I’m traveling to Panama this Friday. Here are some interesting facts about the country’s health care system.
- Life expectancy is better than America Life expectancy in Panama is 79.59 while in the US it is 79.30
- Mix of public and private health insurance. Panama’s health care architecture rests on two distinct public pillars. Caja de Seguro Social (CSS)or Social Security Fund, acting as both a health care provider and a pension administrator, funded through the payroll contributions of employees and employers. Formally employed workers – and their dependents – are entitled to CSS services, which extend to a network of approximately 80 hospitals and health centres. Second public entity, Ministerio de Salud (MINSA)Oversees public health policy and operates over 830 low-cost facilities, which act as a safety net for people outside the formal labor market. Parallel to these two institutions, a small but growing private sector serves high-income Panamanians and foreign patients, offering short wait times and amenities not typically found in the public system. The result is a three-track system – CSS, MINSA, and private – that collectively serves a population of approximately 4.5 million.
- Panama spends much less on health care than the US (as a share of GDP).. Panama spends 8.47% of GDP on health care, much less than the 18.0% of GDP the US spends.
- out of pocket expenses are high. Panamanians’ out-of-pocket costs represent 40.5% of total health care spending. In comparison, out-of-pocket spending as a share of health expenditure is only 10.9% in the US, compared to a global average of 17.3%.
- recent improvements. From Confused: “In March 2025, Panama enacted law number 462A landmark reform that merged the existing pay-as-you-go and blended pension sub-systems into a unified capitalization framework. The law mandates a gradual increase in employer contribution rates – from 13.25% in April 2025 to 15.25% by March 2029 – and requires the central government to transfer about $966 million annually to shore up the liquidity of the system.
- urban rural divide. Panama is a very divided society. A World Bank report states that
“While poverty in urban areas was 4.8 percent in 2023, poverty in indigenous areas (comarcas) reached 76 percent – 15 times higher.” This is the 8th highest level of income inequality in the world. Facilities in urban areas (ie, Panama City) are much better than in rural areas. For example, Panama City hosts several prestigious private hospitals (for example, Pacifica Salud Hospital Punta Pacifica and Clínica Hospital San Fernando). - medical tourism. Panama’s private healthcare sector has developed into a regional center for medical tourism, attracting patients primarily from the United States, Canada, and Latin America looking for quality care at significantly lower costs.
- pharmaceutical improvements. Earlier, both CSS and MINSA used to purchase pharmaceuticals separately. The landmark Law 419 of February 2024 completely changed the system: it integrated CSS and MINSA purchasing power, created National Drug Pricing System (SINPREM) – established an international reference pricing (IRP) database based on comparator countries, including the US, Germany, France, and Japan – established Managed Access Agreements (MEAs) for outcomes-based reimbursement, and launched a National Medicines Observatory to enforce maximum reference prices with the goal of reducing drug costs by 20-30%.
Anyone who is an expert on Panama’s health care system, let me know what information I have missed and if anything above is incorrect.
