<!-- Start of picture text --> FIGURE 3: PROGRESSIVITY IN ABSOLUTE AND RELATIVE TERMS OF THE COLOMBIAN HEALTHCARE SYSTEM<br>Panel A. Progressivity in Relative Terms Panel B. Progressivity in Absolute Terms<br>80 20<br>70<br>60 15<br>50<br>40 10<br>30<br>20 5<br>10<br>0 0<br>1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10<br>Income Decile<br>Income Decile<br>Scenario 1 Scenario 3 Scenario 2 Scenario 1 Scenario 2 Scenario 3<br>Source: World Bank Group and staff estimates based on the 2017 ENPH<br>Note: The deciles were put together using market income + per-capita pensions<br>Given this particularity, in the last scenario, only employees whose contributions are less than the sum of the<br>costs of the average health cost of the contributor and their beneficiaries **** is considered eligible to receive<br>transfers in kind for health services. However, it should be mentioned that the contributory health system<br>considers cross-subsidies, that is, that the surplus of the contributions of some people is used to pay part of the<br>shortfall of the others. This situation means that on average, 82.4 ***** percent of the difference between the<br>cost of the average premium and the contributions made by the contributor is paid with resources from the<br>National General Budget. Figure 3 presents the results of the three scenarios.<br>When calculating the Kakwani coefficients and the marginal contribution to the reduction of inequality for each<br>of the scenarios, it is found that: under the first scenario, the Kakwani coefficient associated with health care<br>transfers is 0.7210, while the marginal contribution is 0.0239. On the other hand, when considering the second<br>scenario, the Kakwani coefficient hardly amounts to 0.4301, and the marginal contribution coefficient is 0.0254.<br>And finally, when calculations are made using scenario number three, the Kakwani coefficient is 0.6381, while the<br>marginal contribution is 0.0385. It is important to emphasize that the Kakwani coefficient of the first scenario can<br>be interpreted as an upper limit, while that associated with the second scenario can be considered the lower<br>limit.<br>N ote: * They must submit and pay the CREE tax, Corporations, Legal and similar persons, Foreign companies, and entities from<br>their income from national sources that are taxpayers of income and supplementary taxes.<br>** As defined by the Ministry of Health, the subsidized healthcare system is the mechanism through which the poorest<br>population in the country, without payment capacity, has access to health services through a subsidy offered by the State.<br>*** Since employers are exempt from making the 8.5 percent payment, this is equivalent to 68 percent of the total payment,<br>which is 12.5 percent. It is important to emphasize that the employee contributes the other 4 percent, and the rule does not<br>exempt employees from paying.<br>**** If a household is made up of 4 people, the cost of the average health cost of this household is equal to the sum of the<br>UPC values for all the household members.<br>***** The cost of the average health cost of the contributory health system in 2017 amounted to 21,041,466 million pesos.<br>66.7 percent of the people who responded belong to the contributory health system and are employees with a salary of less<br>than 10 smmlv and their beneficiaries. In other words, the cost of health services for this population amounts to 15,749,559<br>million pesos. To cover the costs of the contributory health system in 2017, the national government made contributions<br>amounting to 8,794,582 million pesos. In other words, the national government covered 56 percent of the cost of the<br>“contributory-subsidized” system. If cross-subsidies did not exist, government contributions would need to cover 68 percent<br>of the system's costs. This means that, on average, 82.4 percent of the difference between contributions and the cost of health<br>services is paid with resources from the National General Budget, and the remainder is paid with cross-subsidies.<br>each decile<br>% of market income + pensions % of transfer in kind received by<br><!-- End of picture text --> 23