Contractual Interaction Between EPS and IPS in Colombia: Information Asymmetries Agency Theory and Efficiency in Cost Management
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: This study explores the contractual dynamics between Health Promoting Entities (EPS) and Health Service Providers (IPS) in Colombia through the lens of Agency Theory and strategic cost management. It aims to reveal how asymmetries in information, weak incentive structures, and misaligned interests affect the cost-efficiency of health service provision.
METHODS: A mixed-methods approach was adopted. A qualitative policy review examined Colombian regulatory frameworks (Law 100 of 1993 and subsequent reforms) and analyzed predominant contracting models (capitation, global prospective payment, fee-for-service). Semi-structured interviews were conducted with decision-makers in EPS and IPS, and thematic analysis was used under grounded theory. Quantitatively, cost-efficiency was measured using public data from SISPRO and Supersalud, applying Data Envelopment Analysis (DEA).
RESULTS: The findings reveal a weakened principal-agent relationship due to severe information asymmetries, insufficient monitoring mechanisms, and limited transparency in contractual enforcement. EPSs hold disproportionate negotiating power, transferring risk to IPSs without adequate compensation or aligned incentives. This leads to fragmented care, reduced efficiency in chronic disease management, and higher system costs. Disparities between territories further aggravate inefficiencies, especially in decentralized health networks.
CONCLUSIONS: To strengthen EPS-IPS interaction, Colombia's health system must redesign contractual frameworks that foster transparency, shared risk, and aligned performance incentives. Implementing value-based contracting models, supported by robust information systems and outcome tracking, is critical to enhance efficiency and sustainability across all care levels.
METHODS: A mixed-methods approach was adopted. A qualitative policy review examined Colombian regulatory frameworks (Law 100 of 1993 and subsequent reforms) and analyzed predominant contracting models (capitation, global prospective payment, fee-for-service). Semi-structured interviews were conducted with decision-makers in EPS and IPS, and thematic analysis was used under grounded theory. Quantitatively, cost-efficiency was measured using public data from SISPRO and Supersalud, applying Data Envelopment Analysis (DEA).
RESULTS: The findings reveal a weakened principal-agent relationship due to severe information asymmetries, insufficient monitoring mechanisms, and limited transparency in contractual enforcement. EPSs hold disproportionate negotiating power, transferring risk to IPSs without adequate compensation or aligned incentives. This leads to fragmented care, reduced efficiency in chronic disease management, and higher system costs. Disparities between territories further aggravate inefficiencies, especially in decentralized health networks.
CONCLUSIONS: To strengthen EPS-IPS interaction, Colombia's health system must redesign contractual frameworks that foster transparency, shared risk, and aligned performance incentives. Implementing value-based contracting models, supported by robust information systems and outcome tracking, is critical to enhance efficiency and sustainability across all care levels.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
OP2
Topic
Economic Evaluation, Health Policy & Regulatory, Organizational Practices
Topic Subcategory
Academic & Educational, Best Research Practices
Disease
No Additional Disease & Conditions/Specialized Treatment Areas