Press Office – Roberto Schmalbach – Bucaramanga
Tuesday, September 9, 2014
Speech by Senator Jorge Enrique Robledo in a plenary session of the Colombian Senate, September 2, 2014
(Translated by Eunice Gibson, CSN volunteer translator)
“We don’t know what has happened to 1.4 billion pesos and still more of the health funds belonging to Colombians. Gaviria, the Minister of Health, ought to resign.”
The criminal charge of fraud against the cartel of private entities that promote health (EPS (plural) is the Spanish acronym.) now sleeps the sleep of the just. The nation’s chief prosecutor, charged with investigation of the robbery, entered into contracts with Saludcoop for more than five billion pesos. It has been established that, under Statute 100, Colombia’s health system is beyond repair. According to the Comptroller’s Office, the Health Ministry has failed to comply with the order of the Constitutional Court regarding the Capitation Payment Unit. (UPC is the Spanish acronym.) There continues to be corruption in the recovery of funds by the Solidarity and Guarantee Fund (Fosyga is the Spanish acronym). The EPS owe hospitals and clinics more than 6 billion pesos. Of the 955 health institutions (ESE) existing in Colombia, 430 are at high financial risk and 568 are at medium to high financial risk. According to the Public Defender’s Office, there were almost 300,000 denials of health services in 2013. According to the Public Defender’s Office, a civil rights action is filed every four minutes in Colombia, and the majority are based on denials of urgent needs.
Illegally, with money from the UPC, Saludcoop purchased 28 clinics and 14 pieces of real estate, and invested in the Rio Grande Country Club, the Impeccable Laundry, and Saludcoop Mexico.
According to the Comptroller’s Office, Saludcoop incurred 1.4 billion pesos of debt to the health system, because it appropriated the funds illegally. In addition, it owes 583 billion to entities that provide health services. (IPS (plural) is the Spanish acronym). Saludcoop is cause for its dissolution and liquidation. And the government does nothing. Between 2010 and 2013 the delinquent accounts owed by the EPS to the IPS rose from 1.9 to 4.2 billion pesos. The Minister and the Superintendent ought to resign. The health system requires major surgery and profound change, not half measures.
I begin by expressing my solidarity with the people of Ibague and Tolima that right now are suffering a disaster with their principal hospital, Federico Lleras, the provincial hospital, overwhelmed by an extremely serious crisis. And in the debate we will see that there are many other crises in the public health system. I want to make it an example to illustrate why we are having a debate such as this one right now.
Let’s remember that in 2011 I made a speech that in some ways is the antecedent for this one. What we warned about then has come to pass throughout these now nearly three years. I am going to explain how things, far from having improved, have even gotten worse, not just in relation to the general functioning of the health system, but also in what has to do with the Saludcoop case, a matter on which I dwelt in detail at that time. Supported by the decisions of the Superintendence of Industry and Commerce, (Superindustria is the Spanish nickname.) I complained that the principal EPS of the country have set up a cartel—that’s the word that Superindustria used—to defraud, to rob, using colloquial language, health funding. I also pointed out how Saludcoop had inflated its charges for medications to 800 billion pesos. A little later, the Vice Minister of Health filed a criminal complaint against them. That charge sleeps the sleep of the just. We are talking about manipulation of Fosyga’s recoveries and how medications were paid for at absolutely scandalous prices, about the horrors of vertical integration as an instrument for defrauding the system, about the immense debts of the EPS to the IPS, and about the hospital crisis, not just public hospitals but private hospitals as well. We showed how the government’s audits of the accounts of the fraudulent cartel were practically nonexistent, because the EPS told them what they felt like telling them and, in a sense; they also did whatever they felt like doing.
I mentioned specifically that it seemed to me a big mistake to have appointed as the nation’s Attorney General someone who had contracts for more than 5 billion pesos with Saludcoop, a company that was being examined closely at that time. I insisted that, according to the Superintendence of Health, Saludcoop had illegally pocketed, or robbed, we could say, using more direct language, 600 billion pesos in health funding. At that time, the decision was challenged, but it was a decision already made by the Superintendence of Health. I explained that the health situation of Colombians was terribly bad. Lastly, I pointed out that, under Statute 100, Colombia’s health system was beyond repair.
The idea, my friends, is to look back at what has happened, at what is new, and how we should proceed. And I begin with a warning. This is not an argument against cooperativism—I have nothing against that respectable human activity. Neither is it an argument against the workers at Saludcoop. The dispute is with some of the directors of Saludcoop, and not in any manner against the workers and much less against the patients of Saludcoop. Most of them are victims of this disaster.
I will divide my presentation into two main areas. First, what is happening to Colombia’s health system. Second, what is going on with the Saludcoop case. I will conclude by pointing out that things are going from bad to worse. I will emphasize my dissatisfaction with the explanations that not only the Minister of Health, Dr. Gaviria, but also the Superintendent of Health have given me. And, depending on the explanations that I hear today, it is likely that I will end up requesting resignations, because I believe that somebody has to take responsibility for things that don’t work as they are supposed to.
What the Constitutional Court ordered
We begin by pointing out that in 2012 the Constitutional Court ordered the Ministry of Health to prepare a clear, technical methodology to guarantee that the EPS would not be able to continue inflating UPC funds. The UPC is the amount that the government gives every EPS and that is used to protect the rights of the citizens. This is called the right to a required health plan. (POS is the Spanish acronym.) And there are many indications that the EPS inflate the UPC. And if they inflate it, they end up pocketing extremely large amounts of health funding. Thus, the Constitutional Court ordered that, beginning in 2012, the new UPC had to be designed by the Health Ministry based on a careful study. I will be very succinct in the explanation because time is short, but I can show that that study was never carried out and that the UPC continues to be defined, basically, by very questionable reports furnished by the very same EPS, who have the power, more or less, to report whatever they want. Minister Gaviria tells me that he carried out a reform in relation to what happened in 2011, but it is clear that he has not been able to solve the problem. And the Comptroller General of Colombia has formed an opinion about the failure to comply with the order of the Constitutional Court. That has gone very badly.
