Colombian total health spending has experienced a rapid growth in the last ten years, at an annual compound growth rate of 15%. However, the country’s health spending only ranks seventh in Latin America, indicating untapped potential for growth. Before 1993, only 20% of Colombians were covered by public healthcare services. Colombia moved to address this issue by undergoing a sweeping healthcare reform – a policy known as Law 100. The reform established a Mandatory Health Plan (MHP) to provide healthcare access as a basic right for all citizens, rather than a privilege for a select minority. The goal was to minimize country’s healthcare coverage inequality; and by 2013, the system covered 96% of the Colombian population.

A material component of the MHP was the introduction of private insurance companies to properly manage & allocate taxpayer healthcare funds, and to sell public health insurance packages. These private insurance companies are known as Empresas Promotoras de Salud (EPS), and serve as intermediaries between patients and public healthcare funds. In turn, Colombians have a choice in deciding which EPS should represent them, giving way to a market environment with regulated competition.

Public health insurance coverage in Colombia is split into two plans: a Contributory Plan and a Subsidized Plan. The Contributory Plan is financed by wage contributions, with 8% of the burden placed on the employer, and 4% on the employee. This plan accounts for 47% of the MHP. Typical enrollees in the Subsidized Plan are either unemployed, or Colombians falling below a specified income level. These individuals are associated with an EPS through a local government authority. The government predominately finances this plan through general taxation, with additional funds coming from a transfer of 1.5% of collections from the Contributory plan. This type of plan makes up 53% of the MHP.

Smaller segments of the Colombian health insurance system include Prepaid Health Plans and Health Insurance. Prepaid Health Plans are provided by private companies who charge an additional fee to offer a wider selection of medical services. Health Insurance is provided by Life Insurance companies as an alternative to Prepaid Health Plans.

In addition to Insurance, two notable Colombian Healthcare segments are Clinical Services and Pharmaceuticals. Clinical Services comprises private hospitals and outpatient services, and of the total 71,480 beds in Colombia’s health system, 54% are used by private hospitals. The Pharmaceutical space in Colombia has an estimated market size of $6.7 billion, and is attracting the attention of large international players for industry consolidation.

Although Colombia has achieved widespread access to healthcare coverage, the quality of public healthcare in Colombia is poor. According to World Bank data, Colombia has seen a 10% decrease in public health-related expenditure from 2003-2009, though this level has stayed roughly stable since then. As the broader economy continues to grow, citizens appear to be shifting to private healthcare packages to avoid the lackluster quality of public healthcare.

Colombia has struggled in recent years to allocate its resources effectively through its EPS-driven system. While the move toward using EPS’ as intermediaries has expanded public access to health insurance plans, there is widespread speculation that these companies are withholding payments and investing taxpayer funds in areas unrelated to healthcare.

  • Population:

    48.7 million(2016, World Bank)

  • GDP:

    $282 billion(2016, World Bank, USD)

  • Healthcare Spending:

    $20 billion(2016, Brocair estimate, USD)

  • Healthcare Spending as % of GDP:

    7.2%(2014, World Health Organization)

  • Annual Healthcare Spending Per Capita:

    $411(2016, Brocair estimate, USD)