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

One of the primary objectives of Colombian social health insurance reform was to increase competition among for-profit insurers. Unfortunately, the flat capitated formula creates an opportunity for sickness funds to maximize reimbursement gains by cream skimming--selecting against unhealthy individuals. This paper explores sickness fund selection behavior to evaluate the efficiency losses associated with the introduction of managed competition in Colombia. Data from a 1997 Colombian household survey are analyzed with a bivariate probit model with partial observability using instrumental variables. The model yields some evidence of sickness fund selection based on health status. Public policy options to discourage risk selection by health status are discussed

Actuarial science · Bivariate analysis · Business · Competition (biology · Econometrics · Economic growth · Economics · Health care · Multivariate probit model · Probit model · Public economics · Public fund · Reimbursement · Global Health Care Issues · Healthcare Policy and Management · Healthcare Systems and Reforms

• A Guide to Living Standards Measurement Study Surveys and Their Data Sets

  Margaret E Grosh•A guide to living standards…•1995

  Incluir item

• Partial observability in bivariate probit models

  Open Access•Dale J Poirier•Journal of Econometrics•1980

  Incluir item

• The Demand for Post-Acute and Chronic Care in Nursing Homes

  James D Reschovsky•Medical Care•1998

  Incluir item

• Supply-Side and Demand-Side Cost Sharing in Health Care

  Open Access•Randall P Ellis, Thomas G Mcguire•The Journal of Economic…•1993

  Incluir item

• Forming and reforming the market for third-party purchasing of health care

  Open Access•Wynand P M M Van De Ven, Frederik T Schut et al.•Social Science & Medicine•1994

  Incluir item

• The Benefits of Asymmetric Markets

  Open Access•Tibor Scitovsky•The Journal of Economic…•1990

  Incluir item

• Job Queues and the Union Status of Workers

  Open Access•John M Abowd, Henry S Farber•Industrial and Labor Relations…•1982

  Incluir item