Universal Health Care for Filipinos by alvin.dakis

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									Universal Health Care

    for Filipinos
        Cecilia S. Acuin, M.D.

        Julian M. Cañero, M.D.
      Ernesto O. Domingo, M.D.
      Kenneth Hartigan-Go, M.D.
     Chrysanthus E. Herrera, M.D.
      Paul Gideon D. Lasco, M.D.
       Bryan Albert T. Lim, M.D.
        Alvin B. Marcelo, M.D.
        Junice D. Melgar, M.D.
     Ramon P. Paterno, M.D., MPH

      Alberto G. Romualdez, M.D.

Table of Contents

Acknowledgment ............................................................................................................. ii

Executive Summary ....................................................................................................... iii

Draft Executive Order ..................................................................................................... xi

Introduction ..................................................................................................................... 1

Governance .................................................................................................................. 19

Health Information Systems .......................................................................................... 27

Regulatory Reforms ...................................................................................................... 41

Organizing Health Services Towards Universal Health Care ......................................... 60

Reforms in Health Human Resources in the Context of Universal Health Care ............. 78

Health Financing ......................................................................................................... 123


The authors acknowledge the contributions made by Ms. Ana Go of the Asian Institute of

Management Dr. Stephen Zuellig Center for Asian Business Transformation.

This paper was supported by grants from the University of the Philippines System and

the National Academy of Science and Technology.

Executive Summary
        The 1987 Philippine Constitution affirms the right to health of ALL Filipinos and

directs the State to protect this right. Despite the efforts of both the government and

private sector to apply the advances of scientific medicine and modern public health

methods, health status indicators have been slow in improvement and have lagged

behind our ASEAN neighbors. Within the country, there are glaring disparities in health

status among regions and income groups. This disparity in health status results from the

inequities in society in general and, within the health system, from the inequity in access

to health services. This inequity in access results from a health system characterized by:

inappropriate governance within the health system, an antiquated and inadequate health

information system, ineffective regulation of health goods and services, fragmentation of

health service delivery, a dysfunctional health workforce, and unfair, unjust and

inadequate health care financing.

        The Philippines must implement Universal Health Care to address the inequities

in the health system. Universal Health Care is defined as the provision to every Filipino

of the highest possible quality of health care that is accessible, efficient, equitably

distributed, adequately funded, fairly financed and appropriately used by an informed

and empowered public. Universal Health Care will ensure health as a right to ALL

Filipinos regardless of ability to pay.

        To implement Universal Health Care, radical reforms are needed in the six

building blocks of the health system, namely: focused and directed governance based

on a policy of equity, a dynamic health information system useable for health policy

formulation, regulation of health care, integrated and rational health service delivery, an

adequate production of well motivated human health resources, and an adequate and

equitable health financing.

Health Governance

       The Department of Health serves as the government’s overall policy formulation

and implementation agency in health. The DOH must assert its leading role within the

health sector and develop the cooperation of other sectors of society to implement

Universal Health Care.

       The most glaring governance problem to achieve Universal Health Care is the

lack of an encompassing policy of health service provision that explicitly addresses the

issues of health inequity and its social implications. The firmly entrenched top-down

approach stifles attempts at introducing participatory processes in health decision-

making and policy formulation through the Primary Health Care Approach.

       The DOH in consultation with the other sectors of society must articulate a clear

and explicit national policy of health service provision that directly addresses the issue of

inequity. An executive order addressed to all government agencies that defines health

equity as equal and just access to health care will provide the basis for the

implementation of Universal Health Care.

       Participatory processes must be effectively implemented for decision-making and

policy formulation along the lines of the Primary Health Care approach. Existing

mechanisms must be strengthened and new ones installed for the effective and

meaningful participation of families, communities, professional groups and other relevant

groups in the management and operation of health programs, facilities and activities.

Health Information Systems

       Information systems are crucial for decision-making and policy formulation.

However, the health information systems in the Philippines are rudimentary and

ministerial – the data are gathered and recorded as a matter of duty, and not for their

usefulness to the health care system.

       Higher offices are deprived of timely information which could be crucial to

effective and dynamic national policies. The lack of effective leadership and direction for

the implementation of health information standards has caused stagnation in the

improvement of the data gathering system.

       To address this burgeoning problem, the Department of Health must take the

lead in the creation of a framework of health information system, taking its cue from the

rapidly expanding field of e-Health. This is defined by the World Health Organization as

a cost-effective and secure use of information and communication technologies in

support of health and health attendance fields, including health care services, health

surveillance, health literature, health education, knowledge and research.

       The Health Information System of the Philippines must reflect a multi-user and

multi-perspective design. It should be able to provide support for the decision-making

process by deconstructing what decisions need to be made, the knowledge that is

required to support these decisions, and the information and data components. Services

should be documented at the point of care – relevant patient information will eventually

form the building blocks of the national health information database.

Health Regulation

       Regulation of health stems from the government’s responsibility to ensure that

the people, especially the underprivileged, have adequate and equitable access to

health products, facilities and services. A regulatory system aims to provide a set of

methods to influence behavior of both providers, specially the private sector, and protect

the buyers from their own inability to judge quality. Regulation must improve access,

advance moral principles and counteract monopoly.

       The Philippine health regulatory authority struggles with the problems of scarce

resources, inadequate staff and capability, inefficient use of available technology, and

lack of progressive technological development. Health policies and regulations are

inadequately enforced, because of the lack of manpower, technical capacity, funding,

organization, as well as the problem of legal constraints. As a result, health facilities are

not only substandard and dilapidated, but uncoordinated and fragmented, if not absent.

       Initiatives must be taken to address these problems. An integrative framework for

the harmonization of the different regulations of the health care system is necessary.

Coordination and capacity-building must be at the forefront of these reforms. The various

stakeholders, such as the LGUs and the private sector, must also be directly involved as

well. Education and other participatory processes will be central in engaging the different

stakeholders of health.

Health Services

       Health services can be characterized by the dichotomy of public and private

hospitals and the fragmentation at the local level. The former traces its roots back to the

American colonial model, whereas the latter stems from the enactment of the Local

Government Code of 1991. Primary care is devolved to municipalities and barangays,

and there is a palpable absence of a unified, cohesive and logically organized referral

system. These problems are further compounded by the lack of quality assurance of

these health institutions.

Health services can be improved through the implementation of the following reforms:

1.     Strengthening Primary Care – through the development of the “Essential Health

       Package” (EHP) that center on problems identified in the community. The EHP

       should not limit services and goals, but instead serve as starting points of a

       comprehensive primary health care program. Pilot EHPs can be implemented in

       several disadvantaged provinces.

2.     A multidisciplinary primary care team approach that is linked to a referral system.

       The primary care team will serve as the gatekeeper between the patients and the


3.     Reinstituting the District Health System through political and financial support –

       the subcontracting of a capitation based Global Health Budget to provide

       essential health services can be used to reinvigorate the district health system.

4.     Integrating all referral hospital services, whether public or private to align with the

       visions of Universal Health Care.

       The DOH must take the lead in removing the structural barriers to the integration

of our national health systems.

Health Human Resources

       The health care system of the country suffers from the paradox of lacking health

care professionals, especially in economically depressed regions, while at the same time

enjoying an oversupply of the said professionals. Most doctors and nurses are

concentrated in the private sector, while the supply of midwives, who provide the basic

health care needs for the poor, is inadequate to meet the demands of the rural and

barangay health centers.

       These problems can be traced back to three factors: unregulated market forces,

quotas determined by capacity rather than sustainability, and absence of emphasis on

public service and common good. These factors combine to produce the phenomenon of

migration to other countries and overcrowding in a highly competitive job market.

       Reforms in HHR production must be anchored on fundamental changes in the

recruitment, education, training and deployment of health care professionals. These

must be guided by the overall objective of providing competent, well-motivated,

transformative and committed professionals in a system of universal health care. These

must be based on a country’s demands of health care instead of market forces.

       These reforms will be anchored on regulations. A commission headed by the

DOH and including members from the CHED, PRC, PHIC, LGUs, DOLE, DEC, etc, can

spearhead the efforts in promulgating policies regarding the standards and regulations in

the production, practice and deployment of health professionals.

Health Financing

        The Philippines faces the same health financing issues of the region: chronic

underfunding, inequitable sourcing of funding (low public spending leading to high out-of-

pocket spending), efficiency issues in terms of allocation of limited financial resources

and payment mechanisms leading to higher health care costs. Added issues are the

fragmentation and overlap of the health financing institutions and by the lack of an

articulated national health policy based on equity and health as a right as basis for

health financing policy formulation.

        To rectify the situation, the stakeholders in Universal Health Care must craft a

unified Health Financing Policy based on equity and health as a human and

constitutional right.

        Total Health expenditure (THE) must be increased to the WHO recommended

level of 5% of GDP. Government and Philhealth share must be increased such that Out

of Pocket payments are eventually reduced to 20% of THE.

        Funding for health care must be allocated to the more cost effective public health

interventions and primary care services, while maintaining the quality of tertiary level

health services. Philhealth’s move towards Case Mix payments, true capitation and

global budgeting should be further developed for financing both primary and tertiary care


        Achieving the goal of UHC also demands that government address the social

determinants of health beyond the health system. Increasing poverty should be

addressed by a comprehensive national socio-economic development that includes

asset reforms, agricultural modernization and national industrialization. Universal Health

Care will address issues of inequity of access. National socio-economic development will

create the living conditions for a healthy population. Only with a clear program for

national socio-economic development, will Universal Health Care succeed in making our

people healthy.

Purpose of this paper

       This paper will serve as the basis for the proposed executive order which follows.

Draft Executive Order


                               EXECUTIVE ORDER NO.____

Directing all government agencies to cooperate, coordinate, facilitate, and otherwise
contribute to the implementation of Universal Health Care for all Filipinos.

WHEREAS the 1987 Philippine Constitution affirms the right to health of all Filipinos and
directs the State to protect this right;

WHEREAS scientific medicine and modern public health, introduced in the Philippines
more than one hundred years ago, have contributed to the improvement of overall health
status of Filipinos;

WHEREAS despite continued efforts of government and private sector in the application
of scientific medicine and modern public health methods in the health care of Filipinos,
current health status indicators show that the Philippines still lags behind its neighbor
countries in health development;

WHEREAS the health status of individuals, families, and communities in the Philippines
varies widely in accordance to socio-economic status and geographic area;

WHEREAS this wide variation in health status between and among population groups
results from social inequities and, within the Philippine Health system, from inequity in
access to health services;

WHERAS this inequity in access to health services results from the following
characteristics of the Philippine health system:

       Inappropriate governance within the health system
       Antiquated and inadequate health information systems
       Ineffective regulation of health goods and services
       Fragmentation of health service delivery
       Dysfunctional health workforce;
       Unfair, unjust and inadequate health care financing

Draft Executive Order

WHEREAS health development programs in the country at all levels have not sufficiently
taken into account the major social determinants of health;

WHEREAS Universal Health Care, defined as the provision to every Filipino of the
highest possible quality of health care that is accessible, efficient, equitably distributed,
adequately funded, fairly financed and appropriately used by an informed and
empowered public, will address the inequities of the Philippine health system;

NOW THEREFORE I, Benigno Simeon C. Aquino III, President of the Republic of the
Philippines by virtue of the powers vested in me by law, do hereby order the following:

SECTION 1. Mandate: In accordance with the provisions of the Constitution and in a
manner consistent with the Administrative Code of 1987, the Local Government Code
(RA 7160) as well as all health provisions of other legislative and administrative
issuances, the Department of Health (DOH) is hereby mandated to be the lead national
agency in the formulation of policies, development of programs, issuance of guidelines
and provision of technical support that will lead to the establishment of Universal Health
Care as the vehicle for health development;

SECTION 2. Tasks: to accomplish this mandate, the DOH is instructed to:

   a. Undertake a review of the structure and functions of its organic as well as
       attached agencies with the end in view of recommending changes (including
       necessary administrative issuances and where needed legislative proposals)
       oriented along the lines of Universal Health Care;

   b. Organize tasks forces, committees, or any type of bodies deemed necessary to
       secure the participation of all relevant national government agencies and
       instrumentalities, local governments, civil society, and communities in the
       development of a national Universal Health Care program;

   c. Within a month from the issuance of this Executive Order, to present to the
       President and the cabinet a two year plan to comprehensively address the health
       problems of disadvantaged population groups particularly the poor, women,
       children and the elderly;

   d. With the cooperation of the other social development agencies (Education,
       CHED including state institutions of higher learning, Labor, Social Services) as

Draft Executive Order

       well as the economic agencies (Budget, Finance, NEDA), develop a budget
       proposal for 2011 directed along the lines of Universal Health Care.

SECTION 3. In support of the DOH’S tasks in relation to Universal Health Care, the
following agencies are directed to extend all cooperation:
   a. DILG – to ensure full cooperation of local government units in the implementation
       of Universal Health Care

   b. Education, CHED and government academic and service institutions: ensure the
       participation of the education sector in the development of the UHC program.

   c. NEDA and other economic and financial agencies – to identify and mobilize
       resources in support of UHC

   d. DSWD – to identify priority segments of the population for UHC implementation.

SECTION 4. Areas of Concern: the above tasks should address issues, challenges, and
obstacles to the attainment of Universal Health Care in the following areas:
   a. Health Governance – establish equity as the overall philosophy of the Philippine
       health system and strengthen existing mechanisms and where necessary install
       new ones for the effective and meaningful participation of families, communities,
       professional groups, and other relevant groups in the management and operation
       of health programs, facilities, and activities.

   b. Health Information – utilize all available resources to establish a National Health
       Information System which will set standards in the collection, collation, analysis
       and utilization of information in support of Universal Health Care.

   c. Regulatory Functions – ensure implementation of regulatory laws, edicts,
       decrees, and other issuances in support of a Universal Health Care policy and
       giving priority to health concerns (especially of the disadvantaged population
       groups) over commercial interests of private groups or individuals;

   d. Health Services Delivery – actions, such as the development of gatekeeping
       mechanisms, should be taken to promote the vertical and horizontal integration
       of health services within government at all levels and between public and private

Draft Executive Order

   e. Human Resources for Health – lead the various health workforce regulatory
        agencies (including CHED, PRC, DOLE, DFA) in the development of an
        integrated plan for health workforce recruitment, production, deployment, and
        management (including compensation schemes) to support Universal Health

   f.   Health Care Financing – increase combined government spending at national
        and local levels as well as through the National Health Insurance Program to
        levels needed to significantly reduce the out of pocket component of total health
        expenditures to 20% or less by 2015;

SECTION 5. Effectivity: This Order shall take effect immediately.

DONE in the year of Our Lord 2010 this __day of December
FOR the President
By Executive Secretary.
                             Cecilia S. Acuin, M.D.

                           Bryan Albert T. Lim, M.D.

                          Paul Gideon D. Lasco, M.D.

        University of the Philippines Manila National Institutes of Health

    Being poor and sick is a deadly combination no Filipino should have to

    suffer. The downward spiral of poverty and illness must be halted by

    timely, accessible and adequate health care.

The Philippine Situation

       Health is a basic human right guaranteed by the Philippine constitution. The

great disparity in access to and use of health care has resulted in unacceptable

differences in health status between the rich minority and the poor majority of Filipinos

constituting a grave violation of this right for most of our countrymen.

 60     low est
 40     highest
 30     income
       NMR         PostNMR   IMR   ChildMR   U5MR   Perinatal

Figure 1. Under 5 Mortality rates, NDHS 2008

       Conventional health status indicators of life expectancy at birth (LEB), infant and

child mortality (IMR), and maternal mortality ratio (MMR) show considerable variation

when disaggregated according to income groups and geographic location. Rich urban

communities like those in Metro Manila, Cebu, and Davao, with access to modern

facilities, have outcomes comparable to those of developed countries – i.e., LEB over 80

years, IMR less than 10, MM less than 15. In contrast, poor rural communities, such as

those in Bicol, the Samar provinces and ARMM, have results that approach those of

least developed countries – i.e., LEB under 60 years, IMR over 90, MM over 150. 1

       Infants (period from birth to 1 year of age) from the poorest quintile die at twice

the rate of the richest during the neonatal period (birth to first 28 days of life), and at four

times the rate during the post neonatal (after 28 days to 1st year) and under 5 periods.

(see figure 1) The Child (1 to 4 years of life) mortality rate of the poorest is almost 10

times that of the richest.







            I       III      NCR IV B   VI      V III    X    XII A RMM
   Philippines II         CA R IV A   V    V II       IX   XI CA RA GA
Figure 2. Prevalence of wasting in children <5 yrs by
region, NNS 2008, data from FNRI

         Nutritional status is among the strongest predictors of childhood mortality. 2 The

same patterns of disparities can be observed from results of the 2008 National Nutrition

Survey (NNS) of the Food and Nutrition Research Institute (FNRI).

         The prevalence of childhood thinness or wasting, an indicator of severe acute

undernutrition, in ARMM is the highest in the country based on the 2008 National

Nutrition Survey. It is double that of neighboring Davao (Region XI) and more than twice

that of Cebu (Region VII) which has the lowest prevalence among the regions. (see

figure 2)

         Underweight prevalence, one of the hunger-related Millennium Development

Goals (MDG), increased from 24% in 2003 to 26% (2008) nation-wide, and the key to its

reduction will be to address hunger, illness and poverty in Regions like Zamboanga

(Region IX), Bicol (Region V), and MIMAROPA (Region IVB) where 1 in 3 children are

underweight. (see figure 3)









              I       III       NCR IV B   VI      V III      X      XII A RMM
     Philippines II         CA R IV A    V    V II       IX       XI CA RA GA

  Figure 3. Underweight Prevalence in children <5 years by
  region, NNS 2008, data from FNRI

         These disparities are the result of the following deficiencies in our health system:

            Basic health services as well as tertiary care for the majority of Filipinos are

             inadequate, fragmented, inefficient, and incomplete. At least in part due to

             this, for lowest income groups these services are largely inaccessible and


            The Philippines’ health sector is dominated by commercial interests of a

             segment of the system that is less driven by health outcomes but is primarily

             about bottom-line profits.

            Health personnel are insufficiently educated, inappropriately trained, and

             poorly motivated to address the health care concerns of most Filipinos in the

             setting in which they live. As a result, poorly compensated government

             health workers are unable to influence behaviors of their high earning private

           sector counterparts within the change-resistant environments of their

           respective professional organizations.

          Much of this commercial dominance of our health care system is the result of

           a failure, so gross as to constitute a default, of public financing for health. The

           combined weight of the uncoordinated spending for health by the national

           government, local governments and our national social health insurance

           program has been so low and so weak that it has driven our health system

           into a debilitating dependence on out-of-pocket payments by patients.

A comparison with neighboring countries

       The Philippines has lagged so far behind its neighbors in ASEAN in terms of rate

of mortality reduction that it may miss reaching its MDG 4 goal of reducing the under five

mortality rate by 2/3 from 1990 levels by 2015. Our rate of reduction has slowed

alarmingly particularly over the last 8 years (from 59 to 38 in the period 1990 - 2000;

from 38 to 34 between 2000-2008). Our country is already expected to miss its MDG 5

goal of reducing MMR to 1/4 the 1990 rate - a goal that Malaysia, Thailand and Vietnam

have already met - as well as the goal to reduce poverty, which is actually increasing. 3

Figure 4. U5MR of ASEAN countries (ranked by GNP per capita) 1990- 2008, UNICEF 2010

Figure 5. MMR of ASEAN countries 1990- 2008, WHO 2010

       The disparities are apparent in public health program coverage as well. (see

figures 6 to 9) Equity in coverage is a problem particularly for technology dependent

care. For example, ORT includes home fluids which can be given at home without

considerable external resources (unless restricted to ORS), but SBA & vaccines have

distribution issues in addition to allocation ones; antenatal care can be provided closer to

home so the equity gap is narrower than birth attendance. The provision of SBA is

particularly relevant to reducing MMR and neonatal MR, but needs to be coupled with

other facility interventions, as Thailand's experience shows.4

          Among our ASEAN neighbors, Thailand has the narrowest gaps and the highest

coverage levels. Yet even Vietnam appears to have surpassed us in terms of coverage

though not necessarily in narrowing equity gaps. Myanmar's immunization gap is

narrower than ours, while Indonesia is closing in on us at this time.5,6

      Comparison of ORT use for childhood diarrhea
 90      by lowest & highest income quintiles
 80          High







         Cambodia     Indonesia   Philippines   Thailand

Figure 6. Comparison of ORT use for childhood diarrhea by lowest & highest income

         Skilled Birth Attendance coverage
       by lowest and highest income quintiles





             Indonesia      Philippines         Vietnam
      Cambodia         Laos            Thailand
Figure 7. Skilled birth attendance coverage by lowest & highest income quintiles

           Antenatal care (at least 1 visit)
        by lowest & highest income quintiles






             Indonesia       Philippines         Vietnam
      Cambodia        Lao PDR           Thailand

Figure 8. Antenatal care (at least 1 visit) by lowest & highest income quintiles

                       Immunization coverage by lowest
                          & highest income quintiles
             low est
100          highest




       Cambodia Indonesia   Lao PDR   Myanmar Philippine   Vietnam   Thailand

Figure 9. Immunization coverage by lowest & highest income quintiles

Why universal health care?

        To address these deficiencies, radical reforms in all components of the Philippine

health system are required. Such reforms must be aimed at achieving UNIVERSAL

HEALTH CARE in the country over a reasonable period of time (10-15 years). This

means that every Filipino should have access to high quality health care that is efficient,

accessible, equitably distributed, adequately funded, fairly financed, and directed in

conjunction with an informed and empowered public. The overarching philosophy is that

access to social services is based on need and not on the capability to pay. This,

ultimately, places people at the center of socio-economic development.1

        Universal health care is the government's mandate to ensure every Filipino's

right to health. It is a health system imperative because it improves the efficiency of the

nation's human resources. And it is a society's moral responsibility - that the rich, the

able and the powerful, in solidarity, support the poor, weak and marginalized.

        Hence, UHC goes beyond just providing universal insurance coverage, which

only reduces the financial barriers (affordability) to health. A more comprehensive

approach involving the health and societal systems need to be mobilized to reduce

physical (availability), cultural (accessibility) and other barriers to care.

        This paper proposes a UHC model for the Philippines adapting the 6 building

blocks of a health system: 1) health financing, 2) health human resources, 3) regulation

of drugs and other health products, 5) health service delivery, and 6) governance in

health.7 Each of these building blocks will be described in the succeeding chapters. Each

chapter includes proposals for their reform in order to achieve UHC.

A brief history of the Philippine health care system

       The Philippine health care system can be described as pluralistic, having evolved

from indigenous healing practices through several centuries of exposure to varying

colonial health systems. Remnants of these different influences can be appreciated in

the values and practices of Filipinos regarding health. Health care is provided by a

mixture of public and private sources, with utilization mainly decided by capacity to pay.

The system is fragmented in several ways: 1) there is fragmentation within the public

system as the Department of Health has no direct link with local government service

providers, 2) among the local governments, the provincial health system has no direct

link with the city and municipal health systems that are within its geographic area, 3)

government links with the private sector are limited to licensure by the DOH and

accreditation by Philhealth, 4) the referral system operates largely on a personal level,

depending on who one knows at the next level of the health system hierarchy.

       The inequities in health care delivery can be traced historically to the Spanish

colonial era, when health care provided to the Spaniards and the native elite differed

from that available to the rest of the populace. (see appendix 1) Attempts at public health

intervention have even been interpreted as efforts to contain the spread of epidemics

(primarily cholera in the 1800s) from the poor to the well-off.8 While efforts to increase

access to health care were made during the American and early Republic periods, these

continue to be challenges up to the present.

       There are many laudable initiatives in the history of the Philippine health care

system, and many firsts in Asia or the developing world achieved (for example having a

government entity solely focused on Nutrition policy - the NNC) but the reach of these

efforts have fallen short of expectations. The vision of Universal Health Care comes on

the heels of multiple attempts at health system reform.9,10,11 By this time it is hoped, we

have learned from our past and are ready ensure equity in health.

A brief overview of UHC in other countries

        Appendix 2 provides an overview of the different health systems of countries

considered to have achieved UHC. There are essentially three sources of financing:

taxes, health insurance and out-of-pocket (OOP). Countries with UHC have striven to

reduce OOP in order to increase access to health care and to make it more equitable.

