Reforming Health Care

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Although the Philippines proudly boasts some of the best doctors and nurses in the world, the country's health care system as a whole has plenty of room for improvement.

The Filipino health sector bears resemblance to that of its educational system in that the private sector maintains several very high-level institutions, while the public sector is faced with a severe lack of funding due to a stretched national budget.

Generally speaking, private hospitals inside the capital city of Manila, such as St. Lukes Medical, Makati Medical, Asian Hospital and the Medical City are on par with international standards – some even claim to be better than 95% of all US hospitals. However, both private and public health care outside major cities rapidly deteriorates due to a weak insurance sector and low per-capita GDP (in 2008 the Philippines ranked 163 globally, posting approximately $3300). Among other Association of South-east Asian Nations the country ranks below Indonesia ($3900), Thailand ($8500) and Malaysia ($15,900) in terms of per-capita GDP.

One of the factors contributing to the Philippines' low per-capita GDP is the dramatic growth of its population, which has ballooned from 60m in 1990 to well over 98m today. According to some estimates the country's population growth rate currently stands at 1.96%, double the rate of local neighbour Vietnam (0.98) and three times higher than that of Thailand (0.62%). While this prolonged growth in population has led to increased consumption and higher total employment figures, thus helping drive economic growth, it has also led to the country's high rate of child malnourishment, which stands at 20.7%.

Further complicating access to health care is the underdevelopment of insurance. Although insurance is still not financially viable for the majority of the country's population, even those who can afford it still do not elect to cover themselves and their families; instead relying on relatives for medical emergencies.

According to 2007 data, per-capita public health expenditures in the Philippines remain extremely low at $120, which pales in comparison to Malaysia ($544), Thailand ($264) and even Vietnam ($151). However, analysing government health expenditures as a percentage of the total reveals that the Philippines is closer to being on par with its neighbours, using 6.1% of its budget on health care compared to Vietnam (6.4%), Malaysia (7.0%) and Thailand (11.3%).

An expanding budget deficit in 2009 combined with low tax collections will likely prevent any major health care reform for the country in the near future. However, in an attempt to lower health care costs for the average Filipino, particularly the cost of medicines, the government recently enacted Republic Act No. 9502, known as the Universally Accessible Cheaper and Quality Medicines Act of 2008. This piece of legislation gave the Department of Health the power to impose hefty administrative fines and penalties on any company caught in violation of a newly imposed maximum retail price.

According to the health undersecretary, Alexander Padilla, 90% of pharmacies and hospitals have complied with the maximum drug retail price, which took effect on August 15, on essential medicines. While this will certainly bode well for the consumer, it will have repercussions on pharmaceutical companies who may suddenly find the Filipino market less attractive.

Despite some deficiencies, the Philippines' health sector does have several bright spots – the first being its clear advantage in human resources. The country produces world-renowned doctors and nurses, many of which display their respective trade on the international stage.

According to Dr Alfredo Bengzon, the former secretary of health and the current president of Medical City, "The demand for our doctors, nurses and care-givers speaks volumes on the top-notch quality of the Filipino health care provider. We bring together technical proficiency with a natural caring disposition, and it is truly a unique combination."

The country is also currently evaluating the possibilities of developing a strong medical tourism market given the abundance of highly qualified English-speaking medical workers, sophisticated private hospitals and competitive pricing. However, if the Philippines is to increase its weight in a medical tourism market currently dominated by Thailand and Singapore – which also happen to be regional aviation hubs – it will need to first increase overall tourism numbers.

Though domestic tourism has picked up dramatically in recent years, international arrivals still have not reached any significant milestones. According to several industry insiders currently hospitals and medical clinics in and around Manila are ready to service medical tourism in terms of quality and even capacity. The challenge ahead for the country to become a serious player in the medical tourism market is to build a reputation that will attract medical tourists.

As the Philippines continues to develop economically, general standards of living will increase. In the meantime, in the absence of increased spending, the focus will likely be on preventative measures, which are key components for the country as it combats diseases, population growth and sanitation-related illnesses.

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