AAAH 1st Conference October 29,2006 1 Globalization/International Trade and Implications on HRH:...

AAAH 1st Conference October 29,2006

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Globalization/International Trade and Implications on HRH: Supply,

Demand and MigrationF. Marilyn E. Lorenzo RN,DrPH

ProfessorCollege of Public Health, Institute of Health Policy and

Development Studies, National Institutes of Health University of the Philippines, Manila

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Presentation Outline

• Why trade health services?

• Philippine v Global Situation

• Modes of trade

• Implications of health services trade on HRH development

• Current and proposed solutions





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Why Trade Health Services?





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Exports and Imports of Health Services

to generate jobs & income

to upgrade hard & soft infrastructure

to generate revenues

*Expand scope of services*Improve quality*Provide efficient services

In principle…….


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Developed Nations

•Rising health care expenditures•Aging populations•Shortage of human resources in health care (e.g. doctors, nurses, aids)•High cost of medical services•Government financing of health care historically high•Government financing now being constrained by the above trends

Global Health Situation

0

100

200

300

400

500

600

700

1999 2013

ASIAJAPANCHINA

Global health expenditure is US$3 trillion per year; Asia’s health care market: 77% of

global market

In US$BSource: Hong Kong Coalition of Service Industries

The average Japanese visitsthe hospital 14.4 times peryear, thehighest in the world


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Developing Nations

Global Health Situation

•Budget on health services relatively small•Providers lack financial resources

to upgrade

•Health care financing mostly from private

BUT:•Large pool of trainable human resources •Have advantage in tourism

•Need additional fiscal resourcesto fund higher health budgetrequirement

Philippine Scenario55% private financing43% public financing (including social insurance)

DOH budget – 1.6% of totalbudget on social, economic& other services (including finance charges)

Relatively slow expansion &modernization programs, operations not viable

Increasing migration of healthprofessionals


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Modes of Trade

http://www.expeditevcs.com/Telemedicine.jpg



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Modes Description Examples (Health care services)

CROSS-BORDER

TRADE IN SERVICES (MODE 1)

the possibility for non-resident service suppliers to supply services cross-border into the Member’s territory.

o All forms of telemedicine o Medical Transcription o Other health-related business

process outsourcing (e.g. processing of bills and insurance claims)

The GATS Framework

http://www.expeditevcs.com/Telemedicine.jpg

http://www.aafp.org/fpm/980100fm/telemedicine.gif


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CONSUMPTION OF HEALTH SERVICES ABROAD (MODE 2)

the freedom for the Member’s residents to purchase services in the territory of another Member.

o Health Tourism o Retirement

o Medical and nursing education provided to foreign students

The GATS Framework


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Spa/Herbal/Natural HealingMedicalRehabilitation

HealthTourism

Long Stay(Retiring

Individuals &Active Retirees)

Retirement(Immigrants &Retired Elderly)

Diagnostics (e.g. second opinion, initial assessment)

Non-invasive procedures (cosmetic, dermatology)

Invasive procedures (replacement surgeries, cancer, etc)

Independent LivingCommunities

Assisted Living& Continuing Care

Mode 2: Consumption Abroad

“pull factor”





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Major Drivers for Movement of Patients

Aging PopulationsShortage of Health ProfessionalsHigh Cost of Medical ServicesPoor Health Facilities in home countriesLong waiting for

treatment & surgery


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Major Players in AsiaCountry Volume of Foreign

Patients Export Revenues

Current Markets Targets

Thailand 800,000

US$470 million in revenues

Americans 59,000 Japanese 130,000 Britons 14,000

US$2B (2010)

India 150,000 Middle East and South Asian US$1 (2012)

Malaysia 122,000 foreign patients

($9.4 million).

60% of foreigners who seek treatment are from Indonesia, another 10% are from Brunei, Vietnam, Singapore and Thailand. The rest are from West Asia, South Asia (Bangladesh and India) and Japan.

US$1B ( 2010)

Singapore 150,000 –200,000 (spent S$345 M a year

US$915 M

Indonesians and Malaysians account for 70-85%

1 million international patients per year by 2012 US$2B

Source: NTO wesbites


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COMMERCIAL

PRESENCE (MODE 3)

the opportunities for foreign service suppliers to establish, operate or expand a commercial presence in the Member’s territory, such as a branch, agency, or wholly owned subsidiary.

o Investments in hospitals o Investments in health

insurance companies o Ad-hoc basis (contract-based)

The GATS Framework


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Mode 3: Commercial Presence

• Options: – Philippine providers set up branches

abroad (exports)– Philippines attract investments in medical

zones or existing facilities (e.g Bumrungrad in Asian Hospital) – imports – and improve finances and enhance local linkages


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MOVEMENT OF

HEALTH

PROFESSIONALS (MODE 4)

the possibilities offered for the entry and temporary stay in the Member’s territory of foreign individuals in order to supply a service.

o temporary movement of health personnel to provide services abroad

o short-term health consulting assignments.

