Colombia’s healthcare system, once hailed for its ambition to provide universal coverage, is now precariously teetering. Built around three pillars - the government, the Health Promoting Entities (Entidades Promotoras de Salud, EPS) and the Healthcare Provider Institutions (Instituciones Prestadoras de Salud, IPS) - the model has expanded access but also created financial and operational fragility that is now threatening its very survival. 

At the heart of this crisis lies the EPS, the insurers entrusted with collecting contributions and reimbursing hospitals and clinics. A recent report by the Comptroller General’s Office revealed that 80 percent of these entities fail to meet legally required reserves, collectively carrying over USD 6.4 billion in debt.  

An advisor to the National Congress, specialising in healthcare observed bluntly that “the issue of payment instability particularly from entities like FOMAG (responsible for managing health services, pensions and severance pay for Colombia’s teachers) is without a doubt the biggest current risk for any private operator in the Colombian healthcare system.” The advisor continued, “We’re dealing with an environment where EPS providers are technically bankrupt, hospitals are burdened with unpayable debts, and many service providers simply can’t sustain daily operations.” 

“We’re dealing with an environment where EPS providers are technically bankrupt, hospitals are burdened with unpayable debts, and many service providers simply can’t sustain daily operations.”

Advisor to the National Congress, specialising in healthcare, Colombia

This payment instability has had severe consequences for IPS. As one expert explained, “This situation has directly impacted private healthcare operators, particularly IPSs, which are facing payment delays of over four or five months for services that have already been provided and audited. This not only undermines their liquidity but also weakens the system’s operational capacity.” Smaller clinics, unable to bridge the cash flow gap, are cancelling treatments and laying off staff, while larger conglomerates are consolidating control. 

An example of this consolidation is the expansion of Patria and its Zentria network. Patria now represents over 30 percent of Colombia’s private hospital infrastructure. One executive at a healthcare service provider noted that their vertical integration and presence in mid-sized cities can create barriers to entry and “they are able to influence patient flows, operating costs and negotiation conditions.”

From an equity perspective, this is pushing a stark divide, “a private, efficient and profitable tier for those who can afford it, and a public tier in collapse for the rest of the population,” stated the healthcare executive. 

The government’s response so far has been controversial. In 2024, it intervened directly in Sanitas, citing financial mismanagement. The move prompted Keralty, Sanitas’s Spanish parent company, to launch legal proceedings. The National Congress advisor noted that “the government’s failure to comply with constitutional mandates to ensure adequate funding for the system has deepened the crisis and institutional trust has been damaged.” The Constitutional Court later suspended the intervention, but the case highlighted the polarising atmosphere in which policy decisions are being made. 

“The government’s failure to comply with constitutional mandates to ensure adequate funding for the system has deepened the crisis and institutional trust has been damaged.”

Advisor to the National Congress, specialising in healthcare, Colombia

Yet, believe it or not, there are pathways forward. Our experts argued that rather than dismantling the EPS entirely, policymakers should focus on practical measures, “by applying technical measures, expanding direct payments, setting up bridge funds, scaling up factoring and signing annual agreements with clear schedules, a more predictable and secure cash flow can be built for the system.” In this environment, non-recourse factoring, where providers convert receivables into immediate liquidity by transferring the risk to a third party, has emerged as an increasingly popular financial strategy. 

Looking ahead, three strategic priorities are taking shape. First, providers are diversifying revenue streams. “We must urgently reduce reliance on the public system, entering the prepaid healthcare market, medical tourism and direct-pay models could offer more stable income flows,” explained the healthcare executive.  

Second, there is growing interest in public-private partnerships with direct payment guarantees, bypassing EPS intermediaries entirely, “who currently offer no certainty at all,” an expert remarked. Third, innovation is becoming essential, “business models need to become more innovative, scalable and capital light.” The healthcare executive cited, “What’s gaining ground now are integrated platforms - high-resolution primary care, digital health, telemedicine, remote monitoring and AI-driven solutions.” 

Ultimately, the sector’s future health will be shaped not just by technical solutions but by political forces. “There’s also a key question hanging over the sector: who will be the next president?” For investors, this uncertainty is both a risk and an opportunity. As one advisor concluded, “Given the current discontent with the left-wing government, my macro-level advice to international investors is to be optimistic and enter the sector now.” Without decisive action, the country risks seeing its vision of equitable healthcare becoming medical grade waste.