Tobacco Tax 10: More Questions on Sin Tax Money

 A physician friend,  Dr. Tony Leachon, posted this PhilStar report  last year.

And peopled asked again, "where is the money?" or "how was it spent?" 

From the law, Sin Tax Reform Act of 2012 (RA 10351), 85 percent should go to fund universal health care (UHC) via PhilHealth and DOH hospital facilities, and 15 percent to fund alternative livelihood to tobacco farmers.

So even non-contributing people, so long as they declare themselves as poor, automatically become PhilHealth members and get free or subsidized hospitalization. Also, all senior citizens, poor or non-poor, get PhilHealth membership card.

The big question is if PhilHealth can absorb all that money. Being a PhilHealth member does not automatically mean there is PhilHealth spending on the person. In my case, I have been a Medicare, then PhilHealth member for 3 decades now, I have never been hospitalized all this time, so PhilHealth has never spent anything on  me yet. Well, my daughter got food poisoning while we were on vacation in Iloilo about two years ago, she was hospitalized, I got some PhilHealth subsidy for the hospital bill.

One ugly feature of this law is the earmarking of revenues for UHC. The DOH, PhilHealth, health NGOs, and consultants, etc. -- are jumping with joy that there are more money from sin tax. Since this money comes from more smokers and drinkers in the country, or the number of consumers of these "sin" products remain the same, indirectly there is a problem here, a moral hazards problem.

With huge money coming in on top of regular appropriation to the DOH that is also rising, what PHealth is doing now is force absorption of the money. Thus, even non-poor senior citizens become automatic members and hence, are covered.

A better option should have been for PHealth to reduce the monthly and annual contribution of paying members, so that the payment gap between them and those who contribute zero and yet are also members, declines.

I have argued before that earmarking is wrong. In this case, many people in the health sector are jumping with joy that there are more tax money from the pockets of more smokers and more alcohol drinkers in the country. If people are concerned with better health, they should be happy if the number of smokers and alcohol drinkers have declined, one indicator of which is that sin tax revenues are declining.

Without earmarking, the bulk of the extra sin tax revenues should have been used to retire some public debt. After all, we will be paying P399 B (yes, almost P400 B) for interest payment alone, and this year 2015 alone. That's how big the public debt is. Lower debt means savings in interest payment, and such savings can be used for the health sector, but at a lesser amount than P43 B in 2014.

This way, there is reason for the health sector to be happy -- smaller public debt, lower interest payment, more savings for the government for all sectors, and more money for the health sector in particular. It is an indirect way to get additional funding without being parochial and being happy that there are more money from the pockets of more smokers and drinkers in the country.

I supported the hike in sin tax. I support a hike in various consumption taxes including VAT, excise tax, property tax, in exchange for drastic reduction in income tax, personal and corporate. Towards the eventual abolition of income tax.

What I did not support was earmarking for healthcare. It creates sectoral parochialism in government. For instance, if PAGCOR will be privatized (about P200 B or higher) expect that only the education sector aside from huge separation pay of employees, will benefit, nothing on health or housing, agriculture, or reducing the public debt. If NPC hydro and geothermal plants will be privatized soon, expect the energy sector and LGUs to benefit, nothing will go to health, agri, infra, etc.

That people are asking until now, "where is the money?" or "how was it spent?" is one proof that earmarking for healthcare creates more questions, more suspicions, and disappointment.

------------

See also:
Tobacco Tax 6: On Cigarette Smuggling, February 27, 2012. 
Tobacco Tax 7: DOH on NCDs and Tax Hike, March 04, 2012 
Tobacco Tax 8: Ban Smoking, or Raise its Tax?, March 12, 2012 
Fat-Free Econ 27: Sin Tax and Nannyism, October 22, 2012 
Tobacco Tax 9: Why Earmarking Legislation is Wrong, January 14, 2014

Drug Price Control 42: New Round of India Price Caps

 Another round of drug price control in India.

Lessons for the Philippines?

Discussion below, after the news report.

---------

India caps prices of 36 more drugs to improve access - government official

BY ADITYA KALRA AND ZEBA SIDDIQUI

NEW DELHI/MUMBAI Fri Sep 19, 2014 7:34pm IST

(Reuters) - India has capped the prices of 36 drugs, including those used to treat infections and diabetes, in its latest move to make essential medicines more affordable, a senior official of the country's drug pricing authority told Reuters on Friday.

The medicines join a list of 348 drugs deemed essential and that are therefore subject to price caps, covering up to 30 percent of the total medication sold in a country where less than 20 percent of people are covered by health insurance.

"This is a straight-forward, most predictable, overdue action which has been done by us," the official at the National Pharmaceutical Pricing Authority (NPPA) said, declining to be named because of the sensitivity of the matter.

Global and Indian drugmakers have been hit in India by wide-ranging government-imposed price reductions over the last year. Industry officials say prices in the country are already among the lowest in the world, but the cost of drugs is overwhelmingly covered by patients themselves.

India in July capped the prices of more than 100 drugs that are not part of the essential medicines list. The pharmaceutical industry has challenged the move in court.

Indian drugmakers, including Cipla Ltd, Ranbaxy Laboratories Ltd, and Cadila Healthcare Ltd, are among the companies that will be affected by the latest decision, research firm AIOCD Pharmasofttech AWACS said….

MORE TO COME

More big selling drugs for treatment of diseases including cancer, HIV/AIDS and cardiovascular could be brought under price cap to make them affordable in the country, said Rahul Sharma, an analyst with Mumbai-based brokerage Karvy Stock Broking.

The senior official at the pricing authority said the NPPA was drawing up a list of mass-consumed, essential life-saving drugs which it thinks should be added to the essential medicines list, but did not confirm treatments affected….

--------

What are some lesson for the Philippines from this report?

