Friday, September 14, 2012

Institutionalizing the Policy of Privatization – Abandonment of State’s Responsibility to Peoples’ Health

A position paper on the 2013 budget for health of the Aquino administration (14 September 2013)

The 2013 national government budget for health of the Aquino administration reflects the state’s increasing abandonment of responsibility to people’s health while giving profits and incentives to the private sector. The proposed health budget reinforces the policy of healthcare privatization and perpetuates the sugarcoating of anti-people programs through token reforms.

Contrary to the pronouncement of “Greater Focus on the Social Contract”, the alleged “Empowering Budget” neither empowers nor fulfills the social obligations of the present dispensation to the people.

The deliberate misrepresentation of “Greater Stakeholder Participation” as “Public-Private Partnerships for Social Service Delivery” reveals the true purpose of the Aquino regime: to turn health care from a public service into a private enterprise via Universal Health Care, Public-Private Partnerships as major components.

This position paper exposes the inherent flaws of the 2013 health budget through a critique of the national government’s historical failure to provide for the health needs of the people as reflected in its appropriations for health. This paper also puts forward what the Aquino government should be spending for, not on what is willing to spend, if it is in the least bit interested in the lives and welfare of the people.

The practice of deceptive “increases”

At first glance, the national government budget for the Department of Health (DOH) seems to be increasing. Yet government share in total health spending has not gone beyond 1-1.5% of Gross Domestic Product and the DOH budget over the last six years has been a mere P 21.7 billion (Table 1). Currently, government’s share of total health expenditure is just over 23%, which is why out-of-pocket spending is still around 55-60%. This means that Filipinos still pay more than half of their health expenses [1].

A significant amount of P12.612 billion (32%) of the 39.497 billion budget for the Office of the (Health) Secretary will actually go to the Philippine Health Insurance Corporation (Philhealth) as payment for the “subsidy for health insurance premium of indigents under the National Household Targeting System for Poverty Reduction” of the Department of Social Welfare and Development (DSWD).

One-fourth of the health budget amounting to P 10.325 billion is allocated for the “Universal Health Care Program”. This “program”, however, is nothing more than a collection of programs already being implemented by the DOH. The only new item is the P 15.600 million “Social Protection Package for Former Rebels, which is even questionable as a health program.

The other items under the “Universal Health Care Program” are programs that have no significant increase since last year: “Tuberculosis Control” 1.021 billion (in 2012 and 2013); “Non-Communicable Disease Prevention” from P 68.766 million (2012) to P 70.764 million (2013); and the “National Pharmaceutical Policy Development” from P 1.0 billion (2012) to 1.038 billion (2013).

The only two items that actually increased are “Family Health and Responsible Parenting” from P 2.280 billion (2012) to P 2.539 billion (2013), and “Other Infectious Diseases and Emerging and Re-emerging Diseases including HIV/AIDS and dengue” from P 223.797 million (2012) to P 321.951 million (2013). But this is increase is because of the rush to meet up with Millennium Development Goals by 2015 where the government is lagging behind the targets to reduce maternal mortality ratio (which shoots up from 160 to 221 per 100,000 population), cases of HIV/AIDS and dengue.

In contrast, the budget for “Elimination of Disease as Public Health Threat (e.g. Malaria, Schistosomiasis, Leprosy, Filariasis)” actually decreased from P 594.926 million (2012) down to P 520.443 million (2013).

In short, the “Universal Health Care Program” or Kalusugan Pangkalahatan is merely a lip service that offers nothing substantive in form and content.

Questionable allocations that strengthen privatization

In the last six years, the budget allocation for “Health Facilities Enhancement Program” (HFEP) grew logarithmically. From P 1.656 billion in 2008, it doubled to P 3.252 billion in 2010, and doubled again to P 7.144 billion in 2011 (Table 1). This is partly because the total capital outlay allocations of DOH-retained hospitals were removed and lumped together under this item. For 2013, this amount further balloons to P 13.558 billion, which is equivalent to one-third of the entire health budget although it is now separate from the DOH budget.

