Could a math equation save the Colombian healthcare system?

Rethinking the Colombian healthcare system with a new, more comprehensive, equation could save its future. Even more important, it could help people better their health in a more efficient manner. At least that’s what Álvaro Riascos, Mauricio Romero, and Natalia Serna, three Colombian economists –from Universidad de los Andes, the University of California and ICESI, respectively– are telling us.

Riascos, Romero, and Serna recently released a study that proposes a small, but significant change in the way Colombian health institutions –the Solidarity and Guarantee Fund (Fosyga) and the Ministry of Health and Social Protection– predict the risk for each health insurance company. Why is that important? The current structure of the Colombian healthcare system work as follows: health insurance companies receive payments from the Ministry of Health before providing services to their users. The magnitude of these payments depends on the risks calculated for each insured user. So far, the variables in the equation to calculate the risk are age, gender and area of residence. Seems a fairly simple process and it’s been undisputed by public entities.

However, in this case, the simplicity of the process impairs its efficiency. What Riascos, Romero, and Serna discovered is that, despite the usefulness of the current methodology, it’s wasting valuable information available through the Ministry of Health. When the three economists added morbidity, hospitalization rates, and further sociodemographic variables to the equation, it allowed them to predict the risks with a 17% more accuracy. At first sight, it may seem like a small number. But, if applied correctly, it would help the Colombian healthcare system to be more equal and fair.

The danger of the current equation is that health insurance companies have a bigger leeway to increase their economic benefits. Since they receive the payment beforehand any actual use and the calculation for such payments lack accuracy, insurance companies have the incentive of affiliating healthy people –with lower risk–. It’s simple math: knowing that they have the financial margin to do so, health insurance companies are, unknowingly, encouraged to decrease costs, unfortunately, at the expense of Colombians–.

Certainly, the work of Riascos, Romero, and Serna, despite as academic it may seem, is incredibly important for the Colombian healthcare system. The complexity of its use could jeopardize its influence but, evidently, it’ll be worth a chance.

LatinAmerican Post | Juan Sebastián Torres

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