Law 100 of 1993 established the guidelines for the reform of the social security system in Colombia. The first change involved unifying the existing social security, public, and private financing institutions under the umbrella of the General System of Social Security in Health (SGSSS). The reform aimed to create quality-centered competition among service providers and insurers by (1) allowing insurers to negotiate service rates with both public and private providers, and by (2) allowing people the freedom to choose their insurer.
Law 100 of 1993 established the guidelines for the reform of the social security system in Colombia. The first change involved unifying the existing social security, public, and private financing institutions under the umbrella of the General System of Social Security in Health (SGSSS). The reform aimed to create quality-centered competition among service providers and insurers by (1) allowing insurers to negotiate service rates with both public and private providers, and by (2) allowing people the freedom to choose their insurer.
Within the SGSSS the reform created two parallel insurance schemes to target different sectors of the population—a Contributive Regime (CR), which targets the higher income population, and a Subsidized Regime (SR), which targets the lower income population. The CR is mandatory for all formal and informal workers who earn at least one minimum salary per month—as defined by the Ministry of Social Protection and which was equal to USD223 in 2007. The contribution for formal employees is 12.5% of 40% of their monthly wage (Wage40%12.5%); 8.5% is paid by employers and 4% is paid by employees. The self-employed (or informal workers) must pay the entire 12.5% contribution. All of these contributions are collected by Health Promoting Entities (EPS), which are either private (for profit or not-for-profit) or public insurers. The insured enroll with an EPS of their choice. In 2007, 8% of the enrolled population was affiliated with a public EPS, while 92% was affiliated with a private EPS. In 2005 there were 21 EPSs to choose from. The EPSs are responsible for channeling the contributions to the Solidarity and Guarantee Fund (FOSYGA), where the funds are pooled, making it possible to cross-subsidize care for the poor. After the cross-subsidy occurs, funds are then returned to the EPS in the form of a capitation payment unit (UPC). EPSs are then responsible for making appropriate payments to providers for services received by the insured.
The second scheme is the Subsidized Regime (SR), which was designed for the poor and indigent population. This target population is identified through the Selection System of Beneficiaries for Social Programs (SISBEN), which is a proxy-means test designed to identify the most vulnerable members of a municipality. This SISBEN index is calculated at the household level through the use of a questionnaire. There are six score levels, 1 being the poorest. Levels 1, 2, and 3 qualify for the SR. The insurer for those enrolled in the SR is known as a Health Promoting Entity of the Subsidized Regime (EPSS) and functions similarly to the EPS with the exception that it does not collect any contributions from those whom it insures.
Of the 12.5% total contribution per individual to the Contributory Regime, the FOSYGA channels 1.5% into the Subsidized Regime (SR) as a solidarity contribution, while the remaining 11% stays in the CR. Thus, FOSYGA provides cross-subsidies between the wealthy and the poor, the sick and the healthy, and the old and the young.
A third prong to the provision of services is the Basic Health Plan (PBS). This plan is a safety net financed by general taxes that is composed of public hospitals and health centers. While all citizens are eligible to receive the benefits under this plan, it primarily serves those who have not yet been enrolled in either the CR or the SR and those who are enrolled in the SR but require services that are not yet covered under its benefits package. These services are paid for by state funds. In general, interventions that exhibit high externalities such as deparasitization and the early treatment and control of contagious diseases such as tuberculosis and malaria are paid for out of national coffers. The national plan is to slowly shift away from these supply-side policies toward demand-side policies through the expansion of insurance premiums for the poor. This is supposed to promote efficiency and quality, as potential revenues will no longer be stationary but will follow the patients.
As of December 2008, 39% of the population (17,234,265 people) was covered under the CR and 51% of the population (22,485,211 people) was covered under the SR. Meanwhile, 10% of the population (4,730,784 people) had no insurance coverage. Furthermore, by March 2009 there were 1,115,789 people covered under the partial subsidy scheme.
General System of Social Security in Health
Program Summary
Law 100 of 1993 established the guidelines for the reform of the social security system in Colombia. The first change involved unifying the existing social security, public, and private financing institutions under the umbrella of the General System of Social Security in Health (SGSSS). The reform aimed to create quality-centered competition among service providers and insurers by (1) allowing insurers to negotiate service rates with both public and private providers, and by (2) allowing people the freedom to choose their insurer.
