COLOMBIA GAINING ON UNIVERSAL HEALTH CARE, BUT A

UNCLAS BOGOTA 003352 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON EFIN TBIO PGOV CO SUBJECT: COLOMBIA GAINING ON UNIVERSAL HEALTH CARE, BUT A PRICE ¶1. (SBU) SUMMARY: Since the 1993 implementation of national health care coverage in Colombia, the GOC has tripled the number of Colombians with access to public health services. However, the expansion has come with fiscal, legal, bureaucratic costs that are expected to rise further with the recent court-ordered increase in subsidized health services for Colombia's poorest. Providers and independent observers agree that medical care in Colombia rates higher now than before universal care, but worry that legal challenges, high drug prices, and limited government resources could eventually hollow out the progress made. END SUMMARY. More Coverage... -------------- ¶2. (SBU) In 1992 less than 20 percent of Colombia's population had health insurance or financed access to health care services. In 1993, the Colombian Congress passed Law 100 which created a universal health care system with an employer-employee contributory plan and a subsidized plan for low-income and informal sector Colombian worker which received funds from the contributory plan and the GOC. Coverage has since increased to 74 percent of the population. While still not universal, independent experts such as Amelia Fernandez, Dean of the Medical Faculty at Javeriana University, tell us that much of the population remaining outside the system consist of Colombia's 3 million-plus internally displaced persons, remote rural communities, and individuals who have not obtained sufficient personal identify documentation to register for the subsidized program. ¶3. (U) Of the nearly three-quarters of Colombia's population that participate in the national health care system, 45 percent participate in the subsidized program covered by the 30 percent of higher-income Colombians in the contributory system. Under both plans, participants have access to a health maintenance organization-style list of service providers in their local community. Under the contributory plan, Colombian workers contribute 12 percent of their salary to the program with employers covering one-third and the employees covering two-thirds. One and half percent of the funds collected through the contributory plan, together with GOC fiscal resources, help fund the subsidized system which has until recently consisted of a more limited slate of services. But More Costs too -------------- ¶4. (SBU) Critics point out that since implementation of the national plan 15 years ago, costs have grown steadily due to extensive bureaucracy, endless legal challenges over which services the plans cover, and rising costs of prescription medications. Juan Carlos Fernandez, President of Famisanar, one of the licensed private health care companies contracted by the GOC to provide coverage under the national plan, told us that rising costs have squeezed his company's margins to around 2 percent. He placed blame on GOC regulators for setting rate tables too low and creating expensive bureaucratic hurdles which lead to rampant patient legal claims. Fernandez also said his company and many other service providers often find it impossible to receive reimbursement from the subsidized public health fund for services they provide to low-income Colombians and subsequently have to absorb the cost. ¶5. (SBU) Following an August 2008 Colombian Supreme Court decision ordering an expansion of subsidized services under the national health care plan, experts expect the financial pressure on the system will grow even more. Under the court order, the national plan will now have to provide the same set of services to subsidized plan members as contributory plan members receive. Fernandez told us he expects the cost of the decision will run as high as USD 2 billion with the GOC having to cover the cost from fiscal resources rather than employee or employer contributions. Money Still To Be Made -------------- ¶6. (SBU) Despite the increasing costs born by the 20 contract service providers licensed under the national plan, many have prospered under the privatized system. Today, companies such as Colsanitas, Colsubsidio, and Cafam, which started as employee savings funds, provide health networks to both contributory system participants and subsidized system participants and have branched out to lucrative value-added products. In particular, many of the providers offer supplemental "pre-paid" service packages for middle and high-income workers to complement the health services covered by the national plan. Other providers, such as Colmedica and SaludCoop, now own their own hospitals and clinics as well as non-health sector assets such as hotels and even a soccer team. Better than Before, but Room for Improvement -------------- ¶7. (SBU) Independent expert Amelia Fernandez described the system as philosophically sound but in need of improvements in implementation. In particular, she said the GOC needs to strengthen management of the system by the Superintendency for Health in order to reduce the number legal complaints over service claims and clarify benefit packages before costs spiraled out of control. Nevertheless, she echoed the assessment of Juan Carlos Fernandez and other service provider representatives that access to affordable medical services has dramatically improved in the last 15 years and that the national health care system, despite its ongoing challenges and uncertain financial future, remained a success. NICHOLS