Yet the history of increasing appropriations for HFEP has not translated to anything tangible in terms of improving access to health care. The last six years has been notable only in the continued absence of any substantial improvement in government-run hospitals and health facilities. Based on the DOH report on the status of HFEP [2], only 16% of 1,230 infrastructure projects were completed in 2011, although 100% of the 755 projects in 2012 were allegedly completed. Even the 2,200+ rural health centers and 400+ district hospitals that are supposed to benefit from the 2013 budget are largely questionable because there are more barangay health stations, primary care centers and hospitals in dire need of funds. Since there is no clear-cut basis for the use of funds under this item, the concern is that the item is being used either as a milking cow or as additional government “equity” for entering into public-private partnerships (PPPs). It can also be used as political capital, especially since 2013 is an election year for local government officials.

Another questionable budgetary allocation is the P 1.2 billion earmarked for the “Community Health Team” (CHT) program. In 2012, this program allegedly promoted health by delivering 12 Key Messages to some 646,000+ households across the country and deploying some 62,000 personnel/CHTs. However, a cursory look at the Key Messages will raise not a few eyebrows. These include “Keep your promise to stay healthy”, “Practice proper hygiene”, “Use your Philhealth card”, and “Go to the health center when you have been coughing for two weeks or more”. These messages are either obvious (and therefore do not require repetition) or part of what should be routinely informed of patients by the health center staff.

So why is another P 1.2 billion needed for next year, on top of the almost P 1 billion budget already allocated for the same project this year, for something that should be part of routine work by health center staff members? Will this huge amount be used to oil a high profile promotion of the UHC and the PPPs while covering up the ill effects of privatization?

The practice of intentional neglect

The Magna Carta of Public Health and the Nursing Act of 2002 are two laws that are meant to improve the conditions of health personnel. However, the national government has intentionally overlooked the implementation of these laws and has instead promoted the outmigration of the Filipino health workforce.

The Aquino government’s report of its touted deployment of nurses through RN HEALS conveniently forgets that the nurses only have a 6-to-12 month contract and are given a salary (P 8000 per month) that is way below that mandated by law (Salary Grade 15 or P 24,887 per month).

For 2013, the DOH is asking for P 2.799 billion to deploy 22,500 nurses through RN HEALS (P 2.16 billion), together with 221 doctors under the Doctors to the Barrios Program (P 188 million) and 4379 midwives under the Rural Health Midwives Placement Program (P 315 million). By computation, the P 2.16 billion translates to 22,500 nurses allocated only P 8,000 per month for 12 months. This means that the DOH will still be giving much lower remunerations to health personnel than what is required by law.

In terms of government hospitals, several studies have already noted that the DOH is not providing adequate budgetary allocations for these hospitals to function efficiently. According to the study by Lavado et al. in 2010, “The share of hospital allocation in the total DOH budget has been declining”, “There appears to be no clear allocation criteria for hospital budget”, and “Poorer regions are not receiving higher hospital subsidies” [3].

For the past two decades, state-run hospitals have been given budgets not based on what they actually need or spend. Instead, they are given incremental increases that are but a fraction of what they actually need to provide the services required of them. This practice is still reflected in the 2013 budget.

Thus, for example, the budget allocated for Jose Reyes Memorial Medical Center (JRMMC), the flagship hospital of the DOH, is largely insufficient for its 400+ bed capacity. Similarly, like most DOH-retained hospitals, the 700-bed Philippine Orthopedic Center is usually given around 30-40% of what it actually spends per year.

The government purposely encourages government hospitals to implement revenue enhancement programs to generate income which paves way to the entry of private sector/business.