Within the SGSSS the reform created two parallel insurance schemes to target different sectors of the population—a Contributive Regime (CR), which targets the higher income population, and a Subsidized Regime (SR), which targets the lower income population. The CR is mandatory for all formal and informal workers who earn at least one minimum salary per month—as defined by the Ministry of Social Protection and which was equal to USD223 in 2007. The contribution for formal employees is 12.5% of 40% of their monthly wage (Wage40%12.5%); 8.5% is paid by employers and 4% is paid by employees. The self-employed (or informal workers) must pay the entire 12.5% contribution. All of these contributions are collected by Health Promoting Entities (EPS), which are either private (for profit or not-for-profit) or public insurers. The insured enroll with an EPS of their choice. In 2007, 8% of the enrolled population was affiliated with a public EPS, while 92% was affiliated with a private EPS. In 2005 there were 21 EPSs to choose from. The EPSs are responsible for channeling the contributions to the Solidarity and Guarantee Fund (FOSYGA), where the funds are pooled, making it possible to cross-subsidize care for the poor. After the cross-subsidy occurs, funds are then returned to the EPS in the form of a capitation payment unit (UPC). EPSs are then responsible for making appropriate payments to providers for services received by the insured.
The second scheme is the Subsidized Regime (SR), which was designed for the poor and indigent population. This target population is identified through the Selection System of Beneficiaries for Social Programs (SISBEN), which is a proxy-means test designed to identify the most vulnerable members of a municipality. This SISBEN index is calculated at the household level through the use of a questionnaire. There are six score levels, 1 being the poorest. Levels 1, 2, and 3 qualify for the SR. The insurer for those enrolled in the SR is known as a Health Promoting Entity of the Subsidized Regime (EPSS) and functions similarly to the EPS with the exception that it does not collect any contributions from those whom it insures.
Of the 12.5% total contribution per individual to the Contributory Regime, the FOSYGA channels 1.5% into the Subsidized Regime (SR) as a solidarity contribution, while the remaining 11% stays in the CR. Thus, FOSYGA provides cross-subsidies between the wealthy and the poor, the sick and the healthy, and the old and the young.
A third prong to the provision of services is the Basic Health Plan (PBS). This plan is a safety net financed by general taxes that is composed of public hospitals and health centers. While all citizens are eligible to receive the benefits under this plan, it primarily serves those who have not yet been enrolled in either the CR or the SR and those who are enrolled in the SR but require services that are not yet covered under its benefits package. These services are paid for by state funds. In general, interventions that exhibit high externalities such as deparasitization and the early treatment and control of contagious diseases such as tuberculosis and malaria are paid for out of national coffers. The national plan is to slowly shift away from these supply-side policies toward demand-side policies through the expansion of insurance premiums for the poor. This is supposed to promote efficiency and quality, as potential revenues will no longer be stationary but will follow the patients.
As of December 2008, 39% of the population (17,234,265 people) was covered under the CR and 51% of the population (22,485,211 people) was covered under the SR. Meanwhile, 10% of the population (4,730,784 people) had no insurance coverage. Furthermore, by March 2009 there were 1,115,789 people covered under the partial subsidy scheme.
Two different funding streams for insurance currently exist within the Colombian health system. The Contributive Regime (CR) relies on wage contributions for its sustainability. The Subsidized Regime (SR), however, relies on three distinct funding mechanisms.
Two different funding streams for insurance currently exist within the Colombian health system. The Contributive Regime (CR) relies on wage contributions for its sustainability. The Subsidized Regime (SR), however, relies on three distinct funding mechanisms.
Under the CR, employees and the self-employed (informal workers above a set income threshold) pay 12.5% of their salaries to EPSs, which are then responsible for transferring the funds to FOSYGA. In turn, FOSYGA remits a UPC back to the EPS to cover the premium of the insured. The UPC initially adjusted risk based on three variables: age, gender, and geographic location. The premium and risk adjusters are modified yearly by the National Board of Health Social Security (CNSSS). By 2006 the board had introduced risk adjusters for End-Stage Renal Disease and other adjusters have been introduced since. When patients receive services, the EPS handles all payment transactions with the exception of copayments. From 2007 to 2008, CR revenues increased by 12.75%, which indicates an expansion of the CR and a move toward greater coverage.
