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Philippine Health Care System

John Patrick C Lui

PHILIPPINE HEALTH CARE SYSTEM

ORGANIZATION/GOVERNANCE

ORGANIZATION AND GOVERNANCE

HISTORICAL BACKGROUND

HISTORICAL BACKGROUND

In 1941, the Department of Health was carved out of the Department of Health and Public Welfare and established as a separate entity. From the 1950s onwards, there was a steady improvement in patient care, medical education, and public health comparable to other developing countries. The national public network of health centres had its roots in the 1954 Rural Health Act, which transformed the puericulture centres to rural health units (RHUs) in municipalities and to city health centres in cities all over the country (DOH, 1995).

LEGISLATIONS

Principal Legislation in the Health Sector

1954 Republic Act No. 1082 “Rural Health Act”.

1957 Republic Act No. 1939 “Contributions for the Maintenance of Hospital

Beds”.

1959 Republic Act No. 2382 “Medical Act”.

1979 Adoption of primary health care (PHC)

1982 Executive Order 851 “Reorganizing the Ministry of Health, Integrating

the of Health Care Delivery into its Field Operations, and for Other Purposes”.

1987 Constitution of the Republic of the Philippines.

1988 Republic Act No. 6675 “Generics Act”.

1991 Republic Act No. 7160 “Local Government Code”.

1994 Republic Act No. 7722 “Higher Education Act”.

Principal Legislation in the Health Sector

1995 Republic Act No. 7875 “National Health Insurance Act”.

1997 Republic Act No. 8344 “An Act Prohibiting the Demand of Deposits or

Advance Payments for the Confinement or Treatment of Patients in

Hospitals and Medical Clinics in Certain Cases”.

1999 Republic Act No. 7305 “Magna Carta for Public Health Workers”.

2003 Republic Act No. 9184 “Government Procurement reform Act”.

2004 National Health Insurance Act of 1995 amended to Republic Act No. 9241.

2008 1988 Generics Act– amended to Republic Act No. 9502 “Cheaper and

Quality Medicines Act”.

2010 Republic Act No. 7432 ‘Senior Citizens Act” – amended to Republic Act

No. 9994 “Expanded Senior Citizens Act”.

ORGANIZATION

AND

GOVERNANCE

ORGANIZATION

AND

GOVERNANCE

LGU

LEVEL

LOCAL GOVERNMENT LEVEL

The LGUs make up the political subdivisions of the Philippines. LGUs are guaranteed local autonomy under the 1987 Constitution and the LGC of 1991. The Philippines is divided into 78 provinces headed by governors, 138 cities and 1496 municipalities headed by mayors, and 42,025 barangays or villages headed by barangay chairpersons. Legislative power at local levels is vested in their respective sanggunian or local legislative councils. Administratively, these LGUs are grouped into 17 regions.

Within this decentralized setting, the LGUs continue to receive guidance on health matters from the DOH through its network of DOH representatives under the supervision of the regional centres for health and development (CHDs). Provincial governments are primarily mandated to provide hospital care through provincial and district hospitals and to coordinate health service delivery provided by cities and municipalities of the provinces. City and municipal governments are charged with providing primary care including maternal and child care, nutrition services and direct service functions through public health and primary health care centres linked toperipheral barangay health centres (BHCs) or health outposts.

PRIVATE

SECTOR

PRIVATE SECTOR

A major share of the national expenditures on health (about 60%) goes to a large private sector that also employs over 70% of all health professionals in the country. The private sector consists of for-profit and non-profit providers which are largely market-oriented. Health care is paid through user fees at the point of service, or subsidized by official aid agencies or philanthropy. This sector provides services to an estimated 30% of the population who can mostly afford to pay these user fees.

The private health sector is regulated by the DOH through a system of standards implemented by licensure procedures of the department and accreditation procedures of the PhilHealth. Professional organizations, particularly medical specialty groups, also participate in certification systems and programmes.

The PhilHealth benefits scheme pays for a defined set of services at predetermined rates. However, claims payments are uncertain because both the whole claim and the items in each claim may be disregarded or reduced. Private hospitals derive a significant proportion of their incomes from PhilHealth payments as the largest number of PhilHealth members are employed in the private sectors and usually go to private hospitals for health care. HMOs and other private prepayment schemes that supplement PhilHealth coverage of private sector employees further facilitate their accessing of private hospital care services.

DEVOLUTION

Decentralization and Centralization

Under the decentralized or devolved structure, the state is represented by national offices and the LGUs, with provincial, city, municipal, and barangay or village offices. The DOH, LGUs and the private sector participate, and to some extent, cooperate and collaborate in the care of the population.

Before devolution, the national health system consisted of a three-tiered system under the direct control of the DOH: tertiary hospitals at the national and regional levels; provincial and district hospitals and city and municipal health centres; and barangay (village) health centres. Since enactment of the 1991 LGC, the government health system now consists of basic health services–including health promotion and preventive units–provided by cities and municipalities, province-run provinicial and district hospitals of varying capacities, and mostly tertiary medical centres, specialty hospitals, and a number of re-nationalized provincial hospitals managed by the DOH.

ORGANIZATION

CHART

PLANNING

HUMAN

RESOURCES AND FACILITIES

PLANNING

HUMAN

RESOURCES

PLANNING OF HUMAN RESOURCES

  • The initial HRH plans developed by the DOH focused exclusively on health workers employed directly by DOH.
  • The first truly national HRH plan, covering all government employees (DOH and also health workers employed by the Department of Education, the armed forces etc) as well as those in private facilities, was crafted in the 1990s,
  • In 2005, the DOH, in collaboration with WHO-WPRO, prepared a long-term strategic plan for HRH development. The 25-year human resource master plan from 2005 to 2030, was to guide the production, deployment and development of HRH systems in all health facilities in the Philippines.
  • The plan includes a short-term plan (2005- 2010) that focuses on the redistribution of health workers as well as the management of HRH local deployment and international migration.
  • A medium-term plan (2011-2020) provides for the increase in investments for health.
  • A long-term plan (2021-2030) aims to put management systems in place to ensure a productive and satisfied workforce.

HEALTH

FACILITIES

PLANNING ON HEALTH FACILITIES

  • to create a more responsive hospital system by delivering equitable quality health care
  • the importance of leadership; strategic planning based on population needs; accessibility of services especially those in hard-to-reach areas; technical and human resourcedevelopment; operational standards and technology; and networking in the development of
  • to develop 256 LGU district hospitals, 70 provincial hospitals, 10 city hospitals and 70 DOH retained hospitals.
  • In 2008, the plan was expanded and renamed the Philippine Health Facility Enhancement Programme (HFEP). The expansion included the inclusion of rural health centres and village health stations.

INFORMATION

SYSTEMS

INFORMATION

SYSTEMS

EXISTING

SYSTEMS

EXISTING SYSTEMS IN PLACE

• NDRS, FHSIS or Notifiable Disease Reporting System of the Field Health Service Information System;

• NESSS or National Epidemic Sentinel Surveillance System;

• EPISurv or Expanded Programme on Immunization diseases targeted for eradication or, Elimination Surveillance System;

• IHBSS or Integrated HIV/AIDS Behavioural and Serologic Surveillance System.

KEY

ISSUES

CURRENT STATE

Key Issues

• The lack of health informatics standards

• The national and local health information systems are poorly integrated and are weakly governed

• Prevents any system from scaling at a faster rate or inter-operating with another system

• weak enforcement of information-sharing regulations

• lack of IT governance structures such as explicit standards and blueprints for health information

NEW

DEVELOPMENTS

NEW DEVELOPMENTS

  • Philippine Integrated Disease Surveillance and Response Project or
  • PIDSR. The PIDSR aims to establish a surveillance system that enables early detection, reporting, investigation, assessment, and prompt response to emerging diseases, epidemics and other public health threats Philippine Health Information
  • Network (PHIN) in 2008 which designed and now implements the Philippine Health Information System (PHIS).
  • University of the Philippines Manila’s Community Health Information Tracking System or CHITS which provides as an electronic medical records system
  • The Philippine Health Insurance Corporation has the largest clinical database in the country and has one of the most sophisticated information technology infrastructures. But it still manages claims manually, using paper adding undue burden on both providers and payers and increases the cost of processing claims on hospitals and on Philhealth.

Philippine Integrated Disease Surveillance and Response

Framework

MAIN

GOVERNMENT REGULATORS

REGULATION

DEPARTMENT OF HEALTH (DOH)

DEPARTMENT OF HEALTH (DOH)

REGULATES

• GOODS

• SERVICES

• FACILITIES

DOH REGULATORY AGENCIES

• Food and Drug Administration or FDA (formerly Bureau of Food and Drugs)

  • regulation of products that affect health

• Bureau of Health Facilities and Services (BHFS)

  • covers the regulation of health facilities and services.
  • with the regulatory teams in Centres for Health Development (CHDs) is in charge of licensing hospitals, clinics, laboratories and other health facilities.
  • sets the regulatory policies and Standards of licensing, accreditation and monitoring of health facilities and services to ensure quality health care.

• Bureau of Health Devices and Technology (BHDT)

  • o regulates radiation devices

• Bureau of Quarantine (BOQ).

