Cablegate: Colombia Gaining On Universal Health Care, but A

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SENSITIVE
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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

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