1. DETERMINANTS OF HEALTH
CARE EXPENDITURE:
COLOMBIAN CASE
Lorena Mesa Melgarejo
EPH-2010
IZP-UJ
2. Objective
How much is the health
care expenditure in
Colombia? and, What are
its determinants?
3. Mandatory Payroll Taxes
Contributions Resources National
Government
Local
Solidarity
Insurance for
contributors
EPS-C
Insurance for
Capitation
Capitation subsidized
UPC
UPC citizens
EPS-S
5. Mandatory Payroll Taxes
Contributions Resources National
Government
Local
Solidarity
Insurer for
contributors
EPS-C
Insurer for
Capitation
Capitation subsidized
UPC
UPC citizens
EPS-S
6. How much is the health
care expenditure in
Colombia? and, What are
its determinants?
7. How much is the health care
How much is the health care
expenditure in Colombia?
expenditure in Colombia?
GDP 6.1%
5,1 % Public 1% Private
2008
Out-of-pocket 48,7%
Out-of-pocket 48,7%
HEALTH EXPENDITURE PER CAPITA
284,0 US$
Datas from WB, 2008
8. What are the determinants of HC Expenditure?
It is a tool
Representing the amount
(fixed) per capita for insurance
the citizens in the Health Care
System
It is incomes independent
Representing the cost
calculated for providing services
in average conditions of Quality,
Technology and Hostelry,
according with the
epidemiological profile (Supreme
Low Court)
9. Model designed by Minister of Social Protection
Cost Estimation ofsays the UPC must be
The Low says the UPC must be
The Low Package
(OHP)based on epidemiologic profile of
based on epidemiologic profile of
Cost Estimation of new
theprocedures will include into the
the population
population
package OHP
Actuarial Techniques Incurred But not Reported IBNR
and Incurred But Not Enough
Reported Reserve IBNER
Age
Age
Trending
Population Characteristics
Risk Sex
Sex
adjustment
Geographical Area
Geographical Area
Parametrics
Parametrics
Models (Regretion)
(Regretion)
Non -Paramtrics
Non -Paramtrics
10.
11. UPC – C
UPC – C UPC – S
UPC – S
260,06 US$
260,06 US$ 151,11 US$
151,11 US$
12.
13. DISCUSSION
•It is important to develop a model in which the
•It is important to develop a model in which the
epidemiologic profile will be included; at the same
epidemiologic profile will be included; at the same
time the UPC must be reflect the health status of
time the UPC must be reflect the health status of
the population and how this health status is
the population and how this health status is
expressed in the health expenditure. Coherence
expressed in the health expenditure. Coherence
between epidemiologic situation and heath
between epidemiologic situation and heath
expenditure is an urgent analysis’ topic
expenditure is an urgent analysis’ topic
14. •Improvement the epidemiological systems
•Improvement the epidemiological systems
information like a strong tool for using in the
information like a strong tool for using in the
Health Care Expenditure calculus. Also, going
Health Care Expenditure calculus. Also, going
deeper in the necessary information for calculate
deeper in the necessary information for calculate
de UPC, for example: to assess if is enough: sex,
de UPC, for example: to assess if is enough: sex,
age and geographic area as population
age and geographic area as population
characteristics.
characteristics.
•Assessing the UPC in the subsidies' regimen, in
•Assessing the UPC in the subsidies' regimen, in
which there are more risk factors and more
which there are more risk factors and more
necessities.
necessities.
•The technologies are not taking into account for
•The technologies are not taking into account for
calculating the UPC
calculating the UPC
In this presentation I will tray on to explain you how much is the health care expenditure in Colombia, and what are its determinants. But first is neccesary to understand how is our financing system?
