Health Financing: Who Pays for Health Care in the Philippines?

by Gideon Lasco, MD

Mang Torio, a farmer in Central Luzon, was in his middle 50s when he began to feel a lump on his throat. At first, he thought it was just a passing malady, but after a few months, the symptoms worsened. He decided to consult a doctor, and he was diagnosed with nasopharyngeal cancer - a rapidly spreading tumor that carries a poor prognosis: it can be fatal within several months or a few years. Even though there was little chance of recovery, his family put together what little funds they have to pay for the chemotherapy, surgery, and several weeks of hospitalization. Five months after the
diagnosis, Mang Torio was dead, his rice fields had been mortaged, and his five children were left without any funds to continue their education.

The sad story of Mang Torio is an everyday reality in many public hospitals in the Philippines. And it demonstrates how disease is not only a health problem, it is also a major financial burden. This is particularly true for diseases that require drastic measures and hundreds of thousands of pesos at short notice. Most people simply do not have enough funds to cover the expenses, yet life, priceless that it is, must be saved at all costs, and Filipinos will do everything to raise the required amount - from selling or mortaging farmlands to making emergency loans. The social and financial cost of these diseases, such as cancer, stroke, and heart attack, is so tremendous that they are called "catastrophic illnesses".

Addressing this vulnerability is one of the goals of universal health care. And one of the tangible solutions is a national health insurance program - this is what PhilHealth has been striving to be since its inception in 1995. In the Kalusugan Pangkalahatan program launched by the Aquino administration in 2010, "financial risk protection" is also listed as one of the three strategic thrusts towards Universal Health Care.

Who pays for health care in the Philippines? The answer to this question is always a combination of government, private sector, and individuals, but what underscores the importance of universal health care is that the proportion of what individuals shell out is too much. In health policy parlance, this is termed "out of pocket expenditure" (OOP). According to the World Health Organization, 20-30% OOP of health care is the healthy proportion. In the Philippines, the rate is a staggering 57%. This 57% does not only represent catastrophic illnesses, but also daily health expenditures. Patients purchase drugs, consult their doctors, and pay opportunity cost for their consultations and hospitalisations.

The rest of the health expenditure is spent by the government, through various agencies, including public hospitals that are subsidized. Politicians also dispense of government money, through their congressional allocations, to help their constituencies. Charity organizations, including the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Amusement and Gaming Corporation (PAGCOR) actively engage with tertiary hospitals like the Philippine General Hospital; social workers usually facilitate how health care is subsidized, how much is subsidized, and who gets subsidized. These donor-individuals and agencies perpetuate the notion of health as a form of charity and as a tool of political and corporate patronage, and does not move towards a social consciousness of health as a shared responsibility of the people.

The move for governments to take an increasing role in health, and an increasing share in paying for health care, is justified whether one sees health as a means or an end. Those who see health as a means invoke the role of health in development and economic productivity. On the other hand, those who see health as a end in itself focus on “health as a right”. These perspectives are in agreement in seeing out-of-pocket expenditure as something that must be decreased if we are to achieve Universal Health Care.

On the other hand, it is not enough to ask how we finance the healthcare of individuals. The other side of health financing, which is probably more challenging, is how to get the funds in the first place, for government to be in the position to assume a greater share of health spending? There are two schools of thought in this matter, one advocating for a social health insurance scheme, in which voluntary contributions are given by its beneficiaries, usually according to their ability to pay (the rich pay more; the poorest of the poor pay nothing). The recently-enacted health care scheme in the United States, popularly known as “Obamacare”, is a move towards this direction, and through PhilHealth, this is where the Philippines lies as well. On the other hand, there are also those believe that this system should be rejected in favor a tax-financed system;  just get the necessary health costs from taxes. Countries that have adopted this scheme include the United Kingdom and Thailand. Although we are pursuing a socialized health insurance scheme, there are those that suggest that we move towards a tax-based system.

Within the current policy framework, however, how can we thus improve health financing? Let us discuss the solutions that are on the table.

The three dimensions of universal coverage 
The World Health Organization speaks of three dimension of universal coverage. These dimensions are also means by which out-of-pocket expenditure can be lowered. The three dimensions are: Who gets covered, What is covered, and how much is covered.

