Health for all bankable

Published by rudy Date posted on May 9, 2011

THE INSTITUTIONALIZATION of a more rational and less burdensome healthcare system for all Filipinos is possible, and providing comprehensive and accessible health services to all Filipinos is bankable.

The basic approach to a workable and bankable health-reform agenda is socialized medicine: the healthy subsidize the sick, and the rich subsidize the poor.

Social equity

It is based on social equity, a developmental mindset that looks at the health budget as an investment in human resources and economic development.

Socialized medicine enables developed nations of Europe and North America to provide universal healthcare for all their citizens on a long-term and sustainable basis.

Contrary to misperceptions, a universal healthcare delivery system similar to many countries in Europe is neither impossible nor difficult to achieve.


The heavy initial expenditures for universal healthcare could turn into high-yield investments that could reap dividends through a healthy and productive population.

Rational universal healthcare would significantly reduce the incidence of several top killer diseases that are largely preventable like pneumonia, tuberculosis, hepatitis, heart disease, stroke and kidney ailments. The immediate result would be the significant reduction in healthcare expenditures.

Healthcare system

The Philippine healthcare delivery system is composed of the following:

Health infrastructure, consisting of the network of public and private hospitals, community-based healthcare organizations, diagnostic centers, and private medical and dental clinics.

Service providers, composed of health professionals: doctors, nurses, midwives, dentists, medical technologists, physical therapists, X-ray technicians, barangay health workers and others who provide health services.

Payor. Philippine National Health Accounts showed that as of end-2007, the total health expenditure was P234.3 billion or 3.2 percent of the gross domestic product—54 percent came from out-of-pocket payments, 37 percent from government and 9 percent from other social health insurance.

Insurance program

Republic Act No. 7875, or the National Health Insurance Act of 1995, created the National Health Insurance Program, which is envisioned to provide all Filipinos with healthcare financing through the Philippine Health Insurance Corp. or PhilHealth.

RA 7875 mandates that the National Health Insurance Program “shall provide health insurance coverage and ensure affordable, available and accessible essential healthcare services for all citizens.”

Many not covered

Many Filipinos still do not have health insurance coverage. PhilHealth’s claim that 87 percent of our population was covered by medical insurance by end-2010 is an exaggeration.

The 2009 Department of Health-PhilHealth Benefit Delivery Review showed that only 56 percent had insurance coverage. The 2008 National Demographic and Health Survey showed that only 38 percent had PhilHealth coverage. The low coverage contradicts the spirit and essence of RA 7875, which seeks that all Filipinos have health insurance coverage within 15 years since PhilHealth’s inception in 1994.

Out-of-pocket payments

The low health-insurance coverage is not the only problem. Despite their health insurance, PhilHealth members have to shell out heavy out-of-pocket payments for medical needs, ranging from 20 to 80 percent of their health expenses.

A top official of the DOH and PhilHealth has stated shortcomings in health financing have resulted in out-of-pocket expenses as the primary source of health expenditure. “Out-of-pocket expenditure has been the rate limiting step of many of our countrymen in availing themselves of health services. Due to scarcity of financial support and fragmentation of health services as a consequence of devolution, our health facilities have suffered neglect,” the official said.

Essential services

Amid the depressing health statistics, the “essential” healthcare package connotes comprehensive and total healthcare in which services are delivered from “womb to tomb” without imposing the burdensome out-of-pocket requirements on the people.

Comprehensive and total healthcare services should include pre- and post-natal care, post-partum care for mothers, preventive medicine and diagnosis, and management of diseases for all age groups. Total healthcare includes counseling in which people are properly advised on how to meet their health needs.

The people, as a matter of right, should have access to these medical services at no additional expense beyond their PhilHealth premiums or at the least expense on their part.

Can universal health be achieved now?

PhilHealth has become a major government-owned and -controlled corporation (GOCC), generating a huge resource base over the past 16 years. Its annual reports show that its total assets reached P106.1 billion by end-2009. The National Health Insurance Fund is now over P100 billion, providing ample liquidity and leeway for its requirements.

