M a r k e t Wat c h

M a r k e t Watc h
Colombia’s Universal Health Insurance System
The results of providing health insurance for all in a middle-income
country.
by Ursula Giedion and Manuela Villar Uribe

ABSTRACT: By insuring more than 80 percent of its population, Colombia provides a valu-
able opportunity to gather evidence on a hotly debated health policy issue. Results from
three studies evaluating the impact of universal health insurance in Colombia show that it
has greatly increased access to and use of health services, even those that are free for all,
and has reduced the incidence of catastrophic health spending. The impact has been more
dramatic among those most vulnerable to health shocks: those living in rural areas, the
poorest, and the self-employed. [Health Affairs 28, no. 3 (2009): 853–863; 10.1377/
hlthaff.28.3.853]

T
h e p o s i t i v e e f f e c t of health insur-
ance coverage on the use of medical
care has been widely demonstrated
and is generally accepted in the developed
world.1 However, little evidence is available
on the impact of health insurance in the de-
veloping world.
Hoping to reap the benefits of health insur-
ance for its population, in 1993 Colombia ap-
proved a universal health insurance scheme
(Law 100) whereby all citizens, irrespective of
their ability to pay, are entitled to a compre-
hensive health benefit package. In Colombia’s
system of universal health insurance, people
participate in one of two regimes depending
on income: the Contributory Regime (CR),
which covers workers and their families with
monthly incomes above a minimum monthly
amount (approximately US$170 per month),
and the Subsidized Regime (SR), which covers
those identified as being poor through a proxy
means test.
n Financing. The CR is financed by man-
datory payroll tax contributions (11 percent).
The government uses national and local tax
revenues and a payroll tax (1.5 percent) as a
“solidarity contribution” (that is, a subsidy
from those who pay into the CR to help pur-
chase coverage for those in the SR).
n Benefit packages. Members of both
schemes have access to a package of specified
benefits. The CR package, known as the POS
(Plan Obligatorio de Salud), includes all levels
of care, while the SR package, known as the
POSS (Plan Obligatorio de Salud Subsidiado),
covers most low-complexity care and cata-
strophic illnesses but provides only limited
coverage for most hospital care and provides
no short-term disability coverage (Exhibit 1).
To fill the gap, the POSS is complemented by
services provided by public hospitals, financed
through direct payments to providers inde-
pendent of what services they supply and of
patients’ insurance status. According to the
health reform law of 1993, those so-called sup-
ply-side subsidies should be transformed into

Ursula Giedion (ugiedion@gmail.com) is a consultant with the Brookings Institution in Bogota, Colombia.
Manuela Villar Uribe is a consultant with the World Bank Group in Washington, D.C.

H E A L T H A F F A I R S ~ Vo l u m e 2 8 , N u m b e r 3 853
DOI 10.1377/hlthaff.28.3.853 ©2009 Project HOPE–The People-to-People Health Foundation, Inc.

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Health Tr a c k i n g

EXHIBIT 1
Characteristics Of The Contributory Regime (CR) And Subsidized Regime (SR) In
Colombia’s Universal Health Coverage Scheme, 2007

Characteristic CR SR
Population coverage
Target population Individuals and families with the ability to Eligible individuals as determined by a
pay: those employed earning at least one means test (Sistema de Identificación de
minimum salary; self-employed workers Beneficiarios, or SISBEN)
earning at least two minimum salaries

Number of enrollees, 2007a 21.5 million 18.2 million

Percentage of the total population 42% 50%

covered, 2007a

Contents of the benefit package

Family coverage Yes Yes

Public health education and outreach Full range of public health education Full range of public health education
and outreach services and outreach services

Preventive care, individual and family Full range of preventive services Full range of preventive services

Outpatient services (consultations, All All obstetric services, all pediatric

treatment, diagnostic tests, services for children under age one, low-
rehabilitation) complexity outpatient services, minor
trauma, glasses for children and the
aged, family planning

Dental care Basic care Basic care

Inpatient services All Hospitalization for low-complexity care;

all obstetric services; all pediatric
services for children under age one;
general surgery for herniorrhaphy,
appendectomy, cholecystectomy,
hysterectomy; orthopedic care

Medications All medications in national listing All medications in national listing

Catastrophic care Treatment with radiotherapy and Same as for CR

chemotherapy for cancer; dialysis and
organ transplant for renal failure; heart,
cerebrovascular, neurological, and
congenital surgeries; treatment of major
trauma; intensive care unit; hip and knee
replacement; major burns; treatment for
HIV/AIDS

Transportation For referrals, catastrophic care For referrals, catastrophic care

Excluded conditions Cosmetic surgery; fertility treatment; sleep Same as for CR plus all conditions not
disorder treatments; organ transplants listed above
(except renal, heart, corneal, and bone
marrow); long-term psychotherapy and
psychoanalysis; treatment for end-stage
renal disease

Maternity and sickness leaves Covered Not covered

SOURCE: Adapted from D. Pinto and W.C. Hsiao, “Colombia: Social Health Insurance with Managed Competition to Improve
Health Care Delivery,” in Social Health Insurance in Developing Nations, ed. W.C. Hsiao and P. Shaw (Washington: IBRD/World
Bank, 2007), 105–131.
a
National Health Survey 2007.

