Saint Paul University Philippines

Tuguegarao City, 3500 Cagayan North

Master of Science in Nursing – Adult Health

In Partial Fulfillment for the Course

ADVANCED HEALTHCARE ECONOMICS WITH NURSING ENTREPRENEURSHIP

Wella Joy P. Diola RN

Name, RN
MSN Students

MARIA GIRLIE D. JORDAN, MSN

Professor

SUMMER 2019
MODULE B
In the previous module, you learned the economic history, population growth and
health care including the factors that affect the cost of health care. This module focuses
on the discussion and economic concepts in cost management and management of
hospital cost and how quality care is affected by these costs.

Objective: Discuss the changing role of management and the competencies required to function in
the managerial role as well as to optimize utilization of resources.

You should be able to define these terms before you start:

Standard cost profile

- An estimated pre-determined cost of performing an operation or producing a good or service
under normal conditions.

Cost determination
- Interaction between the demand and supply in the true market that is used to determine the
cost for goods and service.

Patient care classification

- Grouping of patients according to the acuity of their needs and the degree of their dependency
on nurses in order to objectively estimate the required nursing hours of direct patient care.

Cost center
- A department within a business to which cost can be allocated of a department within an
organization that does not directly add to profit but still costs the organization money.

Quality indicators
- Are standardized evidence based measures of health care quality that can be used with readily
available hospital in a patient administrative data to measure and track clinical performance and
outcomes.

Revenue center
- Is a distinct operating unit of a business that is responsible for generating sales.

• CONCEPT of COST:

Costs are expenses or assets having utility for future periods

• Cost information in relation to time frame
• Costs that change in relation to volume or time
• Cost data utilized for product pricing
• Costs related to strategic and operational planning and control

• WHAT IS COST MANAGEMENT?

 It is an ongoing process of Planning and controlling to meet strategic directions of the
organization. Its uses are product pricing, inventory valuation and income determination as well
as product planning and control.

There are 5 functions of cost management systems:

• Cost determination
• Activity forecasting
• Functional Cost - Center Budgeting
• Performance reporting on a product level
• Performance reporting on a functional level

Define and explain the 5 functions of cost management. You may use any journal on Health Economics,
or managing health care costs, quality and technology by Mychelle Mowry et al or any reference you
may found.

1. Cost determination is the interaction between the demand and supply in the true market that is
used to determine the cost for goods and service. It is in this process where enterprise organizes
and systematically manages all the cost information and starts by identifying the cost elements.
Under the cost determination is where the total cost or target cost for materials and labor are
computed.

2. Activity Forecasting is a technique that uses historical data as inputs to make informed
estimates that are predictive in determining the direction of future trends. Businesses utilize
forecasting to determine how to allocate their budgets or plan for anticipated expenses for an
upcoming period of time. It also provides information about the potential future events and
their consequences for the organisation which may or may not reduce the complications and
uncertainty of the future. Forecasting is useful in dealing with troubles such as sudden changes
in demand levels, price cutting maneuvers of the competition, large swings in economy and
many more. Formulation of the problem is the first step followed by choosing of forecasting
method to use. There are three general types of forecasting which are qualitative techniques,
time series analysis and projection and causal models. Qualitative techniques make use of
qualitative data such as expert’s opinion, human judgements etc. to turn qualitative information
in to quantitative estimates. Time series technique is a statistical method that uses past
historical data which will be compared and analyze through trends and cycles. Lastly, Projection
and causal model is the most sophisticated method as it expresses mathematically the relevant
causal relationships, and may include pipeline considerations like inventories and market survey
information.

3. Functional cost or center budgeting are the total sum of all expenses both fixed and variable for
a specific step in the value chain. It’s the total cost associated with each step a product takes
from the manufacturer to the consumer. Examples of these are manufacturing, retailing,
marketing, advertising and many more. This department does not generate income for the
company but are still part of the budget.
4. Performance reporting on product level is a fusion between a sales report and an inventory on
hand report. It permits you to compare your inventory data for a product with sales data such as
item's sold per month, cost of goods and revenue. Information such as seasonal brand
performance, individual product performance, product popularity and products that haven’t
sold can be seen in this report which can be a useful tool for future inventory planning.

5. Performance reporting on functional level is a method to define the requirements of a project,

product or service, based on the required functions and the specific needs related to those
functions. This report enables the owner to document their performance requirements in terms
of functions and needs without reference to a specific solution. For each function, needs are
expressed in terms of assessment criteria, levels of performance and a flexibility for each level.
This report is useful in terms of defining project goals and requirements, identifying business
needs to develop or improve business processes, restructuring organization and defining
requirements for projects
Unit: Neonatal Intensive Care Unit
Final Product Nursing Care

• What are the clinical nursing needs?

Some of the clinical nursing needs of our unit are the following:

1. A way to decrease incidence of exchange transfusion for hyperbillirubenimia in

newborn due to ABO and RH incompatibility

2. A means to check and verify proper placement of endotracheal tube and a way to
lessen arterial blood gas extraction on newborn ventilated patient.

• What is their prevalence?

1. Hyperbillirubenimia in newborn in our unit accounts for 10-15 cases per month. Some of the
cases are mild ABO compatibility which can be manage by an ordinary phototherapy. Middle
east being open to expatriates from around the world, half of our census are composed of
different nationalities such as Syrians, Egyptians, Sudanese etc. which makes ABO and RH
incompatibility common. Another contributing factor is the lack of sunlight exposure due to
extreme hot temperature in the Middle East which is not conducive for exposure for
newborns.

2. Prematurity and respiratory distress syndrome on newborn are another common cases in
our unit. Ventilation being one of the main priorities of treatment for RDS patients, our unit
accounts for 5-10 cases per month to which some will stay ventilated for 2-5 days.

• What are the diagnostic problems and how they are resolved?

1. Cost – can be resolve through looking for other source of funding such as sponsorship,
donation or credit

2. staff capacity to operate – can be resolve through skills training

• What are the therapy options?

