VZCZCXRO2286
RR RUEHAO RUEHRS
DE RUEHBO #0335/01 0551708
ZNR UUUUU ZZH
R 241708Z FEB 10
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 3027
INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS SECTION 01 OF 03 BOGOTA 000335 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI ECON CO
SUBJECT: URIBE'S HEALTH CARE SCHEME UNDER FIRE 
 
REF: 08 BOGOTA 3352; BOGOTA 163 
 
¶1. (SBU) SUMMARY. President Uribe declared a "Social Emergency" 
just before the New Year, giving the executive branch the power to 
issue health care reforms by decree.  The decrees -- implemented 
without Congressional approval -- aim to prevent the financial 
collapse of the health care system, which faces an estimated $3 
billion shortfall.  The measures also seek to improve medical 
attention for 51% of the population that receives subsidized health 
care.  Widespread public opposition has focused on the GOC's lack 
of consultation with stakeholders, restrictions on prescribed 
treatments, and penalties against doctors who fail to adhere to the 
new program.  Within several weeks, the Constitutional Court is 
expected to rule on whether the new taxes and reform measures are 
legal.  END SUMMARY. 
 
 
 
GOC ADDRESSES RISING COSTS, HEALTH CARE INEQUALITIES 
 
--------------------------------------------- ------- 
 
 
 
¶2. (SBU) Colombia faces the dual challenge of widening access to 
health care and improving the quality for its poorest citizens. 
The GOC enacted two parallel health system programs in 1993 to 
ensure universal access to health care: the subsidized program, 
which covers the unemployed and the informal sector, and the 
contributory program, under which the salaried or self-employed 
contribute 12% of their salary.  Under this progressive design, 
contributors help underwrite the subsidized system.  As a result, 
health care coverage expanded from 20% of all Colombians in 1992 to 
94% in 2009 (ref A).  While the 1993 reforms resulted in very high 
levels of "coverage" in terms of numbers of Colombians having 
health insurance, "access" -- in terms of actual services -- has 
lagged considerably, especially in rural areas. 
 
 
 
¶3. (U) The health care system is threatened by two problems.  The 
system is almost bankrupt due to unrealistic estimates of the 
number of Colombians in the contributory system.  Unemployment for 
2009 averaged 12% (13% in the last decade), and the informal sector 
has increased in size -- from 48% to 58% of the workforce -- over 
the past 10 years (ref B).  Second, those under the subsidized 
program (51% of the Colombian population) enjoy fewer benefits and 
lower-quality care than those in the contributory system. 
 
 
 
¶4. (SBU) The proposed reforms identify new funding sources to avoid 
bankruptcy of the system and equalize health care coverage for 
subsidized and contributory users under the basic Obligatory Health 
Plan ("POS").  By July 2010 - as directed last year by the 
Constitutional Court -- the POS coverage must be the same under 
both the contributive and subsidized plans.  The Finance and Health 
Ministries calculate that this ruling will impose an additional 
US$3 
 
billion in funding costs. 
 
 
 
GOC IMPOSES LIQUOR TAX, ABOLISHES LAWSUITS 
 
------------------------------------------ 
 
 
 
¶5. (SBU) To expedite the process and avoid a laborious negotiation 
with Congress, President Uribe declared a "Social Emergency" on 
December 23, 2009, allowing him to impose new taxes and procedures. 
Of the 16 decrees, ten (Decrees 126-135 of 2009) are considered 
controversial and include major changes to the health care system. 
New elements include: 
 
 
 
-- Regulations to control health costs, including a list of 
approved drugs and treatments under the POS.  There are sanctions 
and even jail time for doctors and health professionals who do not 
abide by these regulations. 
 
 
 
-- VAT tax of 14% imposed on national and imported beer sold in 
 
BOGOTA 00000335  002 OF 003 
 
 
Colombia (the prior VAT was 3%), which will help finance the 
broadening of services covered by the POS.  Similar taxes will be 
imposed on cigarettes, liquor and gambling. 
 
 
 
-- Services that are not included within the POS are called 
"exceptional health services" and will be reviewed by a committee 
of health care providers and outside experts.  Previously, patients 
could initiate a judicial lawsuit ("tutela") to obtain needed 
treatment for their ailment.  If the committee denies coverage, the 
patient can utilize pension savings to pay for medical services. 
 