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demand-side subsides, where insurance is sub-
sidized for beneficiaries and insurers pay pro-
viders for services actually delivered to their
clients. The aim is to achieve universal cover-
age with the same benefits in both regimes.
n Choice of insurers. In both the CR and
the SR, the insured person chooses an in-
surer—known as an Entidad Promotora de
Salud (EPS, meaning health-promoting entity)
in the CR and an Administradora del Regimen
Subsidiado (ARS, meaning administrator of
the subsidized regime) in the SR—whose
ownership may be public, private, or mixed
and which may be run either for profit or not
for profit. In the CR, twenty-one health insur-
ance entities are available; 82 percent of en-
rollees are affiliated with a private EPS, while
18 percent are affiliated with a public EPS.2
Forty-three different health insurance entities
operate in the SR; 44 percent of enrollees are
affiliated with a private EPS, and 42 percent
are affiliated with either a public community-
based or indigenous health plan.3
n Competition and contracting. Because
prices and benefits are both determined by the
government, any competition among insurers
would be expected to be on the basis of qual-
ity. The insurer contracts for health services
with a network of public, private, or own-
service providers (providers that are owned by
the insurers themselves). To protect the finan-
cial sustainability of public hospitals, insurers
in the SR are forced to contract with the pub-
lic provider network for at least 40 percent of
the premiums.
n Premiums and risk adjustment. The
government sets a unique premium with risk
adjustment by age, sex, and location, to be paid
to all insurers for each beneficiary. This pre-
mium is about US$244 per person per year in
the CR and US$137 in the SR.4
n More recent developments. Before the
1993 reform, 24 percent of the population had
health coverage; by 2007, more than 80 percent
had it, according to recently released data from
the 2007 National Health Survey (NHS).5 This
places Colombia among the very few countries
in the developing world reaching near-
universal health insurance coverage.6 The in-
H E A L T H A F F A I R S ~ Vo l u m e 2 8 , N u m b e r 3
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M a r k e t Wat c h
crease was especially dramatic among the low-
est quintile of the population, rising from 6
percent before the reform to more than 70 per-
cent by 2007. Furthermore, the current admin-
istration aims to achieve universal coverage by
2010 by mobilizing new resources for the SR,
including the approval of an increase of payroll
taxes from 11.5 percent to 12.5 percent, to be
channeled to the SR.
Despite the extraordinary increase in cov-
erage, criticism of Law 100 is omnipresent in
Colombia, and calls for its complete overhaul
are not uncommon. Many argue that the bene-
fits of the current health system are unclear
and that the transformation of supply to de-
mand subsidies has not advanced quickly
enough, leading to inefficiencies in the alloca-
tion of resources.7 Some also doubt whether
the major fiscal effort involved in financing the
SR—approximately 1 percent of GDP in
2003—has been worthwhile.8 Also, there are
concerns that increased labor taxes will make
a stagnant formal employment situation
worse.9 Others argue that the system is highly
inequitable, given the differences in the benefit
packages provided for the poor and the
nonpoor; these critics seem to have forgotten
that before 1993, the poor had no right to any
explicit benefit package and that fiscal restric-
tions do not allow the country to provide “ev-
erything to everybody, now” but rather call for
a gradual extension of insurance coverage.
n International views. International ob-
servers also have expressed contrasting and, to
a certain extent, opposing views on whether
the Colombian system has been a success or an
outright failure, often without citing much ev-
idence. For example, a group from the World
Bank observed in 2006: “The 1993 health sec-
tor reform in Colombia is a good example of a
successful government initiative to extend so-
cial health insurance to the poor.”10 Tony De
Groote and colleagues concluded, conversely,
that “some ten years after the implementation
of ‘Law 100,’ a review of the literature shows
that the proposed goals of universal coverage
and equitable access to high-quality care have
not been reached.”11 The important question is,
then, What does the evidence really show?
855
Health Tr a c k i n g
Debate on whether health insurance is a
worthwhile strategy to improve access to
health care is not limited to Colombia. For ex-
ample, a World Health Organization (WHO)
resolution adopted in 2005 called on member
states to ensure that health financing systems
include a method for prepayment of financial
contributions for health care.12 At the same
time, a recent Joint NGO Briefing Paper criti-
cizes health insurance as a financing mecha-
nism by lamenting the lack of evidence on
whether health insurance can work in low-
income countries.13 It is hardly surprising,
then, that many countries and international
organizations have followed the implementa-
tion of the Colombian health reform with in-
terest. In this context of national and interna-
tional debate, evidence of the impact of this
scheme not only provides important informa-
tion for policy making in Colombia but also
provides lessons to other countries envision-
ing similar reforms.
This paper is a synthesis of three recent im-
pact evaluation studies on universal health in-
surance in Colombia.14 The main goal of these
studies was to analyze existing survey data to
evaluate the following three questions: (1) Has
insurance improved access to and use of health
services both for the poor insured under the
SR and the nonpoor insured through the CR?
(2) Has insurance reduced the risk of out-of-
pocket health spending that destabilizes or
impoverishes households? (3) Has insurance
been able to positively affect health outcomes
among enrollees in the SR?
Study Data And Methods
To answer these questions, the studies syn-
thesized here used an array of available data
sources and methods. No randomized trial
data were available to evaluate the impact of
health insurance in Colombia, so the analysts
had to rely on retrospective, already available
household survey data—namely, two rounds
of the Demographic and Health Survey (DHS,
1995 and 2005) and one Living Standards
Measurement Survey (LSMS, 2003).15 When
there are no experimental data, no clearly su-
perior impact evaluation method exists, and
856
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the final choice depends on the specific cir-
cumstances and often requires testing several
methods. As Richard Blundell and Monica
Dias indicate, “The appropriate methodology
for non-experimental data depends on three
factors: i) the type of information available to
the researcher, ii) the underlying model and iii)
the parameter of interest.”16 The parameters of
interest of the studies presented here are re-
lated to access and utilization, health status,
and financial protection, and no single house-
hold survey pulls together data for all of these
dimensions.
Although the 1995 and 2005 Colombian
DHS surveys provide household data on ac-
cess, utilization, and health status, concentrat-
ing mostly on small children and women of re-
productive age, the LSMS 2003 provides
information on general use of health care, out-
of-pocket spending, and respondents’ socio-
economic characteristics (including income
and employment). Also, unlike DHS surveys,
previous rounds of the LSMS are not compara-
ble, thereby limiting their use as a repeated
cross-section data set. The implications are
fourfold.
(1) Only a cross-section analysis (LSMS
2003) was available to evaluate the impact of
health insurance on financial protection in
both the CR and the SR. In the CR, an instru-
mental variable (IV) approach was used; in the
SR, a propensity score matching (PSM) tech-
nique was more appropriate.
(2) The gradual implementation and still
incomplete coverage of the SR among the poor,
together with the existence of a repeated
cross-section data set (DHS 1995 and 2005),
provided the unique opportunity to apply an
array of semiparametric methods (PSM, differ-
ence-in-difference, and matched double differ-
ence, or MDD), to identify differences in ac-
cess, utilization, and health status between
those with insurance and those without it.
(3) The key issue when trying to establish
causal relations between health insurance and
health outcomes is selection bias (that is, are
members systematically different from non-
members in ways that also affect outcomes?).
In the CR, membership is mainly determined
May/ June 2009