The degree to which taxes or health insurance are used to meet health expenditures

reflects the values and philosophies of the different countries. On one end of the

spectrum is Cuba, where government foots the bill for all its citizens and for (almost) all

their health expenses,12,13 and the other extreme, possibly represented by the Thai

model, has health insurance paying for most, if not all, expenses. However, Thailand's

government pays the premium for majority of its population and owns and runs majority

of the hospitals and health facilities - so in essence, government still provides the bulk of

total health expenditure.14,15

        The organization and management of the health systems varies, with Cuba,

again on one end, where all facilities are government run. 12,13 South Korea may be at the

other end, where health facilities are mostly in private hands. 16 However, a common

feature is the degree to which the health system is regulated in order to meet socially

determined goals of equity and access. Among countries where government owns and

runs the facilities, the concern is usually about quality of care (for example, waiting time,

distribution of manpower and services). For those where the facilities are predominantly

private, the main issue appears to be cost-containment for the system as a whole.

       Governments employ means tests and other methods (for example, age, nature

of employment, risk status like pregnancy) to determine who needs services for free or

to be subsidized and by how much. Different systems vary in the services covered,

although catastrophic care appears to be universally covered. The extent to which

governments themselves provide care also varies; health providers may not necessarily

be government employed, while pharmaceuticals and other health products/devices,

often in private hands, are covered through various schemes.

1. Blueprint for Universal Health Care 2010-2015 and Beyond. University of the

   Philippines Forum. http://www.up.edu.ph/upforum.php?i=289. Accessed December

   7, 2010

2. Pelletier DL, Frongillo EA Jr, Habict JP. Epidemiologic Evidence for a Potentiating

   Effect of Malnutrition on Child Mortality. American Journal of Public Health. 1993


3. The Millennium Development Goals Report 2010. United Nations, 2010.

4. Acuin CS, Khor GL, Liabsuetrakul T, Achadi EL, Htay TT, Firestone R, Bhutta ZA.

   Maternal, neonatal, and child health in Southeast Asia: towards greater regional

   collaboration. Lancet. Article in press.

5. Gwatkin DR, Rutstein S, Johnson K, Suliman E, Wagstaff A, and Amouzou, A.

   Socio-Economic Differences in Health, Nutrition, and Population in Cambodia. The

   World Bank, September 2007.

6. Countdown 2008 Equity Analysis Group, Boerma JT, Bryce J, Kinfu Y, Axelson

   H, Victora CG. Mind the gap: equity and trends in coverage of maternal, newborn

   and child health services in 54 Countdown countries. Lancet. 2008 Apr


7. Everybody’s Business: Strengthening Health Systems to Improve Health Outcomes.

   World Health Organization, 2007.

8. De Bevoise, Ken. 1995. Agents of apocalypse: epidemic disease in the colonial

   Philippines. Princeton University Press, Princeton, New Jersey

9. National Objectives for Health, 2005 – 2010. DOH Manila, 2005
10. Health Sector Reform Agenda Philippines, 1999-2004. HSRA monograph series no.2

   Department of Health, Manila, Dec. 1999.

11. Fourmula One (F1) for Health. Department of Health, 2006.

12. Ochoa, FR and Visbal LA. Civil society and health system in Cuba. A case study

   commissioned by the Health Systems Knowledge Network, World Health Organiztion

   Commission on the Social Determinants of Health, 2007

13. Health in the Americas. Pan American Health Organization, 1998

14. Wibulpolprasert S. Thailand Health profile 2005-2007. Bureau of Policy and Strategy,

   Ministry of Public Health. Thailand, 2007.

15. Sakunphanit T. Universal Health Care Coverage Through Pluralistic Approaches:

   Experience from Thailand. Health Care Reform Project, National Health Security

   Office, Thailand, 2006.

16. Soonman K. Thirty years of national health insurance in South Korea: lessons for

   achieving universal health care coverage Health Policy Plan. 2009;24(1): 63-71 first

   published online November 12, 2008

17. Hassenteufel P and Palier B. Towards Neo-Bismarckian Health Care States?

   Comparing Health Insurance Reforms in Bismarckian Welfare Systems, in Reforming

   the Bismarckian Welfare Systems (eds B. Palier and C. Martin). Blackwell Publishing

   Ltd. Oxford, UK, 2009.

18. Brown LD. Comparing health systems in four countries: lessons for the United

   States. Am J Public Health. 2003 Jan;93(1):52-6.
Appendix 1: A History of the Philippine Health System

                 HEALTH FINANCING                  HEALTH HUMAN                 INFORMATION              GOVERNANCE &                   SERVICE DELIVERY
                                                   RESOURCES                    SYSTEMS                  REGULATION
PRE-             Fee-for service. “Fee” was        Each village had its own     Oral traditions          Healers had concurrent         Done by healers. Very local in
COLONIAL         anything of value agreed upon     healer; there were also      committed to             functions as village elders    scope.
“No health       by the healer and patient         itinerant healers.           memory & passed          or priests
care system;                                                                    on via
as ”                                                                            apprenticeship
SPANISH          Religious hospitals sourced       Health care provided by      Pen and paper.           Largely by religious orders,   Hospitals ran by religious orders
“Feudal health   their budget from revenue         native healers,              Data not                 until the 19th c when the      catered to the elite, soldiers and
care system”     which included donations, etc.    paraprofessionals            standardized &           beginnings of public health    the indios.
                 Spanish government provided       (vaccinators, mediquillos,   unreliable               system seen through local
                 some support to medicos           etc) & religious orders                               health boards, sanitary        Private practice begun in the late
                 titulares assigned to the         until the mid 1860s when                              inspections, & quarantine      19 century
                 provinces                         the University of Santo                               measures were set up
                                                   Tomas opened its
                                                   medical school to native
AMERICAN         Largely fee for service, except   1905 – UP College of         Data kept per            1898 – Military Board of       1907– Philippine General
“Health care     for government facilities that    Medicine and Surgery         hospital/ facility       Health to care for the         Hospital was established and
system           served the poor for free          was established, with the    Centralization still a   injured American soldiers      opens in 1910.
established in                                     Johns Hopkins as             problem
1930;                                              blueprint. Nurses                                     1902 – worst cholera           1933 – Community Health and
                                                   produced in Philippine                                epidemic hit the country.      Social Centers established.
                                                   Normal School.                                        Led to the establishment of    These were the precursors of
                                                                                                         Civilian Bureau of Health      Rural Health Units/ Centers
                                                   Several graduates of UP                               and Bureau of                  During the Commonwealth,
                                                   Medicine were sent                                    governmental laboratories.     Bureau of Health had 11
                                                   abroad for further                                    Sewage system and water        community and social health
                                                   training. Several                                     supply improved                centers, 38 hospitals, 215
                                                   milestones in medicine                                                               puericulture centers, 374 sanitary
                                                   happened in this era.                                 Health System centralized;     divisions, 1,535 dispensaries &
                                                                                                         policies such as Food &        72 laboratories.
                                                   Medical associations                                  Drugs Act (1914) enacted
                                                   began to flourish; PMA
                                                   started in 1903
Japanese         Some hospitals continued to       Health professional          Many health              Dissolved the National         Many services could not be
Occupation       operate under the Japanese -      training was disrupted       records & facilities     Government and replaced it     continued during the war &
                 backed government with            during this period           were destroyed.          with the Central               Japanese Occupation.
                 services given for free                                                                 Administrative Organization
                                                                                                         of the Japanese Army.
                                                                                                         Health was relegated to the
                                                                                                         Department of Education,
                                                                                                         Health and Public Welfare.
              HEALTH FINANCING                   HEALTH HUMAN                 INFORMATION             GOVERNANCE &                   SERVICE DELIVERY
                                                 RESOURCES                    SYSTEMS                 REGULATION
EARLY         Health services in government      The Philippine Medical       Disease                 In 1947 the DOH was            In 1954 the RHU Act (RA 1082)
REPUBLIC      facilities provided free to all;   Act of 1959 (RA 2382),       Intelligence Center     created,as well as a           institutionalized the Rural health
              private care paid for out-of-      followed by the 1st          established in 1960     Bureau of Hospitals and a      Units, tasked to provide the ffing
              pocket on a fee-for-service        Philippine Midwifery Act     "to assess the          Bureau of Quarantine . In      basic services: Maternal & Child
              basis.                             (RA 2644) in 1960 &          state of the nation's   1948 the Institute of          Health, Environmental Health,
              GSIS created                       other laws governing &       health, to supervise    Nutrition (now FNRI); & in     Communicable Disease Control,
                                                 regulating the practice of   activities and          1963, a Food & Drug            Vital Statistics, Medical Care,
                                                 different health             training in             Administration (later known    Health Education & Public
                                                 professions. MDs             epidemiology and        as BFAD) were established.     Health Nursing.
                                                 continue to train in US,     health statistics       1958 – EO 288, partial
                                                 with some choosing to        and to give advise      decentralization of DOH
                                                 migrate.                     to the health           with creation of 8 Regional
                                                                              secretary".             Offices and Directors
MARTIAL LAW   Medical Care Act of 1969           Migration of MDs to US       An integrated           Focus on Health                Nutrition & child health
              implemented; health takes up       increases                    health information      Maintenance. Specialty         emphasized with the establish-
              2.8% of GNP                                                     system was              hospitals were built (Heart,   ment in 1974 of NNC & in 1976
                                                                              attempted but not       Lung, Kidney, PCMC,            of EPI. Primary health care
                                                                              continued               RITM)                          started in 1979. Integrated Health
                                                                                                                                     Care Delivery System mandated
                                                                                                                                     in 1982
DECENTRALIZ   National Health Insurance Act      Continued diaspora of        FHSIS developed         Generics Act passed in         Inter-local health zones started in
ATION         of 1995. Philhealth created.       health workers, now          by 1990 & modified      1988; with the LGU code of     1999
              PhilHealth assumed the             involving nurses & other     in 1996.                1992, health care was          2003- TB DOTS implemented.
              responsibility of administering    health professionals with    National Telehealth     devolved.
              the former Medicare program        migration not just to the    Center of UP-NIH        Health Sector Reform
              for government and private         US but to other countries    established             started in 1999
              sector employees from the          as well
              Government Service
              Insurance System in October
              1997, from the Social Security
              System in April 1998, and from
              the Overseas Workers Welfare
              Administration in March 2005.
Appendix 2: Characteristics of Countries with Universal Health Care

Country      Health service organization         Governance & Regulatory                  How is health financed?              Who benefits & what are paid
(references)                                     context                                                                       for?
Cuba         Integrated, organized, led and      Cuba is a socialist state. Oriented      The National health system           All Cubans are covered with full
(12, 13)     funded under the direction of       towards primary & preventive             provides services for free to all.   medical and dental services,
             the State, with operations          care, community participation is         Government covers almost 90%         including hospitalization and
             decentralized into provinces &      central to its health organization &     of health expenditures in the        prescription drugs
             municipalities                      mobilization efforts.                    country, the rest come from out-
S Korea      Providers (MDs & hospitals) are     There is no gatekeeping system.          Regulated fee for service pays       Although policy for mandatory
(16)         mostly private, paid for by         Although there is now a single-          services administered through a      health insurance was enacted
             insurance-regulated fees for        payor natl health insurance              national health insurance            since 1976, universal coverage
             services; services not covered      system, the mostly private               system as single payor, with         was achieved only in 1989 with
             are charged at market rates.        providers prefer unregulated             govt subsidizing insurance for       inclusion of the self-employed.
                                                 services.                                the informally employed, small       Curative services, biannual
                                                                                          business employees (partial          checkups and vaccination are
                                                                                          support) and the poor (full          covered. Co-payments are
                                                                                          support) . Govt' accounts for just   discounted for the poor, >65 yrs,
                                                                                          53% of THE. OOP is high              and for chronic & catastrophic
                                                                                          relative to other OECD               conditions. Co-pay for out-patient
                                                                                          countries.                           services are higher for hospital
                                                                                                                               than for clinics.
Thailand     The Thai health system is a mix     The central government sets              Government pays insurance for        All Thais are covered. Under the
(14, 15)     of public & private- the govt       policies & regulates the health          3/4 of pop’n not covered by          Universal Coverage Scheme &
             provides majority of hospital and   system, with health offices in-          employment schemes;                  SSS, reimbursement for curative &
             most community level care           charge of operations at provincial,      Employees, employers &               capitation arrangements for
             while private sector provides       district & subdistrict levels. Private   government share in the              preventive care are made with
             about 1/3 of hospital care &        hospitals are mostly in urban            insurance of those employed          contracted health providers.
             urban specialist                    areas.                                                                        Private bed, special nurse &
                                                                                                                               eyeglasses are not covered by
UK, Nordic   Primary care trusts link          Government owns and regulates              General revenues (taxes) pay         All citizens are covered for
countries    community, specialty and          health care providers                      for 86% of health expenditures       hospital & ambulatory care, as
(17, 18)     hospital care, with GPs (under                                                                                    well as drugs, but dental care and
             govt capitation contracts) acting                                                                                 glasses are not well covered
             as gatekeepers - all are state
             employed. QOC is a big issue
Country      Health service organization         Governance & Regulatory               How is health financed?             Who benefits & what are paid
(references)                                     context                                                                   for?
Germany,     Germany has regulated private       Health insurance is based on the      Highly regulated, universal,        In France, about half of
France       health providers; France has        principles of social solidarity and   multi-payer health insurance        ambulatory care, dental & eye
(17, 18)     networks of a mix of private &      risk pooling. Government tightly      systems pay for ~80% of health      care are covered by
             public providers and services -     regulates the rules by which          expenditure, rest is paid through   supplementary insurance. Only
             patients are free to choose their   providers negotiate fees with         private insurance and out of        the richest 25% of Germans have
             provider and level of care within   insurers or sickness funds.           pocket. Taxes pay for those not     supplementary insurance, as
             the terms of their insurance        Doctors' unions negotiate fees &      covered by employment               mandated by law.
             benefits or pay OOP if beyond       regulatory conditions on behalf of    insurance.
             these terms. Cost containment       MDs
             is a big issue
Canada       National policies protect           Most physicians are private           Publicly administered, single-      Canadians are covered for "all
(18)         solidarity & community interests,   practitioners who are paid by         payer (govt from taxes) national    medically necessary services",
             while provinces are responsible     Medicare at fee-for-service rates.    health insurance systems pays       including some prescription drugs.
             for operations.                     These rates are negotiated            for services. Govt accounts for     Private insurance pays for dental
             Community care access centers       through provincial medical            about 70% of health                 service, rehabilitation care, private
             are the hub of service provision    associations. Most hospitals are      expenditures, rest from private     care nursing, rest of prescription
                                                 non-profit, paid with provincial or   insurers and out of pocket.         drugs
                                                 regional budgets through
                                                 institutional agreements.
                  Alberto G. Romualdez, M.D.

University of the Philippines Manila National Institutes of Health

Overview (Introduction)

       Overall governance of the Philippine health system is vested in the national

government through its Department of Health (DOH). The DOH is headed by a cabinet-

rank Secretary of Health appointed by the President of the Republic of the Philippines

and concurred in by the Commission on Appointments of the Philippine Congress

(Legislature). It exercises technical supervision over all agencies, institutions, groups,

and individuals who provide health services or are otherwise considered as stakeholders

of the health system through national health policies, standard setting, and rules and

regulations covering the provision of health care. These include entities of the national

government, local government health services, as well as private sector health providers

including civil society or non-governmental organizations.

       DOH is the government’s overall policy formulation and implementation agency

in health. To support this function, DOH oversees a number of attached agencies

responsible for areas of special concern in the health sector in which the Secretary of

Health is chair or co-chair of the respective governing bodies. Among these are Phil

Health for health care financing, the National Nutrition Council for nutrition policy, and

the Population Commission for population issues and reproductive health.

       DOH also directly administers and controls a network of national hospitals that

provide tertiary medical care. In addition it also has technical authority over other

national government agencies that maintain facilities that provide health services to

particular groups or populations (e.g., Defence and Education Departments and the

Judiciary system).

       Governance of local government health facilities and services is exercised by

DOH through its programs for technical assistance and support as well as by virtue of its

regulatory powers and the accreditation process of the Philippine Health Insurance

Corporation (Phil Health). In addition, DOH serves as a key link with multilateral and

bilateral international donors with interests in the health 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. This

dominant private sector is also technically supervised through the regulatory agencies of

the DOH. The National Health Insurance Program through Philhealth and its benefits

programs also has a significant role in the financing of the private hospital system.

       As well, DOH has some influence on a largely unseen “informal” health system of

alternative health care through the Philippine Institute of Traditional, Alternative and

Complementary Health Care (PITAHC).

Key issues and concerns

       The lack of a clearly articulated overarching philosophy of health service

provision that explicitly addresses the issue of health equity and its social implications is

a major deficiency of the Philippine health system and its governance structures. Such a

deficit results from a firmly entrenched top-down approach to policy formulation, planning

and management of a health care delivery system that is dominantly supply-side driven

and provider oriented.

       As a consequence, the attempt to introduce participatory processes in health

decision-making and policy-formulation with the adoption of the PHC approach in the

early eighties faded out with the emergence of “selective primary health care” and the

resurgence of technology-dominated vertical approaches. The present governance

infrastructure, even as decentralized through devolution, does not allow for effective

community participation which was an important element of the Primary Health Care


Governance Functions within the Health System

       The concern for equity and the provisions for community participation should be

built into the mechanisms for discharging the core governance responsibilities in health

at all levels –from highest central level to the most peripheral units of implementation. In

the present Philippine situation, core governance responsibilities (or functions) are

currently exercised as follows:

      Policy formulation and strategy development at all levels -

            o   Within the executive branch of government there are a number of

                mechanisms by which DOH can exercise its health policy and

                coordination functions. Cabinet meetings provide opportunities for direct

                interaction with the President and the heads of the other government

                departments that carry out health or health related activities including

                other social services such as education, welfare, economic development,

                and security. Membership of these agencies in other coordinating bodies

                and attached agencies of DOH provide other venues for policy

                formulation and coordination of strategies.

            o   DOH cooperates and provides technical support to key committees of the

                two chambers of the Philippines Congress. Through such committees, the

                health sector provides inputs to legislation on health whenever the two

                branches of government agree on the need for such.

       o   There are presently no formal mechanisms for providing technical health

           information and communication support for the judicial branch of


   Planning of health programs and mechanisms for health service delivery –

       o   At the national level, DOH develops plans for supporting priority public

           health programs such as TB DOTS, Immunization, and Maternal

           Neonatal and Child Health and Nutrition. It has also formulated the

           National Objectives for Health that provides inputs to program planning at

           different levels. The DOH also plans the development of capabilities of

           national service outlets such as retained hospitals

       o   At the local level the DOH has developed technology for the formulation

           of local investment plans for health. Provincial investment plans for health

           (PIPH) initiated in some provinces have recently been rolled out to all

           provinces. City and municipal level planning processes are also

           programmed within the year.

       o   In the private sector, the DOH together with local governments can

           influence planning of facilities and services through regulations on the

           distribution and location of such facilities and through standard setting

           and licensing functions.

   Managing the health sector –

       o   The DOH hospital system is presently managed through direct interaction

           between the Secretary of Health and the hospital chiefs. The hospitals

           also communicate directly with the Budget Department as well as

           individual congressmen who provide them with additional funds. A policy

           of fiscal autonomy and income retention has led to unprecedented

           dependence on user fees for financing resulting in exclusion of non-

           paying population groups.

       o   Management of public health programs (including those of national

           concern such as communicable disease control) is discontinuous with

           local governments responsible for implementation at grass-roots level as

           mandated by the Local Government Code of 1992. As well, direct

           management of hospital services up to secondary and tertiary levels has

           been devolve to provincial governments. Although local health boards

           have been set up at both levels, these have been largely non-functional in

           practice and even those that do exist lack powers and authority to provide

           effective   consumer   and    community    inputs   to   governance   and


   Public accountability and transparency

       o   Because of the extremely confused reporting lines, satisfactory public

           accountability and transparency for health outcomes and key result areas

           of health programs are nearly impossible. Administrative and financial

           accountability mechanisms are better developed but still remain out of

           public reach (at community level).

   Generating and interpreting intelligence and information

       o   The present system for data gathering as well as analysis and use of

           information is antiquated.    Information technology is inadequate and

           inappropriate at all levels but especially at the barangay and community


      Coalition building within and outside health sector

           o     DOH and a number of local government health offices maintain close

                 links to established civil society organizations but these are generally at

                 program level. There are however no existing mechanisms to seek out

                 and develop such linkages at policy levels.      Peoples’ and grassroots

                 organizations have     only sporadic opportunities to        participate      in

                 governance functions at any level.

      Coordination of International Assistance

           o     DOH through its Bureau of International Health and Cooperation has

                 overall responsibility for coordinating externally funded health activities

                 particularly those undertaken by official multi and bilateral development

                 organizations.    DOH is also the official contact of the World Health

                 Organization which participates in international health coordination on the

                 official donor side.

Recommendations for Improving Governance

1. A clear articulation of an overall philosophy of health service provision that explicitly

   addresses the issue of equity:

      An executive order addressed to all government agencies concerned with health

       should be issued. The EO will define health equity as equal and just access to

       health services for all Filipinos regardless of income.        It will also direct the

       mechanisms to reform the health system to achieve equity in all the six building


2. Installation of an effective participatory process in decision-making and policy-

   formulation in health along the lines of the Primary Health Care approach:

      The system of PHC committees at community, LGU, regional, and national levels

       in place in the 80s should be revived. These bodies should have real power over

       health policy formulation, decision-making, and management of health programs

       and facilities.

      Additionally, regularly monitoring of public perceptions and opinions on health

       matters should be a standard component of implementing mechanisms for

       policies, programs and projects.

3. Development of Indicators of Good Governance in Health

      The concept of good governance in health is a recent development and there few

       established indicators for its measurement.      In general, the indices thus far

       developed are derived from management systems and as such tend to reflect

       top-down approaches.

      It is recommended that policy issuances, program performance, and other

       functions of leadership and management be analyzed and evaluated from the

       perspectives of the various people-centred domains of health stakeholders.

      Indicators of equity and people participation should be emphasized.

      Assessments should take into account the social determinants of health as

       factors affecting health equity.
Health Information Systems
                      Alvin B. Marcelo, M.D.

                     Julian M. Cañero, M.D.

  University of the Philippines Manila National Telehealth Center


       Information has been identified by the World Health Organization as one of the

pillars/building blocks for strengthening health systems. 1 This is in recognition of the

crucial role of information systems in supporting decision-making at many levels of the

health sector. Indeed, valid and reliable information is requisite for the delivery of more

effective, efficient and equitable health care. 2 This makes health information

management one of the cornerstones of universal health care. If properly designed to

address health inequities, health information systems can assure that every Filipino will

have access to quality healthcare and to an effective, efficient, and sustainable health


History of the Philippine Health Information System

       As early as the 1960s, the Department of Health (DOH) already operated a

national health information system. This was revised slightly in 1984 to reflect the shift in

strategy for towards Primary Health Care, a policy adopted by member states of the

World Health Organization, including the Philippines. 2

       In 1989, the Field Health Services Information System (FHSIS) was first

implemented to replace the old system. It mandated field personnel working in the local

Barangay Health Stations (BHS) or Rural Health Units (RHU) to collect data for the

different national health programs. At the time, data collectors were burdened with

submitting as many as forty different forms yearly. With the devolution of health services

to the Local Government Units (LGU) in 1992, there was deterioration of the quality of

management and services, poor staff morale, deteriorating infrastructure and lack of

financing of operational costs and services. 3 This led to the design and implementation

of the Modified Field Health Services Information System (MFHSIS) in 1996 which

reduced the number of forms submitted from 40 to only 7 per year. In 2001, the system

further evolved into the Distributed Field Health Services Information System (DFHSIS)

and was piloted in 6 different sites. However, there were multiple problems encountered

with the system and was thus, not scaled nationwide. 2

       In 2007, the Philippine Integrated Disease Surveillance and Response (PIDSR)

Project was created to provide a framework and to propose a comprehensive approach

to health information systems development. This was followed by a DOH-led Philippine

Health Information Network (PHIN) in 2008 which designs and implements the Philippine

Health Information System (PHIS). In terms of the implementation, the specifics and

operational aspects of these programs at the field level are not yet clearly documented.

Specific Problems of the Philippine Health Information System

       The management of health information in the Philippines is at best rudimentary

and ministerial because data collectors perform their work as a matter of compliance

without regard for the information's usefulness for decision-making at all levels. Several

factors were found to have caused this.

