Growth deceleration and fiscal headaches

COLOMBIA - Report 01 Sep 2023 by Juan Carlos Echeverry and Andrés Escobar Arango

The three main healthcare insurers wrote a letter to the Minister of Health, and made it public, claiming that they see severe difficulties for their short-term financial viability. The argued that the money transferred by the system was insufficient to meet their costs; that the distribution of resources among the insurers was unfair; and that there are costly pending payments. The signatories, which provide health insurance to 13 million affiliates, claim they are owed COP 1.9 trillion by ADRES, the public agency in charge of resource distribution.

Healthcare Minister Guillermo A. Jaramillo called the letter “a storm in a glass of water.” He claims the government has made all payments, except for pandemic-related debts incurred during the previous Duque government. If worse comes to worst – namely, if the providers go under -- the government could circumvent them, and pay to hospitals directly, he suggested. The healthcare system may still work for some months. Yet 2024 could witness the collapse of healthcare provision, with severe political consequences.

Rumor has it that President Gustavo Petro is seriously angry over the stalemate his government is facing, in this and other areas. He blames the private sector and the media. He foresees a defeat in the October 20th regional elections, which would make it even tougher for him to advance his policy agenda. Be prepared for more turmoil in coming months.

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