In a 2008 decision, the Constitutional Court had ordered the government to prepare a system to limit the cases in which the EPS were denying the citizens their POS rights. It set forth an explanation that is important. When the government has already paid the EPS to provide POS rights, and one of those rights is denied, that does not just affect the citizen, but it also provides a basis for a civil rights action that ends up with the EPS paying twice for the same right. Yes there is fraud here and the thefts are absolutely colossal. Therefore, after a reasonable time, the Constitutional Court points out that the government has not acted appropriately either, and that, in a certain sense, the EPS can continue acting arbitrarily. And the Comptroller General’s Office (CGR is the Spanish acronym.) has the same opinion. I won’t read the words in detail, because time is short.
Another serious issue revealed three years ago is the issue of fraudulent recoveries from Fosyga, the agency where an extremely important amount of money is deposited, largely to cover sums that the EPS do not pay in the case of the civil rights actions. There the possibilities of fraud are enormous. Fosyga’s liabilities are extremely high, and we know that they present all kinds of debatable manipulations or corrupt acts, definitely. There also the Court has stated, supported by the CGR, that Fosyga is not complying with what has been ordered. We are talking about billions of pesos.
Even the CGR has pointed out that auditing by the Colombian government of EPS accounts is supremely minimal. That is one of the most serious problems. The current system was designed, as former Minister Santamaría explained to me in that debate, not with the idea of providing strong supervision of the EPS, but rather, as he stated, and I quote him exactly—I have the citation—to stimulate free competition. The EPS would keep an eye on each other, because if one of them did the wrong thing, their customer would go to another one and then, by the magic of the market, the problem would solve itself. And so we keep on believing the EPS, by faith. And let’s not forget that faith means believing in that which cannot be proved, a belief that is very respectable in the field of religion but that is a serious mistake in the affairs of human beings.
Statute 1438, adopted in 2011, ordered the government to carry out a thorough investigation to establish how much the EPS are spending on administration. Here also they opened a great big hole through which it is very easy to steal health funding, because it is easy to inflate administrative costs, costs of the bureaucracy and the paper, and charge excessively. Then the law gave the Health Ministry a deadline to do a serious job and warned that, in the meantime, the maximum charge for administrative expenses would be 10% for plans with contributions and 8% for subsidized plans. But the study was never really carried out. The CGR has stated with certainty that no appropriate regulations for enforcement of the cited article of the statute were ever promulgated. The Ministry of Health has twice called the UPC’s attention to this. The explanation given by Minister Gaviria is completely unsatisfactory because in some ways it also supports the EPS, in the part dealing with intentions, but not in the part dealing with outcomes. That has to do with the UPC.
Disorder and Disarray
If one looks at the landscape that I am trying to explain concisely, one would have to conclude that the result is going to be disorder and disarray. It is easy to steal health resources in Colombia. It is harder to grab a rattle away from a baby than it is to pilfer those funds improperly. That kind of aberration and others keep the health system from functioning. And I will demonstrate with facts the ways in which the health system is functioning poorly.
First and foremost, the saddest and the worst is the enormous debt of the EPS, the truly favored members of the system, organized for their own benefit. Debts of more than 6 billion pesos to all of the public and private hospitals and clinics, debts that result in the awful attention given to the health of the patients. Those debts leave the clinics and hospitals in exceptionally bad condition. For its part, the government owes the clinics and hospitals government debts besides those of the EPS, nearly 500 billion in round numbers, to save time.
Where does that leave the network of public hospitals, fundamental to the good health of the people, because they care for those not covered by EPS and private IPS. Of the 955 ESE that exist in the country, 430 are at high financial risk and 568, 60%, between high and medium risk, which is to admit that they are functioning in very difficult conditions. It is worth mentioning that all of the statistics that I am furnishing come from official information. My office did not produce them. They are the statistics furnished by different government agencies.
Let’s go back to the EPS and examine the financial indicators of solvency or permanency, which are extremely bad. Of 52 contributory scheme EPS and 33 subsidized scheme EPS, 63% are functioning with very questionable indicators. So much so that in many cases there ought to have been intervention already, because they definitely are not complying with the most basic regulations. The worst practices have evolved into usual practices and are generating other bad practices. The whole thing functions so badly that one regulation even ordered the Financial Superintendence to be more vigilant about the functioning of the EPS. That was conditioned on compliance by the EPS with a series of minimum requirements demanded by the Superintendence. And what the Superintendence ended up concluding is dramatic. According to the agency, none of the EPS have complied with the four minimum requirements. It’s a disaster, Mr. Minister and Mr. Superintendent, because let’s not forget that in the end the EPS are insurance companies, and if the Financial Superintendence did not even want to get involved, for fear of what they might find, just imagine what must be going on.
The citizens suffer and the health workers suffer
Everything I’ve said so far leads to the final point, which is the key to this debate. It is how the people are doing, the ordinary citizens, not the one that enjoys prepaid health care and not the one who travels to the United States for treatment and not President Santos. For him they found a cancer on Monday, operated on Tuesday, and on Wednesday he was home, fresh as a daisy.
The financial crisis hurts the people. That is the root of the problem. That is what is serious about what I am saying. Minister Gaviria regularly brags that the country has a very high rate of coverage and he gives us the percentages. But he is always careful to say that we “technically” have universal coverage. Of course, he knows about these things and he knows that by introducing the word “technically” he is protecting himself. Because it is one thing if I have the “technical” right to treatment and quite another to actually receive treatment. It is one thing to have an insurance card and quite another to have things work the way they are supposed to. Because people can have insurance cards, but if it doesn’t provide them with medicine, if it doesn’t schedule their surgery, if the specialist doesn’t show up, if they just give you a few medications and tell you to come back later for the rest, well, that is a denial of your rights. And the barriers to access, as we all know, are extremely high.