Expanding population coverage, particularly to populations without ready access to health care, would obviate the need for them to consume their own resources for health care. However, the amount of coverage needs to be sufficient for all the expenses involved. In countries such as Thailand, even the transportation expenses of patients are reimbursed, since they have identified access to health facilities as a major reason for not seeking medical consult. This is true for the Philippines as well, and we need to adopt innovative strategies to make people more comfortable with health care. Finally, coverage should extend to catastrophic illnesses. This has already been launched by PhilHealth in July 2012, with the unveiling of the “Z Benefits for Catastrophic Illnesses”. Drawing from the illustration I used at the beginning of this article, Mang Torio's diagnosis of nasopharyngeal cancer is not yet covered in the benefits package of PhilHealth. This means that even if he were a PhilHealth member today, his illness would still be a heavy financial burden.

Efficiency through regulation and rational health care
An efficient health care system means that the money spent on health translates to beneficial gains in individual and public health. When people spend so much money on drugs and supplements of little or no evidence of benefit, we can call it a form of inefficiency. The government can solve this problem by regulating these pharmaceutical and 'nutriceutical' products and approving only those with clear indications and proven efficacy and safety. The technicality that supplements that do not seek any 'therapeutic claims' is exempt from the stringent testing that drugs are subjected should be rejected on the grounds that therapeutic claims are implicit on any product that associates itself
with illness or wellness. The Food and Drug Administration is mandated to implement these regulations, but it needs political backing of the government if it is to succeed.

Equally important in achieving efficiency in health is the avoidance of unnecessary procedures and hospitalizations. Fortunately, there is an increasingly growing body called “evidence-based medicine” that subscribes to the primacy of rigorous scientific evidence in guiding clinical and hospital policies and practices. Procedures such as CT scans, MRI, and laboratory tests are validated according to their ability to diagnose. Also, concepts in clinical epidemiology, which looks at disease patterns and distribution, such as “number needed to treat” . The weight of these studies notwithstanding, one must acknowledge that there are also economic motivation to pursue excessive health care. Thus, these tendencies have to be kept in check by professional societies as a self-regulatory measures, and by the Department of Health. The PhilHealth, which is becoming the major payor of health care, is also in a position to push clinical practice towards rationality by scrutinizing how patients were managed, given the diagnosis and the patient's history and physical examination findings.

Moreover, regulation of hospitals should also take into consideration the economics of health care. For four CT scan machines in one small town is obviously too many; investors seeking to return their investments would resort to coaxing doctors that practice there to over-prescribe a CT scan, either directly or indirectly; this would lead to unnecessarily procedures and the toll will ultimately be paid by the patients themselves.

Reforming the pharmaceutical and healthcare industries 
Reforms on drug pricing also have to be made, as drugs comprise a major amount of health expenditure. If the cost of drugs in the Philippines were as low as that in neighboring Thailand, it would cut spending on drugs into half, slicing the out-of-pocket spending by several percentage points. But why are we not able to do this? The answer lies in weaknesses in the regulatory infrastructure, as well as a weak local pharmaceutical industry that fails to provide any competition to multinational companies. The trend towards generic drugs and the rise of generics-only drugstores might change this, but four years after the Affordable Medicines Act of 2008, little has changed in the cost of many essential drugs.

On the other hand, healthcare, too, has to be regulated. Again, PhilHealth can leverage its influence. Already, it is implementing case payments which fixes the amount of cash that a doctor (or a hospital) gets for specific procedures. This move forces health care providers to work within certain

Legislative and political action
Restoring a health-promoting environment requires legislation in many areas. In raising revenues, the “sin tax bill” will be a key component, but the political debates about this bill are still ongoing, and it is likely that the outcome of this bill will be less than that for which it has been intended. In expanding coverage to reproductive health, an RH bill must be pursued. In strengthening regulatory agencies such as the Food and Drug Administration, new laws and amendments need to be introduced, although at times, the current legal framework is sufficient; but what is lacking is political support in carrying out these laws.

Ultimately, the health reform is a political process, and public clamor for health care is the catalyst that will move our leaders to act on it. Equally important, thus, are activities that raise awareness on health, such the Secretary's Cup of the Department of Health and its partners – a series of debates, talks, and town hall meetings that aim to build a constituency around Universal Health Care. The media should also participate in giving health issues a fair share of the public discourse.

CONCLUSION
Health financing remains a pressing challenge in reforming the Philippine health sector. Today, a majority of health care is still paid for by patients and their families, and this leads to catastrophes that ultimately affect economic productivity, and reduce overall quality of life in the country.

The general measure of a well-financed health care system is by looking at how much individuals spend for health care, an index termed “out of pocket expenditure”. Consequently, the problems in health financing can be augmented by moves that will (1) decrease out-of-pocket spending and/or (2) increase government spending, which is in turn enabled by generating revenues.