There are three primary funding mechanisms for the SR: 1) national transfers from general taxation providing for 48% of SR resources, 2) solidarity contributions from the CR that are transferred by FOSYGA providing for 40%, and 3) district and municipal efforts providing for 11% of SR funds. National transfers are pooled under the Subsidized Regime’s System of General Participation (SGP) which is responsible for allocating resources to the different districts and municipalities across the country. The solidarity contribution from the CR is transferred by FOSYGA directly to the municipalities. The municipality then transfers the UPC to an EPSS of the patient’s choosing. In 1997 there were over 200 EPSS, but by 2005 there were only 43 EPSS, of which 28% were private for profit, 16% were private not-for-profit, 14% were public, 36% were community based, and 6% were for indigenous populations. The subsidized regime UPC is approximately 60% of the contributing regime UPC, which is in line with the reduced number of services offered within the SR. As with EPSs, the EPSS is responsible for payment transactions with service providers for their members.
Finally, supply-side subsidies to public hospitals/providers and public health programs are paid for by national transfers from general taxes. These funds flow into the SGP, which is then responsible for their disbursement.
General System of Social Security in Health
Funding
Two different funding streams for insurance currently exist within the Colombian health system. The Contributive Regime (CR) relies on wage contributions for its sustainability. The Subsidized Regime (SR), however, relies on three distinct funding mechanisms.
Under the CR, employees and the self-employed (informal workers above a set income threshold) pay 12.5% of their salaries to EPSs, which are then responsible for transferring the funds to FOSYGA. In turn, FOSYGA remits a UPC back to the EPS to cover the premium of the insured. The UPC initially adjusted risk based on three variables: age, gender, and geographic location. The premium and risk adjusters are modified yearly by the National Board of Health Social Security (CNSSS). By 2006 the board had introduced risk adjusters for End-Stage Renal Disease and other adjusters have been introduced since. When patients receive services, the EPS handles all payment transactions with the exception of copayments. From 2007 to 2008, CR revenues increased by 12.75%, which indicates an expansion of the CR and a move toward greater coverage.
There are three primary funding mechanisms for the SR: 1) national transfers from general taxation providing for 48% of SR resources, 2) solidarity contributions from the CR that are transferred by FOSYGA providing for 40%, and 3) district and municipal efforts providing for 11% of SR funds. National transfers are pooled under the Subsidized Regime’s System of General Participation (SGP) which is responsible for allocating resources to the different districts and municipalities across the country. The solidarity contribution from the CR is transferred by FOSYGA directly to the municipalities. The municipality then transfers the UPC to an EPSS of the patient’s choosing. In 1997 there were over 200 EPSS, but by 2005 there were only 43 EPSS, of which 28% were private for profit, 16% were private not-for-profit, 14% were public, 36% were community based, and 6% were for indigenous populations. The subsidized regime UPC is approximately 60% of the contributing regime UPC, which is in line with the reduced number of services offered within the SR. As with EPSs, the EPSS is responsible for payment transactions with service providers for their members.
Finally, supply-side subsidies to public hospitals/providers and public health programs are paid for by national transfers from general taxes. These funds flow into the SGP, which is then responsible for their disbursement.
In both the CR and the SR individuals choose their insurer as well as the provider within the insurer’s network. Enrollment mechanisms between the two systems, however, are quite distinct. While anyone is free to enroll in the CR, it is mandatory for formal sector workers and self-employed workers who earn one minimum salary per month. The CR enrolled 13,335,932 persons in 2001 and 17,234,265 persons in 2008.
In both the CR and the SR individuals choose their insurer as well as the provider within the insurer’s network. Enrollment mechanisms between the two systems, however, are quite distinct. While anyone is free to enroll in the CR, it is mandatory for formal sector workers and self-employed workers who earn one minimum salary per month. The CR enrolled 13,335,932 persons in 2001 and 17,234,265 persons in 2008.
Between 1993, when the reform was passed, and 2002, there arose the need to implement monitoring and supervision mechanisms to enforce the enrollment of self-employed workers in the CR. This has largely been achieved through two distinct methods. First, law 797 of 2003 linked pension and health insurance contributions. This affected enrollee evasion, as individuals wishing to have a pension must also have health insurance. It also affected contribution evasion, since the income level used to calculate pension contributions is also used to calculate CR contributions. Second, decree 1703 of 2002 instituted sanctions on employers if they did not ensure that self-employed workers (e.g. consultants) participated in the CR. Finally, between 2006and 2007 the Integrated Payroll Contributions Settlement system was instituted, obliging all companies and the self-employed to settle their social security payments through electronic fund transfers.