The working conditions, that by itself I will leave for another debate. The circumstances of the doctors and nurses are disastrous. Slave drivers manage these Colombians. And the management at Saludcoop is particularly bad. That’s true for all of the EPS, but Saludcoop is a special case.
Let’s look briefly at some statistics. Minister Gaviria likes to insinuate that things are not as bad as reported but realistically, I would say, they are even worse. The Public Defender’s Office talks about nearly 300,000 denials of health services in 2013. That figure is similar to the number of people who are filing claims and we know that the majority of Colombians don’t even file claims. Sixty % of the denials deal with simple medications. The Health Ministry is in charge of an indicator known as PQR – petitions, complaints, and claims – and the PQR increased 25% between 2012 and 2013, which shows that things are getting worse. Complaints related to laboratory tests worsened by 14%; surgeries, 26% worse; high cost cancer services are 51% worse, emergency services, 30%, hospitalizations 31% and we could go on. We conclude then that things, as measured by claims made by the citizens and according to government agencies, and not just by things stated by Senator Robledo, are getting worse.
The civil rights action
Let’s spend a little time on the matter of the civil rights action, the only good thing, I would say, that has happened to the health system since 1993 when the Congress passed Statute 100. The government has been making an enormous effort to defeat it, to discredit it, to limit it, and the effort has been headed up by Dr. Alejandro Gaviria, who has worked on that with utter and complete dedication. A study has just been released by the Public Defender’s Office, an agency that officials ought to respect. The Public Defender’s Office reports that in Colombia a civil rights action is filed every four minutes. It adds that 70% of those actions demand rights under the POS. I repeat, the UPC is the money that the government gives to the EPS to deliver to the citizens their rights under the Compulsory Health Plan (POS is the Spanish acronym.). The government has already paid for delivery of the rights under the POS. We Colombians have already paid for that. So when an IPS doesn’t pay, it is stealing the money, literally speaking, because it already has the money in its pocket and it ends up converting it to earnings or to some other inhumane use.
Next I am going to mention Minister Gaviria’s demolition of this estimable study produced by the Public Defender’s Office. First he alleges that the number of civil rights actions has not increased, a half-truth. Next he argues that those who file civil rights actions are trying to skip the wait times, that is to say, he considers them a species of undesirables who go around dodging their obligations. After that he tells us that the majority of the civil rights suits are decided in favor of rich people, the same people who fought against tax reform a year and a half ago. He portrays the rich people of Colombia as those poor folks who have to pay the IVA (value-added tax) and the middle class, overwhelmed by heavy taxes. The Minister also says that that people are now not asking for essential services, but rather just the ancillary services, and once again it is the people’s fault because they are asking for too much. He adds that that part about 70% of the civil rights actions being about POS could not be true, that is to say, he tries in a systematic manner to undo the study published by the Public Defender’s Office.
At the end he certainly makes his intent clear, because the last phrase of this explanation, published in El Espectador, admits objectively that there are problems behind the civil rights actions, but he adds “it is a mechanism that has to be avoided because it creates problems of regressivity in the system”. In summary, Minister Gaviria requests that we throw out the only good thing that has happened in the health system for Colombians in the last 25 years.
We should make a clarification here: He said that the civil rights suits were not increasing. That is not true. He is making a clever statistical manipulation, comparing what has happened in recent years with the civil rights actions filed in 2008, the peak year. But he is silent about the fact that since 2010 or, you might say, since the moment when Dr. Santos arrived in the President’s Office, the civil rights actions have been increasing. Let’s look. They went from 94,000 to 105,000, to 114,000, to 115,000, and those filed last year, 2013, are the highest since 2008. You cannot then reasonably say that there has been an improvement.
I conclude this part by insisting that this is the crisis promoted by President César Gaviria with Statute 100 in 1993. Its proponent here in the Senate was Dr. Álvaro Uribe, now also a Senator. Statute 100 does not work, because it is not a law intended for the health of Colombians, but rather a law intended to finance the business of the health of Colombians. It is based on the proposition that if there are no earnings for the EPS, earnings that are at the cost of the rights of Colombians, there could be no health system. It is the radical proposition of neoliberalism, of the World Bank, of all those who share these conceptions. And by the way, I will mention that the Polo Democatico Alternativo Party does not share in the agreement announced recently by the Democratic Central Party and the National Unity Party that is headed by Minister Gaviria, in relation to several ideas on reform of the health system. No more lukewarm measures. Among the laws, decrees, resolutions, and Statute 100 there have been at least 600 lukewarm measures. What we have to do here is major surgery, and begin by changing things completely.
How Saludcoop pocketed the money allocated for health
Before we examine the case of Saludcoop, we should provide a key explanation. The money allocated for health, the UPC for paying the POS, is a parafiscal (based on payroll deductions) resource. What is a parafiscal resource? It is money that some members of society pay as a kind of tax for a specific expenditure that will benefit only those members of society. The best-known case, because it is very old, is the National Coffee Fund. The coffee growers pay a contribution and the money remains in the fund and can only be used to benefit the coffee growers. It is administered by the Coffee Growers Federation, but not as owner of the money. If the Federation were to pocket the money it would violate the law and the Constitution. What does the Coffee Growers Federation do? It charges a fee for administering the funds, but the money belongs to the National Coffee Fund. It is the owner and the money charged by the Federation is different, and the two cannot be confused. I am providing the example of the coffee and of the Federation because it is well known, but the same system works with the Cattlemen’s fund and other similar institutions.
