Unable to create scaled Thumbnail image.

Message of the Secretary Enrique T. Ona - 63rd Annual Convention, Philippine Hospital Association

November 22, 2012

Manila Hotel

Good Morning.

The health sector today is in a period of transition. The theme of your celebration this year, “The Challenge of Affordable Health Care, Playing by the Rules or Changing the Game,” captures both what we in the Department of health wants to achieve as well as the reality that we are in the midst of a major change as far as the health sector is concerned.

Two nights ago, the Senate, after five days of marathon plenary sessions, approved on second and third reading Senate Bill 3299, popularly known as the sin tax bill. We await the bicameral conference committee for the reconciliation of the versions of the Senate and the House of Representatives and its expected approval by the President of the Philippines before the end of the year.

This legislative measure once signed into law and implemented, will drastically change the landscape of our health system, and of course for the better. Most of the incremental revenues from the increase in the excise taxes of alcohol and tobacco products, less the 15% to be allocated for the tobacco producing provinces, are earmarked for health. This translates to an additional P35-40 billion for health care in the first year and more on the years to come.

The additional revenues generated from this measure will be used to enroll to PhilHealth and additional 5.6 million families, the next poorest 20% of our population popularly known as Q2. This will be on top of the 5.2 million families, the poorest 20% members (20-25 million people) or Q1 already enrolled to PhilHealth. Eventually, 10.8 million families, or about 50-55 million of our poorest and poor Filipinos will now have automatic access to health insurance.  We will be able to expand the benefits of PhilHealth—increase the number of medical and surgical conditions under case rates woth no balance billing for the poor as well as expand our catastrophic care package to include major NCDs such as heart failure attacks, stokes, other cancers and trauma. At long last, we will have the funds needed to finally eliminate public health threats such as malaria, schistosomiasis, filariasis and rabies and others. With more funds for upgrading and modernization, the stereotype of decay and deficiency associated with our government hospitals and other health facilities will hopefully be banished very soon. And we will be able to hire more doctors, nurses and other health professionals to seal our gaps in health care human resources.

This is one positive game changer that we welcome for our health care. We are more afforded this opportunity to ensure the sustainability of Kalusugan Pangkalahatan or universal health care for our people here in the Philippines.

I have always believed that our public hospitals reflect the state of our public health care system. And through the years the public often has unfavorable memories of their stay in government hospitals: for example, they won’t forget the smell, the crowding in the wards, long lines for procedures, stock outs of medicines and other supplies, rusting IV poles and beds, among many others.

The reform of our government hospital system is critical in ensuring the success of Kalusugan Pangkalahatan.

The investments of the national government in upgrading and modernizing our public hospitals and other health facilities have increased significantly since the Aquino administration started more than two years ago. From P500 million in 2007, the funds for the Health Facilities Enhancement Program have increased steadily to P5.1 billion in 2012. For next year 2013, we are proposing P13.6 billion for infrastructure and equipment to many more Barangay Health Stations (BHS), 1,635 Rural Health units (RHUs), 220 Municipal and District Hospitals, 24 Provincial Hospitals and 66 DOH Health Facilities.

Another P3 billion from the year 2012 budget is being used by 26 identified national government hospitals for infrastructure and equipment as the DOH’s counterpart for the public private partnership programs of these institutions.

The modernization of the Philippine Orthopedic Center into a 700-bed world-class center for Bone and Joint Diseases is the first PPP approved by the President and the NEDA Board for health. In the pipeline are 9 strategically located regional hospitals designated as centers for health that will cater to heart diseases, oncology and transplant, which we will pursue through PPPs.

This morning, the Department of Health will be signing a Memorandum of Understanding with the United Nations Economic Commission for Europe (UNECE) for the establishment of the International Specialist Center for PPPs in health in the Philippines. This center will collate and distill best practices in PPPs in health and assist us in increasing our capabilities for implementing these strategies. This MOU signing will be signed by no less than the UNECE Executive Secretary, Mr Sven Alkalaj.

But beyond funding the immediate needs of our hospitals, which are admittedly vast, we are laying the foundations for much needed government hospital reforms.

We have mandated that all hospitals in both government and private must have operating rooms to ensure that our people will have access to appropriate emergency surgical care, such as appendectomies and cesarean in 1-2 years for our level 1 hospitals.

Income retention, which our DOH-retained hospitals now enjoy, must be extended to all government hospitals, such as those run by the local government units. This will be an incentive for hospital administrations to improve financial efficiency. Retained income can then be used for their own hospital operations.

The word corporatization, is often misunderstood and controversial in the context of hospital operations. For me, it is basically a governance reform wherein hospital directors are made accountable to a board of directors composed of representatives of government, the private sector and civil society. Corporatization actually will instill fiscal discipline, translating into financial sustainability and improved services eventually. Corporatization also affords the hospital management certain administrative flexibilities to ensure, among others, that it can hire and retain better performing personnel.

I assure all of you that while we want that financial sustainability of our public hospitals, the much-feared end of government subsidies and “privatization” will not happen. Government will continue funding the operations of our hospitals and there will be no transfer of ownership from the government to any private entity. Rather, we recognize the importance of partnering with the private sector for their capital and expertise, especially now when government funds will never be enough for the bottomless health care needs of our people.

Over at PhilHealth, we are now also instituting reforms to reduce the lag time for claims processing and payment. We are reviewing our case-rates, introduced last September 2011, with the aim of making them more fair and acceptable to our health care providers. Soon, we will be expanding both the number of medical and surgical conditions paid under case rates and the catastrophic care benefit package. All these changes has the intended effect of increasing PhilHealth support value, with the added benefit of substantially increasing hospital income, especially from patients once considered “charity” but are now paid for by PhilHealth.

These are just some of the many changes, which will ensure the realization of Kalusugan Pangkalahatan. I thank the continuous support of the Philippine Hospital association for our health reforms we are undertaking today.

The promise of accessible, affordable and quality health care will soon be within the grasp of our people.

Thank you very much and good morning.