  • o covers international health surveillance and security against the introduction of infectious diseases into the country

PROFESSIONAL REGULATORY COMMISSION (PRC)

PROFESSIONAL REGULATORY COMMISSION (PRC)

REGULATES PROFESSIONAL HEALTH WORKERS

  • administers, implements and enforces the regulatory policies

of the national government with

  • respect to the regulation and licensing of the various professions and occupations under its jurisdiction
  • enhancement and maintenance of professional and occupational standards and ethics and the enforcement of the rules and regulations.
  • administers and conducts the licensure examinations of the various regulatory boards
  • It is made up of professional regulatory boards that monitor the conditions affecting the practice of professions
  • adopt measures as may be deemed proper for the maintenance of high professional, ethical and technical standards.

PROFESSIONAL REGULATORY COMMISSION (PRC)

REGULATION OF HEALTH PROFESSIONAL SCHOOLS

The Commission on Higher Education (CHED) is the governing body that regulates both public and private higher education institutions as well as degree-granting programmes in all tertiary educational institutions, including health science schools in the Philippines. The CHED is responsible for ensuring access to quality education.

REGULATION AND GOVERNANCE OF THIRD PARTY PAYERS

PhilHealth, the country’s national health insurance programme, is governed by the National Health Insurance Act of 1995 or the Republic Act 7875, which replaced the Medicare Act of 1969. It is mandated to provide health insurance coverage and ensure affordable, acceptable, available and accessible health care services for all citizens of the Philippines (RA 7875).

PATIENT

EMPOWERMENT

PATIENT EMPOWERMENT

PhilHealth and Patient Information

PhilHealth and Patient Information

PhilHealth is mandated to provide health education to address the health care information gap. As determined by the Corporation and from Republic Act 7875, section 10 – the following will be provided: inpatient care with inpatient education packages and outpatient care with personal preventive services. Furthermore, the Implementing Rules and Regulations calls for health education packages.

Patient Rights

Patient Rights

The Philippine government through its 1987 Constitution and several international instruments explicitly recognizes health as a human right. Specifically, the Constitution establishes the rights of patients with the following provisions:

  • The State shall protect and promote the right to health of the people and instill health consciousness among them. (Sec 15, Art II, 1987 Constitution)
  • No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. (Sec 1, Art III, 1987 Constitution)
  • Patients´ rights are protected under the purview of the Revised Penal Code and the Medical Act of 1959.

Patient Choice

Patient Choice

  • There is no effective gatekeeping mechanism. Patients are free to choose their physicians, including specialists. However, poor patients have extremely limited choice of service provider due to financial constraints.
  • Patients’ choice may also be affected by the providers’ or health facilities’ accreditation by PhilHealth. As of 2008, not all health facilities are accredited with PhilHealth. Only 1531 hospitals, 843 Rural Health Units, 19 dialysis clinics, 406 TB- DOTS clinics, 288 maternity clinics and 20 576 physicians are accredited by PhilHealth.

Patient

Safety

Patient Safety

  • The Code of Ethics of the Medical Profession in the Philippines promulgated as Republic Act No. 4224 establishes the right of the patient to proper treatment by physicians.
  • The law stresses the need for a high standard of care in the medical profession and the protection of every Filipino’s right to life.
  • Proposed legislative proposals for formal laws on “Patients´ Rights” and “Medical Malpractice”, have been recently rejected.

Patient

involvement

Patient Participation/Involvement

Although the DOH adopted PHC in 1979, patient empowerment has remained more a concept than a practice. The relationship of the health system to individuals, families, and communities is still largely one of giver to recipient. On the whole, the patient and community remain recipients of health care. While there has been increasing awareness of the need for community and patient participation in health decision-making, structures for ensuring this are still weak or non-existent.

HEALTH FINANCING

HEALTH

FINANCING

HEALTH

EXPENDITURE

HEALTH

EXPENDITURE

OUT

OF

POCKET

HEALTH EXPENDITURE - OUT OF POCKETS (OOP)

SPENDING on health care grew 10.5% in 2016 to P655 billion, with more than half of spending still out-of-pocket. The Philippine Statistics Authority said total health expenditure (THE) in 2016, as a percentage of gross domestic product, was 4.5%.

Current health expenditures (CHE) accounted for 96.3% of THE while health capital formation expenditures — or assets that health providers have acquired and used in the production of health services — totaled P24 billion or 3.7% of THE. Filipino households bore most of the burden for health care, with household-out-of-pocket (OOP) spending totaling P342 billion, or 54.2% of the total CHE for the year.

Government schemes and compulsory contributory health care financing schemes accounted for 34.2% or P216 billion.

Voluntary health care payment schemes followed with 11.6% or P73 billion. Each Filipino spent P6,345 for health-related expenses last year, up 8.7% against the 2015 total based on current prices.

In real terms, per capita health spending grew 6.8% to P4,406.

HEALTH EXPENDITURE - OUT OF POCKETS (OOP)

SOURCE OF FINANCING DURING INPATIENT VISITS, PHILIPPINES, 2008

HEALTH EXPENDITURE - OUT OF POCKETS (OOP)

DISTRIBUTION OF OUT-OF–POCKET EXPENDITURE BY COMPONENTS AND BY SOCIOECONOMIC STATUS, IN PERCENT, PHILIPPINES. 2000-2009

GOVERNMENT

GOVERNMENT EXPENDITURE

The country’s Total Health Expenditures at current prices grew by 8.0 percent in 2017 amounting to Php 712.3 billion from Php 659.3 billion in 2016. It contributed 4.5 percent to the Gross Domestic Product (GDP).

The 2017 Total Health Expenditures (THE) comprised of 96.1 percent Current Health Expenditures (CHE) and 3.9 percent Health Capital Formation Expenditures (HK) in government sector

GOVERNMENT EXPENDITURE

Government health expenditure, by type of expenditure (% of THE)

GOVERNMENT EXPENDITURE

Government health expenditure, by use of funds (% of THE), 1995-2005

GOVERNMENT EXPENDITURE

Health expenditure as a share (%) of GDP, Philippines & other countries, 2007

SOCIAL

HEALTH

INSURANCE

SOCIAL HEALTH INSURANCE

In 1995, the Philippines passed the National Health Insurance Act (RA7875), which instituted the NHIP. The law also created the Philippine Health Insurance Corporation (PHIC), more commonly known as PhilHealth, to administer the NHIP and to replace the then existing Philippine Medical Care Commission that operated the Medicare Programme.

SOCIAL HEALTH INSURANCE

SOCIAL HEALTH INSURANCE

SOCIAL HEALTH INSURANCE

MAIN

SOURCE

OF FUND

MAIN

SOURCE

OF FUND

GOVERNMENT

GOVERNMENT

The government, as a whole, spent more on personal health care than public health care each year from 2014 to 2016. More detailed expenditure accounts indicate that spending on hospitals dominated the government’s personal health care expenditures. The government also allots a much larger share of its resources to salaries of employees compared to maintenance and operations and capital outlay. The share of capital outlay both by national and local governments to total

health expenditures is negligible.

SOCIAL

HEALTH

INSURANCE

SOCIAL HEALTH INSURANCE

The social health insurance programme, known as PhilHealth, increased its share of total health spending at an average annual rate of 9.6% from 2015 to 2016. “Public funding” through PhilHealth has been expected to set the incentive environment in order to have a greater leverage and drive forward health system performance.

PRIVATE

SOURCES

PRIVATE SOURCE

The private sector continues to be the dominant source of health care financing, with households’ out-of-pocket (OOP) payments accounting for 40-50% of all health spending in the same period. In recent years, the trend for OOP payments has been upward despite the expansion of social insurance.

OUT OF

POCKETS PAYMENTS

OUT OF POCKET PAYMENTS

According to the 2006 FIES, the average Filipino household spends about Php 4000 (US$ 84) per year on medical care. This represents about 2% of total household expenditures. Drugs account for almost 70% of total household OOP payments while less than 10% of total OOP is spent on professional fees. When OOP payments on health care are broken down by income quintile, it becomes evident that the poorest households allot about 73% of their OOP payments to drugs and medicines, about 13 percentage points higher than the share among the richest households.

VOLUNTARY

HEALTH

INSURANCE

VOLUNTARY HEALTH INSURANCE

Based on the 2005 Philippine National Health Accounts, 6.3% of all health care spending was financed by private health insurance and HMOs. This combined spending is about 40% lower than PhilHealth’s share of total health spending. In terms of coverage, however, the 2003 NDHS indicated that private insurance and HMOs together account for less than 10% of all insured households, while PhilHealth had a dominant 86% share. The disproportionately large spending of private insurance and HMOs is likely to be financing the more expensive services purchased by the richer households, who are more likely than the poor to have membership in private insurance and HMOs.

DONORS

DONORS

Donors account for a relatively small share of total health care expenditures. From 1998 to 2004, foreign-assisted projects (FAPs) had an average share of 3.4% of total health expenditures (Table 3-13). FAPs include all those projects undertaken by the DOH, including other national government agencies with health-related mandates. Compared to other developing countries, this share is relatively low, although higher than Asian neighbors Viet Nam, Indonesia and Thailand.