It’s the same with health. Health resources are all parafiscal, administered by the EPS, but they are not supposed to pocket the money. They are sacred resources, as the Constitutional Court, the Council of State and the Comptroller’s Office have said. Health funds are one thing and the property of the EPS is quite another. The most that the EPS can do is, when the work is complete, impose a charge for the administration of the funds. That earning can indeed become part of their property and they spend it on whatever they want. I often say that with that money—not with health funds—the EPS can even buy a whorehouse in New York. I repeat, not with health funds, but with what they have converted into earnings by administering, we assume honestly and efficiently, the health funds.
What has happened here? Where did they get the idea, as Saludcoop has done, that the EPS can pocket health funds, not as payment for a service, but taking them directly. This is not one of Senator Robledo’s complaints. This happened legally. In 2010, the Health Superintendent, Mario Mejía, imposed a sanction on Saludcoop and ordered it to return 300 billion pesos worth of Health funds that Saludcoop had spent on other items. Besides that, he prohibited payment of 300 billion pesos of debt for investments that Saludcoop had made in businesses that had nothing to do with health. Saludcoop is not allowed to invest Health funds. It can buy things with its own money, but not with UPC, because UPC only pays for medications, physicians and health professionals, surgical procedures, hospital stays and the necessary administration of what is called medical treatment.
What did Saludcoop buy with health funds? Twenty-eight clinics, for 109 billion pesos, 14 pieces of real estate, an investment in the Río Grande Country Club, the Impeccable Laundry and Salud México. How can they justify using UPC funds to invest in clinics or in an EPS in Mexico? Someone might say, because they were clinics. No. They can’t be purchased because the UPC only pays physicians, medications, procedures and administration. So when Saludcoop buys a clinic, it is taking health funds belonging to Colombians and making them its own property, because the clinic remains in the name of Saludcoop, not in the name of the people of Colombia. And if Saludcoop wants to sell it tomorrow, going back to my analogy, and invest the money belonging to the people of Colombia in a country club or in a whorehouse in New York, they cannot do it. The one who was the superintendent at that time demonstrated that perfectly.
The manipulation by Santos with Conrado Gómez
And here is where one of the worst attacks by President Juan Manuel Santos against the health system took place. It is that he appointed Conrado Adolfo Gómez as the new Health Superintendent and the first thing he does is fire all of the technicians who had spearheaded the investigation of Saludcoop, and besides that, it was complicated. And a few days later, Saludcoop asks Gómez to throw out the sanction. Of course, there are appeals, but I’ll make the story short. What ends up happening is that the attempts at retreat at that time by the government of President Juan Manual Santos, by Health Superintendent Conrado Gómez, and by the Minister of Health fell apart because the Cundinamarca Superior Court in its decision orders them not to retreat and tells them that those funds are health funds and that Saludcoop was not allowed to spend them as if the funds were its own. There was an appeal to the Council of State and the decision of the prior Superintendent of Health remained in force. The fact is that that money was stolen, pardon the use of the word, but it is the right word. All in all, 600 billion pesos: 300 billion that they had already pocketed and another 300 billion that they were about to pay the banks along the way for their assistance.
The Health Superintendent also left in place three things that are key to what happened next. First, he ordered Saludcoop to repay the money already spent to the health system: 300 billion pesos in health funds. And in addition he warned them that in the future they would not be permitted to carry out this kind of bad practice. And more than that, that they would not be allowed to continue paying those debts with health funds, but that they would have to use their own resources. That is to say, the other 300 billion pesos could not be covered with health funds belonging to all Colombians, but that they would have to do it with their own money. Saludcoop will have to see where they can find it, whether from their earnings or make use of money from their other businesses.
And as if that were all, the CGR is doing the same thing. That which I just mentioned happened over four years, 2004 – 2008. What the CGR did was done over the period of 1998 – 2010, and follows the same procedure, and it is very simple: demonstrate how much money belongs to you and how much you have invested and that which you cannot demonstrate belongs to you, those are health funds. Just simple arithmetic. And the CGR sentenced Saludcoop to return 1.4 billion pesos that they had pocketed, partly because they had pocketed the funds already and partly because they were continuing to pocket them. I would say that this is the greatest robbery of public property in the history of Colombia. Because there are other scandals here, where they talk about billions of pesos, but the losses are not billions. They might be 50, 100 thousand. Here we are talking about, according to the CGR, the loss of 1.4 billion pesos.
Where did Saludcoop spend that money? For example, in clinics: one in Medellín, another in Bucaramanga and another in Pasto and they add up to more or less 20 billion pesos. In a decision made in June of 2001, they approved an investment of US$800,000 in Ecuador. Why invest Colombian health funds in Ecuador? There were negotiations with Cruz Blanca EPS about buying Cafesalud, that is to say, so that the EPS Saludcoop could buy another EPS. They could not do it because the UPC’s money is not for that purpose—it’s for health. But still they authorized an investment of between 10 and 13 million dollars. An amount that was important to invest in a gymnasium called The Pines. I just love education, but health funds cannot be used to build classrooms in the schools. They also authorized Saludcoop to join with Cruz Blanca EPS, Cafesalud and Salud Total to set up medication sales businesses and that is not a permitted expenditure for health funds either. They ended up buying the Cafesalud EPS and they spent health funds, funds that belong to the people of Colombia, US$25 million. And in that same deal, Palacino brags that there they also purchased Epsifarma, Epsiclinicas, Epsiméd, businesses that have nothing to do with the specific purpose of the POS and the UPC. In that same decision, they approved indebtedness up to US$25 million for another kind of business. They created a prepay in Mexico that cost US$7 million. For the Two Pines Gymnasium we see another 7 billion pesos. Ninety-two billion more in clinics. They got together with an administrative council in Singapore, in an extremely luxurious hotel, and they traveled there to decide on buying a building for 72 billion pesos. Payments to promote a basketball tournament also appear. I love the sport, but health funds are not intended to promote basketball championships or things of that kind.
