A Strategy for Financing Priority F1 Investments

A Strategy for A Strategy for Financing Priority F1 Financing Priority F1

InvestmentsInvestments

National Staff MeetingNational Staff MeetingDepartment of HealthDepartment of Health

April 19-21, 2006April 19-21, 2006

Overall Approach to DevelopingOverall Approach to DevelopingA Financing StrategyA Financing Strategy

►Proposed investmentsProposed investments

►Rationalizing investmentsRationalizing investments

►Available sources of financing Available sources of financing

►Implementation thru budget Implementation thru budget reforms reforms

Proposed Investments – 16 Convergence Proposed Investments – 16 Convergence SitesSites

►Total requirement = P7.8B over 5 yearsTotal requirement = P7.8B over 5 years Average per year = P1.6BAverage per year = P1.6B Average per site per year = P0.1BAverage per site per year = P0.1B

►Expected DOH support = P0.58B for 5 yrsExpected DOH support = P0.58B for 5 yrs Average of P7.2M per site per yearAverage of P7.2M per site per year Largely TA/TR supportLargely TA/TR support

►PHIC premium counterpart = P7.2BPHIC premium counterpart = P7.2B Average of P90M per site per yearAverage of P90M per site per year Assumes high enrollment and 90/10 sharingAssumes high enrollment and 90/10 sharing

Proposed Investments – Proposed Investments – National Support for Service deliveryNational Support for Service delivery

► Total requirement = P29.9B over 5 yearsTotal requirement = P29.9B over 5 years Average per year P5.98B per yearAverage per year P5.98B per year

► ComponentsComponents Public health = P29BPublic health = P29B Health promo = P0.2BHealth promo = P0.2B HEMS = P0.2BHEMS = P0.2B NEC = P0.3BNEC = P0.3B NCHFD = P0.2BNCHFD = P0.2B

► Investments for retained hospitals assumed Investments for retained hospitals assumed to be limited to revenuesto be limited to revenues

Proposed Investments - National Proposed Investments - National Support for RegulationSupport for Regulation

►Total requirement = P0.9B over 5 yearsTotal requirement = P0.9B over 5 years Average per year = P180MAverage per year = P180M

►Components:Components: BFAD = P0.6BBFAD = P0.6B PMU50 = P0.2BPMU50 = P0.2B BHFS BHFS = P0.1B = P0.1B BHDT = no estimate submittedBHDT = no estimate submitted BQIHSBQIHS = no estimate submitted = no estimate submitted

Proposed Investments – Proposed Investments – National Support for the NHIPNational Support for the NHIP

►Total requirement = P23.5 billion over Total requirement = P23.5 billion over 5 years5 years Average per year = P4.7 billionAverage per year = P4.7 billion

►Other investment concernsOther investment concerns National government arrearsNational government arrears EO 276 arrearsEO 276 arrears

Proposed Investments – Proposed Investments – National Support for GovernanceNational Support for Governance

►Total requirement = P7.5BTotal requirement = P7.5B Average per year = P1.5BAverage per year = P1.5B

►ComponentsComponents HRH = P6BHRH = P6B IMS = P1.3BIMS = P1.3B Others = P0.2BOthers = P0.2B

►CHD stewardship = not yet includedCHD stewardship = not yet included

Summary of Proposed Summary of Proposed InvestmentsInvestments

►TOTALTOTAL = P69.6B= P69.6B►16 sites 16 sites = P 7.8B= P 7.8B►National supportNational support = P61.8B= P61.8B

►Average per year Average per year = P 13.92B= P 13.92B Estimated requirements exceed the Estimated requirements exceed the

proposed 2006 DOH budgetproposed 2006 DOH budget

Rationalizing Proposed Rationalizing Proposed InvestmentsInvestments

► Focus on incremental investment Focus on incremental investment requirementsrequirements

Exclude those already funded (DOH, PHIC, LGU, Exclude those already funded (DOH, PHIC, LGU, FAPS)FAPS)

Remove overlaps, duplication, redundancyRemove overlaps, duplication, redundancy► Those with clear and valid basis for cost Those with clear and valid basis for cost

estimatesestimates► Prioritize those that meet F1 criteria (AO Prioritize those that meet F1 criteria (AO