Health expenditures by FAPs, in million US$, 1998-2005

FINANCIAL

FLOW

GOVERNMENT

NATIONAL GOVERNMENT HEALTH EXPENDITURE

The country’s Total Health Expenditures at current prices grew by 8.0 percent in 2017 amounting to Php 712.3 billion from Php 659.3 billion in 2016. It contributed 4.5 percent to the Gross Domestic Product (GDP). The 2017 Total Health Expenditures (THE) comprised of 96.1 percent Current Health Expenditures (CHE) and 3.9 percent Health Capital Formation Expenditures (HK) in government sector.

PHILHEALTH

HOUSEHOLD

Household spent the highest health expenditures in 2017

Household-out-of-pocket payment (OOP) posted Php 372.8 billion or 54.5 percent of CHE in 2017, followed by government schemes and compulsory contributory health care financing schemes at Php 225.9 billion or 33.0 percent. Voluntary health care payment schemes contributed Php 85.7 billion or 12.5 percent.

More than half of OOP amounting to Php 186.6 or 50.1 percent went to pharmacies. Private general hospitals came in second at Php 97.5 billion or 26.1 percent; followed by providers of ambulatory health care at Php 50.3 billion or 13.5 percent.

FIRMS

HMO AND

PRIVATE

INSURANCE

HMO AND PRIVATE INSURANCE

Based on the 2005 Philippine National Health Accounts, 6.3% of all health care spending was financed by private health insurance and HMOs. This combined spending is about 40% lower than PhilHealth’s share of total health spending. In terms of coverage, however, the 2003 NDHS indicated

that private insurance and HMOs together account for less than 10% of all insured households, while PhilHealth had a dominant 86% share. The disproportionately large spending of private insurance and HMOs is likely to be financing the more expensive services purchased by the richer

households, who are more likely than the poor to have membership in private insurance and HMOs.Based on the 2005 Philippine National Health Accounts, 6.3% of all health care spending was financed by private health insurance and HMOs. This combined spending is about 40% lower than PhilHealth’s share of total health spending. In terms of coverage, however, the 2003 NDHS indicated

that private insurance and HMOs together account for less than 10% of all insured households, while PhilHealth had a dominant 86% share. The disproportionately large spending of private insurance and HMOs is likely to be financing the more expensive services purchased by the richer

households, who are more likely than the poor to have membership in private insurance and HMOs.

HEALTH

CARE

PROVIDERS

FUND

COLLECTION

FUND

COLLECTION

GOVT

BUDGET

GENERAL GOVERNMENT BUDGET

Government health expenditures are funded out of general tax revenues collected by the Department of Finance (DOF). National government agencies such as the DOH and Philhealth are then allotted annual budgets by the Department of Budget and Management (DBM). Local governments also receive a share of taxes from the national government. This allotment is known as internal revenue allotment or IRA and is based on a formula that consists of the following variables: land area, population, and revenues generated by LGUs, such as local taxes.

Since 2000, national tax revenues have grown by an average of 9.9% per annum. Taxes collected in 2008 amount to 14% of GDP. Over 75% of all national taxes are collected by the Bureau of Internal Revenue (BIR) and mostly in the form of direct taxes. Over 40% of total national tax revenues are generated from net income and profits. Excise taxes have been on the 48 decline at least from 2005 to 2007. This trend may have some implications on health care financing as a law on sin taxes (RA 9334) provides for the earmarking of 2.5% of the incremental revenue from the excise tax on alcohol and tobacco products for the DOH’s disease prevention programmes and 2.5% of the incremental revenue for the PhilHealth’s coverage of indigent households, which was not actually implemented. For local governments, the shares from national tax revenues are more than double the amount of tax collected from local sources.

TAXES OR CONTRIBUTIONS POOLED BY A SEPARATE ENTITY

TAXES OR CONTRIBUTIONS POOLED BY A SEPARATE ENTITY

For formally employed PhilHealth members, premium contributions are collected as payroll taxes (automatic deductions from monthly salaries) and are shared equally by the employer and employee. Premiums amount to 2.5% of the salary base. Monthly premiums range from a minimum of Php

100 to a maximum of Php 750, which is equivalent to 2.5% of a monthly salary cap of Php 30 000. Thus, premium contributions become regressive for those with salaries exceeding the cap, although the cap has been pushed upwards over the years to make the situation less regressive.

Under the SP, annual premium contributions amounting to Php 1200 per family are fully subsidized by the national government and LGUs following a premium-sharing scheme that depends on the LGU’s income classification. Monthly premium contributions for individually-paying programme (IPP) members are pegged at Php 100 which can be paid quarterly, semi-annually, or annually. For overseas Filipino workers (OFWs), the payment of PhilHealth premium contributions is mandatory whether they are leaving the country for jobs overseas for the first time or returning to their Employment sites overseas under new work contracts.

Annual premiums are pegged at Php 900 which is 25% lower than the minimum premium contributions for those locally and formally employed. Finally, individuals who have reached the age of retirement and have made 120 monthly contributions become lifetime PhilHealth members. They are exempted from premium payments and, along with their qualified dependents, are entitled to full benefits.

TAXES OR CONTRIBUTIONS POOLED BY A SEPARATE ENTITY

Premiums for the NHIP as a whole and for the SP in particular are subsidized by the following national taxes and other sources of funding:

  • The Reformed Value-Added Tax Law of 2005 (RA 9337) which provides that 10% of the LGU share from the incremental revenue from the value added tax shall be allocated for health insurance premiums of Enrolled indigents as a counterpart contribution of the local government to sustain universal support.
  • Sin Tax Law of 2004 (RA 9334) which provides that 2.5% of the incremental revenue from excise taxes on alcohol and tobacco products starting January 2005 shall be remitted directly to PhilHealth for the
  • purpose of meeting the goal of universal coverage of the NHIP.
  • ases Conversion and Development Act of 1995 (RA 7917) which provides that 3% of the proceeds of the sale of metropolitan Manila Military camps shall be given to the NHIP.
  • Documentary Stamp Tax Law of 1993 (RA 7660) which states that starting in 1996, 25% of the incremental revenue from the increase in documentary stamp taxes shall be appropriated for the NHIP.
  • Excise Tax Law (RA 7654) of 1993 which states that 25% of the increment in the total revenue from excise taxes shall be appropriated solely forthe NHIP.

POOLING

OF

FUNDS

MAIN AGENCIES

FOR POOLING OF FUNDS

NATIONAL

GOVERNMENT

NATIONAL GOVERNMENT

The annual process of developing a DOH budget starts with the issuance of the budget call by the Department of Budget Management (DBM) around late February to the middle of March. The budget call is a DBM advisory informing national government agencies to start formulating

their budgets for the year. The budget ceilings issued by DBM are based on available funds in treasury and projected government income for the year. Line agencies like the DOH then prepare annual budget proposals based on these set ceilings. The line agency proposals are consolidated into a national expenditure programme (NEP) that is submitted to congress. Congress then converts the NEP into a general appropriations bill which will be deliberated on and passed jointly by both houses.

LOCAL

GOVERNMENT

UNITS

LOCAL GOVERNMENT UNITS

LGU health budgets are developed in a similar way to the DOH budget. This begins with the issuance of the budget call by DBM, which stipulates the internal revenue allotment (IRA) allocation for the year. In addition to the IRA, the LGUs aggregate funds from all sources, such as income from user fees, PhilHealth capitation and reimbursements and grants from external sources. In areas where there is an existing province-wide or city investment plan for health (PIPH/CIPH), the annual budget is synchronized with its annual investment plan. The annual budgets are passed by respective LGU legislative councils.

PHILHEALTH

PHILHEALTH

PhilHealth pools funds from all sectors of Philippine society. For the formally employed, premiums are collected through payroll taxes. For the indigent households, LGUs make direct payments to PhilHealth for their share of premium contributions, while the national government

(particularly the Department of Budget and Management) is billed for their corresponding share. For the individually paying members, premiums are paid voluntarily through a network of collecting agents, including PhilHealth regional and service offices and selected private banks. Similarly, overseas workers may remit premium payments through selected financial institutions overseas. Premiums, once collected, are managed as a single fund, with the various membership groups enjoying uniform benefits. The exception to this uniformity rule is the sponsored programme (SP), whose members are entitled to basic outpatient services in RHUs.

TAXES OR CONTRIBUTIONS POOLED BY A SEPARATE ENTITY

PURCHASING AND PURCHASER-PROVIDER RELATION

PURCHASING

NATIONAL GOVERNMENT

AND

ITS

HOSPITALS

NATIONAL GOVERNMENT AND ITS HOSPITALS

In 1991, the management of provincial, district, and municipal hospitals as well as primary care facilities was transferred to LGUs, i.e. the provincial and municipal governments, under the leadership of governors and mayors, respectively. However, specialty hospitals, regional and training hospitals, and sanitaria (health facilities for the recuperation and treatment of individuals with leprosy) were retained under the management of the central DOH. Over the years, some hospitals that were originally devolved were eventually re-nationalized. To date, there are about 70 retained hospitals throughout the country.