These are my impressions and observations:

1. Government intervention like price control, once started, is never or hardly reversed and recalled. It only invites more intervention. In this case in India: original 348 drugs in the essential medicines list + more than 100 drugs outside of the essential medicines list last July + 36 drugs this month + “more to come”.

Thus, people should not be enamored or hoodwinked with more government interventions  like price control and their beautiful, bleeding heart promises and justifications. Once started, they acquire their own life and create their own momentum. And such interventions will soon victimize those who asked for it in the first place, either directly or indirectly, like the proverbial "Law of unintended consequences."

2. India’s NPPA could be the “model” of former Cong. Ferjenel Biron, Sen. Manny Villar and other legislators in the last Congress when they were adamantly pushing for the creation of a permanent bureaucracy to be called Drug Price Regulation Board (DPRB). One consolation of PH drug price control experience is that we do not have a permanent bureaucracy with permanent and full time bureaucrats whose main purpose in this planet is to justify endlessly, and expand endlessly, the list of medicines to be put under price dictatorship.

A permanent price control board is very dangerous. The most extortionists, the most corrupt in  government will salivate to head it and use it for harassment and extortion of some players. Like threatening "pay us or we will put your most saleable, most popular drugs under price control". It is happening in India. The NPPA officials have gone outside the essential medicines list.

The DOH Advisory Council on the Implementation of RA 9502 (previously called the Advisory Council for Drug Price Regulation) is a non-permanent agency, just an ad-hoc body that does not even meet regularly.

3. While the original target of price control were the products of west-based innovator multinationals (US, Canada, Europe), continued expansion of price control is now victimizing local companies, generic multinationals:  Ranbaxy Laboratories (5th largest specialty generic pharma in the world),  Cadila Healthcare (5th largest pharma company in India), Cipla  Ltd. (42nd largest publicly traded company by market value in India). Data I got from wiki.

Ranbaxy (or Dr. Reddy’s?) is the India version of Unilab, they are both the biggest pharma in their respective countries.

This is one reason why we do not see or hear any local generic pharma in the Philippines supporting drug price control, in 2009 or now.

A physician friend from PhilHealth, the government-owned social health insurance (SHI) corporation, asked me,

What if the social health insurance provides the cap?One, the cap is meant to protect those that are insured.Two, the covered population provides predictable demandThree, it opens a group of consumers who previously are not buying.. Example,  the poor.. Or not compliant with their medication.. Example, those who have NCDs .What if those who are selling pharma products covered by SHI receives rebate?

Good questions. If the SHI like PhilHealth will provide a price cap to certain medicines that patients will pay, and the selling pharma companies receive a rebate from the SHI, then I think it  is fine. It is not a price control but a price subsidy. It is no different from a rice subsidy (NFA pays high to rice producers and consumers pay low) or MRT/LRT train subsidy (DOTC pays huge money to MRT operators and passengers pay low).

If government should impose a mandatory, forcible price cut (ie, price control), then government should pay the firms that are affected -- through DOH budget or DOF-BIR tax rebate. Government must share burden for some of its bleeding heart programs.

In the current practice of price control, neither the DOH nor the DOF share any burden. And not only for the 19 or so molecules covered by price control of August 2009, but also for the mandatory, forcible price discount of 32 percent (20% forced discount + 12% VAT waiver) for senior citizens and persons with disabilities (PWDs). Not all senior citizens and PWDs are poor that they deserve a forced discount. And not all drugstores, restaurants, bus lines, etc. are rich to shoulder the forced revenue cut. Henry Sy, Gokongwei, Lucio Tan, George Ty, Manny Villar, Sonny Belmonte, Franklin Drilon, FV Ramos, ettc. are no poor yet in the law, they deserve a forced discount and private enterprises are forced to  give them a 32 percent discount. This is a continuing headache for many players in the health sector -- pharma (local and multinational), drugstores, hospitals. Nagtuturuan who should shoulder the biggest burden and the burden inventor, the government, has zero share in the burden sharing.

Some people may ask, "You have criticized a lot of policies, what do you propose?"

Simple. Government should step back, zero  involvement, in pricing by private enterprises. Government should encourage more players and competitors to come in. Competition will drive prices, not only of medicines and vaccines but also lab tests, hospital fees, professional fees. Unless patients will deliberately go to expensive hospitals and physicians, expensive drugstores and  choose expensive  medicines. 

When someone sells fake or counterfeit medicines, anesthesia, vaccines, etc.  and public health is affected, government should come in. Hard and harsh. Why? Because there is clear violation of contract, that sellers and producers should only supply good quality meds, food. It is in the promulgation of the rule of law that I believe in  BIG government. Government should over-spy, over-bureaucratize, over-penalize, criminals,, thieves and  murderers, sellers of fake medicines and adulterated food, etc.

Government should also reduce if not abolish, various taxes and fees on medicines and  vaccines. In many instances, government is a major contributor to  expensive medicines, expensive rice, expensive electricity and so on, via various taxes, charges, fees and royalties on those products and services. Yet government portrays itself as the "champion of the masses" and indirectly demonize the major players via more regulations and prohibitions, like price control policies.

----------

See also: 

Drug Price Control 38: Presentation at USC, Cebu, March 2010, March 01, 2014 

Drug Price Control 39: Presentation at USC, Cebu, March 2014, March 25, 2014

Drug Price Control 40: CWF Wants Price Dictatorship for Lipitor, September 12, 2014

Drug Price Control 41: Exchanges with Joey Ochave at MeTA PH, September 17, 2014

UHC 20: Health Equality Will Never Happen

In most discussions about universal health care (UHC) in the Philippines and abroad, focus is on having health equality among people, to be provided by the government. While it is a noble goal, I think it is an unrealistic one and will result only in more public disappointment, even public anger.

