Annex 2: Emerging Key Issues Arising from the HEALTH SUB-GROUP

PHILIPPINES DEVELOPMENT FORUM – CEBU 2007

WORKING GROUP ON MDGS AND SOCIAL PROGRESS

HEALTH PARTNERS GROUP

Statement by the PDF MDG and Social Progress Sub-Working Group on Health
(co-chaired by the Department of Health, the EC and GTZ)

The Health Partners Group acknowledges that many of the health-related commitments of the
2006 PDF have materialised 1 , in particular in the areas of health financing and good governance.
The group also acknowledges the wider developments registered under the government’s
FOURmula One for Health strategy, which engages the public and private sectors, national
agencies and local government units, external development agencies, and civil society to get
involved in the implementation of health reforms.

However, progress have been below expectations on some of the commitments of the 2006 PDF.
Emerging issues, whose control extends beyond the remits of the health sector, require the
attention and the support of PDF partners. While the 2007 PDF meeting will rightly focus on
emerging issues, pending issues need to be re-emphasised.

PENDING ISSUES
A Brief but Insistent Reminder

In 2005 (Davao) and 2006 (Tagaytay) the PDF MDG and Social Progress Working Group
advocated for a stronger population policy, in due recognition of the negative health and social
effects of the currently excessive population growth, especially in terms of maternal mortality
(MDG 5) among the poorest segments of the population. Some steps have been made, but more
is needed if the government commitment, to bring population growth down to 1.9% by 2010, is to
materialise. In particular, partnerships need to be forged between the central government and the
Local Government Units (LGUs) for the implementation of the government’s Contraceptive Self-
Reliance Strategy.

In 2006 the PDF identified Advocacy for breastfeeding and young child feeding, including the
implementation of the Milk Code, as a quick win to improve nutrition and reduce infant
mortality (MDG 4). The Implementing Rules and Regulations of the Milk Code were signed by
the Secretary of Health shortly after the PDF meeting, but one year down the line they are still
under a Temporary Restraining Order and a WTO Notification.

The two above issues are major obstacles to the attainment of related MDGs, which have
amongst the lowest probabilities to be attained in the Philippines especially in the poorest
provinces. Therefore, the Health Partners Group urges the PDF to provide the necessary
collective push toward the full realisation of its previous recommendations with respect to
these issues.

The Health Partner Group would also like to draw the attention of the PDF on two key
emerging issues, namely (i) the poor financial protection for health and (ii) the threats
of respectively HIV/AIDS and Avian Influenza to social progress in the Philippines and
their possible impact on the economy.

1
Achievements against the recommendations of the 2006 PDF are reported separately.

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Annex 2: Emerging Key Issues Arising from the HEALTH SUB-GROUP

TWO KEY EMERGING ISSUES

1. POOR FINANCIAL PROTECTION FOR HEALTH

1.1. Social Health Insurance: Need for more effective social protection

Over the last 10 years, the national social health insurance programme (NHIP) has been well
established through PhilHealth. However, to unleash its potential as a mechanism for fair and
equitable health financing as part of the DOH reform programme as well as making a meaningful
contribution towards the MDGs, in particular with regards to social protection and poverty
reduction, the NHIP faces two major challenges:

• Insufficient coverage of the population. While PhilHealth membership is mandatory,

approximately 30% of the Philippine population are without health insurance coverage,
which means that the national health insurance programme is 30 % short of the goal of
universal social health insurance coverage.
• Insufficient financial protection. Those who are members receive only limited financial
protection. Currently, PhilHealth membership does not protect its member from sliding into or
sustaining poverty due to health related catastrophic expenses. The current design of the
benefit package places the risk of catastrophic payments on the member instead of the
insurance - thus missing to some extent the purpose of insurance. Ideally the risk for covering
catastrophic expenses should be shared between insurance and service providers.

These health financing challenges lead to a high financial burden on people seeking health care.
Approximately 44% of all health spending in the Philippines is out-of-pocket according to the
national health accounts. Estimates from the QIDS research study show that on average only
around 50% of the total cost of obtaining treatment is covered by PhilHealth. However, we also
know that many of the poor, even with a PhilHealth card, do not even seek care because of the
cost of travel, and expectations they may have to make substantial co-payments.

Need for commitment and action:

The issues of (1) enrollment for universal coverage, (2) shifting the financial risk from members
to PhilHealth and service providers as well as (3) safeguarding and improving the quality of care
need to be addressed simultaneously. This requires commitment and action from LGUs,
PhilHealth as well as DOH.

1.2. High costs partly capture the benefits of health expenditures: Need to contain the
costs of drugs and health service provision
Increased insurance coverage and enhanced insurance benefits won’t translate into the desired
level of protection for members if they are captured by high costs. Similarly, private health
expenditures will not yield their due outcome is prices are too high. This is the case in the
Philippines for two main reasons:

• Current health financing mechanisms based on fee-for-service reimbursements encourage price

escalation of health service provision. In particular, the way benefits are currently designed
under PhilHealth allows hospitals to simply increase their prices when benefits are raised.
Hence, the lack of a mechanism to control the cost of services including professional fees
renders any expansion in benefits ineffective in decreasing out of pocket expenses
• Drug prices in the Philippines are among the highest in the region (at the minimum 3-4 times
higher than the international price index scale; 2002 WHO/HAI Measuring Drug Prices Study).

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Annex 2: Emerging Key Issues Arising from the HEALTH SUB-GROUP

This issue is particularly critical in the many cases where drugs are lacking at public hospitals,
because the poor are forced to purchase drugs from private pharmacies at higher cost and
without the possibility of reimbursement.