While the expansion of the SR was taking place, a unique and innovative enrollment qualification criteria was used designed to give priority to targeted groups based on income level and degree of vulnerability/likely need for care, while taking into consideration the available funds. Priority was given to special populations such as orphans and the elderly, regardless of SISBEN score, which is the proxy-means test used to identify the most vulnerable members of a community. Preference was then assigned to the poor who were either pregnant, under the age of 5, displaced by violence, or disabled. The rest of the population was ordered by SISBEN score, with a score of 1 representing the most destitute and a score of 5 representing the least destitute. Once the ranked list was published, individuals signed up with an EPSS of their choice. If an individual did not sign up, he or she had to wait until the next round of affiliations to do so. Enrollment of those who were eligible was ongoing as additional funds become available. Also, after all level 1 and 2 individuals were covered, municipalities that had resources left over could begin to cover level 3 individuals. This process was slightly altered by Accord number 415 of 2009, which states that the non-affiliated, eligible population can sign up with the SR at any point during the year. In 2002 the SR enrolled 11,444,003 persons. By 2009, this number had risen to 23,804,788.
An important issue is the monitoring of fraud within the SR. Starting in 2000, the government began monitoring and updating the subsidized scheme databases. This led to the expulsion of many fraudulent enrollees. By 2005, a complete database of SR enrollees had been set up and included their names, identification numbers, and the name of their EPSS. This database was completed in 2009.
Beginning in 2004, there was an expansion of partial subsidies to SISBEN level 3 individuals. The UPC for this plan equals approximately 42% of the CR UPC. While this plan expands coverage to those who remain uninsured, it offers a smaller benefits package. As of March 2009 there are 1,115,789 individuals covered by partial subsidies.
Lack of automatic mobility between the SR and CR upon a change in labor standing among the poor is thought to be a disincentive for Colombians to move into formal employment. The fear existed primarily among subsidized regime enrollees who would not be able to easily rejoin the SR if they lost their formal sector employment. To deal with this concern, in 2005 the government stated that a person can be reinstated into the SR within the year in case of subsequent eligibility changes. Furthermore, at the end of the year the process of re-enrolling in the SR will be quicker and easier. This change should lead to expansions in the formal workforce and higher levels of CR enrollment as more people are willing to leave the SR.
Population coverage has increased significantly since the 1993 reform, with a substantial part of the growth taking place after 2002. In 1990, 15.7% of the population had health insurance coverage. By 2008 the percentage of those covered had risen to 89.36%. This is a 570% increase in coverage over an 18 year span. The populations that were most affected by the reform were the bottom 2 income quintiles. Figure II shows that coverage for quintile 1 increased by 540% while quintile 2 increased by 250% between 1992 and 2003. Figure 2 also shows that there was a drop in coverage between 1997 and 2000, with an eventual recovery in 2003. This effect was primarily caused by a severe macroeconomic recession between 1998 and 2000. The recession not only reduced formal employment, affecting enrollment in the CR as well as the solidarity contribution to the SR, but it also reduced general tax transfers to the SR. With the recession ended and renewed political support for health coverage, the growth trend continued its upward movement.
General System of Social Security in Health
Population covered
In both the CR and the SR individuals choose their insurer as well as the provider within the insurer’s network. Enrollment mechanisms between the two systems, however, are quite distinct. While anyone is free to enroll in the CR, it is mandatory for formal sector workers and self-employed workers who earn one minimum salary per month. The CR enrolled 13,335,932 persons in 2001 and 17,234,265 persons in 2008.
Between 1993, when the reform was passed, and 2002, there arose the need to implement monitoring and supervision mechanisms to enforce the enrollment of self-employed workers in the CR. This has largely been achieved through two distinct methods. First, law 797 of 2003 linked pension and health insurance contributions. This affected enrollee evasion, as individuals wishing to have a pension must also have health insurance. It also affected contribution evasion, since the income level used to calculate pension contributions is also used to calculate CR contributions. Second, decree 1703 of 2002 instituted sanctions on employers if they did not ensure that self-employed workers (e.g. consultants) participated in the CR. Finally, between 2006and 2007 the Integrated Payroll Contributions Settlement system was instituted, obliging all companies and the self-employed to settle their social security payments through electronic fund transfers.