1. 360 degrees tunnel type phototherapy machine – this machine provides intensive phototherapy
treatment with a powerful LED lights and cylindrical design that is highly recommended for
babies who has critical bilirubin levels.
 2. Patient monitor with cardiac/ecg waveform, temperature, NIBP, Oxygen saturation and CO2
detector.

• What are the costs of developing or continuing to develop the product?

The cost of developing this product would require evidence based studies and clinical trial in order to
assess the effectivity and identify areas of improvement.

• What are the costs of producing the product?

1. Tunnel Type Phototherapy – 200,000 to 300,000 pesos per unit

2. Patient Monitor – 40,000 to 50,000 pesos per unit excluding the disposable materials such as ET
CO2 detector probe and ECG sticker probe

• What resources are required?

1. Financial resource and if availing the product permits the hospital’s budget.

2. Educative actions and staff training in operating the equipment.

3. Estimation of the amount of equipment needed to fully cover the needs in the unit.

• What new information must be learned?

New information that are needed to learn includes handling and operating of the machine.

• What are the critical success factors?

1. Fund and financial resources

2. Safe and Effective operating

3. Quality

4. Profitable

• What is the likelihood of success?

It is more likely that availing this equipment can help address the clinical needs mentioned
above. The risk that are brought about the clinical needs outweighs the cost of the product.
Patients in NICU are considered fragile and the less exposure to invasive procedure, the higher
the chance of not acquiring infection which will help prolong life and increase chance of
surviving.
 QUALITY and COSTS

Introduction:

Hospitals are complex institutions and different parts of the hospital actually produce different
products. The average is made up of some basic services for routine admissions, along with some
specialized units as heart transplant, oncology and respiratory intensive care.

Hospitals exist to allow a large number of doctors to share expensive capital, equipment and cooperate
in the care of many patients. Since many of these costs are fixed, hospitals should show economies of
scale (average cost per patient per day falling as more patients are treated). The need to accommodate
random fluctuations in the number of admissions and to preserve some buffer of empty beds for
emergencies create economies of scale.

Diseconomies of Scale arise from the difficulties of coordinating and managing a larger institution.

• If more than 500 bed hospital- becomes costly, patients have more complaints
About getting lost in the system and being part of a factory rather than a caring
institution.

Learning Activity

Read on the following:

• Evaluation of Nursing care in terms of process and outcomes

• Issues on Research and Quality Assurance
• Evaluating Quality Care
• Concepts on Quality assurance
• Costs
• Budgetary and Utilization Review
• Republic Act 7875 (NHIP)

Competition among hospitals

• Most care decisions are made by the doctors hence, hospitals compete for doctors.
• If ability to decide on hospitalization is taken out of the doctors, compete for contracts and
appeal to payers – lower prices

Note: Hospitals must compete for the party that has the power to make the revenues come to them,
not the patient

Quality is the most important aspect of medical care-

• Show reputation for outstanding care and scientific process
• Customer satisfaction

QUESTION:

Discuss how the hospitals compete in the following instances:

• Competing for Patients

There is an increasing amount of private hospitals built in major cities of our country aside from
the government hospitals which caters mostly on the poor sector of our country. Competition in
getting patients varies on the availability of services, doctors and affordability of services being
offered by the institution. Most of the competition can be seen in the private sector since most
of the government hospitals are already crowded with patients who wanted to avail free
services. Patients are the number one source of revenues for the hospital and an increase in
numbers of patients is equals to an increase in revenues. Hospitals continuously upgrade not
only their facilities but as well as advancements in devices and services. Convenience and
expertise are also a contributing factor in attracting clients. Accreditation from HMOs and other
health insurance are also major influences in enticing customers. For tertiary government
hospitals, facilities such as bed capacity, availability of high technology diagnostic machines and
specialist doctors are some of the common reasons why patients choose to seek confinement
there. Some hospitals offer competitive packages or discounts for a certain service or procedure
thus attracting clients prioritize affordability without compromising the quality of service they
will receive. In our modern digital world, advertisements are also one of the major contributors
in drawing patients.

• Competing for Doctors

Recruitment of doctors is barely new in the world of health care field. Most hospitals offer
promotions, chairmanship, competitive salary and excellent program. Hospitals compete for
doctors who have great number of loyal patients and who are considered popular in their fields
which mostly are specialist. These high profile physicians can help boost the hospital’s revenues
since luring a star doctor means getting his patients too. Some doctors look for an institution
where they can develop their clinical practice and having the ability to do research.

• Competing for Contracts

Hospitals not only compete for patients and doctors but also with contracts such as third party
payers, HMO’s and the likes. These organizations provide health care financing, insurance and
health care plans. Competition on these aspects differs on access, premiums, benefits and the
quality of service to be rendered. To secure network contracts, the hospital will secure affiliation
in the third party payers and in order for these payers to commit with the hospitals, the hospitals
must provide cost effective offers that the third party payer can benefit also.
NATIONAL HEALTH INSURANCE PROGRAM – Republic Act 7875

For foreign students they may discuss their own health insurance program available in their country.

QUESTION:

Discuss the NHIP in terms of:

• Purpose

The national health insurance program aims to improve access of all Filipinos to quality health
facilities and ensure that everyone shall receive affordable health services against the ever increasing
cost of medical care.

• Coverage

All the citizen of the Philippines shall be covered by this program specifically targeting the
poor/indigenous sector of the community.

• Nature

The nature of this program is to provide financial security in health rather than just helping
people pay for health services. The agency will provide uniform benefits for all, develop single but
comprehensive primary care package for all. Ultimately, the end service will be to ensure no balance
billing for the non-formal members or ward admissions and fixed copayment for formal sector members
or private room accommodation.