2005-0023)2005-0023) Doable given available resourcesDoable given available resources Sufficient groundwork and buy-inSufficient groundwork and buy-in Triggers a reform chain reactionTriggers a reform chain reaction Produces tangible results and generates public Produces tangible results and generates public

supportsupport

Rationalizing 16 4-in-1 Site Rationalizing 16 4-in-1 Site Fund Requirements - RESULTSFund Requirements - RESULTS

BeforeBefore AfterAfter

DOHDOH P0.6BP0.6B P0.1BP0.1B

PHICPHIC P7.2BP7.2B P1.5BP1.5B

TOTALTOTAL P7.8BP7.8B P1.6B (=0.3 per P1.6B (=0.3 per year)year)

Examples of items removed or reduced:

•LGU requests for additional TA/TR/RX already being funded in regular program (e.g. TB-DOTS)

•IP enrollment based on municipal poverty rates and conservative assumption on enrollment growth

•Items that are part of LGU counterpart (e.g. salaries, TEV, local monitoring, etc.)

•Non-priority activities like study tours, community-based health financing

Rationalizing 16 4-in-1 Site Rationalizing 16 4-in-1 Site Fund Requirements - RESULTSFund Requirements - RESULTS


DOHDOH P0.6BP0.6B P0.1BP0.1B

PHICPHIC P7.2BP7.2B P1.5BP1.5B

TOTALTOTAL P7.8BP7.8B P1.6B (=0.3 per P1.6B (=0.3 per year)year)

Examples of items removed or reduced:

•LGU requests for additional TA/TR/RX already being funded in regular program (e.g. TB-DOTS)

•IP enrollment based on municipal poverty rates and conservative assumption on enrollment growth

•Items that are part of LGU counterpart (e.g. salaries, TEV, local monitoring, etc.)

•Non-priority activities like study tours, community-based health financing

Rationalizing Fund Requirements Rationalizing Fund Requirements for National Support - RESULTSfor National Support - RESULTS


Service deliveryService delivery P29.9BP29.9B P3.0B (=P0.6B per year)P3.0B (=P0.6B per year)

Examples of items reduced or removed:

• Items already funded by DOH budget (e.g. TB drugs, vaccines, etc.) =

• Estimates based on needs of entire population were reduced by at least 15% to account for private sector utilization and excessive buffer stocks

• MIS needs by program overlap with IMS proposal

• Redundant and repetitive TA/TR activities (e.g. policy guidelines development)



Financing Financing P23.5BP23.5B P3.5B (P0.7B per year)P3.5B (P0.7B per year)


• Enrollment limited to areas with valid poverty id system

• Conservative projection of enrollment growth using municipal poverty rates were used

• Arrears not included



RegulationRegulation P0.9BP0.9B P0.3B (P0.06B/year)P0.3B (P0.06B/year)

GovernanceGovernance P7.5BP7.5B P1.4B (P0.28B/year)P1.4B (P0.28B/year)


• Cost requirements that did not show any basis or estimation procedures

• Only HRH requirements for DOH were included

Summary of Rationalized Summary of Rationalized Investments Over 5 YearsInvestments Over 5 Years

► 16 sites16 sites = P1.6B= P1.6B

►National supportNational support = P8.2B= P8.2B

Service deliveryService delivery = P3.0B= P3.0B RegulationRegulation = P0.3B= P0.3B FinancingFinancing = P3.5B= P3.5B GovernanceGovernance = P1.4B= P1.4B

►Grand totalGrand total = P9.8B = P9.8B (P1.96B per year)(P1.96B per year)

Matching Needs & Sources of FundsMatching Needs & Sources of Funds (average per year) (average per year)

SOURCESOURCE LOWLOW HIGHHIGH

Budget increaseBudget increase 0.00.0 P2B (20%)P2B (20%)

Usable FAPSUsable FAPS 0.0 (0%)0.0 (0%) P1.5B (100%)P1.5B (100%)

Revenue sharingRevenue sharing P0.15B (10%)P0.15B (10%) P0.3B (10%)P0.3B (10%)

Efficiency gains Efficiency gains (%MOOE)(%MOOE)

0.1B (3%)0.1B (3%) 0.2B(5%)0.2B(5%)

