Measuring Social Return on Invements (SROI) of Barangay Health Centers

1. Measuring Social Return on Invements (SROI) of Barangay Health Centers Proposed Project John Gokongwei School of Management With SOSE Health Sciences Department (Managerial Accounting Service Learning)

2. Health Situationer • “..., evidence of health service consisting basically of primary health care interventions, indicates that the lower the group’s economic status, the less it uses health services.” (p. 1)  • “The disparity of health status among income groups is evident: the infant mortality rate among the poorest quintile of the population is more than twice the level of the richest quintile, and more than thrice for under-five mortality rate.” (p. 3) • “The WHO database showed total per capita expenditure on health in the Philippines was at $177 from 2000–2004. This is relatively low by comparison to neighboring countries like Malaysia ($355) and Thailand ($257).” (p. 8) • “Historically, the bias of government expenditures has been towards personal or curative care, especially hospitals.” (p. 12) Source: Congressional Planning and Budgeting Department, 2008 Budget Briefer on Health

3. Opportunity: Upgrading the RHUs • Health facilities most utilized by the bottom 40% income bracket: Rural Health Units in both rural and urban areas. (2002 Annual Poverty Indicator Survey APIS) • DOH Health Sector Reform Agenda (2006): “… a reallocation of resources towards more spending on preventive care is only realistic if the quality of care in hospitals can be improved and basic care unnecessarily served at hospital level shifted towards health centers and RHUs.”

4. Devolved Health System (Post-1991) Regional hospital and medical centers (managed by DOH) Provincial hospitals (managed by provincial govt) Municipal or district hospitals (managed by provincial govt)

5. Devolved Health System (Post-1991) City health offices (managed by city govt) Barangay Health Units (managed by urban barangay & municipal govt) Rural Health Units (managed by municipal govt)

6. Ongoing Reforms in Health Service Delivery • Problem: Public primary health facilities are perceived as: • Being low quality, and are thus frequently bypassed.  • Clients are dissatisfied due to long waiting times; • Offering inferior medicines and supplies; • Poor diagnosis, resulting in repeated visits • Lack medical and people skills of the personnel available, especially in rural areas.  Aim: improving the accessibility and availability of basic and essential health care for all, particularly the poor. Result: Secondary and tertiary facilities are inundated with patients needing primary health care.

7. Measuring Return on Investments Which business entity is more profitable? Company X Company Y Profit: P1 million Profit: P2 million Incomplete information: How much was invested in each entity?

8. Measuring Return on Investments Which business entity is more profitable? Company X Investment: P5 million Profit: P1 million ROI: P1M/P5M = 20%

9. Measuring Return on Investments Which business entity is more profitable? Company X Company Y Profit: P1 million Inv’t: P5 million Profit: P2 million Inv’t: P20 million ROI: P1M/P5M = 20% ROI: P2M/P20M = 10%

10. Social ROI Monetary equivalent of Social Benefits & Outcomes SROI = Money, Supplies, People’s Time, Borrowed Facilities

11. Social ROI School Feeding Program: 60 malnourished grade 1 to 3 children fed for 6 months. Target outcome: 20% increase in weight

12. Social ROIInvestment Requirements

13. Social ROIOperating Costs

14. Social ROISocial Benefits * Annual value of benefits discounted at 8% (long-term govt bond rate)

15. Social ROIPutting all the Elements Together Social Benefits – Operating Costs SROI = Investments P977,866 – P347,640 SROI = P108,000 SROI = 584%

16. SROI of San Isidro Health Programs Higher agricultural productivity, greater tax collection, higher municipal revenues, better test scores, longer life expectancies, etc. SROI = Costs of upgrading RHUs, improving capability of key players, better sanitation and waste management facilities Health programs can be broken into their components and measured separately.

17. Using SROI • DECISION MAKERS: • LG executives • Non-government organization leaders • Foundations heads • Other stakeholders USES: 1. Forecasting the costs and benefits assuming that the activities meet their intended outcomes 2. Evaluating actual outcomes to see if the benefits exceeded the costs. OUTCOMES: Vital information to help determine how resources can be most effectively allocated in the public health sector.

