2023-05-27 17:04:00
Generic Opinion EE
Photo: Diego Peña Pinilla
Vilfredo Pareto was an eclectic Italian economist who was born in the mid-19th century and named following, some say in an unfair attribution, a fairly reasonable notion of efficiency. Pareto efficiency in the context of public policy decision-making is achieved when a policy decision improves the conditions of the entire population targeted by the policy or at least the conditions of a specific subgroup without harming the current conditions of anyone. That is, there are only net improvements in part or all of the group but no one is negatively affected. I will return to this point at the end. (Read: What’s next for health reform in Congress)
The main problem: timing.
If one reviews the data, the most important factor that divides the experience of the country’s inhabitants in the Colombian health system is not income or the type of insurance, but urban/rural residence. According to the study that we carried out together with Nicolás Guzmán, 18% of Colombians faced barriers to accessing health services in 2019. If these figures are broken down by place of residence, it turns out that 16% of the inhabitants of urban areas and 26 % of those living in rural areas faced barriers to access that year.
Being clear that the main determining factor of facing barriers to access to the health system by Colombians is their place of residence (urban/rural), the next step is to evaluate what types of barriers they face. The data suggest that the main problem in both urban and rural areas is timeliness, that is, how quickly appointments are obtained. This is reflected in two fundamental data:
1) 3 out of 4 filed guardianships claim opportunity problems according to the annual report of guardianships of the Ombudsman’s Office in 2021.
2) According to the work we carried out with Guzmán, the main barrier to access to health services faced by urban and rural Colombians is what is known as “accommodation”. This type of barrier combines both opportunity problems and the fragmentation of care (reflected, for example, in authorizations or the need to go to different providers instead of receiving comprehensive management). In rural areas, specifically, in a distant second place is the acceptability barrier (people do not access it because they do not find the provision of health services acceptable or reliable) and as a third, the geographical barriers to access a health service provider. health.
Knowing then that “accommodation” barriers and in particular opportunity are the main access barrier experienced by both urban and rural residents, the question remains as to whether the current reform will improve this problem. I mention an example in the region to illustrate what can be expected with the reform in terms of opportunity. (You can read: Health reform: face to face following the run over first debate in the House)
The Costa Rican case
Costa Rica has an admirable health system for its primary care system with wide coverage, which, having been well implemented for so long, has managed to have a low avoidable hospitalization rate, almost half the OECD average. The Costa Rican health system is managed by a central institution (the Caja Costarricense de Seguro Social – CCSS), similar to what ADRES is expected to do in Colombia.
However, as the population has aged and the demand for health services has increased above the supply, the CCSS has had difficulties in maintaining the opportunity in health services. In 2019, the average waiting time for surgery was 369 days and 200 for an outpatient consultation. This occurs because in centralized systems such as the Costa Rican one, the market mechanisms that might compensate for the increased demand are restricted and the public and centralized systems are unable to do so quickly enough. It must also be said that to operate this system, Costa Rica dedicated 1,737 international dollars per capita in 2020 while Colombia dedicated 1,335 international dollars for its own system.
So, even though Costa Rica has an excellent health system for its own institutional configuration but with a growing problem, which is opportunity, why are we trying to imitate a system that in our context would worsen our main problem? Also, are we willing to dedicate 30% more health spending per capita, as Costa Rica does?
What we take for granted: payment for health services
According to the World Bank, in 2020 less than 14% of health spending came from the pockets of citizens. This figure is important because it constitutes an indicator of a fundamental pillar of health systems, financial protection. With rising health costs, it is increasingly difficult for a household to pay for health services without a robust system of financial protection. For example, a day of hospitalization in an intensive care unit can cost around 3 million pesos in Colombia. How many families would have fallen into ruin if we had not had a good financial protection system during the pandemic? In some countries in the region, families were required to make advance payments of thousands of dollars to be admitted to an ICU, an absolute horror.
Financial protection is obtained through, one, contribution pooling mechanisms, and two, risk management mechanisms (primary, technical and financial). The current reform eliminates the current risk management functions of the EPS and transfers these functions to ADRES. However, ADRES does not have the capacity to perform such risk management.
