HEALTH SECTOR EXPENDITURE FRAMEWORK….A Multi-year Spending Plan for the Department of Health *

HEALTH SECTOR EXPENDITURE FRAMEWORK….A Multi-year Spending Plan for the Department of Health *

* Dr. Rosario G. Manasan

Senior Research Fellow

Philippine Institute for Development Studies

Consultant

FOR DISCUSSION PURPOSES ONLY

Outline of presentation Objective of the study

Patterns and trends in NG spending on health

Estimates of resource gaps in the context of DOH budget reforms

Alternative HSEF scenarios

To develop a policy-based multi-year expenditure estimates for the health sector or a health sector expenditure framework (HSEF) in support of the F1

Objective

Patterns/ trends in NG spending (1)

Figure 1. National Government Spending on Health

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,00012,00013,00014,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

DOH w ith Philhealth DOH w ithout Philhealth

Inf lation Adjusted w / Philhealth (1995 prices) Inf lation Adjusted w /o Philhealth (1995 prices)

National government spending on health deteriorating since 1999

Spending patterns and trends (3)

Figure 3. Distribution on DOH Budget

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

1998 1999 2000 2001 2002 2003 2004 2005 2006

GASS Policy Regulation SD - Public Health SD - Hospitals

Directions of budget reforms

Need to increase or secure allocations for public health; justified because of public good nature of public health

Need to “liberate funds” by increasing cost recovery and reducing subsidies to retained hospitals and regulatory agencies

Need to secure nat’l subsidies for premium to indigent program of PHIC to ensure sustainability of retained hospitals

Budget for DOH regulatory services

Budget Revenues

(in million pesos) (in million pesos)

BFAD 120 130 108.3BHDT 23 5 21.7BHFS 27 30 111.1BQIHS* 45 60 133.3Total 215 225 104.7

Table 6. Budget of regulatory agencies, 2004Agency Rev/

Budget (%)

With greater cost recovery from the DOH’s regulatory services, there is scope for reallocating resources away from regulatory bureaus of the department.Sustainable revenue generation of regulatory agencies depends on their credibility to set standards, verify/ enforce compliance.

For this to happen, critical investments to build capability in these agencies needed.

Budget for DOH regulatory services (2)

Sharp drop in real per capita DOH spending on public health in 1998-2006 is most worrisome trend.

Devolution of public health with implementation of Local Govt Code oftentimes used to justify this trend.

National government continues to have a role in public health Public good nature of public health

Estimates of cost of devolved health functions netted out of DOH budget in 1993 does not include PhP 1 billion for public health commodities retained in DOH budget

Budget for service delivery – public health

Budget for service delivery – public health (8) Table 11. Summary of DOH Resource Requirements for Public Health to Meet MDG

(in million pesos)

Available in

2006 budget 2007 2008 2009 2010

Child care

EPI (including hepatitis) 290.29 294.76 303.31 312.10 321.12

2nd dose of measles vaccine 23.13 23.80 24.49 25.20 25.93

Vitamin A (50%) 9.08 21.03 21.51 22.01 22.51

Maternal care

Tetanus toxoid immunization 21.54 22.47 23.43 24.42 25.45

Vitamin A (50%) 18.05 40.43 41.36 42.32 43.29

Iron (50%) 5.71 40.43 41.36 42.32 43.29

BEMOC/CEMOC training w/ LGU share 2.29 2.29 2.29 2.29 2.29

Reproductive health w/ LGU share 51.08 51.08 51.08 51.08 51.08

Diseases

STI treatment 0.00 148.98 151.96 155.00 158.10

HIV/ AIDS treatment 11.00 35.82 37.75 39.77 41.91

Malaria treatment 9.22 9.22 9.22 9.22 9.22

Lab supplies for malaria 1.40 1.40 1.40 1.40 1.40

Mosquito nets (50%) 164.00 205.00 205.00 205.00 205.00

Spraying (50%) 0.60 17.50 17.50 17.50 17.50

Malaria training w/ net of LGU share 4.40 4.40 4.40 4.40 4.40

Tuberculosis treatment

adults 314.40 414.40 414.40 414.40 414.40

children 7.20 79.20 79.20 79.20 79.20

Laboratory supplies 9.45 9.45 9.45 9.45 9.45

TB training w/ net of LGU Share 17.20 17.20 17.20 17.20 17.20

IEC for TB 19.83 19.83 19.83 19.83 19.83

TOTAL 979.87 1,458.69 1,476.14 1,494.09 1,512.56

Requirements

Budget for service delivery – public health (9)Table 12. DOH Resource Gap for Public Health Services

(in million pesos)

2007 2008 2009 2010

Child care

EPI (including hepatitis) 4.47 13.02 21.81 30.832nd dose of measles vaccine 0.67 1.36 2.07 2.80Vitamin A (50%) 11.94 12.43 12.92 13.43

