Chapter 9: Financial 'blood-letting' in the Colombian health system: rent-seeking in a public health insurance fund
The Colombian health-care system has experienced a systems crisis due to large-scale schemes of corruption combined with mismanagement and lack of control. In May 2011 news broke of major corruption allegations in the use of the public health insurance fund, FOSYGA (Fondo de Solidaridad y GarantÌa del Sistema General de Seguridad Social en Salud). Since then it has become clear that virtually all actors of the health system have participated in and/or tolerated growing levels of corruption or grabbing leading to a profound crisis of financial sustainability as well as of legitimacy.To understand the case, we need to briefly explain the complex insurance-based Colombian health system, which was established in its current form (of regulated competition between health insurers) through a major reform in 1993. The Colombian health system aims at universal health insurance coverage and consists of three sub-systems: (1) the public health insurance system, which covers around 90 per cent of the population and is divided into two sub-systems, the contributive system for people with capacity to pay for health insurance (approximately 40 per cent) and the subsidized system for the poor and marginalized (approximately 50 per cent); (2) the public system for the poor without health insurance coverage; and (3) private health insurance which offers complementary coverage. In the public health insurance system there are health insurance companies, EPS (Empresas Promotoras de Salud) and health service providers (health service providers, which can either be public or private in nature (Pinto and Hsaio, 2007).
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