Engaging the Private Sector for UHC

All Rights Reserved. Maria Elena Baltazar Herrera. 2015

ENGAGING THE PRIVATE SECTOR FOR UHC

HEALTH SECTOR ROUND TABLE

Asia Think Tank Summit 2015 Asian Development Bank

Manila

20 to 22 May 2015

Maria Elena (Maya) Baltazar Herrera, FASP, PhD

Asian Institute of Management

Asia Network for Capacity Building

in Health Systems Strengthening (ANHSS)

Disclaimer: The views expressed in this paper/presentation are the views of the author and do

not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board

of Governors, or the governments they represent. ADB does not guarantee the accuracy of the

data included in this paper and accepts no responsibility for any consequence of their use.

Terminology used may not necessarily be consistent with ADB official terms.


UHC in Asia: Engaging the Private Sector

Diversity in Asia. Many things happening. e.g. ASEAN 2015

The private sector is significant in many Asian countries

Most Asian countries are interested in leveraging the private sector

Asia has diverse health systems but there is emerging interest in SHI as a mechanism for UHC

There is a wide spectrum for collaborating with the private sector for health system goals and many methods have been tried

There are lessons to be learned as well as continuing challenges


Asia: Diversity of health systems

6

Total Health Expenditure (THE)

>60%

40-60%


Growth of number of private hospitals

Trends Malaysia: 18%

increase in the share of hospitals market from 2000 to 2011

China: 17% increase of the proportion of number of hospitals in private sectors from 2005 to 2010

Japan, Singapore, Taiwan: Stable over 11 years

7

Pri

va

te h

os

pit

als

(in

% o

f to

tal n

um

be

r o

f h

os

pit

als

)

Private hospitals (%), 2000 - 2011


Growth of private hospital beds

8

Pri

va

te h

os

pit

al b

ed

s (

in %

of

tota

l n

um

be

r o

f h

os

pit

al b

ed

s) Private hospital bed (%), 2000 - 2011


Growth of private health sector

9

Pri

vate

Healt

h E

xp

en

dit

ure

(in

% o

f to

tal)

Private health expenditure (% out of total), 1995 - 2010


Complex Environment (Sample: SHI in Laos) 2011 2012 2013 2015 2020

Law: Charter

And Mandate

Establish NHI

Organization

Establish

Technical

Functions

Four Baskets,

One Fund

Establish LT Funding

For Indigent Cover

Benefit Delivery

Database

Create a Plan

For Membership

Management

Universal

Coverage

Develop a Plan

For

Provider Mgt

National QA

and

Accreditation

Capacity Building

50%

Coverage

Merging of

Membership

Databases

Begin Merging

at Provincial Level

Nationwide

Risk

Pooling

Capacity Building on SHI Technical

And Operational Functions

Long-term IT Plan

Development of Quality

Standards,

Capacity Building for Function

Full Merge

Integrate

d

NHI IT

System

ORGANIZATIONAL

FUNDING

OPERATIONAL

MEMBERSHIP

PROVIDERS

Fully

Sustainable

Funding

30%

Coverage

14%

Coverage

Evaluate Benefits,

Contributions, Payment

Fully

Capacitated

Appropriation

to support Law

Transfer Staff

& Budget


Evolving role of private sector in health systems in Asia

Capital

Investment

Provision

Entrepreneur

Intermediary

Regulator

Financing

Insurance

11


PPP Mechanisms Contracting: Outsourcing

Contracting: Purchasing

Operating Contracts

Private Finance Initiative

Public Private Integrated Partnerships

Build Operate Transfer

Build Own Operate Transfer (BOOT)

Co-location


Public Private Partnerships in Health

Primary care

Public health

Vaccinations

Maternal &

child health

Management

of entire

hospital or

network of

hospitals

and/or clinics

Lab analysis

Diagnostic

tests

Medical

equipment

maintenance

IT equipment &

services

Maintenance

Food

Laundry

Cleaning

Billing

Hospital Management

Specialized

Clinical

Services

Clinical

Support

Services

Primary

Care

Non-

Clinical

Services

Design

&

Construction

Detailed designs

Building

construction

Medical

equipment

Capital financing

Dialysis

Radio-

therapy

Day surgery

Other

specialist

services

Wide Range of Alternatives

Under a PPP, a government or national health insurer contracts with a private

partner (for-profit or not-for-profit) for a health care service and/or facility

Governments can select from a wide range of options depending on their needs


Potential Collaboration with Academia Better understanding of local situation

Mapping

Capacity Building Policy Makers and Implementors Knowledge Events, Courses, Workshops. with UHC, SHI.

Learning from Experience Identifying key Projects and documenting lessons

Work with an international network

Focus on key needs: Pilots and Evaluations

Key areas (RH), Centrally managed broad interventions

Easy Reference Material: Evidence, Tools


Harding-Montagu Framework Applied to Private Hospital & Specialist Service Sector

Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.