We know that in Colombia our social security system is conformed by two regimens, or two kind of insurance, Contributory and subsidized. The Contributory regimen is hold through the mandatory payroll contributions of employees and employers, a part of this payment is transfer directly to EPS-C, this is the contributors insurances name, and other small part is sent to a big pooling, its name is FOSyGA (Guaranty and Solidarity Found). In other hand, The subsidized regimen, in which is concentrated the government effort, both national and local. The government through taxes provides the great part of Fosyga sources, of it’s the government pay at EPS-s, the subsidized insurances as Unity Per Capita. After I come back in this point because is the main point in the determinants of health expenditure in Colombia. Now I want to explain you more deeply each of one
The Contributory regime´s source is the mandatory payroll contribution per month of each member or affiliated. This amount is based on the income of the persons, (payment capacity), not on the risk or not on the plan. Each member has to contribute 12.5% of his/her monthly salary. If the person has an formal job his/her employer pay the 8.5% and the person pays the 4% left; if the person is an informal worker has to pay 12.5% completly: in both cases the benefices are the same, It mean is the same health plan. Nobody can be member of contributory regimen if not has more than minimiun wage, for this year is 280 dollars more or less. These payments goes to Insurance company. Sometimes this percent is less than the fixed UPC in this case the government must come back the money necessary to supplement the UPC.
The subsidized regimen´s sources are basically three, national and local government resources, namely Taxes, and solidarity (1.5%). These resources are concentrated in the Fosyga account and after are transferring to Insurances companies, according with the fixed UPC for citizen subsidized. This is a sumary of financing health care system.
Now come back to the questions. With the above element we can understand better this situation.
According with World Bank datas, in 2008 the heath care expenditure was the 6.1% of the colombian GDP. In which 5,1 corresponding to public expenditure. The Out-of-pocket was 48,7% . This GDP percent is destined for UPC payments in both regimens to the Insurance companies. We can suppouse that the UPC is a central element in the health care expenditure in Colombia, but the questions is why and how is calculated.
The main determinant of health care expenditure in Colombia is the UPC fixed per year, the UPC has the fallow characteristics. – It’s a Tool designed, which aim is guaranteed the “health rigth ” and the health care acces, in an effective way. This Unit, is a amount, it represented how much money must pay the government by each citizen insured, independenly of their incomes, It mean, that the government pay the same amount by person into the each regimen, but not between regimen and this in this moment an important problem in colombia related with the equity. Also, according with our suprem court, the UPC r epresenting, in special, the cost calculated for providing services in conditions of: Quality, Technology and Hostelry (Supreme Low Court) at least, but at the same time, the low says that the UPC must be based on population epidemiological profile.
The model is designed by Ministry of Health, the low 100 says the UPC must be based on epidemiologic profile of the population, however, For calculating the UPC the government, or the comision CES (ver) take into account three central elements Actuarial technics, some charecteristics of the population and estatistics models. The Actuarial techniques: the Actuarial sciencies in general is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries. For colombian case, the techniques or elements used are: the cost of obligatory plan (according with the insurance company information), the government through information´s systems estimate the cost per year that one person average use the services. Other element is the Cost Estimation of new procedures will include into the package, is an assumption. The adjusted by Incurrend but not reporter IBNR, and IBNER, these are subjective estimate often used by insurance companies to recognize losses incurred but not reported, in other word are mechanism based on observation of past events and its projection into the future, may resolve the dilemma of how to estimate these responsibilities by events not known at present, but with clear impact on the future on the basis that such claims eventually emerge and be reported . Also, the trending is a m ethods of estimating future costs of health services by reviewing past trends in cost and utilization of these services ; and risk adjustment Meaningful comparison of patients’ outcomes requires adjustment for those patients' risk factors. The population characteristics are age, sex and geographical area. And for the calculation are used model parametrics, and not parametrics.
Some times the government can say…. Yes!, but depend the budged…
This graphic show us how has been the increase of UPC in both regimens compares with Inflation in the country and with basic salary (this is a minimum payment allowed for law in formal employs)
I want to propose you some elements for analysing and discussing on the paper I consider relevant, these are: It is important develop a model in which the epidemiologic profile be included; at the same time the UPC must be reflect the health status of the population and how this health status is expressed in the health expenditure. Coherence between epidemiologic situation and heath expenditure is an urgent analysis’ topic
And: Improvement the epidemiological systems information like a strong tool in the Health Care Expenditure calculus. Also, going deeper on the necessary information for calculate de UPC, for example if is enough: sex, age and geographic area as population characteristics. Assessing the UPC in the subsidies' regimen, in which there are more risk factors and more necessities. The technologies are not taking into account for calculating