There is transportation inequality, some drive a sports car, others drive an ordinary sedan, others drive a motorcycle while others do not even have a bicycle. There is education inequality, housing inequality,  food inequality, labor inequality, businessmen inequality, and so on. Inequality is everywhere, here and abroad, and most people can live with an unequal world, so long as their right to life (against murderers, abductors, etc.), right to private property (against thieves, destroyers of property) and other basic freedom are protected.

Health equality or near equality will never happen. For one, people have different abilities, priorities and ambitions in life. Second, people have unequal health input into their own body and family. Some prioritize alcohol or tobacco or junk foods over vegetables and other healthy food. Some prefer to live in dirty surroundings (with rats, mosquitoes, other pests) just to be near something that is important to them, like near workplaces. 

If people look up to government as the implementer of health equality, they will be in for a big disappointment. As I posted in my previous blog posts, when I was working at the House of Representatives (1991-1999), we have three forms of health insurance: (a) Medical and dental clinic inside with a phalanx of full time doctors, nurses and dentists, with free medicines; (b) HMO coverage (Intellicare that time, I don’t know now) that conducts annual medical check up,  can cover both outpatient and hospitalization expenses, and (c) PhilHealth membership and contribution. I am sure this multiple health insurance is done also at the Senate, SC, BSP, Malacanang, DND, DepEd and many other departments and govt corporations. Also in big LGUs like provincial capitols and big city halls.

Many poor people especially in rural areas do not have even one of these. They may have access to a rural health unit but there are no full time doctors there, no free medicines.

To have UHC, what is important is that everyone should have a health insurance card, but it does not mean that it should be a government-monopolized service. Give people choices where they want to get their HC provider. Take the case of Switzerland:

There is no state monopoly. So you can choose an insurance group which is connected to your line of work. Or you could go with a trade union-run insurance co-operative. Or a private, commercial company. That means there is some competition among these companies to provide the best possible service for the lowest possible price. Then these companies, in turn, have some choice over which doctors and hospitals they commission to work for them. So again, the doctors and hospitals have to compete to offer the best facilities and treatment at the lowest possible cost. Poorer people get credits which enable them, too, to choose insurance.

(See Healthcare competition 1: Switzerland)

There should be competition among different healthcare providers, not monopolization by the national or central government. Where there is competition, people have choices, HC providers are under pressure to provide value for money.  In a nationalized, monopolized and politicized structure like PhilHealth, they exaggerate enrollment but cover as few as possible, or for those covered, to pay as little as possible. There should be surplus somewhere to cover political patronage elsewhere.

Thus, If we wish to have real UHC, there should be more competition, not more consolidation and monopolization. We are actually moving at the wrong track.

--------

PhilHealth held a national public consultation on the draft Implementing Rules and Regulations (IRR) of the new PhilHealth law last September 06, 2013 at Crowne Plaza Hotel, Ortigas. I attended it.

The IRR proposes to raise the mandatory monthly contribution from 2.5 to 5.0% of the monthly basic pay of those in the formal sector, 2.5% contribution each from employers and employees. This hike in mandatory salary deduction causes anxiety to many workers and employers. Then there are plans to hike also the mandatory SSS monthly premium or contribution, possibly in PagIBIG too. On top of regular hikes in the minimum wage.

Government is making hiring of people in the formal sector become more expensive. If it is expensive to hire workers, less hiring of workers will happen. Instead of hiring 10 workers, companies will hire only 2 or 3 multi-skills people, give them gadgets and pay them 2x or 3x the min wage. The other 7 or 8 people, they can try their luck elsewhere. Or be employed in the informal sector with no min wage, no SSS, PhilHealth, etc.

I respect Doc Quasi and the rest of the UHC Study Group (Docs Domingo, Paterno, etc.). But their advocacy of health equality and centralized, monopolized HC provision will never happen. 

Stem Cell 2: Comments from My Physician Friends

After posting in my facebook status the PhilStar article re DOH Sec. Ona’s proposal that PhilHealth will soon cover stem cell treatment (SCT), several physician friends commented, below. The images I got from the web, I just added them here.

(1) From Doc Ethel:

It infuriates me Nonoy. Patients should not be made to undergo treatment that has not been proven to be safe and effective. And to pay for that is nothing less than unethical, bordering on malpractice. –

(2) From Doc Tony:

Soon every doctor will buy ADI stem machine with rebates and referral system will be in place creating a huge pyramid scam - medical tourism type concept. Why would past PMA leaders band together and risk their image ( ???$? ) and engage the doh secretary. This is to lend credibility to the PSSCM grand plan. FDA has been used too.

Philhealth will be used here. After August 31 deadline, SCT will go big time. With skin regeneration given FDA approval based on FDA new set of guidelines, our kasam Bahay s have plans of having SCT ahead of us.

Philhealth money will be squandered for SCT rather than for building hospitals in the country side , salaries of healthcare professionals, research, PGH renovation, improvement of Fabella hospital, Jose Reyes Hosp, renovation of the dilapidated FDA office in Alabang the only eye sore in posh Alabang area. The stem cell centers in manila will be magnet for more tourists - it's fun in the Philippines. Great plan.

(3) From Doc Jed:

Noy, it seems that the article merely shows that the Secretary is friendly to local stem cell therapy practitioners and that specific supplier of stem cell activator equipment.

Having stem cell therapy covered by Philhealth cannot be done unless it is of proven efficacy for treatment. Our present coverage at thus time is even focused on therapeutic and not on preventive healthcare.

(4) From Doc Donn:

Sec Ona did not say na standard of care ang stem cell. he said that sct is innovative therapy. kaya ung about philhealth, it will happen decades from now when sct is already accepted as standard of care. Until that happens, philhealth will not cover it. the sct issue is being muddled by bogus claims but we must also recognize that there are scts that show promise for certain indications. Still, scts are innovative therapies rather than standard of care. 

