The landscape of Argentina’s medical industry looks set for a seismic shake-up, as the national government charges seven healthcare providers with forming a “cartel” to coordinate astronomical price hikes earlier this year.
In December 2024, the Argentinean Government’s anti-competitive watchdog, the National Commission for the Defence of Competition (CNDC, by its Spanish acronym), said its investigation into “cartelisation” had “found elements that constitute a collusive agreement between a group of prepaid medicine companies, the confederation that groups them together and the person who presided over them”.
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From December 2023 to April 2024, medical fees rose by an average of 141% after newly elected President Javier Milei issued his ‘mega-decree’, which deregulated healthcare and several other sectors of the Argentinian economy.
The seven companies facing charges are Galeno Argentina S.A., Hospital Británico de Buenos Aires Asociación Civil, Hospital Alemán Asociación Civil, Medifé Asociación Civil, Swiss Medical S.A., Omint S.A. de Servicios and Organización de Servicios Directos Empresarios (OSDE). The providers were given 20 working days to present their defence and disprove the charges.
If not, “the government may fine the companies up to double the illicit benefit obtained”, according to presidential spokesperson Manual Adorni.
The CNDC also said that “agreements between competitors or concerted practices, commonly known as cartels, constitute a serious infringement of competition law, which can lead to fines of up to 30% of the turnover of the offending companies in Argentina”, in a statement released 12 December.
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By GlobalDataAlso under scrutiny is the Unión Argentina de Salud (UAS) and its president during the period of alleged collusion, Claudio Fernando Belocopitt – who is also the current president of Swiss Medical S.A. The original accusations were sparked by an interview Belocopitt gave to Radio 10 in December 2023, when he alluded to a coordinated strategy to increase prices.
Milei and Belocopitt have clashed several times over social media, with the Argentinan president endorsing a series of criticisms and insults against Belocopitt on X, one of which called him a ‘garca’ (‘oligarch’). Belocopitt was obliged to resign as president of the UAS, which accounts for 75% of Argentina’s private healthcare providers, when the anti-competitive probe was first launched in April.
Prepaid healthcare providers – Argentinian doctors’ “worst enemy”
At the time, the Economy Ministry’s Industry and Trade Secretariat forced the healthcare companies to reverse the price hikes and ruled that fees could not increase by more than Argentina’s (also astronomical) rate of inflation.
Despite this ruling, Argentinian healthcare professionals and patients continue to report a scarcity of medicines, widespread staff shortages and continually high prices.
“As doctors, the ‘prepagas’ [prepaid healthcare providers] are our worst enemy”, says Alejandra Báez, head neuro-oncologist at the Ángel Roffo Oncology Institute, part of the University of Buenos Aires (UBA).
Doctors who treat patients through prepaid providers in Argentina only earn a small fee per consultation, typically between $11 to $30, Báez adds.
Argentinian healthcare professionals also say their salaries are lower in comparison to their peers in other South American countries – a source of discontent that has led to multiple nationwide strikes this year by unionised workers.
Doctors-in-training, Argentinians or otherwise, often complete medical school at the UBA before moving to Brazil, Uruguay or the US in pursuit of higher wages. On average, Argentinian doctors earn $9.61 per hour, compared to $29.15 per hour in Uruguay or $126 per hour in the US.
The main alternative option to prepaid providers is the ‘obras sociales’. These employer-provided plans guarantee a minimal level of care for employees, financed by workers’ contributions to insurance companies, which are run by ‘sindicatos’, or trade unions.
Amid anti-competitive accusations, the prevalence of the ‘prepagas’ is projected to dip even further. In 2022, 6.8 million people (14.7%) were covered by prepaid healthcare while 22.1 million people (47.7% of the Argentinian population) were covered by ‘obras sociales’.
43.1% of Argentinians were exclusively covered by the public health system, and 11.2% by the Comprehensive Medical Attention Program (PAMI, by its Spanish acronym), a social security programme for retirees.
Deregulation sparks ‘cartel’ of price-hiking
The investigation comes almost exactly a year into Milei’s administration, which promised free-market liberalism at all costs when the self-described ‘anarcho-capitalist’ took office in December 2023.
Within the first month, Milei passed his ‘mega-decree’ of deregulation. Executives at private healthcare providers saw an unencumbered opportunity to drive profits, in turn forcing thousands to give up their healthcare insurance due to unaffordable costs.
At the start of 2024, Milei’s administration chose to extend the 2023 budget without adjusting for the 227.31% inflation experienced over the previous 12 months.
The impact on healthcare was drastic. In real terms, the government spent 35% less on medical institutions in Q1 2024 than it did during the same period in 2023, according to a report by the Centro de Economía Política Argentina (CEPA) think tank.
The sharp response and threat of legal action against the seven ‘cartelised’ healthcare providers from the CNDC indicates recognition from the government that its deregulation had been exploited.
Milei will never renege on his raft of austerity measures, which have included subsidy cuts, removal of price caps and layoffs for tens of thousands of government workers. While unemployment and poverty rates have surged, Argentina’s long-mismanaged economy is starting to improve, with monthly inflation decreasing significantly.
Healthcare inflation remains a charged political point in Argentina. At a time when simmering anger over unjust health system costs has been laid bare by the killing of UnitedHealthcare CEO Brian Thompson in New York City, Milei’s administration has shown unprecedented flexibility to bend his ‘free market at all costs’ mantra.
All eyes now turn to the seven prepaid healthcare providers facing ‘cartelisation’ charges, which had until 1 January 2025 to provide evidence to the contrary.
The UAS, Galeno Argentina S.A., Hospital Británico de Buenos Aires Asociación Civil, Hospital Alemán Asociación Civil, Medifé Asociación Civil, Swiss Medical S.A., Omint S.A. de Servicios and OSDE declined to comment when approached by Medical Device Network.