by employment status and income level. How-
ever, information on these determinants is
available only in the LSMS, which does not
provide any health status variables that can be
expected to change as a consequence of bene-
fits provided under the CR. Therefore, the
analysis of the CR did not look at the impact of
health insurance on health status.
(4) The analysis of the impact of the CR
was limited to a cross-sectional data set
(LSMS 2003), and the choice of methods was
restricted to either PSM or IV. Because a large
majority of the target population of the CR is
already insured, the construction of a suffi-
ciently large control group using PSM was not
possible, so the studies used IV.17
PSM as well as double difference (DD) and
MDD analyses were used to evaluate the im-
pact of the SR on access, utilization, and
health status, while PSM was used to evaluate
the impact of the SR on financial protection;
the IV approach was used to evaluate the im-
pact of the CR on all outcome variables. In
each case, household-level data were com-
bined with administrative data at the munici-
pal and departmental level and with block-
level census data related to the determinants
of membership and therefore used to control
for potential selection bias.18
Study Results
n SR: access and utilization. Using
PSM, the average difference between matched
individuals is our estimate of the impact of the
SR on selected outcome variables (Exhibit 2).
Regardless of the matching method used, the
estimates confirm that the SR has improved
access for the poor. Those insured by the SR
are approximately 40 percent more likely to
have used outpatient visits in the past year (69
percent of the insured versus 49 percent of the
uninsured) and almost half as likely to have
experienced barriers to access when needing
care (25 percent and 42 percent, respectively).
Insured people report problems with access
resulting from limited supply more often than
the uninsured do, which is an indication that
once health insurance reduces financial barri-
ers to access, other barriers begin to play a
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M a r k e t Wat c h
more important role. Also, insured children
who are coughing or suffering from diarrhea
are more likely than uninsured children to be
taken to a health care facility. This is impor-
tant, because both acute respiratory infections
and diarrheal diseases are still among the key
causes of mortality among small children in
Colombia. Furthermore, insured women are
somewhat more likely than uninsured women
to give birth in a health facility and to be as-
sisted by a doctor or other skilled health per-
sonnel, and they tend to receive more prenatal
visits. Importantly, insured children are more
likely than uninsured children to have their
immunization programs completed for their
age and, therefore, are less likely to die from
vaccine-preventable diseases. The positive im-
pact of subsidized health insurance on mater-
nal care as well as on immunization coverage is
interesting, because these services are pro-
vided free to everyone, irrespective of health
insurance status. Health insurance affects uti-
lization beyond affordability and may have an
effect on a provider’s way of interacting with
insured mothers (for example, by reminding
them to immunize their children).
One criticism of this analytic approach is
that it can only match individuals based on ob-
served variables. The results can be questioned
if there is reason to believe that there are sys-
tematic differences between the insured and
uninsured that are not accounted for by the
matching process and that also influence out-
come variables. To test whether the analysis in
Exhibit 2 can withstand this criticism, we im-
plemented an MDD analysis using data from
the DHS 1995 and 2005 to correct for observ-
able and unobservable differences between the
insured and the uninsured that did not change
over time. The results largely confirm the pre-
vious findings. For the smaller set of outcome
measures that were available in all three sur-
veys, affiliation with the SR is consistently as-
sociated with greater improvements in access
for those it insures. Increases range from 42.0
percentage points for prenatal visits to 10.7
percentage points in the probability of taking
children to a health care facility when they are
coughing (Exhibit 3). Even the probability of
857
Health Tr a c k i n g