Under these two major domains, we have identified the following solutions: Expanding coverage according to the three dimensions of universal health care; Implementing reforms in pharmaceutical and healthcare industries; Pursuing measures that will raise efficiency and rationality of health care; and finally, legislative and political action.

As we end this discussion, it is important to state the one truism in health policy that cannot be ignored: that development itself is an antidote to health care; in general, as a country develops, so does its health care. While difficult to prove, the point here is that there are complex factors affecting health care that goes beyond the purview of public health or health economics. Also termed as “social determinants of health”, these factors are an invitation for multi-sectoral, interdisciplinary collaborations.

Ultimately, the conclusion we can make is that health financing in the Philippines requires a comprehensive approach that supports regulatory and legislative reforms aimed at raising revenue and reducing inefficiency; a commitment to expand the 'three dimensions of universal coverage', and a mechanism to increasing the capacity of the government to pay for health care, through raising revenues, and a strengthened, comprehensive, and sustainable health insurance system.

Manila
October 16, 2012

Statement of purpose: From Medicine to Medical Anthropology

by Gideon Lasco, MD

As a Filipino doctor, one of the most important questions I see is this: For a Filipino, what does it mean to be healed? As medical student and then as a full-fledged physician, I have offered cures for countless patients, but treatment is one thing, healing is another. Why are traditional healers so effective in making their patients satisfied, to a point that a substantial number of patients go to them instead of going to hospitals? Could these healers be tapping into a therapeutic way that, though unknown to physicians, resonates well with patients and their expectations?

In the larger context, what does it mean to improve health care in the Philippines? Universal Health Care is emerging as a sought-after direction in our country's health care. But will universal access to health care translate to a health care that is responsive to the felt needs of the people? Who defines what is 'health care' in the first place? Although I am part of the Universal Health Care Study Group as a writer, researcher, and advocate, I believe that the cultural perspective must have a voice in this debate; if we are to move on to Universal Health Care, we must move to one that is culturally relevant.

Medical anthropology, I believe, can help me join the growing (and timely) search to find answers to these questions. My personal experiences and interests led me to discover this exciting field. I have travelled around the country - from Itbayat to Bongao – first as a travel writer and mountaineer, and then as a researcher interviewing indigenous healers. The intrepid and inquisitive spirit I have developed in all these travels and adventures will help me confront, and then push beyond, our understanding of culture and health in the country. If it requires travelling to far-flung areas - or immersing into marginalised sectors of our society - then I shall welcome it.

As a doctor, my calling is to heal and I am convinced that for healing to take place, one must first understand. This is my clinical motivation for pursuing medical anthropology: The awareness that the pursuit of it has the potential to improve health care in the country; it is at least as important for health as a research scientist's latest discovery about the human DNA, or a clinical researcher's innovation on a surgical technique. And, to use medical terminology, since medical anthropology enables understanding and understanding leads to healing, I contend that medical anthropology is a field that is both diagnostic and therapeutic.

In my fieldwork around the country, interviewing traditional healers, I am reminded of a divining ritual called 'pagtatawas', in which the healer makes the sign of the cross using ‘tawas’ (alum crystal), cooks it, and interprets the finished, molten product. "What comes next?" I asked. The healer answered: "Nothing. That's it. That's the treatment." For them, treatment consists of the patient being shown what happened to him or her, what caused the illness. Diagnosis and treatment are seen as one; for the patient, to understand is to be healed.

There is no magic in traditional medicine. But it deserves to be taken seriously because it is taken seriously by the people. My task as a future medical anthropologist is not to glorify or reject traditional or Western medicine, but to study them, and in studying them, find ways to apply the lessons to our health care. My field will not be the villages alone, for there is as much culture in the hospitals as there is in the far-flung areas; both are valid foci of study, both realms will tell us a lot, and I yearn to be part of the growing (and much needed) interest in making sense out of them. If we follow through, from listening to understanding and then to applying what we’ve learned, then medical anthropology would not only be clinically relevant, but also relevant to the people (which I see as the ultimate end of research, whether in the social or empirical sciences).

This is the 'medicine' that I hope to someday offer the Filipino people; the perspective that I hope to bring to the body of scholarship. I strongly believe that medical anthropology is much needed in our country, and that my experiences, interests, and advocacy can find unity in this field. Thus, I am committed to pursue a career in Medical Anthropology.