Paper Based and Manual Reporting Systems

       Health information systems in developing countries in general are paper-based

and manually driven. This is best represented by the tally sheets of cases filled up by

health workers in health centers weekly and monthly. Each vertical DOH program (e.g.,

maternal care, expanded program on immunization, etc.) is represented by its own

separate tally sheet and corresponding logbook. This results in health care workers at

the grassroots level being overburdened with manually recording and computing

statistics for all of these programs. In turn, delays ensue because health care workers

give it low priority compared to patient care. By the time the tally sheets find their way to

higher offices, several weeks or months may have already passed. 4

All-or-none Phenomenon

        As a matter of convenience, a health statistic report is considered complete only

when all of its component data are accounted for. This means that unless all barangays

(villages) submit their tally sheets, the municipal report cannot be labeled complete. The

provincial report in turn cannot be completed without data from all the municipalities.

Under this all-or-none scheme, the delay of a single barangay can potentially hinder the

release of the much needed national health report. This phenomenon occurs all around

the country which results in national statistics being delayed for more than a year. 4 In

fact, the latest national health report still dates back to 2008, as of this writing.

Hierarchical Flow

        Health data is first observed and compiled at the barangay level then submitted

to the Municipal Health Officer before it is compiled yet again and submitted to the

Provincial Health Officer. This system was meant to allow local health officers to detect

local anomalies and trigger them to take immediate action. This system however,

deprives higher health offices the timely data they need in order to effect national health

policy changes. Furthermore, as data passes through each level, it becomes susceptible

to consolidation errors as well as deliberate mishandling of data. This results in higher

level data becoming poorer in quality. 4

Target-based Reporting

       Health care workers at the grassroots level are generally aware of targets of

national health programs and are expected to meet them. For example, a national target

for a program may set an arbitrary 80% coverage for the current year. Some indifferent

health care workers may report immunization coverage statistics that match their target

even if their actual data is lower. Setting targets for data reports is both counter-

productive and manipulative. It explicitly suggests to health workers what numbers are

expected while the paper-based reporting implicitly provides them with the freedom to

edit their results without accountability. This results in poor quality data which are used

for decision-making like procure medical supplies. These also become basis for national

policy decisions.4 In some cases, poor quality data has resulted in over-procurement of

vaccines that were essentially wasted because the drugs exceeded the number of

children to immunize.

Mixing Good with Bad Data

       While some health care workers at the grassroots level (such as those described

earlier) are indifferent about data quality, others are diligent. But when these two sources

(good and bad quality data) are combined, the consolidated result becomes

questionable and even useless. Furthermore, health workers who are meticulous about

their work become demoralized when they learn that their hard work has been rendered

practically useless by colleagues who are known to fabricate their reports. 4

Disintegrated and Paradoxical Vertical Programs

       The Department of Health delivers various vertical programs such as maternal

care, child care, family planning, TB, malaria, leprosy, and many others. Each of these

programs has its own reportorial requirements, own sets of forms and logbooks for the

use by the health care workers. A patient may be recorded in more than one logbook if

he presents with several   conditions (e.g., a pregnant woman under treatment for TB).

This can result in bloating the number of patients in the center's census if the number of

records in the logbook is used to count the number of patients served.

       Some programs contradict each other's objectives. In the maternal care program,

an increase in the number of pregnant women is expected (given the rise in population

growth). On the other hand, the family planning program also expects an increase in the

number of women using contraceptives. However, we know for a fact that an increase in

the use of contraception should result in a decrease in the number of pregnancies.

When these targets are not met, some health care workers are compelled to just invent

numbers to fit the program’s expectations. 4

Data Cemeteries

       At present, a typical health center is like a data cemetery, that is, it has piles of

logbooks and paper records gathering dust over the years. These logbooks once

archived are forgotten and not used for planning or for analysis. Without easy access to

their census, health care workers in the health center are not aware of the incidence and

prevalence of diseases in their communites. 4

Lack of Computerized Health Information Standards

       While the DOH and Philhealth maintain their respective computerized health

information systems, they are not standards-based and cannot easily exchange data

with each other. There is also lack of a roadmap and leadership as to who should build

and manage the national health information system.

What is e-Health?

       E-health is a relatively new term for an emerging field in the intersection of

medical informatics, public health and business, referring to health services and

information delivered or enhanced through the Internet and related technologies. 5 The

World Health Organization defines it as a cost-effective and secure use of information

and communications technologies in support of health and health-related fields,

including health-care services, health surveillance, health literature, and health

education, knowledge and research. It currently encompasses several fields:

   ●   Electronic Medical Record – a computerized legal medical record used within a


   ●   Electronic Health Record – a collection of electronic medical records which refer

       to a single patient

   ●   Patient Health Records – a patient controlled electronic medical record (i.e.

       Google Health)

   ●   Telemedicine – the delivery of health care to a remote site through the use of

       telecommunications technologies

   ●   Telehealth – the delivery of health services (not limited to clinical care) through

       the use of telecommunications technologies

   ●   Health Informatics – resources, devices and methods required to optimize the

       collection, storage, retrieval and use of health information

   ●   Consumer Health Informatics – analysis, study and implementation of methods

       for making health information accessible to consumers / patients 6

   ●   E-learning – provision of educational materials and virtual classroom interaction

       through telecommunications technologies

       Due to the rapid development of the field, these are only a few examples of the

sub-domains which comprise the general term e-Health.

e-Health as part of the 6 building blocks of the WHO framework for improving

health systems

       The WHO proposed framework for improving health systems consists of 6

building blocks: service delivery; health workforce; information; medical products,

vaccines and technologies; financing and leadership and governance. Furthermore, it

characterizes a well-functioning health information system as one that ensures the

production, analysis, dissemination and use of reliable and timely information on health

determinants, health system performance and health status. 1



   Workforce                                                              Financing

Figure 1. Interactions of the 6 building blocks for improving health systems

e-Health as part of the solution to the problems of the Philippine Health

Information System

       A health information system (HIS) is an integrated set of components that work

together to provide support for decision making in healthcare. Because of the multi-user,

multi-level perspectives of HIS, designing and implementing them are challenging.

Literature is rich with documented failed HIS implementations. 7

       In general, most failed HIS reveal unfilled gaps in the knowledge and skills of all

stakeholders of the health system. A poorly designed HIS will be unable to provide

support for the decision making of public health managers, clinicians, and patients

whereas an effective one clearly creates value for all of these stakeholders. An effective

HIS is built through a process that starts with understanding what decisions need to be

made by these various players and be able to deconstruct them into the data elements

for collection. For purposes of Universal Health Care therefore, a deep understanding of

decisions that pertain to guaranteeing the comprehensiveness of healthcare must be

defined clearly at the outset so that appropriate health information systems can be built

that can deliver this promise. Figure 2 shows how responsive health information systems

should be designed: starting from knowing what decisions or actions are to be made and

deconstructing these sequentially into knowledge and further into its information and

data components. Following this deconstruct paradigm, the resulting health information

systems are more able to address the needs of decision makers at different levels of the


     Data             Information               Knowledge                Decision

Figure 2. The Construct-Deconstruct Paradigm

Deconstructing Healthcare: Information at the Point-of-Care

       The collection of health information begins with an encounter at the point of care.

Although these encounters come in many forms (in clinical settings or in household

surveys), those that have most impact to the universality of healthcare are those that

document services at the point-of-care. For example, a health care worker will interview

patients about their symptoms, perform a physical exam as well as request for some

necessary laboratory tests. Every data collected from the patient contributes to his

health record and helps the health worker take appropriate actions or make decisions

about the level of care to provide. The health record becomes the fiduciary tool to

document the services (and their quality) delivered to a person. The concept of universal

health care is hinged on documentation of quality services received by patients from

their providers as depicted in their health records.

Constructing the Public Health Information System from Point-of-Care Data

       Health information systems do not end at the point-of-care. When several patient

records are combined and analyzed in a facility, they can provide information on the

performance of the institution. While the collection process may have ended for the

clinician and the patient, focus then shifts to the public health professional who will

consolidate these individual data to find patterns that may be emerging from a

population. The public health information system is then built from point-of-care data.

Although designed and collected separately, individual level data in the clinics and

facilities become the building blocks that form the larger public health information

system. It is this multi-purpose, multi-stakeholder nature of health information (individual

at one level yet public at another) that makes health information systems complex and

difficult. The varying needs and agendas of clinical and public health stakeholders, if not

properly addressed, can result into disintegration and information silos in different parts

of the health system.

Telemedicine: Providing Access to Health Services

        The World Medical Association defines “telemedicine” as: “the practice of

medicine over a distance, in which interventions, diagnostic and treatment decisions and

recommendations are based on data, documents and other information transmitted

through telecommunication systems.”8 It is a thoroughly studied discipline that dates

back to the initiatives of the National Aeronautics and Space Administration (NASA) to

monitor vital signs of astronauts in space. It has since evolved into a myriad of

applications ranging from telemetry to telesurgery. Evidence shows substantial benefits

from telemedicine for patients in remote hard to reach areas. 9

        If universal health care means being able to connect every citizen to the health

system, then access becomes a fundamental principle that is needed to guarantee that


A Reference Information Model for Healthcare

        The complexity of modeling health information challenges designers and

architects of health information systems. While most transactions will be done by local

health workers, more sophisticated analysis will be made by higher level experts. A

standard dataset is necessary to guide both field workers and central epidemiologists in

the way they manage their information.

        The minimum data set to document service provided (which we may call the

“service data atom”) are the following:

    1. Patient

       2. Provider

       3. Service provided

       4. Time

       5. Location

          These five data elements, having been found to be fundamental to documenting

health care and universal access, should then advise government of the health

informatics standards that are needed to create interoperable information systems, to


       1. Client registry: a master list of all patients and their identifiers

       2. Provider registry: a master list of all providers and their identifiers

       3. Terminology registry: a list of all attributes relevant to documenting healthcare.

          This terminology registry will contain the canonical codes and names for the main

          services rendered by providers to patients (e.g. antenatal care, BCG vaccination,

          measles vaccination).

       4. Standard date and time formats

       5. Standard geographic codes down to the barangay level; and if available, to the

          latitude and longitude using a standard base map


          The current national health information system leaves much to be desired.

Despite substantial internal and external investments, health information systems are

still disintegrated and non-interoperable. Lacking access to a blueprint or enterprise

architecture, implementers are left to their own designs and build systems that will not be

able to communicate with each other. The Department of Health must prioritize the

creation of the enterprise architecture to enable the participation of a larger group of

implementers in both the public and private sector.

       With this blueprint, the Department of Health then needs to define the health

informatics standards that will meet the requirements of the enterprise architecture. With

these standards, implementers will be constrained to operate within a clear set of rules

which, if fully complied, will guarantee inter-operability with similarly compliant systems.

These standards must be promulgated at the soonest possible time by DOH even if it

would mean letting go of their current implementations that do not meet these new


       Lacking the enterprise architecture and standards, implementers are best

advised to store the minimum dataset, the service atom, which contains the five data

elements: patient identifier, provider identifier, service identifier, location identifier and


1. Everybody’s Business: Strengthening Health Systems to Improve Health Outcomes.

   World Health Organization

2. Marcelo, AB, Ramos, BT, dela Rosa J et al. Evaluation of Decentralized Field Health

   Service Information System in Selected Infectious Disease Surveillance and Control

   Project Sites in the Philippines. Department of Health.

3. Grundy, J, Healy, V, Gorgolon L, Sandig E. Overview of Devolution of Health

   Services in the Philippines. Rural Remote Health. 2003 Jul-Sep;3(2):220. Epub 2003

   Jul 1.

4. Marcelo, AB & Marcelo PF. “Report of Pregnancy by Short Messaging System

   (SMS): A Strategic Data Point in the Philippine National Health Information System”.

   University of the Philippines Manila

5. Eysenbach G (2001). "What is e-Health?" J Med Internet Res 2001;3(2):e20

6. Eysenbach G (2000). “Consumer Health Informatics” BMJ 2000; 320; 1713

7. Littlejohns P, Wyatt JC, Garvican L. Evaluating computerised health information

   systems: hard lessons still to be learnt. BMJ 2003 Apr 19;326(7394):860-3.

8. WMA Statement on the Ethics of Telemedicine.

   http://www.wma.net/en/30publications/10policies/t3/index.html Accessed December

   12, 2010

9. Wade VA, Karnon J, Elshaug AG, Hiller JE. A systematic review of economic

   analyses of telehealth services using real time video communication. BMC Health

   Serv Res. 2010 Aug 10;10:233.
           Regulatory Reforms
                         Kenneth Hartigan-Go, M.D.

Asian Institute of Management – Dr. Stephen Zuellig Center for Asian Business


Predicaments of the Philippine Regulatory System

       Regulation plays a vital role in the success of the Universal healthcare by

ensuring that the people, especially the poor will have access to quality and accessible

health products, devices, facilities and services. Health care regulatory system is an

important imperative of the government to ensure access to quality and accessible

health products, devices, facilities and services, especially those commonly used by the

poor through the set of standards and enforcements. With the adoption of Universal

Health Care, the government should be able to assert its regulatory authority to ensure

accessibility of quality healthcare services. Its regulatory bodies should have adequate

resources. However, this has been a serious challenge for the government. The

mechanisms for regulation of health goods, services and facilities remain inadequate,

weak and unresponsive.

       Regulatory system aims to provide a set of methods to influence behavior. This

particular reform agenda is part of the six building blocks for building stronger health

systems1 and contributes to the overall understanding, application and adoption of a true

Philippine Universal Health Care.

       The roles of regulation are fairly established,2 these are:

              Establishing Rules Governing the Private Sector

              Protecting Buyers from Their Own Inability to Judge Quality

              Counteracting “Supplier Induced Demand”

              Improving Access

              Advancing Specific Moral Principles

              Counteract Monopoly

              Counteract Externalities

       Health regulatory authority, in general, grapples with scarce resources,

inadequate staff and capability, inefficient use of available technology, and lack of

progressive technological development. “There are no funds for technical and operations

researches, which are necessary to provide the basis for standards development. There

are not enough training facilities, testing laboratories and experts to handle the

qualification requirements for regulation of manpower, certification/conformity testing and

monitoring of regulated products.”3

       Another identified factor includes the lack of quasi-judicial power amongst

regulatory authorities as they are currently “limited to standards development,

inspection, licensing and accreditation, assessment, monitoring and imposition of fees.”3

Regulation of health facilities

       The Bureau of Health Facilities and Services (BHFS) of the DOH is in charge of

the regulation and licensure of health facilities and services such as hospitals, clinics,

laboratories and other health service establishments. In support of the BHFS is

Philhealth accreditation which provides incentive for compliance in the quality guidelines.

       However, the criteria used in BHFS licensure and DOH accreditation are mostly

based on inputs like number of beds and the presence or absence of certain medical

equipments and medical professionals. Outputs and performance indicators like in-

patient and out-patient visits, and the health condition of the discharged patient are not

given enough weight.”4

       Despite the presence of various laws and guidelines on quality assurance and

efficient investment, health facility remains substandard and fragmented. These laws

and guidelines includes: Administrative Order 21 s. 2007 Harmonization and

Streamlining of Licensure System for Hospitals; Guidelines for the issuance of certificate

of need to establish a new hospital (AO 29 and its amendments AO-4, AO-4A and AO-

4B); the Rationalization Plan of health facilities; RA 4226 (An Act Requiring the

Licensure of all hospitals in the Philippines and Authorizing the Bureau of Medical

Services to Serve as the Licensing Agency); and other guidelines concerning birthing

facilities, private clinics, blood banks, dialysis center, etc.

        The problem lies in the enforcement of the laws and authority. In 1999, the

Department of Health identified that the lack of manpower, technical, organizational and

legal constraints hamper the enforcements of the policies and regulations. 5 They cited

that the competency and skills of regulatory officers are inadequate. Sotto (2006) also

noted that:

                “Until recently, there was not even an introductory training course

        for regulatory officers of the DOH. In the past, regulatory officers attended

        a two-week training course conducted by the UP College of Public Health.

        A few were sent abroad to gain exposure in standards setting and

        enforcement practices of other countries. Except for the Bureau of Health

        Devices and Technology, which requires its regulatory officers to take a

        Master of Science in Applied Physics, Major in Medical Physics, an

        advanced degree is not compulsory for the regulatory officers below

        division chief level.”6

        The lack of technical capacity has been compounded by the inadequate number

of staff. “With more than 1,700 registered hospitals in the Philippines alone, a total

manpower complement of approximately one hundred staff from the BHFS and CHD is

generally unsatisfactory to provide regular and quality assessment and monitoring of

these hospitals and health facilities.”6

       As a result, some of the health facilities, particularly those maintained by local

government units such as rural health centers and barangay health stations, are

substandard and dilapidated, if not, none existent. Health facilities are uncoordinated

and fragmented. In many cases, primary and secondary hospitals are situated next to

rural health units, but were largely performing the same basic outpatient health center

functions.7 Contrary, there are localities without healthcare providers particularly in the

far-flung areas. Close to 60% of all accredited hospitals are located in Luzon while over

70% of free standing dialysis clinics are found in the National Capital region alone.

Moreover, there are hospitals that have deteriorated thus can no longer perform the

services according to their level. More often than not, such cases were neglected for

lack of adequate resources to respond to the resource needs.

       The health referral system lost cohesion post-devolution. Logistics, transport,

patient referral protocol, distinctions (complementarities) between levels of service were

all affected adversely by lack of clarity regarding local government co-operation and

under-financing of the operational costs of the district hospital.7

Regulation of health professionals

       The Professional Regulations Commission administers, implements and enforces

the regulatory policies for the practice of health-related professions. It administers

licensure exams, enhancement and enforcement of professional, occupational, ethical

and technical standards.

       In support of the PRC are the Specialty Societies that practice self-regulation in

their respective field of professions. These societies monitor the practice and hold

continuing education programs for their members and compel members to participate in

conferences, symposia and other society activities. Societies also police unethical

behavior and those found guilty of unethical conduct are expelled from its roster and

subjected to further disciplinary actions by the Philippine Medical Association which is

the umbrella organization of all medical societies.

       Philhealth also contribute to the enforcement of standard for healthcare providers

through accreditation. Accredited providers may participate in the National Health

Insurance Program which ensures quality of service. Accreditation may be revoked or

suspended when acts are committed resulting in adverse patient outcomes or when

there is evidence of fraudulent claims.

       Despite various regulatory mechanisms, gaps has been identified which affects

access to quality health service amongst providers. The Philippine Health Human

Resource (HRH) Master Plan identified the lack of integrated HRH system or an

overarching framework that will ensure efficient production, deployment, regulation, entry

and exit.

       Other issues identified include the standard workforce to population ratio,

workforce to bed ratio; and the maldistribution of health professionals concentrating

primarily in the urban areas.

       Based on the HRH Master Plan, the workforce to population and bed ratio,

stipulated in the DOH A.O. 147 s. 2004, is insufficient to respond to meet the patients’

needs. Moreover, there were necessary positions that were not included in the minimum

standard. For the case of the Rural Health Units, DOH A.O. 100 s. 2000 stipulates the

standard workforce to population ratio; however, it is also limited to doctors, nurses,

midwives and rural sanitary inspectors and fails to take into account medical

technologists, dentists and other health professionals which counter the Sentrong Sigla

Quality Standards.

       The low standard is compounded by maldistribution of health workforce between

rural and urban areas. It has been reported that 50 to 70 percent of all medical

practitioners are concentrated in the cities (Department of Health, 1994). Moreover, it

was recorded in 2005 that 36 percent of the 7,671 government doctors are in the

National Capital Region while the other regions average 300 doctors. However, the

ARMM and the CARAGA, two of the poorest rural regions only have 89 and 76,

respectively.8 In the case of Philhealth accreditation, 35% of its accredited doctors are

based in NCR. This is about eight times more than the average number of Philhealth

accredited doctors in regions outside NCR.

Regulation of health devices

       The Bureau of Health Devices and Technology (BHDT), created by P.D. 480 and

P.D. 1372, responsible for formulating and implementing standards for radiation facilities

and devices used in medicine, dentistry, veterinary medicine, industry, education,

research, anti-crime, military and consumer applications. It also conducts health

technology assessment, studies and researches on radiation devices and technology

and provides technical assistance and consultative services to stakeholders.

       However, due to meager resources and limited technological capacity, BHDT

lags behind the industry. It has not been able to cope with the technological progress as

the industry invest heavily in research and development to produce more products to be

imported to the country.

       Technical and operations training remains a challenge as there are very few

experts   to   handle    the   regulation    of   quality   standards   for   healthcare,

certification/conformity testing and monitoring of regulated products. There are

difficulties in dealing with industry as health regulators may not possess the skills to

substantially manage resources or industry people.

       Maldistribution is also a problem for medical devices. Of the 3,860 basic X-ray

facilities, 1,200 can be found in the National Capital Region. Of the total of 5,141

facilities are found in the country, across the regions. Regions with least categories are

CAR, ARMMM and CARAGA. General Radiography facilities found in CAR, ARMM and

CARAGA are 67, 23 and 46 respectively.9

Regulation of medicines

       RA 9711 reorganized and expanded the existing setup of the Bureau of Food

And Drugs (BFAD) into Food and Drugs Administration (FDA) with four specialty areas

that include: (1) Center for Drug Regulation and Research (to include veterinary

medicine, vaccines and biologicals); (2) Center for Food Regulation and Research; (3)

Center for Cosmetics Regulation and Research (to include household hazardous/urban

substances); (4) Center for Device Regulation, Radiation Health, and Research, formerly

the Bureau of Health Devices and Technology become fully integrated with the FDA.

       Prior to the law, BFAD had to operate with meager resources, inadequate staff,

lack of technological development in carrying out its responsibility of regulating drug

industry and their products, devices, vaccines, food, cosmetics, nutriceuticals and

hazardous household chemicals and toys.

       BFAD, aware of such shortcomings, have conducted studies that show that there

is a grave lack of manpower where regulated establishments and products overwhelm

inspectors such in the tables shown below. The ratio of the number of Food and Drug

Regulation Officers (FDROs) with the number of establishments is 1:202; while the ratio

of the number of evaluators for the PSD with the number of products is 1:1,513. These

data somewhat give an overview of how BFAD is in urgent need for reorganization and

systems reform.

Figure 1. Establishments vs. CHD Manpower Complement per CHD (2006)

Figure 2. Breakdown of BFAD Regulated Establishments (2006)

Figure 3. BFAD Registered Products vs. number of evaluators (2006)

       In addition to overseeing the safety of food and cosmetics, the agency also faces

a formidable load of nearly 20,000 registered drug products. The equipment for

chemistry, manufacturing and controls for registration approval need to be upgraded to

cope with an increasing number of applications for product registration numbering to

approximately 150 to 200 applications monthly.10

       Aside from the regulatory mechanisms, accepted standards in manufacturing

such as the Good Manufacturing Practice (cGMP) have not been satisfactorily and fully

implemented. As of October 4, 2010, there are only 57 establishments with cGMP. The

implementation of full compliance to GMP has been repeatedly postponed.              The

prevailing argument of most drug companies is that they need to continue operating in

order to have profits to plough back into investments for their plant’s GMP. cGMP

certification must also be applied to the source of finished medicine products imported

by local importers.10

       There are also issues in poor regulation of generic drugs in terms of the capacity

to comply with bioequivalence requirement for establishing product interchangeability as

stipulated by the Generics Law of 1998 and further by the Universally Accessible

Cheaper and Quality Medicines Act of 2008.

       Another significant omission of the agency as a truly effective regulatory agency

is the absence of a functional adverse drug reactions (ADR) monitoring and

Pharmacovigilance system. In 1995, the Philippines became a full member of the World

Health Organization Adverse Drug Reaction Surveillance System based in Uppsala,

Sweden (now the WHO-Uppsala Monitoring System) through the establishment and

early accomplishments of the National Adverse Drug Reaction Committee (NADRAC).

However, over time, the Philippines became almost a non-functional status in the WHO

program.    Currently, FDA has embarked on an effort to revive ADR monitoring

spearheaded by its new ADR Unit which organizes training seminars all over the country

for key DOH-retained and LGU-operated hospitals and pharmacies, but not the private

health sector yet.

       FDA also failed to regulate unethical intensive marketing practices which led to

“asymmetry of information” where the consumers know very little about the nature of the

product and the variety of choices and options, while the drug manufacturers and

intermediaries particularly the physicians and pharmacists know much more. The

asymmetry of information led to brand loyalty amongst consumers and physician

resulting to some sort of monopoly which allows firms to set prices above the

competitive level. This has also resulted to irrational drug use.