• National Health Insurance Program Fund

(where, whom and percentage how the fund is appropriated)

Under the law, contributors or income earners will have to pay for their premiums while the
government will assume the contributions of non-contributors. Direct contributors are required to pay
progressive premium rates from 2.75% for those whose income ranges from the fixed base of 10,000 up
to an income ceiling of 50,000 on its initial year of implementation. The premium rates shall gradually
increased in following years at a maximum projected premium rate of 5% by year 2025 for members
with income ceiling of 100,000. The schedules of projected premium contributions from 2020 onwards
are as follows:
 However, inability to pay premium contributions will not inhibit members from enjoying benefits.
Employers in this case shall be asked to pay all missed contributions with penalty interest of at least 3%,
compounded monthly. On the other hand, self-employed individuals, which include migrant workers
and professional individual practitioners, will be required to pay a maximum of 1.5% penalty interest for
missing premium contributions. The precise premium sharing of both the employee and employer for
employed individuals has yet to be determined through the Implementing Rules and Regulation (IRR) of
the Act. Direct contributors who will pay premium contributions are to automatically enjoy additional
benefits provided by PhilHealth. On the other hand, indirect contributors which include indigents, senior
citizens and persons with disabilities, will be eligible for the basic health benefit package and are to be
covered by the premium subsidy included in the General Appropriations Act (GAA) under the
Department of Budget and Management (DBM), the amount of which shall be released to PhilHealth.
The effective implementation of the new law will vastly rely on the funds that will use in the program.
This means that the government must guarantee that it has adequate funding to provide every Filipino
citizen his medical benefits regardless of whether the membership is contributory or non-contributory.
Under the law, the government is to acquire the funds for the implementation of the UHC Act from the
following sources

 Total incremental sin tax collections as provided for in Republic Act No. 10351 or the Sin Tax
Reform Law
 Philippine Amusement Gaming Corp. (PAGCOR), which would be 50% of its income share for the
National Government
 Philippine Charity Sweepstakes Office (PCSO) which is to provide 40% of its Charity Fund, net of
documentary stamp tax and its mandatory contributions;
 Premium contributions of members
 DoH through its annual appropriations as included in the GAA ; and
 PhilHealth through its national government subsidy.

There is a funding requirement of P257 billion for the preliminary implementation, but only a P217
billion allocation was approved by Congress. With this deficit, the government has to look for additional
funds to augment the budget shortfall of P40 billion. Moreover, the government must take additional
measures in sourcing funds to sustain the program in the long-term, especially when the population
continues to grow and is expected to reach 110 million by 2020 according to census-based population
projection of the Philippine Statistics Authority (PSA). One such initiative sought by the Department of
Finance (DoF) is to further increase excise tax on alcohol products and cigarettes by supporting the Sin
Tax Reform Proposal that forms part of Package 2 Plus of the TRAIN law.
 Answer the following questions based on your readings on NHIP:

Several guiding principles were adopted in the pursuit of NHIP. Explain each one:

• Allocation of national resources for health

Improving the health of the general population can help lower risk of death for the whole
population. In our country, the center for curative services and institution can be found in urban area
thus leaving the rural area deprived from a reasonable access to health care services. Like our governing
figure in health which is the Department of Health, their vision is for Filipinos to be among the healthiest
people in South East Asia and in order to achieve this vision, the government aims not only to promote
preventive measures but also to control and decrease risk of death by providing free access to health
care services. Health is considered central to human happiness and well-being and according to the
World Health Organization, health also makes an important contribution to economic progress as
healthy populations live longer, are more productive and save more.

• Universality

The program is intended to all Filipino citizens including the poor and indigenous sector making
sure to provide at least the basic minimum package for everybody.

• Equity

Regardless of the capacity to pay for health care services, the program make sure that services
are to be given equally for all whether you a patient can financially afford it or not.

• Responsiveness

The program will cover all kinds of services that a member needs regardless of age, case and
condition.

• Social Solidarity

It highlights the interdependence between individuals in the society, which allows them to
contribute and feel that they can help improve the lives of others through collective sharing despite the
differences in age, group and society.

• Cost Sharing
 The share of cost will vary on the member’s status making sure the collection is fair and suitable
while the health care provider will only collect the reasonable amount for a certain case.

• Professional responsibility of health care providers

The health care providers and their institution will be responsible and will work hand in hand
with the government in implementing this law.

• Quality of services

This program will make sure that not only will the Filipinos receive free access in health care
services but the government and the institution will provide a quality of care that will best benefits the
members,

• Cost Containment

Through the use of effective cost containment, the program will be able to maintain expense
level to inhibit unnecessary spending as well as thoughtfully reducing expenses to improve profitability
without long term damage in the institution.

• Maximum community participation

The program will be supported by preexisting local units in terms of organization and acquiring
human resources.
 • A requisite for accreditation – is the existence of a formal ongoing quality assurance program
(QAP).
The objective of the program is to:

• ensure health care professionals of accredited health care institution possess the training
and credentials to render quality health care services
• Work towards the promotion of uniform health care standards
• Ensure appropriateness of medical procedures and administration of drugs and medicines
consistent with generally accepted standards of medical practice and ethics
• During inspection the Phil Health monitors and verifies compliance to the requisite of a Quality
Assurance Program (QAP)
• Gross violation of this QAP requisite shall constitute a ground for suspension/ revocation of
accreditation.

QUESTION: Identify 10 activities of the program (QAP) in each institution:

Reference: Rule XVII , section 92 of the Revised Rules and Regulations implementing the National
Health Insurance Act of 1995 (R.A. 7875). Activities of QAP specific for health care providers.

1. The proper review of credentials of individual health care professionals working in the health
care institution.

2. The provision of referral and practice guidelines for the health care providers.

3. A utilization review and monitoring scheme for the performance of health care provider.

4. A measurement of health outcomes and patient satisfaction including mortality, morbidity,

infection rates and other related activities.

5. A data gathering and retrieval system from the health and financial records to support
performance monitoring and outcomes measurement activities.

6. A system of peer review and feedback to the health care professionals and mechanism for
change in practice patterns as needed.

7. The appointment of a specific person responsible for quality assurance in the institution.

8. The implementation of remedial measures to correct defects identified in the health system.
 9. A documentation of regular meetings for members of quality circles or quality assurance
committee.

10. The documentation of processes developed, evaluated and improved.

MONITORING NURSING CARE QUALITY

Nursing often has taken the lead in patient care quality assurances by investigating the quality of service
delivered by practitioners.

