UHC 18: DOH Budget, Healthcare Deregulation and PharmaWealth

After I posted UHC 17: First, Second and Third Lines of UHC for the Poor in the Advisory Council loop last week, July 30, DOH USec Madz replied that DOH budget is presented as DOH proper which is smaller and DON family which is bigger because it includes the fund of National Nutrition Council, PoPCoM, corporate hospitals PHC,Lung Center and NKTI.

Leonie Ocampo of PPhA also replied,

Thanks Nonoy. I know it is not easy to be done, but if we want to be serious in looking after the health especially of the poor who can not afford to buy their medicines, ways to ensure they get the right medicines (quality, safety and efficacy assured) must be done. As I write this comment I know someone is dying because of;  

1. medicines taken are not the right medicines for the condition, in short NOT the best choice for the condition but given because it is what is available. 

2. medicines taken maybe are what are needed as determined by the doctor but the quality is questionable; counterfeit, substandard, fake, spurious and falsified but purchased by LGU or a government agency because they are the cheapest. ( price is not only the consideration in buying medicines anyway) 

3. medicines are right and chosen right but not used right because of lack, no or misinformation  given to the patient and . . .  many more reasons.  

RESULT : GAP between the clinically-tested effects of the medicines and the actual effects when used by the patient happen. Is this not a GOOD WASTAGE of the people's money?This is why the PPhA and I am supporting the DOH to really put its IRON HANDS on this.

I thanked USec Madz for her reply. I checked the DBM’s Budget of Expenditures and Sources of Financing (BESF) 2014, and here’s what I got.

Source: http://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2014/B12.pdf

So DOH’s regular plus special purpose funds was P51.05 billion in 2012, much larger than other DOH presentation saying they only have P42 billion last year. The infusion of P14 billion for PhilHealth last year, or one year before the elections this year, explained such huge jump in 2012 budget.

The combined regular fund + special purpose funds this year is P52.56 billion and P82.77 billion next year, or an increase of P30 billion over this year’s budget. That increase is huge, larger than the regular budget of the DENR (P23.7 billion this year and P23.91 billion next year) or DOJ (P10.9 billion this year and P11.6 billion next year).

The deregulation of health insurance that I mentioned in my earlier paper refers to allowing people to have health insurance  but it does not mean that it should be PhilHealth only. People, especially those in the formal sector, should have the freedom and choice to opt out or not contribute to PhilHealth if they wish to, so long as they get another health insurance provider – an NGO or corporate HMO, an LGU, a private health foundation, and so on..

I also thanked Leonie as her perspective as a pharmacist can inject new perspective, a wake up call for many sectors who only focus on "cheaper medicines" as the single most important consideration in incorporating government medicine procurement with UHC policy.

Also last week, July 29, I attended a forum on "Designing Competition Reforms in Developing Countries" at the Phil. Institute for Development Studies (PIDS), Makati. DOJ Assistant Secretary and a friend, Geronimo "Indian" Sy mentioned in his presentation that a local pharma owned by a Congressman is able to supply medicines to many government hospitals and there might be anti-competition acts there.

He did not stay long after his talk though. I spoke during the open forum and supplied the "missing info" referred to by ASec Sy. I said that it's PharmaWealth owned by the family of former Cong. Ferjenel Biron. I added that an anti-competition act is possible because as a Congressman approving, raising or reducing the budget of government hospitals and other agencies, the legislator has the advantage in "winning" a medicine supply contract with many DOH hospitals. I saw the data presented during a UHC forum at the AIM the week before that.  PharmaWealth can supply amlodipine 10mg for only P0.35 a tablet to some government hospitals, and sell at P2+ or P3+ per tablet to other government hospitals. 

UHC 16: Dialogue on UHC and Medicine Access, AIM July 25-26

The Department of Health (DOH), Philippine Health Insurance Corporation (PHIC or PhilHealth), FDA and the AIM Dr. Stephen Zuellig Center for Asian Business Transformation (AIM ZCABT) will hold a policy dialogue tomorrow and on Friday, on “Universal Health Care and Access to Medicine” at the Asian Institute of Management (AIM), Makati City.

I received the invite only today when the DOH National Center for Pharmaceutical Access and Management (NCPAM) extended the invite to all members of the DOH Advisory Council for the Implementation of RA 9502 (Cheaper Medicines Law of 2008). Thanks to Mhyanne Dioso, the chief “workhose” of NCPAM for the Advisory Council, aside from NCPAM Director, Doc Virgie Ala.

The main objective of the seminar is “to identify the gaps and solutions in ensuring universal access to medicines in the Philippines” and hence, contribute to attaining universal health care (UHC) or Kalusugan Pangkalahatan.

The DOH’s budget has been rising big time in recent years: from only P18.9 billion in 2008, marginally rising to P23.7 billion in 2009 and P24.6 billion in 2010. When the PNoy Aquino government came, the DOH budget jumped to P31.8 billion in 2011, P42.1 billion in 2012, to P52 billion this year. Next year, the DBM-approved budget that was sent to Congress is P87 billion, or a P35 billion jump over this year’s budget.