Manila
June 13, 2011

Youngblood: Doctors and 'hilots'

by Gideon Lasco

(Note: This essay was published in Inquirer's 'Youngblood' column on October 12, 2010)

THE SEARCH for cures is one of the most important struggles of man. We have always endeavored to find ways to treat the illnesses afflicting humankind, be they biological, social, political or spiritual. We look up to doctors because they hold the promise of a cure. However, even before the arrival of Western medicine, our people already had their own ways of dealing with health problems. This collective experience combined with present-day medical science shapes the way we deal with our health.For our community immersion, my blockmates at the University of the Philippines College of Medicine and I spent six weeks in San Juan, Batangas. We served as doctors of the barangays, conducting clinics, paying home visits and assisting in their programs. More significantly, we lived with the people. We were assigned to live with “Nanay Nelly,” a senior citizen who ran a sari-sari store.

At the Philippine General Hospital, we see patients in the Outpatient Department by the hundreds, and it becomes a daily struggle to attend to all of them. But in Barangay Pinagbayanan, where we only had a few patients daily, we had more time to know our patients better. So we probed deeper into their health practices. They shared, and we listened.

Asked, for instance, why they do not go at once to hospitals for treatment, they said: “Of course, we want to go to the hospital. But what if we cannot afford it? Where will we go?”

Since lack of money is often the rule more than the exception among people needing medical attention, hilots provide an alternative. They charge P20 to P50 per consultation—and the service comes free if the patient is really poor. These hilots may not be always able to cure, and indeed we see many patients in the end-stage of serious ailments after relying on hilots for too long, but they at least offer some hope for many of our countrymen. Being part of the community, these hilots treat their patients with a compassion that sometimes cannot be found in the cold, clinical setting of modern-day hospitals.

We also encountered beliefs which are irreconcilable with modern science but which people strongly hold to this day. For instance, Dr. Jose Rizal wrote that the leading causes of illness in the Philippines are “winds, vapors and rain,” and to this day this thinking is very much alive in the community. One patient who had a skin disease he believed to have acquired during a flood refused an ointment, arguing that a “wet” ailment cannot be cured by another wet substance. As a compromise, we prescribed Amoxicillin, which proved equally effective.

Our group welcomed such encounters because they helped us understand better the attitudes of our patients at the PGH, many of whom come from the provinces.

One day, on my way to San Juan after a short visit to my hometown of San Pablo, Laguna, I dozed off in the bus. When I woke up and stood up, I felt a stabbing pain shoot up from my lower back.
When I arrived at Nanay Nelly’s house, I shared my problem with everyone. She suggested that I consult a hilot who happened to be making the “rounds” at the time. (Just like physicians who make daily rounds of hospitals, hilots pay visits to patients in their communities to see how they are doing.) She proceeded to tell me stories of successful cures done by this particular hilot, including the usual tale about someone getting well in her hands after being diagnosed with terminal cancer by his doctor. Seeing it as an opportunity to deepen my immersion experience, and wishing that indeed I would get some relief from the pain, I welcomed Nanay Nelly’s suggestion.

The hilot was initially reluctant to examine me when she heard that I was a doctor. “Surely you have better drugs for this!” her face told me. But when I told her I was really in pain and needed help, she seemed to settle down.

She began by asking me when and how I got the pain and to describe how severe it was and its quality. Then she examined my lower back, palpating my spine. After a while I saw her nodding her head, apparently arriving at her diagnosis.

She proceeded to massage my back with native oil. And then she took out a plaster, wrote some words in it, and patched it on my back. When I asked what she wrote on the plaster, she said they were Latin words: “SATOR AREPO TENET OPERA ROTAS.” I noted that the words formed a palindrome much like those in Dan Brown novels.

Immediately I felt a soothing sensation, probably because the plaster contained menthol. I thanked the hilot and promised that I would keep the plaster in place until I felt better, in accordance with her instructions.

And just as doctors don’t charge their colleagues, the hilot refused my offer of payment. “Maybe next week it would be my turn to consult you,” she said with a smile.

Later that day, I was feeling better; the pain was almost gone. When I told one of my batchmates about it, he wondered whether the cure was for real or it was merely another demonstration of the placebo effect.

But what is real and who can say for sure? Belief being subjective and experience-based, it is a personal choice. I could attribute my healing to inevitability (“it will heal by itself”), to the therapy (either working through scientifically explainable or mystical phenomena), to God (working by His sheer power or through circumstance which could include any of the above) or even to myself (the power of positive thinking). Or maybe a combination of all of these. But whatever the case may be, I definitely learned a great deal from the hilot and the community.