While the expansion of the SR was taking place, a unique and innovative enrollment qualification criteria was used designed to give priority to targeted groups based on income level and degree of vulnerability/likely need for care, while taking into consideration the available funds. Priority was given to special populations such as orphans and the elderly, regardless of SISBEN score, which is the proxy-means test used to identify the most vulnerable members of a community. Preference was then assigned to the poor who were either pregnant, under the age of 5, displaced by violence, or disabled. The rest of the population was ordered by SISBEN score, with a score of 1 representing the most destitute and a score of 5 representing the least destitute. Once the ranked list was published, individuals signed up with an EPSS of their choice. If an individual did not sign up, he or she had to wait until the next round of affiliations to do so. Enrollment of those who were eligible was ongoing as additional funds become available. Also, after all level 1 and 2 individuals were covered, municipalities that had resources left over could begin to cover level 3 individuals. This process was slightly altered by Accord number 415 of 2009, which states that the non-affiliated, eligible population can sign up with the SR at any point during the year. In 2002 the SR enrolled 11,444,003 persons. By 2009, this number had risen to 23,804,788.
An important issue is the monitoring of fraud within the SR. Starting in 2000, the government began monitoring and updating the subsidized scheme databases. This led to the expulsion of many fraudulent enrollees. By 2005, a complete database of SR enrollees had been set up and included their names, identification numbers, and the name of their EPSS. This database was completed in 2009.
Beginning in 2004, there was an expansion of partial subsidies to SISBEN level 3 individuals. The UPC for this plan equals approximately 42% of the CR UPC. While this plan expands coverage to those who remain uninsured, it offers a smaller benefits package. As of March 2009 there are 1,115,789 individuals covered by partial subsidies.
Lack of automatic mobility between the SR and CR upon a change in labor standing among the poor is thought to be a disincentive for Colombians to move into formal employment. The fear existed primarily among subsidized regime enrollees who would not be able to easily rejoin the SR if they lost their formal sector employment. To deal with this concern, in 2005 the government stated that a person can be reinstated into the SR within the year in case of subsequent eligibility changes. Furthermore, at the end of the year the process of re-enrolling in the SR will be quicker and easier. This change should lead to expansions in the formal workforce and higher levels of CR enrollment as more people are willing to leave the SR.
Population coverage has increased significantly since the 1993 reform, with a substantial part of the growth taking place after 2002. In 1990, 15.7% of the population had health insurance coverage. By 2008 the percentage of those covered had risen to 89.36%. This is a 570% increase in coverage over an 18 year span. The populations that were most affected by the reform were the bottom 2 income quintiles. Figure II shows that coverage for quintile 1 increased by 540% while quintile 2 increased by 250% between 1992 and 2003. Figure 2 also shows that there was a drop in coverage between 1997 and 2000, with an eventual recovery in 2003. This effect was primarily caused by a severe macroeconomic recession between 1998 and 2000. The recession not only reduced formal employment, affecting enrollment in the CR as well as the solidarity contribution to the SR, but it also reduced general tax transfers to the SR. With the recession ended and renewed political support for health coverage, the growth trend continued its upward movement.
One controversial component of the Colombian health system is that CR members—the wealthier—receive a richer benefits package than the poorer SR members. The CR benefits package covers all levels of care including inpatient, outpatient, maternity leave, and sick leave. The SR package covers all low-complexity care and catastrophic illnesses but provides only limited coverage for most hospital care and no short term disability coverage.
One controversial component of the Colombian health system is that CR members—the wealthier—receive a richer benefits package than the poorer SR members. The CR benefits package covers all levels of care including inpatient, outpatient, maternity leave, and sick leave. The SR package covers all low-complexity care and catastrophic illnesses but provides only limited coverage for most hospital care and no short term disability coverage. The SR is complemented by services provided by public hospitals, financed through direct payments to providers from the state, independent of what services they supply and of patients’ insurance status.
General System of Social Security in Health
Benefits package
One controversial component of the Colombian health system is that CR members—the wealthier—receive a richer benefits package than the poorer SR members. The CR benefits package covers all levels of care including inpatient, outpatient, maternity leave, and sick leave. The SR package covers all low-complexity care and catastrophic illnesses but provides only limited coverage for most hospital care and no short term disability coverage. The SR is complemented by services provided by public hospitals, financed through direct payments to providers from the state, independent of what services they supply and of patients’ insurance status.
One of the central aspects of the 1993 reform involved separating the financing, stewardship, and delivery functions within the health system. While hospitals still receive some supply-side subsidies through the SGP, the spirit of the reform is to eventually transform them into demand-side subsidies. Health service providers must now compete on the basis of quality for the majority of services provided. Under this scheme EPSs and EPSSs negotiate contracts with service providers. They also coordinate service delivery between patients and a network of public and private providers. Preventive and primary care services are primarily contracted by capitation, with EPSs providing such services through vertically integrated networks and EPSSs providing such services mainly through public hospitals. Most specialist and hospital care is paid for either by service packages or on a fee-for-service basis.