There is an urgent need for effective mechanisms to control and reduce the prices of drugs and
service provision. Recommended measures are a change of provider payment modalities of
PhilHealth for health services (away from fee-for-service!), increased use of quality generic
drugs, continuous price and quality monitoring (Drug Price Reference Index, quality control),
taking up opportunities for pooled procurement (hospital pharmacies and LGUs), promoting
rational prescribing and price regulation of prescribed drugs.

Need for commitment and action:

Concerted effort of LGUs (promote generics, monitor prices and quality, pro-poor interventions),
DOH and PhilHealth (capitation or DRGs 2 for service provision; promotion of generics), service
providers (rational prescribing, promotion of generics) and BFAD 3 (exploring means of price
regulation of prescribed drugs).

2. EMERGING PUBLIC HEALTH THREATS TO THE PHILIPPINE ECONOMY AND

TO SOCIAL PROGRESS - Take advantage of time

2.1. Growing HIV/AIDS: Act now or pay later

The reported number of HIV infection in Philippines continues to grow and the rate of increase is
accelerating. Compared to the average of 16 HIV cases per month in the last 5 years (2001-2005),
the AIDS Registry had shown a monthly average of 27 new cases in 2006. As early as May 2006
the total HIV cases have already exceeded that of 2005.

The majority of HIV cases hit Filipino adults during their peak years of economic productivity
(58% were aged 25-39 years old). All modes of transmission have already been reported, but
sexual transmission means remains to be the most common (87%). Because AIDS is a behaviour-
driven disease and behaviour takes time to change, and because the incubation period of HIV
infection could take as long as 10 to 15 years, the impact of all actions or non-actions taken today
will be felt after a decade or so. The message therefore is clear: act now or pay later.

In conditions where HIV prevalence is still low, as in the Philippines, investing in fighting AIDS,
in the face of many other pressing development problems, is often a dilemma. But from the
standpoint of public health and sustainable development, the Philippines must act ahead of the
epidemic. The national response to AIDS needs to accelerate NOW because of, not despite, its
numerous socio-economic challenges. Expanding prevention and care efforts when HIV
prevalence is still low is much more effective and less costly than dealing with a full-blown
epidemic. The key is to act boldly before health systems become overburdened, before human
resources are incapacitated or lost, before children are orphaned, and before the vicious cycle of
AIDS and poverty takes hold.

Countries which have successfully stabilized their rates of HIV infection are those which have
approached AIDS, not merely as a health problem, but from the imperatives of social and
economic development and national security. The Philippines has that precious gift of time to

2
Disease Related Groups
3
Bureau of Food and Drugs

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Annex 2: Emerging Key Issues Arising from the HEALTH SUB-GROUP

take action that ensures that threats to the country’s development, such as AIDS, do not gain
momentum. So let’s try to avoid what happened in other countries.

AIDS being a preventable disease, the country must urgently raise public awareness. Global
experience tells us that in the absence of cure and vaccine, education remains to be the most
effective weapon to fight AIDS. Massive education is one of the salient provisions in Republic
Act 8504. The Philippine AIDS Prevention and Control Act of 1998 is one of the most
progressive and comprehensive AIDS laws in the world. Its full implementation, therefore, is
vital in achieving our Millennium Development targets, and key to the success of the country’s
fight against HIV.

In the meantime, public health authorities should pursue their efforts towards the populations at
greatest risk and strengthen HIV/AIDS surveillance systems.

Need for commitment and action:

Concerted effort of all relevant partners for large-scale dissemination of correct and up-to-date
information in all avenues available: in schools, communities, workplaces, international and
domestic exit and entry points, etc.

2.2. Avian Influenza: Establish appropriate compensation and surveillance

systems
The Philippines is still free from Avian influenza (AI) that affects over 50 countries in the world
today. However, the threat is still very high considering the globalization of trade and industry,
transportation and communications. As the Philippines has one the highest proportion of its GDP
attributed to the poultry Industry (>2%) any outbreak of Avian influenza would have dramatic
economic repercussions. As of 21 February, there are no human cases of avian influenza in the
Philippines compared to 274 cases, and 167 deaths affecting 11 countries in the world.

This gives the Philippines the advantage of time to prepare for the pandemic influenza. The
preparedness has taken the leanings from the SARS response in 2003. The preparedness plan
included the Intersectoral Task Force and Community Emergency Response Network used during
the SARS response. This Task Force is headed by the Department of Agriculture. Department of
Health is using its training materials on emerging infectious diseases as basic training for
Pandemic Influenza preparedness including surveillance and response.

The Asia Pacific Strategy for Emerging Diseases (APSED) has been developed to assist
countries to plan and be ready to address emerging diseases as AI. WHO is now pilot testing the
APSED tools in the Philippines and will again make the Philippines in an advantageous position
to further plan ahead for controlling any emerging disease in the country.

However, AI surveillance in animals needs strengthening. FAO is presently assisting the

Bureau of Animal Industry in building laboratory capacity for field surveillance and response at
both the national and country's regional level. It will also strengthen the established national
network of laboratories to support surveillance. At the community level, protection of
livelihood of families related to food security and income generation is also
considered. However, the issue of adequate compensation to farmer for culled animals, which is
essential for securing successful control of any possible AI outbreak in poultry, has not been fully
addressed.
Need for commitment and action:
Urgent need to establish appropriate compensation and surveillance systems.

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