This document discusses public and private health spending in the Philippines. It provides data on the leading causes of death from 1997-2005 and notes diseases of the heart and cancer as the top two causes. It also shows health care resources available in the Philippines compared to neighboring countries. The document outlines the government health facilities and resources in the Philippines at the national and local levels. It discusses issues with government spending on medicines and the importance of medicine innovation for developing new drugs and treatments. It advocates for government reforms to make the healthcare system more competitive through reducing taxes, encouraging more players, and allowing decentralization instead of re-centralizing healthcare.

1. Public and Private
Health Spending
Bienvenido “Nonoy” Oplas, Jr.
Minimal Government Thinkers Inc.
Paper #3 presented at Dr. Alvin Ang’s
graduate class on Public Finance
Ateneo de Manila University, Quezon City
28 January 2015

2. Killer Diseases, World
The Economist Daily Chart, Sept. 28, 2011
Estimated death from AIDS, million
The Economist, June 03, 2011

3. Killer Diseases, Philippines
Source: National Statistics Office,
http://www.census.gov.ph/data/sec
tordata/sr11564tx.html
Death per
100,000 popn.
1997 2000 2005
1. Diseases of
the heart
69.8 79.1 90.4
2. Malignant
neoplasms
(cancer)
37.5 47.7 48.9
3. Tuberculosis,
all forms
32.2 36.1 31.2
4. Diabetes
Melitus
9.4 14.1 21.6
5. Transport
accidents
9.9 2.4 9.1

4. • If some people will over-eat, over-
sit, over-smoke, or over-drink, and
have diff. types of NCDs, should the
rest of society pay heavily for their
treatment, incl. drug subsidies?
• Distinction bet. personal/parental
responsibility and government
responsibility in healthcare

5. Health care resources (per 1,000 population)
ADB, Key
Indicators
for Asia
and the
Pacific
2014
PH has
more
physicians
per 1,000
people
than
Thailand,
Indonesia,
Myanmar,
Cambodia,
Laos.

6. PH Government Health Facilities and Resources
(they are many actually, not “not enough” as often heard)
National Government
1. Department of Health (DOH), DOH hospital
2. PhilHealth subsidies to poor patients in private hospitals
3. UP, Philippine General Hospital
4. DND, AFP hospital, Veterans hospital
5. DILG, PNP hospital
6. Other state universities' hospitals
7. PCSO, PAGCOR donations for health
8. SSS, GSIS, etc. health spending
Local Governments
9. Provincial, District, City hospitals
10. Provincial, City, Municipal health centers
International Agencies
11. WHO, WB, ADB, other multilaterals’ health portfolio
12. USAID, JICA, KOICA, CIDA, EU, etc. bilateral grants
As of 2013:
• DOH hospitals 60
• LGU hospitals 584
• Rural health units
(RHUs) 1,285,
• Barangay health
stations (BHS) 962.

7. Right, PH govt. Universal
healthcare (UHC) vision
Below right, estimated
distribution of total health
expenditures (THE) in PH
Below left, DOH budget
converted to US$

8. Wastes and corruption of
course, happen in many
government agencies,
national and local.
This explains why govt
spending on medicines is
“high”. A P10/tablet retail
price, instead of becoming P5
due to bulk purchase,
becomes P20 or P50 or
P150/tablet due to price-
padding and robbery.
"Even test tube brushes, which cost around P10-P20 perhaps, cost P350!
Gloves which cost P120-P150 pesos are priced P550 in that receipt. Amoxicillin
syrup which costs P15-P20 is priced P115,"
"All patients who need medicines as per my prescription have to go to his
(mayor's) office to get the medicines themselves... Even this much jacked-up
medicines are used as political tools,… I hope I can also see they are getting
the right medicines. Those who dispense the drugs are waiters of the mayor
with no health background.”.

9. The Role of Medicine Innovation
(and why IPR busting policies should be avoided as much as
possible)

10. Drug Innovation and Consumers
Before generic drugs, innovator drugs are invented first, and it is a long and
costly process. R&D for one safe and efficacious drug takes 10-12 years,
and on ave., only 1 out of 8,000 compounds reach approval for use.

11. Patent expiry and generic drugs
Patients benefit from (a) drug innovation even at initially higher price, then (b)
generic drugs at lower price. Chart source: PHAP

12. As new medicines and treatment vs infectious diseases
come on stream, people are living longer, healthier

13. Life expectancy
from birth (years)
ADB, Key
Indicators 2014
* PH, 1990-2000, life
expectancy rose by 1.6
yrs,; 2000-2012,rose by
1.8 yrs. At this rate, by
2015, Filipinos on ave.
can expect to live
around 69.2 yrs.

15. Government reforms for a competitive healthcare
• Reduce taxes on medicines and healthcare. import tax 1-
5% + VAT 12% + local government taxes.
• Encourage, invite more players in pharma (innovators
and generics), drugstores, hospitals. Competition from
more players is often the best insurance to bring down
prices and improve products and services quality.
• Focus on fighting substandard, fake medicines, in
partnership with civil society. Protect the public via quality
control, not drug price control,
• Do not re-centralize healtcare, allow decentralization and
competition among LGUs, among private health
insurance, drugstores, hospitals, pharma.