All Rights Reserved. Maria Elena Baltazar Herrera. 2015
ENGAGING THE PRIVATE SECTOR FOR UHC
HEALTH SECTOR ROUND TABLE
Asia Think Tank Summit 2015 Asian Development Bank
Manila
20 to 22 May 2015
Maria Elena (Maya) Baltazar Herrera, FASP, PhD
Asian Institute of Management
Asia Network for Capacity Building
in Health Systems Strengthening (ANHSS)
Disclaimer: The views expressed in this paper/presentation are the views of the author and do
not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board
of Governors, or the governments they represent. ADB does not guarantee the accuracy of the
data included in this paper and accepts no responsibility for any consequence of their use.
Terminology used may not necessarily be consistent with ADB official terms.
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
UHC in Asia: Engaging the Private Sector
Diversity in Asia. Many things happening. e.g. ASEAN 2015
The private sector is significant in many Asian countries
Most Asian countries are interested in leveraging the private sector
Asia has diverse health systems but there is emerging interest in SHI as a mechanism for UHC
There is a wide spectrum for collaborating with the private sector for health system goals and many methods have been tried
There are lessons to be learned as well as continuing challenges
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Asia: Diversity of health systems
6
Total Health Expenditure (THE)
>60%
40-60%
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Growth of number of private hospitals
Trends Malaysia: 18%
increase in the share of hospitals market from 2000 to 2011
China: 17% increase of the proportion of number of hospitals in private sectors from 2005 to 2010
Japan, Singapore, Taiwan: Stable over 11 years
7
Pri
va
te h
os
pit
als
(in
% o
f to
tal n
um
be
r o
f h
os
pit
als
)
Private hospitals (%), 2000 - 2011
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Growth of private hospital beds
8
Pri
va
te h
os
pit
al b
ed
s (
in %
of
tota
l n
um
be
r o
f h
os
pit
al b
ed
s) Private hospital bed (%), 2000 - 2011
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Growth of private health sector
9
Pri
vate
Healt
h E
xp
en
dit
ure
(in
% o
f to
tal)
Private health expenditure (% out of total), 1995 - 2010
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Complex Environment (Sample: SHI in Laos) 2011 2012 2013 2015 2020
Law: Charter
And Mandate
Establish NHI
Organization
Establish
Technical
Functions
Four Baskets,
One Fund
Establish LT Funding
For Indigent Cover
Benefit Delivery
Database
Create a Plan
For Membership
Management
Universal
Coverage
Develop a Plan
For
Provider Mgt
National QA
and
Accreditation
Capacity Building
50%
Coverage
Merging of
Membership
Databases
Begin Merging
at Provincial Level
Nationwide
Risk
Pooling
Capacity Building on SHI Technical
And Operational Functions
Long-term IT Plan
Development of Quality
Standards,
Capacity Building for Function
Full Merge
Integrate
d
NHI IT
System
ORGANIZATIONAL
FUNDING
OPERATIONAL
MEMBERSHIP
PROVIDERS
Fully
Sustainable
Funding
30%
Coverage
14%
Coverage
Evaluate Benefits,
Contributions, Payment
Fully
Capacitated
Appropriation
to support Law
Transfer Staff
& Budget
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Evolving role of private sector in health systems in Asia
Capital
Investment
Provision
Entrepreneur
Intermediary
Regulator
Financing
Insurance
11
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
PPP Mechanisms Contracting: Outsourcing
Contracting: Purchasing
Operating Contracts
Private Finance Initiative
Public Private Integrated Partnerships
Build Operate Transfer
Build Own Operate Transfer (BOOT)
Co-location
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Public Private Partnerships in Health
Primary care
Public health
Vaccinations
Maternal &
child health
Management
of entire
hospital or
network of
hospitals
and/or clinics
Lab analysis
Diagnostic
tests
Medical
equipment
maintenance
IT equipment &
services
Maintenance
Food
Laundry
Cleaning
Billing
Hospital Management
Specialized
Clinical
Services
Clinical
Support
Services
Primary
Care
Non-
Clinical
Services
Design
&
Construction
Detailed designs
Building
construction
Medical
equipment
Capital financing
Dialysis
Radio-
therapy
Day surgery
Other
specialist
services
Wide Range of Alternatives
Under a PPP, a government or national health insurer contracts with a private
partner (for-profit or not-for-profit) for a health care service and/or facility
Governments can select from a wide range of options depending on their needs
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Potential Collaboration with Academia Better understanding of local situation
Mapping
Capacity Building Policy Makers and Implementors Knowledge Events, Courses, Workshops. with UHC, SHI.
