Title

Are Colombian Sickness Funds Cream Skimming Enrollees? An Analysis With Suggestions For Policy Improvement

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.

Publication Date

9-1-2004

Publication Title

Journal of Policy Analysis and Management

Volume

23

Issue

4

Number of Pages

873-888

Document Type

Review

Personal Identifier

scopus

DOI Link

https://doi.org/10.1002/pam.20052

Socpus ID

4944253984 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/4944253984

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