.PARALLEL UNIVERSES.: Things I Learned at the First Philippine Health Financing Summit

17 April 2010

Things I Learned at the First Philippine Health Financing Summit

'Better late than never.

Finally, after so many years, the Philippines had its first Health Financing Summit last April 14, 2010 at the GT-Toyota Asian Center Auditorium inside the UP Diliman Campus.

It was very low-key. I don't think the media covered it. Most of the people who attended were from the academe. There were lots of familiar faces from UP Manila, Ateneo Graduate School of Business, De La Salle University, and the Asian Institute of Management.

The likelihood of having appendicitis in a lifetime is 7 percent. At present, if one undergoes appendectomy, the total expense from the operation and hospitalization is around Php 70,000.00 or US$ 1,574.00 (1 US$ = Php 44.48) ¹.

For Filipino women, the likelihood of having breast cancer in a lifetime is 12 percent. After being diagnosed, expenses will most likely run in the range of Php 1.5 million or US$ 33,760.97 for the first year, and around Php 120,000.00 or US$ 2,700.88 per year for the next four years, excluding doctors' professional fees ¹.

Latest available national health account data available is 2005. It shows a per capita health spending of P1,978 or US$ 44.52 in 2004 to P2,120 or US$ 47.72 in 2005 or a measly 7.2 percent increase ².

Health spending in the Philippines is mostly private or out-of-pocket. Nearly 60 percent of all health spending here is out-of-pocket ².

WHO defines catastrophic health spending as any of the following: [a] it happens when households reduce their basic expenditures in order to cope with paying the medical bills of one or two of their family members, [b] it may be equal or above 40% of the household's capacity to pay, and [c] there is no consensus on what the catastrophic threshold is.

Poor families define catastrophic health spending in very simple terms: it is a choice between being unhealthy or being poorer.

The government response made thru the Department of Health (DOH) to counteract out-of-pocket health spending is to increase social insurance coverage ³. It presents the framework below as for health sector reform:

In terms of health indicators like infant and maternal mortality rates, the Philippines has shown improvement from 1950 to 2009, but lags behind when the same figures are compared with its Asian neighbors like Thailand, Malaysia, Singapore, Vietnam, Korea and Japan. It only fares better than Indonesia ⁴.

Professor Phua Kai Hong of Singapore acknowledges that while there is substantial growth of social insurance in the Asia-Pacific region, the current predominate health spending method is still out-of-pocket. In China, for example, 50 - 60 percent of the total health budget is spent on drugs and diagnostics.

Slide from Prof. Phua Kai Hong, NUS

Health Systems Financing:

Examples from the Asian Region

Prof. Hong also said showed the health expenditures as percentage of GDP of developed countries. "But don't be misled," he said. "It's not how much countries spend that's really important, it's about getting the expected results. The questions to ask are if people get well or if they die in spite of all the health spending."

Slide from Prof. Phua Kai Hong, NUS

Health Systems Financing:

Examples from the Asian Region

What we can learn from the Singapore experience ---In the figure above, Prof. Hong gave reasons for Singapore's high health performance ranking in spite of its low per capita health expenditure: [a] their relatively high GNP, [b] their lower consumption due to their age structure, [c] their strong budgetary controls on public spending, [d] the absence of a comprehensive health insurance, and [e] government subsidies for public health and differential pricing for personal consumption.

UK Ambassador Stephen Lille gave a picture of what the UK National Health Service (NHS) is. Founded in 1948, it has these 3 magnificent core principles: [a] it meets the needs of everyone, [b] it is free at the point of delivery, and last, but most important I think is, [c] it is based on clinical need, and not the ability to pay.

Slide from H.E. UK Ambassador Stephen Lille,

The UK National Health Service

The UK Ambassador ended his talk with this quote from Aneunn Bevan, the NHS architect: "No society can call itself civilized if a sick person is denied medical aid because of lack of means." Ouch! There's the rub.

To many Filipinos, good health has always been associated with the availability of medicines and the capacity to pay for their respective prescribed dosages made by physicians. This is sad as this shows that the current mindset still remains to be curative and not preventive.

Because good health = availability of medicines, the drive is to make the government go beyond the Cheaper and Quality Medicines Law, go beyond the Maximum Drug Retail Price (MDRP) Executive Order, go beyond the Food and Drug Authority Law, and go beyond the Generic Act of 1988. MDRP should have expanded coverage and include all essential medications. This remains to be a great challenge for the next President of the Philippines.

There must also be a bridge between health financing and quality of care delivered. Poor quality generates additional costs and current financing arrangements may impede health improvements.

Slide from Dr. Madeleine de Rosas-Valera, WHO-WPRO

Patient Quality and Safety:

A Requirement for Successful Health Financing

Mayor Sonia Lorenzo of San Isidro, Nueva Ecija, a small town in Northern Philippines, gave a talk on how a local government unit is able to cope on health expenditure problems. She cites the value of volunteerism among citizens, the importance of integrating health in schools, allotting 16 percent of municipal funding to health concerns, and having at least 10,000 families enrolled in social insurance with member co-sharing.

Overall, my verdict on this summit is more than satisfactory. Presentations were able to identify the problems and suggest possible solutions. My only criticism is that it tried to cover so many topics in such a short time, to the detriment of the audience missing out taking their lunch. Next time, organizers should make this at least a two-day affair.