The experience made me realize that if we could learn from hilots, albularyos and other healers, we can develop a universal, holistic, culturally acceptable health care system in the Philippines.

Gideon Lasco, 24, is a graduate of the UP College of Medicine. He passed the board exams last August and is currently a resident physician at the San Pablo Doctors’ Hospital in Laguna.

Six days of community medicine in an urban poor community

by Gideon Lasco

(Note: This is a reflection of our experience as volunteer health staff in Brgy. 143, Pasay City, as part of our medical training. I was a third year medical student then)

On our first day, we were excited to see our barangay. Ate Nene, the prominent BHW of Brgy. 143, fetched us from the LRT station. She told us that our first stop was the local health center, where we are to pay a courtesy call to the doctor. However, when we arrived there, he didn’t show up in spite of our waiting for him for over an hour. We then proceeded to the walk through the Barangay. We passed by the “Tunnel” where we saw for the first time the grim realities of the area. The tunnel’s walls and roof were patched-up shanties, stacked on top of each other; on its 1-meter wide floor the women washed their clothes, the men took their baths, the children roamed about. Everything was done in the footpath which is also the social area of the neighbors. We began to notice how politics is a significant part of the BHWs’ concerns; they introduced us to the new barangay chairman, and the outgoing Kapitan Ong, who seemed apathetic to our presences.

On our second day, we were again asked to drop by the local health center first, to pay a courtesy call to the doctor. Once again, he didn’t show up, and we insisted that we proceed to the barangay hall already. There, Dr.Portia Marcelo followed and a Barangay Health meeting was held. Foremost in the BHWs’ minds was the recently-concluded elections; they had supported the losing candidate and they were suddenly insecure about their position as BHWs. Because of these, they seem paralyzed and unmotivated. What came out of the meeting was a need to engage with the new officials, and it was agreed that they ought to make a report to present their accomplishments in the past few years. As ICCs we did virtually nothing but observe the proceedings. Only four or five BHWs were present on this day.

On our third day, we went straight to the Brgy. Hall. We checked up around 18 kids to track their health and nutrition. They are enrolled at the Supplemental Feeding Program (SFP) but due to the elections this program has been put to a halt, and it was the first time in two months that a check up took place. We found many of the kids malnourished, with dental carries, scabies infection, among others. We identified some of them for follow-up.

On our fourth day, only two BHWs were present: Ate Babes and Ate Cynthia. We were supposed to help them make their report to the new barangay officials. Perhaps their poor attendance can be related to their feeling of being ‘paralyzed’ due to, again, politics. We taught Ate Cynthia how to use a computer. Moreover, we conducted home visits to 5 kids whose special health concerns we identified the day before. Meanwhile, Kapitan Ong continued his tong-its sessions with his friends.

On our fifth day, again only two BHWs were present. Ate Babes was there, too, and we continued to help them in making their report.

On our sixth and final day, we came to help the BHWs present their final report. It was also supposedly a feedback/conclusion session. Again, very unfortunately, only Ate Babes was there.  She was disillusioned too, because she felt that she was being left alone in the struggle. It was only Ate Babes who accompanied us when we rode the jeepney and bade Brgy. 143 farewell.

From these six days, it is very apparent that the BHWs lacked motivation. Unfortunately, down to their level, political intrigue is rampant even though their positions are actually minor and petty.

Probably they are beginning to feel that their efforts are futile. However, negative attitudes are like infectious diseases, they are communicable…honestly I felt unmotivated too sometimes because we were going all the way from PGH only to meet with one or two BHWs…there wasn’t much accomplishment in that. Hopefully, when the political dust settles, the BHWs can get back to work again; there is so much that needs to be done.

It is also unfortunate that the barangay officials don’t seem to care. The Brgy. Captain just loitered around his office. How can he expect others to work if he is as lazy as that? The local health doctor exhibited a similar attitude: how can he inspire future doctors, or even his constituents, if he’s always late and doesn’t take his job seriously?

I realized also that it is not enough to see the poor from a distance, or read about their plight. Actually being there inside the tunnel and palpating the body of poverty is an experience that gives me a clearer picture of Metro Manila. There are realities within the tunnel that do not see the light of day, and these things you will never see unless you really go to these people and listen to their stories. Beneath those high-rise buildings, below those modern roads are dark tunnels. Hopefully, in the future, the people of Brgy 143’s tunnel will find their way out.