Financing Health Services>> Asec Maylene

 Health technology assessment- assess safety, efficacy of incoming health technology

 Underfunding, procurement, magna carta benefits of healthcare workers, misallocation of funds,
inequitable sourcing of funding: high out of pocket, fragmentation and overlap of various
funding sources (DOH, Philhealth and LGUs)
 Health financing > financial management (bookkeeping, accounting)
o Raising enough revenues (collection- e.g. through tax, social insurance, user fees, others-
external sources, medical savings account, informal payments-under the table bills/
negotiations; and generation)
o Pooling of funds (social health insurance); opposite: out of pocket
o Managing revenues to pool health risks equitably and efficiently
o Ensuring purchase of health services that are allocatively and technically efficient and
provider payment
o Most important question answered: who should pay for what?
 Health financingUHC intermediate objectives: service use relative to need (and not ability to
pay), efficiency, quality, transparency and accountability
UHC goals: health gain and equity in health, financial protection (ability to sleep soundly) and
equity in finance, responsiveness (serving individuals with dignity)
1. Revenue collection
o Public
 Non-tax revenue- eg. Environmental fee
o Private
 Voluntary health insurance (HMO)
 Medical savings account: forced savings by workforce in Singapore
2. Pooling of funds
a. Risk subsidization (transfer of funds from that of low risk to high risk)
b. Equity subsidization (from rich to poor)
c. Cross subsidy from productive to non-productive part of the life cycl
 BCDs of effective pooling
d. Big size: Population must be big enough (ie general population)
o Compulsory/ forced: low adverse selection; the law automatically provides coverage for
the entire population
o Diverse risk profile
 Pooling arrangements
o General revenue: widest risk pooling; covers whole population; part of which is given to
DOH; ex. UK
o Community financing: community health fund, community health insurance; restrictive
within a specific locality
o User fees, medical savings account, out of pocket: no risk pooling
3. Purchasing and provider payment: types
 Time based: salary (fixed regardless of patients seen, but dependent on attendance), line item
budget
 Service-based: fee for service target, fee for patient, target payments
  Population-based: capitation payment (through social health insurance)- as an individual
practitioner, I can hire a you for 10,000 a week (block contract)
o Depends on a fixed number of people to treat

National Health Budget>> Dianne (Planning)

 DOH 2023: 49% MOOE, 34% PS

 Tier 2: new or expanded PPAs
o Will compete with fiscal space of other agencies
o Appraisal criteria:
 strategic fit- management approved
 inclusion in the MTEP
 alignment with directives
 mandate fit
 absorptive capacity- OBUR (obligation), DBUR (disbursement)
 readiness for implementation
 economic distribution
 stock inventory
 others

Local government cycle>> Dr. Lester Tan (Director, Bureau of Local Health Systems Development)

GAA= national

Appropriation ordinance= local

Ruling on Mandanas-Garcia: local government code: internal revenue allotment, while in the
constitution: national taxes

 IRA NTA= national tax allocation

Special Health Fund: Highly urbanized cities/ ICC

 Devolution- evaluation: essential medicines (ie deworming)

Philhealth>> Mel Santillan

Overview of the Provider Payment Reforms toward DRG-GB (Diagnosis related groups-global budget)

 Philippines is not yet using this type of payment mechanism

 Philhealth: offshoot to medicare, started in 1995
 Administrator of the National health insurance program
 Single fund/ single payer
 Social health insurance “bayanihan”
 Government owned and controlled corporation

Provider payment mechanism

  Instrument by which the purchaser of health services (Philhealth) transfers funds to
health care providers in exchange for services.
 Philippines: case-based- (from 2014 to present) for inpatients- include all case rates and
z benefits; and capitation: payment is predetermined per beneficiary for standard
services for a fixed period (ex. Primary care)
 Other PPM:
o per diem- fixed amount each day
o global budget- Brunei
o fee-for service (PPM: fee for service from 1995 to 2011); also seen in Korea-
efficient through digitalization
o DRG: US, Australia; started in Philhealth in 2008
 each has its own advantages and disadvantages
 UHC law (2019): transition from fully case-based (all-case rates or ACR) to DRG-GB to
global budget to minimize disadvantage of other PPM (section 18b)- performance-
driven, close-end (global budget- there is a cap), prospective payments based on disease
or diagnosis-related groupings
o Transition is through rationalization of selected case rates- based on financial
risk protection, epidemiologic data, equity; ex. Cataract- ophthalmologists have
seeker to gather potential cataract patients and do medical missions; and ask
Philhealth to pay them; OB doing CS even if not indicated- no need to monitor
labor, higher PF
 Costing: top down (to understand hospital operations, cost centers, saan gumagamit ng
resources; faster) and bottom up (activity-based; to validate top down costing)
 Overall direction for provider-payment: fund pool ACR DRG
 DRG
o Payment scheme
o Patient classification scheme
o For In-patient
o Purpose: to relate a hospital’s case mix to the resource demands and associated
costs experienced by the hospital
o We are adapting Thai DRG version 5.0 (IT system free)
o Payer’s perspective: case mix complexity refers to the resource intensity
demands
o More responsive and accurate in giving incentive
o Consider patient attributes (age, gender, comorbidities), length of stay, diagnosis
and procedures, discharge status
o What issues can DRG-GB solve: incentives for quality and efficiency, coverage,
flexibility, decrease turn around time for claims
 Global budget: all the reimbursements for a hospital in a given year, with performance
bonus
 RVS: relative value scale ICD-based system
 Konsulta Konsulta plus

