Measuring Social Return on Invements (SROI) of

Barangay Health CentersProposed Project

John Gokongwei School of ManagementWith SOSE Health Sciences Department

(Managerial Accounting Service Learning)

Health Situationer• “..., evidence of health service consisting basically of primary health

care interventions, indicates that the lower the group’s economic status, the less it uses health services.” (p. 1)

• “The disparity of health status among income groups is evident: the infant mortality rate among the poorest quintile of the population is more than twice the level of the richest quintile, and more than thrice for under-five mortality rate.” (p. 3)

• “The WHO database showed total per capita expenditure on health in the Philippines was at $177 from 2000–2004. This is relatively low by comparison to neighboring countries like Malaysia ($355) and Thailand ($257).” (p. 8)

• “Historically, the bias of government expenditures has been towards personal or curative care, especially hospitals.” (p. 12)

Source: Congressional Planning and Budgeting Department, 2008 Budget Briefer on Health

Opportunity: Upgrading the RHUs• Health facilities most utilized by the bottom 40% income

bracket: Rural Health Units in both rural and urban areas. (2002 Annual Poverty Indicator Survey APIS)

• DOH Health Sector Reform Agenda (2006): “… a reallocation of resources towards more spending on preventive care is only realistic if the quality of care in hospitals can be improved and basic care unnecessarily served at hospital level shifted towards health centers and RHUs.”

Devolved Health System (Post-1991)Regional hospital and medical centers (managed by DOH)

Provincial hospitals (managed by provincial govt)

Municipal or district hospitals (managed by provincial govt)

Devolved Health System (Post-1991)

City health offices (managed by city govt)

Rural Health Units (managed by municipal govt)

Barangay Health Units (managed by urban barangay & municipal govt)

Ongoing Reforms in Health Service Delivery

Result: Secondary and tertiary facilities are inundated with patients needing primary health care.

Problem: Public primary health facilities are perceived as: Being low quality, and are thus frequently bypassed. Clients are dissatisfied due to long waiting times; Offering inferior medicines and supplies; Poor diagnosis, resulting in repeated visits Lack medical and people skills of the personnel

available, especially in rural areas.

Aim: improving the accessibility and availability of basic and essential health care for all, particularly the poor.

Measuring Return on InvestmentsWhich business entity is more profitable?

Profit: P1 million Profit: P2 million

Incomplete information: How much was invested in each entity?

Company X Company Y

Measuring Return on InvestmentsWhich business entity is more profitable?

Profit: P1 million

Company X

Investment: P5 million

ROI: P1M/P5M = 20%

Measuring Return on InvestmentsWhich business entity is more profitable?

Profit: P1 millionInv’t: P5 million

Profit: P2 millionInv’t: P20 million

Company X Company Y

ROI: P1M/P5M = 20%

ROI: P2M/P20M = 10%

Social ROIMonetary equivalent of Social

Benefits & Outcomes

Money, Supplies, People’s Time, Borrowed Facilities

SROI =

Social ROISchool Feeding Program: 60 malnourished grade 1 to 3 children fed for 6 months.Target outcome: 20% increase in weight

Social ROIInvestment Requirements

Investments Details Costs1. Kitchen facilities inside BHC

Cooking equipment & utensils, storage space, work space, kitchen sink, etc.

P100,000

2. Recording & monitoring equipment/supplies

Weighing scale, office supplies, folders

P2,000

3. Flatware, cutlery, & drinking glasses

60 children X 50/child P3,000

4. Seminar for parents of children in feeding program

Snacks, hand-outs P3,000

Total: P108,000

Cost Components Details Costs1. Ingredients, cooking, & washing supplies

60 meals X 2 meals/day X 22 days/month X 6 months X P20/meal

P316,800

2. Time of mothers who cook & serve meals

3 mothers X 2 hours/day X 22 days/month X 6 months X P35/hour

P27,720

3. Time of health worker in recording & monitoring children’s weight & health

1 health worker X 3 hours/week X 26 weeks X P40/hour

P3,120

Total: P347,640

Social ROIOperating Costs

Social ROISocial Benefits

Benefits Details (Hypothetical) Duration Present Value*

1. Reduced visits to the BHC

60 children X 2 visits saved/year X P200/visit

3 years P61,850

2. Less medicine for illnesses

60 children X 3 sickness episodes per year X P300/episode

3 years P139,163

3. Better school attendance

60 children X 20% more than usual proportion of elementary children who proceed to high school X P2,000 higher monthly salaries after graduation

6 years after

graduating from HS

P776,853

Total: P977,866

* Annual value of benefits discounted at 8% (long-term govt bond rate)

Social ROIPutting all the Elements Together

SROI = P977,866 – P347,640P108,000

584%

SROI =Social Benefits – Operating Costs

Investments

SROI =

SROI of San Isidro Health Programs

SROI =

Higher agricultural productivity, greater tax collection, higher

municipal revenues, better test scores, longer life expectancies, etc.

