The Health System in the Phillipines

Table of Contents

1. SOCIAL HEALTH INSURANCE AS A PART OF SOCIAL SECURITY

2. THE HEALTH STATUS IN THE PHILIPPINES
2.1 HEALTH INDICATORS
2.1.1 LIFE EXPECTANCY
2.1.2 MORTALITY RATES
2.2 ILLNESSES
2.3 REPRODUCTIVE HEALTH AND MALNUTRITION
2.4. ENVIRONMENT AND WATER
2.5. MISSING ACCESS

3. THE PHILIPPINE HEALTH SYSTEM
3.1 HEALTH FACILITIES, PERSONNEL AND THE DISTRIBUTION OF MEDICINES
3.2 REGIONAL DISSIMILARITIES AND THE DEVOLUTION
3.3 HEALTH CARE UTILIZATION
3.4 THE MAIN SECTOR PRIORITIES FOR HEALTH

4. HEALTH FINANCING IN THE PHILIPPINES
4.1 FINANCING RESOURCES AND AGENTS
4.1.1 PUBLIC SPENDING
4.1.2 PRIVATE SPENDING
4.1.3 EXTERNAL FUNDS
4.1.4 EQUITY WITHIN HEALTH FINANCING SYSTEM
4.2 USE OF FUNDS
4.2.1 PUBLIC HEALTH PROGRAMS
4.2.2 CURATIVE CARE

5. PUBLIC HEALTH FINANCING AGENTS IN THE PHILIPPINES -SOCIAL SECURITY FUNDS
5.1 GSIS:
5.2 SSS:
5.3. PHILHEALTH:
5.3.1 VISION, MISSION, MEMBERSHIP AND BENEFITS
5.3.2 PHIHEALTH PROGRAMS
5.3.2.1 The Indigent Program
5.3.3 THE EFFECTS OF IP ENROLLMENT ON POOR PEOPLE
5.3.3.1 Utilization in RHUs
5.3.3.2 Utilization in hospitals

6. CONCLUSION

7. APPENDIX

8. BIBLIOGRAPHY

1. Social health insurance as a part of social security

The term social security is very complex and there is no clear definition. It is accepted that the social insurance system is a part of social security. But Social security is defined more broadly as a complex system of measures that shall provide social justice within a society via the solidarity principle.¹ Therefore, social assistance is also a part of social security. According to a narrow definition social security is given when every member of society has achieved an acceptable standard of living. In Germany the definition of social security refers to its system of social insurance but social security is broader and further comprises measures within social policies e.g. an active labor policy, education policy etc. The German government focuses on the social insurance system as the major column of social security as well. One focus of development policies of the German Federal Ministry for Economic Cooperation and Developments (BMZ² ) lies on social security. Within that framework major objectives are to strengthen social insurance systems and to provide basic social services to the (poor) populations of developing countries. The BMZ defines (national) social security systems as established institutions that are to support people in mitigating risks and coping with their impacts.³ The aim in developing countries is to secure the (poor) population against the occurrence of future emergency situations and against existing current emergency situations. Social security systems shall strengthen the risk management capability in a sustainable way. This shall improve the capacity of coping mechanisms. Furthermore, there is a need for subsidizations of extremely poor people so that they can participate in social insurance systems.⁴

The model for the development of social security systems in developing countries is the structure of the German welfare state. Thus, the provision of social security is a key task of the state.⁵ Germany’s social security system provides far-reaching security for employees. It is based on the “five pillars”⁶ of social pension, disability, unemployment, long term care and health insurance. Four key principles have to be guaranteed for the successful implementation of social security systems.⁷

- The first is the subsidiary principle meaning that the state shall only intervene if individual coping mechanisms (also within a family) are not sufficient to ensure the mere subsistence.
- Social security systems are furthermore based on solidarity. Solidarity means that the both society and the individual shall recognize their mutual dependence. The individual receives social security benefits regardless of its contributions, age etc.
- Moreover, participation and responsibility are necessary to fortify the self-help and self-organization capacity of poor people. The responsible insured is a person who actively involves in maintaining and reestablishing its health rather through preventive care than treatment.
- The fourth principle is the decentralization of social politics⁸ as well as the inclusion of social security into social and economic policies.

