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

    Authors

    A. J. Trujillo;D. C. McCalla

    Comments

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    Abbreviated Journal Title

    J. Policy Anal. Manage.

    Keywords

    HEALTH-INSURANCE; UNION-STATUS; CARE; SELECTION; WORKERS; DEMAND; Economics; Public Administration

    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. (C) 2004 by the Association for Public Policy Analysis and Management.

    Journal Title

    Journal of Policy Analysis and Management

    Volume

    23

    Issue/Number

    4

    Publication Date

    1-1-2004

    Document Type

    Article

    Language

    English

    First Page

    873

    Last Page

    888

    WOS Identifier

    WOS:000223736500011

    ISSN

    0276-8739

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