After years of planning the Philippines’ universal health care (UHC) system is operative, strengthened by collaboration and the expertise of the private sector. The mandate to expand preventive and primary care to a growing population is wide, with a range of strategies to tackle both communicable diseases and non-communicable diseases (NCDs). Limited financing and a shortage of medical personnel remain legacy constraints on the system, while the Covid-19 pandemic placed further pressure on health care infrastructure. Nonetheless, the government continued to forge ahead with its goal, deploying resources to priority areas as funds and capacity allowed, while the private sector stepped up to fill some of the remaining gaps. It is expected that there will be greater levels of cooperation between public and private actors as UHC gains momentum.
Structure & Oversight
Medical care is regulated at the national government level by the Department of Health (DOH), which is tasked with developing nationwide health plans, setting technical standards, building capacity, and issuing guidelines to providers and the public. The DOH is also responsible for providing tertiary care, while primary care is largely the responsibility of local government units (LGUs).
National health insurance is provided through the Philippine Health Security Corporation, known as PhilHealth. Covering the entire population since the passing of the UHC Law in February 2019, members either pay an insurance premium or, as in the case of the elderly and disabled, receive a full government subsidy. Premium contributions for the organisation came in at P146.3bn ($2.9bn) in 2019, marking an increase on the P106.4bn ($2.1bn) and P121bn ($2.4bn) collected in 2017 and 2018, respectively. Conversely, the value of claims paid by PhilHealth declined from P114.6bn ($2.3bn) in 2018 to P97.4bn ($1.9bn) in 2019.
With improved sanitation, greater access to health facilities and rising incomes, Filipinos now live longer and experience lower rates of death at birth. The country’s average life expectancy rose from 61.1 years in 1960 to 71.1 years in 2018, according to the World Bank, while infant mortality fell from 66.4 per 1000 live births to 22.2 over the same period. These factors contributed to the quadrupling of the population, from around 26.3m in 1960 to nearly 108.8m by mid-2020. The Philippine Statistics Authority (PSA) projects the population will reach 115.4m in 2025.
While immunisation can help the population live longer and healthier lives, the uptake of vaccines remains below target. According to the latest annual report from the DOH, the rate of fully immunised children under one year old stood at 66.2% in 2018, compared to the government’s goal of 95%. This rate has not improved in recent years; instead, it marks a decrease from 69.8% in 2016 and 87% in 2014. In 2017 vaccine adoption was negatively affected when the manufacturer of the dengue vaccine Dengvaxia acknowledged that its product may adversely affect those who had not already been infected with the disease. This led the DOH to suspend its use in the school immunisation programme. As evidence of the impact that wider vaccination could have, at least 900 children under the age of 15 died in 2018 from measles, tetanus, tuberculosis (TB) and diphtheria – all of which have vaccines.
In terms of health infrastructure, the number of hospitals stood at 1222 in 2014, according to the PSA’s “2019 Statistical Yearbook”. This is lower than the 1700 hospitals recorded in 1995, largely due to the 2012 reclassification of 500 primary hospitals to infirmaries, as well as the trend of building larger medical campuses. While the total number of beds grew from 80,800 to 98,429 between 1995 and 2014, this was outpaced by population growth: the bed-to-population ratio dropped from 11.8 beds per 10,000 people in 1995 to 9.9 in 2014. However, the number of barangay (village) health stations increased by 85% from 11,646 in 1995 to 21,546 in 2018, highlighting the focus on widening access to health facilities – particularly for primary care.
NCDs lead to the premature death of hundreds of thousands of Filipinos, and cost the economy an estimated P756.5bn ($15bn) per year, or 4.8% of GDP, according to the World Health Organisation (WHO). Indeed, these diseases – which include cancer, diabetes, heart disease and stroke – account for 68% of deaths in the Philippines. In 2018 ischaemic heart diseases were the leading cause of death in the country, while cancer was second and diabetes fifth. Notably, the World Bank estimates that 7% of Filipino adults live with diabetes. In correlation with rising incomes – or, more specifically, with the associated risk factors such as sedentary lifestyles and smoking – the prevalence of NCDs is expected to expand.
Government organisations are accordingly taking a combined approach to prevent and control NCDs by encouraging healthy lifestyles; applying extra “sin taxes” on alcohol, cigarettes and unhealthy foods to discourage their use; and facilitating access to treatment. “Awareness and access to information are priorities for tackling NCDs, as a large part of the issue stems from people not knowing where they can go to be diagnosed and treated,” Beaver Tamesis, president and managing director of drug company MSD Philippines, told OBG. “Late diagnoses, in particular, can have a very negative effect.” In a move to improve affordability and widen access to treatment, the government exempted medications for preventing and treating diabetes, hypertension and high cholesterol from value-added tax from January 2019. More recently, the Covid-19 pandemic led to a discussion of health and nutrition as a strategy to boost immunity, although it remains to be seen whether this will translate into a longer-term shift in attitudes and behaviours that could lower the prevalence of NCD risk factors once pandemic-related concerns subside.