The major task of the state is to provide an adequate framework to mitigate social, economic and ecological risks and to enable the private initiatives. Thus, the state contributes to a decentralized, pluralistic system of social security. The problem with a pluralistic system is that conflicts of interest between private and public solutions arise. A second conflict comes up between social justice and efficient implementation. According to the BMZ⁹ the major approaches of social security are:

- Security against violence and human rights violations
- The implementation of labor standards
- Income security
- Social security of women and children
- Old age security
- Support for groups in need of social assistance
- Security of the poor during natural disaster
- Health security

Social security in case of illness is one of the most vital security necessities of both poor people and developing countries as a whole. Good health status is crucial to the economic and social development of developing countries. Experts estimate that every year, 100 million people are reduced to poverty because they are unable to afford the costs of medical care.¹⁰ Unfortunately to date a good health status is not possible for everybody. The health status depends on variables at three levels. It is the interaction of household determinants (e.g. income and education), community-level determinants (norms and values) and health-system determinants (accessibility and quality) that determine the health status¹¹ within a country. The role of social security systems in particular social health insurance in improving the health status is to advance the health- system determinants. Of utmost importance is further the household determinant income.

Social health insurance can support the processes of improving quality of services through sound financing. Thus, people seek treatment in health centers even at the village level and not only proceed directly to health facilities at the district or provincial level. Beyond that, social health insurance can also develop better access to health facilities. The difficulty is that in most developing countries and especially in rural areas the network of health providers is patchy and many people can not reach health care providers. Access is determined by two major factors: availability of health facilities and personnel as well as affordability.¹² Social health insurance can especially determine the affordability of health services. But to understand when social health insurance isneeded and what its tasks are we need to understand the underlying problems at first.

2. The health status in the Philippines

2.1 Health indicators

2.1.1 Life expectancy

According to the World Health Organization (WHO) the most vital indicators for the health status of a nation are life expectancy data and several mortality rates. Central WHO health data indicates that the health status of the Philippines has improved in the last decades. The most important indicator for improved health in the Philippines is life expectancy at birth. In 1970 citizens of the Philippines could expect to reach 58 years (male and female average) whereas in 2004 life expectancy was already 68 in average (65 for males and 72 for females).¹³ Besides, the WHO derives from the above mentioned data the healthy life expectancy (HALE) at birth. The life expectancy at birth is reduced by the periods in which a person is ill or disabled (temporary or permanently) to get the HALE indicator. Thus, in 2004 HALE in the Philippines is around 57 years for men and 62 years for women.¹⁴ Another important figure is to measure how life is shortened due to bad health e.g. in the case of death after a coronary disease. The WHO states that bad health shortens the life of male Philippine citizens by 12.4% (Germany 7.8%) and the life of females even by 14.3% (Germany 9.3%).¹⁵

2.1.2 Mortality rates

The second group of health indicators comprises mortality rates. The most significant is the under-5-mortality rate (child mortality). In 2004 approximately 34 (40 male and 28 female) children out of 1,000 died before they reached their fifth birthday. The figure has declined from 54 in 1993.¹⁶ The next indicator is the infant mortality rate (IMR). It measures how many children out of 1,000 before their first birthday. In 2004 about 29 children¹⁷ died in the Philippines before they completed their first year. The figure declined from 34 in 1993.¹⁸ Although the rate declined in recent years the performance of the Philippine health system is insufficient as the reduction rate was the slowest in all of the ASEAN countries.¹⁹ A third and vital health indicator is the maternal mortality rate (MMR). It measures how many women per 100,000 live births die. The figure for the Philippines remains with 172 on a high level and declined form 209 in 1993.²⁰ But still the WHO finds that the figure of the indicator has barely improved since 1970.²¹

