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Saving Colombian Healthcare

The Colombian government must look at healthcare as a powerful source of economic growth

September 2018


This article first appeared in Portafolio, Colombia on 4th September 2018

In the election campaign, Iván Duque Márquez promised to increase health spending in order to meet the challenges facing Colombian healthcare: increasing pressures from an ageing, more demanding population that increasingly suffers from non-communicable diseases such as cancer, diabetes and stroke; and an accumulated debt 8 billion pesos and ongoing financial deficits.

At 6.2% of GDP, Colombia is not spending enough on healthcare to meet these challenges. The average spend amongst OECD countries is 9% of GDP.

This under-resourcing is complicated by the 2015 introduction by a legal guarantee of the fundamental right to health for all citizens, which has given 48 million Colombians a right to almost any treatment registered in the country. As a result, patients often secure access to new medical technologies through litigation, rather than through the healthcare system’s established procurement mechanisms.

“Colombia has the most judicialised health care sector in the world,” according to Jaime Arias, president of the Colombian Association of Integral Medicine Companies (ACEMI). “There is pressure from the courts to provide high-end health care to all citizens, and the field of health jurisprudence has grown rapidly.” This has contributed to a deepening financial crisis in Colombian healthcare.

Another problem is the incorrect assumption made in the 1990s reforms that 80% of Colombians would pay into the system from their monthly salary as formal employees. But more than half the country’s jobs are in the informal economy, so there is insufficient income from insurance premiums.

This combination of underfunding and ever-increasing demand make the Colombian healthcare system look increasingly unsustainable. Yet in an environment in which healthcare is extremely political, it will be difficult to reform Colombians’ legal right to treatment. The large informal economy also limits the potential to raise taxes to solve the problem.

To escape this impasse, the government should look more closely at how the Colombian healthcare sector can contribute economic growth.

An interesting new report from healthcare consultancy IQVIA argues that the government should not view healthcare as a cost whose growth must be restrained, but as a strategic sector that can contribute to economic development. A strong economy provides more resources for healthcare spending so complementary relation between health and economic growth can be beneficial for every Colombian.

To boost growth, more could be done to promote medical R&D. One example is the provision of clinical trials for drug development. Hungary managed to boost GDP by 0.2% in 2010 alone through international participation in clinical trials, providing valuable extra healthcare revenue. Corporate tax rates could also be cut to encourage investment into knowledge-intensive health industries, similar to schemes in Europe.

More paying foreigners should be encouraged to be treated in Colombia’s world-class medical facilities. Efforts to commercialise health research taking place in universities should be intensified. The modernisation of healthcare through private investment in infrastructure also holds promise.

All these reforms come with little political cost, yet would add to Colombia’s GDP growth and provide extra resources for the stretched healthcare system. To solve the healthcare challenge, the government must think creatively.

Philip Stevens is director of Geneva Network, a UK-based think tank that focuses on health, innovation and trade issues