Briefly discuss the following issues related to the development of criteria and methodologies:

• Structure – Process – Outcome

Structure-Process-Outcome (SPO) framework for quality assessment in nursing delivers a

comprehensive evidence based model of the intervention of interest. Structure is the setting in which
care takes place including the organizational resources and characteristics. Process is the actual activities
that constitute care including diagnostic, treatment, rehabilitation, prevention and patient education.
Lastly, outcomes are the end result of the processes of care including favorable and/or adverse changes
in health status that can be credited to health services. An effective quality assessment for the discipline
of nursing is dependent upon a body of evidence that exhibits relationships between the full
complement of nursing interventions and the full range of outcome sensitive to nursing interventions.

• “Ideal System” described by Hegyvary and Hausmann in 1976

Quality Nursing Care

A review mechanism should replace group accountability and care activities maybe tracked for
individual patients and compared against a set of clearly defined standards. Such a system provided an
excellent framework for quality assurance systems.

How can nursing establish an environment and structure that facilitates QA mechanism?

• Communication through rapid and accurate data retrieval and analysis

Caring for patients involve sharing of information and discussing of their management and
because of this, interest in the modern use of information and communication to support health services
increased. Exchanging of information is crucial in to the delivery of care on all levels of the health care
delivery system. In order to diagnose and treat a patient effectively, the health care team must have
access to all vital clinical information that will help guide make the right diagnosis and management. As
much as communication is important in the health care field, it is most commonly the least priority of
some institution in terms of improving and upgrading, and because of this underinvestment, a small
progress has been made in terms of meeting the information needs and the other process involve in
operating a hospital. A lot of modern efforts were made to develop a more rapid and convenient way of
making patient’s information readily available as this has proven to help make a better quality of service
in the hospital. From paper files to electronic medical records, the health care providers were given an
easy access to complete and accurate patient data round the clock. It gave not only convenience to the
staff but fast and accurate information which the whole health care team shares.

• Technology such as bedside based automation, etc

Advancement in medical technology has proven to be helpful in terms of delivering quality care for
patients. In our modern world, a lot of high technology medical equipment is made available which
provide convenience and precise outcome in assisting with medical and nursing procedure. Technology
has proven the health care field that it can improve care efficiency, quality, safety and cost but at the
same time, it is all possible for it to produce errors and adverse events. Though technology holds much
promise in improving the services in the hospital, device related are also inevitable and benefits of it may
not be realize because of the inadequate maintenance plan in implementing the new technology.
Technology has transformed the way nursing care is conceptualized and delivered and before all these,
nurses and other health care provider relied purely on their skills in assessment in monitoring the
patient. With the availability of monitoring machines, it has made possible for the staff not only the
convenience of acquiring assessment data such as heart rate, oxygen saturation etc. but also accurate
and rapid report.
 What are the advantages of automation in quality assurance mechanisms?

1. Saves time, labor and cost

2. Improvement on quality and consistency

3. It makes population health management feasible, scalable and sustainable

4. Provides access insights to given data specifically big data which helps in predicting trends in
health care systems.

5. Helps reduce waste through electronic medical recording

6. Increase predictability of outcomes

7. It provides higher throughput which helps nurses handle a larger populations of patient at one
time

8. Provides data driven insights that can be used for performance improvement and optimization
CONTROLLING HOSPITAL COSTS THROUGH REGULATION-

Please explain each one of them?

• Phil Health Corporation created by the R.A. 7875 (NHIP)

Through the creation of Philhealth Corporation hospital cost are controlled through the implementation
of case based payment scheme which offers a more predictable and equitable benefit payment based on
patient’s medical condition.

• Budgetary Review

Under budgetary review, cost control and profit maximization are implemented. It allows the
management to maximize the use of available resources in a most profitable manner. It also enables
delegation of authority and a means of communication in the committee.

• Utilization Review

It is a process of reviewing the appropriateness, effectiveness and quality of services provided by the
hospital. This helps minimize the cost by determining the recommended treatment appropriate of the
patient’s condition. Through this, proper treatment can be given and prevent or minimize unnecessary
costly procedures.

• Administered Prices (Preferred Provider Organization-PPO/ Health Maintenance Org.-HMO)

PPO and HMO help regulate cost by providing medical treatment on a prepaid basis for the member.
Together they share the same goal of reducing health care cost by focusing on preventive care and
implementing utilization management controls.

Summary:

Health care providers should identify the inefficiencies that have developed in the industry,
largely because of the manner in which hospitals have been financed. Prospective Payment (PhilHealth)
is designed to encourage hospital administrators to manage the process in the most cost-effective
method possible while simultaneously assuring quality health care.
 Nurses have a significant impact on quality assurance programs. Nurses are the only providers
who directly care for the patient 24 hours a day from admission through discharge. Therefore, they are
in a position to identify inefficiencies, redundancies, and omissions. Nurses must develop a formal
review mechanism that will trace the care of specific patients by specific nurses.

------END of ACTIVITY B-------

MODULE C
INDIVIDUAL ACTIVITY
Submitted by: Wella Joy P. Diola
2018-03-0329

PART I. CRITIQUING:

I. Latest Trends/Issues related to Health Economics

BELTRAN, Bjorn Biel (May 2018): Looking into the Future of Health Care

The health care industry stands to benefit greatly from the strong economic growth of the
Philippines, but it may also face new, unprecedented challenges. Prosperous times have an
outsized effect on population growth. Affordability and accessibility, though they have always
been the main concerns of the country’s health care system, will become ever the more
important as the population of Filipinos in both rural and urban areas follows its economic
trajectory.

