Borradores de Economía - Fiscal and macroeconomic effects of different health system risk factors

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The series Working Papers on Economics is published by the Office for Economic Studies at the Banco de la República (Central Bank of Colombia). The works published are provisional, and their authors are fully responsible for the opinions expressed in them, as well as for possible mistakes. The opinions expressed herein are those of the authors and do not necessarily reflect the views of Banco de la República or its Board of Directors.

AUTHOR OR EDITOR
Arango, Luis E.
Botero-García, Jesús Alonso
Gallo, Daniela
Melo-Becerra, Ligia Alba

The series Borradores de Economía (Working Papers on Economics) contributes to the dissemination and promotion of the work by researchers from the institution. On multiple occasions, these works have been the result of collaborative work with individuals from other national or international institutions. This series is indexed at Research Papers in Economics (RePEc). The opinions contained in this document are the sole responsibility of the author and do not commit Banco de la República or its Board of Directors.

Publication Date:
Monday, 11 December 2023

Abstract

This paper evaluates the fiscal and macroeconomic effects of some risks faced by the health system. These comprise changes in demographic and morbidity patterns, new medical technologies, inefficiencies in the system and the structure of the labor market. These factors represent a challenge for the fiscal sustainability of the health system since they require an increase in public resources and permanent sources of financing. The analysis is carried out using a Computable General Equilibrium Model (CGEM). According to the study, it is estimated that in 2030 an additional 1.91% of GDP will be required in public resources compared to 2022. However, if the country can increase economic growth and labor formalization, fiscal pressures could be reduced. Improving efficiency in the use of available resources and increasing productivity would also contribute to reducing the need for fiscal resources and improving the well-being of the population.