Vol. XIII
No. 6
November-December
1995
The Challenge
of Health Care
Financing Reforms*
by Orville Solon, Lea Sumulong,
Carlos Antonio Tan, Jr., Joseph Capuno,
Pilipinas Quising and Stella Alabastro
HEALTH CARE STRUCTURE AND FINANCING: AN OVERVIEW
I
n 1991, the government spent approximately P29 billion for the health
sector, an amount that was barely 3 percent of the country’s gross national
product (GNP). A Department of Health-Philippine Institute for Development
Studies (DOH-PIDS) survey estimates that roughly 24 percent of the
population (14 million Filipinos) utilized some form of medical care in 1991.
Dividing the P29 billion spent on health care by the number of health care users
that year, it is estimated that each consumer received an average of P2,000 worth
of medical services. In the same year, the average cost of hospitalization was
three times this amount. This could only mean that some consumers did not
receive the appropriate health care services needed. In this sense, it can be said
that because of lack of financing, much of the health care needs are unmet.
At present, health care services are financed through various modes. These
include the following:
z Direct payments by individual families . Health care consumers finance
up to 38 percent of total national health care expenditures through direct out-ofpocket payments. Individual families dip into their savings, borrow, or sell
property to raise the amount needed to cover medical expenses. This method of
financing dominates private health care markets.
F Page 12
*This is a condensation of chapters 1 to 5 of the integrative report of the DOH-PIDS project Baseline Studies
on Health Care Financing Reforms. The project was designed to provide baseline information that would improve our
understanding of the Philippine health care financing system. The studies undertaken focused on secular influences on
the health care system, the behavior of health care consumers, the profile and behavior of health care providers including
various types of medical manpower (doctors, nurses, midwives), and the operations and performance of health care
financing institutions. The bulk of the research materials came from primary data on households, hospitals (and patients),
clinics (and patients), and insurance firms (and members) collected from seven provinces in four regions in the Philippines.
Secondary data from relevant government institutions complemented the survey data.
ISSN 0115-9097
Editor's Notes
In this special issue, we highlight the
findings of the integrative report of the
Department of Health-Philippine Institute for
Development Studies project on Baseline
Studies on Health Care Financing Reforms..
The integration of the 24 individual
research studies under the project was truly
a herculean task, and for this effort, we
should thank Dr. Orville Solon and his
associates.
To cover everything in the integrative
report in so short a space would do injustice
to it and that is the reason why our main
article focuses only on an overview of the
health financing system, demographic factors
which impinge on health care financing, and
a profile of both health consumers and health
providers. We strongly suggest that the reader
go through the entire integrative report for a
more indepth analysis of the issues involved.
Chapter 8 of the integrative report ( an
evaluation of Medicare and prospects for
improving the system) is featured starting on
p. 2 while Chapter 9 (on private health
insurance as alternative financing
mechanisms) can be found on pages 6-7 of
this DRN issue.
Meanwhile, as a tribute to the
successfully concluded APEC economic
leaders' meeting in Osaka, Japan, also
included in this issue is the economic leaders’
declaration of action during that meeting,
which you will find on p. 10.
What's Inside
2
6
An Evaluation
of Medicare
Private Health
Insurance
as Alternative
Financing Source
10 APEC
Economic Leaders’
Declaration of Action
DEVELOPMENT
RESEARCH
NEWS
I
n 1969, Republic Act 6111 was
signed into law creating the
Philippine
Medical
Care
Commission (PMCC) as the overall
policymaking
and
coordinating
body to oversee the Medicare program.
In performing oversight functions
over Medicare, the PMCC takes care of
programming and structuring medical
benefits. In contrast to direct provision
of health care services, the PMCC
provides medical services to its
beneficiaries indirectly, either through
direct payment to accredited providers
or through reimbursement to the
patient of actual health expenses
incurred. As such, the monitoring and
evaluation of the quality of services by
providers logically becomes a major
PMCC
responsibility.
In
the
management
of
the
program’s
funds— known as
the Health Insurance Fund (HIF)—
the
Government
Service Insurance
System (GSIS) and
the Social Security
System (SSS) act
as financial intermediaries tasked to
collect premiums, disburse benefit
payments, and invest reserves or
unused premium contributions. These
activities are undertaken by the GSIS
and SSS independently of each other.
2
Lackadaisical coverage
Between 1980 and 1991, the
annual average growth rate of Medicare
coverage was over 2 percent, roughly
equal
to
the
country’s
annual
population
growth
rate
between
intercensal years 1980 and 1990. This
implies that the Medicare coverage base
(consisting of premium payers, their
dependents, retirees, and voluntary
self-employed members) has been
merely
keeping
pace
with
the
population expansion, on average.
Over half of the population
continue to be without coverage. This
is because Medicare concentrated
largely on the industrial and service
sectors (through SSS) and the public
sector (through GSIS). As a result,
coverage among the self-employed,
November-December 1995
grew only by 2 percent. In other words,
Medicare enrollees represented a little
more than 25 percent of the employed
population in 1980, then fell to about 20
percent in 1990. However, as a
percentage of the salaried employee,
Medicare enrollees averaged 48 percent
during 1981-1990.
Unequal access to medical services
Although
Medicare
members
receive uniform financial support, they
still face unequal access to medical
care due to other constraints imposed
by the market, such as the uneven
distribution of hospital facilities and
medical specialists across regions.
In terms of number of accredited
hospitals and clinics across regions in
the country, Central Luzon (Region 3),
An Evaluation of Medicare*
Program performance
To measure Medicare performance against its objectives, several
aspects of its administration and
operations need to be reviewed. The
DOH-PIDS project thus includes as
one of its studies an evaluation of the
Medicare
administration
and
operations. The succeeding sections
constitute the major findings of such
evaluation which cover the period 198191 of the Medicare history.
*This is a condensation of Chapter 8 of the
Integrative Report of the DOH-PIDS project Baseline
Research on Health Care Financing Reforms.
those in the informal sector and in the
farms is very low. In fact, a large
proportion of the working poor,
farmers, fisherfolk, and rural workers,
are without coverage because the
geographic dispersal of farms and
fishing
villages
makes
Medicare
insurance
difficult
to
provide.
Moreover, SSS has attracted few selfemployed to Medicare because it offers
social security insurance as a take-itor-leave-it package, which includes
Medicare, retirement, disability, and
education components. In 1991, social
security coverage was extended to selfemployed
farmers
and
fisherfolk
earning at least P18,000 annually, based
on SSS findings that rural cooperatives
could serve as locus of collection and
payment.
During 1980-90, the labor force
grew close to 4 percent annually and
the employed population grew by over
3 percent, but Medicare membership
Southern Tagalog (Region 4), and
Southern Mindanao (Region 11) have
the most number (164 to 173) compared
to Metro Manila’s 142. Metro Manila
has the largest bed count mostly found
in tertiary hospitals.
