Correa proposes new rules, new management for Ecuador’s social security system; expats using IESS health care services could be affected

Feb 16, 2015 | 19 comments

President Rafael Correa says the country’s social security system (IESS) requires top-to-bottom reform to restore its financial stability. During his Saturday television broadcast, he said he is drafting legislation he will submit to the National Assembly to address what he calls a “crisis.”

 Teodoro Maldonado Carbo Hospital in Guayaquil.

Teodoro Maldonado Carbo Hospital in Guayaquil.

The move follows recent reports that IESS is running deficits in both its worker beneficiary and health care programs. Although Correa says that a full financial report on the system is not yet available, he says the short-fall amounts to “several hundred million dollars a year.”

He said that payouts to social security beneficiaries must be balanced by income even if it means increasing contributions by employees and employers.

Correa also said that the IESS health care system was operating in the red. On Tuesday, he paid a surprise visit to Teodoro Maldonado Carbo Hospital in Guayaquil, the country’s largest IESS hospital, which he claims is running a large deficit due to mismanagement. The hospital’s administrator was replaced on Friday.

“What I found there was absolutely terrible,” the president said. “The reality is tragic and we must make changes quickly to assure that the hospital is filling its mission of serving the people of Ecuador.” He said that patients at the hospital were enduring lengthy waits for services due to poor organization. He added that in 2014, the hospital used only 63% of its $190 million budget, failing to correct operational problems.

Specifically, Correa criticized the hospital’s relationship with private health care providers who are reimbursed for services the IESS cannot provide. “What I found in that relationship was indolence, inefficiency and corruption,” he said.

He also said that he was looking into claims by some IESS personnel that private providers were refusing to take patients due to poor reimbursement rates offered by the government. “Health care is a public service, not a commodity. If necessary, we will nationalize private clinics that do not cooperate with us,” he said.

Correa said his office is studying large cost over-runs due to new rules that make medical services free to children of IESS members. Until 2014, IESS members paid for services for their children.

He is also reviewing the program that allows “voluntary” membership in IESS for health care coverage. IESS officials say that many of those in the program are elderly and have chronic conditions that are costing the system more money than it takes in. An estimated 2,000 Ecuador expats receive medical coverage through the program.

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