One of the central aspects of the 1993 reform involved separating the financing, stewardship, and delivery functions within the health system. While hospitals still receive some supply-side subsidies through the SGP, the spirit of the reform is to eventually transform them into demand-side subsidies. Health service providers must now compete on the basis of quality for the majority of services provided. Under this scheme EPSs and EPSSs negotiate contracts with service providers. They also coordinate service delivery between patients and a network of public and private providers. Preventive and primary care services are primarily contracted by capitation, with EPSs providing such services through vertically integrated networks and EPSSs providing such services mainly through public hospitals. Most specialist and hospital care is paid for either by service packages or on a fee-for-service basis.
Colombia’s provider market features two levels of market competition. On the first level, enrollees choose their EPS or EPSS based on the quality of its provider network. On the second level, the EPSs and EPSSs select their provider network based on their price and quality. Therefore, there are real incentives within the system for providers to supply better quality services at lower prices.
Services are organized by levels of care. The first level includes facilities that offer general medicine. This level is supposed to provide the majority of services. The second level comprises providers of basic specialized medical and surgical services. Finally, the third level includes institutions that provide specialty and sub-specialty care as well as high complexity hospitalization.
Providers must meet minimum quality, financial, and administrative standards that are enforced by the Ministry of Social Protection (MPS). Providers must also register at the local health authority, which issues a three year certificate. The health authority verification is met through an on-site inspection. Furthermore, since 2002 the Obligatory System to Guarantee the Quality of Health Services (SOGCS) has helped to maintain and improve the quality of health services by focusing on accreditation, audit, and information management.
In terms of monitoring service providers, Law 100 mandated the establishment of a compulsory quality assurance system. However, the creation of such a mechanism lagged behind the implementation of other facets of the reform. In 2002, a quality assurance system was finally implemented that introduced a licensing and accreditation process for both public and private facilities. And in 2006 a systematic dissemination of hospitals’ quality began to take place on a regular basis.
General System of Social Security in Health
Service delivery system
One of the central aspects of the 1993 reform involved separating the financing, stewardship, and delivery functions within the health system. While hospitals still receive some supply-side subsidies through the SGP, the spirit of the reform is to eventually transform them into demand-side subsidies. Health service providers must now compete on the basis of quality for the majority of services provided. Under this scheme EPSs and EPSSs negotiate contracts with service providers. They also coordinate service delivery between patients and a network of public and private providers. Preventive and primary care services are primarily contracted by capitation, with EPSs providing such services through vertically integrated networks and EPSSs providing such services mainly through public hospitals. Most specialist and hospital care is paid for either by service packages or on a fee-for-service basis.
Colombia’s provider market features two levels of market competition. On the first level, enrollees choose their EPS or EPSS based on the quality of its provider network. On the second level, the EPSs and EPSSs select their provider network based on their price and quality. Therefore, there are real incentives within the system for providers to supply better quality services at lower prices.
Services are organized by levels of care. The first level includes facilities that offer general medicine. This level is supposed to provide the majority of services. The second level comprises providers of basic specialized medical and surgical services. Finally, the third level includes institutions that provide specialty and sub-specialty care as well as high complexity hospitalization.
Providers must meet minimum quality, financial, and administrative standards that are enforced by the Ministry of Social Protection (MPS). Providers must also register at the local health authority, which issues a three year certificate. The health authority verification is met through an on-site inspection. Furthermore, since 2002 the Obligatory System to Guarantee the Quality of Health Services (SOGCS) has helped to maintain and improve the quality of health services by focusing on accreditation, audit, and information management.
In terms of monitoring service providers, Law 100 mandated the establishment of a compulsory quality assurance system. However, the creation of such a mechanism lagged behind the implementation of other facets of the reform. In 2002, a quality assurance system was finally implemented that introduced a licensing and accreditation process for both public and private facilities. And in 2006 a systematic dissemination of hospitals’ quality began to take place on a regular basis.
In 2002, what had been the Ministry of Labor and the Ministry of Health were merged together to form the Ministry of Social Protection (MPS). The MPS is responsible for pensions, health insurance, public health programs, and other social assistance programs.