Meanwhile,
many
secondary
facilities are found in Regions 3 and 4,
which are relatively economically welloff, while small primary facilities
abound in the more depressed areas
like Regions 5, 10, and 11.
No lack of effort in expanding
base
The presence of a fairly large
number of nontertiary facilities in
outlying regions suggest that efforts to
widen the catchment area for Medicare
services have not been wanting, as a
result of which Medicare eligibles have
access to at least primary types of
medical care.
DEVELOPMENT
RESEARCH
NEWS
Metro Manila leads pack
Metro Manila leads other regions
in the number of beds per thousand
Medicare
population
(Medicare
population per region was estimated
by multiplying the total Medicare
coverage by the percent of employed
found in that region) with almost 9
beds per thousand. Central Visayas
and Western Mindanao, which have
low bed capacities, also have low bed
to
population
ratios.
Cordillera,
however, has a high bed count per
thousand despite having a low bed
capacity because it has the lowest
estimated Medicare population.
The pattern of regional allocation
of physicians (including dentists)
accredited by Medicare looks very
much like the regional distribution of
health facilities since accredited doctors
work within accredited hospitals and
clinics.
However, only NCR, CAR,
and Region 5 have at least 1 doctor per
1000 Medicare population.
This
indicates that while the introduction of
Medicare caused the outlying regions
to make rapid gains in the provision of
medical services, they have yet to
experience any substantial gain in per
capita availability of facilities and
medical manpower relative to Metro
Manila residents.
Services not uniform across regions
However, only a few regions have
the full range of Medicare services since
few medical specialists are available to
take on the more difficult and
complicated Medicare cases.
General practitioners dominate
the
system,
far
exceeding
the
recommended ratio of 0.05 per 1000
population in all regions. On a national
level, only obstetrician-gynecologists
and pediatricians are in oversupply
while the rest are underrepresented.
This indicates that the lack of advanced
facilities in poorer regions constitute a
significant deterrent to the availability
of medical specialists. Moreover, no
incentives
exist
to
encourage
concentration of specialized medical
3
“Over half of the
population continue to be
without health coverage.
This is because Medicare
concentrated largely on
the industrial and service
sectors (through SSS) and
the public sector (through
GSIS).”
resources
in
poverty
stricken
communities.
Fortunately,
the
resulting
Medicare
use
patterns
do
not
necessarily correspond to health care
access levels. Although accredited
health
facilities
and
medical
practitioners tend to congregate in
Metro Manila and other urban places,
Medicare use, at least within the public
sector, is not monopolized in the NCR.
Specifically, a higher number of users
is found in Regions 4, 10, 11, and 12.
Furthermore, the following patterns of
Medicare usage emerged: dependents
are more likely to use Medicare than
members;
female
beneficiaries
outnumber males by roughly two to
one; except for Metro Manila, all
regions have a larger number of rural
beneficiaries.
Claims processing for government
workers
In the GSIS Medicare processing
system, there is a clear-cut separation
of responsibilities and control among
various
entities.
There
may
be
understaffing, however, because of the
growing stockpile of half-processed
claims. In particular, it takes ten days
to complete the processing of each of
the daily surge of 2,000 incoming
claims, resulting in a backlog of close
to 51,000 claims per month. There is
further evidence that few claims are
November-December 1995
being disapproved by the GSIS. Except
in 1974, 1978 and 1979, the proportion
of rejected claims has not gone beyond
10 percent between 1972 and 1988.
Beginning 1980, there has been a
declining
trend
in
disapprovals,
averaging only 4 percent between 1982
and 1988.
On the whole, although an
obvious routinization has set in, it is
unclear whether the lack of rigor
actually encourages fraud. What is
clear is that there are no standards to
go by since there is no complete manual
of operations.
Claims processing for the private
sector
Unlike GSIS where all processing
takes place in its central headquarters
in Manila, SSS has completely devolved
claims processing to its ten regional
offices.
The
processing
system,
although new, is very detailed and is
well-equipped with controls that can
detect most incomplete, irregular and
fraudulent claims.
Under
the
new
processing
system, backlogs are few and a new
standard of 10 days processing time
has been set. This is very plausible
since only 600-700 claims come in daily.
However, it is a widely-held
perception that the rate of claims
rejection in SSS processing is too high.
If this is so, then processing efficiency
is being falsely traded off with a fewer
number of beneficiaries. On the other
hand, a spin-off benefit of an efficient
processing scheme is the early detection
of
claims
which
are
irregular,
incomplete or fraudulent.
Unit cost of processing claims
Given their respective claims
processing features, it is estimated that
the cost of processing a single GSIS
claim was about P17 in 1991 or about
P89 cheaper than a single SSS claim for
the same year.
F Page 4
DEVELOPMENT
RESEARCH
NEWS
An Evaluation...
EPage
3
Steady increase in health insurance
fund
The health insurance fund (HIF)
has risen steadily, from P491 million in
1980 to P3 billion in 1991, representing
an average yearly increase of 18.4
percent. SSS accounts for two-thirds to
three-fourths of the fund, partly
because of its larger membership base
which brings a correspondingly bigger
chunk of collection income.
In
terms
of
composition,
Medicare income over the years has
shifted progressively in favor of
investment income, with the change
occurring much more rapidly for SSS.
In 1980, barely 10 percent of Medicare’s
total income is investment income. By
1990, almost 45 percent of Medicare’s
earnings came from investment interest
payments alone. The phenomenal
growth of investment income suggests
an increasing ability by Medicare to
cope with inflationary medical care
costs by lessening pressures on
collection
income.
As
Medicare’s
dependence
on
premium
income
weakens, its risk-sharing capability can
be expanded.
Healthy fund management
At no point between 1980 and
1990 did the Medicare system suffer
any underwriting shortfall, defined as
the difference between total expenditures (benefit and administrative
expenses) and premium payments. SSS
never had to draw from investment
revenues to defray expenses, while
GSIS experienced net underwriting
losses in 1985, 1988, and 1991.
Rising income from premiums and
investments
The system as a whole has been
experiencing a rising net income
(defined as premium income plus
investment
income)
which
has
4
November-December 1995
expanded almost
Table 1
eight times, from
Changes
in
Income
due to the Medicare Tax
P154 million in
(By Quintile)
1980 to over P1
billion in 1991. As
usual, the inQuintile
Benchmark Income
After tax Income % Change
(In pesos)
(In pesos)
crease is largely
accounted for by
SSS.
SSS’ total
Poorest quintile
53.3188
53.2304
-0.166
income has conQuintile 2
85.4098
85.2755
-0.157
sistently pulled
Quintile 3
119.0240
118.8480
-0.148
away from total
Quintile 4
174.2980
174.0670
-0.133
e x p e n s e s ,
Richest quintile
337.2500
336.8150
-0.129
allowing its net
income to grow.
