A Proposed Condition-Based Risk Adjustment System for the Colombian Health Insurance Program

Healthcare in Colombia is financed by the government through insurers (“EPSs” or Entidad Promotora de Salud). Currently funds are distributed to EPSs through an age/sex and geographic location risk adjustment system. The current system has many shortcomings that have required the development of work-arounds to ensure that EPSs are adequately compensated for high-risk members. In keeping with funding regimes in other countries the Colombian Ministry of Health (“MinSalud”) is exploring a condition-based risk adjustment system. By including high-risk conditions the proposed system would treat all insurers and members equally and remove the need for special payments. We explore the development of such a condition-based risk adjustment system, discuss some of the issues that it raises and suggest ways that Colombia may address them