A big portion of such huge jump in the proposed spending next year will be used to cover more poor households in PhilHealth insurance system, as the President said in his State of the Nation Address (SONA) last Monday. And medicine procurement by DOH hospitals and other agencies will likely get a big boost too.

Please note that public health spending in this country does not only come from the DOH. There are also the LGUs through their provincial, city and district hospitals, provincial and city/municipal/barangay health centers. Then other government agencies like the AFP Hospital, Veterans (under the DND) hospital, PNP Hospital, UP-PGH, PCSO ambulances and health charities, and so on. And almost all departments and agencies have their own in-house clinics for the healthcare of their employees and their dependents. There is huge public spending in healthcare and many people do not realize it, so they ask for more subsidies through the DOH and PhilHealth.

Back to the forum tomorrow. Among the speakers will be DOH Secretary Enrique T. Ona, DOH UnderSec. Madeleine “Madz” Valera, PhilHealth President and CEO Alexander “Alex” Padilla, FDA Dir.- General Kenneth Hartigan-Go, and Mr. Deejay Sanqui of IMS Health.

I hope that Sec. Ona will give an overview of the big DOH budget next year seeking approval by Congress. It seems that the “creeping re-centralization” of healthcare is no longer creeping but already hopping. Healthcare is among those functions by the national government that were devolved and decentralized to the LGUs under the Local Government Code of 1991.

I also hope that PhilHealth President Alex will not announce another round of hike in annual premium, especially for those in the formal sector. PhilHealth hiked plans to hike the premium from 2.5 to 3.0 percent of the basic salary of those working in the formal sector just a few years ago. The premium of OFWs has been raised from P900 to P1,200 per year and the sponsored program, the poor, from P1,200 to P2,400 per year, but the poor do not pay this amount, the LGUs and/or the DOH do.

My advocacy for minimal government in healthcare does not include healthcare for pediatric diseases and infectious diseases for both children and adults. I support further DOH and LGUs spending for these two types of diseases. But I do not support more government subsidy for NCDs for adults. If people have money to buy lots of fatty/salty food and drinks, lots of alcohol and tobacco products, or nice flat tv and DVD players and become couched potatoes, and they become sickly later, they should also have the money to buy private health insurance to augment their PhilHealth insurance. To say that they have no money for their own healthcare while they can spend for those food, drinks and smoking, is simply “palusot” and must be checked.

PhilHealth I think, should prioritize issuing automatic membership card for all poor children, say 6 years old and below. If DOH and LGU resources cannot support automatic coverage for older children and parents from poor households, then other agencies like DSWD, PCSO, UP PGH, private charities and foundations can come in. But usually LGU hospitals provide universal coverage for their local residents, young and old alike.

Tomorrow afternoon panel discussion will be on “Innovating and Improving Access to Medicine via Good Governance” with Tarlac Gov. Victor Yap, Gov. Alfonso B. Umali, Jr. of ULAP, Ms. Esther Go of Medilink, and Dr. Peter Glen Chua of FDA as speakers.

The role of LGUs is important in this aspect as lots of waste if not corruption in medicine procurement and distribution happen at the LGUs level. Many LGUs do not have the proper training and expertise in the proper storage and dispensation of medicines given free to their local residents.  

On Day 2, July 26, there will be a panel discussion on “4Ps of Financing Pharmaceuticals”: Rational Pricing, Tailored Procurement, Strategic Purchasing, and Risk Pooling, with four speakers:

Dr. Melissa Guerrero of DOH-NCPAM, Mr. Bienvenido Bautista of PITC Pharma, Inc., Dr. Dennis Ross-Degnan of Harvard Medical School, and Dir. Carlos Da Silva of AHMOPI.

NCPAM has a big budget for medicine procurement for “drugs entitlement” on certain diseases like breast cancer. PITC Pharma is the state’s chief drug importer and wholesaler for the various DOH-sponsored Botika ng Bayan, Botika ng Barangay, and other DOH agencies.

I am curious about the lectures on various topics like the ASEAN Pharma Harmonization, Anti-Microbial Resistance (AMR), Drug Price Referencing, PPP to Improve Access to Medicine, and PHIC and PCB 2. The  speakers will be Ms. Joyce Cirunay of FDA, Dir. Virginia Ala of DOH-NCPAM, Mr. Alex Haasis of NCPAM, Dr. Anthony Faraon of Improving Access to Medicine Project, and Dr. Francisco Soria of PHIC.

We shall have an ASEAN Economic Community (AEC) in 2015 or less than two years from now. The ASEAN Free Trade Area (AFTA) will mature, meaning zero tariff for all imports from any ASEAN member-countries, except perhaps for poorer economies Myanmar, Cambodia and Laos who might slap import tariff on some imported products from other ASEAN countries.

Singapore is the regional headquarter of many innovator pharma companies, not only because it is a regional financial center at par with Hong Kong, but also it strictly respects IPR like patent and trademark. Thus, IPR-busting policies like compulsory licensing of new and patented medicines, and drug price control are not done there. An ASEAN harmonization plan will consider this disparity in IPR and drug pricing policy. Many ASEAN countries like the Philippines, Thailand, Indonesia, Malaysia and Vietnam have laws allowing CL or similar schemes, and drug price control policy. Singapore does not have such policies.