In 2002, what had been the Ministry of Labor and the Ministry of Health were merged together to form the Ministry of Social Protection (MPS). The MPS is responsible for pensions, health insurance, public health programs, and other social assistance programs.
The National Council on Social Security in Health (CNSSS)—which is composed of representatives from the government, insurers, unions, employers, and pensioners among others—had been responsible for setting the UPC and content of the benefits packages. However, law 1122 of 2007 called for the CNSSS to take on a solely advisory role. As such, some of its duties include defining medications to be part of the CR and SR plans, designing the criteria by which beneficiaries of the SR are selected, and developing the necessary measures to avoid adverse selection on the part of EPSs and EPSSs.
Law 1122 passed the responsibility for setting the UPC and the content of the benefits packages to a new entity, the Health Regulatory Commission (CRES). This commission is presided by the MPS and also includes the Treasury as well as five expert commissioners as established under decree 1429. The shift in responsibility took place in order to have a more technically competent body overseeing what are by nature more technical issues.
The Health Superintendence is an entity separate from the MPS that is responsible for authorizing the entrance of new insurers into the regulated marketplace. It also supervises the performance of insurers, paying particular attention to their risk management practices. Finally, it functions as the entity through which complaints can be brought by the different actors within the health system.
General System of Social Security in Health
Institutional structures
In 2002, what had been the Ministry of Labor and the Ministry of Health were merged together to form the Ministry of Social Protection (MPS). The MPS is responsible for pensions, health insurance, public health programs, and other social assistance programs.
The National Council on Social Security in Health (CNSSS)—which is composed of representatives from the government, insurers, unions, employers, and pensioners among others—had been responsible for setting the UPC and content of the benefits packages. However, law 1122 of 2007 called for the CNSSS to take on a solely advisory role. As such, some of its duties include defining medications to be part of the CR and SR plans, designing the criteria by which beneficiaries of the SR are selected, and developing the necessary measures to avoid adverse selection on the part of EPSs and EPSSs.
Law 1122 passed the responsibility for setting the UPC and the content of the benefits packages to a new entity, the Health Regulatory Commission (CRES). This commission is presided by the MPS and also includes the Treasury as well as five expert commissioners as established under decree 1429. The shift in responsibility took place in order to have a more technically competent body overseeing what are by nature more technical issues.
The Health Superintendence is an entity separate from the MPS that is responsible for authorizing the entrance of new insurers into the regulated marketplace. It also supervises the performance of insurers, paying particular attention to their risk management practices. Finally, it functions as the entity through which complaints can be brought by the different actors within the health system.
EPSs and EPSSs are free to establish payment levels and payment mechanisms for services that they purchase from providers. Both entities have used the fee schedules, adjusted for inflation, developed by the pre-reform public health plans as ceilings for price negotiations. As of 2008, provider associations were forcefully seeking the establishment of price floors by the MPS.
EPSs and EPSSs are free to establish payment levels and payment mechanisms for services that they purchase from providers. Both entities have used the fee schedules, adjusted for inflation, developed by the pre-reform public health plans as ceilings for price negotiations. As of 2008, provider associations were forcefully seeking the establishment of price floors by the MPS.
There are two payment mechanisms common to both EPSs and EPSSs. In general, preventive and primary care services are contracted on a capitation basis. Most specialist and hospital care, however, is paid for either on a fee-for-service basis or by a services package.
The CR and SR enrollees must also pay copayments, which vary according to an individual’s income. CR copayments are charged according to salary income. Enrollees with salaries lower than 2 minimum monthly salaries (mms) have a maximum copayment of USD46.70 annually. The maximum copayment for enrollees with incomes in the range of 2-5 mms is USD 195.20 annually. Finally, enrollees with incomes greater than 5 mms have a maximum copayment of USD390.30 annually. SR copayments are set according to SISBEN category. The poorest enrollees, who are classified in category 1, pay co copayments. On the opposite end of the scale, enrollees classified in category 3 pay 10% of the service value.
General System of Social Security in Health
Provider payment mechanisms
EPSs and EPSSs are free to establish payment levels and payment mechanisms for services that they purchase from providers. Both entities have used the fee schedules, adjusted for inflation, developed by the pre-reform public health plans as ceilings for price negotiations. As of 2008, provider associations were forcefully seeking the establishment of price floors by the MPS.
There are two payment mechanisms common to both EPSs and EPSSs. In general, preventive and primary care services are contracted on a capitation basis. Most specialist and hospital care, however, is paid for either on a fee-for-service basis or by a services package.
