companies refuse to offer prepaid health insurance to the elderly. So: Why does Coomeva Medicina Prepagada accept persons 60 years and older as customers? Is it profitable to offer such policies?

Coomeva: Coomeva Medicina Prepagada has a fundamental principle to bring voluntary insurance alternatives to users at any age, so our tariff is structured to account for the risks associated with age. We accompany our affiliates in health care at all stages of life.

Medellin Herald: A growing community of expats in Colombia (many of them English-speaking) are considering retirement or have already retired here. But many don’t know that there is prepaid health insurance available for those 60 and older – perhaps because many of these expats don’t have a good command of Spanish, or perhaps because they may have certain pre-existing health problems that would exclude them from certain coverages. So: Does Coomeva have a marketing plan (such as offering bilingual sales and service) to help reach out to this growing community of expats?

Coomeva: All foreign persons that reside in Colombia can acquire any of the programs offered through Coomeva Medicina Prepagada, provided that they meet certain requirements [exclusive of certain pre-existing illnesses], the most important of which is affiliation to a POS [mandatory health services] system. We have personal assessors to help guide and answer questions about our policies and services.

Medellin Herald: What are the advantages of Coomeva Medicina Prepagada compared to what’s available from an EPS policy? Are there fewer delays in service, less bureaucracy, more services offered, more types of medicines, more types of procedures that aren’t included in an EPS policy?

Coomeva: A Coomeva Medicina Prepagada policy holder has special coverages depending on the type of contract, with direct access to a wide variety of health professionals and health institutions nationally, with which one can obtain quality services, wide opportunities and comfort.

Prepaid Medicine affiliation means tranquility and confidence for affiliates and their families. Although the national health system in Colombia is qualified by the World Health Organization as one of the best in the world and among the top in Latin America, some treatments and health services aren’t available within the EPS system.

Because of that, a voluntary insurance plan – that is, a prepaid medical plan, a complementary plan, a home health care plan, or a medical service policy – is worth the cost, once you consider situations such as surgeries, hospitalizations, health technologies, intermediate or intensive care, certain commercial medicines, among others, when you look for superior attention.

Medellin Herald: Relatively recent laws in Colombia and certain Supreme Court and lower-court decisions have expanded services, procedures and medicines for those in the EPS systems (contributory and subsidized), including expanded “POS” and No-POS” procedures and medicines. Because of these recent changes, it’s becoming more difficult to see the difference in value between what you might get from a relatively low-cost EPS policy versus the much-more-expensive (but reputedly better, faster and more thorough) prepaid medical policies. Given this situation, what is Coomeva’s perspective on the advantages of prepaid medicine when some judges and politicians here may adopt populist laws and rulings (aiming to make everything "free" or extremely low cost)? Is Colombia heading toward a health system like that of Cuba or Venezuela, where almost everything is “free” by law, but the resulting quality and availability of services, procedures and medicines is mediocre or even non-existent?

Coomeva: In Colombia, the demand for prepaid medicine is growing as a result of a growing understanding among people here of the value of health promotion and sickness prevention, as well as the desire to ensure in advance access to the most opportune, comfortable and free choice of health services at any moment, without waiting for services. This is what Coomeva Medicina Prepagada has been offering in Colombia for 42 years.
Colombians are learning about these models that promote health, which signify confidence, tranquility and physical attention to these health situations. These are the moments when we all want to have access to the best services available.
Prepaid Medicine users receive differentiation in health services in terms of quality, promptness and comfort, including:
• Direct access to specialists;
• A wide network of health services;
• Greater agility in administrative procedures;
• Integrated services; and
• Preferential attention.

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Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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