Source: Beringuela (1993).
Since 1984, net
income has overGSIS has posted a higher return on
taken total expenses and in 1991, SSS’
equity (35 percent annually) compared
net income accounted for over 97
to SSS’ 23 percent per year.
percent of Medicare’s net revenues. In
For the entire Medicare system,
contrast, GSIS’ total expenditures have
as cumulative reserves shot up fifteenkept pace with its total income across
fold from P439 million to close to P7
the
years,
maintaining
constant
billion, reserve capacity (defined as
pressure on both investment and
reserve levels as a percent of total
collection incomes.
expenses) also went up from 1 year to
as high as over 5 years in 1989. On
Longterm fund stability
average, it will take more than 3 years
Medicare’s ability to meet longbefore Medicare funds dry up, given
term obligations from its local assets
current
expenditure
levels.
In
and earning power, as measured by
particular,
SSS’
reserve
capacity
leverage ratios, is much more secure
averaged close to 5 years in the last
and less prone to destabilizing factors.
decade while GSIS averaged only about
The predictability of premium income
1 year.
and sound investment decisions have
largely kept both debt-to-total assets
Spending keeps pace with income
ratio (total liabilities/total assets) and
The
growth
of
Medicare
debt-to-equity ratio (total liabilities/
expenditures
has
kept
pace
with the
reserves) exceedingly low during the
growth
of
collection
and
investment
1980-91 interval. Of the two systems,
SSS has kept total liabilities to a incomes. Generally, benefits expense
minimum while constantly stockpiling as a proportion of collection income
assets. GSIS, meanwhile, has relatively captured anywhere from 68 to 92
percent during 1980-91 but benefits
higher liabilities.
Overall, the system’s return on expense for GSIS grew faster than that
investment
(ROI)
has
alternated for SSS by about 2 percentage points.
between respectable lows (e.g., 10 In the same light, the claim of GSIS
percent) and exceptional highs (e.g., 38 benefit expenditures on collection
percent). Medicare’s ability to offset income is relatively larger compared
correspondingly high benefits and to SSS.
operating expenses by high incomes,
Public workers more dependent
as measured by return on equity, is
on Medicare
likewise generally in good shape,
Although more people were
averaging about 25 percent yearly
brought into the Medicare program,
during the period 1980-91. On average,
DEVELOPMENT
RESEARCH
NEWS
not many more of those eligible actually
received medical care services. The
number
of
beneficiaries
hardly
changed, at about 6-7 percent of the
coverage base in 1980-91. It should be
noted, however, that GSIS has given
benefits to a higher percentage of
eligibles within its own Medicare
coverage base, always about twice as
that of SSS. Apparently, many public
sector workers are dependent on
Medicare,
presumably
because
Medicare is the only medical insurance
available to them.
In the private sector, many firms
offer comparable social security benefits
to their workers, resulting in a lower
usage of Medicare. Benefits paid per
recipient rose from less than P300 in
1980 to almost P1,300 in 1991. SSS paid
higher average values per claim but
GSIS paid as much as two-thirds higher
benefits per capita (since GSIS has a
bigger proportion of beneficiaries in its
coverage base).
Laxity in accreditation
Medicare accreditation is based
on the licensing standards of the
Department
of
Health
(DOH).
Secondary and tertiary hospitals need
only show their DOH license to operate
in order to gain PMCC accreditation.
This laxity is meant to facilitate, rather
than hinder, accreditation. Appropriate
norms
on
PMCC
accreditation
procedures, however, such as the
number of medical personnel, number
of beds, facilities, etc., are not precisely
determined. A comprehensive manual
of operations on how accreditation is to
be done in the context of a more
professionalized process is clearly
necessary.
Weak monitoring
In addition, PMCC’s power to
monitor accredited hospitals all over
the country has not been fully
implemented because of budgetary
constraints and lack of orchestration of
efforts within the Medicare system. In
the first quarter of 1991, PMCC put
under surveillance only 15 percent of
5
November-December 1995
the total number of providers all over
the country which is estimated at 1543.
This
is
because
PMCC
hardly
coordinates with SSS and GSIS, both of
which also have surveillance powers
over the hospitals.
A coordinated effort to resolve
this problem would have addressed
some of the capacity constraints being
experienced by PMCC and perhaps
would have achieved economies of
scale in monitoring.
it costs six times as much to process
claims in SSS than in GSIS in 1990 and
almost three times as much in 1989.
Combining the costs incurred by SSS
and GSIS in administering the Medicare
program, total operating costs have
risen to over P97 million in 1991,
compared to only about P26 million in
1981, reflecting an increase of more
than 370 percent.
Administrative costs
In terms of monthly income, the
poorest group’s contributions comprise
more than 50 percent of total GSIS
contributions, followed by the middle
income group at 35 percent and the
richest group at about 12 percent. For
SSS, the pattern is reversed. The lowest
income group’s contributions comprise
no more than five percent of total
contributions while the highest income
The
costs
of
implementing
Medicare Program I are jointly borne
by SSS, GSIS, and PMCC. The two
social security agencies have derived
their resources for administrative
expenditures from the HIF while
PMCC depends fully on the central
government for its financial resources.
Who contributes the most
“...it was found that the Medicare
payroll tax is regressive since the decrease
in income declines as income increases...”
For
1981-91,
the
operating
expenses of the Medicare program
under SSS were on the upswing, not
because resources have been poured
to the detection and reduction of fraud
and abuses, but because of fringe
benefits given by the SSS management
to its employees. This is not to suggest,
however, that these benefits are
excessive and ought to be discontinued.
The issue is whether on the basis of per
peso of benefits, it is becoming costlier
to be insured in Medicare under SSS
than under GSIS. To restore the balance
between benefits and operating costs,
SSS
could
make
the
necessary
adjustments by revising the Medicare
benefit structure or simply increasing
medical care benefits.
By contrast, Medicare operating
costs under GSIS are declining. In fact,
group comprises almost 54 percent of
total contributions.
The pattern of
distribution of Medicare contributions
across age groups is similar for GSIS
and SSS, with more than 60 percent
being accounted for by members in the
26 to 45 age group. In GSIS,
contributions
are
almost
equally
accounted for by each gender group
while in SSS, contributions from male
members predominate those from the
females.
Who benefits the most
The pattern of distribution is
similar for both GSIS and SSS Medicare
contributions. For GSIS, however, a
large portion (more than 70 percent) of
F Page 6
DEVELOPMENT
RESEARCH
NEWS
An Evaluation...
