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IconTechnical Notes

Philippine National Health Accounts (PNHA)

Private Sources

.:: Out-of-Pocket

• Data Sources

Data on household expenditure for health are taken from the National Statistics Office's (NSO) Family Income and Expenditure Survey (FIES) conducted every three years. The 1991, 1994, 1997and 2000 FIES results were used directly in the PNHA estimation.

Other data/parameters used include: (a) 1992-2002 Personal Consumption Expenditures (PCE as estimated in the National Income Accounts); (b) proportion of PCE spent by non-household entities (1990 Social Accounting Matrix of NSCB); and (c) proportion of household health care expenditures truly paid for by household funds (PNHA Rider to the 1994 FIES.)

• Coverage and Estimation

For the FIES years 1991, 1994, 1997 and 2000, household health care expenditures were estimated directly by multiplying the ratio of health care to total household expenditures (computed from the FIES) by the PCE for the current year.

During non-FIES years, household health care expenditures were estimated by multiplying (a) the ratio of health care to total household expenditures (computed from the FIES) for the closest FIES year(s) with (b) PCE for the current year.

If estimation year falls between two FIES years, the ratio used is derived by linear interpolation of the: (a) computed ratio from the FIES conducted prior to the estimation year; and (b) the computed ratio from the FIES conducted after the estimation year.

If estimation year comes after an FIES year and no FIES has been conducted after the estimation year, then the ratio computed from the most recent FIES is used and assumed to remain the same in the current year.

The 1998, 1999 and 2000 PNHA estimates of out-of-pocket were updated/revised as results of the 2000 FIES.

The PNHA Rider to the 1994 FIES provides an estimate of the percent of health care expenditures which are truly paid for by household funds, that is, excluding the value of free medical goods and services from government hospitals/clinics and value of medical goods and services paid for by employers, medicare, private health insurance and charitable or philanthropic organization.

In all the calculation involving the use of the PCE, the proportion of spending by non-profit institutions serving households (NPISH) was netted out of PCE to make PCE comparable to the composition of FIES expenditures.

Similarly, in all calculations involving the ratio of health expenditures to total household expenditures, the proportion of the spending that went into taxes, gifts/donations and miscellaneous expenditures are netted out of the FIES household expenditures for comparability with the composition of the PCE (net of non-household final consumption expenditures).

• Classification by PNHA Use

Except for 1994 for which the PNHA Rider to that year's FIES provides household health expenditure breakdown by NHA use categories, no such breakdown are available for the other years.

.:: Private Insurance

• Data Sources

Data on health benefit payments and administrative plus other costs of private insurance companies were taken from the 1991-2002 Annual Reports of the Insurance Commission.

GSIS provided the data on benefit payments from the Hospitalization Insurance Plan (HIP) component of its Optional Life Insurance Fund (OLIF). The administrative and operating expenses of the OLIF were directly lifted from the Annual Reports of GSIS.

• Coverage and Estimation

Included are health benefit payments by both life and non-life insurance companies and the administrative costs attributable to the health insurance activities. Health benefits are reported in the Annual Report and these are used directly in the PNHA.

Included also are benefit payments from the Hospitalization Insurance Plan (HIP) under the Optional Life Insurance program of GSIS.

General administrative expenses and other costs of health and accident insurance activities were estimated using the assumption that for any company, the average cost per peso of any type of insurance benefit paid is the same. Thus, general administrative cost for health insurance was estimated by multiplying the proportion of health and accident benefit payments (to total benefit payments of a company) with the total general and other operating expenditures of the same company.

General administration cost for the HIP component of the Optional Life Insurance of GSIS are estimated by applying the proportion accounted for by HIP benefit payments (out of the total benefit payments for Optional Life Insurance) to the total general administration cost of Optional Life Insurance.