The GATS Framework


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Mode 4: Movement of Natural Persons

• Shortage of Medical Professionals Abroad• Philippines is major exporter in this trade• Migration will still continue • Seek better market access and national

treatment for our health professionals• Foreign medical professionals are allowed entry

only under certain intra-company arrangements or contracts but not allowed to practice or establish commercial presence


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Summary of Risks/Trade-OffsModes of Trade Health Policy Objectives

Equity Quality Efficiency

Cross-border Remote areas serviced

Improved v. Substantial investment

Movement of Consumers

“crowding out” of nationals

Migration of public health workers to private

v. Improved quality

Skills upgrading

v. Possible loss of investment

Commercial Presence

Possible two-tier system

v. Possible freeing up of resources

Movement of Natural Persons

Reduced access to services

Loss of quality Loss of public investments v. foreign exchange remittances

Source:Adam and Kinnon (1998)


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•Aging Populations in

OECD

•Shortage of medical professionals

•Exports of Medical Professionals

•Commercial presence on ad-hoc basis•Tele-education and/ormovement of foreignstudents to the Phil•High Cost of Medical

Services

•Health Tourism •Long Stay•Retirement

•Requirements for maintenanceof patient records•Relatively high cost of labor fortranscription

Telemedicine

•Poor healthcare systemsin developing nations

•Telemedicine (tele-diagnosis/teleconsultation)

post-consultation *between patient and physician or *between physicians

Medical Transcription

•Aging Populations inOECD

•Shortage of medical professionals

•Exports of Medical Professionals

•Commercial presence on ad-hoc basis•Tele-education and/ormovement of foreignstudents to the Phil•High Cost of Medical

Services

•Health Tourism •Long Stay•Retirement

•Requirements for maintenanceof patient records•Relatively high cost of labor fortranscription

Telemedicine

•Poor healthcare systemsin developing nations

•Telemedicine (tele-diagnosis/teleconsultation)

post-consultation *between patient and physician or *between physicians

Medical Transcription

Exportable Health Services


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Health Services trade and HRH Development


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Major Issue: Human Resources Development

Health TourismRetirement

*Exodus of Doctors and Nurses*Decline in Enrollment in Medicine*Rapid Increase in Enrollment in Nursing*Decline in Quality of Nursing Education

Poor National Health Care System

Low Salaries of Medical ProfessionalsLack of Opportunities for Medical Professionals in the CountryLow Budget on Health Expenditures


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Deployment of Nurses (POEA,2005)

Year Deployed OFW Nurses

Migrant Nurses Total Outflow of Nurses

1992 5,747 1,226 6,973

2000 7,683 1,230 8,913

2001 13,536 1,575 15,111

2002 11,911 2,248 14,159

2003 8,773 2,246 11,019


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Nurse Medics• Enrollment in nursing in NCR increased from

8,600 in 1998-99 to 34,277 in SY 2003-04• Enrollment in medicine declined from 7,162 in

SY 1998-99 to 6,551 in SY 2003-04• Enrollment in medicine declined from 9,106 in

SY 2002-03 to 6,551 in SY 2003-04





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Deterioration of Quality (PRC,2006)

Year NLE Examinees

NLE Passers

% Passing

1994 41,459 25,477 61%

2000 9,270 4,602 50%

2002 9,453 4,228 45%

2003 15,624 7,528 48%

2004 25,294 (62%)

12,581 49.7%

2005 50,280 25,951 51.6%


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Performance of Nursing SchoolsCHED NURSING SCHOOL REPORT CARD (CHED, 2005)

CATEGORY AVERAGE % BOARD PERFORMANCE

NUMBER OF SCHOOLS

% OF SCHOOLS

OUTSTANDING PERFORMANCE

90%-ABOVE 12 4.4

HIGH PERFORMANCE

75-89% 15 8.5

AVERAGE PERFORMANCE

50-74% 46 26.2

LOW PERFORMANCE

30-49% 64 36.5 58.2

VERY LOW PERFORMANCE

BELOW 30% 38 21.7

SUB TOTAL: 175 65.0

SCHOOLS WITH LESS THAN 5- YEAR AVERAGE

94 35.0

TOTAL 269 100.00


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Current and Proposed Solutions





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Major Goal

In the exchange ensure

Mutual Benefits!





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Government is supporting these initiatives….