18. The Proposed Project • Managerial Accounting students currently enrolled with JGSOM, and Health Science majors from SOSE, will work with BHCs from January to March 2011 to measure the SROI of their health facilities and programs. • The students’ work will be guided by their professors, and will be in fulfillment of their course requirements. • Important outcome: standard measurement methodologies will be developed for the more common aspects of BHC operations. To a large extent, the monetary conversion of the benefits accruing from better health would depend on the assessment of the stakeholders.

19. Timely Study • Drive for universal PhilHealth coverage by the Aquino administration, especially among poorer segments of the population, must be complemented by availability of front-line health care facilities for PhilHealth members to fully realize benefits from membership. • Greater consciousness towards pro-poor government programs, especially in the areas of social welfare, health, and education, will also encourage greater investments in Barangay Health Centers (BHCs) and Rural Health Units (RHUs) by local government officials. • PhilHealth willing to provide funding for improving BHC/RHU infrastructure and programs from membership capitation fees.

21. Financing Health Care Premium Filipino Families Premium Health Care Services LGUs Reimbursements for health care services Funding for infra-structure & health programs BHCs Corporate Foundations

22. Critical Success Factors • The BHCs must have: • Active stakeholder groups which participate in the planning and implementation stages of the health programs. • Reliable accounting records of their investments, expenditures, and revenues. • Knowledgeable people who can provide information to the students regarding their health programs.  • Point persons who can set up meetings with the stakeholder groups, including barangay and municipal officials, as well as accompany the students during their visits.

23. Project DetailsHealth Programs Covered in Study • Focus on those illnesses/conditions with PHIC reimbursements and which can be served by the BHCs: • Feeding and Child-related Diarrhea* • Adult Tuberculosis* (Diagnosis & Treatment) • Maternal Health (Pre-natal*, delivery*, post-natal*) • * Diagnostic tests and professional fees covered by PHIC.

24. Project DetailsInvestments Required to upgrade BHC to PHIC Accreditation Standards A. Clinic Facilities 1. Building 2. Sanitation and safety standards 3. Clinic condition 4. Equipment and supplies 5. Clinic staff B. Service Capability 1. Medical Consultation in Pediatrics, Internal Medicine, OB-Gyne, Minor Surgery 2. Lab Exams for CBC, Urinalysis, Fecalysis, Sputum microscopy

25. Project DetailsIdentification of Benefits • Direct: • Increase in Quality Adjusted Life-Years (QALY, also known as Years of Healthy Life, or YHL) – fairly well-documented in health economics literature • Reduced drug expenses from healthier life • Others • Indirect: • Less absences in school/work • Savings in trips to hospitals if illness becomes acute • Others

26. Project DetailsGroup Organization • Each group made up of: • 5-6 2nd Year Managerial Accounting Students: • Estimate value of health benefits • Estimate costs of running health programs • Estimate investment costs related to infrastructure, training, equipment, etc. • 3 3rd or 4th Year Health Science Students (in service-learning subjects): • Identify components of health programs • Identify benefits of target clientele of health program (literature review and community survey) • Identify investment requirements

27. Project DetailsPutting Everything Together SROI of Successful Health Programs Study the health programs, benefits, costs, and investments of the RHU in San Isidro, Nueva Ecija. Compute SROI. Estimate the potential SROI of health programs to be implemented through BHCs in BagongSilang and Pansol. (3 groups, 1 per program) Study the 4 existing BHCs in BagongSilang, Caloocan and 2 in Pansol, QC re investment requirements for PHIC accreditation (All 6 groups) Investment Requirements (2 groups in Caloocan, 1 group in QC)

28. Tentative Schedule • Jan. 8, 2011: Orientation meeting for students and faculty re community health situation of target BHCs at BagongSilang (Caloocan) and Pansol (QC), successful health programs atSan Isidro (Nueva Ecija), and SROI framework. • Jan. 15: Kick-off meeting with local govt, health officials, and other stakeholder groups at San Isidro (AM), Pansol(AM) and BagongSilang (PM) • Jan./Feb.: The students visit the communities and BHCs to gather and analyze data. • Mar. 1-15: Students prepare their reports. • Mar. 3rd week: Students present their findings to their classmates as part of a class learning activity, as well as to the stakeholders. • April: Students finalize their study, with inputs from faculty and stakeholders.