And here is where questions start for the government, for the Health Minister and for the Superintendent. What has happened now that these irregularities have been revealed? I have to point out here—it’s boring to say it but I have to—that the answers are not satisfactory, Mr. Superintendent and Mr. Comptroller, and Mr. Minister. Your answers are awfully slippery, keeping quiet about things. For example, if you ask the Health Superintendent, “How is it going with the order about the famous 600 billion?” He answers, “That deadline passed last February 20 without the order being carried out by the EPS”. Or, he says, there is a serious problem there and the problem is that the EPS are not complying. But then you ask him specifically if Saludcoop has continued to spend money to pay contractual debts with health funds, which is prohibited. Remember that that is one of the express prohibitions. And the Superintendent’s answer is that he noted that they were not doing that with their new loans, donations, leasing, and investments. But we were not asking about new activities, but about the prior ones. Of course there is a prohibition of new ones, but there is also a prohibition of paying the debts that have been identified as spurious.
After receiving such unsatisfactory answers, our office undertook to try to clarify how much money has been paid throughout his intervention. By intervention what I mean is that the government is managing Saludcoop and so the Intervenor is a government official.
In leasing, which are forms of credit, they ended up making payments that totaled 42,802 million pesos between 2011 and 2013. In addition, we see payments for 195,554,000,000 pesos to the bankers, to the financial sector.
There is a very impressive fact, evidenced in a letter that came into our hands. It mentioned a pair of letters exchanged by the former Intervenor, who at that time was Dr. Wilson Sánchez, and the Executive Vice President of the Bank of Bogotá. The Bank says that the debts will remain in one way or another and the Intervenor responds by accepting that. And there is a detailed description—unfortunately there is not time enough to look at every detail—but I will provide some elements. The first is that in the letter, the Bank of Bogotá makes clear to Saludcoop that these are the debts of the Saludcoop Group. How come? Since when can Saludcoop and health funds be administered that way and end up invested in Cruz Blanca or in Cafesalud, or in a series of IPS or in institutions that could be part of Saludcoop Group? No, they have to keep the accounts separate, because when the government through UPC gives funds to Saludcoop, it is to invest in the health of Colombians and not in the businesses that the EPS might be setting up all around.
The Bank of Bogotá requires Saludcoop to commit the funds that Fosyga recovers for them, I repeat, health funds belonging to all Colombians, “the resulting amount will be applied thus: 20% to accelerate payment of the debt and 80% for payments to providers”. Twenty percent that might not even be related to health, but rather to those indirect businesses that Saludcoop owns. And the providers, that are not only IPS, but also laundries that wash sheets, software businesses, or other kinds of activities not necessarily related to health expenses. In this item we are talking about 194 billion pesos to be paid in the coming years under some specific conditions, and I won’t wear you out by detailing them.
Not only that, there is a warning there that, in the Porvenir EPS there are 17,850,000 pesos in a revolving fund that is supposed to create working capital to be distributed internally to the other businesses that belong to the Group. Saludcoop here appears to be responsible for funds belonging to the other businesses in the group. And Mr. Intervenor accepts all these kinds of petitions from the Bank of Bogotá. More examples: Cruz Blanca, 31 billion pesos; Cafesalud, 16,500,000,000 pesos, Work Fashion, a food business, Biorescate, all appearing with that debt of 194 billion pesos. And we remind you that the funds will be divided 20% for the Bank of Bogota and 80% for health care providers. At the same time that Saludcoop owes more than 500 billion pesos to the IPS, both public and private, and at the same time in which that debt continues unpaid, the Intervenor is signing these commitments in order to privilege the debts owed to the financial sector.
And it’s the case that some clinics in which Saludcoop invested are like promises to sell and appear to amount to some 38 billion pesos. Unfortunately, we could not find out what was going on with the investments and payments outside the country because we were not given access to the information. And we could not find out, because neither the Superintendent nor the Intervenor would provide the information, how much of those funds were paid with their own money, which they could have done, and how much was paid with funds belonging to the UPC, which could not be done. Pay attention to what I’m saying. Here there were payments that they could have made, if they were made with funds belonging to Saludcoop. We’re looking at a difficulty that has to be explained.
Does Saludcoop have its own money to pay 238 billion pesos? Lacking the data, as we are told, from other municipalities, the conclusion is that that is doubtful. Because between 2010 and 2013, the period that we are talking about, Saludcoop suffered net losses of 736 billion pesos. So where would they get the money to make those payments? But I repeat, here what is serious is that nobody, not the Health Superintendent and not the Ministry, has given us the data that we requested specifically, because it was part of the debate, and we were left to deduce the facts. I am questioning the possibility that Saludcoop could have paid those 238 billion pesos with its own funds. Because if Saludcoop is suffering enormous losses, where will they get the money? One could say, it’s that they had operational income of 158 billion pesos. Yes, of course, they might have had that, but weren’t those operational revenues spent on operational expenses? But even if one hundred percent of those operational revenues were funds that Saludcoop was able to spend freely, there is still a hole of 80 billion in funds that nobody knows where they came from. Or more likely, they do know where they came from, they came from UPC funds.
And the foregoing continues while Saludcoop’s debts to the IPS remain pending. That is what causes the most pain, and what we are most interested in, because it is the IPS that provide the service and that mistreat the patients and the users when they damage their finances. The debts total 583,179,000,000 pesos. Those debts, unsurprisingly, consist of the following: barely 7 billion with Saludcoop’s own IPS. And the difference, 569 billion pesos, with the IPS that are not part of the Saludcoop Group. And there we find, Dr. Gaviria, one of the foul-ups of vertical integration. It is that the EPS privilege their businesses, smash their competitors, and thus can keep concentrating power, power that they use to abuse the health system and act against the people’s interests. Because I am now going to explain how the officials themselves have to admit that Saludcoop’s IPS inflate their bills in order to pick the EPS clean. It isn’t surprising, because in the case of institutions like these, the deal is easy to see. I run the Saludcoop EPS and I am the owner or co-owner of a whole bunch of IPS and I run the business so that my IPS pick clean my EPS, which is money intended for health, or you might say, I grab what’s been grabbed from funds appropriated for health.