EXHIBIT 2
Estimated Effect (Using Propensity Score Matching) Of Treatment On Treated People
For Access, Utilization, And Financial Protection Status, Colombia, 2005

Access and utilization Insured Uninsured

Had outpatient visit in past 12 months 0.687 0.488***
Not receiving medical care when needed 0.251 0.416***
Not receiving medical care when needed due to supply reasons 0.299 0.134***
Child taken to a health care facility when coughing 0.455 0.381***
Child taken to a health care facility when having diarrhea 0.365 0.296**
Birth in a health facility 0.865 0.815***
Birth attended by a doctor 0.809 0.755***
Birth attended by a skilled professional 0.855 0.801***
Child immunization complete 0.402 0.373**
Number of prenatal visits 5.513 5.177***

Financial protection
Catastrophic spending 0.3942 0.6080***
10% of capacity to pay 0.2783 0.4202***
20% of capacity to pay 0.2029 0.3136***
30% of capacity to pay 0.1594 0.1956*
40% of capacity to pay
Falls below endogenous poverty line 0.0609 0.0513
Falls below national poverty line 0.0638 0.1003*
Falls below national indigence line 0.0435 0.0414
Falls below endogenous or national poverty linea 0.0986 0.1407*

SOURCE: Authors’ calculations using data from the Demographic and Health Survey (DHS) 2005.
NOTES: Matching method: Kernel Eparechnikov (bandwidth 0.001). Other matching methods were implemented with very
similar results. Results from the use of these methods can be obtained from the authors upon request; send e-mail to Ursula
Giedion at ugiedion@gmail.com.
a
Endogenous (to the household) poverty line equals a basic household basket of goods and services.
*p < 0.10 **p < 0.05 ***p < 0.01

EXHIBIT 3
Estimates (Using Matched Double Difference) Of The Change In Health-Related
Outcome Variables In Colombia, Nationwide And By Urban/Rural Area, 1995–2005

Difference, 1995 to 2005

Access and utilization: outcome variables National Urban Rural

Child taken to a health care facility when coughing 0.107*** 0.090*** 0.078**
Child taken to a health care facility when having diarrhea 0.074** 0.099** 0.151**
Birth in a health facility 0.043*** 0.009 0.047**
Birth attended by a doctor 0.057*** 0.008 0.062**
Birth attended by a skilled professional 0.051*** 0.007 0.044**
Child immunization complete 0.061*** 0.041** 0.118***
Number of prenatal visits 0.420*** 0.172* 0.391**