DTI-Board of Investments2005 Investments Priorities Plan

Department of TourismDepartment of Health

Executive Order No. 372

NEDA MTPDP 2005-2010

PEZA

There’s need to coordinate and harmonize private and public sector initiatives.

Focus of private-public partnership (Cluster-based Approach):

•Upgrading quality of hard and soft infrastructure•Work towards reaching international standards of health care delivery•Explore the potentials of the local market to upgrade quality





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Strategic Directions: HRH Master Plan

Human Resource Development Increase health budget specifically on HRH Dev’t

To increase benefits allowable via social health insurance in order to increase demand for health care by 3 timesStrengthen capacity of Philhealth as an insurerAccess to funds by physicians particularly those in the provinces

Improve retention/return schemes: e.g. brain circulation Encourage lifelong learning (building credentials): Career mgt. Pursue proposals of NIH and PMA:

National Service ActCreation of Commission on Health Human Resources Development (can be part of the overall national structure)


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Strategic Directions:HRHMP

Developing Firm InfrastructureNeed for database/inventory of facilities and business networks here and abroadAccreditation of major hospitals with JCIAccess to financing via investment opportunities (e.g. joint ventures, management contracts)Cluster-based Approach: Closer links among associations across health and related industries (e.g. medical, travel, IT, etc.), government and academe





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Options for Negotiations• Conduct multi-stakeholder meetings to discuss Philippine

position in the GATS framework, regional arrangements, and bilateral arrangements specifically:

• Identifying the benefits and costs in relation to health objectives

• Implementation of exchange compensation schemes• Open up activities with significant inflows of capital that

would enhance local linkages• Identifying options for allowing foreign medical practitioners

and foreign investors and mutual recognition of licenses and standards





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Thank You !

Mabuhay!





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• Aging Populations in OECD

Country 1996 2010 Australia 15.6 19.3 Canada 16.2 20.4 Denmark 16.5 23.0 France 20.2 22.5 Germany 21.0 25.1 Italy 22.1 26.1 J apan 21.0 29.8 Netherlands 17.9 22.3 Switzerland 19.3 23.6 UK 20.7 23.3 US 16.4 18.8

In the year 2025, the proportion of those 65 and over will be highest in Japan, followed by Italy.

Source: WB


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Country Extent of Shortage and Year

Canada 78,0000 (2011)113,000 (2016)

Australia 31,000 (2006)40,000 (2010)

Aging PopulationsShortage of Health Professionals

Sources:


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Aging PopulationsShortage of Health ProfessionalsHigh Cost of Medical Services 0 20000 40000 60000 80000 100000

Bangkok

Singapore

London

USA

India

Kuala Lumpur

Japan

Philippines

0 500 1000 1500 2000 2500 3000 3500 4000

Bangkok

Singapore

London

USA

Kuala Lumpur

Japan

Philippines

Cost of Daily HospitalizationUSA – US$1,742Japan – US$800Philippines – US$25-40

Cost of Cardiac ByPass Surgery (in US$)

Cost of Comprehensive Male Examination

Source: PATA; UA&P

Source: PATA;UA&P


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Aging PopulationsShortage of Health ProfessionalsHigh Cost of Medical ServicesPoor Health Facilities in home countries

•Citizens of Micronesian States and other Southeast Asian countriessuch as Indonesia take advantage ofthe cheaper cost of services andbetter quality of facilitiesin developing countries like Thailand,Philippines, India


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Need for Strategic Directions

•Lack of framework on the development of the health services sector•Absence of unified body to address local health sector and trade concerns •Lack of human resources development plan in relation to the needs of the local population and trade potentials•Absence of roadmap on exportable health services •Lack of inventory of health care providers/health professionals•Lack of discussions on the implications of the GATS among doctors, nurses or students and how to address possible risks•Lack of statistics on the contributions of other modes of health services trade(e.g. health tourism)BUT – private sector initiatives are existing


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Strategic Directions• Institutional Structure

– Foster private sector initiatives– Government to support or enable rather than increase intervention– Public-private mix to optimize scarce resources and create forum for public

discussions– Clearly define the national structure (from the existing inter-agency groups) to

address development of health services and trade in health services (e.g human resource development, coordination among stakeholders, development of common vision and targets)

• London Medicine• Australia’s National Health Industry Development Forum• Singapore Medicine• Malaysia’s 5-Committees

– Establishment of an incentive structure targeted at specific services such as health tourism and designed to attract capital flows and enhance local linkages (already initiated by BOI)


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Need for Strategic Directions• Domestic Policies

– Foreign Direct Investment – Policies to ensure universal access (Let’s not

ignore domestic market potentials)– Regulatory Policy on Standards and Accreditation

• International Policies – Work on insurance portability– Recognition of hospital and professional

standards




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