In summary, I think the main problems in health financing in the Philippines are:

Not enough money available - holds true for both the citizens, who spend mostly out-of-pocket for their health expenditures, and the government, which is tasked to address all health need problems.
Weak Political will - the next President should have a stronger will to make health a priority in his administration programs. The next Health secretary should also have strong public health leadership skills.
Corruption - needs to be stopped so lost money can be channeled to number 1 where it is mostly needed.
Preventive, Not Curative - Filipinos need to learn that in the long run, an ounce of prevention is cheaper and goes a long way than the more expensive pound of cure.

_______________
Sources: 1 - Dr. Alvin Caballes, Social Medicine Unit, UP Manila
             2 - NCSB 2005, Philippine National Health Accounts PNHA
             3 - Dr. Liezel Lagrada, DOH
             4 - Dr. Eduardo Banzon, World Bank

The likelihood of having appendicitis in a lifetime is 7 percent. At present, if one undergoes appendectomy, the total expense from the operation and hospitalization is around Php 70,000.00 or US$ 1,574.00 (1 US$ = Php 44.48) ¹.

For Filipino women, the likelihood of having breast cancer in a lifetime is 12 percent. After being diagnosed, expenses will most likely run in the range of Php 1.5 million or US$ 33,760.97 for the first year, and around Php 120,000.00 or US$ 2,700.88 per year for the next four years, excluding doctors' professional fees ¹.

Latest available national health account data available is 2005. It shows a per capita health spending of P1,978 or US$ 44.52 in 2004 to P2,120 or US$ 47.72 in 2005 or a measly 7.2 percent increase ².

Health spending in the Philippines is mostly private or out-of-pocket. Nearly 60 percent of all health spending here is out-of-pocket ².

WHO defines catastrophic health spending as any of the following: [a] it happens when households reduce their basic expenditures in order to cope with paying the medical bills of one or two of their family members, [b] it may be equal or above 40% of the household's capacity to pay, and [c] there is no consensus on what the catastrophic threshold is.

Poor families define catastrophic health spending in very simple terms: it is a choice between being unhealthy or being poorer.

The government response made thru the Department of Health (DOH) to counteract out-of-pocket health spending is to increase social insurance coverage ³. It presents the framework below as for health sector reform:

In terms of health indicators like infant and maternal mortality rates, the Philippines has shown improvement from 1950 to 2009, but lags behind when the same figures are compared with its Asian neighbors like Thailand, Malaysia, Singapore, Vietnam, Korea and Japan. It only fares better than Indonesia ⁴.

Professor Phua Kai Hong of Singapore acknowledges that while there is substantial growth of social insurance in the Asia-Pacific region, the current predominate health spending method is still out-of-pocket. In China, for example, 50 - 60 percent of the total health budget is spent on drugs and diagnostics.

Slide from Prof. Phua Kai Hong, NUS

Health Systems Financing:

Examples from the Asian Region

Prof. Hong also said showed the health expenditures as percentage of GDP of developed countries. "But don't be misled," he said. "It's not how much countries spend that's really important, it's about getting the expected results. The questions to ask are if people get well or if they die in spite of all the health spending."

Slide from Prof. Phua Kai Hong, NUS

Health Systems Financing:

Examples from the Asian Region

What we can learn from the Singapore experience ---In the figure above, Prof. Hong gave reasons for Singapore's high health performance ranking in spite of its low per capita health expenditure: [a] their relatively high GNP, [b] their lower consumption due to their age structure, [c] their strong budgetary controls on public spending, [d] the absence of a comprehensive health insurance, and [e] government subsidies for public health and differential pricing for personal consumption.

UK Ambassador Stephen Lille gave a picture of what the UK National Health Service (NHS) is. Founded in 1948, it has these 3 magnificent core principles: [a] it meets the needs of everyone, [b] it is free at the point of delivery, and last, but most important I think is, [c] it is based on clinical need, and not the ability to pay.

Slide from H.E. UK Ambassador Stephen Lille,

The UK National Health Service

The UK Ambassador ended his talk with this quote from Aneunn Bevan, the NHS architect: "No society can call itself civilized if a sick person is denied medical aid because of lack of means." Ouch! There's the rub.

To many Filipinos, good health has always been associated with the availability of medicines and the capacity to pay for their respective prescribed dosages made by physicians. This is sad as this shows that the current mindset still remains to be curative and not preventive.

Because good health = availability of medicines, the drive is to make the government go beyond the Cheaper and Quality Medicines Law, go beyond the Maximum Drug Retail Price (MDRP) Executive Order, go beyond the Food and Drug Authority Law, and go beyond the Generic Act of 1988. MDRP should have expanded coverage and include all essential medications. This remains to be a great challenge for the next President of the Philippines.

There must also be a bridge between health financing and quality of care delivered. Poor quality generates additional costs and current financing arrangements may impede health improvements.

Slide from Dr. Madeleine de Rosas-Valera, WHO-WPRO

Patient Quality and Safety:

A Requirement for Successful Health Financing

Mayor Sonia Lorenzo of San Isidro, Nueva Ecija, a small town in Northern Philippines, gave a talk on how a local government unit is able to cope on health expenditure problems. She cites the value of volunteerism among citizens, the importance of integrating health in schools, allotting 16 percent of municipal funding to health concerns, and having at least 10,000 families enrolled in social insurance with member co-sharing.

Not enough money available - holds true for both the citizens, who spend mostly out-of-pocket for their health expenditures, and the government, which is tasked to address all health need problems.
Weak Political will - the next President should have a stronger will to make health a priority in his administration programs. The next Health secretary should also have strong public health leadership skills.
Corruption - needs to be stopped so lost money can be channeled to number 1 where it is mostly needed.
Preventive, Not Curative - Filipinos need to learn that in the long run, an ounce of prevention is cheaper and goes a long way than the more expensive pound of cure.