Health Spending 7: Health/GDP Ratio 2011

There was a Philippine Health National Accounts (PHNA) Dissemination Forum held last Friday, June 07, 2013 at Crowne Plaza Galleria. I did not know it, got no invite. I think only members of Alternative Budget Initiative (ABI) Health cluster NGOs were invited. Anyway, thanks to Mercy Fabros of WomanHealth, she emailed the presentation materials today.

The main presentation was made by Ms. Jessamyn Encarnacion, Director, Social Statistics Office, National Statistical Coordination Board (NSCB). I don't know if those materials will be posted online in their website, but here are the relevant numbers.

So, total health expenditures (THE) 2011 =  P 431,047 billion (current prices)

Gross domestic products (GDP) 2011 = P9,735,521 billion (current prices)

THE/GDP ratio = 4.43 percent

I checked the WHO website for the Philippines, http://www.who.int/countries/phl/en/

It's data of THE/GDP ratio for 2011 = 4.1 percent.

Another understatement and wrong data by the WHO. I think they are getting wrong data for the denominator, the GDP.

Please recall that until March this year, WHO data said that the Philippines' Health/GDP ratio 2010 = 3.6 percent only.  But I made a simple computation for 2010:

THE = P379.32 billion.

GDP=  P9,003.48 billion

Health/GDP ratio = 4.2 percent.

I discussed it here, Health Spending 6: Health/GDP Ratio 2010,

WHO was wrong with its computation, yet it did not double check its figures. The DOH, WB, ADB, UN, NGOs, etc have been using that wrong WHO ratio.

It's good that they have replaced that old and wrong 2010 data with 2011 data. And still it's wrong.

It should 4.4 percent,not 4.1 percent.

Some people might be wondering what the heck is a 0.3 percent of GDP difference, it's "small anyway". Wrong, it's not a small amount.

At P9.375 trillion GDP size, just 0.1 percent of it means P93.75 billion, or more than double the total DOH budget of P42.08 billion in 2012.

So a 0.3 percent understatement of health spending = P281.22 billion of understatement.

That is a big amount, it's not small.

To continue the NSCB presentation, here are their additional numbers. The per capita health expenditures.

The never-ending MDG targets saga.

Health Spending 6: DOH's Proposed 2013 Budget

Government healthcare spending is among the biggest items in the national budget. Such spending is not limited to the budget of the (a) Department of Health (DOH) but also to (b) state universities like the PGH under the UP budget, (c) DND and DILG for the AFP and PNP Hospitals, (d) PCSO, PAGCOR which give away ambulances and provide hospitalization coverage to some poor people, (e) other Departments and national government agencies, (f) local governments with their respective city/district/provincial hospitals, (g) charity groups, corporate foundations, company spending, and so on. See my previous discussion here,  Healthcare Competition 9: Deregulate Further the Supply of Healthcare.

That is why I think the estimated national health spending of around 3.8 percent of GDP is understated. I think that ratio refers only to DOH and other national government spending for health. If we include all the above mentioned offices and institutions' spending, it should easily reach 5 percent or higher.

Anway, I attended the DOH budget presentation at the Senate last September 04. Below are some of the powerpoint slides presented by DOH Secretary Enrique Ona. Thanks to Mercy Fabros of WomanHealth who posted the presentation to our CHAT discussion group.

From P42 billion this year to P53 billion next year or a jump of P11 billion in one year. Percentage wise, the DOH along with the DSWD budget have among the highest, if not the highest, growth rate next year.  The Office of the Secretary (OSec) and the HFEP are the biggest items.

See the huge spike in DOH budget, rising by about P9 billion a year on average from 2010 to 2013. Allocation for sponsored program or subsidies for poor households to become PhilHealth members, is the main explanation for this huge jump. This function should have been done by the local government units (LGUs) but many of them  are not doing their job, so the DOH has re-centralized this function. Healthcare is among the services that were devolved and decentralized from the DOH to the LGUs when the Local Government Code (LGC) of 1991 was enacted. But recently, the move has been towards re-centralization.