PhilHealth data submitted to the House appropriations committee show that its annual revenue is expected to breach the P400-billion mark by end-2011.

PhilHealth’s financial health is reflected by its revenues, which will reach P40 billion by end-2011.

But low benefit payments negate PhilHealth’s resource buildup. Table 1 shows the benefit payments, premium collections and investment portfolio in 2006-2009. Benefit payments rose substantially in 2009 as the run-up for the 2010 presidential elections heated up.

On the breakdown of its benefit payments, Table 2 shows that PhilHealth paid the biggest amount to the private sector. Its expenditures for the indigent program or sponsored members, though still low, indicate a rising trend. At least 20 percent of the people could be labeled as indigents since they could not remit the monthly premium and therefore their premiums must be paid by the local or the national government as mandated by RA 7875.

Delinquent contributor

Table 3 shows that members account for the largest PhilHealth premium contributions. Subsidies from the national and local governments have been declining. And it now appears that the most delinquent PhilHealth premium contributor is the government itself.

As a matter of accounting procedures, the figures for 2008 and 2009 were the collective contributions of the local and national governments, and GOCCs to PhilHealth’s indigent program.

Overall, PhilHealth’s financial position has improved tremendously but benefit payments for members have yet to improve. Hence, reforms are necessary to initiate a trickle-down effect. PhilHealth can launch a “Health for All” program, geared toward healthcare for Filipinos at the least cost and with minimum or no out-of-pocket payments.

The administration of President Aquino, through the DOH and PhilHealth headed by Health Secretary Enrique T. Ona, has given the Health for All program top priority. It is now better known as the Aquino Health Agenda.

Paradigm shift

The proposed health reform agenda, as contained in the “Universal Health Care for All Filipinos” program, is a paradigm shift on how healthcare has to be pursued. The Health for All blueprint should probably contain a five-point program, which can be completed as soon as possible:

Universal health insurance coverage in which all Filipinos, without exception, will be covered by health insurance, mainly through PhilHealth.

Mobilization of health professionals into medical teams that will provide health services to all Filipinos.

Revenue generation for funding support and subsidy to the program initiatives.

Massive training, retooling and skills development for health professionals to meet the growing healthcare needs of the country.

Preventive medicine that centers on vaccination programs at the grassroots level.

The health infrastructure is practically complete, the health manpower is available although not yet well distributed, and the health financing can be assured at least for the next two to three years. Everyone wants this goal of Health for All to be achieved.

The time for achieving universal healthcare for all Filipinos is now.

Compulsory insurance

At least 20 million families by end-2010 should have been covered by health insurance. The nationwide network of barangays will have to be used for the compulsory PhilHealth membership campaign.

The barangays will distinguish paying members from nonpaying or indigent members. State subsidies will be used for nonpaying members as mandated by the PhilHealth law.

Revenue generation

Based on actuarial studies, PhilHealth’s annual premium collections can breach P60 billion by end-2014 and double it by 2020. When all Filipinos become PhilHealth members, a premium collection target of P60 billion could constitute the minimum requirement to assure the success of the Health for All program.

The success of this program will depend on funding support and state subsidies. Aside from insurance premiums, the blueprint calls for the enactment of a new law that raises the excise taxes on “sin products”—beer and alcohol products, and cigarettes and other tobacco products.

The current level of excise taxes on sin products has been described as probably the lowest in all of Asia. The government spends more than P100 billion annually for the treatment of diseases related to drinking and cigarette smoking.

To raise more revenue from sin taxes and to regulate and restrict alcohol use and smoking, the excise tax should be raised preferably by 100 percent.

Mobilize professionals

PhilHealth accredited by end-2009 a total of 23,501 medical professionals, mostly doctors. This is broken down into 11,092 general practitioners, or doctors who do family medicine; 11,909 specialists; 195 dentists; and 355 midwives.