Since 2001, retained hospitals enjoyed a significant degree of management and fiscal autonomy in accordance with a special provision in the General Appropriations Act (GAA), which was implemented through various guidelines. These issuances allowed DOH-retained hospitals to retain their income which can be used for Maintenance and Other Operating Expenses (MOOE) and capital outlay (CO) but not for the payment of salaries and other allowances. Retained hospitals were also given authority (even encouraged) to set and collect user charges. A DOH directive has set a ceiling for mark ups to a maximum of 30% of actual cost, so user charges cannot be readily used to compensate for other cost centres in hospital operations. Overseeing the implementation of these policies is the National Centre for Health Facility Development (NCHFD).

NATIONAL GOVERNMENT AND ITS HOSPITALS

Funds of selected DOH-retained hospitals (in million Php), by

major source

LGU

AND

LOCAL

HOSPITALS

LGU AND LOCAL HOSPITALS

The relationship between LGUs and local hospitals is very similar to that between the DOH and its retained hospitals. Provincial and district hospitals are funded out of the provincial government’s budget while municipal/city hospitals are financed by the municipal/city budgets. Many government hospitals that are under the management of LGUs also charge user fees, generally below cost. Management and financial parameters are determined primarily by the local chief executive and, in varying level of influence and technical leadership, the local hospital chief.

There is limited information on the financing status of local government hospitals. Early studies under the health sector reform agenda (HSRA) reported that most LGUs spend close to 70% of their health budgets on personal care, mainly hospitals (Solon, et al. 2004). Hospital budgets, in turn, are used mainly for staff salaries (around 80%). One proposal to free up LGUs from the burden of financing and managing hospitals was to corporatize these facilities. Corporatization was one of the alternatives in hospital reform espoused by the HSRA in 2000. This approach aimed to provide fiscal and management autonomy to public hospitals. To date, all DOH-retained hospitals have fiscal autonomy.

PHILHEALTH

AND

ACCREDITED HEALTH CARE

PROVIDERS

PHILHEALTH AND ACCREDITED HEALTH CARE PROVIDERS

For health care providers to be eligible for insurance reimbursements, they need to be accredited by PhilHealth. Accreditation is primarily for purposes of quality assurance –“the verification of the qualification and capabilities of health care providers prior to granting the privilege of participation in the NHIP, to ensure that health care services that they are to render have the desired and expected quality”. Both health care professionals (doctors, dentists, midwives) and facilities (hospitals, RHUs, TB-DOTS facilities, free-standing dialysis centres, maternity care clinics) undergo independent PhilHealth accreditation processes. Accreditation contracts are renewed yearly for facilities and every three years for professionals, but can be suspended or revoked during the period of validity if acts are committed resulting in adverse patient outcomes.

PAYMENT

MECHANISM

PAYMENT MECHANISM

PAYMENT

FOR

HEALTH

SERVICES

PAYMENT

FOR

HEALTH

SERVICES

Public health services and outpatient care

PUBLIC HEALTH AND OUTPATIENT CARE

In general, services provided by RHUs are free of charge. The main constraint in these public facilities is availability of both goods and services. RHUs belonging to LGUs that are enrolled in PhilHealth’s outpatient benefit package (OPB), in principle, are partly funded by capitation fees collected from PhilHealth. As mentioned earlier, LGUs are reimbursed Php 300 for every indigent household enrolled under the SP, with the understanding that this capitation is used to fund the provision of free outpatient care at the RHUs. In practice, however, capitation fees from the OPB are not always spent for the intended purpose. Under the programme, LGUs are not actually prohibited from pooling these capitation fees into their general funds, which means such fees can be (and frequently are) spent on items other than outpatient care. Observers cite the failure of PhilHealth to properly communicate to the LGUs the intent of the fund as well as to closely monitor the utilization of the capitation fund as the main reason for the underperformance of the OPB.

Under PhilHealth’s special outpatient benefit packages, namely the outpatient TB-DOTS benefit package and the outpatient malaria package, health care providers are paid per case. Under the case payment scheme, providers are paid a set fee per treated case handled. The amounts of the case payment as well as the recipient of the payment (whether facility or professional) vary for each package. Accredited providers are given Php 600

per malaria case eligible for the outpatient malaria package. Accredited DOTS facilities are paid a flat rate of Php 4000 per case in two installments: Php 2500 after completion of the intensive phase of treatment and Php 1500 after the maintenance phase.

Inpatient care

INPATIENT CARE

Both public and private hospitals charge user fees for inpatient services. User fees are not subject to any form of regulation, as such facilities with fiscal autonomy are free to charge rates which they deem appropriate. In public facilities, while charges may vary according to a patient’s willingness-to-pay, charges may still fall below cost. A 2003 survey of 30 district hospitals in the Visayas shows that zero fees were charged in three out of ten provinces. While there has not been any recent study on pricing in local hospitals, observers believe that under the devolved set-up, some public hospitals may either not have strong incentives to charge prices that reflect the true cost of resources or may lack the technical skills to charge the appropriate prices.

Pharmaceutical

Goods

PHARMACEUTICAL GOODS

PhilHealth’s inpatient benefit package provides for reimbursement of expenses on drugs and medicines listed in the Philippine National Drug Formulary (PNDF) up to specified ceilings. However, household data have shown that, to a very large extent, OOP payments are used for drugs and medicines. Until recently, drug prices were largely unregulated and were determined by market forces. In August 2009, however, after much public debate, maximum retail drug prices (MRDPs) were imposed by the DOH on selected drugs, resulting in a 50% reduction in current prices.

Households’ out-of-pocket payments, by expenditure item

PAYMENT

FOR

HEALTH

CARE

PROFESSIONALS

PAYMENT FOR HEALTH PROFESSIONALS

Health care providers in the Philippines are paid in a combination of ways. Doctors in private practice charge fees-for-service, with the exception of those under retrospective payment arrangements with health maintenance organizations. On the other hand, doctors and other health care professionals working in the public sector are paid salaries. In addition to salaries, the staff in public health facilities may receive PhilHealth reimbursements provided that they are employed in PhilHealth-accredited facilities.

The basis for payments also varies across sectors. Private health care professional typically charge market-determined rates. In the public sector, salaries follow the rates stipulated in the Salary Standardization Law. To illustrate, a doctor employed as medical officer III in a district hospital receives a minimum monthly basic salary of Php 19 168 whereas a hospital chief (chief of hospital I) receives at least Php 25 196 per month. The Magna Carta for Public Health Workers provides for additional benefits but the amount depends on factors such as the basic pay and nature of assignment of workers, and the employer’s capacity to pay.

PHYSICAL

AND

HUMAN

RESOURCES

PHYSICAL

AND

HUMAN

RESOURCES

There has been a general upward trend in the number of both private and government hospitals over the last 30 years, with the biggest growth noted in the 1970s, and a flattening off of growth in the last ten years. Most hospitals in the country are privately-owned. The average bed-topopulation ratio from 1997 to 2007 matches the DOH standard, i.e., 1:1000 population. The DOH is directly responsible for planning of government health facilities; all proposed new health facilities, including those in the private sector, must obtain a certificate of need from the DOH. Funding of hospitals is through the General Appropriations Act, local government budgets, PhilHealth and user fees.

PHYSICAL

RESOURCES

PHYSICAL RESOURCES

INFRASTRUCTURE

INFRA-STRUCTURE

GENERAL

INFRA

GENERAL INFRASTRUCTURE

The number of both private and government hospitals generally increased in the last 30 years. About 60% of all hospitals in the country are privately-owned. Government hospitals, however, are more strategically located as they serve as core or terminal referral hospitals in regions and provinces. While some serve as referral facilities, private hospitals are more often based in cities or more urban municipalities.

Hospitals by ownership and service capability, 2005-2007

Number of government and private hospitals, 1970-2006

HOSPITAL BED

HOSPITAL BEDS

Traditionally, government hospitals in the country are larger and have more beds compared to private hospitals; however, there are more private hospitals. Over the years, the difference between government and private hospital beds has decreased. From 1997 to 2007, the average number of beds totaled to 43 846 in government hospitals and 41,206 in private hospitals. The average bed-to-population ratio for the country for the 10-year period was 107 per 100 000 population. Although this ratio meets the standard set by DOH for the country (1 bed per 1000 population), ratios across regions, provinces and municipalities vary.

Based on Republic Act 1939 (1957), government hospitals are mandated to operate with not less than 90% of their bed capacity provided free or as ‘charity’. For private hospitals, the DOH through AO 41 (2007) required all private hospitals to identify not less than 10% of the authorized bed capacity as charity beds. This was issued as a requirement for hospital licensure.

Number of beds in government and private hospitals and total

population, 1997-2007

DISTRIBUTION

DISTRIBUTION

Inequities are evident in the distribution of health facilities and beds across the country. In terms of the regional distribution of hospitals, urban based hospitals — such as those found in the NCR and Region IV-A — comprise about 17% of all hospitals from all regions in 2005. The hospital beds in these two regions account for 36% of the total for the country.

Of the regions, Region XIII and ARMM have the least number of health facilities and beds.ARMM, in 2005, was most deprived of hospital beds given its population size. The ARMM population is comparable to that of Regions IX, IV-B and XIII but with only 20 hospitals to serve the population. Although the number of beds in ARMM increased from 560 to 640 in 2008, the ratio is still 0.19 per 1000 population (AIPH, 2008), far below the DOH standard.