       FDA failure in regulating marketing practices of drug industry has led to some

form of industry group self-policing their members to undertake ethical marketing,

advertising and promotions through a code. This industry code, while not perfect, defines

the limits of permissible interaction and relationship between prescribers and drug

industry. But since this code covers only the research and development based industry,

it does not cover local drug companies or non-members of the Pharmaceutical Health

Care Association of the Philippines (PHAP).

       The poor compliance to regulatory bodies and accepted standards undermines

the quality, safety and efficacy of the pharmaceutical product. Moreover, the market

imperfections and inability of the government to address the issues through competitive

market mechanisms perpetuates the proliferation of high cost of medicines. The

pharmaceutical market remains afflicted by substandard, counterfeit drugs that threaten

the life of the consumers.

Regulation of Health Financing

       In 1994, the DOH issued the Rules and Regulations on the Supervision of Health

Maintenance Organizations (AO No. 34 s. 1994), which gave the Office for Health

Facilities Standards and Regulations (OHFSR) authority to exercise regulatory functions

for HMOs, whether investor-based, community-based or cooperative-based.11 The

OHFSR issues licenses and permits, including the Clearance to Operate, to HMOs, and

provides medical and employer organizations with a list of HMOs whose clearance has

been issued, suspended, cancelled or revoked.

       Despite the mandate, HMO operation in the country has been generally regarded

as highly unregulated. The framework for regulation remains to be the Presidential

Decree No. 612 (Insurance Code) issued in 1974 and amended by Presidential Decree

No. 1460 (also known as the Insurance Code of 1978).

       Based on the DOH A.O., the minimum facilities for an investor-based HMO

acting as a stock corporation are the management of one tertiary hospital or affiliation

with five tertiary hospitals, and an outpatient clinic with basic diagnostic facilities for

resting ECG, chest and extremity X-rays and CBC, urinalysis and fecalysis. Meanwhile,

community-based or cooperative HMOs operating as non-stock or non-profit are

required to be affiliated with one general hospital and one outpatient clinic. As of

December 31, 2005, there are seventeen (17) DOH-licensed HMOs in the country.

       Despite the mandate from the DOH and Insurance Commission, there remains

some regulatory ambiguity. “Pre-need and health care plans that are considered as

“insurance” products fall outside the jurisdiction of the Insurance Commission. This has

resulted in differing rules and regulations applied to various insurance products, and

thereby created confusion in the market.”12

       “Due to the lack of rules to enforce the provision of the Cooperative Code,

cooperatives were driven to provide various in-house insurance schemes to meet the

needs of their members. However, these insurance schemes are unregulated, did not

undergo any actuarial studies and may therefore be considered as unsafe and unsound.

It exposes their members to further risks. More than 65% of total cooperatives registered

with the CDA are no longer operating due to mismanagement, governance issues and

more importantly, the lack of rules and regulations. Since most of these cooperatives

have, in one way or another, informal insurance schemes, the need to come up with the

necessary regulations becomes more apparent to protect their members’ interests.”

       Aside from the HMOs, Philhealth can also utilize its leverage as the national

health insurance provider to negotiate for quality, access, cost benefit and cost

containment imperatives. By, leveraging Philhealth’s purchasing power, it can strengthen

its influence over service provider behavior, drug cost, quality of services, etc. At

present, Philhealth fails to consider this aspect of regulation and acts more like a

reimbursement agency.

       As a result of the inefficiencies of the regulatory authorities, health products,

devices, facilities and services remain inaccessible to the majority of the Filipinos,

particularly the poor. The upper class A and B can avail first class services, branded

medicines, hi-tech laboratory tests from world class private tertiary hospitals in the urban

centers. While the poor, particularly those in the far-flung rural areas resorts to

substandard, poor quality, fly-by-night health facilities, medicines, and services. There

are even those unreached Filipinos who have not seen any health facilities, health

professionals, medicines, and devices- even those as basic as sphygmomanometer.

Current Initiative to Address the Problem

       Given these concerns, the Department of Health is pushing for various reforms to

strengthen the health regulatory authorities through stronger mandates, management

and governance, augmentation of resources, capability and technological development.

       Acknowledging the need for reforms, a new Food and Drugs Administration Law

(RA 9711) was passed in June 2009 to strengthen the administrative, technical capacity,

and resources of the drug regulatory authority. The law also indicated fiscal reforms

within the FDA to encourage growth and development in technical capacities through

increase in user’s fee and a business plan for investment.

       With the introduction of the new law more funds can be utilized by the agency to

gear up its capability to address the various issues. It now faces and evolves towards a

more effective regulatory agency in compliance with ASEAN Harmonization standards.

       The challenge so far, is the delay in crafting the implementing rules and

regulations which remains in the draft stage. Moreover, at the moment, FDA is headed

by an interim director general but only as the Officer-In-Charge designate. Because of

this situation, more in-depth and substantive reforms might not be undertaken unless the

political mandate is clear and the position and title is officially made.

       The other recent piece of legislation is RA 9502 passed in June 2008. The

government imposed a mandatory and voluntary drug price reduction. Moreover, it

complements the Generics Act of 1998, for it also requires and ensures the production of

an adequate supply, distribution, use and acceptance of drugs and medicines identified

by their generic name.

       However, the law remains inadequate. The law requires greater collaboration

amongst the regulatory and other concerned agencies particularly Philhealth. Philhealth

needs to take advantage of its leverage and the provisions of the law to reinforce greater

compliance amongst the providers and the industry.

Conclusion: Alternative Interventions for Regulatory Reforms (Universal

Health Care)

       The analysis of the predicaments of the health regulatory system depicts

complex and systemic problems which entail dynamic and systemic approach for the


Integrative framework and harmonization of regulatory mechanisms

       There is a need to address the fragmentation of the regulatory system and the

health system itself. An overarching and integrative framework of Universal Healthcare

should be reinforced amongst health regulators both at the national and local level.

Regulatory authorities should be working hand-in-hand to ensure provision of

comprehensive and quality health care. A good facility alone will not deliver good health

services. It should be complemented by adequate and competent health care providers,

with equipment, medicines at affordable cost particularly for the poor. Ensure

coordination amongst regulatory tools of each agency. For example, exploring areas for

Philhealth’s roles both as the main purchaser of health goods and services. It can

leverage its position to lower costs and ensure quality, thus assuming quasi-regulatory


Strengthen the Regulatory Authorities and harmonize mechanisms

       Strengthen the mandate, system, regulatory tools, systems and resources of the

regulatory agencies. Give the regulatory agencies quasi-judicial powers to ensure

compliance of the private sector. However, it must also be ensured that accountability

and transparency should also improve. Put information technology systems and

performance management systems in place to enhance efficiency and transparency in


Deputizing the LGUs

        Intensive efforts are needed to educate devolved local government health

systems to understand their role in health regulation. Health regulation should not be the

sole responsibility of national agencies. LGUs have an important stake in protecting the

health of their constituents. Short of analytical testing, there are many ways that LGUs

can ensure quality, such as supplier prequalification, physical inspection, supplier

performance monitoring, good storage practices, and rational drug use. This also

recognizes the fact that drug quality is more than analytical testing.

Involve the private sector and educate the consumers

       The private health care system (clinicians and hospitals) have to be informed and

made to appreciate that the selection of essential medicines has to be tightly regulated

and cost and price are part of a clinical decision tree.       They have to accept other

payment mechanisms such as case payment instead of fee for service. DOH-retained

hospitals must be reminded of AO 137: Waiver of Excess Fees and Charges for

Philhealth Indigent Patients in All DOH-retained hospitals. Failure to justify the non-use

of formulary (essential drug list) means disincentives from the NHIP in paying

professional fees.13 On the part of the consumers, they should be given the proper

information with regards to their options. For example, intensify campaign for use of


1. Everybody’s business: Strengthening health systems to improve health outcomes.

   World Health Organization, 2007.

2. Roberts MJ, Hsiao W, Berman P, Reich M. Regulations. Chapter 11, in Getting

   Health Reform Right. Oxford University Press, 2004.

3. National Objectives for Health. Philippines 2005-2010. Department of Health,

   October 2005.

4. Capuno, J. A case study of the decentralization of health and education services in

   the Philippines. HDN Discussion Paper Series. PDHR Issue 2008/2009 No. 3.

5. Villaverde M, Solon O, Ramirez M. Health Sector Reform Agenda Philippines 1999-

   2004. Department of Health, 1999.

6. Sotto, A. The Challenge of Health Regulation in the Philippines: Towards

   Acceptability and Efficiency. University of Queensland, 2006

7. Grundy J, Healy V, Gorgolon L, Sandig E. Overview of devolution of health services

   in the Philippines. Rural and Remote Health 3 (online), 2003: 220.

8. De Guzman, JPS. Flight of the caregiver. Medical Observer, 14(1), pp. 12-13. 2005

9. Number of X-ray Facilities by Category and By Region as of August 24, 2007.

   Bureau of Health Facilities and Services. Manila, 2009.

10. Food and Drug Administration Philippines. http://www.bfad.gov.ph Accessed

   December 3, 2010.

11. Rules and Regulations on the Supervision of Health Maintenance Organizations.

   Administrative Order No. 34 series of 1994. Department of Health, 1994.

12. Lanto GM, Almario J, Geron MP. Microinsurance: does traditional regulation apply?

   Philippine Institute for Development Studies Policy Notes, October 2008.
13. Waiver of Excess Fees and Charges for Philhealth Indigent Patients in All DOH-

   retained hospitals. Administrative Order 137 series of 2002. Department of Health,

 Organizing Health Services

Towards Universal Health Care
                        Junice D. Melgar, M.D.

   University of the Philippines Manila National Institutes of Health

       The delivery of health services is fragmented into over over 3,000 discrete units,

2,600 facilities at primary, provincial, regional and national levels and over 1,000 private

facilities of which only the hospitals have been counted. (see figure 1) The public-private

dichotomy seems to have evolved naturally from the Americal colonial model while the

fracturing of the public health system is of recent origin, the enactment of the Local

Government Code of 1991. This Code conferred the power and authority for health care

services, including primary care and hospital services to specific LGUs, barangays,

muncipalities and cities and provinces. The result is the absence of a unified, cohesive

and logically organized health system, but instead “several autonomous organizational

structures with the common thread being their concern with the provision of health goods

and services.”1

Primary Care

       Primary health care is provided at 3 levels: over 15,000 Barangay Health

Stations (BHS), close to 19,000 Rural Health Units (RHUs) or Urban Health Centers

(HC), and over 300 Primary or District Hospitals. (DOH BHFS, Distribution…). BHS and

RHU services revolve mainly around the following: diarrheal disease, ARI, dental health,

environmental health (specifically water and toilet), immunization, family planning,

nutrition, prenatal and postnatal care, and TB control.2 This health care provision has

been described as “selective PHC,” “vertical,” i.e. aligned along programs, disease and

interventions, not on people, doctor-centered, and “rationed” by availability of doctor,

medicines and laboratory services.3

District system

        The “district health office” was specified as such in 1987. The office exercised

jurisdiction over district hospitals, municipal hospitals, rural health units, barangay health

stations and all other Ministry units in the health district.4

        With devolution mandated in 1991, health districts were transferred to the

jurisdiction of provincial governments where many did not thrive owing to the lack of

funds and the departure of personnel.5 Health districts were revived and rehabilitated as

Interlocal Health Zones (ILHZ), i.e. a “clustering of a group of contiguous municipalities

that have a core referral hospital and a number of primary level facilities such as RHUs

and BHS.”5 According to the administrative order, ILHZs were designed to be venues for

harmonizing preventive and curative care through integrated governance, management,

financing, resource-sharing and provision of health services.

        Referral hospital system. There are 4 hospital levels reflecting “graduated

resource capacities and care capability”: 41% are primary, 36% are secondary, 9% are

tertiary, and 6% are quaternary.1 In general, there are slightly more government beds for

all levels, except for tertiary hospitals where private beds are the majority. The number

of hospitals appears to be directly related to the size of the regional population.

However, there are significantly less government hospitals in the more impoverished

regions belying the notion that “government hospitals are mechanisms for tempering


                        PUBLIC                                          PRIVATE
                                    LEVEL 1-4:                             LEVEL 1-4:
                                    721 HOSPITALS (100%)
                                                                           1,074 HOSPITALS (100%)
                                    48,349 BEDS (100%)
                                                                           47,642 BEDS (100%)

                                                  LEVEL 4:                         LEVEL 4:
                             LEVEL 4              50 HOSPITALS (7%)                69 HOSPITALS (6%)
                                                  21,034 BEDS (44%)                14,976 BEDS (31%)

                                                  LEVEL 3:                         LEVEL 3:
                           LEVEL 3                38 HOSPITALS (5%)                183 HOSPITALS (17%)
                                                  5,212 BEDS (11%)                 15,428 BEDS (32%)

                                                  LEVEL 2:                         LEVEL 2:
                              L-2                 271 HOSPITALS (38%)              405 HOSPITALS (38%)
                                                  14,890 BEDS (31%)                11,582 BEDS (24%)
                                                  LEVEL 1:                         LEVEL 1:
                                                  362 HOSPITALS (50%)              417 HOSPITALS (39%)
                     L-1      L-1      L-1        7,213 BEDS (15%)                 5,616 BEDS (12%)

                                                  RURAL & URBAN
                                                  HEALTH CENTERS
     MUNICI-                                      (1,879)
                                                  BARANGAY HEALTH
                                                  STATIONS (15,343)

Figure 1. Levels of Health Care Delivery (Source: DOH Bureau of Health Facilities and


General performance of health delivery organizations

        Primary care: With primary care facilities widely dispersed and administered

disparately, it is very difficult to get a picture of their functionality and viability. In 2003,

Sentrong Sigla (SS) announced the percentage of facilities that met SS standards: 53%

of health centers, 15% of district and provincial hospitals, and 3% of barangay health

stations.7 The SS Quality Assurance Program inquired into the delivery of basic services

- EPI, Disease surveillance, Control of ARI, Control of Diarrheal Diseases, Micronutrient

Supplementation/Nutrition, FP, TB control, STDs and HIV-AIDS, Environmental Health

and Sanitation and Cancer control – as well as compliance with facility standards and

regulation. However, we have no information whether any general assessment of

Primary care provision is being done, whether or not via the SS QAP.

       Inter Local Health Zones (ILHZ). 23 years after the concept of the district was

laid down, the effort to “model” ILHZ consumes a lot of DOH and donor resources and

effort. DOH targeted the modeling of about 152 ILHZ (calculated from NSCB) in 65

convergence sites. As of 2006-2007, 83 of these ILHZ are reported to be functional.8

Yet, despite some very promising practices in 5 provinces, enormous challenges persist,

including the perennial insufficiency of human and physical resources, unstable political

leadership of the Health Boards, misunderstandings about the role of the DOH, and

insufficient management resources and capacity, including of information. 5 These

structural difficulties prompted the evaluator above to ask a basic question: Do devolved

health services have strategic advantage over other options of delivering health care

services, in terms of providing equity and efficiency?

       Patient responses and outcomes. According to the National Demographic and

Health Survey (NDHS) 2008, 8% of Filipinos visited a health facility or sought

consultation in a month, 3.9% in public facilities and 3.1% in private facilities. In terms of

specific facilities, 34% went to RHU/BHS, 20% to private hospitals and 19% to private

clinics. Reasons for consultation were illness/injury, 68%; and check up, 28%.

       4% were confined in one year, 51% in public facilities, 48% in private. In terms of

specific facilities, private hospitals accounted for 44% of inpatients, provincial and

regional hospitals for 17% per level, and district hospitals, for 12%.

       It is apparent that patients, even the poor are more inclined to seek care in

private facilities and the only barrier seems to be cost. The cost of consulting in a private

facility is 3 times that in public facility (PhP 2,864. vs. 1,051.; while the cost of inpatient

care in private hospitals is also 3 times that in public hospitals (PhP 2,4278. vs. 9,849.)9

        For a middle income country, the fact that the Philippines is not meeting some of

the health indicators associated with public health, such as immunization against

measles in one-year olds and death rates associated with TB, indicates something

amiss with the health system. This fact is emphasized in maternal mortality, the

reduction of which is associated with a strong referral system at the district level.10 Poor

health outcomes are a function of the way health care services are organized and made



To address the problems wrought by the inherently disorganized health care delivery

system, the following steps are being proposed:

I.   Strengthen Primary Care to ensure responsiveness and sustainability

        Devolution has caused the provision of primary care to be non-uniform, focused

on a few vertical programs, and substandard in many cases. A strategic step towards

strengthening is to reconfigure and implement a package of “Essential Services”.

Develop and provide an organic Essential Health Package (EHP)

        Primary care or Essential care was originally defined in the Alma Ata declaration

as “Essential health care based on practical, scientifically sound and socially acceptable

methods and technologies made universally accessible to individuals and families in the

community through their full participation and at a cost that the community and country

can afford to maintain at every stage of their development in the spirit of self-reliance

and self-determination11 EHP of varying sizes and composition have been proposed for

countries, including those reconstructing from war and conflict, without much success. 12

This failure has been attributed to the failure to recognize that EHPs are inherently

“value” laden and that where values conflict they could distort the package, prolong its

implementation and eventually affect its viability. Another lesson is that the enabling

conditions for the realization of the package are vital: “good technical and management

training for the eventual providers of essential services, adequate resource levels,

consistent allocative decisions, sound professional tools made available across services

(information, relevant guidelines for action, realistic targets, functioning monitoring

mechanisms), and effective incentives.”12 Chile’s EHP and the way it was processed is a

notable precedent in this regard: There was no preset package but an organic one that

assimilated people’s demands and needs; packages were developed for both primary

and secondary levels; citizens and public officials were involved in discussions on the

benefits and costs of the package; and the package is periodically subject to evidence-

based reviews.13

       In response to the most pressing health problems affecting most Filipinos,

including those in the Millennium Development Goals (MDGs), an Essential Health

Package has been proposed to the WHO that consists of services around 8 areas:

Maternal and Newborn Care, Reproductive Health, Child Health and Nutrition,

Communicable Diseases, Noncommunicable Diseases, Mental Health, Acute Care and

Oral Health.14 The package is based on studies in rural and urban communities. It

specifies services at 3 levels – BHS, RHU/HC, and District hospitals – and specifies the

required personnel, essential medicines and diagnostic examinations per level. The

package describes facilitating factors as well as obstructing factors, and was projected to

cost PhP 1,379.00 per capita.3

       The EHP is not conceived to limit services but to serve as starting points for

patient-centered care. The Primary Health Care principle of putting people “in the center”

implies going beyond simple health care provision to address peoples’ needs, foster

enduring relationships between providers and patients, and relate to people not as

objects of care but as partners in managing their health and community.13 Person-

centered care, which is equity taken to the individual level, has been shown to increase

patients’ trust and compliance, improve treatment effects, strengthen integration of

preventive and promotive care, and promote better quality of life.13

       Our proposal is to pilot the EHP and EHP process in 6 or so provinces prior to

cascading it. The first step is to build consensus and support for the EHP nationally and

in the pilot provinces. It is necessary to get the buy-in of critical stakeholders - patients,

providers, and policymakers across LGUs, DOH, Philhealth and other funders. The next

step is to put in the necessary human and logistical requirements and assure continuing

funding. The last step is to implement and assess.

Enable primary care teams to develop primary care network and select patients

for referral to the primary care hub, the district hospital

       The complex and social nature of many health problems requires solutions

coming from other health workers as well as from nonhealth sectors. This requires a

multidisciplinary primary care team that is closely linked with other community resources

and able to tap into these resources as often as necessary. Health-related human

resources include laboratories, pharmacies, health specialists, shelters, transport

drivers, drug rehabilitation centers, etc. Nonhealth human resources include parents,

teachers, social welfare agencies, credit facilities, lawyers, law enforcement, employers,

etc. Broad linkages are necessary for the comprehensive management of social health

problems but also serve to engender intersectoral support for health.

       Simultaneously with building bridges to the community, the primary care team

acts as gatekeeper identifying those patients requiring more technical diagnosis and

care and channeling them to the hospital system, via the district hospital. Based on the

roles and capacities delimited by the EHP, the primary care team will manage patients

and refer them to the upper levels accordingly.

       Our recommendation is to include these “broadening” and “filtering” functions of

the primary care team when they are selected and trained.

Figure 2. Primary Care as a hub of coordination: networking with the community served

and other partners

II. Expedite the establishment and/or functioning of the district system or

   Interlocal Health Zones (ILHZ) as the key link between the Primary System and

   the Hospital system

       The gatekeeping and filtering functions of several primary care teams will

converge on the District facility and system. Though the district facility was originally

conceived to deconcentrate from a centralized system,11 the same is being used

inversely to integrate the primary care and hospital systems. The district health system

has been proven to be essential and effective in localities where multiple stakeholders,

but particularly different configurations of local chief exectutives, endeavored to rise

above LGU political boundaries and jointly managed what are incipient forms of district

systems under devolution.5 Though the formation process is arduous and the new

district systems continue to be buffeted by all sorts of political, financial and

administrative challenges, the pivotal role of district systems need to be asserted and

institutionalized for the long term integrity and viability of the health system. This is

important for municipalities and cities where barangays are decisive.

Reinstitutionalize the District Health system through political and financial

support through the province

       The original concept of the district health system flowed from an emphasis on

autonomy through decentralization (not devolution):

       “A district health system based on primary health care is a more or less self-

contained segment of the national health system. It comprises first and foremost a

welldefined population, living with a clearly delineated administrative and geographic

area, whether urban or rural. It includes all institutions and individuals providing health

care in the district whether governmental, private or traditional. A district health system,

therefore, consists of a large variety of interrelated elements that contribute to health in

homes, schools, work places and communities, through the health and other sectors. It

includes self-care and all health workers and facilities, up to and including the hospital at

first referral level and appropriate laboratory, other diagnostic and logistic support

services. Its component elements need to be well-coordinated by an officer assigned to

this function in order to draw together all these elements and institutions into a fully

comprehensive range of promotive, preventive, curative and rehabilitative health


        Anchored on the principles of Primary Health Care, district health systems are

expected to incorporate the guiding principles of equity, accessibility, emphasis on

promotion       and   preventions,   intersectoral   action,    community     development,

decentralization, integration of health programs, and coordination of separate health

services.11 Under the present conditions of unfettered LGU autonomy, the integration

role of district health system becomes imperative, where integration is defined as “the

process of bringing together common functions within and between organizations to

solve common problems, develop a commitment to a shared vision and goals, and,

using common technologies and resources, achieve health goals for the community.”11

Three elements of integration are particularly vital: integration of service tasks, eg

providing primary preventive and outreach services from hospitals; integration of

management and support functions, eg planning, budget, communication, training,

transport, quality assurance and research; and integration of organizational components,

eg putting in place a coordinating mechanism like a council that ensures that discrcete

parts of the system -human, physical and financial- are harmonized.11

        Our propoposal is to support the provincial governments’ assertion of their power

and authority to revitalize and strengthen the district health system in both rural and

urban settings. DOH must mobilize human, technical, political, and funding resources to

reestablish the place of district system in the whole delivery system.

Facilitate and support the establishment of well functioning District Hospital

        The district hospital is defined as a hospital at the first referral level that is

responsible for a defined geographical area with a defined population and governed by a

politico-administrative organization. District hospitals generally serve communities of

50,000-500,000. In some countries, an intermediate facility between the primary care

center and district hospitals exists serving populations of 10,000 to 50,000. The physical

scale of the hospital is established on the basis of a determination of the number of beds

required and a suggestion for the minimal hospital area per bed. 11

        District hospitals perform a wide array of functions, in addition to the provision of

First Referral Level Care, including public health functions and training and research.

The essential services provided at this level are: Medicine, Surgery, Pediatrics,

Obstetrics and Gynecology and Dentistry; which are supportyed by: Anesthesia,

Radiology, and Clinical laboratory11

        District hospitals play a critical role in providing timely medical care, including

surgery for the conditions that typically account for a large share of the population’s

disease burden, such as surgery for complications of childbirth. Surgery for these and

other conditions is most effective when provided at the district level, particularly in the

poorest countries. Proper performance of their functions actually increase the over-all

cost eefectiveness of health care. Yet district hositals are typically underfunded and

suffer deficiencies in quality.15

       Our proposal is to integrate the rehabilitation and strengthening of district

hospitals as part of the entire district system. Such strengthening can be piggybacked on

current efforts to improve health care and hospital facilities under the Province-wide

Investment Planning for Health (PIPH). However, beyond the physical infrastructure,

continued human, political and funding support must be assured.