It then seems prudent that the Philippines keeps its sights focused on finding solutions to both
new and longstanding health care concerns, as it steps forward into its bountiful future. “The
Philippine Health Care Industry is enjoying unprecedented growth,” Ma. Cristina G. Coronel,
Healthcare Information Management Association of the Philippines president, had said in the
Healthcare Information Management Services (HIMS) Conference in 2016. “[By 2022], the HIMS
industry could be making $5 billion in revenues with 210,000 direct employment or 14.8%
growth,” she said. The opportunity lies in the new avenues of service that technology is opening
up. Ms. Coronel noted new and expanded types of services of the industry, like telemedicine,
which is the remote diagnosis and treatment of patients by means of telecommunications
technology, could allow patients to access medical expertise in more convenient ways, providing
ease of access and a potential cost savings for the patient. Aside from Telemedicine, Ms.
Coronel also pointed out the potential of innovative work in voice, non-voice, information
technology, and analytics coming from the pharmaceutical businesses, health IT, and from the
provider-and-payor-centric processes.

Technology and innovation are also providing a buffer against the rise of chronic, or
noncommunicable diseases that continue to put undue strain on the country’s taxed health care
systems. According to the World Economic Forum, the five leading noncommunicable diseases
— cardiovascular disease (CVD), chronic respiratory disease, cancer, diabetes and mental ill-
health — will cost the global economy US$47 trillion by 2030. To combat this, GE Healthcare’s
Sustainable Healthcare Solutions (SHS) for emerging markets seeks to develop technologies that
are clinically and economically relevant to countries like the Philippines. Myra Eskes, president
& CEO of GE Healthcare ASEAN, said in the Hospital Management Asia conference in 2017 that
they are aiming to engage in providing skills training for medical personnel as they believe that
having good equipment does not automatically mean having good patient outcomes. GE
Healthcare also provides financing solutions that are viable and sustainable in the long term to
address the issue of funding for players in the industry.

Elisabeth Staudinger, president of Siemens Healthineers, Asia Pacific, likewise, said during the
conference that her company is using artificial intelligence to help interpret radiology images,
whether it’s X-ray, CT or MRI scans. “We see opportunities helping hospital providers to become
a lot more efficient by utilizing information coming off equipment they’ve installed in the
hospitals. Then there’s also this greater vision of creating information which is available globally
and can be utilized no matter where you are in this planet for determining the best care for a
patient,” Ms. Staudinger said. In the advanced field of biopharmaceuticals, impressive work is
being done on immuno-oncology, gene therapy, and personalized medicine, all of which can be
used to treat fatal diseases like cancer. Immuno-oncology, for instance, aims to coax the body’s
own immune system to fight the disease. Unlike traditional approaches such as radiation
therapy and chemotherapy, which kill healthy cells along with cancerous ones,
immunotherapies target cancer cells by enhancing the body’s own innate ability to fight off
rogue invaders.

“Rapid change and unprecedented opportunity are now the hallmarks of the biopharmaceutical
industry. But the future of health won’t just be defined by the innovations we set out to create;
it will be equally shaped by how we respond to — and anticipate — the challenges and
consequences of each great advancement. The more we know, the more “known unknowns”
are revealed. The boundaries of areas left for researchers to explore constantly expand, while
possible applications of new technologies proliferate,” Albert Bourla, chief operating officer of
Pfizer Inc., wrote for the World Economic Forum.

The most meaningful changes in health care, Mr. Bourla noted, will come from the right blend
of innovation and deliberation. As new discoveries in medicine push the boundaries of what
was thought possible, there should also be an equivalent and simultaneous effort in building
mechanisms that explore each innovation through a prism of social, economic and political
filters to better anticipate the consequences of progress.

“As we map out new health care territories, we must make sure each route leads back to
patients. Large-scale changes driven by tech innovation are only as valuable as their impact on
individual people’s lives, lives we are constantly striving to improve and extend. I believe that
the best way to protect and treat the people we all serve is to identify the potential benefits
and the potential challenges of each new breakthrough. Leveraging innovation wisely will let us
help more patients than ever before.”

My Critique:

Modern medical technology has contributed and gave a big impact in the health care
field through medical process and practices of health care professionals. The advancement of
Science through the use of this modern equipment laid the foundations for bigger and better
equipment that can be used to create a better quality of life and reduce hospital costs. Medical
technology is necessary as it helps in the betterment of the services the hospital and the health
care professional can provide to the patient. One good example of this can be seen in the
advancement in imaging and diagnostic equipment. The improvement in this apparatus helps
provide detailed views which then prevent exploration surgeries and also provides accurate
diagnosis and later on proper treatment and management for the patient. Another great
example of how technology helps delivered care in rural areas is through telemedicine.
Department of Health is now conducting RX boxes to be deployed in rural areas. RX boxes is a
combination of diagnostic devices capable of identifying common medical problems,
computerizing results and transmitting data electronically in the city where a doctor can
interpret, diagnose and later on plan for treatment and management. This is a solution that the
government is currently eyeing that will hopefully address health problems in far flung areas
and help serve the country’s poor masses. The total cost of the device is cheaper than
employing doctors.

Advancement in technology can be really expensive but the turn out or the outcome can
eventually justify the cost. The article mentioned a lot about high technology equipment but
also emphasize on the importance of skills training for staff. Technology is an important factor in
in the progress of our health care industry. Improving health for patients can rise if the
improvements are associated with new effective but costly technologies or drugs. It will only be
valuable if the benefits of the medical advances exceed the cost of the care. Prevention has
always been a better option than cure. Improving the health of the general population can help
lower risk of death for the whole population. The advances in technology have provided the
mankind a better and prolong life span. Life expectancy increased because of the mentioned
improvements in our society not only independent in the medical care aspect but as well as in
economic growth. A country with a developed economy is more likely to afford the expenses
that modern technology entails. Expenses are not only the primary issue in improving health
but also the scope that a governing body can reach. In the Philippines for example, the center
for curative services and institution can be found in urban area thus leaving the rural area
deprived from a reasonable access to health care services. Like our governing figure in health
which is the Department of Health, their vision is for Filipinos to be among the healthiest
people in South East Asia and in order to achieve this vision, the government aims not only to
promote preventive measures but also to control and decrease risk of death. Improving one’s
health is important as health is considered central to human happiness and well-being and
according to the World Health Organization, health also makes an important contribution to
economic progress as healthy populations live longer, are more productive and save mor

II. Latest trends/issue related to Health Economics

KUCHERYAVENKO, Oleg (January 2018): Here’s how we can overcome global

health challenges. World Economic Forum

The global health context has changed dramatically. Countries spend more on health, as the
population is ageing and the burden of chronic diseases is growing; novel and expensive
medicines and health technologies become available; and demand for better health is increasing
as people’s income grows. To meet these needs, countries are in a constant race to secure
sufficient and sustainable financing for the health sector. But the gap between the financial needs
of health systems and actual spending continues to widen. Even the wealthiest nations struggle to
keep up with ever-increasing costs of health services.