Learning from Experience Identifying key Projects and documenting lessons
Work with an international network
Focus on key needs: Pilots and Evaluations
Key areas (RH), Centrally managed broad interventions
Easy Reference Material: Evidence, Tools
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Harding-Montagu Framework Applied to Private Hospital & Specialist Service Sector
Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Strategy Assessment Goal Tools
PHSA
Intermediaries
Govt. Capacity
Delivery
Financing
Mostly Private Provision
Mixed Mostly Govt
Provision
Mostly OOP Mixed or transition
Mostly Govt or Social Health
Insurance
Committed Leadership
Dedicated Staff or PPP
Unit
Experience
Facility & Professional Associations
Grow
Harness
Convert
Restrict
Relationship to Government
Distribution (equity)
Efficiency
Quality of Care
Insurers NGOs
EQA / Accreditation
Taxation, Ownership, & Subsidy
Contracting
PPPs
Regulation
Information / Recognition
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
MAPPING THE ENVIRONMENT FOR UHC
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Environment
& Situation Reach Availment Support
Demographics
Indigents
Health
Environment
Policy
Awareness
Desirability
Affordability
Ease/
Convenience
Information
Availability
Requirements
Effective
Requirements
Efficiency
Policy
Ease &
Availability
Benefit Design
Locus of Care,
Treatment
Protocol
Purchasing,
Contracting
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Sample: Differential Analysis Coverage:
Formal: High compliance
Sponsored: LGU decision
IPP: Low
Availment: High for Formal
Low for Sponsored
Support: Low for Formal (Low for NCR)
High for Sponsored (High for ARMM)
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
UH
C D
imen
sio
ns
Which people?
Co
st
Sh
arin
g
Setting Sectoral Targets Analyzing by Sector Outcomes
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Thank You!
Maria Elena (Maya) Baltazar Herrera
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Maria Elena Maya Baltazar Herrera, FASP, PhD
Assoc. Professor, Asian Institute of Management
Core Teaching: Strategy and Policy, Finance and Governance, Organization Development.
Research and Interests: Enterprise Risk Management, Corporate Social Responsibility, Entrepreneurship, Health Finance and Policy, Governance of Family Corporations
Fellow and Former President, Actuarial Society of the Philippines
President & Co-Founder , Solutions Incorporated, an Abelica Global Firm
Columnist, The Manila Standard Today
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Maria Elena Maya Baltazar Herrera, FASP, PhD
Experience:
CFO, Asian Institute of Management
Research Director, AIM RVR Center for CSR
VP, CFO and Actuary, The Manufacturers Life Insurance Corp. (Phils)
President, LTS Corporation
Consulting Actuary, The Wyatt Company Phils (now Towers Watson)
Head, Actuarial Department and Group Insurance Administration, Lincoln Philippine Life Insurance Corporation
ma
ya
_aim
@yahoo.c
om
Go
og
le m
e: M
aya B
altazar
Herr
era
On
Tw
itte
r:
ma
ya_aim
Inte
gra
tions.tum
blr.c
om
On
Fa
cebook: In
tegra
tions M
anila
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
EXTRA SLIDES
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Hospital Financing Requirements Lot and Infrastructure (Bricks and Mortar)
Initial Outlay Lease/Rent Maintenance Costs
Equipment: Capital Expense (inc. Replacement) Maintenance
Operating Expenses: Fixed vs. Variable Staff: Health and Non-Health Non-staff Expenses Medical Services, Hotel expenses, General Administration
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Non-Public Financing
Private Financing
User Fees
Private Health Insurance (PHI)
Private Sector Purchasing Contracts
Private Sector Bonds
Donations
Development Organization Financing
Grant Facility for Private Hospitals
Development Loan Facility for Private Hospitals
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Public Financing
Direct Government Purchasing Contracts
Social Health Insurance Other government pre-payment fund (i.e. Health Equity Fund)
Free use of government land/ Donation Conditional Donations
Indirect Tax Exemptions: Income Tax
Allowed Deductions: Donations to Hospitals, etc.
