1. Health Sector Expenditure Framework (HSEF): A Multi-year Spending Plan for the Department of Health Rosario G. Manasan

2. Outline of presentation HSEF/ Purpose Estimates of resource requirements and gaps in the context of DOH budget reforms Alternative HSEF scenarios

3. medium –term expenditure estimates for the health sector compares cost estimate- requirements with the amount of funds that is projected to be available for the implementation of priority and critical programs and projects i.e, Fourmula One for Health PPAs What is HSEF ?

4. WHY HSEF? IMPORTANT INPUT FOR THE IMPROVEMENT OF PUBLIC FINANCE MANAGEMENT Injects policy and strategic focus at the budget preparation stage Strengthens the impact of policy priorities on budget allocation Commits decision-makers to a sustainable fiscal policy and a clear set of sectoral priorities Encourages a medium –term/ multi-year perspective to decision-making

5. POLICY AND STRATEGIC FOCUS MTPDPMDGs F-1 NOH

6. Estimates of resource requirements for various programs in health sector derived in this study are reflective of some efficiency improvements in service delivery estimates assume lower wastage factors estimates assumes better targeting of subsidies Estimates of resource requirements

7. How much is needed to meet MDGs?

8. How much is the resource gap?

9. How much is required for SHI-IP? How much is the resource gap?

10. DOH Spending patterns and trends (1)

11. DOH Spending patterns and trends (2) Reduction in real per capita spending on public health is dramatic. Reduction in real per capita spending on tertiary care is less so.

12. What needs to be done?  Need to increase or secure allocations for public health; justified because of public good nature of public health  Need to secure nat’l subsidies for premium to indigent program of PHIC and to ensure sustainability of retained hospitals

13. What needs to be done? (2)  Need to reallocate funds or liberate funds by increasing cost recovery and reducing subsidies to retained hospitals and regulatory agencies

14. Why liberate funds from hospitals?  National government subsidies to retained hospitals is said to be inefficient and inequitable Inefficient because hospital subsidies can benefit more people if converted to social health insurance premium subsidies Inequitable because access to retained hospitals tends to be limited to residents of mostly well-off urban centers

15. Budget for service delivery – hospitals (1)

16. Budget for service delivery – hospitals (2)

17. Budget for service delivery – hospitals (3)

18. Budget for service delivery – hospitals (4)

19.  Given this perspective, there is scope to reallocate resources away from retained hospitals.  “Financing F1” paper proposes that retained hospitals contribute at least 5% of their MOOE allocations to support essential F1 programs in exchange for greater access to and more flexible use of user fees and PHIC reimbursements. Budget for service delivery – hospitals (5)

20.  With greater cost recovery from the DOH’s regulatory services, there is scope for reallocating resources away from regulatory bureaus of the department. Sustainable revenue generation of regulatory agencies depends on their credibility to set standards, verify/ enforce compliance. For this to happen, critical investments to build capability in these agencies needed. Budget for DOH regulatory services (1)

21. Budget for DOH regulatory services (2)

22. Alternative HSEF scenarios  Health budget ceiling pegged at 2006 levels Case 1a.  Reallocation from hospitals and regulatory bureaus equal to 5% of MOOE in 2007 and 10% MOOE in 2008-2010  Order of priority – FAPs then public health  no additional allocation for premium subsidies for health insurance of indigents

23. Alternative HSEF Scenarios (2)

24.  Budget ceiling pegged at 2006 levels Case 1b.  Reallocation from hospitals and regulatory bureaus equal to 5% of MOOE in 2007 and 10% MOOE in 2008-2010  Order of priority – public health then FAPs  no additional allocation for premium subsidies for health insurance of indigents Alternative HSEF Scenarios (3)

25. Alternative HSEF Scenarios (4)

26. Alternative HSEF Scenarios (5)  Budget allowed to grow Case 2a:  Reallocation from retained hospitals equal to 5% of MOOE in 2007 and 10% of MOOE in 2008-2010  full coverage for FAPs  increased support for public health so as to reduce gap initially by 50% in 2007, 65% in 2008 and 100% in 2009- 2010  increased support for subsidies to indigent premium from 25% of gap in 2008; 50% of gap in 2009-2010.

27. Alternative HSEF Scenarios (6)

28. Case 2b:  Reallocation from retained hospitals equal to 5% of MOOE in 2007 and 10% of MOOE in 2008- 2010  full coverage for FAPs  increased support for public health so as to reduce gap by 100% in 2007-2010  increased support for subsidies to indigent premium initially from 50% of gap in 2008 and by 100% of gap in 2009-2010. Alternative HSEF Scenarios (7)

29. Alternative HSEF Scenarios (8)

30.  There is a resource gap!  We need to enhance capacity of hospitals to capture a larger share of the market and acquire a lion’s share of PHIC reimbursements but without compromising access to care by the disadvantaged  We need to enhance capacity of regulatory agencies to improve services  We need to have financial reforms through the HSEF and other PPAs Last words…