Cost Management Gaps and Economic Waste in Colombia’s Health Insurance System: A Strategic Need for Costing and Microcosting Methodologies
Author(s)
JUAN C. FERNANDEZ MERCADO, MBA, MSc, PhD, MD1, Nelson Alvis-Guzman, MPH, PhD, MD2.
1UNIVERSIDAD DE CARTAGENA, Cartagena, Colombia, 2Universidad de Cartagena - ALZAK Foundation, Cartagena, Colombia.
1UNIVERSIDAD DE CARTAGENA, Cartagena, Colombia, 2Universidad de Cartagena - ALZAK Foundation, Cartagena, Colombia.
OBJECTIVES: To identify and characterize the cost management inefficiencies within the Colombian health insurance system (EPS-IPS), emphasizing the economic and operational impact of not implementing standardized methodologies such as cost analysis, microcosting, and economic benefit evaluation. The study aims to expose structural gaps and “waste” that compromise financial sustainability and quality of care.
METHODS: A mixed-methods study was conducted using documentary review of national technical standards, EPS-IPS financial audits, and gray literature from 2018 to 2024. Additionally, 12 expert interviews were analyzed under a thematic coding framework focused on the cost-efficiency triad: structure, process, and outcomes. A simulated cost-effectiveness analysis was performed for three common chronic conditions: diabetic foot, chronic renal failure, and high-cost oncologic treatments, comparing current practices versus scenarios with applied microcosting models.
RESULTS: Findings reveal that 76% of the evaluated EPS-IPS contracts lack disaggregated costing models. Inefficiencies due to generalized capitation, underestimation of indirect costs, and absence of outcome-based financing were recurrent. The diabetic foot case showed that without microcosting, average patient costs exceeded COP $12,000,000 per case, compared to COP $6,500,000 under optimized cost-management, implying a 45% cost reduction and lower amputation rates. Lack of standardized cost-benefit assessment resulted in opportunity losses equivalent to COP $1.8 trillion annually across the sector.
CONCLUSIONS: The Colombian health insurance model demonstrates systemic financial leakage due to the absence of costing and microcosting methodologies. This represents a critical barrier to value-based health management and to the achievement of financial sustainability. Implementation of structured costing models can yield savings, improve outcome predictability, and enhance transparency in contractual relationships. Strategic reforms must prioritize training, regulatory frameworks, and alignment with the quintuple aim of healthcare to ensure scalable and equitable cost-efficiency.
METHODS: A mixed-methods study was conducted using documentary review of national technical standards, EPS-IPS financial audits, and gray literature from 2018 to 2024. Additionally, 12 expert interviews were analyzed under a thematic coding framework focused on the cost-efficiency triad: structure, process, and outcomes. A simulated cost-effectiveness analysis was performed for three common chronic conditions: diabetic foot, chronic renal failure, and high-cost oncologic treatments, comparing current practices versus scenarios with applied microcosting models.
RESULTS: Findings reveal that 76% of the evaluated EPS-IPS contracts lack disaggregated costing models. Inefficiencies due to generalized capitation, underestimation of indirect costs, and absence of outcome-based financing were recurrent. The diabetic foot case showed that without microcosting, average patient costs exceeded COP $12,000,000 per case, compared to COP $6,500,000 under optimized cost-management, implying a 45% cost reduction and lower amputation rates. Lack of standardized cost-benefit assessment resulted in opportunity losses equivalent to COP $1.8 trillion annually across the sector.
CONCLUSIONS: The Colombian health insurance model demonstrates systemic financial leakage due to the absence of costing and microcosting methodologies. This represents a critical barrier to value-based health management and to the achievement of financial sustainability. Implementation of structured costing models can yield savings, improve outcome predictability, and enhance transparency in contractual relationships. Strategic reforms must prioritize training, regulatory frameworks, and alignment with the quintuple aim of healthcare to ensure scalable and equitable cost-efficiency.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
EE175
Topic
Economic Evaluation, Health Service Delivery & Process of Care, Organizational Practices
Topic Subcategory
Budget Impact Analysis, Cost/Cost of Illness/Resource Use Studies
Disease
No Additional Disease & Conditions/Specialized Treatment Areas