1. A Strategy for Financing Priority F1 Investments National Staff Meeting Department of Health April 19-21, 2006

2. Overall Approach to Developing A Financing Strategy ► Proposed investments ► Rationalizing investments ► Available sources of financing ► Implementation thru budget reforms

3. Proposed Investments – 16 Convergence Sites ► Total requirement = P7.8B over 5 years  Average per year = P1.6B  Average per site per year = P0.1B ► Expected DOH support = P0.58B for 5 yrs  Average of P7.2M per site per year  Largely TA/TR support ► PHIC premium counterpart = P7.2B  Average of P90M per site per year  Assumes high enrollment and 90/10 sharing

4. Proposed Investments – National Support for Service delivery ► Total requirement = P29.9B over 5 years  Average per year P5.98B per year ► Components  Public health = P29B  Health promo = P0.2B  HEMS = P0.2B  NEC = P0.3B  NCHFD = P0.2B ► Investments for retained hospitals assumed to be limited to revenues

5. Proposed Investments - National Support for Regulation ► Total requirement = P0.9B over 5 years  Average per year = P180M ► Components:  BFAD = P0.6B  PMU50 = P0.2B  BHFS = P0.1B  BHDT = no estimate submitted  BQIHS = no estimate submitted

6. Proposed Investments – National Support for the NHIP ► Total requirement = P23.5 billion over 5 years  Average per year = P4.7 billion ► Other investment concerns  National government arrears  EO 276 arrears

7. Proposed Investments – National Support for Governance ► Total requirement = P7.5B  Average per year = P1.5B ► Components  HRH = P6B  IMS = P1.3B  Others = P0.2B ► CHD stewardship = not yet included

8. Summary of Proposed Investments ► TOTAL= P69.6B ► 16 sites = P 7.8B ► National support= P61.8B ► Average per year = P 13.92B  Estimated requirements exceed the proposed 2006 DOH budget

9. Rationalizing Proposed Investments ► Focus on incremental investment requirements  Exclude those already funded (DOH, PHIC, LGU, FAPS)  Remove overlaps, duplication, redundancy ► Those with clear and valid basis for cost estimates ► Prioritize those that meet F1 criteria (AO 2005- 0023)  Doable given available resources  Sufficient groundwork and buy-in  Triggers a reform chain reaction  Produces tangible results and generates public support

10. Rationalizing 16 4-in-1 Site Fund Requirements - RESULTS BeforeAfter DOHP0.6BP0.1B PHICP7.2BP1.5B TOTALP7.8B P1.6B (=0.3 per year) Examples of items removed or reduced: LGU requests for additional TA/TR/RX already being funded in regular program (e.g. TB-DOTS) IP enrollment based on municipal poverty rates and conservative assumption on enrollment growth Items that are part of LGU counterpart (e.g. salaries, TEV, local monitoring, etc.) Non-priority activities like study tours, community-based health financing

11. Rationalizing 16 4-in-1 Site Fund Requirements - RESULTS BeforeAfter DOHP0.6BP0.1B PHICP7.2BP1.5B TOTALP7.8B P1.6B (=0.3 per year) Examples of items removed or reduced: LGU requests for additional TA/TR/RX already being funded in regular program (e.g. TB-DOTS) IP enrollment based on municipal poverty rates and conservative assumption on enrollment growth Items that are part of LGU counterpart (e.g. salaries, TEV, local monitoring, etc.) Non-priority activities like study tours, community-based health financing

12. Rationalizing Fund Requirements for National Support - RESULTS BeforeAfter Service delivery P29.9B P3.0B (=P0.6B per year) Examples of items reduced or removed: Items already funded by DOH budget (e.g. TB drugs, vaccines, etc.) = Estimates based on needs of entire population were reduced by at least 15% to account for private sector utilization and excessive buffer stocks MIS needs by program overlap with IMS proposal Redundant and repetitive TA/TR activities (e.g. policy guidelines development)

13. Rationalizing Fund Requirements for National Support - RESULTS BeforeAfter FinancingP23.5B P3.5B (P0.7B per year) Examples of items reduced or removed: Enrollment limited to areas with valid poverty id system Conservative projection of enrollment growth using municipal poverty rates were used Arrears not included

14. Rationalizing Fund Requirements for National Support - RESULTS BeforeAfter RegulationP0.9B P0.3B (P0.06B/year) GovernanceP7.5B P1.4B (P0.28B/year) Examples of items reduced or removed: Cost requirements that did not show any basis or estimation procedures Only HRH requirements for DOH were included

15. Summary of Rationalized Investments Over 5 Years ► 16 sites= P1.6B ► National support= P8.2B  Service delivery= P3.0B  Regulation= P0.3B  Financing= P3.5B  Governance= P1.4B ► Grand total= P9.8B (P1.96B per year) (P1.96B per year)

16. Matching Needs & Sources of Funds (average per year) SOURCELOWHIGH Budget increase 0.0 0.0 P2B (20%) P2B (20%) Usable FAPS 0.0 (0%) P1.5B (100%) Revenue sharing P0.15B (10%) P0.3B (10%) Efficiency gains (%MOOE) 0.1B (3%) 0.1B (3%)0.2B(5%) Available funds P0.25BP4.0B RequirementP1.96BP1.96B GAPP1.71B(P2.04B)

17. Financing Issues Under the LOW Scenario ► Financing GAP = P1.7B (average per year) OPTIONS: OPTIONS: ► Renegotiate FAPS ► Prioritize on “zones” & MDG linked programs ► Secure IP subsidy for roll-out ► Regulation & governance to Phase 2

18. Financing Issues Under the HIGH Scenario ► Financing SURPLUS = P2B (average per year) PRIORITIES: ► CHD stewardship & roll-out sites ► Revolving upgrade fund pool ► Additional public health commodities ► Expand IP enrollment

19. Allocation of Incremental Priority Investment Using New Budget Structure ► National supportP4.4  Governance P1.40B  Policies & standards P0.75B  Program implementation P2.25B ► CHD Operations*P0.4B  Governance P0.22B  Field implementation P0.18B ► PHICP5.0B ► TOTALP9.8B * Note: CHD operations budget only reflects those implied by submissions from national programs and the 16 convergence sites

20. Performance Based Disbursement Plan ► National level governance, policies & standards, and program implementation  weighted average of CHD performance  accomplishment of benchmarks for specific interventions (e.g. seals, scorecards, budget reforms, SDAH, fiduciary reforms, etc.)  cost recovery targets, target efficiency gains ► CHD Governance & field implementation  accomplishment of benchmarks contained in 16 sites  LGU service level agreements – by disease or program  improvements in LGU scorecard (overall & by component) ► PHIC  new enrollment using valid IP identification tool  quality of services received by members  level of financial protection

21. Summary (1) ► Proposed investments (=P69.6B) needed to be trimmed; gaps remain (CHD & hospitals) ► Rationalization exercise using F1 criteria derived priority incremental investments (=P9.8B) ► Available sources of funds depending on two scenarios (from P0.25B to P4B)  If LOW, address deficit  If HIGH, prioritize use of surplus

22. Summary (2) ► Investments must be implementation thru budget reforms ► Incremental amounts allocated using new budget structure ► Investments disbursed using performance benchmarks ► Budget reform plan must be backed by joint agreement between DOH, and DBM, DOF