Editorial

Mario García-Molina PhD Liliana Alejandra Chicaíza-Becerra PhD

Profesor titular, Facultad de Ciencias Económicas,
Universidad Nacional de Colombia.
mariogarciamo@gmail.com

Profesora asociada, Facultad de Ciencias Económicas,
Universidad Nacional de Colombia.

Many of the discussions of the current Colombian health care system and its problems are based on a simplified economic perception and its application in this field. On one side it is argued that the Market forces work better than the State, and therefore State intervention should be avoided. On the other hand it is argued that healthcare is of public domain and is a given right, which means that the healthcare needs of every patient should be provided by the State without any other considerations. Although these are the extreme positions in the spectrum, it is necessary to understand their strengths and their weaknesses if we want to understand the particulars, the strong aspects and problems of our system.

Economics as a discipline, has been able to identify positive and negative elements of market forces and of the State, and has identified clearly how neither of these extremes is appropriate in real situations. The assertions that ignore the existence of flaws both of the market system and of the State ignore the complexity of real decisions.

A common error in the discussion of public policy and of economic systems is made when the comparisons are made between an ideal schemes (those considering that there is perfect competition in the market system, and on the other hand, those believing that the State has agenda free and altruistic politicians), and any practical real schemes. In this scenario a theoretical optimal situation under ideal conditions is compared with a practical system that works albeit its problems (the second best option). Obviously, any imperfect system of the real world will look weak when compared with the promises of the ideal world. The extreme positions over Colombia's healthcare system face this dilemma.

The first perception is born from correct assertion, as a free market can lead to good distribution of resources in many situations. However, this view makes an improper generalization: that the free market is better than the State in every situation. Derived from this vision, critics of the tutela (a popular expedite judiciary ruling to correct a claim of basic rights violation, like the right to good health) have appeared, questioning that this legal figure has allowed judges to make decisions with major economic implications. Also resulting from a favorable perception of the free market as the ideal, it has been questioned that State has limited its intervention and has not regulated -much less used normally- mechanisms well accepted in the market as that of endorsing parallel imports.

Those who criticized the tutela seem to forget an aspect clearly pointed out by Ruling T-760: many of the tutelas are requesting services and procedures to which people are already entitled (1). This phenomenon may reflect flaws in the market mechanisms as currently conceived, as the cost containment strategies by EPS (healthcare businesses) show that the enticements in the current system lead them to maximize short term income but not to plan to avoid long term healthcare problems. This clearly shows the need of implementing corrections to the current design, so that all parties in the system receive the proper signals.

Opposed to the extreme version of allowing the free market to move the system, is that of the right of healthcare provision, which in some perceptions is understood as the right of the citizens to receive from the State any treatment that a physician considers appropriate without any other considerations.

From an economical viewpoint, it is very difficult to support this position, because it does not consider two crucial aspects: at what cost and who pays for this (when discussing the characteristics of public assets, the economy defines it clearly as having no rivalry and no exclusion, particulars that healthcare in general do not fulfill, even though some may be met). As a result, in such scenario, the existence of a third party creates a paradise for the pharmaceutical industry, for which it is not surprising that Colombia has high drug prices compared to the international arena.

If the emphasis is placed on the obligation of the State to provide services, ignoring its costs, this clearly ignores the fact that the State does not have unlimited financial resources. In other words, if the society would decide to fulfill all the existing requests for healthcare with the best available treatments (which usually are the most expensive), would any resources be left for the rest of human needs? (2). This highlights the importance of having a unique healthcare plan for the people, which by definition cannot provide everything, but must have ceilings.

Maintaining limits on health care expenses require stronger regulations and a more active role of the State. The State currently has the proper instruments to achieve this role. For example, the State can make massive wholesale purchases of medications, as well as use health technology assessments as indicator of costs to bargain with the industry, endorse parallel imports, strategically use generic medications and the generate and divulge information to consumers. The limitations of the costs and of the healthcare plan could have a role in controlling the explosive tendencies of expenditure growth for the society. Likewise, the generation of information could promote consumer education. However, it is also necessary to have antitrust regulations that counteract the tendencies of industrial concentration of some providers of healthcare technology (3).

The regulation that the State can make on the system does not exempt it of its responsibilities to finance the system. The General System of Social Security in Healthcare (SGSSS) establishes different commitments for each party among them, the State. The financial survival of the system depends on honoring the State's contributions to the system that had been previously established (4). The healthcare system has required State funds and will keep on needing them. Even with the State's funds into the system, expenditure growth must be controlled specially as it involves public resources.

The prior discussion has major relevance considering the scenario generated by the ruling of the constitutional court about POS ( Plan Obligatorio de Salud: mandatory healthcare system) unification with other healthcare plans. Assuming that the State honors the payments already committed, it seems that there is no need to cut down POS services for unification. It would only be needed that these POS services be extended to the rest of the population. But at the same time it is important to introduce expenditure rationalization. Economic analysis could help in this matter. Compliance with ruling T760 requires to make decisions over how much the State is willing to spend on healthcare, as well as to determine how much can it be obtained with the available resources and how could these be used in the best way possible. It is not a simple task, but it is in these topics that economics, as mentioned by Williams (5), can help.

It is clear that neither the State nor the free market by themselves can solve the problems currently existing in healthcare. If in very competitive areas, like banking, State regulation and intervention are strongly exerted, then in an extremely complex area like healthcare, it becomes essential. In other words, the best path to achieve a healthy market is to strengthen regulation, and a good mixed system (although not optimal) is better than market or State utopias.

1. Colombia. Defensoría del Pueblo. La tutela y el derecho a la salud periodo 2006-2008. Bogotá: Defensoría del Pueblo; 2009.

2. Fuchs, V. The future of health policy. Cambridge (MA): Harvard University Press; 1993.

3. Chicaíza, L. Fallas del mercado de la salud en Colombia: el caso de la insuficiencia renal crónica. Revista Economía Institucional. 2005;7(12): 191-208.

4. Ramírez, J. La emergencia social en salud: de las contingencias regulatorias a la desilusión ciudadana. Revista Gerencia y Políticas de Salud. 2010; Sup 9(18): 124-143.

5. Williams A. “Need”–an economic exegesis. En: Culyer A, Wright K (editores). Economic Aspects of Health Services. Londres: Martin Robertson; 1978: 32-45.