(5) From Doc Tony:

Donm. I have respect for sec Ike. But kindly advise him to extricate from PSSCM. He's being used and people will never stop speculating about the motive. I am getting frustrated seeing sin tax gains for Philhealth will go to unproven treatment. I have gone around the country and I have been receiving a lot gory stories about stem cell practice. We don't want this to happen to our healthcare.

(6) From Doc Jed:

Nonoy, I think the preventive aspects would better be addressed by other agencies of the national and local governments. PHILHEALTH being an insurance organization merely provides a form of health care financing. It bases it's health related expenses on statistics and claims management experiences.

I agree that scientific collaborative effort is necessary and such is undertaken in the private sector. Sadly, more often than not, there are always, though subtle, commercial undertones. Not that the commerce aspect is evil in itself, but to cite a quote, "temper their greed".

(7) From Doc Meo:

This is what happens when a clinician with limited administrative and executive experience becomes DOH secretary. It seems to me that Dr. Ona is still having a hard time dissociating himself from his practice. I fully understand his excitement over the progress in stem cell research. I myself am also very enthusiastic about its possibilities. However, Sec. Ona should refrain from making irresponsible statements. He must always keep in mind that he represents a national office. As such, he must be clear if a statement is his personal opinion or an official stand. For example, in the statement, "“Our dream is that when this type of therapy already has a standard of care, its cost will definitely go down. By then, hopefully, (PhilHealth) can offer it already” who exactly was he referring to with the pronoun "OUR"?

Stem Cell 1: PhilHealth to Cover SCT?

I was following the stem cell treatment (SCT) controversy in the Philippines recently.  The Philippine Medical Association (PMA) and the Philippine Society of Stem Cell Medicine (PSSCM), both headed by Dr. Leo Olarte, vs the 21 other specialized medical societies. The former group says stem cell treatment can cure many diseases, the latter camp says it is not true, that stem cell is proven only for bone marrow transplant and blood-related cancer, I think, and that stem cell in other diseases are still under clinical trials.

But one problem came up when DOH Secretary Enrique Ona has generally sided with the PMA-PSSCM camp and even castigated the 21 medical societies for questioning the latter. Sec. Ona is an Honorary Chairman of PSSCM.

Today, I posted this news story from the Philppine Star and posted in the MeTA Philippines email loop. The images I got from the web, I just added them here.

http://m.philstar.com/314191/show/9e9e9bca3e86ccb9a19ca1f3e38608c9/

By Mayen Jaymalin
 MANILA, Philippines - Ordinary people may eventually have the chance to undergo expensive stem cell therapy.  

Health Secretary Enrique Ona said the Department of Heath (DOH) is looking at the possibility of including stem cell therapy in the benefit packages of the Philippine Health Insurance Corp. (PhilHealth) if the medical sector accepted it as a standard care.  

“Our dream is that when this type of therapy already has a standard of care, its cost will definitely go down. By then, hopefully, (PhilHealth) can offer it already,” Ona said.            

He expressed belief that stem cell therapy has the potential to cure diseases such as cancer, autism, diabetes, stroke, liver disease, spinal cord injury, Alzheimer’s disease and Parkinson’s disease....

Stem cell treatment soon to be covered by PhilHealth? Even if it's still under clinical trials for many diseases? And such treatment is not cheap, many practitioners there charging 6 digits, even 7 digits for their rich patients.

If this will push through, ubusan ng pera yan. What's next, PhilHealth will raise the annual premium of members because funds are running out fast? 

If we want UHC, government, the DOH and LGUs in particular, should focus on primary healthcare, in fighting communicable and infectious diseases, and childhood diseases. If people want stem cell treatment and risk their lives and money for the promise of miracle, let them spend their own money, why drag along pooled fund, especially that people are forced, coerced and arm-twisted to contribute to that fund by law?

A lot of distortions in healthcare and other social issues are often initiated by the government itself.

I just hope that such PhilHealth plan will be junked. Or they want another public clamor against it, ala anti-pork barrel robbery movement?

---------- 

Three members of the Council commented:

(a) From Leonie Ocampo of PPhA:

How sad of our DOH to be supporting an initiative and/or treatment not proven by clinical trails yet, more so planning to even put this into the Philhealth benefit package. 

Philippines with its limited resources must FOCUS in the MUST DOs in health care delivery. A lot of problems from procurement, handling and storage, distribution, prescribing, dispensing, administration and monitoring of patients are still into a lot of problems and need government attention to manage and control with the right structure and processes; then here is the department tasks to put all of these in place going to something not proven yet . . wow, I could imagine how much of the people's money will be wasted again. 

Yes, I agree with you Noy, FOCUS should also be given first and foremost on primary health care . . . right structure, right processes, right people and the right resources identified and provided. Let's stop talk, talk and talk but let us start to act in the right direction, sa tuwid na daan. You know what I mean.

(b) From Doc K

Dear all, Doh did not say at anytime that phic will cover stem cell.  Sec Ona has not sided with any groups. Pls do not believe all newspaper reports. Ask why these misleading news are surfacing over the last month.

(c) From Doc Delen:

Dear Nonoy,

Very well said!!!  I totally agree with you!  Really, the priorities of this government is something that we should question.  They are not looking at the needs of the vast majority of the Filipino which can be easily addressed if we put our money on public health and primary health services.  Primary health care is an approach that is not being espoused by the DOH when in fact PHC continues to be the backbone of good health strategies.  Secretary Ona, whose experience is very hospital based, prioritizes tertiary care and hospital centered care which is more expensive.  Certainly, if the government's budget for health is directly given to primary care services, improving the local health center facilities and making health care, including medicines, more available and accessible, then we do not have to have Philhealth that still screens what can be supported or not.  People will now patronize the health centers and exercise their right to health.  This will improve their health seeking behavior and  know that they can avail of services immediately.  They need not wait for their condition to worsen, which is what is currently happening, necessitating a tertiary care consult.  Then, eventually, we can have more healthy people who can now be more productive and contribute more to the economy of the country (but of course there should also be concomitant changes in the economic and political spheres as in providing decent and justly paid jobs, humane housing conditions, good nutrition, good education, etc).