Benefit packages: PhilHealth Benefits Development Plan Protocol

  To determine what services should be covered by the government
 Catastrophic benefit packages: Z benefits for breast CA, ALL, kidney transplant
 Konsulta: primary care
 In patient benefit packages
 Maternity care package
 The fund pool is finite
 Steps:
1. Prioritizing and determining the benefits the NHIP should provide
 Burden of disease
 Consultation with high-level decision makers
 Consider country commitment ie SDG 3: ensure health lives and promote well-
being for all at all ages
 PDP 2023-2028
 Legislative mandates: mental health act, kalusugan nutrisyon ng magnanay,
cancer control act, rare diseases act, newborn screening act
 Emerging diseases
 Public interest
2. Determine provider payment mechanism
3. Develop and design a benefit package
 Benefit scoping: defining the index patient, identifying inputs
 Ex. Mental health: expanded to include outpatient
 Defining clinical pathway (based on CPGs); CPG appraisal
 To know standards of care and minimum standards of care
4. Risk assessment, budget analysis (done by office of actuary), management and board approval
(board includes DOH sec, DSWD)
5. Implementing the benefit package
6. Monitoring and evaluation
7. Decide on the package (enhance, discontinue, continue or terminate), depending on CPGs,
standards of care, technology
 Strategic purchasing: PhilHealth can negotiate during purchasing

Revenue Collection and Generation>> Maylene Beltran, RN, MPA

 Is there a perfect health system by Mark Britnell- video

 Resource generation goals: sufficient and sustainable
 Risk pooling: financial accessibility of health services for all
 Revenue collection
o Tax-based
 Most widespread, especially in Beveridgean
 Very efficient: mobilizes funds from everyone
 Individual contributions are not dependent from the individual’s likelihood of
needing or using health services
 Concept of progressivity]
 Uses of taxes is though political processes
 Macro-allocation
 o Contracting: through health care provider network (incudes private)
 Private insurance
o Adverse selection
o Voluntary
o Principal coverage: primary form of prepayment
o Supplementary coverage; complements public funding
 Community insurance
o Very limited coverage
o Membership premiums are often a flat rate and independent of individual health risks
o Very limited risk pooling
o Affiliation is voluntary
o Cross-subsidization is very limited
o Risk is pooled within a community sharing geographical location or occupation
 User fees/ charges
o Out of pocket
o Most inefficient way
o No unnecessary use of health care (demand = actual need)
o More incentive to utilize primary care facilities
o Instant and greater revenue for health facilities to improve their services
o How it improves equity? Force a system of having exceptions for the poor
o Perils: must be paid at the time of illness
o Supplier-induced demand
o Price elasticity of demand for health services; will avail services ‘kahit magkano pa yan’
o Identifying the poor will get exemptions or reduced prices
 External funds/ ODA (official development assistance- needs to pass through government)
o Bilateral (ex. Japan) or multilateral (world bank, ADB)
o Loan or grant
o Budget support loan
o Concessional loan
o Volatility
o Fungibility- property of a good whose components are interchangeable, equal value
between assets
o Absorptive Capacity
 Medical savings account
 Informal payments- under the table
o Threat to public health and corruption

Time-based remuneration

Service-based

 Cream skimming-simpler cases is treated

Population-based
 Geographic location
 HCPN
Efficiency: value for money

 Allocative efficiency: directing resources to their most productive use; doing things right
 Technical efficiency: are we doing the right things, carrying out activities with the least
possible resources; effectiveness, quality

Equity

 Poverty threshold= 12000/month for a family of 5

  Food threshold= altanghap- only one meal per day
 Near-poor aka entrepreneurial poor aka transient poor= slide down to poverty threshold
during economic shock; target of micro-finance
 Equity addresses: who has more need?
 Relative poverty
 Recognizing trade-offs will enable you to make contingency plans
 Planning= ideal
 Contingency plans= recognizing risks, assumptions

Transaction costs: addressing this will cause efficiency gain

Case rate: looks at efficiency gain

 Package deal
 Average of net gain/losses for each disease
 Performance indicator
 Forces agency to be more efficient

Strategic purchasing

 High population coverage gives more leverage

Prescribing behavior of doctors

Contracting vs. accreditation

 Used by Philhealth to avoid liability

 Contracts entail accountability

Cross subsidization universal coverage

 Relative vulnerability
 Preferential option for the most disadvantaged: equity in healthcare