In the meantime, Sustainable Development Goals put significant pressure on governments to

maintain and scale up health services. Health systems are bursting at the seams; and the low and
middle-income countries are hit the hardest. Everyone agrees the health of the people is
important, although not everyone knows where to find sufficient resources to pay for it. Money
can buy health only if it is spent equitably and efficiently.

Economies grow and countries transition

Countries that demonstrate economic growth tend to spend more on health. In countries with
medium and high levels of economic growth, growth in healthcare spending can stimulate the
economy. In many countries, health spending grew faster than the economy. A recent economic
slowdown suggests that countries cannot be complacent and rely solely on existing financial
capacity to maintain and scale up health services. Countries develop and graduate from one
income status to another. When low-income countries develop into middle income countries, the
level of official development assistance they receive suddenly plummets, exposing them to risks
of institutional and financial instability. This process is called a “health financing transition”.
Countries differ in the way they transition; and in the pace of their investment in health. Those
that lag behind economically-similar countries do so for several reasons. They may lack the
capacity to raise funds. They may not think of health as a priority investment. Lastly, some
countries continue to rely on donors and fail to maximise financing for the health sector by
leveraging the private sector.

Financing for health is more than mobilising resources

Achieving Universal Health Coverage by 2030 requires countries to raise funds to provide health
services; reduce inequalities in the ability to pay; and ensure financial protection against
impoverishment due to spending on health. It all starts with generating enough domestic revenue
that can be pooled in an insurance fund to buy services that people need. When this pooling is
weak, people have to pay for healthcare out of their own pocket.

The Lancet Commission on Investing in Health estimated that an additional $70-$90 billion is
needed annually to make basic services universally available, which corresponds to a third of
low and lower-middle income countries’ total health spending. Getting resources in place is the
first step in a chain of decisions: what health services to purchase, from whom, and how to pay.

Health is one of many priorities

Countries raise and spend money on health when they are committed to doing so. Political will
and desire define whether health wins over military or other expenses. Aspiration to raise funds
for health does not mean it is immediately possible. Low and lower-middle income countries use
between 63% and 78% of their potential to raise revenue. Not long ago, India, Indonesia, and
Myanmar allocated less than 6% of government resources to health, less than many African
countries. Other countries have enjoyed similar success: Vietnam and Singapore increased their
government health spending from 5.6% and 7.4% of government expenditure in 2004 to 14.2%
and 14.1% respectively in 2014.

Taxes are good for health

Resources for health can be raised by growing government revenues through effective tax
collection and combating tax evasion. Rich countries raise more revenue as a share of GDP; and
taxes constitute the largest share of their domestic revenue. Poorer countries have weaker tax
collection systems. In around half of low and low-middle income countries, tax represents less
than 15% of their GDP.

Several countries – Burkina Faso, Kenya, and Senegal – have fully exploited their capacity for
collecting taxes, and any extra efforts in this area are unlikely to result in additional financing for
health. Taxes can also be earmarked for health. For example, Djibouti and Guatemala direct the
revenue from tobacco taxes to health. Economists argue if earmarking tax revenue for health
actually leads to increased health budgets – governments may simply reduce health funding from
their other sources of revenue.
Tax avoidance strategies – such as base erosion and profit shifting – tax incentives to companies,
and corruption also undermine the capacity of developing countries to collect tax revenues. The
evidence that tax exemptions and credits result in larger foreign investments is scarce. In fact,
aside from special cases, tax incentives cause a loss of revenue.

The IMF recommends setting revenue targets and broadening the tax base. While income and
value-added taxes constitute major sources of income in the developed world, the grey economy
of developing countries results in missed opportunities for revenue collection. .

Borrowing remains an option

For some countries, broadening the tax base or increasing the efficiency of tax collection is an
impossible immediate task. In this case, borrowing provides countries with an opportunity to
“live through” the crisis, while front-loading immediate investment needs.

Many countries took advantage of a prolonged period of low global interest rates and access to
development financing. Sovereign debt has continued to grow over the past 20 years, with net
debt inflows in low and middle-income countries, excluding China, reaching $194 billion in
2016. Although borrowing provides the funds upfront, many economists are concerned that
countries may not have the capacity to repay their debt.

Striving forward

The global health community has put the spotlight on domestic financing for health. Trillions of
dollars will be needed to accomplish the SDGs. Projections suggest that even by 2040, only
seven of today’s low-income countries will be able to reach the target for sufficient government
health spending.

The momentum for Universal Health Coverage draws attention to all aspects of health financing
reform: from mobilising domestic resources, to ensuring the efficiency of resource use, and
equity in coverage of financial protection.

The era of a nearsighted approach to development has passed and countries, development
organisations, and the private sector should come together in a spirit of unity to look at the health
sector and governance from a system perspective. By strengthening co-operation in a fractured
world we can overcome global health challenges

My Critique:

The demand in the health care increases as the population is growing and ageing, because of
the advancement in technology the cost is increasingly rising as well. The government then
steps up to find and provide financial source to keep up with the cost. Health financial transition
happens when low-income countries develop into middle income countries, the level of official
development assistance they receive suddenly plummets, exposing them to risks of institutional
and financial instability. In crisis like this, some countries choose to mobilize resources through
generating enough domestic revenue. One good example is the Philippines Philhealth who
generates fund from member contributions and government funding as well as Philippine
Charity Sweepstakes Office who acquire funding through gambling taxes.