It is appalling that Secretary Ona can think of stem cell therapy first to be included in a Philhealth package before he thinks of improving our basic health care services.  Stem cell therapy is very new and still under study and we should not deceive the people and worse, make money from them as indeed this is a very expensive intervention.  And to use our people's money for this is truly something we should not allow!

Thanks Nonoy for your very good insights on this issue.

------------

See also:

UHC 18: DOH Budget, Healthcare Deregulation and PharmaWealth, August 08, 2013 

Drug Price Control 37: Four Years of the Policy, August 16, 2013

UHC 17: First, Second and Third Lines of UHC for the Poor

Later today, I will attend a round table discussion on Health System Shapers (HSS), Patients and Consumers Sector, at the Department of Health (DOH) main office. The goal of this and related fora is to further fine tune the government’s universal health care (UHC) goal.

Last week, I also attended the two-days (July 25-26) “Policy Dialogue on UHC and Access to Medicines “ held at the Asian Institute of Management (AIM) in Makati. Here are two of the definitions or presentations about UHC.

This one is from DOH UnderSec. Madeleine “Madz” de Rosas Valera in her presentation, “The Philippine Response to Universal Healthcare and Access to Medicines 2013”. She added that UHC is one of four major social investments of the government to help the poor. The other three are public education, housing and conditional cash transfer (CCT).

And this one is from Dr. David Lee of Management Science for Health (MSH) in his presentation in the same forum last week, entitled “Medicines as Part of Universal Health Coverage: The Global Dialogue”

Pondering on UHC, I think the health sector already has among the monster budget in the country today. Consider the following:

1. Proposed DOH budget for 2014, P80.2 billion, from P50.5 B* this year and P34.0 B in 2012

http://www.dbm.gov.ph/wp-content/uploads/NEP2014/XIII/DOH.pdf

2. projected PhilHealth revenue 2014, about P80 B, from about P62 B this year and P47 B in 2012. (Revenues almost equal Benefits payment per year)

3. PGH budget, P2+ B, from P2 B this year

4. AFP hospital, P1.5 (?) B, from P1.3 B this year

5. PNP hospital, Veterans hospital, etc.

6. Other state universities' hospitals

7. PCSO, PAGCOR, SSS, GSIS, etc. health spending

9. Provincial, District, City, Municipal hospitals **

10. Provincial, City, Municipal, Barangay health centers

11. WHO, WB, ADB, UN agencies, multilateral grants

12. USAID, JICA, KOICA, CIDA, EU, etc. bilateral grants

* I saw the DOH presentation last year for its 2013 budget, they were spending on a P42B approved budget, now it has been revised to P34 B? What happened to the P8 B? Can an approved budget still be slashed? Weird… will ask around why.

** Total number as of 2013: (a) DOH hospitals 60, (b) LGU hospitals 584,

(c) Rural health units (RHUS) 1,285, and (d) Barangay health stations (BHS) 962. The nearly 600 LGU hospitals alone, I think they will have at least P50 billion budget next year.

Should be P300+ B next year alone? And that’s for government spending alone.

I am wondering if there was any study conducted by the UHC study group (UP Manila), Health Policy Development Program (HPDP, UPSE + UP Manila + other colleges?) or other groups, detailing how much really is spent by the public sector alone yearly, on healthcare?

It seems none, except that every year, there is belief that there is  "not enough money, give more money, raise more money, to public health."

Meanwhile, there are various private and civil society spending on health charities. PHAP Foundation gives about P100+ M a year , Unilab another P100M? other PCPI-affiliated pharma. Zuellig Foundation, Rotary Foundation, GMA Kapuso foundation, ABS-CBN foundation, St. Lukes Foundation, MMC Foundation, etc.

I think ALL foundations and private charity organization have health spending in one way or another. Plus extra spending during calamities, like individuals donating money or medical products and devices.

So we are talking of possibly P500+ billion health spending in one year alone?

And many people still think that health spending is still "not enough". hmmmm...

The first line of UHC for the poor are the RHUs, BHS, and LGU hospitals. The second line will be the DOH hospitals, Philippine General Hospital (PGH), other state universities’ hospitals, AFP hospital, other departments’ health facilities. Plus the charity emergency/wards of private hospitals. That is for outpatient services (have fever, or headache, stomach ache, then go home after consultation) and wards in case of confinement.

PhilHealth should be considered as a third line in UHC of the poor. Yet PhilHealth is the main discussion point when people talk about UHC.

PhilHealth is NOT a healthcare provider, unlike those RHUs, BHS, LGU hospitals. PhilHealth is only a health financier, for those who are hospitalized, and assuming that they were not technically disqualified, say they forgot to pay the premium last month or a few months back. Or they are unmarried couple.

So the focus on expanding PhilHealth coverage may be a secondary consideration compared to improving the healthcare delivery of those RHUs, BHSs and LGU hospitals.

As an advocate of minimal government involvement, in healthcare in this case, I maintain that PhilHealth membership should not be made mandatory and obligatory for all people. What should be made mandatory is that all people, children especially, should have health insurance – whether from private charity organizations and foundations, or private HMOs, or some health NGOs, or LGU schemes and hospitals, or from PhilHealth.

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.

---------------

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

UHC 15: On DOH Plan to Recentralize Healthcare

The quest for government-initiated and centralized universal health care (UHC) can be dizzying for all sectors -- patients/public, private healthcare professionals and providers, government health agencies, the legislature and everyone else. This is because when government centralizes or almost  monopolize healthcare, competition, price differentiation, market segmentation and service innovation is often sacrificed or killed.