SOURCE: Authors’ calculations using data from the Demographic and Health Survey (DHS) 2005.
*p < 0.10 **p < 0.05 ***p < 0.01

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 M a r k e t Wat c h

having complete immunization schedules in-
creased by 6.1 percentage points for those in-
sured during 1995–2005. These results con-
firm what has been found using PSM: health
insurance has improved access even for those
services that by law should be free for all.
Although a comparison of health indicators
at the national, urban, and rural levels shows
that they are still worse in rural compared to
urban areas (Exhibit 4), health insurance
seems to matter more in the disadvantaged ru-
ral areas. For example, the percentage of births
attended by a doctor is above 90 percent for all
childbearing women in urban areas but below
70 percent in rural areas. However, in urban
areas, the increased probability of bringing
coughing children with insurance to a health
facility is 33 percent in rural areas, compared
to only 15 percent in urban areas. Similarly, the
probability of ambulatory visits increases from
44 percent to 66 percent with insurance in ru-
ral areas, compared to a slightly more modest
increase from 53 percent to 70 percent in ur-
ban areas. The more important impact in rural
areas might be explained by overall worse
health indicators in rural areas and, conse-
quently, more room for improvement. Simi-
larly, impact is found to be more important
among the poorest of the poor (lowest quin-
tile) compared to their somewhat wealthier
neighbors (quintile 2).19 This indicates that
subsidized health insurance is reducing equity
gaps not only in insurance coverage but also in
access to services.
n SR: impact of health insurance on
health status. Evaluating the impact of health
insurance on health status is extremely com-
plex. Possibly the most challenging issue is to
find appropriate variables for measuring
health status and to capture changes in under-
lying quality of life that can reasonably be re-
lated to improved access to services covered

EXHIBIT 4
Estimated Effect (Using Propensity Score Matching) Of Treatment On Treated People
For Access And Utilization Comparing The Urban/Rural And Poorest/Poor Quintiles,
Colombia, 2005

Urban Rural Poorest Poor

Access and utilization Treated Control Treated Control Treated Control Treated Control
Had outpatient visit in past 12
months 0.702 0.530*** 0.657 0.440*** 0.652 0.433*** 0.701 0.516***

Not receiving medical care when

needed 0.208 0.352*** 0.324 0.498*** 0.341 0.502*** 0.219 0.384***
Not receiving medical care when
needed due to supply reasons 0.267 0.133*** 0.348 0.172*** 0.348 0.158*** 0.294 0.138***

Child taken to a health care

facility when coughing 0.477 0.414*** 0.404 0.303*** 0.405 0.300*** 0.492 0.390***
Child taken to a health care
facility when having diarrhea 0.362 0.326 0.324 0.235 0.368 0.228** 0.379 0.358

Birth in a health facility 0.942 0.927* 0.747 0.684*** 0.744 0.694* 0.925 0.914
Birth attended by a doctor 0.901 0.875*** 0.678 0.637** 0.675 0.653 0.884 0.859
Birth attended by a skilled
professional 0.933 0.914** 0.74 0.698** 0.736 0.720 0.919 0.909

Child immunization complete 0.450 0.421* 0.329 0.311 0.349 0.321 0.436 0.410
Number of prenatal visits 5.767 5.805*** 5.167 4.549*** 4.739 4.425* 5.932 5.632*

SOURCE: Authors’ calculations using data from the Demographic and Health Survey (DHS) 2005.
NOTES: Matching method: Kernel Eparechnikov (bandwidth 0.001). Other matching methods were implemented with very
similar results. Results from the use of these methods can be obtained from the authors upon request; send e-mail to Ursula
Giedion at ugiedion@gmail.com.
*p < 0.10 **p < 0.05 ***p < 0.01

