Sura EPS Health Network Going Kaput, Leaving Millions in Limbo

Medellin-based health-network-insurance provider Sura EPS – one of Colombia’s biggest EPS organizations, with 5.4 million members – announced May 28 that it has just begun the process to exit the health-insurance market, effectively due to government financial strangulation.

The move comes as Sura EPS — a subsidiary of Medellin-based multinational insurance giant Suramericana — has piled-up huge financial losses over the last two years.

Those losses came on the heels of left-wing demagogue Gustavo Petro becoming Colombia’s President in 2022, promising fantastic miracles for Colombia’s mixed private-public health system.

Sura had managed to stay in-the-black for the eight years prior to Petro taking office in 2022. But ever since then, Petro and his health ministers began strangling Colombia’s EPS organizations via insufficient reimbursements for patient costs.

Colombia’s mixed public-private health system today puts the poorest patients in the “subsidized” EPS networks and millions of others in the “contributory” EPS networks. The government is supposed to reimburse the EPS networks for all the “subsidized” patients — and partially reimburse those in the “contributory” system.

The big problem with this scheme: Millions of low-income Colombian patients contribute little or nothing to the national health-care system, while newer, more-expensive health-care technologies, medicines and advanced procedures are constantly being added at hospitals and clinics.

What’s more, an ever-growing number of Colombians are living longer, adding even more costs.

All of this hits taxpaying Colombians with growing financial obligations to subsidize the many millions of non-payers for all the new technologies, expanded services and an ever-expanding list of “covered” medicines.

However, the government isn’t recouping enough from taxpayers to reimburse the EPS networks for all those extra costs — and President Petro hasn’t come-up with any detailed, rational explanation for fixing this problem.

Instead, Petro and his health ministers have spewed demagoguery, blaming “greedy” EPS networks for the problem — and making fantastical promises including new, hugely expensive health centers in remote areas, along with half-baked “reform” initiatives in Congress, roundly bashed by health-care experts as deliriously unrealistic.

Aside from floundering “reform” initiatives in Congress, Petro’s main effort to date has been the financial strangulation of nearly all the EPS insurance networks, aiming to replace them with a single government payer — rather than maintaining whatever cost efficiencies the private EPS networks have been providing, along with help from those patients shouldering at least some costs in the “contributory” sector.

Having a 100% government-run payment system – without any efficiency drivers provided by the private EPS networks –wouldn’t automatically solve the problem.

Rather, an under-funded, 100% government-run system could make problems far worse, choking the finances of hospitals, clinics, health-care workers and suppliers, while creating even longer lines of exasperated patients waiting for services.

Since Petro began throttling the finances of EPS networks two years ago, Sura alone lost COP$138 billion (US$35.7 million) for full-year 2022 and COP$221 billion (US$57.2 million) in 2023, the company showed.

Colombia’s national health superintendency (“Supersalud”) now has 65 days to process the Sura EPS request to exit the market. What happens after that is unstated, but it likely means a government takeover of the Sura EPS network system.

In a May 28 interview with Medellin’s daily newspaper El Colombiano, Suramericana president Juana Francisca Llano Cadavid lamented the company’s decision to exit the EPS health-insurance market.

“Today we [Colombians] have a different epidemiological profile, with new diseases, and also more health technologies, and evidently there is greater consumption of health services, even by healthy people . . . [and] our health system today does not recognize this and is not sufficiently well funded.

“At Sura we did everything within our power [to avoid the decision to exit the market]. We have modified our operating models, trying to be more efficient. We have searched and designed health care models to prevent disease outcomes that are worse for users. We have spoken with the government, we have spoken with Congress, we have spoken with people and institutions to avoid reaching this point.

“The truth is that at this point EPS Sura no longer has assets, although it has technical reserves to respond to its [current] obligations” — at least for the near term, until those funds run-out, she concluded.