EPage
5
benefits were distributed to the lowest
income group, 20 percent to the middle
income group, and only eight percent
to the highest income group. For both
GSIS and SSS, the 26-45 age group had
the largest claim on Medicare benefits,
followed by the 45-65 age group. In
terms of the retiree group, however, it
is GSIS which was able to distribute a
larger share of benefits, at about nine
percent, compared to SSS’ one percent.
A regressive payroll tax
Medicare
contributions
are
payroll taxes. Like all other taxes, the
true incidence of Medicare tax bounces
off to other sectors in the economy. In
order to quantify the likely impact of
Medicare taxes in other sectors, a
computable general equilibrium (CGE)
model built by Clarete was used. The
Clarete model uses the 1989 data set
for production, consumption, taxes,
and income distribution.
From the CGE experiment, it was
found that the Medicare payroll tax is
regressive since the decrease in income
declines as income increases. This is
shown in Table 1 on page 4 by the high
percentage reduction in income of
household in the first quintile (-0.166
%) compared to only about -0.129
percent for those in the fifth quintile. In
addition, the tax is associated with a
deadweight loss since it distorts the relative
price of labor vis-a-vis other factor prices.
Reforming Medicare
z Expanded role of PMCC
relative to SSS and GSIS .
PMCC
must be endowed with a corporate
structure to improve its leverage over
all the components of the Medicare
system. Potential areas where it can
assert authority as mandated by the
Medicare
Act
are
research
and
development and expanded control
over the management of the health
insurance fund.
6
z Reorientation
of
PMCC’s
profile and distribution of personnel .
The PMCC’s administrative personnel
outnumber its technical personnel by
almost 3 to 1. The ratio is inordinately
high, since a ratio of 1 to 1 would
already be considered too askew in
favor of administrative-oriented skills.
z Prioritization
of
public
information activities . Information is
a necessary ingredient in reducing the
uncertainty in the Medicare system:
PMCC can function as a perfect
information
agent
for
Medicare
enrollees. Well-informed members can
deter abuses and collusive behavior
and prevent roundabout procedures
that lead to misallocation of time and
money resources.
z Help rural people become
organized for Medicare . PMCC could
very well serve as a vertical coordinator
of rural-based Medicare projects. For
instance, it could assess the capability
of the community to sustain the growth
of a local health insurance fund.
z Merging the HIFs . The two
HIFs could be merged and managed
by a third party, preferably a
restructured PMCC. Evidence suggests
that the current setup—in which the
Medicare fund is divided between two
financial intermediaries (GSIS and SSS)
and in which the main developmental
body (PMCC) is more at ease
performing regulatory functions—is
inadequate.
Among
the
potential
benefits of a unified fund are: (1) the
rescuing of GSIS Medicare funds (2)
streamlining of claims processing and
avoidance of costly backlogs (3)
avoidance
of
duplication
of
administrative
expenses
and
(4)
orchestration of disparate efforts on
monitoring providers and imposing
appropriate sanctions.
z Design of appropriate public/
private health service mixes . Engaging
the services of private health care
intermediaries, such as HMOs, can
influence efficiency in the delivery of
medical services and costs themselves
can be contained. DRN
November-December 1995
P
rivate health insurance includes
commercial indemnity health
insurance, health maintenance
organizations
(HMOs),
employer-provided
benefits
and community level insurance.
Commercial indemnity health
insurance firms provide health and
accident
insurance.
These
firms
generally offer health insurance to
complement their life and nonlife
insurance packages whose coverage,
at present, is limited to the upper
income bracket.
Health
maintenance
organizations act both as medical expense
insurers
and
direct
health
care
providers to insured members. There
are three types of HMOs in the
Philippines: investor-based, community-based,
and
employer-initiated
HMOs. Investor-based HMOs, which
focus on the employed sector and are
basically profit-oriented, generate most
of its income from corporate accounts.
Community-based
HMOs
are
experimental, nonprofit organizations
in
lower-income
communities.
Employer-initiated HMOs are formed
by
companies
solely
for
their
employees and their dependents. The
employer-initiated HMO is similar to
the community-based HMO because it
is
established
in
a
corporate
community, is nonprofit, and offers
lower membership fees.
The health insurance industry
tends to favor urban dwellers, the
employed sector, and the economically
better-off population, thereby raising
questions
of
equity
in
service
provisions.
Commercial indemnity insurance
and HMOs
In 1988, there were 102 private
commercial indemnity insurance firms.
Between 1975 and 1988, there were
more nonlife insurance companies (92%
of the total) than life insurance
companies. Of the 92 percent share of
nonlife companies, domestic nonlife
insurance firms accounted for 76
DEVELOPMENT
RESEARCH
NEWS
7
Private Health
Insurance
as Alternative
Financing Source*
percent. On the other hand, domestic
life insurance companies captured a
mere seven percent of all commercial
indemnity insurance firms.
The
Philippines has, by various estimates,
from 12 to 26 HMOs, most of which
were
incorporated
and
started
operating only in the 1980s.
On average, premiums charged
by commercial indemnity firms for one
year of health insurance coverage is
about P4,000. There is also a large
variance in the premium costs being
charged by HMOs to their members,
ranging from a low of P600 to a high of
P35,000. The average annual premium
charged by HMOs, however, is higher
than those charged by commercial
indemnity insurance firms by about
P2,000.
Majority of nonlife insurance
firms
cover
only
hospitalization
services which are in turn limited to
the treatment of injuries due to personal
and/or motor vehicle accidents.
A
few nonlife insurance firms offer a
comprehensive
package
which
includes
outpatient
consultations,
diagnostic services and hospitalization
services but which are likewise limited
only to those needed for the treatment
of injuries caused by personal/motor
vehicle accidents.
Other nonlife
insurance firms only reimburse the cost
of drugs and medicines for the
*This is a condensation of Chapter 9 of the
Integrative Report of the DOH-PIDS project Baseline
Research on Health Care Financing Reforms.
treatment of injuries due to personal
accident.
Nonlife insurance firms generally
provide the benefits to their members
in the form of cash reimbursement,
hence they often do not see the need to
accredit service providers. Neither do
they impose restrictions as to where or
from whom the members could consult
or avail of medical services. There were,
however, defined ceilings for service
cost per accident which usually consists
only of an outer limit. The ceilings
depend on the units of insurance
enrolled in, subject to a maximum
amount. For other nonlife insurance
firms, the ceilings were proportionate
to the principal or total value of the
insurance as well as with the provision
for a maximum amount. Still other
non-life insurance firms have a set lump
sum amount per accident regardless of
the type of services availed of.
All life insurance firms also
provide hospitalization services but
with additional benefits consisting of
any one or combination of the
following:
surgical,
nursing,
and
maternity services. Life insurance firms
likewise provide benefits in the form of
cash reimbursement and do not impose
restrictions with regard to service
providers.
However,
some
life
insurance firms also provide direct
services
through
their
company
physicians.