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Health Tr a c k i n g
under the benefit packages. Additionally,
without any real panel data, it is difficult to
know whether observed differences in health
status variables are the result of health insur-
ance or whether the determination to get
health insurance is partly a result of observed
health status. Given these difficulties, it
should not be surprising that no conclusive ev-
idence emerges on the impact of health insur-
ance on the health status variables that are
available in the DHS surveys.
n SR: impact of health insurance on fi-
nancial protection. According to the 2000
WHO report, one of the three main objectives
of any health system is to protect the popula-
tion from the financial consequences of ill-
ness.20 Likewise, the World Bank strategy for
health, nutrition, and population mentions the
prevention of poverty through improved finan-
cial protection as one of its four main strategic
objectives.21 Health insurance is meant to pro-
vide financial protection by spreading the fi-
nancial risk associated with illness across a
pool of individuals. Evaluating the perfor-
mance of health insurance with regard to fi-
nancial protection was therefore a key objec-
tive of the studies summarized in this paper.
Following the WHO, health-related out-of-
pocket spending is classified as being “cata-
strophic” if it exceeds a specified portion of
household nonsubsistence income (Exhibit 2).
Health insurance greatly reduces the probabil-
ity of incurring catastrophic expenditure. Re-
sults are statistically significant for different
thresholds, but the statistical significance and
the size of the impact decreases as the percent-
age of income spent increases. This is probably
related to the decreasing number of observa-
tions as the catastrophic spending amount
rises, which in turn mirrors the observation
that there are were few high-expenditure re-
spondents and many low-expenditure respon-
dents. This result may be related to the fact
that the SR covers mainly ambulatory care on
the low end of health spending and cata-
strophic illnesses such as AIDS and cancer at
the high end but provides only very limited
coverage for tertiary care (Exhibit 1).
n CR: impact on access and utilization.
860
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Exhibit 5 presents estimates of the impact of
health insurance provided in the CR on access,
utilization, and financial protection. Health
insurance significantly reduces access barriers
for both the self-employed and the employed.22
Unmet need has been reduced by 2 percent
among both groups. More importantly, health
insurance has reduced financial barriers to ac-
cess by 14 percent among the employed and by
47 percent among the self-employed. As in the
SR, the more important impact among the
self-employed may be related to their tendency
to have worse health than the employed, pro-
viding more room for improvement. Other
supply-side barriers in the CR also tend to be
more important among the insured once finan-
cial barriers are removed (note, however, that
this result is only barely significant among the
employed). Moreover, access to medications
has greatly improved with health insurance.
Results show that insurance increases the
use of both formal curative health care and
preventive services.23 Insurance in the CR has
increased the likelihood of members’ using for-
mal care when ill by 57 percent among the em-
ployed and by 26 percent among the self-em-
ployed (Exhibit 5). Self-medication as a way of
meeting unmet demand when ill was 28 per-
cent less likely among employed members and
15 percent less likely among self-employed
members when compared to uninsured peers.
Similarly, visiting a dentist or a general physi-
cian for preventive reasons increased by 34
percent among the employed and by 46 per-
cent among the self-employed.24
n CR: impact on financial protection.
Finally, as expected and consistent with the
reduction in financial access barriers, insur-
ance has reduced the incidence of catastrophic
spending among both the self-employed and
the employed. Results are statistically signifi-
cant for most thresholds of catastrophic
spending (Exhibit 5). For example, the inci-
dence of catastrophic spending drops by 61
percent for the self-employed and by 13 per-
cent for the employed when considering all
households that had out-of-pocket health
spending that totaled 20 percent or more of
their nonsubsistence income. The size of the
May/ June 2009
 M a r k e t Wat c h

EXHIBIT 5
Results From Instrumental Variable (IV) Analysis: Estimated Treatment Effect On
Treated People For Access And Utilization In The Contributory Regime (CR), At The
National Level, Colombia, 2003

Difference

Self-employed and Formally employed and

Access and utilization their families their families
No health care use when having a health problem –0.021** –0.020*
Financial barrier to access –0.473** –0.144***
Supply-side barrier to access 0.090 –0.045*
Demand-side barrier to access –0.353* –0.210***
Access to medications (patient given all or any of the
prescribed medicines) 0.755*** 0.760***
Access to medications (patient given all of the
prescribed medicines) 0.516*** 0.568***
Timeliness of service for visit to general physician and dentist 1.525 –0.910*
Timeliness of service for visit to specialist –1.948 0.322
Formal health care services use 0.256*** 0.567***
Informal health care services use –0.052*** –0.027*
Preventive health care use (physician or dentist visit at least
once a year) 0.459*** 0.342***
Preventive health care use (physician and dentist visit at least
once a year) 0.152*** 0.272**
Self-medication when having a health problem –0.148*** –0.276***

Catastrophic spending
10% of capacity to pay –0.6227*** –0.2712***
20% of capacity to pay –0.6127*** –0.1310***
30% of capacity to pay –0.2720*** –0.0419
40% of capacity to pay –0.1394*** –0.0392***
Falls below endogenous poverty line –0.0127 –0.0287
Falls below national poverty line –0.4100 –0.0004***
Falls below national indigence line –0.0058 0
Falls below endogenous or national poverty linea –0.0599** –0.0004

SOURCE: Authors’ calculations.