Health is one of the many priorities of a country since a healthy population can result to a
healthy economic growth. Some of the countries prioritize it by giving a proportion of their
national budget solely to the ministry of health. In our country’s 2019 budget under the
government of President Duterte, a 50 million budget was allotted for health. It was less than
the budget from the previous years as it was revealed that from 2008 to 2018, the Health
Facilities Enhancement program has a total appropriation worth 238 Billion but as of June 2018
only 15.5 billion were actually disbursed. Regardless, the government made sure that the 2019
national budget will cover the health care needs of the Filipino citizens specifically the poor and
marginalized sector.

Taxes became one of the resources of health funds for majority of the countries in the world.
The experience of the Philippines between 2012 and 2016 is one of the most compelling
examples of ambitious national tobacco tax reform. It involved a fundamental restructuring of
the country’s tobacco excise tax structure and substantial tax increases. This funded an increase
in the number of families enrolled in a health insurance scheme, from 5.2 million primary
members in 2012 to 15.3 million in 2015.

PART II. INSIGHTS:

With the current economic situation that nurses are facing in terms of implementation of
the Philippine Health Care Goals, the Department of Health has to maximize the active
involvement of nurses to attain the National Development Health Goals.

Considering the knowledge that you have gained in Health Care Economics answer the
following questions:

1. How can you improve the current economic situation of professional nurses?

Aside from the traditional hospital and clinic settings work for nurses there are also a lot
of job opportunities outside the hospital and clinical settings. BPO companies offers twice to
three times the salary being offered in a hospital position for a transcription based job. Private
duty nurses through medical mobile applications are now being offered for home based
patients that need medical assistance. There are also a lot of opportunities as nurse
entrepreneur through opening business establishments such as cosmetics, palliative and
educational in nature. I believe that improving the economic condition of my profession doesn’t
only rely on venturing work abroad but it can also be possible to achieve it here in our country
through other opportunities I’ve mentioned above.
2. How can you further enhance the development of the nursing profession so that nurses
can also contribute to the country’s income?

Education is a huge area for nurses to develop and to enhance development in nursing
profession, continuous education is a priority. In our modern world today, with the access to
technology free-lance writing, blogging and a lot of other means are a good media to spreading
health education. If we can promote healthy lifestyle and prevention of disease we are already
contributing in our economy through reduction of cost in health care. Nurses and doctors
nowadays also takes advantage of the social media world by conducting online webinars that
are beneficial in the continuous learning of us nurses.
3. Philippines is part of the 10 countries in the ASEAN integration, as a professional nurse,
what is the impact of this in your current job and in the Philippine economy?

As part of the ASEAN community a lot of great opportunities are in stored for our profession
and this includes availability of nursing jobs in the neighboring country. With an increase in job
opportunities abroad and in the neighboring ASEAN country, it can provide economic growth
through remittances. Another great benefit of this community is the promotion and freedom
for our overseas Filipino workers that will protect them outside our country since the
community encourages inclusive and equal treatment for all ASEAN people.

4. If you were to submit a proposal to address the problem of brain drain among Filipino nurses
and to improve the economic situation of Filipinos nurses, what proposal will you
include and why? Discuss your answers.

Some people assumed that once you emigrated abroad you are instantly living in the “Green
Pasteur” we all hoped to have. Living and working in a foreign country entails a lot of sacrifices
but in terms of economic strategy, monetary remittances are highly valued in our country. We
Filipinos are considered one of the greatest exporters of nurses around the world and what
pushes us to immigrate abroad is the lack of better opportunities in our country. Under
compensation and over workload are few of the reasons why nurses choose to leave their
families and work abroad. If I were to make a proposal that can address the problem of brain
drain of nurses in our country, I will suggest a salary increase and provide better benefit for our
nurses including health. We all have a family to support and as we Filipinos, we grew up valuing
our families and in order to survive, we all have to be financially stable to provide their needs.
This is the part where most of us nurses sacrifice a life away from home and our loved ones just
to provide a better future from them. If only nurses here are justly compensated, then our country
will be able to retain these skilled nurses who will help flourish our health care field.

Part III

1. If you are one of the lucky elected senators in the Republic of the Philippines, what bill
will you propose to encourage Filipino nurses to come back and serve the country?
Explain (15 points)
If I were elected as a senator of the Republic of the Philippines, aside from the salary grade
that we are already fighting for, I will propose a bill that will focus on nurse to patient ratios.
This law aims to protect not only nurses but also the patients. Nurses nowadays are exploited in
terms of workload, aside from the issue of being underpaid, we are also overworked. With the
shortage of staffing in a hospital, we are left to manage whatever is the present census that a
unit can occupy. I believe this is one of the many reasons why nurses choose to immigrate
abroad. In western country safe nurse to patient ratios are being strictly implemented. As much
as they follow the standard for safe practice, they also value the nursing profession. I am aware
that the Department of Health in the Philippines already has a guideline of staffing ratio but I
believe these ratios need to be re-assessed, study and should be strictly implemented. By
having the appropriate ratio of patient assignment, safe practice and a better quality of care can
be given to the patients. The severe workload in the field of Nursing is sometimes what makes
us nurses feel burn out, I for one have experience handling 40 patients in 1 shift in a special area
government hospital in Metro Manila which led me to decide to later on immigrate and work
abroad because of the better offer in salary and a lighter workload.
2. In the 21st century with the advances in technology, what areas can be developed by
nurse entrepreneur? (15 points)
Palliative and supportive care is a field which I believe a nurse entrepreneur can still develop
in our country. Building a hospice and palliative care facility outside the hospital setting for
terminally ill patients can help decrease the number of patients that are usually being occupied
by these cases in majority of our government and private hospitals. By providing facilities like
these, not only will we be able to reduce the census in a specific unit but also the unit will be
able to give the vacant bed to a patient who needed it the most to whom which case is curable.
Managing a terminally ill patient is mostly supportive in form, making sure that we nurses
provide them a comfortable and pain free days until they finally succumb to their illness. Caring
for patients who are close to death, particularly over long periods places a special demands on
the people involve. According to the data of the DOH in the Philippines, 34 organizations
provide 108 hospice and palliative care services in the entire country which is small in numbers.
The challenges in the development of this field are due to the lack of support, awareness and
funding from the government.
3. From the different theories in management, what do you think is the best and what is
applicable to your present area of work and discuss thoroughly? (15 points)
Being assigned in the Neonatal Intensive Care Unit of our hospital, I believe the best
theory in management that is applicable in my department is the Situational or
Contingency Theory. The theory embodied the idea that the right thing to do depend on
the situation the leader is facing. Assessing the nature of task and the follower’s
motivation or readiness to learn and using that to determine the particular style the
leader should use. Special areas such as NICU, cases and conditions are unpredictable. A
leader must be able to assist the capacity and skills of the team member prior to
planning and organizing. With my experience especially working abroad and having co-
workers from different nationality, whenever there is a crisis in the unit, our supervisor
 will approach the problem based on the present situation and the solution that we as
her staff can provide.
4. Few semesters from now, you will finish your Master’s degree in Nursing, how can you
be of help to the annual budget of the hospital/unit/institution. Explain in details your
activities and responsibilities as a member of the budget team. (20 points)