III. Integrate all referral hospital services – public and private – and align with the

   principles of Universal Health Care

       Hospitals, especially large hospitals, are often perceived by the public to be the

epitome of the health care system, associated with dramatic interventions in life-and-

death conditions, imposing buildings, high technology gadgets, and the availability of,

purportedly, the best specialist doctors. Financially they account for about 50% of over-

all health care expenditure…. and organizationally dominate the rest of the health care

system.16 Yet, the roles of hospitals are changing dramatically with changes in

emergency and patient care, workforce configurations, patient expectations of quality

care, etc.17 Hospitals need to “work with each other, …integrate with communities they

serve by moving from a typical technocratic planning model to a more sophisticated

discussion with the public and other stakeholders,…and respond much more

dramatically to changes in public expectation and in the practice of medicine.”17 Referral

hospitals (secondary and tertiary) can be seen as the “capstone” of the referral pyramid,

neither too heavy nor too light or the levels below them will lose cohesion. A

restructuring of referral hospitals is necessary to improve appropriate referral and

utilization, especially by remote and rural populations; to transform the inappropriate use

of referral hospitals as primary health care providers; to improve efficiency; and to

provide much better outreach and support to lower levels of care.” 18

With the involvement of all stakeholders, develop a unified policy framework

       A unified policy framework that would clarify the goals and roles of government

and private hospitals is necessary to prevent further fragmentation of the hospital system

and to align them with national goals and policies on equity. 1,19

       Although both public and private facilities are generally described as belonging to

general categories (primary, secondary, tertiary and quaternary) based on the degree of

departmentalization and specialization, the delineations are not always distinct and

tertiary hospitals are known to provide primary care. Meanwhile, other hospital varieties,

such as ambulatory and 5-bed hospitals, require a reworking of the concept.1 Defining

the content of hospital packages – such as what they did in South Africa 18 – rationalizes

the system while informing all stakeholders.

       Our proposal is for the DOH to develop a unified concept and framework of the

hospital system and its different components, public-national, public-provincial and

private/nongovernment to guide the rationalizing and unifying process.

Continue efforts to integrate nationwide hospitals and hospital services

        The fragmented operation of Philippine hospitals which result in ineffectuality,

inefficiency and inequity require extensive integration mechanisms, some of which are

already being done, e.g. sharing of resources between private and public hospitals, and

coordinated referral systems.19 Coordinating bodies have also been proposed, such as a

hospital development commission for regulation, and a health services and technology

assessment authority for information.1

       The Secretary of Health, Sec. Ona, has mentioned the “clustering of health

facilities as a health governance intervention directed at improving the capacities of

health facilities across the region and beyond.20 This is indicative of DOH’s willingness to

assume a stronger role in health system integration.

       Our proposal is for DOH to study the viability and appropriateness of the different

unifying mechanisms proposed.

IV. DOH must act decisively to address structural barriers to the rationalization

   and integration of the health system.

Below is a model of the health system and its different levels:

Figure 3. Model of health system based on Primary Health Care

       The recommendations raised - which include developing an Essential Health

Care Package, strengthening the District system and hospital, and integrating the

hospital system - cannot be effectively undertaken or sustained if two structural features

of the system: devolution and privatization are not strategically addressed. Patchwork

remedies, such as the establishment of additional structures to coordinate and

harmonize fragmented function will merely add to the work and complexity, and result in

further ineffectuality and inefficiency.

        We propose a serious rethinking of devolution, which, is woven not just into the

Local Government Code, but into the 1987 Philippine Constitution. Decentralization is

proposed by experts as a policy mechanism to achieve a specific objective, e.g.

efficiency, effectiveness, political democracy, etc.21 But in the Philippines, devolution is

not just a means; it is an end in itself.

        Sec. Ona’s concept of “regional clustering,” which falls within the framework of

both the LGC and Constitution bears serious support.

        We also propose serious thinking of public-private partnership, which is

ubiquitous in all the levels of health care, but bears attention given the poor’s growing

predilection for private care in the light of poor public health. There is much scope to

support private initiatives and public-private collaboration, but the bottomline is to

prevent excessive profit making on health, further fragmentation of services, and wider

disparities in health care.

        To summarize, DOH needs to properly organize and manage health care levels

in all parts of the system “so that people get the services they need when they need it, in

ways that are user friendly, achieve the desired results, and provide value for money.”22

1. Caballes AB. An Appraisal of the Policy Environment for Philippine Hospital Sector

   Development. 2010

2. Field Health Services Information System Annual Report, 2007. Department of


3. Modol X, EHP Funding and Costing Feasibility Preliminary Report. September 8,


4. Executive Order No. 119. Reorganizing the Ministry of Health, its Attached Agencies

   and for Other Purposes. Republic of the Philippines. January 30, 1987.

5. Comparative Analysis of 5 Inter Local Health Zones: Current Practices, Policy and

   Program Directions. http://erc.msh.org/hsr/linksites/lhs/ComparativeAnalysis.pdf.

   Accessed November 30, 2010.

6. Administrative Order 174, Series of 2004. Departmenet of Health.

7. Sentrong Sigla – Home. http://www.doh.gov.ph/sentrong_sigla. Accessed December

   1, 2010.

8. Andersson B and Alcantara MO. Philippines: Health Sector Development Program

   Technical Assistance Consultant’s Report. Asian Development Bank, 2007.

9. National Demographic and Health Survey. National Statistics Office, 2008.

10. Freedman LP, Waldman RJ et al. Who’s got the power? Transforming Health

   Systems for Women and Girls. UN Millenium Project Task Force on Child Health and

   Maternal Health, 2005.

11. District Health Facilities: Guidelines for Development and Operation. World Health

   Organization Regional Publications, Western Pacific Series No. 22, 1998.
12. Pavignani E and Colombo S. Analysing Disrupted Health Sectors: A Modular

   Manual. World Health Organization, 2009.

13. Lerberght WV, Evans T et al. The World Health Report 2008: Primary Health Care –

   Now More Than Ever. World Health Organization, 2008

14. Development of an Essential Health Package, submitted by Health Futures

   Foundation, Inc. to WHO Philippines, Sept 2010.

15. The Critical role of district hospitals in providing poor communities with timely, cost-

   effective care. Disease Control Priorities Project, April, 2007.

   http://www.dcp2.org/file/78/DCPP-DistrictHospitals.pdf. Accessed December 1,


16. McKee M & Healy J. The Role of the Hospital in a Changing Environment. Bulletin of

   the World Health Organization 2000;78(6):803-10.

17. Edwards N. et al, Policy brief no. 5: Configuring the Hospital in the 21 st Century.

   World Health Organization, 2004.

18. Hensher M, Price M and Adomakoh S. Referral Hospitals Ch. 66. Disease Control

   Priorities Project, 2006.

19. National Objectives for Health, 2005 – 2010. DOH Manila. 2005

20. Ona, E. The Aquino Health Agenda: Universal Health Care for All Filipinos.

   Florentino Herrera Memorial Speech, October 22, 2010.

21. Saltman RB, Bankauskaite V and Vrangbæk K eds. Decentralization in Health Care

   – Strategies and Outcomes. World Health Organization, 2007.

22. Waddington C and Egger D. Integrated Health Services – What and Why? World

   Health Organization Technical Brief No. 1, May 2008.
Reforms in the Health Human

Resource Sector in the Context

   of Universal Health Care

                      Ernesto O. Domingo, M.D.

   University of the Philippines Manila National Institutes of Health


       An indispensible component of UHC is HHR that is adequate, of the correct mix,

optimally deployed, highly skilled, well motivated, reasonably stable, and functioning

within an integrated health care delivery system which utilizes primary health care as the

primordial service at the community level.

       There are 22 categories of trained health workers in the Philippines which do not

necessarily correspond to international classification as a result of peculiar demands by

the Philippine health care system. 1 For the purpose of this paper only 6 categories will

be included divided into 2 groups designated principal and accessory. This arbitrary

classification is based on the current and future role these professionals will assume in

UHC. The principal category includes physicians, nurses and midwives. Assorted

paraprofessionals, dentists, physical therapists belong to the accessory category. Unless

qualified the term HHR refers to all six.


       One of the most iniquitous features of the current health care system is the

absence or inaccessibility of professional health care to the majority of poor Filipinos. It

is estimated that 60% of Filipinos who die do so without health professional attendance. 2

A survey of government health workers per region in 2006 lifted from the WHO Health

System in Transition Document (HIT) of 2010 is shown in Table 1. Of the 17 regions

surveyed the number of doctors, nurses and midwives in three of the most affluent

regions (NCR, III, and IVA) are, by far the highest. On the other hand the lowest

numbers of these health professionals are registered in the most depressed regions

(CAR, MIMAROPA, XI, Caraga and ARMM) For comparison 40.0%, 34.9% and 26.7%

of doctors, nurses, and midwives respectively are in the three most affluent regions while

the corresponding figures for the three most depressed areas (CAR, MIMAROPA,

ARMM) are 8.2%, 8.9% and 9.4%. NCR, Region III (Central Luzon) and Calabarzon

have the largest proportions in the two highest wealth quintiles, while ARM,

SOOCSKSARGEN, and MIMAROPA have the largest proportions in the lowest wealth

quintiles. CAR is only somewhat better.

Table 1. Government health workers per region, 2006.
Region                      Doctors        Nurses             Dentistsa       Midwives
                            No.     %      No.     %          No.    %        No.    %
NCR                         650     22.0   683     15.6       561    28.8     1,065  6.3
CAR                           83      2.8     151     3.5     32      1.6     599      3.6
Ilocos (I)                    154     5.2     232     5.3     110     5.7     1,019    6.0
Cagayan Valley (II)           95      3.2     176     4.0     69      3.5     816      4.8
C. Luzon (III)                284     9.6     384     8.8     171     8.8     1,630    9.7
CALABARZON (IV-A)             247     8.4     459     10.5                    1,802    10.7
                                                              259     13.3
MIMAROPA (IV-B)               83      2.8     124     2.8                     527      3.1
Bicol (V)                     179     6.1     271     6.2     89      4.6     1,072    6.4
W. Visayas (VI)               263     8.9     485     11.1    111     5.7     1,689    10.0
C. Visayas (VII)              215     7.3     305     7.0     139     7.1     1,495    8.9
E. Visayas (VIII)             152     5.1     208     4.8     90      4.6     880      5.2
Zamboanga (IX)                94      3.2     167     3.8     42      2.2     541      3.2
N. Mindanao (X)               116     3.9     203     4.6     73      3.8     956      5.7
Davao (XI)                    69      2.3     110     2.5     62      3.2     859      5.1
SOCCSKSARGEN (XII)            108     3.7     186     4.3     55      2.8     817      4.8
CARAGA (XIII)                 85      2.9     116     2.7     57      2.9     631      3.7
ARMM                          78      2.6     114     2.6     26      1.3     459      2.7
Philippines                   2,955   100.0   4,374   100.0   1,946   100.0   16,857   100.0
Note: a. – 2005
Source: DOH, 2009; PSY 2008, NSCB.

        We see in the Philippines the paradox of inadequate to absent health care

professionals in many economically depressed regions in the face of an overall

oversupply of such professionals nationally. For example, the total output per year, i.e.

the number of doctors, nurses and midwives passing the Professional Regulation

Commission (PRC) licensure examination covering the years 2005 to 2009 is shown in

Table 2. These numbers constitute the pool of available HHR for the health care system.

In fact in terms of density of health workers relative to the population, the Philippines is

doing well compared to its Asian neighbors (see figures 1 and 2). The density of doctors

in 2004 was 1.14 per 1000 population which was above that of Indonesia in 2006 and

Thailand in 2007. There were 4.2 nurses for every 1000 Filipinos in 2004. This density

was comparable to that of China, Malaysia, Thailand and Korea, and above that of

Indonesia. The 2008 average midwife-to-population ratio of 1.70 per 1000 population

was highest when compared to Malaysia, Indonesia, Thailand, the Republic of Korea

and China.

Table 2. Licensure examination passersa
Profession      Yearly average Period covered
Medicine        2,382            1999-2008
Nursing         29,934           1999-2009
Midwifery       1,852            2010b
a. Source: Professional Regulation Commission (PRC)
b. – only year date available

Figure 1. Doctors per 1,000 population in the Philippines & selected countries, 1990-2008.
Source: WPRO-WHO, 2009

Figure 2. Nurses per 1,000 population in the Philippines & selected countries, 1990-2008.
Source: WPRO-WHO, 2009

       But where are these health care professionals? When disaggregated by type of

practice, the proportion of doctors and nurses in private hospitals is well above those in

public ones. (see table 3) The reverse is true for midwives because midwives are

employed mostly in government run facilities at the barangay level doing primary care.

The number of Department of Health (DOH) registered barangay and rural health

stations number a little over 14,000 and 2,000, respectively, in the year 2001.3 Hence,

while most midwives are employed by the public sector (government) the sheer number

of facilities needing their services cannot be matched by the output of the schools for

midwifery. In the 2003 National Demographic and Health Survey (NDHS) the facilities

that were most utilized were the barangay health stations, followed by public centers and

private clinics.3 Based on the results of the 2007 HPDP-OP survey, those belonging to

the two highest income quintiles accounted for 50% of those who opted for private

(hospital) care while families belonging to the two lowest quintiles comprised 55% of

those who went to government hospitals. (see figure 3) In sum therefore more doctors

and nurses serve the private sector. Midwives who serve mainly the public sector cannot

adequately man the large numbers of barangay and rural health stations because the

production of these professionals relative to demand is comparatively much less than for

doctors and nurses. Considering that the poor Filipinos rely mainly on barangay and

rural health stations for their health service needs the shortage of midwives in these

facilities amounts to lack of access.

Table 3. Government and private health workers, Philippines, 2006.
Profession                  Government                            Private            Total
                    No.              %              No.                %
Doctors             2,955            38.8           4,660              61.2          7,615
Nurses              4,374            18.8           18,948             81.2          23,322
Dentistsa,b         1,946            89.8           220                10.2          2,166
Pharmacistsb        29,274           95.7           1,302
                                                                       4.3           30,576
Midwivesc,d         16,857           93.3           1,218              6.7           18,075
a.- in hospitals
b. - 2005
c. - 2002
d. – private, self-employed: private employees: and private, self-employed and employees
Source: PSY 2008, NSCB

Figure 3. Hospital Utilization by hospital type and patient income quintiles
Source: 2007 HPDP-OP

       In relation to the above, consider the staffing pattern in the five leading tertiary

hospitals in Manila shown in Table 4. These hospitals which also have the most

advanced health technologies in the whole Philippines have a combined capacity of

2095 beds. Their combined medical staff excluding the trainees (fellows and residents)

comes to about 6,151 physicians almost all of whom are specialists. This comes to a

rough ratio of 2.9 physicians per hospital bed. Assuming a very high bed occupancy rate

of 90%, and assuming further that 30% of these physicians have multiple hospital

affiliations, the ratio is still high at 2.2 physicians per hospital bed. These private

hospitals are not only adequately staffed but are in fact overstaffed. Each subspecialty of

medicine is served by an excess number of kindred specialists, in some reaching

ridiculously high number. Since these hospitals cater to the rich and affluent few; the

highest level of care is thus disproportionately consumed by the economically well off

and denied to the poor majority. This is a classic case of inequity. Thus, it is accurate to

say that in the Philippines 70% of physicians serve 30% of the population who can pay

while 30% serve the rest who cannot pay.

Table 4. Bed capacity and number of staff physicians in five top private tertiary hospitals
in Metro Manila
Hospital   Number of Beds     Physiciansa,b,c
A          600                1,900
B          300                900
C          237                1,056
D          480                1,294
E          478                1,001
Total      2,095              6,151
Source: Hospitals
a - mostly specialists
b - exclude M.D. trainees
c - some affiliated to other hospitals

Root causes of the problem

       To understand the problems besetting the HHR sector one has to go back to the

way they are produced. There are at least three easily identifiable causes. These are:

       1. near complete dominance by free market forces, with demand favored over

           need under the philosophy of what the market can bear;

       2. capacity for training determining quota of students rather than sustainability of

           graduates entering the workforce;

       3. absence in the educational/training program of a strong emphasis on public

           service and the common good over private gain.

       Ever since the complete deregulation of higher education in the 1990’s any

institution which can comply with the requirements of the Department of Education

(DEC) and Commission on Higher Education (CHED) is allowed to offer courses in the

health professions. In medicine, from five medical colleges in the 1960’s, all located in

Metro Manila, the number has grown to its present 38 located in various regions of the

country. For nursing the number is even more bewildering, 465 schools and colleges all

over the country. For midwifery there may be some logic in approving the operation of

223 schools because midwives are the backbone of the barangay and rural health

stations. Still the question can be asked, by what basis have these numbers been


       In fact the only basis for the proliferation of these professional schools is that

they have the capacity and the resources to offers such courses, reinforced by the

policies of the approving agencies of government (CHED and DEC) that pay little to no

attention to need and sustainability.

       All schools and colleges offering degrees in medicine, nursing and midwifery are

given quotas on the number of students they can accept into their classes. The quota is

based on the institution’s capacity to provide “standard” quality of instruction which in

turn is based on number and competence of faculty, classrooms, equipment and

patients available as material for instruction. Without going into the merits of the

“standard” as well as the quality of the others, this practice does not take into

consideration the absorptive and retentive capacity of the public and private sectors

engaged in health care provision.

       A perusal of the enrolment figures for the three professions is shown in Table 5.

For the year 2006 the total enrolment in nursing was 340,961. For midwifery the total

enrolment for a 4 year period, 2001-2005, came to 59,836. Without bothering with the

yearly fluctuations in enrolment, the yearly average for this course is 14,935 for the

period covered. For medicine the total enrolment for the 38 medical schools is not

available. However, a surrogate figure can be extrapolated from a number of data. For

example, the total enrolment in the first year class for the last seven years, 2003-2010,

ranges from a low of 2365 to a high of 3745 with an average of 2751. Assuming an

attrition rate of 20% from the 1 st year up to graduation the projected number of students

finishing the course is from 1892 to 2996, average 2444. These figures are close to the

number of M.D. graduates who took internship preparatory to taking the licensure

examination: range 1671-2733, average 2255 per year (2004-2009).

Table 5. Number of schools/colleges and enrolment of principal HHR1
   Course                       Number
                School/college        Total enrolment
Medicine        38                    13,957c
Nursing         465                   340,961d
Midwifery       293                   59,836e
Sources: PRC, CHED, APMC; a - year 2006; b - year 2010; c - extrapolated data from 1 year
enrolment and internship; d - year 2010; e- year 2001-2005

       The entry of these students into the various schools and colleges occurred

without consideration neither to where they will go after graduation nor to the capacity of

the workforce to absorb them. This results in migration to other countries or relocation to

employment unrelated to the original profession (physicians working as nurses) or

crowding into highly competitive workplace (overstaffed tertiary hospitals).

       There is no accurate and timely count of active health workers in the health care

system, much less warm body counts in real time and actual location. 1 There is also no

timely accounting of loss thru attrition. Thus, even the replacement of loss vis-à-vis

replacement via new recruitment, and filling of unmet needs become shaky estimates.

This is a yawning deficiency with consequences on HHR production. Developing the

system that will provide these data should be a major objective of the reform envisioned

for the health information sector.

       In order to forecast the future need for HHR the DOH in collaboration with WHO

developed in 2000 a 30-year Human Resource Master Plan (HRMP-2000-2030) for the

Philippines, a sample of which is shown in Table 6. The plan is based mostly on

estimates of population growth and the consequent need for HHR according to arbitrary

standard ratios. Notwithstanding the many questions raised by the method, the plan

nevertheless can be used as a starting point for more detailed planning.

Table 6. Projected Demand for Health Workforce, 2010-2030 (selected years),
                                       Projected Workforce Requirements
                            2010        2015          2020         2025           2030
Doctors                     19,402     21,158       23,080        25,851       27,491

Nurses                      185,788    202,603      221,010       241,166      263,244

Medical Technologists       6,393      6,633        7,033         7,553        7,779

Physical Therapists         7,644      8,346        9,117         9,964        10,893

Occupational Therapists     5,733      6,250        6,820         7,443        8,126

Pharmacists                 23,518     25,646       27,976        30,527       33,322

Midwives                    18,897     20,603       22,469        24,513       26,751
Source: Lorenzo FME et al HRM Master Plan (2010-2030), 2005

         Unfortunately, there is no indication whatsoever that this plan or any other plan

has ever been considered by those responsible for producing these HHR. Instead, the

supply side, that is, the demand by would be health professionals, becomes the only

imperative responded to by these “producers.” The need if ever it is considered by the

“producers,” refers only to demand from foreign employers.

         The mismatch between overproduction and inadequate absorptive and retentive

capacity of both the public and private sector is at the heart of HHR migration. Table 7

shows the position of the Philippines in the top 20 countries trend in the migration of

health professionals. This and the maldistribution of those who remain in the country

driven by the imperative of economic gain can be linked to the inequity of access to

health professional care.

Table 7. Top 20 countries of medical education for IMG physicians in the United States1
Country                 Total     Percentage
India                    51,447        20.7%
Philippines              20,601        8.3%
Mexico                   13,834        5.6%
Pakistan                 12,111        4.9%
Dominican Republic       7,979         3.2%
Grenada                  6,749         2.7%
USSR                     6,450         2.6%
Dominica                 5,854         2.4%
China                    5,375         2.2%
Egypt                    5,266         2.1%
Iran                     4,940         2.0%
South Korea              4,845         2.0%
Italy                    4,732         1.9%
Spain                    4,343         1.8%
Germany                  4,197         1.7%
Syria                    3,869         1.6%
United Kingdom           3,698         1.5%
Montserrat               3,569         1.4%
Columbia                 3,343         1.3%
Ireland                 3,302          1.3%
Source: American Medical Association, 2009

         The 77.5% of IMGs are in patient care. Note that the Philippines is the only

country in Southeast Asia in the top 20. If the only reason for physician migration were

lack of local opportunity, then there should be more immigrant physicians from our

neighboring countries. The same can be said of nurses and other health professionals.

Maybe there is more to just overproduction and lack of local opportunity. Maybe there is

something missing in the way they are educated and trained.

Public service and the common good over private gain

         Nowhere in the education and training of would be health professionals, by all the

academic institutions in the country, is there a deliberate and serious effort to emphasize

public service and the common good over private gain. A perusal of the representative

curricula from three medical schools, each representing a particular vested group (see

appendices 1, 2 and 3) show the near absence of dedicated time in the curriculum for

students to be made aware that they have a responsibility in providing public service and

promoting the common good. In the medical curriculum of the National University, an

institution with the mandate and the tradition to place public service and the common

good on equal importance as academic excellence, the total time allocated for the

discussion on matters bearing on the subject is only 64 hours out of a total of 2,502

didactic hours in the first 2 years of school. And while there are at least 23 weeks out of

131 weeks in the clinical years (3 rd year to internship) that will provide this opportunity, it

is doubtful whether in fact, this time is devoted to such concern.

        The grant of access to education and training in the health professions has not

been linked at all to achieving a reasonable probability that the student when he

graduates, will place himself in some context that will contribute to the improvement of

access and equity in health.4 While there have been some attempts, especially by the

National University, to incorporate this principle in their academic undergraduate and

postgraduate programs, the effort is “feeble” in the context of the national problem. The

educational process fails to modulate the dominant motivation of the majority of the

students and their families, which bankroll their education, which is to recoup their

investment with profit, in the practice of the profession.

        The heavy emphasis on the science of medicine in the clinical years relegates

the discussion of the social aspects of the profession to unwelcomed distraction. For

comparison the time allotted to a course that provides the venue for discussing the

social, economic, anthropologic, and ethical dimensions of health problems in the

undergraduate years of medicine (1 st and 2nd yr) is shown in Table 8. The table

represents the national university which is secular and public, a religious and private

university with the largest enrolment, and a small institution with no pretensions to public


Table 8. Time in the curriculum providing opportunity for socio-anthropo-ethico-
behavioural (SAEB) discussion1
Curriculum                                       Medical College
                                        A                B              C
               st nd
Preclinical (1 -2 yr.)
    Total Time                    2,502 hours     2,390 hours      2,514 hours
    % biomedical                  94              94               92
    % SAEB                        6               6                8
Clinical (3rd-4th yrs.)
    Total Time                    79 weeks        1,303 hours      1,282 hours
    % biomedical                  81              86               86
    % SAEB                        19              14               14
Internship (5th yr.)a
     Track A
        Total Time (weeks)        52 weeks
        % biomedical              85
        % SAEB                    15
     Track B
        Total Time (weeks)        52 weeks
        % biomedical              62-85
        % SAEB                    15-38
Sources: Official college brochures
a - Internship part of undergraduate in A, postgraduate for B and C

In recruitment of future HHR

       The regulation of health professional education is the responsibility of the CHED

(CHED, RA 7722) in the case of medicine and nursing while the DEC (DEC, RA 2644,

revised 1992) prescribes the requirements for the midwifery course. Although CHED and

DEC are the ultimate authorities prescribing the minimum requirements for admission to

these professional schools, their corresponding education board as well as the official

organization of their respective schools and colleges, for example, the Association of

Philippine Medical Colleges (APMC) may prescribe other admission requirements.

