Beyond the Law: Has AZV Overstepped Its Legal Mandate and the HOH Benefited?

There are moments when power quietly slips past the boundaries of law,  almost unnoticed, almost normal, and unless someone calls it out, it keeps slipping. In Aruba’s healthcare system, that moment is now.

The AZV, entrusted with administering our national health insurance, may have overstepped its legal mandate. And, if so, it hasn’t acted alone. Together with the Dr. Horacio Oduber Hospital (HOH), it may have  been trying to reshape the market for laboratory services – and likely other service providers and medical professionals – in ways that are in my opinion neither lawful nor fair, and certainly not in the interest of patients. What’s unfolding isn’t just a policy disagreement. It is the story of unchecked power, institutional favoritism, and a breakdown in public accountability.

The AZV was established by law as an independent body, shielded from political interference. That means the Minister of Health cannot intervene in its decisions – even though hundreds of millions of florins in taxpayer money flow into AZV every year. Worse still, Aruba never created an independent regulatory authority to oversee AZV’s actions. The current board structure of the AZV does not provide enough or proper oversight – read along and you will see why. In the Netherlands, insurers are kept in check by a separate authority, the NZa – one that not only enforces oversight but also has the legal power to set prices. Aruba has no such safeguard.. That concentration of unchecked power may  already have led to overreach. And unless the system is reformed, it will keep happening.

AZV Has Crossed a Legal Line

AZV does not have the legal authority to impose maximum tariffs on care providers. Despite having admitted this in court in the past, it acts to the contrary. That authority belongs solely to the legislator, through the Prices Ordinance, a formal legal mechanism that must be used if price controls are to be lawfully introduced. Click here for examples of Prices Ordinance implementation including vis-a-vis HOH (granted a long time ago, but there’s been no relevant change in applicable legislation).

Nor does AZV have the authority to subjectively decide who gets to provide services under the national insurance system – and certainly not to appoint the HOH as a “preferred vendor”. The LAZV was built on a model of contract freedom, transparency, and lawful criteria. Access to care provision is not a discretionary favor AZV can hand out to one party over another, especially not while acting beyond its legal mandate.

By unilaterally setting prices and by concentrating market access in the hands of a single provider, AZV has assumed two powers it was never given: (i) pricing authority; and (ii) market gatekeeping. This is not administrative discretion. This is structural legal overreach, and it strikes at the very core of Aruba’s healthcare law.

In 2024, AZV forced deep price cuts on private laboratories, with no lawful authority, no consent, and no legal right to do so. Its justification? Internal budget concerns tied to the Landspakket, a politically agreed reform framework with the Netherlands. But here’s the bottom line: The Landspakket – in my opinion – is not law. It has no binding legal force towards citizens. It cannot override the LAZV, and it certainly doesn’t grant AZV the power to unilaterally reshape the market. This is not a grey area. By any reasonable legal reading, it appears to amounts to a violation of the AZV-framework – a textbook case of détournement de pouvoir détournement de pouvoir: using authority for purposes the law does not permit. Why did AZV choose this route? Probably because otherwise the rates would be determined via a legal process that it doesn’t control and that is overseen by or with input from the Council of State (Raad van Advies) and the Social Economic Council (SER).  

WTO Rules? Apparently Optional

AZV’s legal disregard doesn’t stop at home. It also applies to international law. Under WTO rules, certain appointed Aruban public bodies are required to conduct transparent, competitive tenders for public procurement, including healthcare services. That means open, fair bidding, not closed-door contracts. But AZV has consistently ignored these rules, particularly when awarding secondary laboratory services. It has avoided public tenders, repeatedly and deliberately. And this isn’t just a claim,  it’s been confirmed by the courts. In a prior, 2018 ruling, an Aruban court found that AZV had breached WTO obligations by failing to hold a proper tender. Has it learned from this? Care to make a guess?

The message in the Court ruling was clear: you, AZV, cannot ignore procurement laws that apply to you, to benefit a preferred provider. But AZV has done it anyway, again, and again. Why, well, I guess because they think they can.

