David McKenzie: Ensuring equitable access to health care is one of the most fundamental steps a government can take for increasing the quality of life of its citizens. Many Latin American countries face similar problems to Colombia in meeting this goal: lack of coverage of much of the population, budget constraints, and large reported inefficiencies in the public health system. Consequently, the rich discussion of the Colombian experience provided here by Gaviria, Medina, and Mejía represents an important contribution that has several lessons for other countries planning reforms.
The first key lesson to draw from this paper is the need to pay attention to the political economy of the reforms. The authors argue that the public supply of hospitals is downward inelastic. Further research is needed to uncover who in the political process would have the power to shut down underperforming hospitals and what incentives they would have to do so. Second, the paper highlights the importance of building the appropriate incentives into a reform. Colombia's reform apparently did not have much effect on hospital managers' incentives to operate effectively, and it may have lowered beneficiaries' incentive to work, since they would lose eligibility if they obtained work in the formal sector. Successful reform requires not only laying out what is to be done, but establishing the right incentives for the various actors to make the reform work.
Third, the difficulties faced by the authors in trying to evaluate the impact of the reform ex post highlight the value of proactive policy evaluation. Having before-and-after data for individuals with SISBEN scores close to the cut-off would allow for a more convincing difference-in-differences evaluation. Since prereform data are not available, the authors are forced to carry out an ex post evaluation based on cross-sectional data, using the length of residence in the current municipality as an instrument for whether an individual is enrolled under the subsidized regime. Their first-stage regressions show that this variable is clearly correlated with enrollment, but the exclusion restriction does not convince me. [End Page 64]
The identifying assumption is essentially that, conditional on observable characteristics, being a migrant has no effect on health outcomes or labor force participation. The entire migration literature worries about exactly this problem, however, since migrants do self-select and are likely to differ from nonmigrants in terms of ability, vulnerability, health status, health knowledge, and all sorts of unmeasured factors. The main findings of the paper—namely, that those enrolled in the subsidized regime have better self-reported health and lower labor force participation—could just as easily be interpreted as saying that migrants have worse health and higher labor force participation. Since the desire to work may be one of the main motives for migration, people who moved to an area fairly recently may be more likely to be working than long-term residents. Since migrant jobs are often classified by the three Ds—dirty, dangerous, and difficult—migrants working in them may very well have worse health. Finally, since migrants may exhibit risky health behavior and use health facilities infrequently, they may present worse health outcomes than long-term residents even in the absence of the subsidized regime.
The fact that individuals were apparently using political connections to gain access to the subsidized regime suggests that they expected some benefit from the program. I therefore doubt that all of the positive effect found on self-reported health care and the use of medical services is driven by differences between individuals selected for the program and individuals not selected. An assessment of the reform's effectiveness requires accurate measurement of the size of the benefits, however, and well-measured and credible program impacts may serve as a tool for activists attempting to overcome the political barriers to further reform. Such programs should therefore build evaluation into the program design.
Rodrigo R. Soares: Gaviria, Medina, and Mejía discuss two important dimensions of the health reform in Colombia: the political economy of its proposal and implementation and the effectiveness of the new system as a tool for improving the health and welfare of the poorer...