DISTRIBUTION

HOSPITAL

PERFORMANCE

HOSPITAL PERFORMANCE

The average length of stay (ALOS) reflects the relative case mix among different hospitals, this varied from 2001 to 2006. ALOS in Level 3 and 4 hospitals such as specialty hospitals, research hospitals, medical hospitals and regional centres ranged from 5.8 days in 2001 to 7.26 days 2006. Patients in sanitaria (treatment and rehabilitation facilities for individuals with leprosy) (53.1 days) and psychiatric facilities (91.45 days) have the longest ALOS. District hospitals, which are Level 1 or

2 facilities, have shorter average length of stay. This ranged from 3.4 days in 2000 to 3.64 days in 2006. Generally, the approved number of beds as per issued license to operate (authorized) is higher than the actual beds used (implementing beds). However, in 2004 and 2006, it was noted that implementing bed capacity and occupancy rates are higher than those authorized for medical centres, suggesting more congestion in these government facilities compared to others.

Consumers perceive government hospitals to be of lower quality than their private counterparts. Addressing this perception is a challenge, especially in underserved areas, where quality is affected by limited financial resources and a lack of trained health workers.

CAPITAL STOCK

AND

INVESTMENT

CAPITAL STOCKS AND INVESTMENTS

Funding of government hospitals is largely done through the General Appropriations Act (GAA). Based on the distribution of budget by class in CY 1998-2007, half of the budget went to salaries and other personnel costs (Php 5.79 billion), Php 4.64 billon (41%) to maintenance and other operating expenses (MOOE) and Php 0.97 billion (9%) for capital outlay.

Of the MOOE budget for CY 1998-2007, provision of hospital services had the largest share amounting to Php 2.22 billion or 48%. This was spent on the management and maintenance of the 67 retained and renationalized hospitals nationwide (DOH, 2007). There was a 22.7% increase in the overall DOH budget in 2008 (reflected in the budget spike for specialty hospitals). An additional Php 1.110 billion was allocated for the health facilities enhancement programme; Php 390 million for specialty hospitals like the National Kidney and Transplant Institute, Philippine Heart Centre, Lung Centre of the Philippines and Philippine Children’s Medical Centre; and Php 122.4 million as assistance to national hospitals. The fluctuating appropriations reflect the shifting priorities of the DOH during those periods.

MEDICAL

EQUIPMENT, DEVICE AND AIDS

MEDICAL EQUIPMENT, DEVICE AND AIDS

The Bureau of Health Devices and Technology, Radiation Regulation Division of the DOH formulates and enforces policies, standards, regulations and guidelines on the production, import, export, sale, labeling, distribution, and use of ionizing and non-ionizing devices in medicine and other activities. General radiography represents the most basic equipment available across the country. As of 2009, these devices totaled to 3860 with 31% found in the NCR. NCR has a ratio of 11 general radiography devices per 100 000 population. In 2009, a total of 4123 general radiography devices, CT/PET and MRI were documented across the regions. Though most regions are recorded as having at least one X-ray and CT scan or MRI

, the real numbers are likely to be higher as data regarding these equipment and facilities is only voluntarily submitted to the DOH.

INFORMATION

TECH

INFORMATION TECHNOLOGY

The DOH information management service (IMS) has developed and maintained the hospital operations and management information system or HOMIS. HOMIS is a computer-based system of software developed by the DOH, through the National Centre for Health Facility Development (NCHFD) and the Information Management Services (IMS). It is developed to systematically collect, process, and share information in support of hospital functions for effective and quality health care. At present, there are no formal evaluations of the number of hospitals using HOMIS, nor of its impact

Decision-making for information systems infrastructure in the Philippines is devolved to the local health facilities. Because of the lack of a national e-health master plan or roadmap, there is no clear directive to the public and private sector on how they should invest in information and communications technology in health.

At present, there is no actual count of active health workers, and these data are not regularly collected. Some studies, such as that in 2008 by the Pharmaceutical and Health Care Association of the Phillipines (PHAP) attempted to document the number of active doctors by specialization, but these were estimates.

Health professional training programmes, which are dominated by private colleges and universities, abound in the Philippines. In response to strong overseas demand there has been an increase in the number of health professional programmes especially in nursing and in the rehabilitation sciences, namely physical, occupational and speech therapy (PT/OT/ST).

HUMAN RESOURCES

HUMAN

RESOURCES

TRENDS IN HEALTH CARE PERSONNEL

The largest category of health workers in the Philippines are nurses and midwives due to overseas demand for Filipino nurses. With the oversupply of nurses in the country, many newly graduated or licensed nurses are unable to find employment. Conversely, there is an underproduction in other categories such as doctors and dentists). In terms of health worker to the population ratios, doctor, nurse, medical technologist and occupational therapist ratios have constantly increased over the years, while ratios for the other health professionals to the population have fluctuated, again reflecting changes in local supply of particular health worker categories.

TRENDS

IN

HEALTH

CARE

PERSONNEL

TREND

DATA

HEALTH CARE PERSONNEL TRENDS

Trend in the number of graduates of different health

professions in the Philippines, 1998-2008

HEALTH CARE PERSONNEL TRENDS

Trend in the number of BS Nursing graduates in the

Philippines, 1998-2007

HEALTH

WORKER

DISTRIBUTION

HEALTH WORKER DISTRIBUTION

Minimum number of health workers required in government

& private hospitals based on DOH- BHFS licensing requirements,

Philippines, 2007

Since data on the actual number of health professionals in the private sector is not readily available, the minimum number of health workers required by the DOH for hospitals to be licensed is used to describe distribution (assuming that hospitals should have the minimum human resources for health (HRH) requirements before they can be licensed). There are clear differences in government and private sector distribution. More hospital-based doctors, nurses, PTs and OTs are in the private sector than in government. The table also shows that the positions in government and private hospitals for PTs/OTs and dentists are only in Levels 3 and 4 facilities. The inadequate number of government positions are largely due to the inability of government to create enough positions in the bigger hospitals.

HEALTH WORKER DISTRIBUTION

Government health workers per region, 2006

The inequitable distribution of government health workers is also reflected in DOH and NSCB statistics. These show that three regions, namely the NCR, Regions III and IV-A (which are relatively near to metropolitan Manila) have a higher proportion of government health workers than other more remote regions like those in Mindanao. This regional distribution data is not available for health workers working in the private sector.

HEALTH

WORKER

DENSITY

HEALTH WORKER DENSITY

Although Philippine density is comparable to selected countries, it should be noted that the Philippine ratios are computed based on “ever-registered” health

professionals. Ever registered data does not take into account those who have died, retired or those who are not practicing their professions. This data limitation creates a likely overestimation of the supply of health professionals in the Philippines.

In the last two decades, the density of doctors in the Philippines rose sharply, and then slightly decreased to 1.14 per 1000 population in 2004. As for the nurse-to-population ratio in the Philippines, it was 0.31 per 1000 people in 1993, but since then, this number grew dramatically to 4.43 per 1000 in 2000 and stabilized until 2005. This large increase was mainly due to the high demand for nurses in other countries. Of all the selected countries, the Philippines had the highest dentist density, having 0.54 to 0.56 dentists for every 1000 Filipinos in the period 1997 to 2004.The pharmacist-to-population ratio grew in the

last 20 years for all selected countries except China. Average midwife-to-the population ratio is 1.70 per 1000 people, the highest of all the selected countries. This is followed by Malaysia and Indonesia. The World Bank’s 1993 Development Report suggested that, as a rule of thumb, the ratio of nurses to doctors should be 2:1 as a minimum, with 4:1 or higher considered more satisfactory for cost-effective and quality care. In the Philippines, for government and private health workers in hospitals in 2006, the nurse-to-physician ratio was 3:1, while the midwife-to-physician ratio was 2:1.

HEALTH WORKER DENSITY

Ratio of nurses per 1000 population, 1990-2008

Ratio of doctors per 1000 population, 1990-2008

HEALTH WORKER DENSITY

Ratio of pharmacists per 1000 population, 1990-2008

Ratio of dentists per 1000 population, 1990-2008

TRAINING

OF

HEALTH

CARE

PERSONNEL

Training of Health Care Personnel

Doctors complete a 4-year pre-medical course and a 4-year medical education programme followed by a one-year internship programme that is patterned after the American medical education system. This prepares them for general practice and for beginning specialization in surgery, internal medicine, paediatrics or obstetrics and gynaecology. Nurses go through a 4-year programme consisting of general education and professional courses that mainly trains them in community health and general hospital care.

Pharmacists have a 4-year pharmacy education programme that chiefly prepares them for practice in community pharmacies. A newer direction for pharmacists is towards industrial pharmacy or the practice of pharmacy in pharmaceutical companies. Medical technologists are likewise trained through a 4-year programme. Dentists finish a 6-year programme with the first two years categorized as pre-dental and the last four years as dental curriculum. The pre-dental curriculum is comprised of general education and health-related subjects while the dental curriculum covers basic medical and dental sciences, pre-clinical subjects and clinical training. Physical and occupational therapists (PT/OT) complete 5-year programmes consisting of general education and professional courses. All programmes include licensure examinations that screen graduates for safe practice.