And this is what might raise eyebrows, because the government has failed to carry out its duty to take the investigations to where they ought to go. Part of the problem we face is that there is a negligent, crooked attitude in the Colombian government with regard to the EPS, to all of them and especially to Saludcoop. Look everybody, with the shrewdness that is part of being an official, at how it’s definitely true that Saludcoop’s IPS might be picking Saludcoop clean—that’s a way of saying they are pocketing health funds when they charge more for a service than it ought to be worth. It’s the health system that is feeling it. Then Mr. Intervenor states in a report on the restoration of liquidity, “That suggests revision of the operational structure of the company, with associated companies that might be increasing the costs that result from the intermediation and Saludcoop’s minimal control of costs.” Even the Intervenor admits that he has no control over what is going on and that he is concerned and has doubts in relation to what the companies in the Saludcoop Group are charging. And he also adds in another phrase “ . . . that at the time they furnish services per capita there is a difference in costs from some services in the general market of the EPS”. It is these subtle ways of admitting it that I am complaining about.
And Madam Comptroller General points out: “They keep on hiring the same providers without having done any market studies to look for better prices and better alternatives, so that we have the same cost structure”. And here there is another answer from Mr. Intervenor, an answer that seems extremely significant, to one of the questions from my office: “ The termination of these contractual relations would implicate, eventually, the insolvency of many of these companies and their eventual liquidation. That would generate a detriment to the property and assets of Saludcoop”. Those contractual relations are between Saludcoop and its IPS. What we have here is an EPS captured by the companies associated with the Group. Is the Intervenor admitting that if he actually does what he ought to do, he runs the risk that those businesses won’t succeed and there will be a serious problem? But we are talking about health funds here. There it’s among businesses that are doing business the way they want to, but here we are talking about how they keep losing funds that belong to the Colombian health system.
Santos favors the EPS
I find in President Juan Manuel Santos and in Minister Gaviria, and in the other Ministers, an attitude of obvious favoritism toward the EPS in general and toward Saludcoop. I get the idea that the health system has been taken prisoner by the intermediaries and financiers and that they have been imposing completely unacceptable practices for a very long time. In large measure it is the crisis of a sector where people don’t die of heart trouble, or of kidney trouble, but that what kills them is the health system. The EPS kill them, which is what the popular wisdom has been saying all along, and they are right.
I am going to demonstrate some examples that show how we should not be complacent about the attitude of the national government toward the EPS and toward Saludcoop. I have already told you how the national government has not complied with the rules adopted here in the Congress by friends of the government, hoping to take some control of this mess. They were not carried out. I pointed to a number of cases that I won’t repeat. The defense of vertical integration by Minister Gaviria is well known. And everybody in Colombia knows that nobody here will be able to fix the situation while the EPS have their own earnings as the primary criterion and not the health of the Colombian people. It’s that when the manager of an EPS at the end of the year gets together with his stockholders, with the owners of the company, he doesn’t have to explain how many lives he has saved or how many people have been vaccinated. What they ask him is how much money he earned, and whether the cash register was ringing or not. And if he starts telling stories about the health service, they tell him, young man, you’re out of here. It’s a lot like what happens with the penny war on the buses. We all know how it goes: the bus drivers ignore all of the regulations because every time a passenger gets on, that money goes to his lunch and to food for his family and the bus driver knows that he can’t go home and tell his wife: “Darling, this time there’s no money for food because I drove like an angel—I followed all the rules.” Because you can be sure that his wife is going to say: “Well, my dear angel, get out of here!” Because here it’s all about bringing the money for food. It is the same mess that we are looking at here with a system not set up for the health of the Colombian people. Rather, it’s set up for the businesses of the EPS, making use of the health of the Colombian people. Thus the EPS end up eating it all and finishing off the IPS, both public and private, along with the public and private clinics.
In the civil law relating to health, there was an article that really provoked a scandal. It established that UPC funds are public funds until they are transferred from Salud Mía (My Health) to the officials of the system. In other words, the UPC funds go private in the moment in which officials of the health system touch it. This is the debate we have been having for 25 years. Whether the private entities can steal the money from the UPC, disguised with the story that the funds are for a clinic or for an ambulance. They are so devious, as if we were illiterate and did not know what they are talking about. It was such a disaster that everyone complained about it and Minister Gaviria had to withdraw his famous little article and say that it was mistaken. I ask, how could you make this kind of mistake at this stage of your career?
It is also evident that there is an attitude in the national government and that all of the officials are looking for ways to save Saludcoop from paying the health system the 1.4 billion pesos, looking for ways to see how Saludcoop can keep from returning that money, in addition to the new debts that have appeared and about which I am making serious questions in this debate. In the first place, the Intervenors have used funds in ways that are contrary to the decision of the CGR, and they have hired lawyers costing 11 billion pesos, trying to reverse the decision of the Contraloria that 1.4 billion pesos must be paid, the correct decision, because those funds cannot be spent in the way they have invested them. And still the national government is looking for a way to get the decision against Saludcoop overturned.
Worse yet, the Superintendent of Health argues that Saludcoop is not at fault, but is a victim. What’s going on, Mr. Superintendent of Health, give me a break! Saludcoop pockets 1.4 billion pesos, causes all kind of disasters and it turns out that we end up owing them.
