Independent Research and Policy Advocacy

Managed Competition in Colombia

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Colombia’s healthcare domain, like many other sectors in the country, was completely overhauled as part of the country’s sweeping reforms that followed the adoption of a new Constitution in 1991. The reforms introduced a mandatory social health insurance system, with many of its features designed in line with the theoretical principles of managed competition. The reforms, aimed at revamping and regulating the hitherto fragmented health insurance sector, concomitantly introduced a two-tier system — one for the formally employed and another for the low-income, informal sector workforce — with the broader objective of achieving universal health insurance. Almost three decades later, the verdict, on the impact of the reforms, varies across the system’s stakeholders and therefore, remains ambiguous. While the reforms granted a constitutional right to healthcare, universal access in practice is yet to be achieved. Admittedly, the jury is still out on the optimality of the reform approach Colombia undertook, signalling the important lessons its case holds for developing countries like India. The embedment of managed competition principles in an environment characterized by lowstate presence and weak rule of law makes Colombia an interesting setting to analyse, holding valuable lessons for policymakers seeking to adopt similar approaches in comparable jurisdictions.

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