Saturday, August 25, 2012

Healthcare Competition 9: Deregulate Further the Supply of Healthcare

This will be more of a discussion outline rather than a paper. I would appreciate readers' comments, especially in the two conceptual analysis that I am introducing below.

A. Consumers of Healthcare

Practically everyone, young and old, men and women, rich and poor.

B. Suppliers of Healthcare

1. National government:

   a. Department of Health (DOH) attached hospitals, NCPAM and other agencies; Botika ng Barangay (BnB)
   b: Philippine Health Insurance Corporation (PHIC or PhilHealth)
   c. UP-Philippine General Hospital (PGH) and other state universities offering health courses
   d. Department of National Defense's (DND) AFP Hospital and Veterans Hospital
   e. Department of the Interior and Local Government's (DILG) PNP Hospital
   f. Other Departments and government corporations providing occasional medical and dental missions.
     PCSO and PAGCOR provide limited hospitalization cover, give away ambulances, etc.

2. Local government units (LGUs)

  a. City hospitals (Ospital ng Maynila, Ospital ng Makati, Ospital ng Muntinlupa,...)
  b. Municipal hospitals
  c. Provincial hospitals
  d. Barangay health centers and rural health units (RHUs) under the city or municipal governments

3. Private companies and foundations

   a. Hospitals under a foundation (St. Lukes, Manila Doctors Hospital, Makati Medical Center, etc.)
   b. Other private hospitals, affiliated with the Private Hospitals Association of the Phils. Inc. (PHAPI)
   c. Health Maintenance Organizations (HMOs)
   d. Pharmaceutical companies, members of PHAP or PCPI
   e. Drugstores and pharmacies (Mercury, Watsons, The Generics, members of DSAP)
   f.  Big companies and offices, schools and universities, usually have their own small medical offices/services

4. Civil society organizations

   a. Various NGOs and charity organizations that directly provide health services (Botika Binhi, Alt-Health, PPF, etc.)
   b. Rotary Clubs, Lions Clubs, Mason, JCI, etc. that regularly sponsor medical and dental missions, vaccination projects
   c. Other NGOs, charity organizations, that indirectly provide health services, or do various healthcare policy advocacies

C. Concept 1: Current Financing of Healthcare

First, HC is divided into outpatient and in-patient or hospital confinement services. Financing for outpatient services are usually done via out of pocket (OOP) for those who have no private health insurance, the HMOs for those who have private health cards, LGU hospitals or LGU guarantees if patients are brought to a private hospital ER.

For hospital confinement, that is the main job of PhilHealth. But since its coverage is limited (eg, only P500 per day for hospital bed), the balance is to be shouldered by those mentioned above as financing the outpatient services. Other government agencies like DSWD, PCSO, also give limited cash cover for the balance.

Question: Is this an appropriate representation of the existing health financing system and schemes?

D. Concept 2: Supply and Demand of Healthcare

Some left-leaning groups and health NGOs are definitely calling for health socialism, that the national government, in coordination with LGUs, should provide free or highly subsidized HC services to the public, from outpatient to inpatient services because "health is a right, not a privilege." This is represented by the graph on the left.

Other groups, well a minority actually, like us in Minimal Government Thinkers and other free market-oriented groups and individuals, want to keep government role in HC to be focused on dealing with infectious or communicable diseases, pediatric diseases, children and adults with physical and mental limitations. The rest should be given free choices and options where to get their health insurance.

I believe in universal healthcare (UHC), that everyone should have some form of health insurance. But I do not believe that only the government, national and local as enumerated above, should provide that universal coverage.

Would greatly appreciate readers' comments at this stage.  Meanwhile, here's short but good paper from The Independent Institute,
Competition Based on Quality of Healthcare: Why Does Quality Rise in Free Markets and Decline with Government?

See also:
Healthcare Competition 4: Solving Info Assymetry, September 08, 2010
Healthcare Competition 5: Thailand, September 24, 2010
Healthcare Competition 6: United States, May 05, 2011
Healthcare Competition 7: Moral Hazards in Healthcare Subsidies, May 24, 2011
Healthcare Competition 8: Centralization vs. Deregulation of Healthcare, December 31, 2011

PhilHealth Watch 11: Is PHIC an Insurance Company?, June 12, 2012
Socialized Healthcare 6: Student Debates, Charity Beds and UHC, August 22, 2012

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