a
Endogenous (to the household) poverty line equals a basic household basket of goods and services. Void cells indicate that
insufficient information was available for this variable and subsample.
*p < 0.10 **p < 0.05 ***p < 0.01

impact tends to be larger among the self-em- Concluding Comments

ployed than among the employed. Once again,
this result is significant because the former
tend to show worse health indicators than the
latter, which makes improvements both more
important and possibly easier to achieve. For
example, 21 percent of all employed people
needing health care experienced financial bar-
riers, compared to 35 percent among the self-
employed.
Health insurance has introduced positive
changes in Colombia. Results presented here
indicate five important findings: (1) Insurance
coverage not only has greatly increased for the
general population but also has increased
among the poor and now reaches more than 80
percent of the population. (2) Health insur-
ance in Colombia has improved access and uti-
lization in both the SR and the CR. (3) Access
has improved even for services that are free for
all, regardless of insurance status. (4) Insur-

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Health Tr a c k i n g
ance has reduced the incidence of catastrophic
health spending. (5) The size of the impact
tends to be larger among the more disadvan-
taged groups; in the SR, those in rural areas
and those in the lowest income quintile benefit
more than those living in urban areas or the
less poor. Moreover, although social health in-
surance schemes are criticized for the diffi-
culty of attracting the self-employed, our re-
sults indicate that the benefits of insurance are
even more important among this group than
for other insured people in the CR.
n Future agenda: policy. Colombia’s goal
of reaching universal coverage by 2010 seems
to be grounded on sufficient evidence. Despite
the positive impact of health insurance,
though, much still remains to be done. First,
indicators of access and financial protection
among the insured, such as the number of peo-
ple not receiving care when in need and the
percentage of women giving birth without the
assistance of a physician, still signify room for
improvement. Second, improving the quality
of services should be a key objective now that
improvements in access and financial protec-
tion have been obtained. Third, the more lim-
ited extent of the benefit package in the SR
may explain why subsidized insurance does
not offer as much financial protection as does
the CR. This indicates the need to move in the
direction of equal coverage under both regimes
while making certain not to jeopardize fiscal
sustainability. This issue is currently hotly de-
bated in Colombia, as a recent ruling from the
Constitutional Court has ordered the govern-
ment to provide full health coverage to the
population and unify the benefit packages of
the CR and SR in the name of the fundamental
human right to health and equity.25 Prelimi-
nary estimates indicate that this may cost
close to 20 percent of GDP at current levels.26
This situation clearly illustrates the tremen-
dous challenge of finding a balance between
the guarantee of the fundamental right to
health, the provision of comprehensive bene-
fits, and the financial sustainability of health
systems not only in the developed world but
also increasingly in middle-income countries.
n Opportunity for further research. Eval-
862
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uating the impact of health insurance on
health status using general household data has
many limitations. These limitations are dis-
cussed in greater detail in an online appen-
dix.27 Health insurance is a complex concept
and encompasses many variables. It varies in
extent, duration, organization, and financing,
and its impact will depend on the interplay be-
tween all of these factors. Interesting opportu-
nities for research exist for those wishing to
understand the more complex implications of
health insurance on the provision of health
care and on health outcomes. Colombia’s expe-
rience can help other developing countries as
they struggle with the same challenges in pro-
viding equitable access to services for all.
The authors thank Maria-Luisa Escobar for her
constructive critique of earlier drafts of this paper.
They also thank Jacques van der Gaag, Paul Gertler,
Mead Over, Alex Preker, and April Harding for their
insightful and helpful comments. Preparation of this
synthesis paper was supported by the Global Health
Financing Initiative at the Brookings Institution. The
opinions expressed herein are the authors’ and do not
necessarily reflect the views of Brookings.
NOTES
1. See, for example, J. Hadley, “Sicker and Poorer—
The Consequences of Being Uninsured: A Re-
view of the Research on the Relationship be-
tween Health Insurance, Medical Care Use,
Health, Work, and Income,” Medical Care Research
and Review 60, no. 2 Supp. (2003): 76S–112S.
2. Data for 2005 are from D. Pinto and W.C. Hsiao,
“Colombia: Social Health Insurance with Man-
aged Competition to Improve Health Care Deliv-
ery,” in Social Health Insurance in Developing Nations,
ed. W.C. Hsiao and P. Shaw (Washington: IBRD/
World Bank, 2007), 105–131.
3. D. Pinto, “Colombia: Good Practices in Expand-
ing Health Care Coverage,” in Good Practices in
Health Financing, ed. P. Gottret et al. (Washington:
World Bank, 2008), 137–182.
4. In 2008, the premium was 430,488 Colombian
pesos in the CR and 242,370 Colombian pesos in
the SR. The exchange rate in May 2008 was
1,767.4 Colombian pesos to one U.S. dollar.
5. Although approved in December 1993, the SR did
not begin until 1996.
6. See Hsiao and Shaw, eds., Social Health Insurance in
May/ June 2009