Another learning experience for me in the next two days in health economics and public policy.

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See also:

Socialized Healthcare 12: Nurses, Doctors and Other Resources, March 03, 2013

Socialized Healthcare 13: On Inequality and Inclusive Business in HC, March 19, 2012  

Socialized Healthcare 14: Over-extending Government Role in Health, May 22, 2013 

UHC 15: On DOH Plan to Recentralize Healthcare, June 27, 2013

Socialized Healthcare 13: On Inequality and Inclusive Business in HC

Two weeks ago, I attended this forum at the Asian Institute of Management in Makati, sponsored by the AIM-Zuellig Center for Asian Business Transformation, ACCESS Health, ASSIST and Globe Telecom.  Perhaps a coincidence, another forum that same day, same time, was held in Discovery Suites in Ortigas, about "inclusive democracy" starrring the UN and other groups. And this forum is about "inclusive business" starring the ADB and other groups.

Dr. Moser showed several slides how inequitable the Philippines' healthcare system is.  The Under 5 years old mortality rate (U5MR) is high in the lowest quintile of the population, and skilled birth attendance is highest in Metro Manila and other Luzon regions and provinces, and lowest in Mindanao regions. For the total healthcare expenditure (THE), more than half came from out of pocket or personal and household spending.

Health sector spending here refers to DOH budget only.

Financial protection by income. The two poorest quintiles are protected by the government, national and local, while the middle class and richer groups have private health insurance, on top of their PhilHealth membership contribution as this is mandatory especially for those in the formal sector. Ms. Moser's next slide is interesting. Many if not all ASEAN countries have strong private sector presence in healthcare even though their governments' health spending is substantial. Any discrepancy between actual spending and actual delivery can be attributed to bad governance and/or corruption.

Socialized Healthcare 5: Alterrnative Views on Universal Healthcare

Rights should always be coupled with responsibilities. Some people agree by saying that "With greater rights and freedom comes greater responsibilities." That is one way of saying it; another way is "With greater (personal) responsibilities comes greater (personal/individual) freedom." As Friedrich Hayek said, "People who are afraid of responsibilities are afraid of freedom itself."

In many discussions on health policy, what is often asserted and formulated is that "health is a right" and hence, "universal healthcare is a right." I have no problem with this formulation if this should also be added, that "health is a responsibility", and I am referring to individual (and parental/guardian, civil society, community) responsibility, not just government responsibility as is commonly understood. Thus, "health is a right, health is a responsibility" is easily intertwined.

Below are three articles in BusinessWorld by one of my friends in the local health sector, Reiner Gloor, Executive Director of PHAP, on universal healthcare. I agree with many -- but not all -- of his arguments here. I can sympathize with greater government health support and subsidy for the poor suffering from infectious or communicable and tropical diseases. But I have little or no sympathy for government subsidy for lifestyle-related diseases like illnesses due to heavy smoking, heavy drinking, heavy eating of fatty or junk foods, heavy sitting or sedentary lifestyle.

Reiner is speaking from a private sector and civil society point of view, not government's. So these papers have a balanced perspective on the issue of universal healthcare.
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(1) http://www.bworldonline.com/weekender/content.php?id=50666

April 27, 2012

Medicine Cabinet -- Reiner W. Gloor

Universal health care coverage provides safety net for the poor

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For many poor people, health has become a difficult economic choice between getting better or poorer.

Often characterized by high out-of-pocket spending, health financing systems in low- and middle-income countries have contributed to the vicious cycle where diseases worsen poverty, while at the same time, poverty results in rising incidence of diseases.

The World Health Report 2010 estimated that about 150 million people globally suffer financial catastrophe when they avail of health services. Similarly, 100 million people are pushed into poverty due to direct out-of-pocket spending.

In the Asia-Pacific region alone, about 80 million people experience financial catastrophe and 50 million others are impoverished due to health payments.

These happen since in low- and middle-income countries, health is paid for privately or mainly from out-of-pocket health care systems. The same is true for the Philippines that reported a private out-of-pocket share of 54.3% while government funding was 26.2% and social insurance, 8.5%.

This was validated by the Social Weather Stations (SWS) survey of Filipinos on Health Services and Financing which revealed that for those who have consulted a doctor when they were sick, seven out of 10 of them paid from their own pockets.

The video documentary, "The Road to Universal Health Coverage", emphasized that when households spend a substantial part of their income on health, the results can be catastrophic.

In fact, the same SWS survey disclosed that almost three out 10 Filipinos deferred visits to doctors even if they were sick because they felt that they cannot afford to pay for health care. Seven out 10 respondents also believed that many families get impoverished when a member gets sick and has to be hospitalized.

In shielding families from financial catastrophe and other disastrous social outcomes of direct out-of-pocket health payments, the video documentary highlighted the pressing need for countries to adopt and implement financing strategies leading to universal health coverage.