        As a result of free market forces, stiff competition for enrollees ensues since

there are not enough applicants to fill the quotas of the schools and colleges. The

bottom line requirements for enrollee applicants are thus reduced to academic

qualification and ability to pay for the education. Even academic requirement is not

uniform as some institutions are forced to accept students below the desired academic

cut-off to survive financially. Therefore the recruitment process fails to identify in the

search for the ideal student, the one who after graduation has a high probability of

contributing to access and equity in health service.

In undergraduate and graduate education and training

        In 1975 medical schools were criticized for preparing students for “dimly

perceived requirements of the twenty first century, while largely forgetting or even

ignoring the health needs of today and tomorrow.”4 Unfortunately, the overwhelming

health need of the Philippines today is still basic health services for everyone, not tertiary

care with state of the art facilities.

        A quick glance at the undergraduate offerings of the health professions show the

stereotypical and pigeon-hole character of the courses. The products of these programs

are graduates prepared to practice their profession on the classical model of one on one,

professional-clientele contact, in a controlled environment. Basic health services

anchored on primary health care principles need professionals whose education and

outlook prepare them to work not only with individual patients but with communities both

as care givers and transformative leaders. The undergraduate student is being prepared

to be technologically savvy but is not equipped to appreciate, much less handle the

attendant social dimensions of illness.4

       In 1997 the National Health System (NHS) of Britain was reviewed in order to

improve the speed of delivery of health services. Heretofore, the average waiting time

from referral to treatment was a long 18 months. In a publication entitled High Quality

Care for all, the NHS established the mission of providing high-quality care – driven by

clinical leadership, best evidence, and innovation – as the organizing principle of the

service and has put the NHS firmly on the path toward systemic improvement in

outcomes and efficiency. The review involved 2000 clinicians from all fields of care. It

was a trailblazer because clinicians defined what an effective health care system is. It

also involved them in defining the link between funding and the care provided. Finally

they were challenged to develop a system that puts quality of care before financial gain.6

       Without assuming that the foregoing will be the organizing principle of UHC

(although it is an accepted principle) it nevertheless highlights the role that clinicians and

other health professionals should additionally assume in a UHC. The present system of

undergraduate and graduate education does not give the student as much as a nodding

acquaintance, not to mention comprehensive knowledge, on how our particular health

system works. The undue emphasis on technical knowledge, proficiency in skills, literacy

in technology, and narrow specialization prepare students for practice in first world

countries rather than a developing country like ours.

       The template in undergraduate and graduate education turns out graduates

distinguished only for being copies of one another, clones in other words. The

curriculum, pedagogy, and assessment tools for measuring exit qualifications ensure

that this will be the case. Products of this educational process will be greatly

handicapped once confronted by real health problems in families, communities and


In deployment and retention

       Consideration of deployment should be part of the production process. An

accurate estimate of the need, based on real time high quality information, is the first

requisite of a successful deployment program. Many first world countries are able to

estimate their needs for health human resource on a continuing basis. This estimate is

the basis for regulating the production of health professionals. Measures are available to

their government which are basically incentives to stimulate production or disincentives

to downsize the output if the system is a free market. There is no comparable data in the

Philippines. There is therefore no firm basis to anchor an accurate HHR production.

       There is a HHR production plan in the DOH which estimates the need for the

next 30 years based on projected population increase as shown in table 6. 7 Such a plan

does not capture the true need for HHR because it does not incorporate deployment

data among many others. In the end the deployment status for HHR will be determined

by output and the market forces. Only in a limited manner can the absorptive capacity for

the health workforce be accurately estimated unless reform in the information systems

provide the technological tools.

       The DOH, based on plantilla will have figures of their absorptive capacity. The

same is true for the local government in so far as the health facilities under their control

are concerned. Various industries know their need. But in the private sector, the capacity

of the workplace to support the health care worker is difficult to establish. If the situation

in a private hospital were to be used as a rough parameter for example, the number of

practicing physicians to hospital beds, the resulting number is indicative more of supply

than need. Staffing in a private hospital is based mainly on the principle of the more

physicians the better. This is anchored on another principle: the physician is the clientele

of the hospital because he is the one who brings in patients.

        In principle, the public sector need for HHR must be filled primarily by graduates

of state supported institutions. There are model programs of government that can be

replicated to fill this need like the School of Health Sciences in Leyte, Aurora and

Cotabato. However, the need is empirically estimated to be bigger than can be produced

by these institutions. Therefore, the private sector must make up for the deficiency

based on the strategies to be discussed subsequently on recruitment, education and


        Once absorbed into the system, the workforce needs to be nurtured. Part of the

nurturing process is the provision of competitive working conditions very basic of which

is salary and non-monetary perks. The gap between what a health worker in government

gets compared to one privately employed is too wide to be left unattended. It is useless

to talk of effective deployment unless the playing field is leveled.


Objective underlying reforms in HHR production

        The principal objective of the production of HHR should be to provide competent,

well-motivated, transformative and committed health professionals to the health system

that provides universal care. In order to achieve this objective, fundamental changes

have to be instituted in the recruitment, education, training and deployment of health


In recruitment

       The selection process for students to be given access to a health profession

career must identify those who are expected to be assets in addressing the problem of

access and equity in health care in our country. Depending only on academic

qualification and ability to pay for their education as the main criteria for admission do

not increase this probability. In fact, as reported by Stefan Theil, achievement

differentials i.e., value added to human capital by attending college, are actually higher

at good quality schools with less selective admissions than they are at IVY league

universities. In other words, academic discrimination based on a few point differences in

academic score is less important in getting the desirable student. Criteria designed to

ferret out characteristics that have high predictive value on the career path the student

will most likely follow after graduation should be the main feature of the selection


       As a start, active scouting for desired students must compliment the current

passive method of student intake. The initiative must be on the school, not on

prospective students. The mechanisms for doing this selection process are well

developed and have only to be adopted. One example is scouting for students with

excellent sports aptitude.

       Innovative screening and interview techniques found successful by big business

corporations, world-class universities, religious orders, military academies, lobby groups,

cause oriented advocacy organizations and others can be adopted. Professional groups

specializing in selection methodologies can be tapped for the purpose.

       The future career paths of entering students should not be left completely to

random probabilities. There should be a predetermined student mix where a proportion

of students in a given class are admitted and deliberately guided to a particular career

path, with full knowledge of the students and the faculty. Considering the size of the

entering class in medicine (see table 9) even a 10% share of students deliberately

recruited for a specific purpose will eventually result in a sizeable cadre to spearhead a

particular program.

Table 9. First year enrolment in 38 medical schools 2003 to 2010 and annual number of
interns from 2004 to 2010
School Year      1st year class    Interns
2003-2004        2,714
2004-2005        2,587             2,730
2005-2006        2,365             2,640
2006-2007        2,504             2,277
2007-2008        2,572             1,957
2008-2009        2,771             1,671
2009-2010        3,745             1,447
Source: Association of Philippine Medical Colleges (APMC)

        For state supported schools admission for return service agreement or some

similar arrangement has to be policy. This is an equitable way of repaying the subsidy

extended to the student coming from tax money. A similar arrangement can be justified

in private schools for students enjoying scholarship from government. The private school

can also be persuaded to allocate slots in their classes for student who will be their

scholars, in exchange for which government will reciprocate via tax-incentives and the


        An even better, in the sense of higher success rate, admission policy is to accept

students who have a “social contract” with their community of origin. In the model

adopted by the School of Health Sciences, University of the Philippines Manila, in

Tacloban Leyte, all the students were selected by the community. The continuing stay of

the students in the School depend on the continuing endorsement by the community at

the end of every service leave, which is also a feature of the program. The retention rate,

that is the number of graduates who return to their communities or equivalent places, to

practice their profession is an outstanding 95% over decades of producing such


       It has been shown in the School’s experience that selecting students from within

the underserved communities, in particular those from poor families improve the

eventual retention rate. By favoring native intelligence and trainability over achievement,

many future professionals with desirable qualities, who would otherwise be lost to the

system, were given a chance to complete their education and eventually serve.

In education

       The health problems of the country need professionals whose education and

outlook prepare them to work not only with individual patients but with families,

communities and population as care givers and as transformative leaders. The global

demand for doctors, nurses and other health professionals, particularly in wealthy

countries, has shaped the design and content of the medical curriculum to turn out for

export, products whose knowledge, skills and way of thinking are suitable for health

systems foreign to the Philippine situation.

       The undergraduate program must be fashioned so as to bring out in the students

not only the desire but also the ability to respond to the nation’s health problems. Both

the content and the methodology of undergraduate education need fundamental

reorientation for the singular purpose of making it relevant and responsive to the major

health problems afflicting the majority of Filipinos who are also poor.

       The curriculum should be infused with more social sciences, interwoven in the

teaching of biomedico-technical subjects and further reinforced by dedicated hours of

motivating. Technical lecture should be introduced by a brief discussion of the subject’s

social dimensions. Teaching must be contextual rather than purely content oriented.

Values, especially social values must be given ample space. Ethics governing individual

patient care should be expanded to include those applicable to communities and

populations. Always, the economic implication of any intervention in relation to outcome

must be part of the discussion of any disease state as is the acquisition of state of the art

technology. It is desirable that comparison be made between the outcome of

predominantly social intervention as against purely technological.

       A cursory examination of the curriculum content of the medical undergraduate

program from three medical schools as shown in table 8 and appendices 1, 2 and 3

indicate the comparative importance given to the social dimensions and determinants of

health compared to achieving professional competency in the undergraduate instruction

in medicine. This can be inferred from the time allotted to subjects and/or assignments

(rotation) where concern for relevance can be thoroughly discussed. The data in table 8

would indicate that unless every instruction period in any subject or course is considered

as opportunity for putting social dimensions to the technical subjects, the time dedicated

to such kind of discussions will be overshadowed by technical matters. Hence, the need

to be contextual rather than context oriented.

       The undergraduate curriculum of the health professions is rigid and inflexible.

The assumption is all graduates will pursue the same career path: all will be taking care

of individual patients. Those who have inclinations to pursue other career paths have

been deprived of the opportunity to at least be introduced to the disciplines they will

need later, hence the last three years of their schooling, in medicine, for example, have

been “wasted.”

       The curricula, at least for medicine, nursing, and midwifery should be flexible to

enable students to differentiate early and follow their chosen paths without being

required to take the standard course for the degree. The only must courses should be

those that will equip the student with the language and fundamentals of the profession.

Beyond this, the curriculum should be flexible. It should allow the student who has made

the decision on what he should be after graduation, to start acquiring the requisite

knowledge and expertise relevant to his chosen career in the undergraduate years. This

flexible curriculum is in fact, a requirement for a system where the desirable student is

recruited and guided to a specific career path. The flexible curriculum may also require

multidiscipline and multi-college offerings for a given course. It will inevitably require a

“breaking-down” of the walls that now separate colleges and departments in many

universities. The student emerging from such an educational process will find

multitasking in the workplace a less formidable challenge.

       Another feature of the desirable educational process is the service leave wherein

a student leaves school for a short time for immersion either in a community or a

government run health care facility. The exposure can serve two purposes: strengthen

(reinforce) his desire to serve, or, realize early that this is not the career he wants. Either

way the result is beneficial to the system.

       The locus of schooling if it is close to where the student comes from, greatly

enhances the prospect of the student settling in his native community or some similar

areas. Therefore, dispersal of health professional schools should favor areas where the

need for health services is unmet.

       The undergraduate program should be able to shift to a new program with ease

and dispatch, when demanded by the health sector reform. It should also be able to

create a new type of health professional. It may well be that the backbone of the basic

health service nationally is not a physician, nor a nurse, nor a midwife but a chimera

emerging from an amalgam of health disciplines. Such a professional may, without

intending to, be ineligible to be recruited to work outside the country because, there is no

way his academic status may be evaluated according to international norms.

In training

       Training in the context of this paper refers to the postgraduate period. It pertains

to a program that endows a specialist status to the trainee. Mainly demanded by

specialty professional societies, certification as to specialist status is also by them.

In specialty training

       A universal health care system will require a mix of generalists and specialists,

the right proportion of which has to be based on an accurate estimate of the need for

their services. Currently, specialty training in medicine, the type and number in

particular, is supply driven. Organized private specialty societies determine the number

of training positions in recognized institutions as well as the program. As anticipated the

output of the programs are not in accordance with needs but on capacity of the training

institution. This has given rise to a situation where there are more specialists than

generalists, a condition that has impacted on the quality and cost of medical care. (see

table 10) In this table members of the Philippine Medical Association (PMA) can be

considered the closest number to licensed physicians practicing their profession in the

country regardless of the type and place of their practice or their whereabouts. On the

other hand, members of numbers 8 and 9 societies are pure specialists with no patient

care activity. Those from numbers 2 to 7 societies are almost all patient care specialists.

Members of number 10 society most likely provide family and primary care. From these

numbers a rough estimate of generalists to specialist ratio will range from 1:3.3 to 1:3.0;

very far from the desirable ratio of less than 1:1 in favor of generalist required in a UHC


Table 10. Membership to major professional societies in medicine1
Society                                                Number of members
1. Philippine Medical Association                       64,315
2. Philippine College of Physicians                     7,660
3. Philippine College of Surgeons                       2,256
4. Philippine Pediatric Society                         3,333
5. Philippine Obstetrical and Gynecologic Society       3,131
6. Philippine Academy of Ophthalmology                  1,539
7. Philippine Society of Head and Neck Surgery          458
8. Philippine Society Pathologists                      597
9. Philippine College of Radiology                      1,132
10. Philippine Academy of Family Physicians             ~ 6,000
Source: Individual Societies

        In nursing where there is a real need for nurse specialists, the output from

training institutions is very niggardly because, in fact, there are not even a handful of

institutions that can provide specialty training. In midwifery the issue is more about

postgraduate training rather than specialty training. This is not to say that there is no

need for a midwife specialist. In the future, when UHC is fully implemented, such a

midwife specialist will surely be needed and will emerge.

In postgraduate training

        Postgraduate training at present is very much a drug industry directed activity

since the fund needed are provided by them. The specialty training programs in

hospitals are heavily subsidized by the pharmaceutical companies. All the major

postgraduate activities including annual conventions and overseas attendance of

trainees are bankrolled by drug firms. Withdrawal of financial support can result in

closure of a significant number of training slots in many institutions while postgraduate

courses will effectively stop.

        The biggest number of postgraduate specialty training positions is available in

the Philippine General Hospital (PGH). No other medical center in the country comes

close to PGH in this regard. Table 11 shows the specialty slots called fellowship in the

Department of Medicine in PGH, which has the most number of fellows in training

among all the departments, both clinical and basic. Of the total 74 fellows in 2008, 72 or

97% were funded by pharmaceutical companies. At the Manila Doctor’s Hospital which

has only 8 fellows in the whole institution, 7 or 88% are drug company supported. Similar

situation exists in the rest of training hospitals in the country.

Table 11. Post-residency specialty slots (fellowship), Department of Medicine UP-PGH
Medical Center, 2008
                         Total number       Supported by Drug     Supported by
                         of fellows         Company               Hospital
Allergy / Immunology     2                  2                     0
Cardiovascular             16                16                      0
                           4                 4                       0
Endocrinology              9                 8                       1
Gastroenterology           6                 6                       0
Hematology                 3                 3                       0
Infectious Diseases        2                 2                       0
Medical Oncology           10                10                      0
Nephrology                 8                 7                       1
Pulmonary Medicine         10                10                      0
Rheumatology               4                 4                       0
Total                       74 (100%)        72 (97%)                2 (3%)
Source: Director’s Office, UP-PGH

        Postgraduate programs should be taken away from drug companies’ support.

Professional availing of such programs must be made to pay the cost. A structured,

mandatory and credited postgraduate education must be required for continuing

certification of all health professionals.

Specific initial reforms in the HHR sector

Philosophy of reform

        Health human resource or health workforce is a decisive sector for the attainment

of UHC. The smallest functional unit of HHR is a team and its primordial function is to

provide primary health care according to the Alma Ata declaration.8 HHR production,

specifically number and mix, is based on country need. Sustainability and the

maintenance of an effective, efficient, technically competent and happy workforce are

concerns that are of equal importance as production.

Key policy

        The centerpiece policy is regulation. There should be regulation in the

production, education, training, licensure, deployment, retention and the workplace


Policy instrument for HHR reform

        The policy instrument is the integration under one body of all regulatory functions

exercised by various stakeholders that influence the ability of HHR to optimally provide

the requirements of a UHC.

Stakeholders in the HHR sector

In production,

          Students and their families
          CHED
          Schools, Colleges and Universities
          DEC
          PRC and their respective Boards
          Association of Schools, Colleges and Universities based on profession.
           Example: APMC
          National Professional Organizations. Examples: Philippine Medical
           Association (PMA), Philippine Nurses Association (PNA), United Midwives
           Association of the Philippines (UMAP)
          Specialty Professional Organizations. Examples: Philippine College of
           Physicians (PCP), Philippine College of Surgeons (PCS), and Philippine
           Pediatric Association (PPA)

In deployment,

          Department of Health (DOH)
          Local Government Units (LGUs)
          Department of Labor and Employment (DOLE)
          Philhealth
          Private Health Insurance (HMOs)
          Industry
          Hospitals and Clinics
          Community
          Non-Governmental Organizations (NGOs)

       Based just on the number of stakeholders, it is readily obvious that attempts at

rationalization, integration and regulation of HHR production, deployment, and retention

will face tremendous difficulty because, each stakeholder, has interest and turf to

protect, which interest and turf many not be exactly supportive of UHC. Consider for

example, the number of medical schools relative to the population (see table 11). Under

the present arrangement, would CHED have enough clout to close schools which stay

afloat only because of foreign students?

Table 11. Medical schools/colleges in selected ASEAN countries1
Country       Number of medical Population (in Ratio of schools per
              schools/colleges      thousands)     thousand population
Philippines 38                      90,457         1:2380
Indonesia     32                    238,523        1:7454
Thailand      12                   60,482c          1:5540
Malaysia      8                 27,863              1:3483
Source: Asean database, 2008
a. 2010 b. 2004 c. 2005 d. 2005

The commission model

       An attractive model for the policy instrument is a Commission headed by the

DOH with the following as mandatory members: CHED, PRC, Philhealth, LGU, and ad

hoc representatives from DOLE, DEC, educational institutions, national professional

organizations, and people’s organizations. The membership of these institutions and

agencies in the commission reflects their important role in the configuration of the HHR

sector: DOH is ultimately responsible for the state of health of the population aside from

being the lone Department of government that has the organization, resources and

reach to implement a nationwide health care program: CHED determines the content

and standard of education for health care professionals; PRC is responsible for licensing

of health professionals as well as ensuring ethical and legal behavior in the practice of

the profession; Philhealth, when it finally succeeds in being a true social health

insurance with universal coverage could leverage the quality and quantity of health

services to its members because it will be the major source of funding; the LGU which is

now responsible for providing health services at the provincial and municipal level

provides, funds, administers, and monitors these services; DOLE regulates foreign

employment wherein health professionals constitute a significant number, aside from

having a role in remuneration and entitlement of employees; schools, colleges and

universities are the educators and trainors; professional organizations determine the

production of specialists as well as confer titles to the professional which translates into

the compensation scheme followed not only by private care facilities but also by

Philhealth; people’s organizations represent the interest of the consumers and

communities, which interest must find its way into policy and governance. The

commission may create technical committees representing the other stakeholders not

represented in its membership. The Secretary of Health will head the commission

because the DOH is the dominant agency in matters pertaining to HHR.

Commission’s function

        The commission shall be the only body empowered to craft and promulgate

policy that pertains to standards and regulations of the production, practice and

deployment of various health professionals.

        It is solely responsible for the crafting of any law to be approved by the Congress

in matters within its responsibility.

        It shall be given the power to impose compliance to the policy it promulgates

under pain of sanction.

              DOH           CHED            PRC        Philhealth            LGU

                   Health Human Resource Commission (HHRC)

                                       Chair and CEO
                                    (Secretary of Health)

                                                               Secretariat and
                                                             Administrative Staff

                                  Technical Committees

 Recruitment            Education                 Training               Deployment
 - Family and student   -   DEC                   - Training Hospitals   - LGU
   representatives      -   CHED                  - Specialty            - DOH
   from Universities    -   Universities            Societies            - DOLE
 - PMA, PNA, UMAP       -   Training Hospitals    - Etc.                 - Phil. Hospital
 - LGU                  -   Etc.                                           Association (PHA)
 - DEC                                                                   - Etc.
 - Etc.

Figure 4. A suggested organizational chart of the Commission

Specific initial reforms in HHR as currently existing

       The problems in the HHR already in place have been discussed earlier in this

paper. The root causes of the problems have been analyzed. The consequences of

these problems have been linked to the current state of HHR in the country. Reforms to

address prospective HHR personnel have been proposed but a different set of remedial

measures are needed to align the current HHR to the implementation of UHC. These

measures, at some point, must merge with those instituted in the reform for prospective

HHR as to eventually be a single system.

Principles governing the reform

1. Health service (care) is a team effort. This is a radical departure from the

   identification of a specific health professional, most often a physician, as the basic

   provider of health care. This assumption has spawned the expectation that there

   should be a doctor in every barrio. Requiring the presence of a physician even for

   clusters of barangays is not only unrealistic, but also uneconomical and

   unsustainable in the long run. The team concept starts with the type of services

   needed and to be provided over a defined geographic area from whence a health

   service team is assembled. The team is a functional organization, not a “physical”

   aggregation. The location of the different members need not be in one place all the

   time. What is more important is availability of expertise whenever needed, by

   whatever means, including surrogate presence via modern communication. Thus,

   the membership of the team is variable. A health professional may actually be

   available to more than one team.

2. There is no hierarchical system. While the Health Care Team (HCT) may be

   composed of different health professionals, this by no means implies an automatic

   hierarchical system. Presently, whenever a health team is assembled, the members

   implicitly assume and defer to a predetermined “pecking order” based on the

   educational level of the professional members. Thus, if a physician, nurse, midwife,

   and paraprofessional constitute the team, it is assumed that the physician is first in

   the hierarchy with the paraprofessional, last. The team concept recognizes

   differences in level of expertise but not in the relative importance of their role at a

   particular time.

3. Leadership in the team is not automatic. Leadership changes according to

   circumstances. It is determined by many factors that include need, availability,

   commitment, expertise, and nature of the service among others. For example, if the

   service to be provided is simply giving standard vaccination, the team leader can be

   a midwife or even a paraprofessional (adequately trained, of course). If the team

   leader who happens to be a physician is unavailable most of the time, the

   responsibility can be delegated to the nurse, and so on.

4. Functions as well as responsibility are flexible and moveable. Not only

   leadership function but other functions and responsibilities as well, should be allowed

   to move from professional to professional under the proper condition that includes

   guaranteed safety of the health care recipient. Programs are sometimes stymied

   because of very strict rules about delegating or moving functions from personnel to

   personnel. This is the consequence of having individual and separate laws governing

   the practice of each profession.

5. Realistic reward system. The reward system should take into account the actual

   contribution to the team effort. The current payment scheme to health professionals

   is discriminatory. For example, Philhealth pays for the services of some

   professionals even if the bulk of the work is done by others, who are not among

   those deemed by it to be compensable. In the team concept, material compensation

   should reflect actual participation, quantity, and quality of work put into the service by

   a member, relative to the others. It should be possible for a nurse to be paid more

   than the doctor under the preceding conditions, or the midwife more than the nurse.

