Regional Unimed units to aid Brazil’s largest healthcare operator contributing 10% of technical reserves to avoid intervention
01/20/2025
Unimed Nacional, a healthcare plan operator with 2 million clients nationwide, has reached an agreement to receive a R$1 billion capital injection from 300 regional cooperatives in Brazil. This move aims to balance its accounts and stave off an “intervention” by the National Regulatory Agency for Private Health Insurance and Plans (ANS).
The regional Unimed units will disburse 10% of their technical reserves this year. This is the first time local medical cooperatives are required to use their own funds to rescue Unimed Nacional—the largest in the sector, which has amassed a net loss of nearly R$1 billion between 2023 and the first nine months of 2024, Valor has learned.
Under market rules, local cooperatives participate in Unimed Nacional, and cooperative member physicians have stakes in regional Unimed units. Thus, when profits are realized, the cooperative members receive earnings, and when there are losses, they are required to make contributions. Despite using the same brand nationwide, each regional Unimed operates independently.
The capital injection was contingent upon a change in leadership. A new election is expected, and a new Unimed Nacional leadership will likely be determined within this quarter. “I believe that with this capital injection and new management, the Unimed Nacional issue should be resolved. The situation will be solved this year,” a person familiar with the matter said.
When approached, Unimed do Brasil, the entity responsible for medical cooperatives, did not comment on the Unimed Nacional case.
The largest medical cooperative in Brazil, with revenue of R$6.5 billion by September, secured this funding, but its situation raises a red flag for the Unimed system—including around 300 cooperatives and 20 million healthcare plan users, accounting for nearly 40% of the entire market.
Industry experts interviewed for the report unanimously state that most medical cooperatives lack professional management, with leadership changes every three or four years and physicians maintaining their own schedules.
“Once elected, they continue with both roles, as a practitioner and a manager simultaneously, without an exclusive dedication,” said doctor José Carlos Abrahão, former president of ANS and the National Healthcare Confederation (CNSaúde).
Among the few cooperatives that boast a professionally managed leadership, are Unimed units in Belo Horizonte, Curitiba, Porto Alegre, and Seguros Unimed, which show positive figures, dividend distribution, and lower complaint rates.
According to ANS data, 109 Unimed healthcare and dental plans faced operational losses from January to September 2024—combined, they total 7 million clients. Considering net loss (including financial revenue), 69 ended in the red. Under the sector’s rules, healthcare operators are required to have reserves in case of bankruptcy, and many only achieve a positive bottom line through financial revenue.
Currently, the most emblematic case is Unimed Ferj, which represents all Unimed units in the Rio de Janeiro state and took over Unimed-Rio’s portfolio last year. Its financial statements do not post a deficit, but this comes at the cost of delayed payments to physicians, hospitals, and other healthcare facilities, with debts generated in 2024 already reaching R$400 million (considering Unimed-Rio’s liabilities, the debt is around R$2 billion). In nine months, Ferj recorded revenue from health plan subscriptions of R$2.9 billion, while expenses for payments to healthcare facilities amounted to R$1.9 billion—a R$1 billion deficit. The margin in the sector is tight. For comparison, Unimed Porto Alegre also had revenue of R$2.9 billion, but medical expenses were nearly R$2.5 billion.
“Just because the ownership has changed doesn’t mean everything will improve. Ferj lacks the expertise to manage a portfolio of that size. I believe the regulator [ANS] should have been stricter, as the issue has persisted for many years,” said another person familiar with the matter. The crisis at Unimed-Rio has dragged on for over a decade, with public accusations of fraud in previous managements.
In December, ANS and Unimed FERJ reached a new Term of Commitment, granting FERJ until March 2026 to resolve issues of supplier payments, provision regularization, and complaints. Among major healthcare operators, FERJ leads the regulatory agency’s complaint index, with an indicator of 448.7 compared to 143 for the second place, Unimed São Gonçalo-Niterói. This new agreement did not have the support of the Prosecution Service, Public Defender’s Office, and other Unimed units, as happened with the 2016 agreement, which was not fulfilled.
FERJ said that the commitment term does not provide extended deadlines for adjustments. It adds that it is a document that formalizes operational monitoring and commitments then assumed as provided by law and imposes a fine in case of non-compliance. FERJ also argued that 65% of the R$1.6 billion debt has been renegotiated, with payments up to date. Regarding the delay in payments to physicians, it noted a cash flow issue in December.
Other emblematic cases also involve mismanagement, a problem reported for many years. One such case is Unimed Paulistana, which served 740,000 clients in the São Paulo capital and closed in 2015. This cooperative was created to replace Unimed São Paulo, which also went bankrupt years earlier. Paulistana’s clients shifted to the insurance company, FESP, and Unimed Nacional, currently facing issues. Currently, the city of São Paulo—the largest market in the country—does not have its own Unimed.
In 2023, Unimed Vitória (Espírito Santo) lost R$145 million by investing a significant portion of its reserves in the Infinity fund, which failed. The investment was maintained even after the Brazilian Financial and Capital Markets Association (ANBIMA) disqualified the asset manager in December 2022. The new management that took over the medical cooperative after this incident stated that it “has been acting with austerity and agility in all its actions, especially in the financial sphere,” and that the loss was recorded in the third quarter of 2024’s financial statements.
Last year, the Federal Prosecution Service of Mato Grosso initiated investigations into possible misconduct at Unimed Cuiabá during the 2019-2023 management period. According to the Federal Prosecution Service, “indications of illegal practices related to the financial and administrative management of the entity were identified, including the submission of documents with serious accounting irregularities to ANS, which concealed a deficit of around R$400 million in its 2022 balance sheet.”
Unimed do Brasil reported that “the Unimed System shows operational performance above the market, with 63% of medical cooperatives posting positive results, compared to 51% of healthcare operators in other modalities.”
*By Beth Koike, Valor — São Paulo
Source: Valor International