Neonatal intensive care unit is an expensive area being part of the special areas that handles
newborn with cases such as prematurity, congenital defects etc. Most of the cases require
prolonged length of stay. In order to improve survival and decrease morbidity for newborns, the
department must be able to provide medicines, equipment, machine that are on top of
technology and has proven to prolong life. Most of the materials in this area are disposable
since most of the cases are immunocompromise patients who are easily susceptible to
infection. As a member of the budget team, I will be able to contribute help in planning of the
budget through reviewing the basic cost that our unit incurs. The cost concept includes fixed
cost (incubator, ventilator etc.) and variable cost (diagnostic tool, medicine such as surfactant
etc.). Through understanding the measures of this cost, I will be able to cut expenses and
prioritize those that are more important. Example for fixed cost, cost staffing are considered
fixed cost. Staffing plan can help reduce cost by forecasting of census and eventually reducing
number of employees depending on the census. Some hospitals increase the number of nursing
assistant than the license nurse to reduce personnel cost. The nursing assistant can be given
routine bed side care task and reduce the workload for staff nurse who can then focus on
nursing and medical procedures. Variable cost on the other hand can be minimize through
acquiring materials such as disposable supplies to the lowest bidder supplier. The unit can invite
suppliers to give samples which will then be later on use and assess by the staff. The unit can
then communicate with the hospital’s budget management and refer the suppliers who has
pass the quality testing in the unit. From my experience working in a tertiary government
hospital, we were blessed to find donors who yearly donates medical equipment such as
incubator, ventilator and phototherapy machine which greatly contributes to reduction of cost
in the unit.
5. Our country as a member of the 10 ASEAN community, what do you think are the
strengths and weaknesses of this ASEAN integration to the nursing profession? Discuss
also the 5 ASEAN blueprint (25 points)
Having been part of the ASEAN community heralded remarkable benefits in our country through the
commitment of the community to provide quality of life to its people through cooperative activities that
are people-oriented, people-centered, environmentally friendly and geared towards the promotion of
sustainable development. There are a lot of advantages being part of the ASEAN community which
includes economic cooperation that eliminates tariffs and help ease the flow of goods in our country to
the neighboring countries. This provides more access to the other ASEAN countries and the consumers
will benefit from cheaper prices of good which eventually generates higher exports and imports. The
benefit in the nursing profession is the ability to import medical supplies and equipment for a lower cost.
Another strength is the economic boost accompanied by this community. Investments are encouraged
on all members and these free flows of venture will give economic boost in our country. Through
investment, possible increase in job offers in the field of health care can arise both local and
international. The weakness on the other hand can be seen under the non-interference principle that
the ASEAN members founded. Under this principle, none of the member countries will get involved in
another member country’s domestic affairs including giving a simple criticism to a neighboring country.
This will affect greatly in the situations of overseas Filipino workers to which some are nurses.

The 5 ASEAN blueprints are as follows:

1. ENGAGES AND BENEFITS THE PEOPLE

- The main goal of the ASEAN Socio cultural community is to provide benefits and upheld
principles of good governance. It enhances commitment, participation and social responsibility
of ASEAN community for the benefit of all to empower ASEAN people and strengthen
institution.

2. INCLUSIVE

- The inclusivity provides equitable access to more opportunities for ASEAN people including the
promotion of human rights to all people, women, children, old etc. it will reduce barriers,
provide quality of care, promote equitable access to social protection and enjoyment of human
rights.

3. SUSTAINABLE

- Sustainable environment is the number one challenges in our community in the face of social
changes and economic development. One of the main goal of the community is to help protect
our environment and ecosystem, to strengthen forest management and coastal areas.

4. RESILIENT

- Resilience is an important factor of human security and sustainable environment. The main
objective of this blueprint is to achieve an enhanced capacity to collectively respond and adapt
to current challenges and emerging threats. The ASEAN community wanted to achieve a disaster
resilient ASEAN that is able to anticipate, respond, cope, adapt and build back better, smarter
and faster community. This resiliency is what will make the community survive in times of
inevitable natural disasters that the future may hold. It is also through resiliency that we will be
able to protect each other in health related hazard like biological, chemical, and radiological
nuclear and emerging threats.

5. DYNAMIC

- This characteristic will help strengthen the ability to continuously innovate and be a proactive
member of the global community. It will result to an open and adaptive ASEAN who has
freedom Of universal access to information and technology, promote culture of tolerance,
 understanding and mutual respect for religions, promote people to people interaction, promote
cooperation in sports and a lot more.

REFERENCES:

R. Jones 2007: Nursing Leadership and Management: Theories, Processes and Practice

THANK YOU for choosing Saint Paul University Philippines.

Note: This module was based on the Advanced Health Care Economics Module developed by Dr. Grace Valderrama.

Thank you and GOD bless!

Maria Girlie D. Jordan, MSN
Professor