We will conclude with some specific questions. What will the government do about this disaster? The system doesn’t work. It’s on the edge of collapse. Minister Gaviria has said recently that he is going after the family subsidy funds or part of them. I will say this, Minister: if the government grabs for health the money from the family subsidy, from the workers, that would be another robbery. That money has an owner, Colombians who work for salaries. In a certain sense it is also a parafiscal fund, and the government can’t take it with the argument that they are public funds. Parafiscal funds are public, but their destination is specific and special. Neither do I like the idea, Minister, I tell you frankly, when you say that the reform was defeated here in Congress. Luckily for the citizens, we will see how it will proceed through decrees and resolutions. No. The democratic way is to take it to the Congress, let the people look it over, and don’t concoct it in secret.
And I’ve been saying for a while that I don’t agree with your trying to stick the hidden reform into the National Development Plan. We in the Democratic Alternative Pole are fed up, sick and tired as they say, of seeing how the government is converting the National Development Plan into a species of gigantic orangutan in which to stick 250 and 300 articles on every subject and nothing can be discussed. The worst monstrosities are being approved in this Development Plan, evading the power of Congress to legislate separately on each one of these subjects.
How will Saludcoop pay what it owes, I am asking the Minister. One billion and four million pesos according to the CGR report. Six hundred billion for the decisions of the Health Superintendent. Five hundred eighty-three billion pesos in debts to the IPS. And the assets of Saludcoop, which is producing losses every year, are only 1.3 billion pesos. That company, like other EPS, is in the process of dissolution and liquidation. What’s happening is that here we have been pushing a different idea and it is that the officials, especially in the higher echelons, obey the laws a la carté. There are some laws that they obey and others that they don’t. And then, when the rules impose certain obligations expressly, they make up theories for avoiding them, taking shelter, and certainly here they will say, that they act for the common good and public benefit. They break the law with the story that it’s for the common good.
One example that I forgot to denounce eight days ago: The law expressly requires that the elections that take place have to be done by electronic voting. And the government didn’t feel like following this rule and the Democratic Alternative Pole sent letters and filed petitions as permitted by the Constitution. And they did not use electronic voting. The national government committed an immense malfeasance in the last elections. Something like that is happening to us in this situation.
In conclusion, I would say that things are really terrible. That this health sector continues to function very badly, and that there are laws that don’t work. That the case of Saludcoop is scandalous, that the money is being squandered, Senators and Colombians, the biggest swindle in the history of Colombia. That is what is going on here, and it’s about that that I asking the government to tell us what is going to happen. Is Saludcoop going to pay the money, or is it not going to pay? Is the government going to take measures to make them pay or so that they don’t pay? That is the minimum that we Colombians have the right to know.
I conclude by saying that the responses by officials whom we have questioned in this debate, Minister Alejandro Gaviria, the Health Superintendent, the Intervenor, in my opinion were completely unsatisfactory for all the reasons that I have already explained. I think that at this level, the three officials ought to resign, because they aren’t responding to the needs that the Colombian health system demands. Nevertheless, let’s say that I will have the patience to wait and listen to their explanations, to see if here, before the Senate and before all Colombians, they can give better explanations than the ones that they gave me in their responses. But if they don’t, my presentation of conclusions will stress that these officials, these three, ought to resign their positions and that the national government ought to replace them, let’s say, not with people who are foes of Statute 100, because that is the government’s policy, but at least with officials who will carry out fully what are generally accepted as the minimum obligations of their positions.
There is a debate at the base of all this and it has to do with whether you favor Statute 100, yes or no. It appears that the pollsters and other sectors had an obvious disagreement with the positions of the National Unity (a group of political parties) as well as with the positions of the Democratic Center (a political party). They defend the for-profit model of the EPS, profit that uses funds appropriated for the health of the Colombian people. They not only charge for administration, they also generate earnings with funds that belong to the Colombian people and not to their own investors.
And whenever we question that, they respond by accusing us of being for nationalizing the sector. Recently, for the nth time, I am making clear that our position is not to nationalize the health sector. If you read my lips, I will immediately succeed in convincing you that we are not supporting the nationalization of the health sector. Our defense of the private IPS as well as of the public IPS is a defense of coherence and you can be sure we are not telling tales. The program of the Polo Democratico Alternativo Party, and I hope you are reading my lips, is not to nationalize the Colombian economy or to abolish private property. Stop pulling out those tales, as if we were small children and let’s make an effort to have the debate in objective terms.
Getting into the subject. There is one fact that has impressed me in this debate. Along with Senator Corzo and with Senator Daira Galvis, we mentioned that Saludcoop had lost 1.4 billion pesos of money appropriated for health. Stolen! In addition, I insist that, according to everything that I pointed out, in the period during the government’s intervention, the EPS have pocketed another 238 billion, and we have no way of knowing how much more they will pocket, because the Superintendent, with a straight face, has already said that the contracts have to be carried out. Of course, the contracts have to be carried out, but not with health funds. The health funds are sacred, Mr. Superintendent. Or if not, where are we?
Then we take up the debt of 1.6 billion pesos and it looks as if we are the only ones impressed by this fact. In general, I haven’t heard much concern today about what we have complained of here. This has probably been the biggest raid on public funds in the history of Colombia, or maybe someone can show me a bigger one. There have been a lot of major larcenies, also very significant, but none of this magnitude. So it seems to me very serious that everybody is keeping quiet about this one in particular, and that they brazenly keep right on paying the debts with health funds, which is expressly prohibited by the decision of the Superintendent of Health in 2010. This seems very serious to me, and more so that it does not seem to worry Mr. Minister and does not lead him to make any comment of any consequence. And that they even announce that what happened with Saludcoop should be a reason to investigate the other EPS.