Tax Subsidies/Exemptions for: Private Health Insurance (PHI) premiums
Hospital Construction/ Equipment/Others
Hospital-related Bonds/Debt Financing Instruments
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Harding-Montagu Framework Applied to Private Hospital & Specialist Service Sector
Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Strategy Assessment Goal Tools
PHSA
Intermediaries
Govt. Capacity
Delivery
Financing
Mostly Private Provision
Mixed Mostly Govt
Provision
Mostly OOP Mixed or transition
Mostly Govt or Social Health
Insurance
Committed Leadership
Dedicated Staff or PPP
Unit
Experience
Facility & Professional Associations
Grow
Harness
Convert
Restrict
Relationship to Government
Distribution (equity)
Efficiency
Quality of Care
Insurers NGOs
EQA / Accreditation
Taxation, Ownership, & Subsidy
Contracting
PPPs
Regulation
Information / Recognition
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
CONTEXT
Reference Slides
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Diversity of Health Systems in Asia Jurisdictions
Total health expenditure (% of GDP)
Public health expenditure (% of THE)
Private health expenditure (% of THE)
Myanmar 2.0 12.1 87.9
Cambodia 6.0 21.5 78.5
Afghanistan 10.4 22.5 77.5
India 3.7 28.2 71.8
Pakistan 2.8 28.2 71.8
Singapore 4.5 31.4 68.6
Indonesia 2.8 36.1 63.9
Philippines 4.1 36.1 63.9
Bangladesh 3.7 36.5 63.5
Vietnam 6.8 37.1 62.9
Nepal 5.1 37.4 62.6
Sri Lanka 3.5 45.6 54.4
Lao PDR 2.6 46.5 53.5
Hong Kong SAR 5.2 49.4 50.6
China 5.0 54.3 45.7
Malaysia 4.4 55.5 44.5
Taiwan 6.6 56.8 43.3
Mongolia 5.5 57.0 43.0
Korea, Rep. 7.1 58.2 41.8
Maldives 6.2 60.8 39.2
Timor-Leste 5.7 74.7 25.3
Thailand 3.9 75.0 25.0
Papua New Guinea 4.1 75.2 24.8
Japan 9.2 80.3 19.7
Pacific island small states 6.1 81.7 18.3
Bhutan 4.3 84.6 15.4
29
> 60%
40 - 60%
< 40%
Source: World Bank Database, 2010
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Health System: A complex Adaptive System
30
Components and Functions of the System Objectives of the System
Adapted from WHO World Health Report 2000
policy
Leadership and
Governance
(policy instruments)
Responsiveness
(to peoples non-medical
expectations)
Health
Fair (financial
contribution)
Delivering
services
(provision)
Financing
(collecting, pooling and
purchasing)
Creating resources
Health workforce Information Medical products,
vaccines and
technologies
Facilities Organizations
policy
policy
policy
refers Organization and Management
Social, Economic, Political Physical Environment
Local, National, Supranational
Population
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Quality
Utilization
Need
Universal financial
protection
Final coverage
objectives
Health financing within the
overall health system
Revenue
collection
Pooling
Purchasing
Benefits
UHC intermediate
objectives
Equity in
resource
distribution
Efficiency
Rest of health
system
Transparency
and
accountability
Wider context/ extra-sectoral factors (SDH)
Health Financing and UHC
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Cost sharing/user fees (provider payment)
Health care
Ind
ivid
uals
S
tew
ard
sh
ip o
f fi
nan
cin
g
(go
ve
rnan
ce
, re
gu
lati
on
, in
form
ati
on
)
Collection of funds
Provision of services
Purchasing of services
Pooling of funds
Allocation mechanisms
Allocation mechanisms
(provider payment)
Allocation mechanisms
Coverage
Coverage
Choice?