A famous physician, expert and consultant on UHC and NCDs, also a friend, Dr. Tony Leachon, posted this story from GMA News the other day, in his fb wall,

PNoy to push for less controversial health programs in last half of his term

In a speech during the Department of Health's (DOH) 115th anniversary celebration, Aquino said his administration is determined to attain its goal of universal healthcare for all Filipinos by 2016….

"Last year mayroon tayong Sin Tax, mayroon tayong Responsible Parenthood, ngayon naman ho ay pakikiugnayan ng mas hindi masalimuot ang ating pakay," he added. Aquino, in his speech, said his government was able to enroll some 20 million more Filipinos to the national health insurance program during his first three years in office.

He also boasted of his administration's efforts to expand benefit packages for Filipinos suffering from heart diseases, aside from those with "catastrophic diseases" such as breast cancer, prostate cancer and acute leukemia.

The president likewise pledged to build more new health facilities in far-flung regions of the country, and the rehabilitate old hospitals.

"Hindi tayo titigil hangga’t may mga kababayan pa rin tayong ni hindi nakakakita ng espesyalista sa tanang-buhay nila. Kaya naman sa huling dalawang taon ng ating administrasyon—binawasan ho ako ng isang taon, siguro ‘yong writer ko po ay gusto na ring lumipat ng trabaho—target nating i-upgrade at gawing mas moderno ang 7,325 na mga ospital, klinika, at pagamutan," he said. DOH Secretary Enrique Ona, meanwhile, said his department will propose a law that will facilitate the efficient delivery of health services to distant towns in the country. 

"Kami ay nahirapan nang husto na ipaabot sa ating local health units 'yung tulong ng DOH kasi devolved ang ating health system down to the towns. Sabi namin, pag-aralan on how we can improve the devolution of healthcare," he said in an interview after the event. 

He likewise said he wants a legislation that will "improve the governance" of public hospitals under the DOH.

Among the comments raised by Doc Tony's friends were the following:

(a) Do not neglect the human resource aspect of modernizing health facilities, otherwise we willl have ghosts running our hospitals.

(b) Maldistribution and unemployment of healthcare professionals are serious issues.

(c) There is an over-supply of nurses and there is maldistribution of doctors, maybe even an under-supply of physicians.

(d) Start an Advanced Practice Nursing/ Nurse Practitioner program. Can be piloted with a very good nursing program. It will provide job security and provide additional primary care providers especially in underserved areas.

(e) "Hindi tayo titigil hangga’t may mga kababayan pa rin tayong ni hindi nakakakita ng espesyalista sa tanang-buhay nila." -- Why do the people need to see a specialist? Specialist in what? Why can't they be seen by primary care physicians or nurses? If nurses are trained to render primary care... agree ako jan.

I commented that the move now by the DOH is towards more nationalization and recentralization of public healthcare. But centralized programs often result in centralized expectations and centralized disappointment. Then I asked Doc Tony since he has worked in both private and public hospitals and other healthcare facilities, what are the efficient incentive systems that encourage HC professionals to provide really caring service to patients, so they get well and become economically productive.

Doc Tony replied that HC professionals should be compensated well to stay with a well planned career plan.

That is precisely my point. Very often in government hospitals and HC facilities, the doctors are paid flat rate, whether they see 20 or 200 patients a day, the pay is the same. So the tendency is to provide quickie prescription, little or no patient counselling, then call the next patients after 3 or 5 minutes. When government centralizes, nationalizes and monopolizes healthcare, service differentiation, market segmentation and service innovation is often sacrificed or killed. Government service is meant to uniformize, harmonize and monotonize the public, and sub-optimal health outcome is the result.

In the food sector, there is zero government carinderia or restaurant, zero government supermarket or talipapa, zero or little government farms, and yet people are eating. There are various products for various people with various budget and needs. Service innovation, price differentiation and market segmentation allows the various food producers/sellers to meet with certain food consumers.

In contrast in the health sector, (1) there are tens of thousands of government rural and barangay health centers, (2) tens of thousands of government-sponsored botika, (3)hundreds of government hospitals (DOH, LGUs, PGH, AFPMC, etc.), (4) there are free medicines and entitlement programs for the poor, (5) drug price control policy, (6) mandatory price discounts to senior citizens and persons with disabilities (PWDs), (7) government health insurance monopoly, and health problems are not declining but rising. Expectations rise, disappointment and discontent rise. Centralization and monopolization is wrong.

In another thread, there are good experiences in private-provided healthcare like the case of Dr. Meo Santos-Cao. She said, 

when I had my practice here in Laguna (up to 2006). I did not even register as provider with PhilHealth. I always made sure that this fact was clear to my patients. They paid me directly, usually before discharge from the hospital, but sometimes upon post-hospitalization check-up in my clinic if they had difficulty raising money. And since I didn't have to wait for 3-6 months for PhilHealth to pay me, I always charged much lower than other MDs here.  

I practiced general med. I did minor surgeries, checked on pregnant women and assisted normal deliveries. While it's customary for those services to be provided by specialists (surgeons and OB-Gyne), I had no qualms doing those because I was capable, had training and licensed to practice. In so doing, I gave patients an alternative to expensive services of specialists. In 2005, OBs charged 15k for a normal vaginal delivery, part was paid for by PhilHealth and the bulk out-of-pocket. Whereas, I charged only 6k for the same service, all out of patient's pocket. Malaki pa rin ang natipid ng pasyente. The important point here is that patients must know that they have options and that they cannot be held hostage by the prevailing system. Bottom line pa rin, as Marco pointed out, patient and provider must agree on the service and its cost.