The regulation of health professional education is carried out bythe Commission on Higher Education (CHED, RA 7722). CHED sets minimum standards for programmes and institutions of higher learning recommended by panels of experts in the field and subject to public hearing, and it enforces this. Its coverage includes both public and private institutions of higher education as well as degree-granting programmes in all post-secondary educational institutions, public and private. CHED has the mandate to open institutions and to close those that perform poorly based on the percentage of graduates who successfully pass national board examinations.

HEALTH

PROFESSIONAL

CAREER

PATH

Health Professionals’ Career Paths

There are many vacant government health sector positions in rural and low-income areas. However, some doctors find these areas unattractive due to long and irregular working hours, isolation from medical colleagues, and the absence of incentives to stay in these areas. Newly-trained doctors face radically different choices of where and how to practice. New doctors are much less likely to enter solo practice and are more likely to take salaried jobs in group medical practices, clinics, and health networks (DOLE, 2008). In terms of the career paths that doctors commonly take, Table 4-9 shows that of 45 555 doctors surveyed in 2006 by PHAP, 68% are practicing as specialists and 32% as general practitioners. Of the specialties, the most common tracks are internal medicine (17.5% of all physicians), paediatrics (15.5%), OB-gynaecology (12.5%) and surgery (10.6%). More than half of the specialists surveyed (52%) are found in metropolitan Manila in contrast to only 9% in Mindanao.

There are several distinct levels of the nursing career structure distinguished by increasing education, responsibility, and skills. Advanced practice nursing (APN) involves the expansion of the nurses’ clinical role: Advance practice nurses are clinical nurse specialists and nurse practitioners who have acquired a PhD and have gained specializations in clinical nursing, research, health policy, teaching, and consultations. The concept of APN is being implemented, in part, in the form of the ‘’clinical nurse specialist (CNS)”, supported by Board of Nursing Resolution in 1999 (BON No. 14 s. 99) and the Philippine Act of 2002. While CNS is essentially a certification process to recognize graduate education, research and experience obtained by the nurse, it is anticipated that this will be expanded to define the scope of CNS practice in health facilities. A revision of the 2002 law, currently underway, will formalize APN as a distinct category of healthworker.

Health Professionals’ Career Paths

Distribution of doctors per specialty, 2006

MIGRATION

OF

HEALTH

PROFESSIONAL

Migration of Health Professionals

Among Asian countries, the Philippines holds the record for the greatest increase in migration, across all sectors, since the 1970s. In 1975, just 36 035 workers – mostly professionals – migrated. By 1997, 747 696 Filipino workers went overseas, compared to 210 000 from Bangladesh, 162 000 from Sri Lanka and 172 000 from Indonesia. By 2001, the number of overseas Filipino workers had reached 866,590. Overseas workers provide remittances of at least US$ 7 billion annually, with high unofficial estimates suggesting that the figure may be as high as US$ 12 billion.

The migration of health professionals from the Philippines to industrialized countries is a well-known characteristic of the health workforce – nurses (predominantly female) and physical and occupational therapists account for a large share of total migrants. The health professionals’ decision to migrate relates to a number of factors: economic need, professional and career development, and the attraction of higher living standards. A common reason for migration given by health workers is the low and variable wage rates that do not allow them to earn “decent living wages” in the Philippines. Destination countries such as Saudi Arabia, Singapore, UAE, Kuwait and Canada require migrant health workers to have some years of experience in the hospital setting, creating high-turnover of skilled staff . This, in turn, leads to increased workload in health facilities and the hiring of many new graduates to replace the skilled nurses that left. This situation presents challenges in ensuring quality care for patients.

Migration of Health Professionals

Number of deployed Filipino nurses by Top Destination Countries, new hires, 2003-2009

Migration of Health Professionals

Distribution of health professionals by type of migration, 1997-

2008

PROVISION

OF

SERVICES

Public health services in the Philippines are delivered to communities by the LGUs, with the DOH (through the CHDs) providing technical assistance. In addition, campaigns and implementation of specific national programmes/strategies such as TB, family planning, EmONC, are coordinated by the DOH with the LGUs. At present, other types of health care such as long-term care for the elderly and for persons with disabilities, palliative care, mental health care, dental health care and alternative/complementary medicine are still lacking.

Overall, access remains the fundamental objective of the delivery of public health services. However, problems persist with the quality and effectiveness of these services. Solutions to improve health outcomes through various reforms in the public health system are continuously being pursued.

PROVISION

OF

SERVICES

PUBLIC

HEALTH

Public Health

Improving access to public health services is a fundamental goal of the Philippines’ health system. Public health in the Philippines consists of programme packages for the prevention, management and control of diseases, as well as the promotion and protection of health. To ensure access, these health programme packages have been adapted to the various levels of health care delivery (from community-based to tertiarylevel facilities), to various population groups (mothers and infants, children and adolescents, adults and older persons), and to specific diseases (tuberculosis, malaria, cardiovascular diseases, cancer) . The quality of public health services remains a widespread concern.

The system is managed by the DOH and the local government units (LGUs). While direct delivery of public health services is no longer the DOH´s function, it provides the LGUs with technical assistance, capacity building and advisory services for disease prevention and control, and also supplies some medicines and vaccines. More specific national programmes include campaigns and coordination with LGUs on the implementation of specific programmes and strategies to eliminate leprosy, schistosomiasis, filariasis, rabies and malaria; and reduce morbidity and mortality from vaccinepreventable diseases, tuberculosis, HIV/AIDS, dengue and emerging and re-emerging diseases such as SARS and avian influenza.

REFERRAL

SYSTEM

Referral System

The devolution of health services ended the concept of integrated health care at the district level. Public health and hospital services are now administered independently. The provincial governments took over the management of secondary level health care services such as provincial and district hospitals, while the municipal governments were put in charge of the delivery of primary level health care services and the corresponding facilities, such as the RHUs and the BHCs. The national government, meanwhile, has retained the management of a number of tertiary level facilities. Fragmentation is compounded by the management of the three levels of health care that is vested in three different government levels—an arrangement that has been marred by political differences.

In the early 2000, the DOH embarked on setting the standards of the referral system for all levels of health care. While this system was promoted to link the health facilities and rationalize their use, in practice adequate referral mechanisms were not put in place, and the people’s health-seeking behavior remains a concern. In general, the primary health care facilities are bypassed by patients. It is a common practice for patients to go directly to secondary or tertiary health facilities for primary health concerns, causing heavy traffic at the higher level facilities and corresponding over-utilization of resources. Hospital admissions from the data of PhilHealth reimbursements show that highly specialized health facilities continuously treat primary or ordinary cases . Dissatisfaction with the quality of the services and the lack of supplies in public health facilities are some of the reasons for bypassing (DOH, 2005). This is aggravated by a lack of gatekeeping mechanisms, enabling easy access to specialists.

SPECIALIZED

AMBULATORY CARE

Specialized Ambulatory Care/Inpatient Care

Inpatient care is provided by both government and private health care facilities categorized as secondary and tertiary level hospitals. This type of care is reimbursed by PhilHealth. Filipinos who can afford it receive inpatient care services in private clinics and hospitals that are staffed by specialists and equipped with sophisticated medical equipment. Those who cannot afford private health care go to government facilities that are perceived to be poorly equipped and often lack supplies. It is common practice for medical specialists to conduct private practice in their clinics located in either public or private hospitals, where they also refer their patients for short or long-term periods. Generally, the specialists charge more for outpatient consultations in private hospitals. Unlike the poor who mainly go to the outpatient units of the public hospitals and are attended by residents, the paying patients can go to the specialists of their choice. There are also a small number of ambulatory surgical clinics (ASCs) which provide day surgeries and ambulatory procedures. This care is eligible for reimbursement through PhilHealth, although a present there only 42 ASCs and all are located in urban areas.

PRIMARY

CARE

SERVICES

Primary Care Services

Primary care services are provided by both the government and the private sector. The main providers of primary health care services are the LGUs as mandated by the LGC of 1991. Under this set-up, BHCs and RHUs in the municipalities serve as patients´ first place of contact with the health workers. BHCs are staffed by barangay health workers, volunteer community health workers, and midwives, while the RHUs are staffed by doctors, nurses, midwives, medical technologists, sanitary inspectors, 93 nutritionists and volunteer health workers. A World Bank study (2000) on the type of services provided by health facilities in the Philippines found that 63% of services provided by government primary care facilities are preventive in nature (i.e. immunization, health and nutrition education, family planning services); 30% are for the treatment of minor illnesses and accidents and other services, such as pre/post natal care and deliveries, and the remainder are for laboratory services. Private sector health professionals provide primary care services through free-standing private clinics, private clinics in hospitals, and group practice clinics or polyclinics. They generally cater to the paying population who can afford user fees.