The Philippines also continues to battle with certain communicable diseases: the DOH recorded between 90,000 and 104,000 fatalities due to communicable diseases each year between 2010 and 2018, with TB claiming 22,103 lives in 2018 as the eighth-leading cause of death. As of 2018 the treatment rate for Filipinos with TB was 63% – a statistic the government aims to improve through the 2017-22 Philippine Strategic TB Elimination Plan. The roadmap aims to harmonise and enforce standards of care, while reducing patient costs. Meanwhile, a 2018 spike in measles cases – which rose to 10,024 from 2175 the previous year – continued into early 2019, with over 8400 cases and 135 deaths reported in urban areas between January and mid-February. The Department of Education subsequently decided to review a “no vaccination, no enrolment” policy in public schools, but no such policy had yet been enacted as of November 2020 – reflecting the challenges of balancing disease prevention with parents’ fears of vaccination and the right to education.
Efforts to combat HIV and AIDS have also ramped up in recent years to combat rising cases: there are an estimated 97,000 adults and children living with HIV in the Philippines, according to UNAIDS, and the country has the fastest-growing infection rate in the Asia-Pacific region. In early 2019 President Rodrigo Duterte signed the Philippine HIV and AIDS Policy Act of 2018 into law. It expanded access to testing – especially among youth, who make up the largest proportion of new cases – and free treatment. As of 2018 only 36% of those who had tested positive for HIV were in treatment, so the legislation tasked PhilHealth with developing a package to expand care. In the same vein, the law criminalised denying insurance to a person with HIV in an effort to facilitate treatment and curb discrimination.
While battling these diseases remains important, addressing the Covid-19 pandemic took centre stage in 2020 as government priorities shifted to tackling the spread of the novel coronavirus. President Duterte’s administration responded with one of the longest, strictest lockdowns in the world in an effort to avoid the public health care system becoming overburdened. Indeed, in some cases the president attributed the decision to extend or reimpose stricter measures to health care workers’ appeals.
This shift in priorities led to the suspension of some routine and preventive care. In response, in April UNICEF called on the country to continue immunisations for children under two years of age – particularly in LGUs with few or no confirmed Covid-19 cases – amid fears that 2m fewer children may be vaccinated over the year.
Financing Public Health
The majority of funding for UHC comes from the DOH and PhilHealth budgets, the former of which has fluctuated in the last half decade. The department’s total budget jumped from P87bn ($1.73bn) in 2015 to P112.3bn ($2.23bn) in 2016, but then fell to P95.3bn ($1.90bn) in 2017. Funding recovered to P106.1bn ($2.11bn) in 2018, before dipping once again to P97.7bn ($1.94bn) in 2019 and recovering slightly to reach P100.6bn ($2.00bn) in 2020. The 2020 figure accounted for 2.5% of the entire federal budget and some 0.5% of GDP. PhilHealth, for its part, saw a budget of P71.4bn ($1.4bn) for the year, on par with 2019. In light of the Covid-19 pandemic, the federal budget for 2021 – approved in December 2020 – raised the DOH’s allocation to a record P203.1bn ($4bn), while the budget for PhilHealth remained at P71.4bn ($1.4bn).
While the implementation of UHC and the Covid-19 response efforts shined a spotlight on the public health sector, the Philippines’ private health sector has been experiencing growth in recent years. Figures from the PSA showed that the private sector was responsible for 51% of all hospital beds as of 2014, up from 43.5% in 1990. The growing popularity of private facilities is also evident in the steady upwards trend of domestic private health expenditure per capita, which rose from $17 in 2000 to $87 in 2017, according to the World Bank. Private expenditure as a share of total health spending climbed from 52% to 65.5% over the same period, peaking at 72.6% in 2011. Moreover, out-of-pocket (OOP) expenditure at hospitals amounted to P148.8bn ($3bn) in 2018 – P108bn ($2.1bn) of which was spent at private hospitals, according to the PSA. Total household OOP spending of P413bn ($8.2bn) accounted for 53.9% of health expenditure that year.
