Are Colombian sickness funds cream skimming enrollees? An analysis with suggestions for policy improvement

Understanding consumer preferences in the context of managed competition: evidence from a choice experiment in Colombia

BACKGROUND

In many countries, health insurance coverage is the primary way for individuals to access care. Governments can support access through social insurance programmes; however, after a certain period, governments struggle to achieve universal coverage. Evidence suggests that complex individual behaviour may play a role.

OBJECTIVES

Using a choice experiment, this research explored consumer preferences for health insurance in Colombia. We also evaluated whether preferences differed across consumers with differing demographic and health status factors.

METHODS

A household field experiment was conducted in Bogotá in 2010. The sample consisted of 109 uninsured and 133 low-income insured individuals. Each individual evaluated 12 pair-wise comparisons of hypothetical health plans. We focused on six characteristics of health insurance: premium, out-of-pocket expenditure, chronic condition coverage, quality of care, family coverage and sick leave. A main effects orthogonal design was used to derive the 72 scenarios used in the choice experiment. Parameters were estimated using conditional logit models. Since price data were included, we estimated respondents' willingness to pay for characteristics.

RESULTS

Consumers valued health benefits and family coverage more than other attributes. Additionally, differences in preferences can be exploited to increase coverage. The willingness to pay for benefits may partially cover the average cost of providing them.

CONCLUSION

Policy makers might be able to encourage those insured via the subsidized system to enrol in the next level of the social health insurance scheme through expanding benefits to family members and expanding the level of chronic condition coverage.

Health insurance doesn't seem to discourage prevention among diabetes patients in Colombia

In the South American nation of Colombia, as elsewhere, patients with type 2 diabetes often avoid care that could prevent their condition from worsening. Availability of health insurance may play a role in explaining this behavior. Some patients with diabetes skip preventive measures because they have insurance and calculate that they can access curative services later in life. Insurers may limit preventive services coverage because they can't be assured of sharing in the eventual savings that emerge when a chronic condition such as diabetes is managed properly. Our analysis of a nationally representative sample of Colombians who have type 2 diabetes and who pay premiums into the country's "contributory" insurance program, found no evidence that insurance influences those individuals to avoid preventive services. The evidence is less clear for those participating in a different, fully subsidized insurance program, who-despite the availability of preventive care-are no more likely to seek preventive visits than are uninsured patients. We propose controlled experiments to identify and measure the true causal effects of insurance on prevention and, more broadly, steps to increase patients' understanding of the benefits of prevention.

Biased selection within the social health insurance market in Colombia

Reducing the impact of insurance market failures with regulations such as community-rated premiums, standardized benefit packages and open enrolment, yield limited effect because they create room for selection bias. The Colombian social health insurance system started a market approach in 1993 expecting to improve performance of preexisting monopolistic insurance funds by exposing them to competition by new entrants. This paper tests the hypothesis that market failures would lead to biased selection favoring new entrants. Two household surveys are analyzed using Self-Reported Health Status and the presence of chronic conditions as prospective indicators of individual risk. Biased selection is found to take place, leading to adverse selection among incumbents, and favorable selection among new entrants. This pattern is absent in 1997 but is evident in 2003. Given that the two incumbents analyzed are public organizations, the fiscal implications of the findings in terms of government bailouts, are analyzed.