EMERGENCY

CARE

Emergency Care

Emergency care is governed by RA 8344 which was passed in 1997, penalizing hospitals and medical clinics for refusing to administer appropriate initial medical treatment and support in emergency or serious cases. With a goal of protecting patients in a medical emergency, it mandates that all emergency patients should be stabilized by giving necessary emergency treatment and support without a demand for deposit or advance payment. However, a key weakness of RA 8433 is that it does not set out how this care will be financed, in effect shifting all the financial risks to the hospitals, which then develop schemes to deter the poor from accessing emergency care. While it is crucial that emergency cases are promptly identified in the hospital’s emergency department/unit, it is more vital that management of emergency cases start at the origen of the emergency situation. Unfortunately, only a few LGUs across the countries have the capacity to manage emergency situations. Most of the management of emergency cases only starts at the emergency room, and not at the source of emergency situation.

Since the devolution of health services, emergency management at the municipal and city levels has depended on the political will of the local chief executive to fund and implement an emergency management system. In an administrative order (AO) issued in 2004 declaring a national policy on health emergencies and disaster, all health facilities were enjoined to have an emergency preparedness and response plan and a health emergency management office/unit; establish a crisis and consequence management committee to handle major emergencies and disasters; designate an emergency coordinator in all health facilities; train all health workers on health emergency management; encourage LGUs to establish a health emergency management team and coordination mechanism to link up with DOH-HEMS; and have DOH provide technical assistance on health emergency management to LGUs. The DOH serves as the Operations Centre through health emergency management system monitoring all health emergencies and disasters, informs the public of health emergencies and enforces standards and regulates facilities in the implementation of health emergency procedures (DOH AO 168, s. 2004). Many LGUs have now implemented this AO and have developed disaster management plans. In addition, the National Disaster Risk Reduction 95 and Management Council (NDRRMC), a network of government agencies, monitors, responds, and assists LGUs during health and health related emergency and disaster situations. The DOH is a council member of the NDRRMC.

PHARMACEUTICAL

CARE

Pharmaceutical Care

Pharmaceuticals reach consumers via a supply-driven distribution scheme. Among the wholesalers and retailers, the drugstores have the greatest percentage share in the market at 80.1% (chains have 62.7%, independent stores have 17.4%) while the hospitals have the smallest share at 9.7% (private 7.4%; government 2.3%). Others account for 10.2% market share Clinics, NGOs at 9.9%; government agencies at 0.3%) (PHAP, 2008). Monopolistic pricing exists in hospital drug sales, especially in private hospitals where outside purchases are discouraged. Drug prices in hospitals are reported to be double those of prices in retail outlets (DOH, 2008). Access to essential drugs is constrained by limited availability, irrational use and high costs (DOH, 2008). Availability of medicines is dependent on the presence of doctors to prescribe drugs and the existence of drugstores or pharmacies in the area. Most government health professionals practice in urban areas, especially in NCR and Region III. As private physicians charge for their services, long queues for government physicians in the public health facilities are often the norm. The situation is worse in southern Mindanao (with only 69 government doctors) and ARMM with 78 government doctors. Half of the 3000 plus drugstores in the country are in NCR while the rest are in urban areas nationwide. As a result, remote areas suffer from a shortage of drug supply. To address this, some health workers dispense drugs though their own clinics, RHUs, government hospitals and “BnB outlets” or pharmacies that operate without pharmacists. While there is a law mandating a separation between the prescribing of physicians and the dispensing of pharmacists, this is difficult to implement in practice: clinics and RHUs essentially dispense without pharmacies, while BnBs operate as pharmacies with no pharmacist.

PALLIATIVE

CARE

Palliative Care

In 1991, the Philippine Cancer Society broke new ground when it established the country’s first home care programme for indigent, terminally-ill cancer patients led by a multidisciplinary team made up of a doctor, nurse and social worker. From the mid 1990s onwards, palliative care in the country was enlarged by NGOs and the private sector. A number of hospice care facilities opened during this period. Government support for palliative care for the poor is through the Philippine Charity Sweepstakes Office (PCSO), which covers the cost of patient hospitalization and the establishment of free medical and dental missions in depressed areas

LONG TERM

CARE

LONG

TERM

CARE

OLDER

PERSONS

Older Persons

In the Philippines, RA 9994 defines senior citizens as those aged 60 and above; at this age, medical benefits become available. There are an estimated five million Filipinos aged 60 years old and above. Older persons comprise a little over 6% of the total population, but the proportion is expected to be more than 10% by year 2020 as the number of older people will double by that time (NEDA, 2009). The role of geriatric care is very limited as there are very few homes for the elderly, and geriatric wards are rare in hospitals. After having reached the age of retirement and have paid at least 120 months premium to the programme (including those made during the former Medicare Programme), PhilHealth members are granted lifetime coverage. As lifetime members, they are entitled to full benefits together with their qualified dependents (PHIC, 2009). Lifetime members comprise 1% of the 68.67 million Filipinos covered by PhilHealth (PHIC, 2008). RA 9994 or the Expanded Senior Citizens’ Act of 2010 granted the senior citizen a direct discount of 20% on all pharmaceutical purchases as well as exemption from 12% VAT on these purchases The benefit covers goods and services from drugstores; hospital pharmacies, medical and optical clinics and similar establishments dispensing medicines (including influenza and pneumococcal vaccines) and medical rehabilitative/assistive devices; medical and dental services in private facilities, and free medical and dental services in government facilities, including diagnostic and laboratory fees. A limitation of the Senior Citizen’s Act is that the burden of financing the discount is mostly shouldered by the provider of services – who are consequently reluctant to provide access to care for the elderly. Up to 6.7% of the 20% discount may be transferred as tax credits, but few providers exercise this option.

PERSONS

WITH

DISABILITIES

Persons with Disability

RA No. 7277, otherwise known as the Act Providing for the Rehabilitation, Self-Development, and Self-Reliance of Disabled Persons and Their Integration into the Mainstream of Society and for Other Purposes, was 97 passed in September 1995. This mandated the DOH to institute a national health programme for the prevention, recognition and early diagnosis of disability and early rehabilitation of the disabled. It also required the DOH to set up rehabilitation centres in provincial hospitals, and render an integrated health service for persons with disability (PWDs) in response to seven different categories of disability such as psychosocial, learning, mental, visual, orthopedic, communication or those disabilities due to chronic illnesses. Twenty-one hospitals under the DOH or 22% of all DOH hospitals are maintaining rehabilitation centres. Of the 1492 towns, about 112 (7.5%) have had their frontline health workers trained in communitybased rehabilitation. The lack and mal-distribution of rehabilitation health professionals and facilities is alleviated by the community-based rehabilitation (CBR) approach which is widely accepted and used in providing services to PWDs. Difficulties with the assessment and diagnosis of disability or impairment by rural or city health personnel is one of the persistent challenges cited by regional coordinators handling the Philippine registry for PWDs. There is no national consensus on standard definitions for disability types or methods for collecting information. There are not enough facilities nationwide that deliver community or institution-based rehabilitation services, and their number is decreasing. There were 19 recorded institutions that provide social services to the disabled, elderly persons and special groups in 1996, but they have gradually decreased to 12 in 2003.

MENTAL

HEALTH

CARE

Mental Health Care

In April 2001, the Secretary of Health signed the National Mental Health Policy which contains goals and strategies for the Mental Health Programme (NMHP). Under the DOH, the NMHP aims to integrate mental health within the total health system. It has initiated and sustained the integration process within the hospital and public health systems, both at the central and regional level. Furthermore, it aims to ensure equity in the availability, accessibility, appropriateness and affordability of mental health and psychiatric services in the country. Priority areas are substance abuse, disaster and crisis management, women and children and other vulnerable groups, traditional mental illnesses (schizophrenia, depression and anxiety), epilepsy and other neurological disorders, and overseas Filipino workers. Challenges in the provision of mental health care are the following: continuous overcrowding of mental hospitals (the large ones with as many as 3500 patients) despite efforts to integrate mental health within the general health services and the development of community-based programmes; the non-availability of psychiatric drugs; the fact that hospital-based psychosocial rehabilitation of chronic patients remains the norm, and the reality that university and private hospitals with psychiatry departments are generally situated in urban areas. Home-care services for chronic patients are increasing (in Manila), but the quality of care provided is largely unmonitored. To address these problems, the NMHP has articulated its support for a policy shift from mental hospital-based psychiatric treatment to community-based mental health care. As a first step, the integration of mental health care into general health services proposes the opening of acute psychiatric units and outpatient clinics in 72 government hospitals and the provision of psychiatric drugs.

DENTAL

CARE

Dental Care

About 92.4% of Filipinos have dental caries or tooth decay and 78% have periodontal disease according to the National Monitoring and Epidemiological Dental Survey in 1998 (DOH, 2005). In terms of the decayed, missing, filled teeth index (DMFT), the Philippines ranked second worst among 21 WHO Western Pacific countries. Dental caries and periodontal disease are significantly more prevalent in rural than in urban areas as more dentists practice in urban settings. Only tooth extraction and dental check-ups are free if and when materials and dentists are available in public facilities. PhilHealth does not cover dental health benefits. Oral health is still not a priority of the government, international agencies, lawmakers, communities, families and individuals in terms of financial support, human resources for health, and partnership and collaboration. This has fragmented dental health programmes and has caused poor oral health outcomes over the years. The decision to access oral health care is largely personal and most Filipinos pay for such services out-of-pocket. In 2003, the National Policy on Oral Health was formulated and disseminated as a guide in the development and implementation of oral health programmes. It is focused on health promotion, preventive, curative and restorative dental health care for the population. Oral health services are being integrated in every life stage health programme of the DOH.