Choice?
Contributions
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Policy
Instruments
Description Government Tools by Musgrove (1996) -
Application
Exhortation Dissemination of information
through persuasion and
discussion
Research product testing
Provider information treatment protocols, recommended drugs
Consumer information provider quality comparisons, consumers rights, dangers of smoking, rehydration methods, birth spacing
(Information)
Taxation Encouraging or discouraging behaviors through manipulation
of tax incentives / disincentives
Taxation
(Regulation and Mandates)
Expenditure Government distribution of funds to achieve particular aims in the
form of cash or in-kind support
(provision of space / personnel /
subsidizing activities)
Budgetary support
Subsidies
Concessions
Contracting
(Financing)
Regulation Setting rules of behaviors backed up by directly by the sanctions
(penalties) of the state
Licensure
Accreditation
Employee health insurance
Required immunization of school children
(Regulation and Mandates)
Public Ownership Government directly running the
service in question
Rural public hospitals and clinics
Preventive services
Sanitation
(Direct Provision) 33
Policy Instruments (Government Tools)
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Collection and pooling of funds
Expansion of social health insurance systems by using general revenues to subsidize the poor and (the non-poor) informal sector
Philippines, Indonesia, Vietnam
may be pooled in a single health insurance fund with payroll contributions from the formal sector
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
PPP REFERENCE SLIDES
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Predominant roles of private hospitals
Social health insurance (Japan, South Korea, Taiwan) and SHI-based Mixed system (Philippines)
Private hospitals function as part of the health system
Private hospitals engaged in the health system through the social health insurance
Public hospitals may be corporatized and compete with private hospitals
Historically, private hospitals predominate
36
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Predominant roles of private hospitals
Taxed based collection/Towards social health insurance/Medisave
Influenced by markets
Driven by government policies
37
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Commercialized mixed health systems (I) Unclear line or structure between public and private Definition [Mackintosh and Koivsusalo, 2005]
the provision of health care services through market relationships to those able to pay, including marketisation, commoditisation, privatisation and liberalisation
Marketisation: Shift from free provision/inputs to fee-for-service provision/cash payments for inputs
Commoditisation: Specification of items of service provision that is sold on a market
Privatisation: Shift from government owned asset to private owned
Liberalisation: Removal of constraints on private provision of health care services/purchases/sales
38
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Commercialized mixed health systems (II)
Different patterns:
Different mixes of public and private
Different types of public and private from small scale and unregulated providers to corporate providers
39
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Epidemiological transition
Infectious diseases
Double burden of diseases
Chronic diseases
40
China, India,
Indonesia, Malaysia,
Philippines, Vietnam,
Thailand
Hong Kong, Japan,
South Korea,
Singapore, Taiwan
All Rights Reserved. Maria Elena Baltazar Herrera. 2015
Harding-Montagu Framework Applied to Private Hospital & Specialist Service Sector
Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Strategy Assessment Goal Tools
PHSA
Intermediaries
Govt. Capacity
Information / Recognition
Delivery
Financing
Mostly Private Provision
Mixed Mostly Govt
Provision
Mostly OOP Mixed or transition
Mostly Govt or Social Health
Insurance
Committed Leadership
Dedicated Staff or PPP
Unit
Experience
Facility & Professional Associations
Grow
Harness
Convert
Restrict
Relationship to Government
Distribution (equity)
Efficiency
Quality of Care
Insurers NGOs
EQA / Accreditation
Taxation, Ownership, & Subsidy
Contracting
PPPs
Regulation