Costs of upgrading RHUs, improving capability of key players, better

sanitation and waste management facilities

Health programs can be broken into their components and measured separately.

Using SROIUSES:

1. Forecasting the costs and benefits assuming that the activities meet their intended outcomes

2. Evaluating actual outcomes to see if the benefits exceeded the costs.

OUTCOMES:Vital information to help determine how resources can be most effectively allocated in the public health sector.

DECISION MAKERS:

LG executives Non-

government organization leaders

Foundations heads

Other stakeholders

The Proposed Project Managerial Accounting students currently enrolled with JGSOM,

and Health Science majors from SOSE, will work with BHCs from January to March 2011 to measure the SROI of their health facilities and programs.

The students’ work will be guided by their professors, and will be in fulfillment of their course requirements.

Important outcome: standard measurement methodologies will be developed for the more common aspects of BHC operations. To a large extent, the monetary conversion of the benefits accruing from better health would depend on the assessment of the stakeholders.

Timely Study• Drive for universal PhilHealth coverage by the Aquino

administration, especially among poorer segments of the population, must be complemented by availability of front-line health care facilities for PhilHealth members to fully realize benefits from membership.

• Greater consciousness towards pro-poor government programs, especially in the areas of social welfare, health, and education, will also encourage greater investments in Barangay Health Centers (BHCs) and Rural Health Units (RHUs) by local government officials.

• PhilHealth willing to provide funding for improving BHC/RHU infrastructure and programs from membership capitation fees.

Financing Health Care

Premium

BHCs

Reimbursements for health care services

Funding for infra-structure & health

programs

Health Care Service

s

LGUsPremium

Corporate Foundations

Filipino Families

Critical Success FactorsThe BHCs must have:• Active stakeholder groups which participate in the planning

and implementation stages of the health programs.• Reliable accounting records of their investments,

expenditures, and revenues.• Knowledgeable people who can provide information to the

students regarding their health programs. • Point persons who can set up meetings with the stakeholder

groups, including barangay and municipal officials, as well as accompany the students during their visits.

Project DetailsHealth Programs Covered in Study

Focus on those illnesses/conditions with PHIC reimbursements and which can be served by the BHCs:• Feeding and Child-related Diarrhea*• Adult Tuberculosis* (Diagnosis & Treatment)• Maternal Health (Pre-natal*, delivery*, post-natal*)

* Diagnostic tests and professional fees covered by PHIC.

Project DetailsInvestments Required to upgrade BHC to PHIC Accreditation Standards

A. Clinic Facilities1. Building2. Sanitation and safety standards3. Clinic condition4. Equipment and supplies5. Clinic staff

B. Service Capability1. Medical Consultation in Pediatrics, Internal Medicine, OB-

Gyne, Minor Surgery2. Lab Exams for CBC, Urinalysis, Fecalysis, Sputum microscopy

Project DetailsIdentification of Benefits

Direct: • Increase in Quality Adjusted Life-Years (QALY, also

known as Years of Healthy Life, or YHL) – fairly well-documented in health economics literature• Reduced drug expenses from healthier life• Others

Indirect:• Less absences in school/work• Savings in trips to hospitals if illness becomes acute• Others

Project DetailsGroup Organization

Each group made up of:5-6 2nd Year Managerial Accounting Students: • Estimate value of health benefits• Estimate costs of running health programs• Estimate investment costs related to infrastructure,

training, equipment, etc.

3 3rd or 4th Year Health Science Students (in service-learning subjects):• Identify components of health programs• Identify benefits of target clientele of health program

(literature review and community survey)• Identify investment requirements

Project DetailsPutting Everything Together

Study the health programs, benefits, costs, and investments of the RHU in San Isidro, Nueva Ecija. Compute SROI.

Study the 4 existing BHCs in Bagong Silang, Caloocan and 2 in Pansol, QC re investment requirements for PHIC accreditation

Estimate the potential SROI of health programs to be implemented through BHCs in Bagong Silang and Pansol.

SROI of Successful Health Programs

Investment Requirements

(3 groups, 1 per program)

(2 groups in Caloocan, 1 group in QC)

(All 6 groups)

Tentative ScheduleJan. 8, 2011: Orientation meeting for students and faculty re community health situation of target BHCs at Bagong Silang (Caloocan) and Pansol (QC), successful health programs at San Isidro (Nueva Ecija), and SROI framework.

Jan. 15: Kick-off meeting with local govt, health officials, and other stakeholder groups at San Isidro (AM), Pansol (AM) and Bagong Silang (PM)

Jan./Feb.: The students visit the communities and BHCs to gather and analyze data.

Mar. 1-15: Students prepare their reports.

Mar. 3rd week: Students present their findings to their classmates as part of a class learning activity, as well as to the stakeholders.

April: Students finalize their study, with inputs from faculty and stakeholders.