ALTERNATIVE/

COMPLEMANTARY

CARE

Alternative/Complementary Medicine

A traditional health system evolved from pre-Spanish Philippines with its own popular knowledge and practices and recognized healers that include the hilots (either birth attendants or bone setters), the albularyos (herbalists), and the faith healers. Traditional birth attendants provide 100 home services that are more personal, culturally acceptable and financially accessible than midwives, and this may make it difficult to fully implement the policy of having all births in birthing facilities attended by health professionals. In 1993, a division of traditional medicine was established in the DOH to support the integration of traditional medicine into the national health care system as appropriate. In 1997, the Traditional and Alternative Medicine Act was legislated to improve the quality and delivery of health care services to the Filipino people through the development of traditional and complementary/alternative medicine (TCAM) and its integration into the national health care delivery system. The Act created the Philippine Institute of Traditional and Complementary/Alternative Health Care (PITAHC), which was established as an autonomous agency of the DOH. The Institute’s mission is to accelerate the development of traditional and complementary/alternative health care in the Philippines, provide for a development fund for traditional and complementary/alternative health care, and support TCAM in other ways. It also gives technical advice to regulators such as the Bureau of Food and Drugs (BFAD) or the Food and Drug Administration (FDA) and DOH – Bureau of health facilities and services. Currently, TCM practitioners are not reimbursed by PhilHealth.

MAJOR HEALTH REFORM IN THE PHILIPPINES

HEALTH

REFORMS

1979

Primary Health Care

Prioritizes the eight essential elements of health care including education on prevalent health problems and their prevention and control; promotion of adequate food supply and proper nutrition; basic sanitation and adequate supply of water; maternal and child care; immunization; prevention and control of endemic diseases; appropriate treatment and control of common diseases; and, provision of essential drugs. As an approach, PHC encouraged partnership of government with various segments of civil society; incorporated health into socioeconomic development; and, advocated the importance of health promotion and preventive aspects of health care.

1982

Executive Order 851

Directs the regional health offices to be responsible for the field operations of the ministry in the region by utilizing the primary health care approach in delivering health and medical services that are responsive to the prioritized needs of the community as defined by its members, and by ensuring community participation in the determination of health care requirements

1987

Executive Order 119

Creates the District Health Office (DHO) as one of the component structures of the Ministry of Health. The DHO provides supervision and control over district hospitals, municipal hospitals, rural health units, and barangay health centres. Moreover, this Order creates the Community Health Service under the Office of the Minister to provide services related to the formulation and implementation of health plans and programmes in coordination with local governments and non-government organizations

1988

RA 6675 The

Generics Act of 1988

Aims to promote and assure adequate supply, distribution and use of generics drugs and medicines. This law also emphasizes increased awareness among health professionals of the scientific basis for the therapeutic effectiveness of medicines and promotes drug safety

1991

RA 7160 Local

Government Code of 1991

Paves the way for the devolution of health services to local government units. The process of transferring responsibility to the local government units breaks the chain of integration resulting in fragmentation of administrative control of health services between the rural health units and the hospitals

1995

RA 7875 National

Health Insurance Act

Seeks to provide all Filipinos with the mechanism to gain financial access to health services, giving particular priority to those who cannot afford such services

1999

Health Sector Reform Agenda

Aims to improve the way health care is delivered, regulated and financed through systemic reforms in public health, the hospital system, local health, health regulation and health financing

Executive Order 102

Redirects the functions and operations of the DOH to be more responsive to its new role as a result of the devolution of basic services to local government

2004

RA 9271 The

Quarantine Act of 2004

Aims to strengthen the regulatory capacity of the DOH in quarantine and international health surveillance by increasing the regulatory powers of its Bureau of Quarantine (BOQ). This includes expanding the Bureau’s role in surveillance of international health concerns, allowing it to expand and contract its quarantine stations and authorizing it to utilize its income

2005

FOURmula ONE (F1)

for Health

Implements the reform strategies in service delivery, health regulation, health financing and governance as a single package that is supported by effective management infrastructure and financing arrangements, with particular focus on critical health interventions

2008

RA 9502 Universally Accessible Cheaper

and Quality Medicines Act

Allows the government to adopt appropriate measures to promote and ensure access to affordable quality drugs and medicines for all.

2009

RA 9711 Food and Drug Administration Act

Aims to

1) enhance and strengthen the administrative and technical capacity of the FDA in regulating the establishments and products under its jurisdiction;

2) ensure the monitoring and regulatory coverage of the FDA; and

3) provide coherence in the regulatory system of the FDA

UNIVERSAL

HEALTH CARE

AND FUTURE REFORMS

PHILIPPINE HEALTH AGENDA

UNIVERSAL

HEALTH CARE

LAW

UNIVERSAL HEALTH CARE LAW

HEALTH COVERAGE

HEALTH INSURANCE

DEPARTMENT OF HEALTH

HEALTH

AGENDA

FOR 2016-2022

HEALTH

AGENDA

2016-2022

TARGET

ACHIEVEMENTS

2016-2022 HEALTH AGENDA TARGET ACHIEVEMENTS

1. Reduce the global Maternal Mortality Rate (MMR) to less than 70 per 100,000 live births

2. End preventable deaths of newborns and under-five children

3. End the epidemics of AIDS, tuberculosis, malaria, and neglected tropical diseases and combat hepatitis, water-borne diseases, and other communicable diseases

4. Reduce by 1/3 pre-mature mortality from NCDs through prevention & treatment, & promote mental health & wellbeing

5. Strengthen prevention & treatment of substance abuse, including narcotic abuse & harmful use of alcohol

6. Halve global deaths & injuries from traffic accidents

7. Ensure universal access to Sexual & Reproductive Health (SRH) care services, including family planning, information & education, & integration of Reproductive Health into national strategies & programs

8. Achieve universal health coverage (UHC), including financial risk protection, access to quality essential health care services, & access to safe, effective, quality, & affordable essential medicines & vaccines for all

9. Substantially reduce the number of deaths & illnesses from hazardous chemicals & air, water, and soil pollution & contamination

AGENDA

KEY POINTS

The Philippine Health Agenda 2016-2022 sets the ambitious reform plan with the aim to assure financial risk protection and good health outcomes for the population.

The agenda focuses on guaranteeing all Filipinos equitable geographic and financial access to a comprehensive range of quality health services across different levels of care upon first contact with the health care system.

This agenda builds on three pillars:

(1) guarantee care at all life stages and reduce the triple burden of diseases,

(2) ensure access to functional service delivery network, and

(3) ensuring universal health insurance through expansion of health insurance coverage and improvement of benefit packages. Under the third pillar of universal health insurance coverage, key issues to address include:

(a) persistent issues with balance billing and co-payments,

(b) expanding the PhilHealth benefits package to include outpatient care and drugs that would add value for money,

(c) contracting arrangements with service delivery networks, and (d) enrolling the formal sector through payroll taxes and informal sector through government subsidies.

DOH aims to achieve Universal Health Coverage by 2022 and has prioritized its Health Financing direction (2017-2022) to guarantee universal access to Comprehensive care at primary care level and continuity of care through referral.

These Health Financing directions built on 9 step approach in the following areas:

(a) population coverage,

(b) service delivery package,

(c) role clarification (of various Departments, Agencies and Administrative levels),

(d) revenue generation,

(e) pooling,

(f) resource allocation and strategic purchasing,

(g) procurement,

(h) salaries and compensation,

(i) health facilities.

The more streamlined Health Financing policy and practical roadmap is still under preparation.

According to the Philippine Health Agenda of 2016-2022 and in a proposed Universal Health Care bill recently approved by the lower chamber of Congress, PhilHealth is a main public purchaser for health care consolidating majority of the public funding.

Pooling funds is a necessary step towards less fragmented public health financing system and gives better leverage for strengthening the PhilHealth as key strategic purchaser in the health sector and for changing provider behaviour.

REFERENCES

REFERENCES

https://www.ncbi.nlm.nih.gov/pubmed/15877513

https://www.manilatimes.net/at-a-glance-the-philippine-health-care-system/395117/

https://tradingeconomics.com/philippines/health-expenditure-total-percent-of-gdp-wb-data.html

https://www.doh.gov.ph/sites/default/files/basic-page/chapter-one.pdf

https://dirp4.pids.gov.ph/websitecms/CDN/PUBLICATIONS/pidsdps1637.pdf

https://psa.gov.ph/content/total-health-expenditures-grew-105-percent-2016

https://psa.gov.ph/national-health-accounts-press-releases

http://www.wpro.who.int/philippines/areas/health_systems/financing/philippines_health_system_review.pdf

https://transferwise.com/gb/blog/healthcare-system-in-the-philippines

https://www.doh.gov.ph/node/14000

https://www.pcp.org.ph/files/PJIM%20Vol54%20No2/The_Philippine_Health_Agenda_2016_to_2022.pdf

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