In contrast to DOH-retained hospitals, the two hospitals under the Department of National Defense have been given budgets that are more proximate to their actual needs (Table 2). From 2008 to 2012, the annual Maintenance and Other Operating Expenses (MOOE) of Veterans Memorial Medical Center (VMMC) was four-times that of JRMMC. In the same period, the MOOE of the Armed Forces of the Philippines Medical Center (AFPMC) was almost equal to the combined MOOEs of JRMMC, San Lazaro Hospital, Jose Fabella Memorial Hospital, and Tondo Medical Center, even though the total patient capacity and amount of services provided by the four DOH-retained hospitals are more than twice that of the AFPMC.

Furthermore, unlike the DOH, the DND has been allocating an annual budget for the provision of Magna Carta benefits to its health personnel since 2011 (Table 3). This does not only involve personnel in its two hospitals (VMMC and AFPMC) but also those in its three major services (i.e., Army, Navy, and Air Force).

Similarly, the Philippine National Police has allocated P 3.850 billion every year from 2011 to 2013 for the provision of Magna Carta benefits to its health personnel. This raises the question of selective, if not outright biased implementation of the law. With this, it is clear that the government cares more for the military and neglects the health workers.

Implementing token and deceptive programs to cover up neglect and abandonment

Aquino’s Universal Health Care boasts of the PhilHealth as one of its pillars emphasized “the need for making PhilHealth membership a must for every Filipino”. The DOH intends to realize compulsory membership by “working with other government agencies to enforce mandatory PhilHealth membership for all Filipinos.” Mechanisms to this effect include making PhilHealth membership a requirement for school enrolment, licensing of business, renewal of drivers’ license and other government transactions.

PhilHealth which the DOH described as a “financial risk protection” is in essence a program which passes to the people the burden of paying for their health needs and medical emergencies. With the P100 monthly premium (P200/monthly by October 1, 2012) collection from every member, the DOH so easily deceptively points to PhilHealth program and coverage every illness and health emergencies one encounters.

In the 2013 Budget, the government allotted P12.6 Billion for PhilHealth. This is in line with the 2011-2015 Philippine Development Plan and UHC target to enroll 5 million poorest families by the year 2015. DOH Undersecretary Teodoro Herbosa announced the plan to phase out the charity wards in government hospitals. Curiously in the 2013 health budget, there is no longer a budget item for charity wards in government hospital.

The growing dependence of the DOH on role of Philhealth for healthcare delivery manifests a very myopic approach to decades-old problems besetting the Philippine healthcare system. No access to healthcare? PhilHealth will help you. Cannot afford to buy drugs? PhilHealth will help you. Being plagued by dengue or leptospirosis? PhilHealth will help you. No doctors or nurses in your areas? PhilHealth will help you. Based on the pronouncements of DOH officials, PhilHealth is the new “wonder drug” cure-all for the chronic ills of the health sector.

But PhilHealth cannot cover-up the continuing failure of the Aquino government to provide long-term solutions. For one, Philhealth has its own problems. Its numbers regarding coverage, for instance, is highly suspect because Philhealth has no reliable number of its total members. What Philhealth projects as its percentage coverage are mainly estimates and because of this, many of the real poor will continue to be denied the health care they need. PhilHealth as a social health insurance has many limitations and restrictions.

Moreover, PhilHealth coverage is useless if the public healthcare system remains neglected. For instance, its program of “No Balance Billing” only applies for sponsored members who are confined in accredited state-run hospitals, suffering from selected 23 medical & surgical conditions. Many provincial and district hospitals are not even equipped to provide service for these cases.

Worse, PhilHealth cannot mitigate the effects of privatization. A recent study based on Philhealth’s own projections shows that even if Philhealth pays out all of its funds (P 103 billion) in 2015, this will only account for only 20% of total health expenditure [1]. And since government share will continue to decrease due to privatization, Filipinos will still pay for more than half of their health expenses.

Selection of PhilHealth’s members under its indigency program will continue to be used for political purposes. The distribution of Philhealth cards, usually with only a one-year lifespan, was once associated with the Arroyo regime. Yet the Aquino government is not beyond continuing this EPAL-practice. It will not be surprising when the distribution of PhilHealth cards will once again be used to increase the political stock of candidates running in the 2013 elections.