Available fundsAvailable funds P0.25BP0.25B P4.0BP4.0B

RequirementRequirement P1.96BP1.96B P1.96BP1.96B

GAPGAP P1.71BP1.71B (P2.04B)(P2.04B)

Financing Issues Under the LOW Financing Issues Under the LOW ScenarioScenario

►Financing GAP = P1.7B (average per Financing GAP = P1.7B (average per year)year)

OPTIONS:OPTIONS:►Renegotiate FAPSRenegotiate FAPS►Prioritize on “zones” & MDG linked Prioritize on “zones” & MDG linked

programsprograms►Secure IP subsidy for roll-outSecure IP subsidy for roll-out►Regulation & governance to Phase 2Regulation & governance to Phase 2

Financing Issues Under the HIGH Financing Issues Under the HIGH ScenarioScenario

►Financing SURPLUS = P2B (average Financing SURPLUS = P2B (average per year)per year)

PRIORITIES:PRIORITIES:►CHD stewardship & roll-out sitesCHD stewardship & roll-out sites►Revolving upgrade fund poolRevolving upgrade fund pool►Additional public health commoditiesAdditional public health commodities►Expand IP enrollmentExpand IP enrollment

Allocation of Incremental Priority Investment Allocation of Incremental Priority Investment Using New Budget StructureUsing New Budget Structure

►National supportNational support P4.4P4.4 GovernanceGovernance P1.40B P1.40B Policies & standardsPolicies & standards P0.75B P0.75B Program implementation P2.25BProgram implementation P2.25B

►CHD Operations*CHD Operations* P0.4BP0.4B GovernanceGovernance P0.22B P0.22B Field implementationField implementation P0.18B P0.18B

►PHICPHIC P5.0BP5.0B►TOTALTOTAL P9.8BP9.8B**Note: CHD operations budget only reflects those implied by Note: CHD operations budget only reflects those implied by

submissions from national programs and the 16 convergence submissions from national programs and the 16 convergence sitessites

Performance Based Disbursement Plan Performance Based Disbursement Plan

► National level governance, policies & standards, National level governance, policies & standards, and program implementationand program implementation weighted average of CHD performanceweighted average of CHD performance accomplishment of benchmarks for specific interventions accomplishment of benchmarks for specific interventions

(e.g. seals, scorecards, budget reforms, SDAH, fiduciary (e.g. seals, scorecards, budget reforms, SDAH, fiduciary reforms, etc.)reforms, etc.)

cost recovery targets, target efficiency gainscost recovery targets, target efficiency gains

► CHD Governance & field implementationCHD Governance & field implementation accomplishment of benchmarks contained in 16 sitesaccomplishment of benchmarks contained in 16 sites LGU service level agreements – by disease or programLGU service level agreements – by disease or program improvements in LGU scorecard (overall & by component)improvements in LGU scorecard (overall & by component)

► PHIC PHIC new enrollment using valid IP identification toolnew enrollment using valid IP identification tool quality of services received by membersquality of services received by members level of financial protectionlevel of financial protection

Summary (1)Summary (1)► Proposed investments (=P69.6B) needed to Proposed investments (=P69.6B) needed to

be trimmed; gaps remain (CHD & hospitals)be trimmed; gaps remain (CHD & hospitals)

► Rationalization exercise using F1 criteria Rationalization exercise using F1 criteria derived priority incremental investments derived priority incremental investments (=P9.8B)(=P9.8B)

► Available sources of funds depending on two Available sources of funds depending on two scenarios (from P0.25B to P4B)scenarios (from P0.25B to P4B) If LOW, address deficitIf LOW, address deficit If HIGH, prioritize use of surplusIf HIGH, prioritize use of surplus

Summary (2)Summary (2)► Investments must be implementation Investments must be implementation

thru budget reforms thru budget reforms ► Incremental amounts allocated using Incremental amounts allocated using

new budget structurenew budget structure► Investments disbursed using Investments disbursed using

performance benchmarksperformance benchmarks►Budget reform plan must be backed by Budget reform plan must be backed by

joint agreement between DOH, and joint agreement between DOH, and DBM, DOFDBM, DOF

Documents

A Strategy for Financing Priority F1 Investments