I like the stories that Doc Meo shared, it's about private contract between a service provider (her as a physician) and service consumer (the patients) with no tertiary or external intervention (the state like PhilHealth, especially). The result is fine. If the patients are not happy, no need to rally or demonstrate in the streets to demand that the state should regulate Dr. Meo Cao or whoever. They simply refuse to come back, tell their friends that Dr. Cao is a lousy doctor. But this did not happen, they keep coming back, meaning they are happy with the services provided by Dr. Meo Cao.

Another physician friend also shared that "...with unjust compensation, doctors would opt not to operate lalo na kung difficult cases, the new Philhealth scheme doesnt take into account case difficulty. Di ka na properly compensated, mas malaki pa risk sa license mo, pagod ka pa. I dont think this is in the best interest of the patient. It takes forever for Philhealth to pay the MD and hospital, and only an instant to disqualify patients na may minor delinquencies sa continuity ng payment."
http://funwithgovernment.blogspot.com/2011/10/philhealth-watch-9-physicians-talk.html

On another note, I changed the subject of this thread from "Socailized Healthcare" to simply UHC. See also:

Socialized Healthcare 11: Private Health Insurance and HC Vouchers, November 16, 2012

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

PhilHealth 16: Financial Engineering to Subsidize NCDs Treatment

In a presentation during the MeTA Forum last April 10, 2013 at the Asian Institute of Management (AIM) in Makati, Dr. Rizza Herrera and Dr. Liezel Lagrada of PhilHealth showed some 50 slides about the Primary Care Benefit (PCB) packages, showing only some of those slides here. PCB are outpatient services for the poor, a form of preventive healthcare to minimize incidence of the poor going to hospitals more often. I support more preventive healthcare, but I do not support the view that it's the government that should provide it for all.

PCB1 is one year old now, started in April 2012.

These packages are the equivalent of annual medical check up for clients of private health insurance or health maintenance organizations (HMOs). They even include X-ray. The hypertensive are entitled to once a month check up even though their annual premium is the same (or slightly higher?) than those who have no hypertension and are entitled to only once a year BP measurement.

PhilHealth says they have veered away from rebate mentality to capitation as payment service.  The number of participating local government units (LGUs) have been rising.

PCB1 is not portable, each family is assigned to a specific PCB1 provider, extending it to other member sectors would entail a good tracking system, both from Philhealth and from the providers.

Despite the increase in the number of PCB1 providers, there is still a big gap in the patient : health personnel ratio which greatly affects the realization of quality health care.

Intermission -- some photos that afternoon, speakers and audience....

Then the expansion to PCB 2, mainly addressed to control NCDs. My earlier discussion on PhilHealth claims for NCDs is posted below, PhilHealth Watch 15.

Health Transparency 13: MeTA International Visit to Manila

Last Wednesday, April 10, 2013, the International MeTA Secretariat (IMS) visited Manila to meet up with Medicines Transparency Alliance (MeTA) Philippines Council officers and members, and attend the MeTA Discussion Series on PhilHealth's primary care benefit (PCB) new packages. I am one of the members, that's why I was there.

The three visitors from IMS were Dr. Tim Reed, Executive Director, Health Action International (HAI), Ms. Renee Vasbiner, Administrative Coordinator - MeTA Secretariat, HAI, and Ms. Deirdre Dimancesco. Technical Officer, Medicines, Access and Rational Use, Department of Essential Medicines and Health Products, WHO HQ. 

Tim Reed here speaking during the meeting with MeTA Philippines members, headed by Chairman Roberto "Obet" Pagdanganan (former Bulacan Governor, former PITC President) and Ms. Cecile Sison, MeTA Secretary General. 

The morning meeting was mainly on internal matters, like updates on both the international and Philippines offices of MeTA. There was a brief discussion though on pharmacovigilance, presented by Dr. Mariano Lopez. It is a joint project by the Philippine College of Physicians (PCP), MeTA Philippines, and the Rotary Club of Manila, in coordination with the FDA. Gov. Obet is also the club President this rotary year 2012-13.

The plan is to conduct random drug tests from selected drugstores and hospital pharmacies in terms of drug quality and safety. Any anomaly that will be detected, FDA can quickly act. The results of the FDA laboratory test will be (1) shared among the hospital therapeutics committees to improve drug procurement on the basis of good quality drugs and/or; (2)announced to the general public with considerations for possible litigations and/or; (3)left to FDA’s discretion and regulation.

For me this is a good initiative. Civil society organizations like PCP, MeTA and some Rotary Clubs can and should initiate this kind of projects to further protect patients. One participant narrated that they conducted a similar pharmacovigilance survey in the past, and they encountered difficulty getting the support and cooperation of some government hospitals, especially those run by the LGUs. For instance, they discovered that in a provincial hospital in Bohol, an IV supplied to the hospital was improperly packaged in a mineral water bottle (!).

PhilHealth Watch 15: Rising Claims for NCDs

Payment for the Philippine Health Insurance Corporation (PHIC or PhilHealth) is among the four mandatory monthly payments that people in the formal sector must accept. Meaning even if they are not satisfied with many government services, their monthly take home salary becomes smaller because of these mandatory deductions and forced contributions. The other three are SSS/GSIS, Pag-IBIG, and the withholding personal income tax.

Before tackling the costs and benefits of PhilHealth, here is an important situationer on healthcare in the Philippines in 2009, the latest available data.

Source: National Epidemiology Center, Department of Health; The 2009 Health Statistics

In red are non-infectious or non-communicable diseases (NCDs).  Diseases of the heart or cardiopathy include coronary heart disease, cardiovascular disease, heart failure, hypertensive heart disease, cardiomyopathy, and so on. Vascular diseases or more commonly called as “stroke” refer to brain dysfunction related to diseases of the blood vessels supplying the brain. Main cause is hypertension. Cancers, there are probably 200+ different types of cancer.

