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

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  • Antonio J. Trujillo

    (University of Central Florida)

  • Dawn C. McCalla

    (University of Central Florida)

Abstract

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. © 2004 by the Association for Public Policy Analysis and Management.

Suggested Citation

  • Antonio J. Trujillo & Dawn C. McCalla, 2004. "Are Colombian sickness funds cream skimming enrollees? An analysis with suggestions for policy improvement," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(4), pages 873-888.
    • Handle: RePEc:wly:jpamgt:v:23:y:2004:i:4:p:873-888
    DOI: 10.1002/pam.20052
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    References listed on IDEAS

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    Cited by:

    1. Castano, Ramon & Zambrano, Andres, 2006. "Biased selection within the social health insurance market in Colombia," Health Policy, Elsevier, vol. 79(2-3), pages 313-324, December.
    2. Ronald Eduardo Gómez Suárez, 2007. "Cream-Skimming And Risk Adjustment in Colombian Health Insurance System:: The Public Insurer Case," Archivos de Economía 4295, Departamento Nacional de Planeación.
    3. Antonio Trujillo & Fernando Ruiz & John Bridges & Jeannette Amaya & Christine Buttorff & Angélica Quiroga, 2012. "Understanding consumer preferences in the context of managed competition," Applied Health Economics and Health Policy, Springer, vol. 10(2), pages 99-111, March.
    4. Christine Buttorff & Antonio J. Trujillo & Fernando Ruiz & Jeannette L. Amaya, 2015. "Low rural health insurance take-up in a universal coverage system: perceptions of health insurance among the uninsured in La Guajira, Colombia," International Journal of Health Planning and Management, Wiley Blackwell, vol. 30(2), pages 98-110, April.

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