Health financial system of Colombia

Obichukwu J. Iwunna
Global Health, Law and Governance program
Queen Mary University of London
1st November, 2019

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 Background

The country Colombia

▪ Located in the northern region of the South America continent

▪ Upper Middle Income Country (UMIC) with GNI per capita of
$307.4 billion
▪ Economy chiefly driven by agriculture and mineral mining
▪ 49 million people (2017)

▪ Health system is financed through solidarity social

insurance system and general taxation
▪ Progressive and sustainable health financing system with
96% health coverage
▪ However, coverage is more in urban areas than rural areas
▪ This presentation will give a brief description of the health
financing system in Colombia

Source:
World Bank database. (2019). https://data.worldbank.org/indicator/NY.GNP.ATLS.CD?locations=CO [Accessed 1st November, 2019]
Population pyramid.net (2019). https://www.populationpyramid.net/colombia/2017/ [Accessed 1st November 2019] | 2
General economy

Overview of the economy of Colombia and health

expenditure
Indicator 1995 2016
Gross Domestic Product ($ billion) 92.5 283

Total Health Expenditure per capita (at exchange rate) 171 340.3

THE as % of GDP 7% 5.9%

Government expenditure on health as % of THE 55% 62.2%

Out of pocket expenditure as % of THE 38% 20%

Private insurance as % of THE 7% 11.5%

Source:
World Bank database. (2019). https://data.worldbank.org/indicator/NY.GNP.ATLS.CD?locations=CO [Accessed 1st November, 2019] | 3
Health financing system

Health reforms were implemented to help achieve

universal health coverage
Timeline in Colombia’s Health System reforms

Constitution establishes the Decentralization of public health services from

right of all citizens to central level to 1000 municipalities and
health care Departamentos

1991 1993 1990s 2013

Law 100 establishes the General Social Law 210 introduces sweeping reforms
Health Insurance System (national establishing “Salud-Mia” responsible for
compulsory health insurance system) based managing health system funds and “Mi-Plan”
on “managed competition” integrated benefit package for all

Deena C, Sunil R.A, Cavagnero E. (2014). Health financing profile- Colombia. World Bank

▪ Compulsory social health insurance system through 3 regimes:

− Contributory regime- for people employed in formal sector
− Subsidized regime- for the poor, informal sector and unemployed
− Special regimes- for teachers and military personnel
▪ Private insurance is optional

Source:
http://documents.worldbank.org/curated/en/202221468026099677/pdf/893770BRI0P1230LIC000Colombia0final.pdf
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Health financing system

Organization of the health financing system

Revenue Social health Private Out of

General taxation
collection insurance insurance pocket
65% 15% 20%

insurance
No
Ministry of Health and Social Welfare

Special

Private
Pooling

regime
pooling
*Governm Subsidized Contributory Individual
Purchasing ent EPS EPS purchasing What are the results
of the reforms?
Provision Public providers Private providers

Adapted from Guerrero R. et. al (2015). Universal Health Coverage Assessment, Colombia. Global Network
for Health Equity (GNHE)

*Government expenses includes infrastructure, services, drugs not included in benefit package, public health
campaigns and programs

▪ 12.5% income tax deducted from paid workers, finances the social health insurance. 11% goes to the contributory EPs

▪ Subsidized EPs gets 1.5% from workers salaries and 16 other government tax sources. Beneficiaries do not contribute to
health care insurance

▪ Co-payments are made as % of total care cost in the contributory regime and subsidized regime (except for under 1 year
olds, elderly and rural migrants)

Source:
Guerrero R. et. al (2015). Universal Health Coverage Assessment, Colombia. Global Network for Health Equity (GNHE)
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Health financing system

The proportion of out of pocket payments have reduced over

the years in Colombia

Total Health Expenditure per capita ($) - Total Health Expenditure per capita ($) –
Colombia Peru

350
300 9%
250
200 10% 52%

150 10%
49%
12% 47%
100 10%
16%
54%
52% 55% 39%
50 43% 41%
38% 29% 34%
0
2000 2003 2005 2007 2009 2012

Private insurance expenditure on health per capita

General Government expenditure on health per capita
Out of pocket spending on health per capita

Deena C., Sunil R.A., Cavagnero E. (2014). Health financing profile- Columbia. World Bank. World Bank database.

Compared to Peru (also UMIC), Colombia health system financing has improved remarkably

Sources:
http://documents.worldbank.org/curated/en/202221468026099677/pdf/893770BRI0P1230LIC000Colombia0final.pdf
https://data.worldbank.org/country/peru | 6
Health financing system

The Colombian health system is progressive and equitable

Distribution of different health financial sources by income quintile
Kakwani index
(2010)

Q1
2
General taxation 4 7 87 100 Q2
0
Q3 ▪ General taxation 0.27
Q4
Social insurance 15 11 22 61 100 Q5
▪ Social insurance 0.05

1 ▪ Private insurance 0.34

Private insurance 5 92 100
0
2 ▪ Out of pocket 0.03

Out of pocket 3 6 11 17 63 100

▪ Total 0.15

Total financial 4
8 14 73 100
sources 1

▪ The wealthiest in the society provide 73% of all health finances while the poor contribute 1%
▪ Only 4.6% of households had out of pocket payments that exceeded the threshold
▪ Therefore, the health system is progressive and equitable in financial burden
Source:
Guerrero R. et. al (2015). Universal Health Coverage Assessment, Colombia. Global Network for Health Equity (GNHE)
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Health financing system

Colombia has achieved 96% health coverage

Health coverage (% of population covered by

▪ The 4% of the population who
health insurance)
are not insured are those living
4%
in remote areas, homeless or
5% not on government register

▪ Equity in financing (as the rich

43% pay more) but inequities persist
in geographical access to care

48% ▪ More efforts needed to achieve

universal coverage

Contributory Special regimes

Subsidized Uncovered

Source:
Guerrero R. et. al (2015). Universal Health Coverage Assessment, Colombia. Global Network for Health Equity (GNHE).
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Conclusion

Recommendations to achieve UHC

1
Increase the health
system capacity in rural
areas

2
Provide extra incentives for
health workers in the rural
areas

3
Remove copayments for
subsidized regime

Source: Personal Analysis

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Conclusion

References
Deena C., Sunil R.A., Cavagnero E. (2014). Health financing profile- Colombia. World
Bank. Available from:
http://documents.worldbank.org/curated/en/202221468026099677/pdf/893770BRI0P
1230LIC000Colombia0final.pdf [Accessed 1st November, 2019]

Guerrero R., Prada S.I., Perez A.M., Duarte J., Aguirre A.F. (2015). Universal Health
Coverage Assessment, Colombia. Global Network for Health Equity (GNHE).
Available from:
https://www.icesi.edu.co/proesa/images/GNHE%20UHC%20assessment_Colombia%
204.pdf [Accessed 1st November, 2019]

World Bank Database. (2019). World Bank. Available

from:https://data.worldbank.org/country/Colombia [Accessed 1st November, 2019]

World Bank Database. (2019). World Bank. Available

from:https://data.worldbank.org/country/peru [Accessed 1st November, 2019]

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