With the public health sector focusing its efforts on preventive care, primary care and health literacy, the private sector has focused on offering more specialised services. This segmentation of care could lead to more partnerships between public and private actors, and allow each to leverage their strengths. “The biggest capital investments in technology and advanced tertiary care should be undertaken by the private sector, as we have the capacity,” Maria Corazon Consunji, president and CEO of the Makati Medical Centre in Manila, told OBG. “Public hospitals could send patients who need specialised care to private facilities and pay a contribution for them, which would be easier than undertaking huge capital investments themselves.”
The twin forces of Covid-19 and UHC highlighted the fact that the level of medical staffing is not yet sufficient to meet demand. As of 2019 the ratio of public doctors and nurses to the population both stood at 1:20,000 – far below the WHO recommended ratio of one doctor per 1000 people – and midwives numbered one for every 5000 people. The public sector employs the majority of medical professionals, or 91% of midwives and 61% of nurses, according to the WHO in 2017. Over 90% of doctors and nearly 75% of nurses were stationed in hospitals that year, while health centres and barangay health stations – which are typically the first point of contact for government-provided services – averaged only one doctor and two nurses each.
A large proportion of the Philippines’ medical personnel are employed on a contractual basis; a provision in the UHC Law aims to end this practice and regularise jobs in the public sector. The UHC Law also tasked the DOH with progressively increasing the number of permanent government health workers, in part by granting permanent positions to staff hired in priority areas. Meanwhile, the DOH will continue the implementation of various deployment programmes to fill staffing needs around the country. One such programme is Doctors to the Barrios, which places doctors on twoyear assignments in municipalities that have not had a doctor for at least two years. Another initiative assigns dentists, medical technologists and nutritionists to rural health units to complement existing staff in those areas.
The most recent push to ensure an adequate geographic distribution of staff came in October 2020 when the Senate ratified legislation that granted a full scholarships for doctorates of medicine to at least one qualified applicant from each municipality, requiring them to serve at a government health facility in their hometown for a minimum of four years after licensing.
Of the P413bn ($8.2bn) OOP expenditure by Filipinos in 2018, half was spent at pharmacies. The Philippines is the third-largest pharmaceutical market in ASEAN after Indonesia and Thailand, yet local manufacturing of medicine is low and the majority of pharmaceuticals are imported. When the severity of the Covid-19 pandemic became clear in the spring of 2020, many pharmaceutical stakeholders braced for disruptions in the global medicine supply chain. China is the world’s dominant supplier of active pharmaceutical ingredients, many of which flow to India. The latter is the top producer of generics, and in March the Indian government suspended the export of many popular medicines. Teodoro Padilla, executive director of the Pharmaceutical and Healthcare Association of the Philippines, told local media that month that fortunately many members had contingency plans for such an event and could source medications from other parts of the world. Nevertheless, value chain diversification became a hot topic in the international pharmaceutical industry, and many countries are now exploring strategies to strengthen local supply and distribution.
Generics dominate the market, as the government has sought to manage costs through PhilHealth and other initiatives. While a preference for branded drugs remains among those who can afford them, it is mandatory for doctors at public facilities to prescribe generics and pharmacies must carry the generic version of all medications. Under UHC and other laws, the government is working to lower drug prices and boost accessibility by negotiating prices, expanding drug benefits under primary care, allowing early access to innovative medicines, instituting special access schemes from the private sector and employing pooled procurement.
An important part of the pandemic response was the adoption of technology solutions, facilitating access to care and knowledge sharing. Towards that end, the use of smartphone apps to monitor and contain the virus increased during the crisis. In April 2020 the Department of Science and Technology (DOST) developed an app that provides information on Covid-19-related research and services, including efforts to secure and distribute test kits, personal protective equipment and disinfectants. The private sector and universities also deployed apps for contact tracing, voluntary symptom logging and community monitoring. For example, WeTrace was created by a DOST-funded start-up and is used for patient mapping, case reporting and location tracking. The government of Cebu has made it mandatory in the province.
As Covid-19 took centre stage in 2020, the pandemic highlighted persistent challenges and opportunities for the sector to prioritise once the spread of the virus subsides. Scholarship and deployment programmes for medical personnel should gradually help to fill gaps, build capacity and improve the quality of human capital in both rural and urban areas. This will be key in facilitating UHC and aiding in any future crises. It will be necessary to redouble efforts to improve the aspects of preventive and primary care – such as immunisations and regular check-ups – that fell to secondary priorities amid the pandemic. Meanwhile, the central role that research and innovative health technology played over the course of the year provides yet another opportunity for investment. The Covid-19 pandemic has underscored for all countries the importance of adept crisis management, and this knowledge will assist the government in its overarching aim of building a successful UHC system in the years ahead.