In line with the objective of
managed
care,
HMOs
provide
comprehensive services covering all
November-December 1995
outpatient consultations, diagnostic
services and hospitalization. Though
comprehensive in benefit coverage,
services can be availed only from
accredited and/or company service
providers, except when it involves an
emergency
situation
where
cash
reimbursement is allowed. If a member
avails of services from non-accredited
service providers for a non-emergency
case, claims are subjected to a penalty,
either in the form of lower reimbursable
amount, or disallowance.
Even in
emergency
situations,
procedural
controls are set, which usually entails
notification of the HMO coordinator
within a specified time.
In nonemergency
situations,
procedural
controls such as the issuance of referral
slips or letters of authorization are
imposed.
Just like those of life
insurance firms, HMO benefit ceilings
have both outer and inner limits. Inner
limits are usually set on room and
board daily costs, professional fees,
and number of allowable procedures.
As a policy, commercial indemnity
firms and HMOs have a common set of
conditions which are excluded from
benefit coverage.
Service providers of commercial
indemnity insurance firms are usually
paid on a cash reimbursement basis
upon presentation of a statement of
account. For nonlife insurance firms
which offer packages like motor vehicle
insurance, police reports of the accident
are also required. As to work-related
accident insurance, a certification from
the employer regarding the circumstances of the accident has to be
attached as well.
Although some HMO-accredited
providers are paid on a fee-for-service
basis, most HMO doctors are employed
by the organization and paid regular
salaries. Salaried doctors, which are
mostly general practitioners, usually
serve at HMO-owned outpatient clinics
and hospitals. Accredited doctors paid
on a fee-for-service basis generally
provide specialist outpatient con-
F Page 8
DEVELOPMENT
RESEARCH
NEWS
Private Health Insurance...
EPage
7
sultations and attend to inpatient cases
referred by HMO’s salaried doctors.
These accredited doctors normally run
their own outpatient clinics in certain
hospitals where they have admitting
privileges. Since most HMOs in the
country own only outpatient clinics,
HMOs usually enter into contracts with
hospitals that agree to provide inpatient
care to HMO members.
In order to ensure the financial
viability of HMOs, there is a need to
consider hospital pricing behavior.
Since most HMOs do not own hospitals,
members generally seek inpatient care
from accredited hospitals. However,
the ability of hospitals to adjust their
prices anytime threatens the financial
performance of HMOs, particularly on
their existing contracts with members.
Normally, coverage of inpatient care
under commercial indemnity insurance
companies and HMOs are complementary to Medicare since it starts
only where Medicare coverage ends.
Hospitalized members can avail of
HMO
and
commercial
indemnity
insurance benefits only after exhausting
the allowable Medicare benefits.
Employer-provided schemes
In 1985, at least 50 percent of 42
companies that filed CBAs with the
Department of Labor and Employment
gave some form of health benefits to
their employees.
Moreover, results
from a 1989 survey of CBAs of 149
companies showed that a majority
(32%) included group hospitalization
insurance
contracts
with
private
companies and 15 percent listed
company-administered
medical
insurance
programs
among
their
benefits.
In terms of voluntarily
provided health benefits, results from
a 1990 survey of 127 companies indicate
that 97 percent provided medical/
retainer services and 79 percent used
HMOs. In addition, 87 percent of the
8
respondent companies had infirmaries
or clinics in their premises.
Generally,
premiums
for
employer-provided
health
benefits
come in the form of company
appropriations.
Several companies
appropriate fixed budgets which were
estimated based on benefit ceilings and
total number of employees.
Other
companies appropriate a fixed annual
budget, the amount of which is based
on a study of a similarly-designed
health benefit package.
Still other
companies do not appropriate a specific
amount and just draw from the overall
administrative funds should claims be
made. There are also those which have
established a formula for cost-sharing
November-December 1995
for any form of service. In some firms,
benefits are in the form of cash loans.
There is no limit to the amount of loan
as well as the type of service availed of.
Although the employees do not make
any prepaid contribution, the total loan
is paid back at no interest, with liberal
amortization period depending on the
income level of the employee. In other
firms, benefits covered consist of a
comprehensive package of inpatient
and outpatient services, including
dental, rehabilitation, and maternity
services.
Employer-provided
health
benefits also complement Medicare.
They are generally offered to expand
the inpatient care coverage of, and to
include some outpatient
benefits
to, workers and
their dependents.
Due
to
minimal limits or
exclusions from
coverage,
however, employerprovided health
benefits may be
subject to abuse
and misuse by
company
employees. Furthermore, since employerprovided health benefits are largely
dependent on employers’ generosity
and employees’ demand for benefits,
the expansion and sustainability of
these
health
benefits
may
be
constrained
by
management-union
conflicts.
The expansion of health
benefits is also contingent on the overall
profitability of the business.
The health insurance industry tends to
favor urban dwellers, the employed
sector, and the economically better-off
population, thereby raising questions
of equity in service provisions.
with employees, either in terms of the
cost of the premium or the cost of
actual services used. Among the firms
which have come up with sharing
schemes for the cost of providing health
benefits to their employees, premium
contributions ranged from P240 to
P1,500, and averaging at about P600
per year.
Most employer-provided health
benefits are operated like HMOs where
services are provided by accredited
company service providers.
Some
companies
even
reinsure
their
employees in HMOs. Employers are,
however, generally more lenient and
tolerant about the use of non-accredited
service
providers.
Furthermore,
ceilings, which are negotiated between
the union and the management, are
usually only of outer limit, allowing
the employee to make use of the benefit
Community-based schemes
Although there has been no
complete count of community-based
schemes in the country, evidence from
a sample of these schemes suggests
that most had been in operation for
only about ten years, with the longest
in operation starting in 1971. Generally,
beneficiaries
of
community-based
health schemes were confined to
members of the community organi-
DEVELOPMENT
RESEARCH
NEWS
zation but the benefits were extended
to all relatives of the scheme’s members.
Contributions
made
for
community-based health plans are
often based on the member’s perceived
affordability level which, in most cases,
is agreed upon during community
consultation. Some community organizations are able to establish the
affordability level after a survey of
household income and expenditures.
Other
organizations
conveniently
schedule the collection of members’
contributions after harvest time. There
are also those which link their
respective health plans to incomegenerating projects (IGP). Depending
on the type of health benefits being
offered by various community-based
schemes, premium contributions vary
from a low of P8 to a high of P1,200 per
year.
On average, however, annual
premium contributions charged by
community-based schemes settle at
about P200. Unspent contributions are
usually deposited in the bank to earn
interest. There are also communitybased organizations which have several
other sources of revenue such as
interest income on loans, bank deposits,
rental, and other investments.
Benefits
of
community-based
insurance schemes are even more
varied.