The CR and SR enrollees must also pay copayments, which vary according to an individual’s income. CR copayments are charged according to salary income. Enrollees with salaries lower than 2 minimum monthly salaries (mms) have a maximum copayment of USD46.70 annually. The maximum copayment for enrollees with incomes in the range of 2-5 mms is USD 195.20 annually. Finally, enrollees with incomes greater than 5 mms have a maximum copayment of USD390.30 annually. SR copayments are set according to SISBEN category. The poorest enrollees, who are classified in category 1, pay co copayments. On the opposite end of the scale, enrollees classified in category 3 pay 10% of the service value.
In 1993, out-of-pocket health expenditure as a percent of total health expenditure stood at 52%. By 2006, this percentage had dropped to 6%. It is worth noting that this ratio is lower than that of many OECD countries. Total spending on health as a percent of Gross Domestic Product has grown from 6.2% in 1993 to 7.3% in 2006. However, there was a steady decline from a high of 9.6% in 1997 to the most recent numbers in 2006. Presumably, the significant recession that started in 1998 and continued through 2000 led to this decrease. Interestingly, during this time period coverage in the CR increased by 29% while coverage in the SR increased by 106%. This appears to indicate that at least in Colombia’s case, the institutional makeup of the health system is more important in determining level of coverage than how much money is actually spent on health. In Colombia's case, the institutional makeup of the health system is more important in determining level of coverage than how much money is actually spent on health.
In 1993, out-of-pocket health expenditure as a percent of total health expenditure stood at 52%. By 2006, this percentage had dropped to 6%. It is worth noting that this ratio is lower than that of many OECD countries. Total spending on health as a percent of Gross Domestic Product has grown from 6.2% in 1993 to 7.3% in 2006. However, there was a steady decline from a high of 9.6% in 1997 to the most recent numbers in 2006. Presumably, the significant recession that started in 1998 and continued through 2000 led to this decrease. Interestingly, during this time period coverage in the CR increased by 29% while coverage in the SR increased by 106%. This appears to indicate that at least in Colombia’s case, the institutional makeup of the health system is more important in determining level of coverage than how much money is actually spent on health. In Colombia's case, the institutional makeup of the health system is more important in determining level of coverage than how much money is actually spent on health.
From 1990 to 2006, life expectancy at birth has increased from 68.3 years to 72.8 years. During this same time period the infant mortality rate (per 1,000 live births) has fallen from 26.3 to 17.2, the under-5 mortality rate (per 1,000 population) has decreased from 34.7 to 21.4, while measles, mumps, and rubella immunization has increased from 82% to 89%.
Finally, the effects of the 1993 reform must also be understood within the context of access to health services by the population. A recent study has shown that those insured under either the CR or the SR are almost twice as likely to utilize health services when compared to those who are uninsured. This seems to indicate that health coverage within Colombia does in fact impact whether the population utilizes health resources.
General System of Social Security in Health
Results of the reform
In 1993, out-of-pocket health expenditure as a percent of total health expenditure stood at 52%. By 2006, this percentage had dropped to 6%. It is worth noting that this ratio is lower than that of many OECD countries. Total spending on health as a percent of Gross Domestic Product has grown from 6.2% in 1993 to 7.3% in 2006. However, there was a steady decline from a high of 9.6% in 1997 to the most recent numbers in 2006. Presumably, the significant recession that started in 1998 and continued through 2000 led to this decrease. Interestingly, during this time period coverage in the CR increased by 29% while coverage in the SR increased by 106%. This appears to indicate that at least in Colombia’s case, the institutional makeup of the health system is more important in determining level of coverage than how much money is actually spent on health. In Colombia's case, the institutional makeup of the health system is more important in determining level of coverage than how much money is actually spent on health.
From 1990 to 2006, life expectancy at birth has increased from 68.3 years to 72.8 years. During this same time period the infant mortality rate (per 1,000 live births) has fallen from 26.3 to 17.2, the under-5 mortality rate (per 1,000 population) has decreased from 34.7 to 21.4, while measles, mumps, and rubella immunization has increased from 82% to 89%.
Finally, the effects of the 1993 reform must also be understood within the context of access to health services by the population. A recent study has shown that those insured under either the CR or the SR are almost twice as likely to utilize health services when compared to those who are uninsured. This seems to indicate that health coverage within Colombia does in fact impact whether the population utilizes health resources.