Here what happened is that the very, very distinguished lawyers in Colombia have figured out a way to plunder UPC funds and to pass the money directly into their own pockets, violating the parafiscal nature of those funds. It is very similar to the case of Altillanura. Some big-wheel lawyer invented something that they called a “product”, or rather, a way of breaking the law by means of tricks and manipulations. That concerns me and it leads me to believe that Mr. Health Minister, Alejandro Gaviria and Mr. Health Superintendent ought to resign their positions, independent of the ideological concepts that they are defending. They ought to resign because they do not offer the country the minimal guarantee that a high official ought to furnish—that they will defend public funds and much more, the funds belonging to the health system. And it concerns me that the Intervenors of Saludcoop are trying o see if they can overturn the decision of the CGR, supported valiantly by Dr. Sandra Morelli. Is that the way they are going to repair Saludcoop’s finances? Overturning ownership of public property, overturning ownership of the health funds belonging to the Colombian people. Is that how they are going to repair a private business? What kind of economy is it that we have here in Colombia?
For the rest of it, Mr. Minister, we rend our garments, because I pointed out that things were extremely bad and you made a speech calculated not to refer to the principal complaints that I presented, and you tried to change the subject. Let’s say that it’s not that they have done nothing whatsoever. I didn’t say that, because it would be the last straw if they had been managing these immense sums of money for years and they did nothing at all! I know that it worse things are possible, and that, if you will, it could be even worse than it is now. What I want to emphasize is that it’s really bad, extremely bad. And I will give just one figure to show how bad it is and that has to do with what pains Dr. Gaviria the most, the problem of the financial situation. Between 2010 and 2013, the arrears of the EPS with the IPS increased from 1.9 billion pesos to 4.2 billion pesos. It doubled. If this is OK, if this means that we are seeing the light at the end of the tunnel, I don’t even want to imagine what things would be like if they were worse than this.
He also says that we ought to make a major admission, because they are going to impose some control of prices or they have made some medications available and because they are announcing a decree on biotechnology. First let’s say that any advance that has taken place in the area of medications, and it is not sufficient, is mostly the result of the fight that Colombians have been struggling for years to correct, even though partially, the abuses by the transnational corporations that all of our governments have allowed. And in the case of biotechnology, well, it’s about time they put out the blessed decree. I don’t know how many years they have been giving them gifts, I don’t know how much money has gone to the transnationals, because they don’t have the nerve to publish the decree. Publish it right now, once and for all! And we hope the decree works, because it has been embarrassing to see the spectacle of the government’s vacillation and timidity in facing the interests of the transnationals. To mention just one case: Mr. Ambassador of Colombia in the United States making like a lobbyist, a solicitor, for the points of view of the transnationals. Take the step, but please be quick and admit that you are doing it mostly because of the pressure from the citizens of Colombia that have been mobilized for a good long time.
The Minister should stick out his chest and beg for a medal because he equalized the POS of the contributors with those of the subsidized. That was by order of the Constitutional Court, Minister. Give the credit to the Justices who had the courage to make that decision, also spurred on and stimulated by the complaints of the citizens.
And he says that he’s not opposed to the civil rights action and that is why they promoted the statute. That could be debated for a long time. The national government has done everything possible to impair and put obstacles in the way of the civil rights action. And the case of the statute is part of that, even though they try to deny it. I even have an invitation for you, Dr. Gaviria. Let’s go to your university and to mine, the University of the Andes, and let’s invite the economics students and let’s have a debate where you try to demonstrate that the statute was not meant to impede the civil rights case and I will show that the statute was indeed calculated to counteract the civil rights decision. In the same way that the fiscal sustainability law passed by this government and which affects health funds so much is a rule clearly intended to obstruct the effects of the civil rights decision.
And now, what is to be done with Saludcoop. You will be making the decisions. But one thing we know is that this has already taken a long time. The Superintendent himself has said that, and as far as can be seen, it is going to take much longer. Because, to whom are they going to turn over this problem and how will it be turned over? There are problems here of unheard-of complexity. The 1.4 billion pesos alone, we can assume that there are 600 billion in Supersalud sanctions, we add the 238 billion that, according to what the government has admitted, is being spent inappropriately, then add the half billion pesos in debt to the IPS and we are talking about much more than 2 billion pesos. How are you going to straighten that out, I would like to know. But, more than that, and Comptroller Morelli said this, Saludcoop has incurred everything that leads to liquidation. They won’t liquidate it if they don’t want to—those are decisions that you will be taking. But the fact is that the problem is extremely serious. And if what they are going to do is organize toward leaving it to the same people that have been managing Saludcoop, the reward will be that the government will end up rescuing them, their reward will be that nothing will happen here, that they lost 1.6 billion pesos that we have to look to one side or look for a sacrificial lamb in order to evade responsibility. They can do it, but it won’t be easy to give government money to a private entity legally. And I ask: without transferring government money, how are they going to rescue an institution that is going down? These aren’t things that I’m making up. The problem with the math is that it is inexorable.
If that is a possibility, as suggested by Comptroller Morelli, and it ought to be debated seriously, we have to start by warning that we should not create a catastrophe that doesn’t fit the facts. Arguing that if the entity is liquidated, we have to go from affiliate to affiliate to see where they have affiliated shows a lack of analytic rigor that can’t be allowed at a level of discussion such as we are having. We all know that things are not that way, and that some have changed their location to another, depending on what they decide. And that they can make decisions that would guarantee that there would not be any turmoil under the heavens, to use that expression, and that the workers would not lose their jobs. We should approach the debate seriously, because if we don’t, I suspect that because of a biased analysis, they will discount obvious solutions that have worked in other times and in other agencies. Who is interested in distorting everything, who are the higher-ups who want this mess to be fixed in only one pre-determined direction? These are questions that Colombians and, in particular, we Democratic Alternative Pole party members are asking ourselves.
I conclude by insisting that the Minister of Health and the Health Superintendent ought to resign and allow other officials to come in and fix things at least not as badly as they have been doing.