Healthcare Reform in Colombia at a Standstill as Funding Scarce

Healthcare System in Colombia on the Verge of Collapse

Entidades Promotoras de Salud (EPSs), the health insurance companies that administer the basic benefit package Plan Obligatorio de Salud (POS) in Colombia, have issued a warning about the state of the country’s public healthcare system. Healthcare in Colombia is currently being affected by the blockage of a health reform bill and financial shortfalls. The lack of economic resources is affecting the country’s public hospitals and clinics, which have continued to call for the establishment of minimum tariffs for the services provided to ARS and EPS affiliates. This is subsequently affecting thousands of affiliates to the EPS, and administrators of the subsidised scheme, ARS, who have been forced to resort to the country’s courts to try and receive free medical treatment. They have filed appeals - known as tutelas- against the health ministry. The problems affecting EPSs are said to be so grave that they have urged President Alvaro Uribe to intervene personally in the matter, claiming that the Ministry of Social Protection has been overwhelmed by the seriousness of the situation.

Funding to Expand Subsidised System Falls Short

The proposed expansion of the country’s subsidised healthcare system (Plan Obligatorio de Salud Subsidiado, POS-S), continues to be hindered by a lack of economic resources. Even the minister Diego Palacio Betancourt, has admitted that there will be problems in meeting the government’s target of affiliating nearly seven million new members over the next five years, which would achieve universal healthcare coverage in Colombia. It is understood that this requires funding of between 1.5 billion Colombian pesos (US$615.2 million) and 2 billion Colombian pesos. However, the director of the insurance and protection commission, Alfredo Rueda, has stated that there are only enough funds to maintain current affiliated members and sign up around 900,000 new members for the rest of 2006. Currently, the subsidised healthcare system covers around 18.6 million Colombians, 16.5 million of which are in the lowest income levels and completely subsidised (see table below).

Source: Ministry of Social Protection * As of 15 February 2006 ** As of February 2006

The subsidised healthcare system has been in the spotlight since its creation, as corruption and irregularities are continuously reported within the system. These include delays in the transfer of funds from municipalities to administrators of the subsidised scheme, ARS, as well as inefficient payment procedures from these companies to healthcare services providers. Given this, the national healthcare authority, Superintendencia Nacional de Salud, has launched an action plan, which will tackle irregularities in the management of funds earmarked for providing medical services to the country’s poor.

Outlook and Implications

Law 100, enacted in 1993, completely transformed the Colombian healthcare system by moving towards a model where the government purchases managed care insurance from competing insurance companies on behalf of the poor. This law aimed to provide universal coverage through the POS standard benefit package, which was administered by health insurers. Thus, the law established two systems: the contributory system, targeting workers in the formal sector with the ability to pay, and the subsidised system, aimed at poorer sections of society. However, the constant problems caused by general inefficiencies, contribution evasion and the financing shortfalls, prompted the administration of President Uribe to announce reforms upon arriving on office in 2002 (see Colombia: 29 October 2002: Details of Health Sector Reforms Expected Soon and Colombia: 10 June 2002: President Elect Nominates New Health Minister). The reform, which was approved by the Senate last year, has been blocked in the Chamber of Representatives’ Seventh Commission, which claims that the bill needs changes before it can be given the green light. At this point, the intervention of President Uribe could be expected, although it remains to be seen whether the reforms will finally be approved, and when they might come into force.