For some community-based
organizations, benefits come in the form
of discounts on the price of drugs.
Other schemes require each member
of the cooperative to pay annual
contributions ranging from P100 to
P250, for which he may be reimbursed
of any health expense up to P1000 per
year. In other communities, 10 to 50
percent of the IGP interest earnings are
set aside as contribution to a health
fund from which members can avail of
cash loans up to P200 to P1000 per
illness. Some other
community-based
organizations even
offer dental assistance to members.
Since benefits are
usually in the form
of cash reimburse-
9
ment for health expenses incurred,
there is no need to accredit health care
providers.
However, members are
encouraged to seek services from
government facilities since they charge
lower prices than private facilities.
With lower premium contributions, community-based health plans
generally offer lower-cost benefits. As
supplementary measures, however,
these organizations usually promote
the use of alternative health procedures
and
traditional
medicines
and
maximize the use of health paraprofessionals such as midwives and
trained barangay health workers as
primary care provider.
Principal
members
of
community-based schemes generally
share the characteristics of those with
employer-provided
health
benefits,
except that a larger majority are females
and
only
elementary
graduates.
Similarly, majority of the characteristics
of households covered by employerprovided health benefits are shared by
those
under
community-based
schemes. The only difference is that
households covered under communitybased schemes consist predominantly
of males and belong to the lower income
groups.
Among the various types and
categories of private health insurance,
only
the
health
plans
under
community-based schemes are offered
as substitutes for Medicare insurance.
This is because Medicare has failed to
fully implement Program II which aims
to reach the communities most in need
of assistance in times of health
emergencies.
The development of communitybased health care financing, however,
requires
intensive
communityorganizing inputs. Among others, the
Community-based organizations
perceive the lack of health facilities as
their most serious problem to date.
November-December 1995
organizing process would set in place
very
flexible
organizational
and
management operating systems that
are responsive to local conditions. In
other words, there can be no single
formula for the organization of
community-based health care financing
that may facilitate expansion of
coverage to other areas. As in other
area-based
initiatives,
communitybased health care financing have
limited
potentials
for
achieving
economies of scale.
Community-based organizations
perceive the lack of health facilities as
their most serious problem to date.
Still other organizations face problems
owing
to
conflicting
program
orientations
wherein
some
nongovernmental organizations gave free
health services thereby making it
difficult to encourage members to remit
premium contributions.
Nonetheless, support from the
government will be well-appreciated,
particularly in terms of:
z the establishment of hospitalbased drug cooperatives where lowincome groups can avail of low-cost
medicines unavailable in communitybased drug cooperatives;
z technical assistance or training
on health;
z grants;
z increased
assistance
for
income-generating projects to sustain
the health plans; and
z continuing
support
for
preventive health measures.
Policy agenda for government
z The infrastructure for telecommunications needs to be enhanced to
minimize delays in the processing of
documents and facilitate field-level
decisionmaking of commercial indemnity firms and HMOs.
Improved
communication facilities would also
enhance data retrieval and management to serve as basis for planning or
policy formulation.
F Page 11
DEVELOPMENT
RESEARCH
NEWS
10
November-December 1995
APEC Economic Leaders’
Declaration for Action*
1
We have gathered in Osaka to
further advance the Asia-Pacific
economic dynamism and sense of
community. The Asia-Pacific is
experiencing the most striking
economic growth in the world and everincreasing interdependence. It is a major
contributor to global prosperity and stability.
We believe our economic reforms
based on market-oriented mechanisms have
unleashed our people’s creativity and energy
and enhanced the prosperity and living
standards of our citizens in the region and
the world as a whole. In the current climate
in our vast and diverse Asia-Pacific region,
APEC presents us with a golden opportunity
for the 21st century. Through APEC, we can
harness, coordinate and channel dynamic
economic trends to our collective advantage.
2
At Blake Island, we established the
vision of a community of AsiaPacific economies, and at Bogor,
we set a number of specific goals
and objectives, including:
z free and open trade and
investment in ithe Asia-Pacific no later than
2010 in the case of industrialized economies
and 2020 in the case of developing
economies,
z expansion and acceleration of
trade and investment facilitation programs,
and
z intensified development cooperation to attain sustainable growth, equitable
development and national stability.
We have, with Osaka, entered the
action phase in translating this vision and
these goals into reality. Today, we adopt the
Osaka Action Agenda, the embodiment of
* This Declaration highlights the Asia-Pacific
Economic Cooperation Economic Leaders' Meeting held
last November 19, 1995 in Osaka, Japan. It is an important
document in that it sets up the direction APEC is supposed
to take in the coming years. The next APEC economic
leaders' meeting is scheduled in November 1996 at Subic,
Philippines.
our political will, to carry through our
commitment at Bogor. We will implement
the Action Agenda with unwavering resolve.
3
The Osaka Action Agenda is the
template for future APEC work
toward our common goals. It
represents the three pillars of trade
and investment liberalization, their
facilitation, and economic and technical
cooperation. Achieving sustained economic
development throughout the APEC region
depends in pursuing actions in each of
these areas vigorously.
Reflecting the diverse character of
APEC and the broad scope of our activities,
we will achieve the longterm goal of free
and open trade and investment in several
ways. We will:
z encourage and concert the
evolving efforts of voluntary liberalization
in the region
z take collective actions to advance
our liberalization and facilitation objective
and
z stimulate and contribute to further
momentum for global liberalization.
4
We emphasize our resolute
opposition to an inward-looking
trading bloc that would divert from
the pursuit of global free trade,
and we commit ourselves to firmly
maintain open regional cooperation. We
reaffirm our determination to see APEC
take the lead in strengthening the open
multilateral trading system. We trust that
enlarged participation by APEC economies
in the WTO would facilitate greater regional
cooperation. We will explore joint initiatives
under the WTO, including preparations for
the Ministerial Meeting in Singapore.
Ensuring that APEC remains consistent with
the WTO agreement, we will achieve trade
and investment liberalization steadily and
progressively.
Desiring that trade and economic
tensions among APEC economies be
resolved in a nonconfrontational manner,
we are committed to finding ways of
ameliorating trade friction. We agree on
the desirability of an APEC dispute mediation
service, without prejudice to rights and
obligations under the WTO agreement and
other international agreements.
5
In the Action Agenda, we have
agreed to a set of fundamental
principles to guide the achievement
of our liberalization and facilitation:
comprehensiveness; WTO consistency; comparability; nondiscrimination;
transparency; standstill; simultaneous start,
continuous process, and differentiated
timetables; flexibility; and cooperation. We
direct our ministers and officials to
immediately begin the preparation of
concrete and substantive Action Plans to be
submitted to the 1996 Ministerial Meeting
in the Philippines for assessment. Overall
implementation of the Action Plans will
begin in January 1997 and will be reviewed
annually.