2.2 Illnesses

The main illnesses that cause morbidity in the Philippines are communicable diseases. Their prevalence in the Philippines remains on a very high level. Four of the five diseases that cause the most deaths are communicable diseases (diarrhea, bronchitis, pneumonias and influenza). The fifth top killer is hypertension. Other communicable such as Malaria (8th most deadly disease) and tuberculosis (TB) further aggravate morbidity. In the case of Malaria the reasons are “delayed consultation, irregular delivery as well as a lack of necessary drugs for treatment.”²² The number of tuberculosis infections remains with 540/100,000 (and a death rate of 57/100,000) at a high level but fortunately the treatment success rate is around 88%. A tremendous problem with tuberculosis is that 70% of the dead were the main breadwinner in their households and at least 80% of TB-infected loose their income opportunity after infection. Thus, tuberculosis does not only threaten the health of a single person but also the livelihood of nearly every second family of tuberculosis infected persons.²³ Other than communicable diseases also non-communicable diseases are increasing. One example is heart diseases. Every minute nine people die of heart diseases.²⁴ The Department of Health finds that these diseases “have emerged as the major causes of mortality in the country today.” Cardiovascular diseases (e.g. hypertension and stroke) are the number one causes of death. They account for approximately more than 25 percent of all deaths in the Philippines.²⁵

2.3 Reproductive health and malnutrition

47.0% of all Philippine women use contraceptive methods (32.3% artificial ones, 14.7% natural ones).²⁶ The morale of the influential Catholic Church denies any use of contraceptives. That is why state agencies often do not provide artificial contraceptive methods or advisory services for family planning. Women report that they feel intimidated when using the ‘pill’ and fear social stigmatization of the local chaplains. That is one of the reasons why the fertility rate is 3.1% (2004). At the beginning of the year 2004 the Catholic Church started a nationwide campaign against the reproductive health act. The law was to provide the basis for better health provision for women, sexual education of young people, recognition of male responsibility in family planning etc. Due to the pressure exerted by the church and militant enemies of abortion the budget committee of the national parliament finally decided not to provide any funds for the implementation of the bill and de facto canceled the law. Thus, the abortion rate is still high in the Philippines. The ‘State of the Philippine Population Report’ estimates that one fifth of all pregnant women do abort every year (approximately 400,000 abortions.

The daily ingestion in the Philippines is about 2,390 calories per person per day. In Germany an average person takes in more than 3,580 calories per day.²⁷ Therefore, according to WHO data, nutritional problems are common in the Philippines. At least 18% of its population has to abstain from one meal a day.²⁸ Mostly women do take in one meal less in order to feed their men and children or to save money. But still more than 30% of all children are undernourished or malnourished. In poor people’s diet costly components such as fish, meat and vegetables are often exchanged for soy sauce, brown sugar or salt.²⁹ The Food and Nutrition Research Institute (FNRI) found out that most Philippine citizens take in too less Vitamin A, iodine and ferrous. Therefore, many women do suffer of anemia. According to the World Bank (WB) the percentage of undernourishment among the population declined by 0.6%. But this decline is far slower than in neighboring countries such as the Cambodia (1.1%) or Laos (0.9%). However, in cities where the nutrition status is usually better the traditional diet has been amended or substituted by pre-processed food or fat fast food.

2.4. Environment and water

The hygienic situation and the missing supply with clean drinking water further aggravate the health problems in the Philippines. According to the National Statistics Agency more than 24 million households (2000) neither have save access to clean drinking water nor hygienic toilets.³⁰ Unsanitary circumstances as well as the contamination of water - especially in great agglomerations - contribute to the above mentioned prevalence and spread of communicable diseases. Usually a wastewater system is missing and thus, rubbish and wastewater reach rivers unrefined. The rich on the other hand have access to clean drinking water and can even afford to irrigate their golf courts whereas the poor and informal sector workers have to live with bad water quality. The National Health Insurance Corporation PhilHealth stated in 2003 that there are “islands of excellent provision”³¹ whereas poor people die more often because of diseases related to bad hygiene.

Another environmental health threat is air pollution. Especially in the urban agglomeration of Metro Manila the exposure to air contamination with dust particles, sulfur and aerosols is extremely high. For example, the usual concentration of particulate matter in Manila’s air is four times higher than the maximum threshold value of an EU directive. It is estimated that approximately 16 persons die of air pollution every day in Metro Manila.³²