Developing Nations.
7. A. Gaviria et al., “Evaluating the Impact of Health
Care Reform in Colombia: From Theory to Prac-
tice,” Working Paper (Bogotá: Economic Devel-
opment Research Center, 2006).
8. G. Barón, “Cuentas de salud de Colombia, 1993–
2003: El gasto nacional en salud y su financia-
miento” (Bogotá: Ministerio de la Protección So-
cial, 2007).
9. Gaviria et al., “Evaluating the Impact.”
10. P.E Gottret et al., Health Financing Revisited: A Prac-
titioner’s Guide (Washington: World Bank, 2006).
11. T. De Groote, P. De Paepe, and J.P. Unger, “Co-
lombia: In Vivo Test of Health Sector Privatiza-
tion in the Developing World,” International Jour-
nal of Health Services 31, no. 1 (2005): 125–141.
12. WHO, “Achieving Universal Health Coverage:
Developing the Health Financing System,” Tech-
nical Briefs for Policy-Makers no. 1 (Geneva:
WHO, 2005).
13. Oxfam International, “Health Insurance in Low-
Income Countries,” Joint NGO Briefing paper no.
112, May 2008, http://www.oxfam.org/uk/
resources/policy/health/downloads/bp112_
insurance.pdf (accessed 25 March 2009).
14. U. Giedion et al., “The Impact of Subsidized
Health Insurance on Access, Utilization, and
Health Status: The Case of Colombia” (Washing-
ton: World Bank, forthcoming); U. Giedion et al.,
“The Impact of Health Insurance in the Manda-
tory Contributory Regime on Access and Utili-
zation: The Case of Colombia” (Washington:
World Bank, forthcoming); and C.E Flórez et al.,
“The Impact of Health Insurance in Colombia on
Financial Protection” (Washington: World Bank,
forthcoming).
15. DHS surveys were carried out by PROFAMILIA
(a nongovernmental organization providing fam-
ily planning services) and jointly financed by
PROFAMILIA, the Instituto de Bienestar Famil-
iar (Institute for Family Welfare), the U.S.
Agency for International Development (USAID),
the Ministry of Social Protection, and the United
Nations Population Fund (UNFPA). The LSMS
was carried out and financed by the Departa-
mento Nacional de Estadísticas (DANE, Na-
tional Department of Statistics). A table summa-
rizing the data sources and methods is available
online at http://content.healthaffairs.org/cgi/
content/full/28/3/853/DC1.
16. R. Blundell and M.C. Dias, “Evaluation Methods
for Non-Experimental Data,” Fiscal Studies 21, no.
4 (2000): 427–446.
17. More details are provided in a technical appen-
dix, as in Note 15.
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M a r k e t Wat c h
18. The administrative data included, among other
indicators, the distance of the municipality from
the capital of the department, the level of politi-
cal unrest as measured by the number of attacks
by irregular armed forces, the average education
level at the municipal level, the percentage of the
population with unmet basic needs, total re-
sources allocated to health, per capita income,
and health insurance coverage at the municipal
level. Block-level census data from 1993 (prior to
the implementation of the health reform) in-
cluded the following variables: percentage of
households with access to public services, pro-
portion of household members over age twelve,
average number of household members, and per-
centage of female-headed households.
19. M.L. Escobar “Health Sector Reform in Colom-
bia,” May 2005, http://www1.worldbank.org/
devoutreach/may05/article.asp?id=295 (accessed
1 June 2008).
20. WHO, Health Systems: Improving Performance
(Geneva: WHO, 2000).
21. World Bank, Healthy Development: The World Bank
Strategy for Health, Nutrition, and Population Results,
World Health Report (Washington: World
Bank, 2007).
22. An employed person works for a private com-
pany or government. A self-employed person is a
day or unskilled laborer, an independent profes-
sional, an independent worker of any other type,
an employer, or an independent farmer.
23. Services were deemed “formal” if a person having
a health problem during the past month obtained
the services of a general physician, specialist,
dentist, health facility, nurse, or medical care-
taker. Informal health care refers to respondents
who had a health problem during the past month
and obtained the services of a pharmacist, apoth-
ecary, traditional healer, and the like.
24. See Giedion et al., “The Impact of Subsidized In-
surance,” Annex Table 3.
25. Constitutional Court Ruling no. T-760, J. Magis-
ter Manuel Jose Cepeda Espinosa, Bogotá, 31 July
2008.
26. J.C. Echeverry et al., “Monthly Report: Health
System Crisis with Macro Consequences” (New
York: Latin Source, 30 August 2008).
27. See the online appendix, as in Note 15.
863