The first release of the PNHA (i.e., 1991-97 PNHA) included net income and additions to reserves among the “others” use of fund. These two items were later excluded from the PNHA concept of health expenditure as these do not represent actual expenditure. Instead, information regarding these is placed as memo items under the PNHA annual matrices. For private life and non-life insurance companies, net income of a company was estimated by multiplying the proportion of health and accident benefit payments (to total benefit payments from all insurance activities of a company) with the total net income from all insurance activities of the same company. Likewise, additions to reserves of a company was estimated by multiplying the proportion of health and accident benefit payments (to total benefit payments from all insurance activities of a company) with the additions to reserves from all insurance activities of the same company. Only life insurance companies reported additions to reserves. For HIP, net income before increase in reserves (for GSIS) was estimated by applying the proportion accounted for by HIP benefit payments (out of the total benefit payments for the Optional Life Insurance) to the total net income before increase in reserves of the Optional Life Insurance.

• Classification by PNHA Use

All health and accident benefit payments are classified under personal health care. Expenditures cannot further be classified according to the specific type of facility due to lack of data.

All other expenses are classified under the PNHA uses category "others" (i.e. general administration, additions to reserves and net income).

.:: Health Maintenance Organizations (HMOs)

• Data Sources

Data on health benefit payments and operating costs of HMOs are taken from Financial Statements (FS) submitted to the Securities and Exchange Commission. For those HMOs for which no FS were obtained from the SEC, the FS were obtained, as much as possible, directly from the HMOs themselves.

Consumer price index for medical goods and services for the years 1988 to 2002 were obtained from the NSO.

• Coverage and Estimation

Included in the PNHA are expenditures of entities that have been confirmed to be HMOs: (a) confirmed through brochures obtained from the organization; and (b) confirmed through the listing provided by the Bureau of Licensing and Regulations (BLR) of the DOH.

The first release of the PNHA (i.e., 1991-97 PNHA) included net income among the “others” use of fund. Net income was later excluded from the PNHA concept of health expenditure as it does not represent actual expenditure. Instead, information regarding net income earned by HMOs is placed as one of the memo items under the PNHA annual matrices. Net income of HMOs refers to total revenue net of benefit payments, administrative and operating and other expenses.

For HMOs with missing financial statement, expenditures for that year may be estimated by one of three ways: (a) using CPI for the medical sector, deflate succeeding year's expenditures; (b) using CPI for the medical sector, inflate past year's expenditures; and (c) using a past year's and a succeeding year's expenditures, interpolate expenditures for the year that falls between the two years. Of the three, the third method is preferred if data permits. In any of these approaches, only benefit payments and operating expenses are estimated. No attempt was made to estimate additions to reserves and net income as these do not seem to follow distinct patterns of change over the period covered.

For the years 1992-2002, all three methods were invariably applied.

For HMOs that report premium collections in "net" format (i.e., net premium equals premium collected minus benefit payments) and for which benefit payments data are not available, benefit payments are estimated in one of two ways: (a) for all HMOs with complete data for the year, calculate industry average of the ratio of net premium to benefit payments and then apply the average industry ratio to the specific HMO's reported net premium; or (b) for HMOs with complete data for the year, calculate the industry average of administrative or operating cost per peso of benefits paid and then apply the industry average operating cost to the specific HMO's reported total operating cost.

• Classification by PNHA Use

All HMO benefit payments are classified under personal health care. Expenditures cannot further be classified according to the specific type of facility due to lack of data.

All other expenses are classified under the PNHA uses category "other" (i.e. commission expense, general operating expense, taxes paid and net income).

.:: Employer-Based Plans

• Data Sources

Average expenditure (excluding Medicare premium payments, EC premium payments, cash advances, premium payments to external private insurance or HMO) for the health care of employees per establishment, by employment size and by industry type, were estimated using results of the PNHA Rider to the 1994 Census of Establishments.

Number of establishments by employment size and by industry type for 1992-1994 were obtained from NSO's Yearbooks of Labor Statistics (various years). The 1995, 1996, 1999, 2000 and 2001 data were obtained directly from the Industry and Trade Statistics Department (ITSD) of NSO.

Consumer price index for medical goods and services for the years 1988 to 2002 were obtained from the NSO.