Maternal care

Tetanus toxoid immunization 0.93 1.89 2.88 3.91 Vitamin A (50%) 22.38 23.31 24.27 25.24 Iron (50%) 34.73 35.66 36.61 37.59

Diseases

STI treatment 148.98 151.96 155.00 158.10HIV/ AIDS treatment 24.82 26.75 28.77 30.91Malaria treatment 0.00 0.00 0.00 0.00Lab supplies for malaria 0.00 0.00 0.00 0.00Mosquito nets (50%) 41.00 41.00 41.00 41.00Spraying (50%) 16.90 16.90 16.90 16.90

Tuberculosis treatment adults 100.00 100.00 100.00 100.00 children 72.00 72.00 72.00 72.00

IEC for TB 0.00 0.00 0.00 0.00

TOTAL 478.82 496.27 514.22 532.70

Budget for service delivery – public health (10)

Table 13. LGU Resource Requirement for MDG (in million pesos)

2007 2008 2009 2010

Child care 361.55 372.69 384.15 395.94

EPI logistics 319.54 329.71 340.18 350.95 Iron supplementation (50%) 8.47 8.66 8.86 9.07 CDD 3.91 4.00 4.09 4.19 CARI 2.74 2.80 2.86 2.93 Deworming 26.90 27.52 28.15 28.80

CAPABILITY BUILDING 15.30 15.30 15.30 15.30 ( net of DOH)

BEMOC/ CEMOC 5.70 5.70 5.70 5.70 Malaria 0.80 0.80 0.80 0.80 TB 6.80 6.80 6.80 6.80 HIV/ AIDS 2.00 2.00 2.00 2.00

Contraceptives 733.57 804.82 878.93 956.00 ( net of DOH)

Total 1,110.42 1,192.80 1,278.37 1,367.24

Budget for service delivery – public health (11)

F1 proposal: DOH should rationalize the way it allocates centrally procured and financed commodities to LGUs by using an appropriate balance between need and performance, backed by service obligations or contracts.

The distribution of public health commodities must be made in tandem with other public health instruments like technical assistance, training, health information and promotion.

A major concern for the PHIC is to secure funding for the indigent program.

The DOH has to make sure that the national subsidy requirements arising from the 5-year province-wide health systems development initiatives are fully funded.

Budget for social insurance

Budget for governanceTable 16. FAPs Requirements

( in million pesos)

2006 2007 2008 2009 2010

WHSMP2 124.03 200.00 180.51 180.51 180.51

HSDP ADB 137.00 141.30 185.10 - -

HSPSP EC 56.00 126.02 126.02 126.02 126.02

Netherlands 251.17 81.15 81.15 81.15 81.15 Specialty hosp

KFW grant 57.56 61.65 65.94 - - FP

Total 625.75 610.12 638.72 387.68 387.68

FAPs ceiling for 2006 494.30 - - - -

Addl ceiling 131.45 115.82 144.41 (106.62) (106.62) needed rel. to 2006FAPs ceiling

FAPs – typically viewed as a facility providing extra support to the the DOH. Because FAPs can only be accommodated by crowding out other items in the DOH budget, FAPs need to be guided strategically towards supporting F1 implementation.

Budget for governance (2)

Alternative HSEF scenarios

Health budget ceiling pegged at 2006 levels

Case 1a. Reallocation from hospitals and regulatory bureaus equal to 5% of MOOE in 2007 and 10% MOOE in 2008-2010; Order of priority – FAPs and public health; no additional allocation for premium subsidies for health insurance of indigents

Budget ceiling pegged at 2006 levels

Case 1b. Reallocation from hospitals and regulatory bureaus equal to 5% of MOOE in 2007 and 10% MOOE in 2008-2010; Order of priority – public health and FAPs; no additional allocation for premium subsidies for health insurance of indigents

Alternative HSEF Scenarios (3)

Alternative HSEF Scenarios (5)Budget allowed to grow

Case 2a: Reallocation from retained hospitals equal to 5% of MOOE in 2007 and 10% of MOOE in 2008-2010; full coverage for FAPs; increased support for public health so as to reduce gap initially by 50% in 2007, 65% in 2008 and 100% in 2009-2010; increased support for subsidies to indigent premium from 25% of gap in 2008; 50% of gap in 2009-2010.

Case 2b: Reallocation from retained hospitals equal to 5% of MOOE in 2007 and 10% of MOOE in 2008-2010; full coverage for FAPs; increased support for public health so as to reduce gap by 100% in 2007-2010; increased support for subsidies to indigent premium initially from 50% of gap in 2008 and by 100% of gap in 2009-2010.

Alternative HSEF Scenarios (7)