HOH: Not Just a Beneficiary –  a Partner in Exclusion

Let’s not pretend HOH is simply along for the ride. HOH – as an institution, through decisions of its executive leadership and supervisory directors – has been actively participating in the system AZV created:

• HOH was granted exclusive access to secondary lab services.
• It was shielded from regulatory standards, such as timely accreditation, that private labs were required to meet.
• It benefits from public subsidies and cross-financing, financial advantages unavailable to other providers.
• And it has profited from a structurally closed market, where competitors, even those that lawfully won tenders, have been shut out.

This was not incidental. This was the result of intentional decisions made by HOH’s leadership and board, in alignment with AZV’s practices which are contrary to the framework of the LAZV and the Price Ordinance. In my view, they didn’t just accept the benefits. They enabled the exclusion of others, reinforced an anti-competitive structure, and stood by as public trust and legal safeguards were pushed aside.

This is not about performance or efficiency. It’s about preferential access to public money and public authority, granted without legal basis, and sustained through institutional silence.

Let’s not forget that around 2019/220 HOH was hacked and their data held for ransome. Apparently the ransom wasn’t paid nor was the data returned. So through the date the patient data could be still out there. Yes, your data is still out there! HOH doesn’t seem to care nor does the AZV who still still sees HOH as a darling, even investing in HOH, as opposed to only paying it for its services.

Where Was the Oversight?

Here’s the most disturbing part: this hasn’t just happened once. It has been going on for years. A review of the LAZV, its legislative history, applicable jurisprudence, and regional comparisons all confirm the same: AZV has systematically acted beyond its legal mandate, not only in how it sets prices, but in how it allocates market access.

These actions are so persistent, so deliberate, and so clearly outside the legal framework that, in my opinion, this isn’t a system that lost its way. It’s one where the legal boundaries were known, but ignored. Where boards nodded, rather than questioned. And where silence replaced accountability.

No, Winning Past Court Cases Doesn’t Excuse This

AZV may try to say, “But we’ve won in court.” And yes, it’s true, AZV has won 2 cases brought by the private labs association. But let’s be very clear about what those cases were actually about: they focused on whether the new tariffs were reasonable and whether or not the court needed to appoint experts to validate the rates, not whether AZV had the legal authority to impose them in the first place. The core question, did AZV have the legal power to do this at all? was not presented to the court. 

That legal question, the one that strikes at the very foundation of AZV’s authority. has now been filed before Aruba’s Court of First Instance. The Court will now have to determine if AZV has the legal mandate to impose tariffs, pick providers and segregate services at its discretion, or not?

 The Real Cost: Public Trust and Patient Care

The consequences of AZV and HOH’s actions go beyond contracts and courtrooms. They affect everyone in Aruba. When public institutions overstep the law:

• Trust erodes.
• Transparency disappears.
• Quality suffers.
• And fairness is lost.

This isn’t just a healthcare issue. It’s a question of institutional integrity. The law exists to protect the people, not to be reinterpreted or overreached by those in power to suit their budget or their favorites.

So Who Will Fix It?

If this has been going on for years, and it has, then the question becomes urgent: Who will stop it? Who will have the courage to fix it? The judiciary cannot do it alone. Courts interpret the law, but it’s up to institutions, regulators, and political leaders to enforce it, to uphold it, and to take action when it’s being ignored. We need:

• Regulators who regulate.
• Supervisory boards that supervise.
• Political leaders who confront institutional arrogance.
• Legislators that take action.
• And a public that refuses to accept policy in place of law.

Because policy is not law. And public institutions are not private kingdoms.

Until next week.
Visit www.lincolngomez.com for all columns and podcasts on law, justice, and public accountability.

The views expressed here as in my columns in general are my own, written in my role as a commentator on law and governance. They are grounded in public facts and legal analysis, and should not be understood as advice to any individual or as advocacy on behalf of any party.