6. A functioning network of health services and referral system. A health team

   concept with its shifting membership, function and responsibility cannot succeed

   unless there is a seamless network of progressively higher level of care, available to

   the health care team via a working referral system. The basic health team which is

   operating at the level of the barangays should feel secure that when the need arises,

   help is available from the other primary health facilities as well as from secondary

   and tertiary health care centers.

Basic requirements for HCT to function optimally

       The creation of HCT to provide PRIMARY HEALTH CARE in a Universal Health

Care System requires at least three enabling conditions. These are:

1. A legal basis that will operationalize the six specific principles just enumerated in the

   preceding section.

2. Mechanism for maintaining a skilled workforce to include,

       a. Continuing education and training. This should be a required activity. It

           should not be an ad hoc program. An office should be created tasked with

           developing, implementing, monitoring, and evaluating the program. Clear

           objectives of the program should be stated, the mechanics of implementation

           chosen, and outcome measures developed. Outcome status in the

           professional competence of the team members should be part of the criteria

           for assigning function and responsibility, as well as the corresponding reward.

       b. Opportunity for members of the HCT to continually upgrade their technical

           skill and proficiency skill

       c. Periodic assessment of the preparedness of the team members by simulation

           of a contrived situation

3. An environment that keeps the workforce happy and well-motivated.

       Attrition in the workforce, especially the unplanned ones, is a constant threat to

the effectiveness of the HCT. Some of the incentives to promote contentment and keep

motivation high are:

       a. Full implementation of the Magna Carta for health workers. This is a basic

            provision and must be the minimal basis for compensation.

       b. Compensation from Philhealth for all members of the team. This must be

            implemented as soon as possible because discriminating against some

            professionals who provide health care service creates demoralization which

            drives them to seek work elsewhere.

       c. Competitive remuneration scheme equivalent to the private sector should be

            an objective. At the very least, the difference should not be substantial.

       d. Opportunities for professional growth and advancement should be available

            to members, and should be encouraged even if it results in attrition, as long

            as the lost member proceeds to a higher level of professional status.

       e. Participation or representation in policy formulation from the HCT level and

            higher. Members must be given the opportunity to attend and/or participate

            during policy discussions.

       f.   There should be adequate protection for members from legal and political

            harassment. The Civil Service Commission may provide a novel basis for the


Policy instrument for current HHR reform

       There is need to consolidate into one omnibus law all the individual professional

practice laws.

       The individual laws governing the education, training and practice of a particular

profession is the greatest hindrance to evolving a HCT. As already discussed, the HCT

that will provide the primary health care at the level of the community in a UHC scheme

will have to be characterized by a high degree of flexibility and adaptability. Variations in

membership, function, leadership, compensation, professional growth and advancement

as well as measures to minimize destabilizing attrition cannot be done without an

omnibus (integrating) law. The individual professional law is really more for protecting

turf and privilege rather than access and equity in health care. The omnibus law is meant

to remove that. In its stead the law will provide the legal basis for creating an effective

health care team, that should be the basic unit at the community level, providing primary

health care under a Universal Health Care System.

       The crafting of the LAW should be the priority task of the HEALTH HUMAN


       In the interim the COMMISSION may provide the format for the organization of

the HCT and its immediate deployment at the commencement of the UHC system.


       The attainment of UHC will require reforms in at least six sectors of health;

financing,   governance,    services,   regulation,   information   and   HHR.    The    two

recommended fundamental reforms in the HHR sector have to be harmonized with

recommendations from the five other sectors. The integrating mechanism for

harmonization, the one that will set into motion the efforts to move to UHC has to be a

policy pronouncement from the President of the Republic. It can come in the form of an

Executive Order directing all the concerned agencies and offices under the Executive

Branch of Government to provide the framework for the achievement of UHC.

1. Romualdez AG, De La Rosa JF, Flavier JDA, et al. Health Systems in Transition.

   World Health Organization, Western Pacific Regional Office. Philippines 2010.

2. Villaverde MC, Bethan MM, David LC. National Objectives for Health Philippines,

   2005-2010. Department of Health 2005.

3. Caballes A. An Appraisal of the Policy Environment for Philippine Hospital Sector

   Development. HPDP-OP, USAID-UPECON 2010.

4. Clavel L, Tayag JG (Eds). Strategic Directions for Health Sector Reform. UP Manila

   Centennial Lectures. University of the Philippines Manila 2009.

5. World Health Forum. WHO Regional Office for Europe 1984, vol. 6, 1985.

6. Darzi A. A Time for Revolutions – The Role of Clinicians in Health Care Reform. New

   N Engl J Med. 2009 Aug 6;361(6):e8. Epub 2009 Jul 22.

7. Lorenzo FME et al. The Philippines HRM Master Plan (2005-2030). Department of

   Health 2005.

8. Declaration of Alma-Ata. International Conference on Primary Health Care. Alma-

   Ata, USSR, 6-12 September 1978.
Appendix 1: Curriculum of Medical College A

First Year: Human Development, Structure and Function

Course      Course Title                                             Credits
HS 201      Human Health and Wellness                               40 hours
OS 201      Human Cell Biology                                     120 hours
OS 202      Integration and Control Systems                        136 hours
OS 203      Skin, Muscles and Bones                                104 hours
OS 204      Head and Neck                                           72 hours
OS 205      Thorax                                                 144 hours
OS 206      Abdomen and Pelvis                                     142 hours
HD 201      Human Ontogeny and Parturition                         130 hours
HD 202      Human Physical and Psychosocial Development            120 hours
IDC 202     The Making of a Physician                               64 hours
IDC 211     Introduction to the Research Process                    32 hours
IDC 211.1   Laboratory Research                                     90 hours
                                                          Total: 1,194 hours

Second Year: Human Pathophysiology and Therapeutics

Course      Course Title                                             Credits
HS 202      Biopsychosocial Dimension of Illness                   108 hours
Ther 201    Pharmacologic Basis of Therapeutics                     80 hours
OS 211      Integration, Coordination and Behavior                 180 hours
OS 212      Locomotion and Sensation                               180 hours
OS 213      Circulation and Respiration                            216 hours
OS 214      Digestion and Excretion                                180 hours
OS 215      Reproduction and Hormonal Regulation                   180 hours
OS 216      Hematopoiesis and the Immune Response                   72 hours
IDC 203     The Patient and Illness                                 64 hours
IDC 212     Introduction to Clinical Epidemiology                   16 hours
Elective    Student directed elective                               32 hours
                                                          Total: 1,308 hours
Third Year: Ambulatory Medicine

Course        Course Title                                                           Credits
OS 217        Systemic Diseases                                                     4 weeks
Ther 202      Pharmacotherapeutics                                                  2 weeks
Anesth 250    Integrated Clinical Clerkship I in Anesthesiology                      1 week
FCH 250.1     Integrated Clinical Clerkship in Family Medicine                      2 weeks
FCH 250.2     Integrated Clinical Clerkship in Community Medicine                   2 weeks
Integ 250     Integrated Clinical Clerkship in Dermatology                           1 week
Med 250       Integrated Clinical Clerkship I in Medicine                           3 weeks
Musc 250      Integrated Clinical Clerkship in the Musculoskeletal System           2 weeks
Neurosc 250   Integrated Clinical Clerkship I in Neurosciences                      2 weeks
ObGyn 250     Integrated Clinical Clerkship I in Obstetrics Gynecology              4 weeks
Ophtha 250    Integrated Clinical Clerkship I in Ophthalmology                       1 week
ORL 250       Integrated Clinical Clerkship I in Otorhinolaryngology                 1 week
Pedia 250     Integrated Clinical Clerkship I in Pediatrics                         4 weeks
Radio 250     Integrated Clinical Clerkship in Radiology and Nuclear Med            2 weeks
Surg 250      Integrated Clinical Clerkship I in Surgery                            3 weeks
IDC 204       Holistic Medicine                                                      1 week
IDC 213       Evidence Based Medicine                                               24 hours
IDC 221       Management in Health Care I                                            1 week
IDC 222       Management in Health Care II                                           1 week
Elective      Student directed elective                                             2 weeks
                                                                            Total: 39 weeks

Fourth Year: Hospital Based Medicine

Course        Course Title                                                          Credits
Anesth 251    Integrated Clinical Clerkship II in Anesthesiology                    2 weeks
EM 251        Integrated Clinical Clerkship in Emergency Medicine                   2 weeks
FCH 251       Integrated Clinical Clerkship in Family and Community Med             4 weeks
Med 251       Integrated Clinical Clerkship II in Medicine                          6 weeks
Neurosc 251   Integrated Clinical Clerkship II in Neurosciences                     2 weeks
ObGyn 251     Integrated Clinical Clerkship II in Obstetrics Gynecology             4 weeks
Ophtha 251    Integrated Clinical Clerkship II in Ophthalmology                     2 weeks
ORL 251       Integrated Clinical Clerkship II in Otorhinolaryngology               2 weeks
Ortho 251     Integrated Clinical Clerkship in Orthopoedics                         2 weeks
Pedia 251     Integrated Clinical Clerkship II in Pediatrics                        4 weeks
Rehab 251     Integrated Clinical Clerkship in Rehabilitation Medicine              2 weeks
Surg 250      Integrated Clinical Clerkship in Surgery                              4 weeks
IDC 205       On Being a Physician (integrated in rotations)
Elective      Student directed elective                                             4 weeks
                                                                            Total: 40 weeks
Track A Internship: Comprehensive Health Care

Course         Course Title                                                  Credits
Anesth 260     Internship in Anesthesiology                                  1 week
FCH 260.1      Internship in Family Medicine                                2 weeks
FCH 260.2      Internship in Community Medicine                             6 weeks
Med 260        Internship in Medicine                                       8 weeks
Neurosc 260    Internship in Neurology and Psychiatry                       3 weeks
ObGyn 260      Internship in Obstetrics and Gynecology                      8 weeks
Ophtha 260     Internship in Ophthalmology                                  2 weeks
ORL 260        Internship in Otorhinolaryngology                            2 weeks
Ortho 260      Internship in Orthopedics                                    2 weeks
Pedia 260      Internship in Pediatrics                                     8 weeks
Rehab 260      Internship in Rehabilitation Medicine                        2 weeks
Surg 260       Internship in Surgery                                        8 weeks
                                                                    Total: 52 weeks

Track B Internship: Core Internship + Electives

Course         Course Title                                                  Credits
FCH 260.1      Internship in Family Medicine                                2 weeks
FCH 260.2      Internship in Community Medicine                             6 weeks
Med 260        Internship in Medicine                                       8 weeks
ObGyn 260      Internship in Obstetrics and Gynecology                      8 weeks
Pedia 260      Internship in Pediatrics                                     8 weeks
Surg 260       Internship in Surgery                                        8 weeks
Electives      Student directed electives                                  12 weeks
                                                                    Total: 52 weeks

Track C Internship: Straight Internship in a Department

Course         Course Title                                                Credits
SI 270.1       Straight Internship in Family & Community Medicine         52 weeks
SI 270.2       Straight Internship in Medicine                            52 weeks
SI 270.3       Straight Internship in Otorhinolaryngology                 52 weeks
SI 270.4       Straight Internship in Pediatrics                          52 weeks
SI 270.5       Straight Internship in Radiology                           52 weeks
SI 270.6       Straight Internship in Rehabilitation Medicine             52 weeks
SI 270.7       Straight Internshpi in Surgery                             52 weeks
Appendix 2: Curriculum of Medical College B

First Year

Course                                        Hours   Weighted Score
Gross and Clinical Anatomy                      340             10.0
Physiology                                      272              8.0
Biochemistry                                    272              8.0
Histology                                       102              3.0
Preventive and Community Medicine I              51              1.5
Clinical Epidemiology I                          45              1.5
Neuroscience I                                   33              1.0
Medical Ethics I                                 34              1.0
Psychiatry I                                     17              0.5
Second Year

Course                                        Hours   Weighted Score
Medicine I                                      204              6.0
Pathology                                       238              7.0
Pharma - Therapeutics                           170              5.0
Microbiology                                    136              4.0
Surgery                                         102              3.0
Clinical Pathology                               68              2.0
Obstetrics I                                     51              1.5
Parasitology                                     51              1.5
Medical Ethics II                                34              1.0
Preventive and Community Medicine II             34              1.0
Neuroscience II                                  34              1.0
Behavioral Medicine I                            34              1.0
Clinical Epidemiology II                         34              1.0
Pediatrics I                                     17              0.5
Anesthesiology                                   17              0.5
Third Year

Course                                  Hours   Weighted Score
Medicine II                               340             10.0
Surgery II                                238              7.0
Pediatrics II                             170              5.0
Obstetrics II                              51              1.5
Neurology                                  51              1.5
Behavioral Medicine II                     51              1.5
Gynecology                                 51              1.5
Legal Medicine                             51              1.5
Preventive and Community Medicine III      51              1.5
Ophthalmology                              34              1.0
Medical Nutrition                          34              1.0
Radiology                                  34              1.0
Otorhinolaryngology                        34              1.0
Medical Ethics III                         34              1.0
Clinical Epidemiology III                  45              1.0
Dermatology                                17              0.5
Rehabilitation Medicine                    17              0.5
Appendix 3: Curriculum of Medical College C

First Year

Course                                        1st Sem    2nd Sem   Total
                                               Hours      Hours    Hours
Human Anatomy                                   256        224      480
Physiology                                      192        192      384
Biochemistry                                    128        128      256
Preventive and Community Medicine I              48         48       96
Pedagogy                                         16                  16
Psychiatry I                                               32        32
Second Year
                                               st         nd
Course                                        1 Sem      2 Sem     Total
                                               Hours      Hours    Hours
Medicine I / Physical Diagnosis                  96        192      288
Microbiology                                    128                 128
Parasitology                                                96       96
Pathology                                       160        160      320
Basic Pharmacology                               96         96      192
Preventive and Community Medicine II             48         48       96
Radiology                                        16         16       32
Surgery I                                        32                  32
Pediatrics I                                               32        32
Psychiatry II                                       32               32
Bioethics I & II                                    32               32
Third Year

Course                                        1st Sem    2nd Sem   Total
                                               Hours      Hours    Hours
Medicine II                                     128        128      256
Surgery II                                      104        104      208
Obstetrics Gynecology                            80         80      160
Pediatrics II                                    80         80      160
Ophthalmology                                    16         16       32
Advanced Pathology & CPC                         32         32       64
Otorhinolaryngology                              16         16       32
Preventive and Community Medicine III            80         80      160
Psychiatry III                                   32         32       64
Legal Medicine & Jurisprudence                   32         32       64
Clinical Pharmacology                            32                  32
Bioethics III                                              32        32
Perspective in Medicine                                    16        16
Research Methodology                                       4          4
Fourth Year

Course                                Total Units
Community Medicine Clerkship           ½ month
Medicine Clerkship                    2½ months
Obstetrics and Gynecology Clerkship    2 months
Ophthalmology Clerkship                ½ month
Otorhinolaryngology Clerkship          ½ month
Pediatrics Clerkship                   2 months
Psychiatry Clerkship                   ½ month
Surgery Clerkship                      2 months
Bioethics IV                           12 hours
Elective                               ½ month
        Health Financing
                Ramon P. Paterno, M.D., MPH

                 Chrysanthus E. Herrera, M.D.

      Institute of Health Policy and Development Studies

University of the Philippines-Manila National Institutes of Health

Review of Literature

Functions of Health Financing

       There are three general functions of Health financing: 1) revenue generation, 2)

risk pooling and 3) purchasing.1 Revenues for the health system are usually generated

from taxes, social health insurance premiums and out-of-pocket expenditures. Revenues

generated from taxes or social health insurance premiums are pooled together and

provide protection against catastrophic health expenditure and impoverishment. Out-of-

pocket expenditure pools the risk at most, only at the household level and provides the

least financial protection against catastrophic health expenditure and impoverishment

aside from actually excluding those who have subsistence earnings. Catastrophic health

spending is defined as spending more than 40% of the household income after basic

subsistence needs have been met.2 The revenues generated are used to purchase

health services.

       As discussed in the introduction, there are four general models of health system


1. Tax based funded - the UK National Health Service (NHS) model or the Cuban


2. Social Health insurance funded - the German Bismarckian model

3. Government subsidized National Health Insurance paying for the services provided

   by private providers - the Canadian model and

4. Out of pocket system – including private insurance paid out of pocket. The US model

   after which the Philippines is modeled, is a combination of the different means of

   financing health care: government subsidized insurance with Medicare for the elderly

   and Medicaid for the poor, a tax funded Veterans health service and private health

   insurance or out of pocket payments for the rest. The US model is characterized as

   having one of the highest national health expenditure 3 (16% of GDP in 2007) but with

   a large number of the population uninsured (49 million) and with health outcomes

   ranked only as number 37th in the world.4,5

       Recent documents of the WHO have called for Universal Coverage to address

the continued health inequities among nations and within nations. The WHO Western

Pacific Region Health Financing Strategy for the Asia Pacific Region 2010 – 2015

(WPRO HFS) specifically calls for 1) Universal Coverage, 2) Renewal of Primary Health

Care and 3) Health Systems Strengthening.

Health Financing Trends in the Asia Pacific Region

       Most countries in the Asia Pacific Region face the following health financing

issues: chronic underfunding, inequitable sourcing of funding (low public spending

leading to high out-of-pocket spending), efficiency issues in terms of allocation of limited

financial resources and payment mechanisms leading to higher health care costs.


       Most developing countries within the Asia Pacific Region spent (in terms of Total

Health Expenditure or THE) less than 5% of GDP based on National Health Accounts for

2007. Vietnam had the highest THE at 7% of GDP. The Republic of Korea, Mongolia,

Cambodia and Nepal also spending above 5% of GDP on health. In contrast, the

Philippines spent 3.5% of GDP.6 (See figure 1. The lower bar represents government

spending, while the upper bar represents private spending as % of GDP.)

Figure 1. Government and Private health spending as Percentage of GDP in the Asia

Pacific Region NHA 2007 (Source: WHO Western Pacific Regional Office)

       The WPRO HFS paper asserts that there is fiscal space among governments of

the region to increase health spending, that tax revenues of 13.2% of GDP and total

government revenues at 16.6% of GDP are the lowest of any region in the world. Health

revenues can be increased in the region “by increasing domestic tax revenues,

expanding the tax base, developing social health insurance, borrowing externally or

seeking debt repayment relief.”6

Sources of Funding

        Government spending was less than 2% of GDP in almost half of these

countries. The Philippines government share was about 1.2%. 6 (see figure 1)

       Government spending on health was too low to support universal coverage.

Evidence within the Asia Pacific region which covers the 37 countries of the WHO

Western Pacific Region and the 11 countries of the WHO South-East Asia region,

suggests that countries whose governments spend less than 5% of GDP on health had a

higher percentage of households with catastrophic health expenditures.6 (see appendix


       The major source of health care financing in most countries of the region was

out-of pocket (OOP) payments. Regional data also suggests that countries with greater

than 30% out-of-pocket health expenditures had higher percentage of households with

catastrophic expenditure and consequent impoverishment.6 (see appendix 2)

       Globally, the Asia Pacific region in 2005, had one of the higher levels of out of

pocket health expenditure, with over 40% of total health expenditures in the Western

Pacific region and over 60% in the South-East Asia region.6 In the Philippines, OOP

share was 54% in 2007.7

Efficiency Issues

Allocative efficiency

       Another major issue of health financing is not just the underfunding and

inequitable sources of funding but the inefficient allocation of limited resources. In the

Asia Pacific region:

        …80% of essential care and 70% of desirable health interventions can be

       delivered at the primary level but an average of only 10% of health resources are

       used for primary care in Asia… six countries in the Asia Pacific region spent less

       than 20% on primary health care. The Philippines spent about 11% on public

       health care. By comparison, in 11 OECD countries, outpatient care costs

       averaged 28%...6

Figure 2. Allocation of financial resources to primary health care (2005 estimates)

(Source: Midterm review of implementation: Regional Strategy on Health Care Financing in the

WHO Western Pacific Region 2006-2010, P. Annear, 31 August 2008)

       About half of total health spending in Cambodia, China, the Lao People’s

Democratic Republic and Vietnam went to Pharmaceutical and diagnostic services. 6

Payment Mechanisms

       The manner in which Health Care Providers are paid can significantly affect both

the cost and quality of care, and is therefore instrumental in achieving optimal use of

resources. The more common methods of payment mechanisms are: fee-for service,

salaries, case payments, capitation and global budget.

       The main provider payment mechanisms in the Asia Pacific region are budget

allocations, salaries and fee-for- services. Regulations regarding fees and balance billing

tend to be weak.6

       Fee for service (FFS) is a payment mechanism where the provider is paid for

every service provided, usually at the time of service. According to Liu Xingzhu, “FFS is

regarded as the worst payment method because it encourages over provision of

services and drives cost up”8 This payment mechanism is, however, usually strong in

terms of quality.

Path to Universal coverage

       Carrin et al in the WHO Special Bulletin, November 2008 describes the path to

Universal coverage from an initial stage of a health system characterized by the absence

of financial protection, with a dominance of out of pocket expenditures; to an

intermediate stage of coverage characterized by a mixture of a predominantly out of

pocket payments, community based health insurance initiatives, and limited social health

insurance and tax based spending, and the stage of universal coverage characterized by

a predominance of a tax or a social health insurance funded health system or a

combination of both.9

Figure 3. Key health financing options at different stages of the evolution towards

universal coverage. (Source: WHO Special Bulletin Nov. 2008)

Tax-based versus Social Health Insurance revenue generation for financing

Universal Health Care

       The main advantages of generating revenues for health through taxes, if properly

designed and collected, are that the burden of contribution is more progressive, and it

usually incurs less administrative costs. Coverage is by virtue of citizenship or residence.

A tax funded National Health Service has more direct ways of containing costs. Its major

disadvantage is that tax revenues generally go to the general appropriations and the

government health agency has to compete with the other government agencies for the

appropriate budgetary allocation for health.10 This may however be offset by an

automatic appropriation for health. If there is an automatic appropriation for debt

servicing, then there is a moral and ethical basis for automatic appropriation for health,

given that health as a human right is universally accepted.

       The major advantages of financing Universal Health Care through Social Health

Insurance (SHI) are that the funds raised through SHI premiums are earmarked for

health and the SHI funds represent additional revenues for health.

       On the other hand, the disadvantages of SHI are the following: higher

administrative costs, especially in countries where the employed formal sector is not fully

developed and where there is a large informal sector and indigents. Coverage is

dependent on identification, enrollment and collection of premiums. Historically, SHI

started in Germany. It took Germany 47 years to achieve 50% coverage and another 58

years to achieve 88% coverage. This was so because of the difficulty of covering the

informal sector.1 In the Philippines, the informal sector makes up at least 50% of the

workforce11 and will continue to increase if the trend towards de-industrialization is not


       SHI, because of its nature as an insurance system, pays for personal care.

Public health services, which should cover the whole population, are expected to be paid

from general taxation revenues. Therefore, there would still be a need to generate

revenues from taxes to pay for population based health interventions such as health

promotions, safe water and sanitation, or services that require high or almost universal

population coverage such as immunization.

       The major disadvantage is that SHI premium contributions are less progressive

than income tax payments. Formally employed workers bear the burden of financing

Universal Coverage as they are triple taxed in the form of automatically deducted

income tax, automatically deducted SHI premiums as payroll tax and indirect taxes such

as Value Added Tax.

                        What ever financial route a country takes to achieve Universal Coverage

(through taxes or SHI or a combination of both) the World Health Report 2010

summarizes what countries must do: raise sufficient funds, reduce the reliance on direct

payments to finance health services and improve efficiency and equity.12

The Philippines: Health financing situation

                        The Philippines faces the same health financing issues of the region: chronic

underfunding, inequitable sourcing of funding (low public spending leading to high out-of-

pocket spending), efficiency issues in terms of allocation of limited financial resources

and payment mechanisms leading to higher health care costs. An added issue is the

fragmentation and overlap of the health financing institutions.

Underfunding of the Health System

                        In 2007, the Philippines spent P235 billion or 3.5% of GDP on health. From 1995

to 2007, the Philippines total health expenditure as a nation has ranged from 3.4% -

3.7% of GDP.7 (WHO recommends 5% of GDP as public or government health


  Billions of Pesos

                      150                                                                      THE
                      100                                                                      5% GDP
                            1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Figure 4. Philippines total health expenditure (THE) 1995 – 2007. (Source: NHA, 2007)

Figure 5. Trends in out of pocket spending versus Philhealth and Government share in

Total Health Expenditure. (Source: NHA, 2007)

       Government share of total health expenditure (both national and local) was only

P61B or 26.6% and Philhealth share was only P20B or 8.5% resulting in 54.3% (P127B)

Out of Pocket expenditure.7 (see figure 5)

       Philhealth share in National Health Expenditure has risen but at a very slow rate.

