More than 500 hospitals in Colombia ‘close to bankruptcy’

[Judi Lynn]

More than 500 hospitals in Colombia ‘close to bankruptcy’
posted by Steven Cohen
Aug 8, 2013

More than 500 hospitals throughout Colombia are facing dire financial situations due to a combination of inaction and restrictive fiscal policy on the part of the government, according to the national public hospital association.

“We’ve gone from 400 to 506 hospitals with a medium to high risk of going bankrupt,” Olga Lucia Zuluaga of the association told Colombian news station CM& Wednesday. “What we’re seeing is a pathway to liquidation due to the the fiscal reorganization being demanded by the Finance Ministry,” she added.

The Finance Ministry, Zuluaga explained, has prohibited hospitals from going into debt in order to pay for the necessary personnel, supplies and services they need to accommodate the health benefit plans of their patients. Instead, they must rely entirely on money from health care providers funded by the government. The problem, however, is that these so-called EPS payments come in short, late or not at all.

“For example,” said Zuluaga, ” if a hospital bills $500 million in services, it only collects, or they only pay it, 60%, which is to say, $300 million. And their spending can only correspond to that $300 million, but that doesn’t take into account that hospitals have obligations of up to twice that figure.”

More:
http://colombiareports.com/500-hospitals-close-to-bankruptcy-acesi-director/

[Turbineguy]

1. Call in

American republicans! They'll do a job on you!

[Socialistlemur]

2. They'll need to come up with a solution

But evidently it's nonsense to allow individual public hospitals to borrow money. This lends itself to corruption and out of control spending. Maybe what they need is a system to speed up central disbursements, or even a partially centralized or regional payments system for large providers. This is a complex problem, but I doubt that technically a public hospital can be said to "go bankrupt" since its a public institution...unless in Colombia the individual public hospitals are set up without or outside of any sort of government controls. For example, do they have independent public hospital districts?