The roster of the Philippine Medical Association has at least 40,000 general practitioners and more than 20,000 specialists. The country has enough doctors to serve the entire population.

As of end-2009, PhilHealth had accredited 1,654 public and private hospitals, 1,301 rural health units, 36 ambulatory service clinics, 39 dialysis clinics and 627 maternity clinics. There is room for big improvement for hospitals and clinics.

English model

The Health for All program could adopt the English model, or the socialized medicine model in which every citizen and every family are assigned to specific doctors, who provide them with primary and secondary healthcare.

Every doctor advises these families on how best they could meet their health requirements. He practices primary healthcare, which is preventive. When he sees that a patient’s health condition requires further medical attention, he seeks specialists to attend to the patient.

This system will work on the medium and long term because as family doctors take care of everyone, most diseases could be prevented or at least diagnosed and treated early. The heavy costs of hospitalization due to neglected diseases and disorders can be avoided. As a result, no Filipino shall die without being seen by a doctor. Measures like vaccinations and boosters can help prevent many illnesses.

Wider accreditation

Spreading the accreditation net to include hospitals and diagnostic centers that meet PhilHealth’s requirements will mean better commercial and financial viability for these health institutions.

As the income of health professionals become more consistent and regular they will have no reason to charge exorbitant fees. Rates of medical services will even go down because they will have a steady flow of income from all citizens, who will regularly see their doctors under the Health for All program. A steady income for the health professionals, particularly doctors and nurses, will also prevent “brain drain.”

Filipinos, who need to see their doctors under this program, will have no reason to neglect their health because they are assured of medical attention without out-of-pocket payments.

With less and less out-of-pocket payments Filipino families could have more funds for food and other needs.


Health for All will require the corps of health professionals to undergo frequent but sustainable retraining to keep them knowledgeable of the latest medical trends. They will be equipped with the skills to handle diseases better.

Nurses would have to undergo retraining, retooling and skills development for more specialized functions. Although most of locally produced nurses are aiming for the foreign market, a sizeable number could be mobilized for the Health for All program.

Health for All will require preventive medicine in which the people will have their periodic vaccinations against diseases. The vaccinations will cover polio, hepatitis, influenza, etc. A nationwide program of vaccinations against specific diseases will lower the incidence of infections and the cost of medical care. This is a sustainable program that will lead to a healthier population.

(Dr. Fernando A. Melendres is a graduate of Medicine from the University of the Philippines. He served as clinical associate professor of thoracic surgery at the UP-Philippine General Hospital until 2000. A former director of the Lung Center of the Philippines, he is currently a practicing thoracic surgeon and a regent of the Philippine College of Surgeons.)

Table 1. PhilHealth’s performance
in 2006-2009 (in billion pesos)

2006 2007 2008 2009
Benefit payments 17.1 18.4 18.1 24.3
Premium collections 22.6 23.7 28.4 26.0
Investment portfolio 62.0 73.2 85.2 92.1
Source: PhilHealth annual reports

Table 2. Benefit payments (in billion pesos)
2006 2007 2008 2009
Private sector 8.3 7.4 7.6 9.4
Government sector 3.9 3.8 3.7 4.7
Indigent program 2.7 3.1 2.0 3.3
OFW sector 0.4 0.7 0.5 0.8
Individual paying members 1.4 0.9 1.2 1.7
Nonpaying members 0.7 0.9 1.2 1.8
Total 17.2 18.5 18.1 24.3
Source: PhilHealth annual reports

Table 3. Premium collections
(in billion pesos)
2006 2007 2008 2009
Members’ contributions 19.4 21.3 25.6 24.1
Subsidy from the national government 2.0 3.6 Na Na
Subsidy from LGUs 0.8 0.9 Na Na
Receipts from GOCCs 0.3 0.2 Na Na
NG/LG counterpart for indigent program Na Na 2.7 1.9
Total 22.6 23.7 28.4 26.0
Source: Philhealth annual reports

–Fernando A. Melendres, M.D., Philippine Daily Inquirer

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