The Osaka Action Agenda
is the template for future
APEC work toward our
common goals. It represents
the three pillars of trade and
investment liberalization,
their facilitation, and
economic and technical
cooperation.
DEVELOPMENT
RESEARCH
NEWS
To assist in this process, we instruct
our ministers and officials to engage in
consultation in a collective effort of a
confidence-building nature to facilitate
exchanges of information, to ensure
transparency, and to contribute toward
attaining the comparability of respective
Action Plans.
The Action Agenda may be revised
and improved as necessary in response to
changing circumstances. While we have
chosen the unique approach of concerted
liberalization grounded in voluntarism and
collective initiatives by the member
economies as the key means for
implementing the Action Agenda, its success
hinges upon our own continuing efforts,
strong self-discipline, and close consultation.
6
Governed by the Osaka Action
Agenda’s principles of mutual
respect and equality, mutual
benefit and assistance, constructive
and genuine partnership, and
consensus building, we will promote actionoriented economic and technical
cooperation in a wide range of areas. With
the Action Agenda, APEC has gained
renewed momentum and broader
perspective for economic and technical
cooperation.
Economic and technical cooperation
implemented thorough various means
including Partners for Progress serves to
promote trade and investment liberalization
and facilitation, to narrow the disparities within
the region, and to achieve growth and
prosperity for the region as a whole. We will
thus work through policy dialogue and joint
activities to broaden and deepen intraregional
cooperation in all areas of our interest.
Private Health Insurance...
EPage
9
z Low-cost technologies that
minimize occupational hazards and
thereby qualifying more workers for
health insurance need to be introduced.
Ultimately, economic progress would
enable a larger segment of the
population to enroll in health insurance.
z Government work in public
education, advocacy and information
dissemination on the importance of
health insurance must be intensified.
11
At the ministerial level, valuable
consultations have been held on
macroeconomic, financial, exchange rate,
and other policies regarding capital flows,
capital market development, and
infrastructure financing. We also commend
the valuable contribution at the ministerial
level in such fields as telecommunications
and information industry, transportation,
small and medium enterprises, and science
and technology. We hope that they will
continue their good efforts.
7
We are pleased to announce that
each of us has brought a package
of initial actions demonstrating our
firm commitment to achieving
liberalization and facilitation.
These voluntary actions will spur and inspire
APEC liberalization. They also represent
the first wide-ranging initiatives to accelerate
the implementation of our Uruguay Round
commitments and to deepen and broaden
the outcome of the Uruguay Round through,
for example, acceleration of tariff
reductions, early implementation of WTO
agreement, and pursuance of deregulation.
Together with these measures, our
collective actions including harmonizing
and enhancing the efficiency of customs
procedures and promoting mutual
recognition and improving conformity
assessment capabilities will yield immediate
and tangible benefits for business. We
urge non-APEC economies to follow suit
and help global trade and investment
liberalization.
z A suitable regulatory scheme
to protect the public from undesirable
practices of profit-oriented companies
and thereby promote the image of the
health insurance industry must be
promoted. A combination of government regulation and self-regulation by
a professional health insurance-related
institution seems appropriate.
z Government must provide or
facilitate access to technical assistance
in training managerial and support staff
for better health insurance management. Results from a few community-
November-December 1995
8
The Eminent Persons Group and
the Pacific Business Forum have
made important contributions to
the formulation of the Osaka
Action Agenda. Highly appreciative of the dedication and wisdom of the
people who took part in the process, we
congratulate them on the successful
completion of their task.
Recognizing that business is the source
of vitality for the Asia-Pacific and the driving
force for regional economic development,
we will appoint the members of the APEC
Business Advisory Council to provide insights
and counsel for our APEC activities.
9
Our ambitious attempt to promote
wide-ranging
regional
cooperation and foster the spirit
of community in the Asia-Pacific
will doubtless encounter numerous
new challenges and incur new
responsibilities despite, or perhaps because
of, our economic growth. The Asia-Pacific
region’s fast-expanding population and
rapid economic growth are forecast to
sharply increase the demand for food and
energy and the pressure on the environment.
We are agreed on the need to put these
interrelated, wide-ranging issues on our
longterm agenda and consult further on
ways to initiate joint actions so as to ensure
that the region’s economic prosperity is
sustainable.
Through our actions, we affirm the
vital importance of expanding and
strengthening the shared interests which
are the foundation of APEC and of forging
relationships of trust among our peoples.
We pledge to go forward together to meet
the challenges ahead. DRN
based HMO experiments indicate that
the HMOs needed technical assistance
in
drawing
up
implementation
guidelines.
Marketing support is
necessary to draw members while
information and education are needed
to promote an appreciation of the
benefits offered and the managed care
approach to doing it. All these will
ensure a balance between the efforts
for cost-containment and ensure an
adequate and appropriate health care
F Page 20
DEVELOPMENT
RESEARCH
NEWS
The Challenge of Health...
EPage
1
z Tax-financed public health
budgets . In 1991, tax-financed health
budgets financed 48 percent of total
public health spending.
With
the
devolution of health services, local
health budgets have become an
important source of financing. Public
health facilities provide services at
almost no cost to the user and are
nominally accessible to all Filipinos.
z Payroll tax-financed Medicare program . Ten percent of total
health
expenditures
are
financed
through the earmarked payroll taxes
collected under Medicare.
z Voluntary premium contributions to private insurance funds .
Private insurance—private commercial
indemnity insurance, health maintenance
organizations
(HMOs),
employer-based health schemes, and
community or local health financing
cooperatives—now supports up to 4
percent of total national health care
spending.
B
etween
1980
and
1990,
the
Philippine population grew at an
average annual rate of 2.3 percent.
This means that, on average, 1.2 million
people are added to the population
each year. Assuming a 24 percent
utilization rate, an additional 288,000
health care users will have to be served
by the health sector yearly. If we were
to maintain just the same level of health
spending at P2,000 per person, the
health sector will have to raise about
P576 million per year.
The rate of population growth
notably varied by region. Between 1980
and 1990, for instance, the average
annual growth rates of the population
in the 15 regions of the country ranged
from a high of 3.1 percent (Region 12)
to a low of 1 percent (Region 8). The
variation was even larger among
provinces, ranging from 5.6 percent
for Rizal to about 0.01 percent for
Northern Samar. The high growth areas
12
include
Metro
Manila
and
its
surrounding
provinces
while
the
provinces in Mindanao were the ones
with low population densities.
Population
distribution .