2.5. Missing access

The access to health services depends on the one hand on the availability of facilities and personnel and on available financial resources on the other. As we have seen the availability of health providers and personnel is patchy and regional disparities even aggravate the tense situation. Hence, it is even more important to ensure that people have the finances to get to these facilities and to afford treatment there. The first problem is that many poor people especially those living in rural areas can not afford transportation to health care providers. The bus ride is simply too expensive and the costs for treatment and medicines anyway. Poor people are often forced to rely on informal coping mechanisms in order to cover the costs for medical treatment. Then they have to draw on serious coping mechanisms e.g. to take loans or sell household assets (livestock, jewelry) or even productive assets or land. A starting point for social health insurance is to ensure the financing of basic health care services especially for the poor. The wealthy upper class and the middle class on the other hand can afford access to quality health services whereas the poor have to rely on self-treatment if health services are unaffordable. That is why the under-five morality rate is three times higher amongst poor population groups as amongst rich groups. This is especially impeding when it comes to preventive health care. Preventive measures are more cost-effective³³ than curative care especially in case of communicable diseases. But only 13 percent of total health resources are spent on public health programs for example. The majority of state funding and human resources is spent on treatment for but not on prevention against diseases.

When implementing social health insurance the major task for developing countries is to extend coverage to poor people. Government employees and formal sector workers are already covered in governmental or even private health insurance schemes. Low-income households, however, are often not able to contribute to a social or private health insurance schemes. But their income is too small to cover even small health care costs on their own. That’s why inclusion into social health insurance that is based on a social design of contributions (including cross-subsidization and public benefits) is necessary. It is the only way to make medical services especially hospital treatments affordable for the poor and to guarantee a good health status and the ability to work. Thus, social security is not only a measurement against ill-health but beyond it is an important element of poverty reduction. “Social health insurance for all is thus a step towards achieving the first of the Millennium Development Goals as well as goal four and five.”³⁴ The challenge is to ensure consistent, just and equitable subsidies. As many patients are poor the refinancing possibilities for small health providers are insufficient but refinancing is necessary to guarantee quality.

3. The Philippine health system

The low accessibility of health care services is the result of two major factors. Both factors can be addressed and improved at least partly by a social health insurance scheme.

- an inappropriate health delivery system
- poor health care financing

3.1 Health facilities, personnel and the distribution of medicines

In the Philippines a range of private and government facilities provide health care services. The private sector includes a wide range of health facilities. Primary, secondary and tertiary hospitals are part of the private sector as well as maternity centers, employer-based outpatient facilities, health management organizations, diagnostic laboratories, independent physicians/dentists. Furthermore, “group practice, pharmacists, chiropractors, traditional birth attendants, and other indigenous healers”³⁵ constitute the private sector. The private sector focuses mostly on curative and rehabilitative care. According to a survey conducted by the Department of Health (DoH) and the National Statistic Coordination Board (NSCB) in 2003, more than 1,061 private hospitals with a bed capacity of more than 39,000 existed in the Philippines. These are more than 62% of all hospitals.³⁶ The private sector operates approximately 19,000 drug distributors and outlets. “Other registered private providers included 92,000 physicians, 39,000 dentists, and 44,000 pharmacists.”³⁷

The remaining 640 (38% of all) hospitals are run by the government and provide more than 40,000 hospital beds. The government maintains health facilities on every political level. The most advanced facilities are specialty and tertiary hospitals at the national level. Tertiary hospitals suppose of “at least four specialty services”³⁸ and some have

illustration not visible in this excerpt

Source: Own Elaboration

The provincial governments oversee secondary and primary hospitals at the provincial and regional level through Local Government Units (LGU). Primary hospitals are hospitals with 5 - 10 beds and limited surgical ability whereas secondary hospitals can perform surgeries. Furthermore, the municipal governments run Rural Health Units (RHU) at municipal level and Barangay Health Stations (BHS) at village level. Both facilities are usually less well equipped than hospitals and provide only basic health services. The number of health centers increased in recent years whereas the number of hospitals decreased. BHS are only staffed by a midwife whereas RHUs are staffed with a doctor, nurses and midwives. There are more than 1,850 RHUs and more than 15,000 BHSs in the Philippines.³⁹ An average RHU serves approximately 40,000 people. The facilities provide services based on a referral system.

[...]