Strategy Assessment Goal Tools

PHSA

Intermediaries

Govt. Capacity

Delivery

Financing

Mostly Private Provision

Mixed Mostly Govt

Provision

Mostly OOP Mixed or transition

Mostly Govt or Social Health

Insurance

Committed Leadership

Dedicated Staff or PPP

Unit

Experience

Facility & Professional Associations

Grow

Harness

Convert

Restrict

Relationship to Government

Distribution (equity)

Efficiency

Quality of Care

Insurers NGOs

EQA / Accreditation

Taxation, Ownership, & Subsidy

Contracting

PPPs

Regulation

Information / Recognition


MAPPING THE ENVIRONMENT FOR UHC


Environment

& Situation Reach Availment Support

Demographics

Indigents

Health

Environment

Policy

Awareness

Desirability

Affordability

Ease/

Convenience

Information

Availability

Requirements

Effective

Requirements

Efficiency

Policy

Ease &

Availability

Benefit Design

Locus of Care,

Treatment

Protocol

Purchasing,

Contracting


Sample: Differential Analysis Coverage:

Formal: High compliance

Sponsored: LGU decision

IPP: Low

Availment: High for Formal

Low for Sponsored

Support: Low for Formal (Low for NCR)

High for Sponsored (High for ARMM)


UH

C D

imen

sio

ns

Which people?

Co

st

Sh

arin

g

Setting Sectoral Targets Analyzing by Sector Outcomes


Thank You!

[email protected]

Maria Elena (Maya) Baltazar Herrera


Maria Elena Maya Baltazar Herrera, FASP, PhD

Assoc. Professor, Asian Institute of Management

Core Teaching: Strategy and Policy, Finance and Governance, Organization Development.

Research and Interests: Enterprise Risk Management, Corporate Social Responsibility, Entrepreneurship, Health Finance and Policy, Governance of Family Corporations

Fellow and Former President, Actuarial Society of the Philippines

President & Co-Founder , Solutions Incorporated, an Abelica Global Firm

Columnist, The Manila Standard Today


Maria Elena Maya Baltazar Herrera, FASP, PhD

Experience:

CFO, Asian Institute of Management

Research Director, AIM RVR Center for CSR

VP, CFO and Actuary, The Manufacturers Life Insurance Corp. (Phils)

President, LTS Corporation

Consulting Actuary, The Wyatt Company Phils (now Towers Watson)

Head, Actuarial Department and Group Insurance Administration, Lincoln Philippine Life Insurance Corporation

ma

ya

_aim

@yahoo.c

om

Go

og

le m

e: M

aya B

altazar

Herr

era

On

Tw

itte

r:

ma

ya_aim

Inte

gra

tions.tum

blr.c

om

On

Fa

cebook: In

tegra

tions M

anila


EXTRA SLIDES


Hospital Financing Requirements Lot and Infrastructure (Bricks and Mortar)

Initial Outlay Lease/Rent Maintenance Costs

Equipment: Capital Expense (inc. Replacement) Maintenance

Operating Expenses: Fixed vs. Variable Staff: Health and Non-Health Non-staff Expenses Medical Services, Hotel expenses, General Administration


Non-Public Financing

Private Financing

User Fees

Private Health Insurance (PHI)

Private Sector Purchasing Contracts

Private Sector Bonds

Donations

Development Organization Financing

Grant Facility for Private Hospitals

Development Loan Facility for Private Hospitals


Public Financing

Direct Government Purchasing Contracts

Social Health Insurance Other government pre-payment fund (i.e. Health Equity Fund)

Free use of government land/ Donation Conditional Donations

Indirect Tax Exemptions: Income Tax

Allowed Deductions: Donations to Hospitals, etc.

Tax Subsidies/Exemptions for: Private Health Insurance (PHI) premiums

Hospital Construction/ Equipment/Others

Hospital-related Bonds/Debt Financing Instruments





PHSA

Intermediaries

Govt. Capacity

Delivery

Financing


Mixed Mostly Govt

Provision



Insurance



Unit

Experience


Grow

Harness

Convert

Restrict



Efficiency

Quality of Care

Insurers NGOs

EQA / Accreditation


Contracting

PPPs

Regulation



CONTEXT

Reference Slides


Diversity of Health Systems in Asia Jurisdictions

Total health expenditure (% of GDP)

Public health expenditure (% of THE)

Private health expenditure (% of THE)

