Colombia benefits from one of the most extensive insurance systems and medical financial protection in Latin America, second only to Chile, thanks to the 1993 health care reform, also known as Law 100. This reform created the social security system and covers standards governing the general system of pensions, workplace injury insurance and complementary social services. During the subsequent ten years, insurance coverage expanded from 20 to 78 percent of the total population. According to a study by AmericaEconomia Intelligence, five of the twenty best hospitals and clinics in Latin America in 2011 are located in Colombia. In the third place is the Hospital Fundacion Santa Fe in Bogota, in the eighth place is ranked the Fundacion Valle del Lili in Cali and in the tenth place is Fundacion Cardioinfantil in Bogota.
In September 2008, the Uribe government enacted another law to achieve universal coverage by 2010. Industry experts had previously forecasted a 15 percent increase in public investment, a benchmark that was surpassed in 2008, fueled by the implementation of the Universal Coverage Law.
Despite market size and import contractions during 2009, an important industry recovery began in 2010. U.S. imports enjoy the largest share of the local market, accounting for around a third of all medical equipment imports. However, other competitors such China are quickly increasing market share.
Colombia faced an acute public health care sector crisis during 2009/2010. A grave financial deficit negatively affected local market size and imports. Large purchases and imports were almost exclusively done by the private sector, which continues to be the most stable sector within the medical industry. This crisis has affected the ability of local industry to import a larger amount of state of the art technology. The current public healthcare crisis is being addressed and the measures created to mitigate its impact are expected to be implemented by 2011/2012. Such measures will make the public sector more reliable and attractive to suppliers.
While U.S. medical equipment dominates the market, it is important to note that the enforcement of legislation (Decree 4725 of 2005) related to the import of refurbished/remanufactured equipment has hampered U.S. exports in this segment. This legislation aims to protect the quality of medical service provision in Colombia. Many of the specific conditions and requirements are challenging for small and medium companies. Hardest hit are small, remote facilities in poorer departments of Colombia that have a high risk security profile (i.e. Choco, Sucre, Tolima, Meta etc.).
Other factors have positioned Colombia’s medical industry for growth. The positive economic climate through 2008 stimulated the demand for construction of new facilities throughout Colombia. However, the economic crisis of 2008-2009 slowed down these projects, but as the economy improves, these projects should re-emerge. In June 2008, the Colombian Health Ministry (Ministerio de la Protección Social) joined the Pan-American Health Organization’s Safe Surgery Initiative to reduce the incidence of complications from surgery.
This enhanced focus on technology and medical security boosted the modernization of hospitals, clinics and clinical laboratories. Medical tourism is developing rapidly, albeit late vis-à-vis Asian competitors mainly for plastic surgery and ophthalmology – where Colombia is considered a leader in advanced techniques – as well as trauma and orthodontist work. Colombia also believes its proximity to the United States is a key selling point in promoting the medical tourism industry. Also noteworthy is that in 2009, Colombia officially adopted UL standards.
The U.S.-FTA, scheduled to be implemented in May 2012, will also make newer and better technology more available and affordable to local medical institutions, by eliminating tariffs on 96.2% of imports from the U.S. immediately upon entry into force of the agreement. However, Colombia is also implementing other FTAs with Europe, South Korea and Canada which will create strong competition to U.S. manufacturers. Currently the strongest competitors are Germany, Japan and China.
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