Household health spending picks up as system deteriorates

The complex health situation in Colombia has triggered different changes in the way citizens are spending within the system. Specifically, according to the Dane, Health spending in the country in the second quarter of this year increased by 5.1%.

(See: How the health market is preparing for the changes that a reform of the system would bring)

This is explained by the aging of the population, the prevalence of diseases, the increased purchase of medicines due to shortages and the increase in health insurance policies, prepaid medicine plans and complementary plans. In short, Today, Colombians are spending more money from their pockets and monthly budget on health items and services than they used to.

Although it is not the sector that has increased the most, since it is preceded by the recreation and culture sector with 8.7% from April to June, lIt is true that this upward trend is beginning to generate an alert within the sector.considering that overall household spending rose by 1.6%.

Camilo Herrera, founder of the firm Raddar, said that although it is not the sector that is growing the most in terms of spending, It is important to understand the reasons why this indicator begins to behave in this way.

First of all, there is talk of the ageing of the population. It is inevitable not to think that Colombia is moving towards ageing and although it is a long-term reason, this point makes the country’s health more expensive, taking into account that the frequency of care and health needs are beginning to increase.

On the other hand, another factor is related to the worsening of diseases after the Covid-19 pandemic. According to Herrera, this is also one of the reasons that make health care more expensive in Colombia. Even if we look at the data from Dane, due to the virus and the measures implemented to combat it, In the second half of 2021, household health spending grew by 33%.

(See more: Health reform: what changes does the document that would replace the previous project contain?)

Then, in the same period of 2022, the indicator dropped to 6.6%, to continue the path of reduction to 4.6% in the second quarter of 2023. and finally rise again by 5.1% in the same period this year.

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Thirdly, there is talk of an increase in the consumption of medicines, both Over the Counter (OTC) or more commonly known as free sale, and those prescribed.Although these second products have a different dynamic because they are prescribed, where the EPS generally deliver them, due to shortages they have not been able to do so or the delivery time is delayed, leading people to resolve the problem because they cannot afford to wait.

“This is part of the problem of drug shortages over the last two years. This is not a current situation, but rather households are systematically having to buy more drugs than their health plan normally gives them.“, says Herrera.

Along the same lines, Augusto Galán, director of Así vamos en Salud and former minister of the portfolio, explained that this increase in health spending is worldwide, so Colombia is no stranger to this type of situation. In addition, He stressed that the higher cost of inputs and new technologies also makes the sector more expensive.

“In the Colombian situation, in the health sector, spending has been increasing since 2022 due to devaluation, with higher costs of inputs and new technologies, inflation and an increase in the use of health services, which is related to the fact that the population is suffering from much more severe diseases, which ends up increasing the cost of care for the population.“, he noted.

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More spending on insurance

But at the same time, due to the uncertainty that exists due to the crisis in the sector, not only due to the lack of funding, but also due to the possible changes that can be made to the system in the context of the health reform, the founder of Raddar, Camilo Herrera, highlighted that Many people in the country are increasing their acquisition of health insurance, prepaid medical plans and complementary plans.

(See: Teachers marched against failures in the new health service for teachers)

“Households are investing more in these three things and it is a huge challenge because it is a bigger outlay in people’s pockets. It is an unpleasant, unexpected effect. If you have to buy health products, you cannot buy other things. There will come a point where people have to decide whether to buy acetaminophen or pay for Netflix.“,” says Herrera.

Indeed, by reviewing the data from the Superintendency of Finance, it is possible to see that in the current year, that is, from January to June, The value of health premiums issued increased by 22%, reaching $1.87 trillion. Even if compared to the same period in 2023, the value for that year was $1.54 trillion and in 2022 it was $1.31 trillion, values that confirm that the issuance of these bonds has increased consistently.

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According to the figures, The entities that issued the most health insurance between January and June of this year were Sura, for a value of $1.33 billion with an annual increase of 24%followed by Allianz, which had a value of $0.29 billion and an increase of 16%, and Bolívar, which participated with $176,371 million and an increase of 16%, as well.

(See: The ‘evils’ of the teachers’ health model, according to the business union)

When reviewing the ranking of the 1,001 companies published by Portafolio, it is possible to observe that in the case of the EPS, these between 2022 and 2023 had increases in income, going from $53.6 billion to $66.4 billion, but, The losses deepened, as they went from losing $1.07 trillion in 2022 to losing -1.72 trillion in 2023.

In fact, a similar situation occurred in the general conglomerate of companies in the health sector with income, which went from $98.2 billion in 2022 to $118.1 billion in 2023, but in profits they fell from $642,297 million to -$79,390 million, that is, a collapse of 112.4%.

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