• Coverage and Estimation

Included in the PNHA are expenditures by establishments for the following: (a) health expenditure allowance/ reimbursements; (b) in-house provision of health care (personnel and other facility costs); (c) in-house provision of drugs and medicines; (d) pre-paid (retained) health care providers; and (e) fitness/health programs.

Total health care expenditures for all establishments in 1994 was estimated by multiplying (a) 1994 average health care expenditure per establishment by size of employment and type of industry (PNHA Rider to the 1994 CE) with (b) number of establishments for each size and industry type for 1994. For the other years, the 1994 average health cost per establishment were similarly multiplied by the number of establishments for the current year; and then the total expenditure obtained was adjusted for inflation using the CPI for medical goods and services.

Complete listing of establishments was conducted by the NSO in 1988 and 1996. During intervening years, the NSO generates the annual number of establishments (by employment size and by industry) by updating the previous year’s list only for sample areas. When a complete listing was conducted again in 1996, the total number compared to the previous year (1995) almost doubled. Therefore, it was assumed that data for intervening years are underestimated due to the fact that updating is conducted only in sample areas. To correct for underestimation/undercoverage, the 1992 to 1995 annual number of establishments (by employment size and by industry) were estimated by applying the straight line method to the 1991 and 1996 data (Ideally, it would have been better if the 1988 data was used instead of the 1991 data since 1988 was the year when a complete listing was also conducted. However, the 1988 data was no longer available from the NSO). Further, no updating activities were done in 1997 and 1998. Instead, the next updating was conducted in 1999 based again on sample areas. Thus, the 1997 and 1998 number of establishments were likewise estimated by applying the straight line method to the 1996 and 1999 data.

Data for 2002 were estimated using the consumer price index for medical goods and services.

Administration cost of providing health care was not estimated due to lack of data.

• Classification by PNHA Use

All expenditures for establishments (as estimated above) are classified under personal health care. No breakdowns by PNHA use categories are available.

.:: Private Schools

• Data Sources

Average expenditure (1991-1993) for the health care of students per private school, by enrollment size, were estimated using results from the PNHA Survey conducted by the Commission on Higher Education (CHED) in 1995.

Total number of private schools by year was obtained from the Department of Education (DEpEd) and CHED. Distribution of private schools by enrollment size were obtained from: (a) NHA Survey by CHED (for higher education institutions 1991-1993) and from (b) DepEd (for pre-elementary, elementary and secondary schools 1991-1993, 1995-1996, 1996-1997, 1997-1998, 1998-1999, 1999-2000 and 2000-2001; (c) CHED (for higher education institutions 1995-1996, 1996-1997, 1997-1998, 1998-2000, 2000-2001.

Consumer price index for medical goods and services for the years 1988 to 2002 were obtained from the NSO.

• Coverage and Estimation

Included in the PNHA are expenditures by private schools for providing medical and dental care to students. Expenditures are basically for salaries and wages of health personnel and drugs and supplies.

Total health care expenditures for all private schools from 1991-1993 were estimated by multiplying (a) 1991-1993 average health care expenditure per school by size of enrollment (PNHA Survey by CHED) with (b) number of schools for each enrollment size for the years 1991-1993. For other years, the 1993 average costs were similarly multiplied by the number of schools for the current year; and then the total expenditure obtained was adjusted for inflation using the CPI for medical goods and services.

The 2002-2003 distributions of private tertiary schools by enrollment size were not yet available from CHED at the time of the compilation. Thus, the 2000-2001 distribution was applied to the 2002-2003 total number of private tertiary schools to estimate the 2002-2003 distribution. For the distributions of pres-school and elementary by enrollment size for SY 2002-2003, the 2001-2002 distribution was applied.

Due to unavailability of current data on actual distribution of private pre-school and tertiary schools for SY 2002-2003, the 2000-2001 actual distribution was applied to the total number of schools for 2002-2003. For the actual distribution of private elementary for SY 2002-2003, the 2001-2002 actual distribution was applied to the total number of schools for 2002-2003.

Administration cost of providing health care was not estimated due to lack of data.

• Classification by PNHA Use

All expenditures for establishments (as estimated above) are classified under personal health care. No breakdowns by PNHA use categories are available.

 

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