In terms of showcase programs, nothing exemplifies the politics of palliatives more than the Pantawid Pamilya Program of the DSWD. This intends to cover up neglect of services, pacify the poor and creates dependency among them. Rather than provide jobs or land to the tillers, the Aquino government preferred to expand this dole-out program. But rather than “tide over” (pantawid) the poor, the program has increased their numbers in the last three years. As such, from a budget of P 39.445 billion in 2012, the DSWD is asking for P 44.256 billion in 2013. This amount is bigger than the entire DOH budget.

Neither universal nor adequate health care in the 2013 health budget

The 2013 health budget is replete with the same infirmities that afflict all previous national government budgets. These have intensified the already moribund state of the government-run healthcare delivery system.

Instead of sustainable development anchored on the people, there is the business interest and the push for privatization and corporatization. Instead of the value of service, there is the desire for profit and revenues. Instead of people as patients or as partners in health, they are viewed as clients and communities as markets. Instead of health as a social obligation of government, health has become a commodity being sold to the highest bidder.

Ideally, the national government budget for health should reflect the highest priority being given by that government. Instead, it has become a constant reminder of the exact opposite: the obstinate refusal of the Aquino regime to address the fundamental problems faced by Filipinos. The chronic ills that have affected the healthcare system are being perpetuated, or worsened, by the same level of thinking that has brought about such problems in the first place.

The 2013 budget, like the previous ones before it, embodies the manifest effort to make the neoliberal, market-driven framework of health more acceptable while hiding its innate bankruptcy. Token reforms are used as tools to deceive, if not coerce, the people into accepting privatization. What is obvious is that the Philippine government’s blind obedience to policies being peddled by the World Bank, International Monetary Fund, World Trade Organization, Asian Development Bank and various so-called development agencies, has only made the lives of Filipinos more miserable. From the structural adjustment programs of the 80s to the WB’s “Investing in Health” in the 90s to the “health sector reforms” and “universal health care”, these policies have only enriched the ruling elite and maintained the exploitative conditions imposed on the majority of Filipinos.

Our demand for an adequate health budget

The Aquino government’s health spending should not be less than P527 billion. This is based on the computation that public sector share (both national government and the local government units) of total health expenditure should be 5% of Gross Domestic Product in order to substantially decrease the out-of-pocket expenses of Filipinos.

This amount will have an immediate impact on all Filipinos as it will cut out-of-pocket spending. The funds can easily be raised by the Aquino regime if it has the political will to do so.

The P 527 billion health budget will be broken down as:
  • 35% or P 184.5 billion for improving the public healthcare delivery system
  • 30% or P158 billion P billion to fund health human resource maintenance and development
  • 35% or P184.5 billion for preventive and public health programs, and health promotion
HEAD believes that the health budget being proposed is a step meant to ensure that the right to health is guaranteed and fulfilled by the Aquino government.

The health budget being proposed also challenges the current policy of healthcare privatization and the corporatization of government hospitals. Nonetheless, a higher budget for health is only an initial measure. The demand for a free, comprehensive, and progressive health care for Filipinos remains a continuing call.

Most importantly, the needs of the Filipino people cover a broad range of social determinants that impact their health and lives: jobs, land, homes, and rights. Genuine land reform and national industrialization, together with genuine freedom and democracy, remain imperative.