Paula Acosta, director of Acemi, said in a health corruption forum this week that ADRES currently audits 50,000 invoices per month while the system as a whole audits eight million in the same period of time. The reform, by reducing the capacity to manage risk and not proposing a figure that has the capacity to supply these functions adequately, might leave the health system without an available budget before the end of each year, simply because the expense would be higher to the assigned annual budget. This is evident in the current articles where the providers will simply send the invoice to ADRES and it must send them 80% of the value of the invoice within 30 days, only leaving the remaining 20% for later auditing.
The immediate consequence would be the restriction of services (because there is no money and if extemporaneous disbursements are made they will not be enough as was done before 1993) and the creation of waiting lists. These waiting lists would lead those who have resources, 1) to pay for services out of their own pocket or, 2) to buy private insurance with various benefit packages that compensate for the failures of the health system.
This will lead to an increase in the demand for health insurance with unintelligible clauses including pre-existing prices and adaptable packages for all types of users. This is definitely not aligned with the promise to guarantee the right to health in an equitable manner to all the country’s inhabitants, as enshrined in the Statutory Health Law. There are multiple examples of these private insurance systems in the region. A current example of this phenomenon can be seen in Brazil.
The case of Brazil
Brazil has a single health system that pools resources in what is known as the National Health Fund, which then distributes the resources to the different states and municipalities through supply resources for their corresponding management. This is similar to what the Fondo Único en Salud managed by ADRES is expected to do. However, these supply resources are not disbursed using risk management mechanisms. The consequence of the absence of these mechanisms is that many Brazilians have resorted to private insurance to try to have timely access to health services that are guaranteed on paper, but in practice are not provided on time or with quality. The paradox is that, by not having insurance in the public system, these systems are only used by those who have the resources, increasing inequity in access and with a high risk of information asymmetry between insurers and insureds because each insurer has clauses and different packages.
This implies that in Brazil, despite having a single central health system, 27% of health spending is out-of-pocket while in Colombia, in a private system, it is only 14%. In other words, high-income and medium-income Brazilians must include spending on private insurance or direct payment in their monthly consumption basket, because otherwise they would not have acceptable access to their public health system. Low-income Brazilians have to settle for the public system because they can’t afford insurance that provides acceptable health services. Finally, 90% of spending on drugs in Brazil is made directly from the pocket of users, not by private insurance or the system.
The reform must be shelved
All this shows that the current reform text does not solve the main problem that Colombians have in relation to the health system, which is the low opportunity (and the example is the case of Costa Rica). In fact, it threatens perhaps the most important gain of the system, which is financial protection (and the example is the case of Brazil). In addition, it establishes new relationships and actors that will make health care much more complex by fragmenting it without providing any added value and potentially making it more vulnerable to corruption or simple state inefficiencies.
With this, I am not suggesting that the health system does not require structural changes. In particular, there are aspects of care in urban areas, but especially in rural areas, that must be urgently addressed, precisely to improve those barriers to access. However, a rural health reform does not require new legislation. The country has the necessary legislative framework (perhaps with some specific modifications) to create a differential rural care system where there can be single insurers, supply subsidies, human resource management, and proper integration with the rest of the system. (Read also: Approved in the first debate the health reform of the government of Gustavo Petro)
Returning to efficiency in the Pareto sense, the government has the opportunity to improve the barriers to access using the current legislative framework to solve the access barriers faced by 18% of the population but without harming the other 82% who receive a health service without barriers (although of course, perfectible). The government has wasted almost a year on a health reform that has no future in the Constitutional Court and has abandoned the opportunity to implement a differential system for the provision of health services for rural areas with real capacities with the current legislation. This would be consistent with the government’s promise of change and equity, generating improvements in provision for those with higher access barriers while not ending what we have gained in these 30 years.
*As I write this column, I have no conflicts of interest to declare. I have not received resources from any union or industry nor am I a member of any political party.
* Health systems researcher at the Johns Hopkins School of Public Health.
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