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Sustainability of Colombian healthcare reform

13 April 2015 Angelica Kershaw

After several months of discussion, the Colombian government has given the green light to the so called "healthcare statutory law", which recognises for the first time the right to health as a fundamental human right. Several aspects are addressed in the law, but for the pharmaceutical industry the key reforms included in this legal framework are the unification, modernisation and re-design of the compulsory healthcare plan (POS) and the ratification of the international reference price system as a national healthcare policy to control medicine prices in Colombia.

Soon after the government approved the regulation in mid-February, several stakeholders raised concerns regarding the financial sustainability of the healthcare system with the implementation of these new reforms. Although considering health as a fundamental right is a progressive development, it could open the door to the reimbursement of high-cost medicines that are not part of the POS, in a healthcare system that is already financially constrained. Such pressure is mainly likely to come through the "tutela" - a legal tool reserved for enforcement of fundamental rights.

According to the Colombian pharmaceutical association Afidro, the statutory healthcare law not only raises concerns about financial instability of the healthcare system, but also fails to fix one of the main overarching issues facing the Colombian healthcare system: the role of the healthcare provider entities, or EPSs, which are intermediary institutions responsible for administering public healthcare funding. The role of EPSs has come under increased scrutiny as they have been involved in several investigations and legal cases for irregularities in providing services, double charging for drugs already included in the POS, and alleged collusion.

The Colombian Minister of Health Alejandro Gaviria has recently explained that the re-design of the Colombian mandatory healthcare plan, which will replace the current POS in 2017, will be financed through taxes and savings achieved after the implementation of the reference-pricing system. Indeed, the MoH has also announced that there will be a new round of price controls (the fifth one), which are forecast to reduce healthcare expenditure by COP500 million annually. This saving is likely to be reinvested into funding the new healthcare plan and the big healthcare reform that is taking place in Colombia.

However, Acemi (Colombian Association of EPS) has estimated that the lack of sources to fund the health reform would increase the COP5 billion debt of the EPS with the clinics and hospitals to around COP10 billion. Furthermore, some ONGs and patients institutions have disagreed with the MoH plans of increasing patients' out-of-pocket expenditure through the introduction of a new co-payment for non-POS medicines.

Despite the fact that the new healthcare statutory law is an achievement in the Colombian system that could bring innovation and modernisation, it is very relevant for the government to look for real sources of funding since the savings generated through price controls seem insufficient. Otherwise, the planned modernisation of the healthcare plan will give access to high-costs medicines that the system is incapable of paying for, a situation that would increase the overuse of "tutelas" to secure reimbursement of high-cost treatments, thus, increasing the risk of financial instability in the Colombian healthcare system.

Angelica Kershaw is a life sciences analyst for IHS
Published 13 April 2015

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