 
 
¶6. (U) A national level committee made up of representatives from 
the Ministries of Finance, Health, Colciencias (science and 
technology agency), and three outside experts will periodically 
evaluate the services and medicines covered by the POS. 
 
 
 
MEDICAL ESTABLISHMENT AND PATIENTS OUTRAGED 
 
------------------------------------------- 
 
 
 
¶7. (SBU) President Uribe's government has come under heavy fire for 
not consulting with stakeholders before issuing the decrees.  The 
new measures sparked opposition from medical professionals, labor 
unions, patients, Congress, and the public.  The decrees also 
became a campaign issue for presidential candidates.  Two senators 
plan to introduce a  "patient's bill of rights."  A presidential 
advisor told us privately that Uribe is extremely displeased with 
the handling of the issue by Minister of Social Protection Diego 
Palacios and fears that the health care controversy could be as 
politically damaging as the DMG pyramid scheme. 
 
 
 
¶8. (U) Gustavo Malagon, President of the National Academy of 
Medicine, stated the decrees are a "serious attack on the medical 
profession.  Such an attack has never happened before in this or 
any other democratic nation."  The Academy claims the decrees 
undermine doctors' expertise and limits their autonomy, "trapping 
them in an insurance system that is eminently commercial in 
nature."  This criticism is echoed by the Colombian Association of 
Clinics and Hospitals and other health sector actors. 
 
 
 
¶9. (U) Oscar Rodriguez, Economics Professor at Universidad 
Nacional, noted the reforms are not intended to improve the 
 
health care system; the objective is to alleviate an overburdened 
national budget.  Rodriguez argues that the decrees will increase 
poverty levels, because the poor will have to finance "exceptional" 
illnesses with their limited personal savings. 
 
 
 
¶10. (U) Others criticize the burden of equalizing the two health 
care systems, claiming it will fall too heavily on the contributive 
system.  While the goal is to expand services under the POS, some 
patients fear that by giving the health provider authority to grant 
or deny health coverage to patients (rather than an independent 
judge), objectivity will be lost and coverage will become more 
restrictive. 
 
 
 
¶11. (SBU) Executives at Profamilia, a large private provider of 
reproductive health services, told us the proposed taxes on beer 
and other items will probably only raise about US$1 billion in 
revenue, not enough to cover the US$3 billion health deficit. 
 
 
 
URIBE DEFENDS REFORM 
 
-------------------- 
 
 
 
¶12. (SBU) President Uribe has invested considerable time, notably 
on radio talk shows, answering questions about the emergency 
measures.  He also publicly criticized embattled Health Minister 
 
BOGOTA 00000335  003 OF 003 
 
 
Palacios for not being responsive to criticisms about the decrees. 
Palacios claims the new measures have been "misunderstood." In 
addition to official voices, a handful of respected analysts 
support the reforms, including the Presidents of ANDI (National 
Association of Industrialists) and ANIF (National Association of 
Financial Institutions), who emphasize that the reforms help fix a 
structural fiscal problem. 
 
 
 
GOC BACKTRACKING, COURT TO RULE ON LEGALITY 
 
------------------------------------------- 
 
 
 
¶13. (U) In response to the outcry, President Uribe and Minister 
Palacios held a series of meetings with medical associations and 
Congress to negotiate the implementation and scope of the decrees. 
Already, Uribe has backtracked on some of the decrees, including 
financial sanctions against physicians that prescribe unapproved 
medication or procedures and the use of pensions to pay for 
treatments outside POS coverage. 
 
 
 
¶14. (U) Minister Palacios submitted technical justifications in 
support of the decrees to the Constitutional Court on February 12 
for its review.  The Court is expected to take at least one month 
to consider the constitutionality of the GOC measures. The 
President of the Constitutional Court said the decrees could 
crumble under judicial scrutiny --  particularly the ones imposing 
new taxes. 
 
 
 
COMMENT: A POLITICAL BLUNDER? 
 
------------------------------ 
 
 
 
¶15. (SBU) The fallout from the "Social Emergency" decrees could not 
come at a worse time for President Uribe, who is being criticized 
from many sectors in an election year.  The fiscal implications of 
a universal health care system are a serious and legitimate 
concern.  While no poll numbers are yet available to gauge the 
impact of the controversy, Uribe's popularity may suffer.  By 
unilaterally applying decrees on such a sensitive issue, Uribe has 
given his opponents a theme to rally around as the country heads 
into its presidential campaign. 
NICHOLS