* This is my article yesterday in BWorld.
THERE ARE MANY claims and complaints that (a) the health
condition of Filipinos is “deteriorating” because of rising inequality, and (b)
because government health spending is not big enough. Thus, the goal of
universal health care (UHC) for Filipinos will remain an illusion.
Are these statements true and correct? Two charts below
will provide some answers to these questions above.
LIFE EXPECTANCY
If people evade or survive various infectious diseases,
if they can deal more effectively with non-infectious diseases, then they can
live longer, work and enjoy life longer. (see Figure 1)
Figure 1: Life expectancy in Asia, 1970 and 2010 (in
years)
On May 14, 2015, I attended the Department of Health
(DoH) consultation with civil society organizations, on the proposed DoH 2016
budget. This chart was among those presented by the DoH. Its budget has been
increasing rather fast, rising by almost P10 billion a year from 2010 to 2013,
then by around P18 billion a year from 2014 to the proposed 2016 budget. (see
Figure 2)
Figure 2: DoH Budget, 2010 to Proposed 2016 (in billion
pesos)
DOH BUDGET
Only the Department of Social Welfare and Development
(DSWD) has a comparative huge jump in the annual budget as the DoH, because of
the expansion of the conditional cash transfer (CCT) program. The big annual
increase in DoH budget is also tied to the CCT program as the DoH has
significantly expanded PhilHealth coverage and subsidy to the poor,
particularly those who are CCT beneficiaries. So it is a DSWD-DoH “tag team”
that has been given high priority by Aquino administration.
The huge increase in the proposed 2016 DoH budget is
mainly to increase the MOOE by P11.75 billion, and it is targeted to finance
expansions in (a) Subsidy for health insurance premium payments of indigents
and senior citizens, P6.72 billion, and (b) Implementation of the Doctors to
the Barrios and Rural Health Practice Program, hiring of UHC implementers,
P2.83 billion. (see Figure 3)
Figure 3: Budget increase from 2015 to proposed 2016 (in
billion pesos)
Going back to the two questions above, (a) are Filipinos’
health conditions deteriorating, and (b) is government health spending not big
enough?
No to both questions. The fact that Filipinos’ life
expectancy keeps rising means that less people are dying in each age bracket.
They live and work longer on average than their parents and grandparents.
Note also that Figure 2 shows only increases in the DoH
budget. Other agencies and departments also have rising health spending, like
the following: (a) Philippine General Hospital (PGH) which is under the UP
budget; (b) AFP and Veterans Hospitals, which are under the DND budget; (c) PNP
Hospital which is under the DILG budget, and so on.
Furthermore, almost all provinces and big cities have
their own provincial or city hospitals. The luckiest of them all is the city of
Manila: it has six city-owned hospitals, three DoH hospitals and the UP PGH.
Ten government hospitals in one city, four national and six local, while some
cities do not even have a single hospital. So when people talk about “health
inequality,” government itself is a major contributor to it.
The voices of “more public health spending” never die
out, they even rise every year. But is government direct provision of health
care the most appropriate way to achieve UHC?
HEALTH VOUCHER SYSTEM
Here is a counter-offer. The DoH will still get huge
money from taxpayers and Congress. It will still be the lead national agency in
ensuring UHC. But there will be some difference in these mechanisms.
One, DoH will no longer be the direct provider of health
care via its hospitals, free or subsidized medicines package, and indirect
subsidy to poor people via PhilHealth enrolment. Instead, all hospitals will be
private, all DoH hospitals will be privatized (not abolished).
Two, DoH will be giving health vouchers to all households
nationwide, rich and poor alike as all households are taxpayers, whether via
direct income taxation or indirect consumption taxation (VAT, excise tax on
fuel, etc.). Say a flat rate of P15,000 per person per year, regardless of age.
So a household with four members (parents + 2 kids) will get a P60,000 health
voucher per year. The household can buy a private health insurance, HMO or
hospital, that will take care of them for one year based on certain health
packages, including the annual general checkup.
Lousy and insensitive insurance firms will lose customers
and go bankrupt. Competition among players and vouchers for the poor that are
as good as cash will empower them, and arrogant insurance firms cannot easily
disrespect them. Richer households who want bigger insurance coverage will
simply buy a higher annual package and they just pay the balance between the
higher cost minus the vouchers issued by the DoH.
Three, if none of the family members gets sick for the
year, the balance between the value of voucher minus the cost of annual general
check-up can be converted into cash by the household.
This is important. Why? The households will have the
incentives to take good care of their bodies. Young kids can tell their parents
like “Papa/Mama, please do not smoke or drink too much, so you don’t get sick
often, so we can have extra cash at the end of the year, then you can buy us
more food or more clothes and toys.”
The voucher system with redeemable cash reverses the
incentives system. If people get sick, they can still be covered by the health
voucher; but if they take good care of their health and do not get sick, they
can have cash at the end of the year.
This is a win-win situation for both the DoH and the
public. The DoH will still get its huge annual budget including its share from
the huge sin tax, the public will get the money via health insurance and/or
redeemable cash.
Bienvenido Oplas, Jr. is the president of Minimal
Government Thinkers, Inc., a Manila-based think tank advocating free market
economics.
------------See also:
BWorld 1, PH Economy and Politics, Is there a Disconnection? April 24, 2015
BWorld 2, Benefits of Trade Liberalization for the Philippines, May 16, 2015
UHC 26: Public and Private Spending on Health, January 31, 2015
UHC 27: Paranoia on Healthcare Corporatization and Privatization, April 06, 2015
UHC 28: Health Pessimism Despite Improving Public Health, April 10, 2015
