The Colombian ‘Welfare’ System: Healthcare

I have always thought that in many ways most of the problems related to underdevelopment in Colombia are due to an inferiority complex suffered by much of Latin America. Even though as Colombians we are proud patriots, we shrug our shoulders in embarrassment when it comes to questions about the government’s foreign policy or our view of the nation´s institutions. We like to believe that there are certain things that we don’t do well, and that we probably will never do them as well as those first world, ultra-developed global powers.

How, then do we see the country’s welfare system? What do we think about policies on healthcare, education, benefits and housing? Are they as bad or as good as we like to think, and how do they compare with the offer in other nations?

Opinions about the welfare system as a whole are neither black nor white, but mostly a shade of grey. For example, it is not hard to hear politicians, the media or even family and friends praise our health system while, in the same sentence, expressing disdain for policies on housing, or just as easily, vice versa.

This article is the first in a series looking into the workings of the Colombian ‘Welfare’ system, its strengths and its weaknesses. Today, we´ll look at the state of healthcare – both that provided by the state, and the private sector in the wider context.

Much of what the health services provide now are based on the infamous Ley 100, which was passed in 1993 as a top-up law to the 1991 Constitution. The first thing to know about healthcare in Colombia is that it is plagued with the most confusing set of acronyms which are widely used by the media and politicians (beware of the EPS, IPS, ARL and POS).

What is different about healthcare provision in Colombia is that is intimately linked to employment law and conditions. Healthcare in Colombia works through an insurance system that is provided both by private and public companies in order to avoid one sector gaining the monopoly over it, and this in turn has ensured competition and a high standard of service.

The Entidades Promotoras de Salud (Health Promoting Entities) ‘EPS’ are the insurers, who then supply services when they are needed through Instituciones Prestadoras de Salud ‘IPS’ (Health Providers). The EPS contribution, or insurance, is part of any employees salary and an employer has to affiliate its employees to an EPS by law.

This is not only effective as a means of covering a large proportion of the population, but furthermore it is a cunning plan by the government, since most of the funding for this comes from employers, not from the treasury. As a top-up measure to this system, there is optional private pre-paid healthcare which is provided by the same EPS companies, this gives some the opportunity to access separate facilities.

However there are many problems with the system. The close relation between the healthcare system and employment law has both positive and negative effects. Big labour groups in Colombia have gained access to healthcare as their work is standardised, forcing employers to make their work legal and official while the flip side of this principle is the growth of the informal labour sector. And as with many aspects of life in Colombia, there is a sharp difference between the healthcare provision between rural and urban areas; for example, infrastructure deficits makes access to hospitals and doctors tricky for the more rural populations.

Another problem is access for the elderly, the unemployed and the poorest sections of society. Whilst healthcare provision for the elderly is closely linked to the pension programme, it is not as clear for the unemployed (but we will deal with this more closely in a future article on benefits), leaving this significant group particularly vulnerable.

Even though it is far from perfect it is a system that can be improved and reformed with relative ease when compared to, say, the UK or the US . We have not gone as far as the British with welfare reform, but our has been a process of compromise, perhaps in the name of the national purse (a wise move when looking at the bills the UK National Health Service generates). At the same time, unlike the US, we already have taken the “big steps” towards a fairer system that can actually  ensure dignity of life for the majority of the population.

The state has a long way to go to provide fair and efficient welfare coverage. But we do have a sustainable system that will not break the bank.

As the middle class continues to grow, if it does, pre-paid healthcare will as well, and thus there will be less pressure on the basic EPS, allowing them better to treat sectors, such as the unemployed. The short term alternative is to spend a bigger proportion of the budget on healthcare, and thus swallowing up spending from somewhere else.

We will only know it has become a truly successful system, when our system becomes something we´re proud of, not something we assume is done better elsewhere.