As legislators, doctors, and intermediaries struggle to find common ground on sectoral reform, expectations remain high for Colombian citizens.

The Colombian healthcare system is at a crossroads. A sweeping reform of the system was proposed in 2013 and was the subject of heavy debate in parliament and a key issue in recent elections. Colombia's constitution already recognizes healthcare as a basic human right, but reforms will redefine how the healthcare budget is distributed. Medical tourism, particularly for cosmetic surgery, is a growing area, while the production of pharmaceuticals and medical devices continues to increase.


Healthcare spending in Colombia, at an estimated $530 per capita annually, represents 6.8% of GDP, according to the World Bank. The pharmaceutical industry accounts for 2.3% of GDP. Colombia has 15 physicians, nine dentists, and seven nurses per 10,000 population. The country has some of the best hospitals in Latin America, but the healthcare system is in crisis, with corruption, inequality and inefficiency topping the list of complaints. But the people expect good healthcare.

Julio César Castellanos, Director General of Hospital Universitario San Ignacio in Bogotá, told TBY that, “We have reached universal healthcare through social insurance, and I would say that people in Colombia have learned to claim and demand health as one of their social rights. One of the most important achievements has been the fact that health access has become an essential right. The challenge now is to sustainably provide the highest quality services to Colombian society."


Everyone knows the healthcare system must be changed but cannot agree how. For all the talk of reform, Colombia still operates its healthcare model under Law 100, passed in 1993, which created a mixed public and private insurance market to cover all people in the country. The system has three actors: the state, insurers (Spanish acronym EPS) and healthcare providers (IPS). The law mandates that people with formal jobs, now 40% of the population, obtain private insurance, while the state covers the remaining 60% with public health insurance. Colombia in effect replicated the healthcare system of the US, albeit with wider coverage (97% of Colombians are covered by health insurance), but the system of more than 130 competing private and public insurers and a lack of cost controls have led to repeated abuses and scandals. For example, the WHO in 2009 reported Colombians paying the highest prices in the world for some drugs, such as antibiotics, while hospitals were using proprietary drugs, rather than much cheaper generic alternatives.

According to a report by the International Society for Pharmacoeconomics and Outcomes Research (ISPOR), the government transfers money to insurers for each individual enrolled, a so-called Capitation Payment Unit, but the amount differs for public and private clients. “In 2012, there was a differential unit between the two regimens: $304.24 per year for the contributive regime and $240.94 per year for the subsidized regime, a fact that contributed to inequity within the system," said the report. The Ministry of Health has overall responsibility for healthcare under the General System of Integrated Social Security. The government in 2007 created the Health Regulatory Commission (CRES) to supersede the previous ruling entity, then in 2010 created the Institute for Health Technology Assessment (IETS) to further rationalize the system. Nonetheless, inequalities persisted and the courts became involved, with tens of thousands of cases a year relating to healthcare provision. The government is reported to be implementing a new scheme for universal health insurance in 2014.


The Latin American Private Equity and Venture Capital Association reported that 2013 was a record year for mergers and acquisitions in Latin America, with a 13% increase in investment driven partly by “investor appetite for middle-market opportunities in industries such as consumer products, retail, healthcare and financial services." A May 2014 report on foreign direct investment by the UN's Economic Commission for Latin America and the Caribbean (ECLAC), showed Colombia posting $16.8 billion in FDI in 2013, representing 4.2% of GDP, and the total figure up 8% from the previous year. The oil and mining sectors took nearly half the investment, but the services sector took 38% of total FDI. Nearly a third of Colombia's FDI came from its neighbors, amid large drops in outflows from Chile and Mexico, while Brazil posted negative outflows for the third year in a row. Not only that, but Colombia also made outward investments in 2013 worth $7.65 billion.

Pharmaceuticals, the manufacture of medical devices, and other industries related to the healthcare sector have been growing strongly in recent years, with medical devices exports climbing from zero in 2005 to over $100 million in 2013. Francisco De Paula Gómez, Executive Director of Asociación de Laboratorios Farmacéuticos de Investigación (AFIDRO), told TBY that, “The pharmaceutical market represents around 17% of the health industry in Colombia in terms of spending, according to figures released by the country's Ministry of Health. I think these figures also show rather low spending in medication; for example, the yearly per capita health expenditure in Spain is $2,400, and in Italy, $4,000." Colombia differs from its neighboring Latin American markets in being decentralized. The country's premier pharmaceutical company, Tecnoquímicas, is in Cali, while Procaps, a large Colombian manufacturer of gel caps, is based in Barranquilla.


Medical tourism is another growth area for Colombia's health sector — and is starting to be a two-way street. Adolfo León Moreno Gallego, Director of Cluster Servicios de Medicina y Odontología Medellin, told TBY that, “…now we have enough maturity, knowledge, and experience to offer more comprehensive products and services, with greater added value, to those international markets. We are working on further specializing our health tourism by encouraging the export of biotechnology products and services, as well as applied knowledge for the healthcare industry." Cosmetic surgery is not covered under the national health plan, but the government has reported that medical tourism climbed by 60% in the previous five years. State figures show a liver transplant costing $25,000 in Colombia versus $120,000 in the US, and an increasing number of US and EU citizens are retiring to Colombia because of cheaper living costs and readily available quality healthcare.