¹ See http://72.14.221.104/search?q=cache:4RfB0uuTfoEJ:www.wissens- quiz.de/wissen/bildung/wikipedia/s/so/soziale_sicherheit.html+soziale+Sicherheit+Definition&hl=de&gl=d e&ct=clnk&cd=8, as of 21.6.2006

² German Name: Bundeministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ)

³ See Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (2002), Positionspapier soziale Sicherheit, p. 1

⁴ See Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (2002), Positionspapier soziale Sicherheit, p. 1

⁵ Although Esping-Andersen regards Germany as a conservative welfare state, the major stakeholder of the health insurance system in Germany is the state.

⁶ http://www.bmas.bund.de/BMAS/Redaktion/Pdf/Soziale-Sicherung-im-ueberbli- 364,property=pdf,bereich=bmas,sprache=de,rwb=true.pdf, as of 23.06.2006

⁷ See Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung, Positionspapier soziale Sicherheit, 2002, p. 6

⁸ See Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung, Positionspapier soziale Sicherheit, 2002, p. 1

⁹ See Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung, Positionspapier soziale Sicherheit, 2002, pp. 6-7

¹⁰ See Gesellschaft für technische Zusammenarbeit, Soziale Krankenversicherung in Entwicklungsländern, 2004, p. 1

¹¹ See Schelzig K., Poverty in the Philippines: Income, Assets and Access, 2005, p. 48

¹² See Schelzig K., Poverty in the Philippines: Income, Assets and Access, 2005, p. 50

¹³ See World Health Organization, World Health Report 2006, 2006, pp. 168-176

¹⁴ See World Health Organization, WHO Health Status Philippines, p.1

¹⁵ See Reese, Armut unter Palmen, 2005, p. 45

¹⁶ See Schelzig K., Poverty in the Philippines: Income, Assets and Access, 2005, p. 47

¹⁷ See World Health Organization, World Health Report 2006, 2006, pp. 168-176

¹⁸ See Schelzig K., Poverty in the Philippines: Income, Assets and Access, 2005, p. 47

¹⁹ See Reese, Armut unter Palmen, 2005, p. 45 (resource: PhilHealth Report, 2003)

²⁰ See Schelzig K., Poverty in the Philippines: Income, Assets and Access, 2005, p. 48

²¹ See World Health Organization, Emergency country profile, 2004, p.1

²² World Health Organization, Emergency country profile, 2004, p.1

²³ See Reese, Armut unter Palmen, 2005, p. 45 (resource: study of the Institute for Occupational Health Safety and Development, Januar 2000)

²⁴ Reese, N. Werning, R., Handbuch Philippinen, 2006, p. 124

²⁵ See Degenerative and other non-communicable diseases, (no year) , p.1

²⁶ See http://www.census.gov.ph/data/sectordata/2000/fp00tx.html, as of 03.07.2006

²⁷ See http://www.welt-in-zahlen.de/laenderinformation.phtml?country=44, as of 01.07.2006

²⁸ See Reese, N. Werning, R., Handbuch Philippinen, 2006, p. 124

²⁹ See Reese, Armut unter Palmen, 2005, p. 46

³⁰ See Reese, N. Werning, R., Handbuch Philippinen, 2006, p. 124

³¹ Reese, Armut unter Palmen, 2005, p. 45 (resource: PhilHealth Report, 2003)

³² See Reese, Armut unter Palmen, 2005, p. 47

³³ See Heath Sector Reform Agenda, 2004, p. 14

³⁴ Gesellschaft für technische Zusammenarbeit, Soziale Krankenversicherung in Entwicklungsländern, 2004, p. 1

³⁵ Schneider, P./Racelis, R., The Impact of PhilHealth Indigent Insurance on Utilization, Cost, and Finances in Health Facilities in the Philippines, 2004, p. 10

³⁶ See Reese, N. Werning, R., Handbuch Philippinen, 2006, p. 126

³⁷ Schneider, P./Racelis, R., The Impact of PhilHealth Indigent Insurance on Utilization, Cost, and Finances in Health Facilities in the Philippines, 2004, p. 10

³⁸ Schneider, P./Racelis, R., The Impact of PhilHealth Indigent Insurance on Utilization, Cost, and Finances in Health Facilities in the Philippines, 2004, p. 11

³⁹ See Schneider, P./Racelis, R., The Impact of PhilHealth Indigent Insurance on Utilization, Cost, and Finances in Health Facilities in the Philippines, 2004, p. 10