In terms of the main causes of morbidity, NCDs do not figure much, except hypertension. Infectious and communicable diseases are the top causes.

Despite these, the average lifespan of Filipinos is rising, 67 years and 73 years for male and female, respectively, or average of 70 years for both sexes. This is lower than the Asian average but higher than the global average.

Table 2. Selected Health Indicators, 2010

Source: WHO, http://www.who.int/gho/countries/phl.pdf

The cost of PhilHealth.

The budget of the Department of Health has shown huge increases recently. From only P18.91 B in 2008 to P31.83 B in 2011, then P42.08 B in 2012 and P53.06 B this year.  The big rise in recent years is due to increased premium payment for the DOH sponsored program for PhilHealth membership, some 5.2 million households were newly enrolled in PhilHealth. The  DOH budget is from taxes and other government revenues plus borrowings.  

PhilHealth spending does not come from taxes or borrowings. It comes from mandatory contributions of those in the formal sector, government and private, from individually-paying self-employed people, and from the DOH and LGUs who sponsor the annual premum of several million poor households.

LGUs also have their own healthcare programs for their poor residents, like having their own city or provincial hospitals, barangay/municipal/city health centers, and LGU payment and enrollment of some 5 million poor households to PhilHealth, meaning the LGUs paid for their annual premium. And other government agencies also provide free or cheap healthcare to the poor, like the Philippine General Hospital (PGH), AFP hospital, PNP hospital, and so on.

Mandatory contributions to PhilHealth are:

1. Formal/employed, from 2.5 to 3.0 percent of monthly salary

2. Sponsored program and informal non-poor, from P1,200 to P2,400 per year

3. OFWs, from P900 to P1,200 per year

4. Lifetime members/retired, none.

Benefits of PhilHealth.

People who get hospitalized due to serious diseases will worry less when the hospital bill comes. PhilHealth will pay for various services such as physicians’ fee, laboratory and diagnostic tests fee, hospital room fee, surgery if any, medicines, and so on.

Traditionally, PhilHealth covers only patients who are confined in accredited hospitals for at least 24 hours.  Meaning if the patient stays in the emergency room for 23 hours or less and go home afterwards, the corporation will not pay for any of the bill.

Recently, PhilHealth also pays for outpatient services for poor members through the primary care benefit (PCB) package.

In a presentation last April 10, 2013 at the MeTA Philippines forum held at the Asian Institute of Management, PhilHealth officials led by Dr. Riza Herrera and Dr. Liezel Lagrada discussed an update about the corporation’s packages 1 and 2. Among the striking facts in their presentation was the big jump in claims for four major NCDs from 2002 to 2012. Claims for  hypertension rose from 50,000+ to around 220,000; cancer-related claims rose also from 50,000+ to around 210,000; and heart diseases, from about 25,000 to around 110,000.

Figure 1. PhilHealth claims for four NCDs.

The above chart confirms the prevalence of NCDs as leading causes of death in the country, also worldwide.

In terms of actual payment for the same period, hypertension rose from P0.5 billion to around P3.6 billion; cancers rose from around P0.3 billion to around P1.8 billion.

Figure 2. Payment for Claims for four NCDs.

The plan of PhilHealth and the DOH, with signals from the UN and WHO, is to control NCDs.

The exchanges that followed the presentation were very lively and spontaneous as the audience came from various backgrounds – drugstore owners, drug manufacturers, academe, NGOs, health professional associations, DOH, PhilHealth and so on. Most of the questions,  comments and suggestions, explicitly or implicitly, were directed at how PhilHealth should further consolidate and centralize more healthcare delivery.

And this is where I do not agree. People should not expect too much from PhilHealth. More expectations, more disappointment. As mentioned above, there are other government agencies, local and national, that provide free or cheap healthcare for the poor even if they are not PhilHealth members and contributors. Then there are private foundations, charitable individuals, civil society groups like Rotary Clubs that conduct regular medical missions to the poor.

Limit PhilHealth Payment and Contribution.

PhilHealth must veer away from spending more  on outpatient services for NCDs. It must focus instead on infectious or communicable diseases, pediatric diseases. A patient who has dengue or malaria can easily be treated even if hospitalized for several days. After that the patient goes home and may not come back to the hospital and take PhilHealth claims for several years.

Contrast that to someone who has lung cancer due to over-smoking, or has liver cancer due to over-drinking, or fat and has various diseases of the heart due to over-eating and sedentary lifestyle. This type of patients will keep coming and coming for difficult and complicated treatment and maintenance medications. PhilHealth reserves can sink if not go bankrupt with more of this type of patients. Or PhilHealth will raise the premium from the current 3 percent to 5 percent or higher just to prevent bankruptcy.

The appropriate policy is to limit PhilHealth exposure to the former type of patients for outpatient services and primary care package. If people can have money to buy lots of alcohol or tobacco or fatty food and drinks, then they should have money also to buy private health insurance, on top of their PhilHealth insurance and DOH or LGU healthcare spending.

Let private providers of healthcare offer various packages at various premium payment for various people with various income. Those who are less responsible of their own body or their family should get more elaborate private health insurance. If they are poor, they can approach private charities, charitable individuals and friends, to cover for their funding gap.

Private healthcare providers are under pressure to produce good services to their clients, to satisfy their customers. If their customers are unhappy, they can go bankrupt. This pressure is absent in government healthcare providers because their funding comes from forced and mandatory payment. Even if the public are unhappy with their services, people are forced to contribute money to these agencies.

----------

See also:
PhilHealth Watch 11: Is PHIC an Insurance Company?, June 12, 2012
PhilHealth Watch 12: Assistance to Leptospirosis Patients, September 03, 2012
PhilHealth Watch 13: SHInES on Social Solidarity, November 26, 2012 

PhilHealth Watch 14: Not Yet 85 Percent Coverage, January 10, 2013