Myanmar 2.0 12.1 87.9

Cambodia 6.0 21.5 78.5

Afghanistan 10.4 22.5 77.5

India 3.7 28.2 71.8

Pakistan 2.8 28.2 71.8

Singapore 4.5 31.4 68.6

Indonesia 2.8 36.1 63.9

Philippines 4.1 36.1 63.9

Bangladesh 3.7 36.5 63.5

Vietnam 6.8 37.1 62.9

Nepal 5.1 37.4 62.6

Sri Lanka 3.5 45.6 54.4

Lao PDR 2.6 46.5 53.5

Hong Kong SAR 5.2 49.4 50.6

China 5.0 54.3 45.7

Malaysia 4.4 55.5 44.5

Taiwan 6.6 56.8 43.3

Mongolia 5.5 57.0 43.0

Korea, Rep. 7.1 58.2 41.8

Maldives 6.2 60.8 39.2

Timor-Leste 5.7 74.7 25.3

Thailand 3.9 75.0 25.0

Papua New Guinea 4.1 75.2 24.8

Japan 9.2 80.3 19.7

Pacific island small states 6.1 81.7 18.3

Bhutan 4.3 84.6 15.4

29

> 60%

40 - 60%

< 40%

Source: World Bank Database, 2010


Health System: A complex Adaptive System

30

Components and Functions of the System Objectives of the System

Adapted from WHO World Health Report 2000

policy

Leadership and

Governance

(policy instruments)

Responsiveness

(to peoples non-medical

expectations)

Health

Fair (financial

contribution)

Delivering

services

(provision)

Financing

(collecting, pooling and

purchasing)

Creating resources

Health workforce Information Medical products,

vaccines and

technologies

Facilities Organizations

policy

policy

policy

refers Organization and Management

Social, Economic, Political Physical Environment

Local, National, Supranational

Population


Quality

Utilization

Need

Universal financial

protection

Final coverage

objectives

Health financing within the

overall health system

Revenue

collection

Pooling

Purchasing

Benefits

UHC intermediate

objectives

Equity in

resource

distribution

Efficiency

Rest of health

system

Transparency

and

accountability

Wider context/ extra-sectoral factors (SDH)

Health Financing and UHC


Cost sharing/user fees (provider payment)

Health care

Ind

ivid

uals

S

tew

ard

sh

ip o

f fi

nan

cin

g

(go

ve

rnan

ce

, re

gu

lati

on

, in

form

ati

on

)

Collection of funds

Provision of services

Purchasing of services

Pooling of funds

Allocation mechanisms


(provider payment)


Coverage

Coverage

Choice?

Choice?

Contributions


Policy

Instruments

Description Government Tools by Musgrove (1996) -

Application

Exhortation Dissemination of information

through persuasion and

discussion

Research product testing

Provider information treatment protocols, recommended drugs

Consumer information provider quality comparisons, consumers rights, dangers of smoking, rehydration methods, birth spacing

(Information)

Taxation Encouraging or discouraging behaviors through manipulation

of tax incentives / disincentives

Taxation

(Regulation and Mandates)

Expenditure Government distribution of funds to achieve particular aims in the

form of cash or in-kind support

(provision of space / personnel /

subsidizing activities)

Budgetary support

Subsidies

Concessions

Contracting

(Financing)

Regulation Setting rules of behaviors backed up by directly by the sanctions

(penalties) of the state

Licensure

Accreditation

Employee health insurance

Required immunization of school children

(Regulation and Mandates)

Public Ownership Government directly running the

service in question

Rural public hospitals and clinics

Preventive services

Sanitation

(Direct Provision) 33

Policy Instruments (Government Tools)


Collection and pooling of funds

Expansion of social health insurance systems by using general revenues to subsidize the poor and (the non-poor) informal sector

Philippines, Indonesia, Vietnam

may be pooled in a single health insurance fund with payroll contributions from the formal sector


PPP REFERENCE SLIDES


Predominant roles of private hospitals

Social health insurance (Japan, South Korea, Taiwan) and SHI-based Mixed system (Philippines)

Private hospitals function as part of the health system

Private hospitals engaged in the health system through the social health insurance

Public hospitals may be corporatized and compete with private hospitals

Historically, private hospitals predominate

36


Predominant roles of private hospitals

Taxed based collection/Towards social health insurance/Medisave

Influenced by markets

Driven by government policies

37


Commercialized mixed health systems (I) Unclear line or structure between public and private Definition [Mackintosh and Koivsusalo, 2005]

the provision of health care services through market relationships to those able to pay, including marketisation, commoditisation, privatisation and liberalisation

Marketisation: Shift from free provision/inputs to fee-for-service provision/cash payments for inputs

Commoditisation: Specification of items of service provision that is sold on a market

Privatisation: Shift from government owned asset to private owned

Liberalisation: Removal of constraints on private provision of health care services/purchases/sales

38


Commercialized mixed health systems (II)

Different patterns:

Different mixes of public and private

Different types of public and private from small scale and unregulated providers to corporate providers

39


Epidemiological transition

Infectious diseases

Double burden of diseases

Chronic diseases

40

China, India,

Indonesia, Malaysia,

Philippines, Vietnam,

Thailand

Hong Kong, Japan,

South Korea,

Singapore, Taiwan





PHSA

Intermediaries

Govt. Capacity


Delivery

Financing


Mixed Mostly Govt

Provision



Insurance



Unit

Experience


Grow

Harness

Convert

Restrict



Efficiency

Quality of Care

Insurers NGOs

EQA / Accreditation


Contracting

PPPs

Regulation

Documents

Engaging the Private Sector for UHC