An Approach to FinancingUniversal Health Care

Orville SolonUP School of Economics

June 29, 2010

Key Arguments

• The money already being spent in the health system is sufficient to pay for a critical package of health services for all Filipinos.

• The challenge is to be able to pool and manage the funds to: (a) address inequities, and (b) remove inefficiencies

How Much is Being Spent for Health (2006 Philippine National Health Accounts)

• Total health care spending is at least P225 billion

• Health spending by national and local government units total P52.4 billion

• Social health insurance accounts for P19.1 billion

• Family out-of-pocket spending is P128 billion

Sources and Uses of Health Expenditures – Health Reform Targets

USE OF FUNDS

SOURCE OF FUNDSTOTAL BY USE

GOVERNMENT2/ SOCIAL INSURANCE3/ PRIVATE SECTOR

Target Actual Target ActualOut of Pocket Others4/

Target ActualTarget Actual Target Actual

Personal Health Care

10 9 25 8 20 57 7 8 62 83

Public Health Care

20 10 0 0 0 0 0 0 20 10

Others 10 4 5 1 0 0 3 2 18 7

TOTAL BY SOURCE

40 23 30 9 20 57 10 10 100 100

Reliance on Family Out-of-Pocket Spending Perpetuates Inequities

Addressing Inequities – Progressive NHIP Premium Contributions

Addressing Inefficiencies – Raising Value for Money in the NHIP

• Family out-of-pocket must be converted to additional premium payments of roughly P6 billion per year in premium payments

• But value for money from existing expenditures must be raised before pouring in additional premium payments

Leakages in NHIP Implementation

Target = 100 Fully ProtectedFilipinos

53eligible to file claims

53

22 avail of services covered in accredited facilities

22 8

The 22 who availed of benefits is only equivalent to 8 fully protected Filipinos

A Performance Yardstick for NHIP Implementation: Benefit Delivery Rate• Only 8% of Filipinos are fully protected by the

NHIP. They are:– Eligible to claim (registered, paid contributions)– Knows entitlements, able to access and avails

health services from accredited providers– Total health care expenditures fully reimbursed

• This is what we refer to as the PhilHealth Benefit Delivery Rate

BDR, All Population, 2008Region Coverage Availment Rate Support Value BDR

Philippines 52.8% 42.3% 34.4% 7.7%I-Ilocos Region 64.8% 19.4% 28.7% 3.6%II-Cagayan Valley 48.0% 10.4% 37.6% 1.9%III - Central Luzon 54.0% 24.0% 28.5% 3.7%IVA - CALABARZON 62.3% 34.6% 26.5% 5.7% IVB - MIMAROPA 36.0% 25.5% 31.9% 2.9%V - Bicol Region 45.7% 60.5% 40.0% 11.1%VI - Western Visayas 44.0% 41.1% 37.7% 6.8%VII - Central Visayas 53.8% 60.8% 26.6% 8.7%VIII - Eastern Visayas 37.6% 71.8% 31.6% 8.5%IX - Zamboanga Peninsula 36.3% 91.1% 40.2% 13.3%X - Northern Mindanao 73.9% 51.3% 41.8% 15.8%XI - Davao Peninsula 43.2% 64.5% 41.2% 11.5%XII - SOCCSKSARGEN 35.2% 91.5% 37.1% 11.9%NCR 77.0% 32.9% 21.2% 5.4%CAR 56.7% 36.7% 35.6% 7.4%ARMM 13.6% 87.0% 37.2% 4.4%CARAGA 50.8% 28.4% 42.2% 6.1%

Potential BDR: 77% * 91% * 42% = 29%

BDR by component: Sponsored, non-Sponsored, and by age group

Coverage Availment Support BDR

National 53% 22% 34% 8%

Sponsored 49% 33% 50% 8%Non-Sponsored 55% 41% 28% 6%

Under 21 60% 32% 36% 7%

Under 5 50% 27% 36% 5%

Elderly 52% 58% 27% 8%Note: BDR for the SP owes to higher support value while that for the elderly is due to higher availment.

BDR by special benefit package

Coverage Availment Support BDR

TB DOTS 53% 0.05% 76% 0.02%

MCP 43% 0.85% 73% 0.27%

Direct estimate for OPB BDR is 0.3%

Re-organizing the Financing of Health Care

• National Government: coordination, regulation, surveillance, and national public health threats

• Local Government (preferably provincial): localized public health threats and basic clinical care

• National Health Insurance: critical personal health care

• Individual family finances: preference driven health services