Almost half of Total Health Expenditure in 2007 or around P110B out of P235B was

spent on pharmaceuticals. Sales were 80% in drugstores, 10% in hospitals and 10% in

government institutions. Branded medicines made up 97% of sales leaving only 3% for

generics. Multinationals controlled 68.7% of the market, with Philippine companies only


Efficiency Issues

Allocative Efficiency

                                          As a country, we are not spending enough on public health and primary care.

We spend from 73-78% of our national health expenditure on personal care versus 11-

14% for public health.7 The Philippine Health Sector Reform Agenda had envisioned

that, as government hospitals exercised fiscal autonomy and allowed to charge user

fees and retain income, (in large part, coming from Philhealth reimbursements), they

would need less and less government subsidy and this in turn would lead to a shift of the

DOH budget from hospital subsidy to more funding for public health programs.14 As can

be seen from figure 6, this shift did not happen as the public health expenditure has

remained fairly constant at about 11-14% of total health expenditure.

   % Share in Total Health Expenditure

                                         60                                                                  Public Health
                                               1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Figure 6. Total health expenditure by use of funds 1995 – 2006

Payment mechanisms

       In terms of payment mechanisms, fee-for-service payment mechanism remains

the dominant form of the reimbursement mechanism of Philhealth, constituting 90% of

reimbursement for hospital claims.15,16 This has led to overprovision and higher cost of

health care.

Fragmented Health Financing System

       Government health spending is fragmented among hundreds of stakeholders:

DOH, LGUs (provincial governors and municipal and city mayors) and Philhealth, with

different health financing philosophies, mandates and responsibilities. The LGUs

comprise 81 provinces, 136 cities and 1,495 municipalities. DOH finances retained

hospitals and national health programs. LGUs use their internal revenue allotments to

finance their health facilities and services. The provinces finance the provincial and

district hospitals. Municipalities are in charge mainly of public health and primary care.

Philhealth pays for services of DOH, LGUs and private health facilities. There is often

overlap with what Philhealth reimburses and what the DOH and LGUs provide. 17 The

private sector comprising more than half of service providers and hospitals have their

own largely unregulated fee schedules.

The Path to Universal Coverage: the role of Philhealth

       The path of the Philippines towards universal coverage appears to be through a

health system financed by a combination of Tax-based revenues and Social Health

Insurance. All past health sector reforms have assigned a key role for Philhealth to

address our health financing problems. Philhealth or our social health insurance program

has focused on population coverage the last 9 years and has claimed to have achieved

universal or 85% coverage in 2004 and again 86% as of 2010. Coverage, however,

must be viewed in terms of breadth, depth, height and utilization by populations groups

that are most in need of financial protection. 6

Social Solidarity in reverse

          The claimed 86% population coverage in 2010 is contradicted by the National

Demographic Health survey in 2008 which gave a result of only 38% of respondents

being aware of at least one household member being a Philhealth member. More

recently, the SWS Survey of Filipinos on Healthcare Services and Financing, Jan – Feb

2010, commissioned by the Pharmaceutical and Healthcare Association of the

Philippines gave similar results – only 36% of respondents had Philhealth coverage. But

a more alarming result is a disaggregation of Philhealth coverage among the ABC

versus the D and E income groups: 62% for ABC, 36% D and only 29% E. 18

          Philhealth’s claimed high population coverage is not reflected among hospitalized

patients in government hospitals. Philhealth’s own Quality Improvement Demonstration

Study (QIDS) found that only about 25.5% of children under 6 yrs of age hospitalized in

11 provinces in the Visayas had Philhealth coverage during the baseline survey in


          The depth of coverage comes from the comprehensiveness of Philhealth’s

benefit package which, up to now, mainly covers inpatient benefits. Philhealth’s

outpatient benefits are limited, covering TB DOTS, Maternal Care, and Malaria, and the

Out Patient Benefits for Sponsored members in accredited health centers, as examples.

It does not include outpatient drugs for common non-communicable diseases, such as

for hypertension and diabetes.20 Almost half of the Filipino’s health expenditure is on


       The height of Philhealth’s coverage is the financial protection provided.

Philhealth’s benefits cover from 40-60% of hospitalization expenses. Philhealth

conducted an internal survey on support value (per cent of hospitalization costs covered

by Philhealth benefits), in government wards, based on selected hospitals’ statement of

accounts for the years 2004 – 2006. The results for 2006 gave a support value of 56%

for ordinary cases, 50% for intensive cases and 44% for catastrophic cases. 19 This

support value might even be eroded by as much as 30% by out of hospital purchases.

Philhealth’s Quality Improvement Study found that patients in the secondary hospitals in

the Visayas had outside of the hospital purchases that amounted to 30% of their total

hospitalization costs.19

       Philhealth’s mandate, as stated in RA 7875 or the law that created it, is to

“provide ALL citizens with the mechanism to gain financial access to health services”.

RA 7875 further states: “Access to care must be a function of a person’s health needs

rather than his ability to pay.”21 A proxy indicator of Philhealth’s provision of financial

access to health services is the share of Philhealth in the total national health

expenditure which remains unacceptably low.7

       We would like to add a fourth dimension for universal coverage: that the poor are

able to utilize their Philhealth benefits following the principle of Social Solidarity. Among

the different member groups of Philhealth, the Sponsored Members (the indigents) have

much lower utilization rates.15

       In the end, mere population coverage by Philhealth does not automatically

translate to the poor being able to utilize their coverage, much less be provided financial


       Another disturbing data is that public hospitals are not benefiting enough from

Philhealth reimbursements. In 2006, among the top ten hospitals reimbursed by

Philhealth, only one, Davao General Hospital, was a government hospital. The rest were

tertiary private hospitals mainly serving those who can afford to pay for health services.

Public money, through Philhealth premiums, is maximized by private hospitals to

improve their facilities, which serve those who can pay. In 1999, the Health Sector

Reform Agenda (HSRA) monograph already recognized the “raiding of the meager

benefits of the NHIP by private providers.”14

Slow impact of Health Sector Reforms

       The health sector reforms in the Philippines, from Health Sector Reform Agenda

in 2001 to Fourmula One have approached health financing problems “incrementally and

have not dramatically improved the health financing picture.”17 In 2001, the state of

health financing was described as having: “heavy dependence on family OOP spending;

(46% in 1997) (with) inadequate benefit spending by NHIP, low program benefits and

bias towards hospital-based care, limited population coverage, weak benefit delivery and

provider payment mechanisms.14

       From 2001, HSRA, the National Objectives for Health (NOH) 2005-201022 and

Fourmula One and now the DOH Health Care Financing Strategy 2010-2020 have

looked at Philhealth as having the key role in health financing reform: “health care

reforms will focus on making NHIP the major payor of health services (HSRA), the

flagship program of health financing (NOH) and “the lead implementor of health

financing reform.” (Fourmula One) “Expand coverage, increase benefit payments,

include outpatient benefits, use alternative forms of payment mechanisms, improve

marketing to increase beneficiary knowledge about PHIC benefits, and improve

information system” has been the mantra since 2001 and is now being repeated by the

Aquino Health Agenda. (See appendix 3 for Health Financing Targets of HSRA, National

Objectives for Health 2005-2010 and Fourmula One) Yet ten years later, the state of our

health financing can still be described as in the previous paragraph, but with a worsening

OOP share at 54% and Philhealth share still at 8.5% only.7 Perhaps it is time to reassess

the central role assigned to Social Health Insurance in achieving Universal Health Care

for the Philippines.

AHA: HCF strategy

       Last October 22, 2010, Secretary of Health Enrique Ona unveiled the “Aquino

Health Agenda: Universal Health Care” in the 2nd Philippine Health Outlook Forum

sponsored by Zuellig Foundation. Meant to address the glaring inequities in health status

within the country, Universal health care was presented as a continuation of

comprehensive health sector reform from the health sector reform agenda (1999-2004)

and Fourmula One for Health (2004-2010). The priority health policy directions of the

Aquino Administration include a roadmap towards universal health care through a

refocused and revitalized Philhealth. Main targets are expansion of the NHIP coverage

with enrollment of the poorest of the poor and mandatory enrollment of the informal

sector; increased awareness of Philhealth benefits and entitlements, access to both

inpatient and outpatient services and zero co-payment with no balance billing for health

care costs incurred by the poorest in government hospitals. (underscoring ours)

       Other areas for improvement are: health facilities enhancement, with improved

access to quality affordable medicines; attainment of the MDGs; more aggressive

strategies for Public Health; and Information and Communications Technology for


         However, the budget of the DOH for 2011 remains at P33 billion. And the Aquino

Health Agenda does not specify how the revenues for Universal Health Care will be

raised and to what extent.


         A chronically underfunded health system, with total government, national and

local, and Philhealth share amounting to only about 35% of Total Health expenditure

leads to a level of out of pocket spending (54%) that is much higher than the 30% OOP

level cited by the WPRO Health Care Financing Strategy paper as an upper limit,

beyond which catastrophic health expenditures and impoverishment of the population

increase. As a result, poor families forego seeking health care. 65% of Filipinos who die,

continue to die without medical attendance. 40% of the poorest households cannot buy

the medicines they need.23 Those who are able to access health care through

borrowings, are exposed to the risk of further impoverishment. Exclusion of the poor

from needed health services and/or further impoverishment lead to increasing disparities

in health status among regions, and income groups.


The major issues in health financing are:

1. Divergent Health Financing Philosophy among the major health stakeholders and

   government administrations

2. The chronic underfunding of the health system

3. Inequitable sourcing of funding for health: low government share leading to high out

   of pocket share

4. Efficiency issues

       a. Allocative: spending the limited health resources on expensive tertiary health

           care versus the more cost effective primary and preventive health care

       b. Payment mechanisms: the dominance of the inefficient fee-for-service

           payment mechanism

       c. Fragmentation and overlap of the different financing institutions with

           Philhealth seemingly acting independently of the DOH. (see Philhealth’s

           performance vis-à-vis targets set in HSRA, NOH 2005 – 2010 and Fourmula


Health financing Philosophy

       It is crucial to have a unified Health Financing Philosophy among the major

stakeholders in health in implementing Universal Health Care. Basic to Universal Health

care is the premise that health is both a human right (WHO constitution and UN

instrumentalities) and a constitutional right. (guaranteed by the Philippine constitution)

As a right, health and universal access to health care become primarily the

government’s responsibility. It is the government that has and can mobilize the

resources needed to fulfill the right to health. Health as a right means that ALL Filipinos

have the right to health care first as human beings and second as citizens and not

because of Philhealth’s capacity or incapacity to enroll them. A well regulated private

sector can and should be encouraged to contribute to the attainment of Universal Health

Care. Private providers should be encouraged to serve in marginalized areas, even on a

temporary rotating basis. Private companies can provide their employees benefits in

addition to that being covered by Philhealth. Health and health care services should not

be viewed merely as a cost that has to be contained. Rather they should be seen as a

necessary investment that enables people to live a productive and meaningful life that

allows them to contribute to the overall national development. Equity is the overriding

health policy goal as stated in the Health Governance module. The goal of Universal

Health Care is to abolish disparities in health status among population groups, among

income groups, among regions within the country. If all stakeholders in health agree

with the above philosophy, then there will be minimal contradictory health financing


What is Universal Health Care

        Universal Health Care is defined as the provision to every Filipino of the highest

possible quality of health care that is accessible, efficient, equitably distributed,

adequately funded, fairly financed and appropriately used by an informed and

empowered public.

        This means ALL Filipinos will be able to access needed health care, without

significant out-of-pocket payments at the time he/she needs it. But it is not charity,

because it has been pre-paid either by the taxes or the Philhealth premiums that ALL

Filipinos pay.

How much will Universal Health care cost?

        If government health spending is set at 5% of GDP, this should have been

P451B in 2011 with a projected GDP of P9.02Trillion. (GDP based on IMF projection

April 2010)

        Table 1 summarizes target levels of total health expenditure (THE) as percent

share of GDP. THE for 2011 is targeted at 4% of projected GDP, THE 2013 at 4.5%,

THE 2015 at 5% GDP.

Table 1. Target Scenarios for increasing Total Health Expenditure to 5% GDP by 2015.

Year                             2007           2011              2013           2015
GDP* in current price            6,647          9,018            10,549         12,341
(billions of pesos)
THE 3.5%                         235
THE at 4%                                        361
THE at 4.5%                                                       475
THE at 5%                                                                        617
* Projected GDP taken from IMF World Economic Outlook Database April 2010

       Table 2 shows the share of government and PHIC of total health expenditure as

out of pocket share is reduced from 54% in 2007 to 20% by 2015.

Table 2. Scenarios for decreasing out of pocket share of total health expenditure. (Source:

NHA, 2007)

    THE by Sources of Funding: 2007 – 2015 (2007 actual, based on 2007 NHA)
Year       THE in        Gov't     Amount      PHIC      Amount         OOP      Amount
        Billions of P    share                 share                    share
2007        P 235        26.6%          63     8.5%         20           54%       126.9
2011        P 361         35%          126      18%         65           47%       169.7
2013        P 406         40%          162      25%        102           35%        142
2015        P 617         45%          278      35%        216           20%        123

       For 2011, Government share, national and local, targeted at 35% should be

P126B, PHIC share at 18% should be P65 B and OOP share would decrease to 47% or

P169B. Of the total government and Philhealth share of P181B, P120 B should go to

Primary Care or the essential health package described in the next section.

       By 2013, government share, both national and local, should increase to 40% or

P162B, Philhealth share to 25% or P102 B and OOP reduced to 35% or P142B.

       The figures for 2015 are the targets to be able to finance Universal Health Care

by 2015 and reduce OOP spending to 20%. THE at 5% of GDP equals P617B, with 45%

Government share and 35% Philhealth share. (see figure 10)

Figure 7. Distribution of health expenditure by sources of funds, 1995-2015.

       To start UHC, the DOH budget for 2011 should have been at least P90B instead

of P33B, with LGU spending P36B or a total of P126B government share. (see table 2)

The needed additional P57B (in addition to the P33B DOH 2011 budget) could also be

equally divided between the DOH and the LGUs as long as there are clear

provisions/mechanisms to ensure more equitable distribution of the funds for the LGUs.

The LGU fund should primarily go to the least developed regions to enable these regions

to catch up and decrease their inequities in health and to ensure comprehensive benefits

for all Sponsored beneficiaries.

       There is an alternate proposal for implementing Universal Health Care.24 This

entails the setting up of a National Health Development Fund with at least an additional

P50B to the present DOH budget. This National Health Development Fund will provide

the following:

       1. P14 Billion for the PHIC premium of the poorest 60% of the population

       2. P10B for health infrastructure

       3. P10B for improving personnel salaries of the government Health Human


       4. P15B to ensure adequate supply of 100 essential medicines

       5. P1B for disaster preparedness

       Implementation can begin with the poor families in the regions with the worse

health status: ARMM, MIMAROPA, Samar-Leyte, Bicol, Zamboanga peninsula, West

Visayas and Davao Peninsula and the urban poor areas of Metro Manila, Metro Cebu

and Davao. A major portion of this Health Development Fund will finance the essential

health package (infrastructure, personnel and the 100 essential medicines) to be

described in the following section.

       This budget shortfall can be sourced through expanding the tax base and more

efficient tax collection, from the increment of revenues of the Documentary Stamp tax,

Excise Tax (Tobacco tax), Road Users Tax, earmarked funds from PCSO and Pagcor, a

continued strong anti-corruption drive, a portion of Philhealth P110B health fund, the

removal of Philhealth’s P30,000 monthly salary cap for premiums and Debt for Equity or

Millennium Development Goals swap.

       A strong anti-corruption drive should save the national government some P280B.

(The amount lost to corruption announced during the presidential campaign.) P100B of

this can be used to finance UHC.

       Philhealth uses a salary cap set in 2007 at P 30,000 per month. This means that

someone earning more than P30,000 whether P40,000 or P1,000,000 a month still pays

the same premium as someone earning P30,000 a month. Removing the salary cap will

increase Philhealth’s premium collection by at least P11B annually.25

       Philhealth has a P110B fund as of June 2010. 20 P50B of this could be used to

provide comprehensive benefits for the sponsored members, without depleting the

reserve funds. Comprehensive benefits for the Sponsored members would achieve the

Zero-co-payment target in government hospitals. Later the zero-copayment in

government hospitals can be expanded to cover the rest of Philhealth’s beneficiaries.

This would then make being a member of Philhealth attractive and justify raising

premiums in the future.

       Table 3 lists the possible sources of increased revenues for Universal Health

Care. HSRA in 2001 proposed the automatic appropriation of the 25% incremental

revenue of the Documentary Stamp Tax and the Excise Tax Laws which RA 7875 states

must be appropriated for Philhealth premium subsidy. (3% of the proceeds of the sale of

Fort Bonifacio was also mandated for health by the Bases Conversion Development Act

but was never collected.)14

Table 3. Potential sources of funds for universal health care.

            Source                        Revenue              Potential for UHC
Philhealth Reserve Fund                       P110B                 Initial input of P50B
Removal of PHIC salary cap                                                           P11B
Anticorruption drive                            P280B                              P100B
Road users’ Tax                                  P10B                                 P5B
Pagcor                                           P30B                                 P7B
PCSO (30% to charity)                           P22.6B                              P6.8B
Documentary Stamp tax (25%
of incremental revenue)
Sin taxes amendment
  1st yr                                         P20B                              P10B
  2nd yr                                      P30-40B
  3 rd yr                                   P40-P50B
  4th yr                                         P70B
Debt for Equity Swap                    40% of National                           P100B
TOTAL                                                     P240B + P50B from PHIC fund

Efficiency Issues

        It is not enough to increase revenues for health; we have to make sure that it is

utilized effectively and efficiently.

Allocative efficiency

        Recently, a set of an “essential health package” (EHP) or basic health services to

which ALL Filipinos should be entitled, has been defined by a Filipino Technical Working

Group under the sponsorship of WHO Philippines Country office. What is significant is

that it has been costed. Costing was modeled on a working rural Inter-local Health Zone

(ILHZ) consisting of 5 municipalities (and their respective RHUs) centered around a

functional district hospital with the necessary health facilities, equipment and essential

medicines, and staffed by the health human resource needed to provide the defined


       The EHP consists of 8 services with supporting diagnostic laboratory services

and an adequate supply of prioritized essential medicines. The 8 services build on the

existing RHU health services and were expanded to include community mental health

and oral health and rehabilitative services connected with non-communicable diseases.

The cost to provide ALL Filipinos with this basic health package comes out to about

P1,400 per Filipino. In 2007, with a total health expenditure of P235B, the country’s per

capita health expenditure was already P2,640. However 54% of this P235B came from

out of pocket as noted earlier.7

       The costing of the EHP gives us a more scientific basis for health budget

formulation. To provide ALL Filipinos basic health services, we would need at least a

health budget of P135B (P1,400 X 94 million Filipinos in 2010). The proposed 2011 DOH

budget is only P33B, LGUs spend an approximately equivalent amount and Philhealth

reimbursements totaled about P25B in 2009. All in all, the projected 2011 government

spending, including Philhealth would be about P90B leaving a shortfall of P45B, just to

ensure provision of basic health services up to the District Hospital level. The P135B

does not include the cost of tertiary care.

Overlapping of Finance Agents

       The DOH as the lead agency should convene a task force made up of

representatives of the major stakeholders in health to determine who should pay for

what services. There should be minimum overlap in the financing of services needed to

achieve Universal Health Care. The financing roles of the DOH, LGUs and Philhealth

have been defined in the DOH Health Care Financing Strategy.17

Payment Mechanisms

         Philhealth is moving towards diagnosis related case payment system, wherein

cases are classified into groups that are clinically similar and expected to have similar

hospital resource use and therefore similar reimbursement costs. This would simplify

reimbursements and incentivize efficient management of cases. This payment

mechanism, however, would still not incentivize health promotion and prevention of


Global Budgeting

         The provision of the Essential Health Package can be subcontracted to

interested ILHZs using a Global Budget based on the capitation amount of P1400.

Previously only a minority of ILHZs were functional but subcontracting might provide the

financial incentive for district hospitals and surrounding municipalities to work together.

This capitation payment/global budgeting would incentivize promotive and preventive

health services to lessen the need for the more expensive curative services and


         A similar costing must be done for secondary and tertiary care services as basis

for budgeting for provincial, regional and national hospitals.

Social Determinants of Health and UHC

         To achieve Universal Health Care and to decrease inequities in health,

government must spend for health care. It must spend for health care in the most

equitable, effective and efficient way to ensure ALL Filipinos access to needed health

care without significant out of pocket payment at point of service.

         We must however not forget the social determinants to health (SDH) approach.

The SDH approach believes that improvements in the health sector only account for

about 20% of the improvement in health status while improvements in the social

conditions account for the larger 80 %.26,27

       The country needs a clear program to address the pervasive poverty that is the

root of the inequities in health status. The Philippine Midterm Progress Report on the

MDGs states: “The government’s anti-poverty strategy must focus on agriculture and

rural development through asset reforms (agrarian reform, urban land reform and

ancestral domain reform) accompanied by reforms in the agricultural sector, such as

investments in productivity improvements and supporting infrastructure.” Agrarian

reform, together with agricultural modernization, will create the basis or the domestic

market for national industrialization.

       Only with a clear program for national socio-economic development, will

Universal Health Care succeed in making our people healthy.

1. Carrin G and James C. Health Financing Policy Issue Paper: Reaching Universal

   Coverage vs. Social Health Insurance: Key Design Features in the Transition Period.

   World Health Organization, 2004.

2. Xu K, Evans D, et al. Household Catastrophic Health Expenditure: a Multi-country

   Analysis. World Health Organization, Geneva. Lancet 2003; 362: 111-17.

3. Centers for Disease Control and Prevention: US Health Expenditures.

   http://www.cdc.gov/nchs/fastats/hexpense.htm. Accessed November 26, 2010.

4. Murray C and Frenk J. Ranking 37th – Measuring the Performance of the US Health

   Care System. The New England Journal of Medicine, 362;2 pp. 98-99. January 14,


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   Appendix 1

Appendix 1. Public Health Spending and % of Household catastrophic health expenditure

(Source: Xu, K, Evans DB, Kawabata K, et al. 2003. Household catastrophic health expenditure:
a multi-country analysis. The Lancet. Vol(362):111-117)
Appendix 2

Figure 3. Out of Pocket spending and % of households with catastrophic expenditure.

(Source: Xu K, et. al. Protecting households from catastrophic health spending. Health Affairs, 26.
No. 4 (2007): 972-983)
Appendix 3

Health Financing Targets of HSRA, National Objectives for Health 2005-2010 and

Fourmula One

Targets                      HSRA 2001              NOH 2005-2010          Fourmula 1, 2004

Increase Revenues       Automatic                 Increase investments    Mobilize from extra
for Health              appropriation of the      from internal and       budgetary resources
                        25% incremental           external sources,       User fees
                        revenues of               improve efficiency of   Fees for regulatory
                        Documentary Stamp         resource use.           services
                        Tax and Excise Tax        Increase local govt     From real property
                        Base                      spending for health     assets
                        (3% proceeds from
                        sale of Fort Bonifacio)
Total Health                                      3-4% GDP
    Govt share                                    50% of THE by 2010
                                                  18% National
                                                  32% Local
    OOP                                           20%
                                                  Zero copayment for
                                                  all sponsored
                                                  Zero copayment for
                                                  30% of all PHIC
    PHIC share          Reimbursements to         15% of THE
                        P60B /yr in 5 years
                        (still P27B as of 2010)
Allocative efficiency                             20% of THE to Public
PhilHealth              “HC financing reforms     Flagship program of     Lead implementor of
                        will focus on making      Health financing        Health financing
                        NHIP the major payor                              reform;
                        of health services                                Main lever to affect
                                                                          changes in each of
                                                                          the 4 components of
                                                                          Fourmula 1.
“Refocused” or          Increase benefits and     Expand coverage;        Expand coverage
“Revitalized”           alternative payment       increase benefit        Benefits
                        schemes                   spending; include       Provider payment
                        Expand coverage           outpatient benefits     mechanisms
                        Secure financing          Improve marketing
                          Remove salary cap       mechanisms
                        Expand accreditation      Information system
                        Develop Admin
                        infrastructure – full
                        blown info system

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