References: [1] Paterno RP. “How do we finance universal health care?” Institute of Health Policy and Development Studies. 10 May 2012 (powerpoint presentation) [2] Department of Health. National Expenditure Program 2013 Budget Briefer. August 2012 [3] Lavado RF et al. How Are Government Hospitals Performing? A Study of Resource Management in Government-Retained Hospitals. PIDS, January 2010

Table 1.
Comparison of DOH annual budget per specific line item (2008-2013)(in millions of pesos)
2008 2009 2010 2011 2012 2013
PS 5,833 6,727 6,867 7,710 7,633 8,866
MOOE 10,643 10,585 11,317 15,192 25,995 30,413
Capital Outlay 2,436 6,355 6,466 8,927 8,528 218
Health Facilities Enhancement Program 1,656 2,073 3,252 7,144 5,0781 (13,558)2
Amount to PHIC --- --- --- 3,500 12,028 12,612
NG budget for DOH 18,912 23,667 24,650 31,829 42,156 39,497
Actual DOH budget3 17,256 21,594 21,398 21,185 22,050 26,885
(Source: DBM GAA 2008-2012, NEP 2013)
  • 1Aside from the P 3 billion as PPP equity.
  • 2Set under the “Priority Social and Economic Projects” (see Special Provisions no. 1 of 2013 NEP of DOH) and is not found under the budget of the Office of the DOH Secretary. It is mentioned in the NEP 2013 budget briefer of the DOH.
  • 3NG budget minus (HFEP + PHIC).

Table 2.
Comparison of NG budget between DOH-retained hospitals and
DND hospitals (2008-2013) (in millions of pesos)
2008 2009 2010 2011 2012 2013
Jose Reyes Memorial Medical Center
NG budget 292.199 363.603 367.281 368.288 389.315 465.266
MOOE 68.355 73.855 80.815 71.515 76.446 105.914
PS 220.844 254.642 256.466 296.773 312.869 359.352
CO 3.000 35.106 30.000 --- --- ---
San Lazaro Hospital
NG budget 269.137 343.389 313.536 322.079 315.681 398.813
MOOE 104.712 103.012 112.180 105.680 105.680 165.112
PS 164.425 190.077 191.356 216.399 210.001 233.701
CO --- 50.300 10.000 --- --- ---
Tondo Medical Center
NG budget 102.441 157.692 131.898 136.159 138.316 177.081
MOOE 22.229 26.071 27.729 27.729 29.115 46.966
PS 80.212 92.987 93.669 108.430 109.201 130.115
CO --- 38.634 10.500 --- --- ---
Jose Fabella Memorial Hospital
NG budget 257.411 294.478 299.801 325.889 367.787 390.180
MOOE 50.778 51.778 55.436 53.436 53.436 77.709
PS 201.633 232.650 234.365 272.453 264.351 312.471
CO 5.000 10.050 10.000 --- 50.0 ---
NG budget
921.188 1,159.162 1,112.516 1,152.415 1,211.099 1,431.34
TOTAL MOOE 246.074 254.716 276.16 258.36 264.677 395.701
TOTAL PS 667.114 770.356 775.856 894.055 896.422 1,035.639
Veterans Memorial Medical Center
NG budget 629.334 718.423 689.443 820.151 808.868 829.102
MOOE 309.515 318.857 328.644 371.589 386.294 395.482
PS 319.819 358.566 360.799 395.562 389.574 433.620
CO --- 41.0 --- 53.0 33.0 ---
AFP Medical Center
NG budget 713.339 850.099 923.534 1091.493 1098.104 1163.694
MOOE 405.102 517.530 588.808 727.242 756.895 772.676
PS 306.237 332.569 334.726 364.251 341.209 391.018
CO 2.0 --- --- --- --- ---

Table 3.
Annual budget for Magna Carta of Public Health Workers (RA 7305)
benefits by different DND branches and the PNP (in millions of pesos)
2011 2012 2013
Army 15.855 15.855 15.855
Navy 26.543 26.543 10.175
Air Force 13.702 18.232 15.036
VMMC 22.768 --- ---
GHQ (w/ AFPMC) 62.611 63.578 63.578
TOTAL 141.479 124.208 104.644
PNP 3.850 3.850 3.850
(Source: DBM NEP 2013)

  • DND, Department of National Defense;
  • PNP, Philippine National Police;
  • VMMC, Veterans Memorial Medical Center;
  • GHQ, General Headquarters;
  • AFPMC, Armed Forces of the Philippines Medical Center