Nominally, there is rapid urbanization in the
country but this observation needs to
be carefully examined by considering
natural
increases,
rural-urban
migration, and the reclassification of
barangays from rural to urban. On the
whole, the urban population increased
by 5 percent from 1980 to 1990. It is
estimated that only about 45 percent of
this increase is due to natural increase
and migration. The reclassification of
barangays from rural to urban accounts
for 55 percent of the observed increase
in urban population. This implies that
the rapid increase in urban population
does not necessarily indicate that
urban-based
health
facilities
will
rapidly become congested. The greater
number of so-called urban residents
still remain in virtually rural settings
without any access to health facilities.
Perhaps
a
more
meaningful
measure of the way the population is
distributed throughout the country is
population density. If the population
in 1990 were evenly distributed
throughout the Philippines, there
would be about 200 persons per square
kilometer. This ratio is not particularly
high by world standards. However,
the population is disproportionately
concentrated in centers of economic
activity.
In
Metro
Manila,
the
population density is about 12,400
persons per square kilometer while the
Cordilleras only has 62 persons per
square
kilometer.
An
important
concern for health is that within high
density metropolitan areas (including
Cebu, Davao, and Cagayan de Oro),
there exist pockets of high population
density. One example is the case of
Cebu City where the three most
populated barangays in the inner city
have a population density of up to
50,000 persons per square kilometer.
Population
age-sex
composition .
About 15 percent of the Filipinos belong
to the 0-5 age group and about 5 percent
November-December 1995
are of ages 60 and above. This means
that about 20 percent of the population
belong to the group of heavy health
care users. This highly dependent age
group is supported by a working age
population (15-65 years old) which
comprises 55 percent of the population.
About half the working age population
are between 15 and 30 years old.
This population age structure,
which can still be appropriately
represented as a pyramid, has only
slightly changed between 1980 and
1990. In this intercensal period, the
base of the population pyramid has
slightly narrowed while the middle
portion, especially ages 15-30, has
slightly expanded. The shape of this
age pyramid is primarily the result of
past fertility. One measure which might
explain the shrinking base is the childwoman ratio (CWR) which is defined
as the number of children under 5 years
old per woman belonging to the 15-49
age group. Over the years, the CWR
has declined from 0.69 in 1979 to 0.66 in
1980 and finally to 0.56 in 1990.
There are about the same number
of females as males. However, there
are slightly more females than males in
the 60 and above age group.
IMPLICATIONS FOR HEALTH CARE
FINANCING REFORM
Shifts in population structure
R
elatively high population growth
rates imply that the rate of increase
of the number of health care
consumers will be proportionately
high.
Financing resources will then
have to increase at a much faster rate if
they were to provide for existing unmet
needs as well as to accommodate
natural increases in demand for health
services.
Meanwhile,
the
population
concentration in urban areas does not
necessarily imply that relatively more
urban-based facilities need to be
constructed. A large portion of the
increase in urban population is simply
nominal. As such, primary rural health
facilities may still be the more effective
DEVELOPMENT
RESEARCH
NEWS
intervention in serving reclassified
rural residents.
In metropolitan areas, special
consideration with respect to health
care delivery needs to be made to
address the special problems of those
living
in
high
density
areas.
Furthermore, there are indicators that
the age composition might significantly
vary within an urban center. Adult
health issues might be dominant in
high density inner city areas where
parents
and
working-age
family
members locate. On the other hand,
health issues concerning children and
the elderly might be dominant in
suburban areas.
The
population
age
groups
requiring intensive medical attention
(ages 0-5 and ages 60 and over) still
remain small compared to the working
age population. However, if gainful
employment were not available for the
labor force, the burden of financing the
health needs of the dependent age
groups may actually be heavier.
Implications of epidemiologic
change
T
he
mortality
and
morbidity
patterns of the population are good
measures of the kind of health
services that are being demanded. An
important
issue
for
health
care
financing reform is the so-called health
transition. Based on the experience of
developed countries, health care needs
shift away from communicable and
infectious diseases toward chronic and
rehabilitative care. This mainly derives
from the changing population structure
as well as the advances in disease
control measures. This varying pattern
of diseases implies that more expensive
facility-based health care services will
be demanded.
Changing mortality pattern . In
general, mortality rates (based on
medical
service
statistics)
have
continuously declined from 1965 to
1990. The decline is not the same for all
age groups. Younger age groups have
experienced a more rapid decline than
13
Table 1
Disease Mortality Trends
Increasing secular trend
Vascular diseases
Malignant neoplasms
Heart disease
Typhoid fever
Dengue fever
Hepatitis
Measles
No definite secular trend
Leprosy
Malaria
Nephrologic diseases
Pneumonia
Decreasing secular trend
Gonococcal infection
Syphilis
Bronchitis
Influenza
Varicella
Tetanus
Diphtheria
Whooping cough
Poliomyelitis
Avitaminosis
Diarrhea
Accidents
Filariasis
Schistosomiasis
Source: Sarol (1994).
the older age groups. This may be due
to gains in the prevention of deaths
from communicable diseases including
tuberculosis (all forms), bronchitis,
avitaminoses,
pneumonia,
and
diarrhea.
Government
programs
addressing acute respiratory infections,
the expanded program on immunization (EPI), and the oral rehydration
therapy may have significantly contributed to these gains.
However, in the same period,
death rates from degenerative disorders such as cardiovascular diseases
and
malignant
neoplasms
have
increased
continuously.
These
disorders are usually attributed to risky
lifestyles and habits such as smoking
and alcohol and dietary fat intake. It
may be the case that this pattern
emerged much earlier but was observed
only when deaths due to infectious
diseases significantly declined.
November-December 1995
There appears to be no difference
in the mortality trends between males
and females among the younger age
groups. For older age groups, however,
fatality rates have declined faster
among females than males. This pattern
is particularly evident for tuberculosis.
Unlike the health transition
observed
in
developed
countries
(where
chronic
and
degenerative
diseases have replaced infectious and
communicable diseases as leading
causes of death), local pattern tends
toward a situation where both types of
diseases persist (Table 1). If this pattern
continues, there will be serious
implications
on
the
amount
of
resources needed to finance the health
sector. The level of expenditures on
communicable
disease
control
programs will have to be maintained,
if not increased. At the same time, an
increase in investments in facilities
which can provide the more intensive
services is needed to address chronic
con-ditions.
Morbidity pattern. The four secular
trends for morbidity rates among
various diseases are shown in Table 2.
The
most
disturbing
pattern
is
observed in typhoid fever, for which
the
morbidity
rate
increased
throughout the study period. Other
diseases including bronchitis, dengue
fever and diarrhea also had increasing
morbidity rates since the mid-1970s.
Influenza posted increasing rates
between 1985 and 1990. On the other
hand, diseases for which effective
preventive measures are available had
shown
declining
morbidity
rates.
Diseases covered by the DOH’s EPI
have been declining steadily since 1975.
Observed
trends
in
disease
morbidity vary across age groups.
Among younger groups, there was a
much faster decline in morbidity rates.
This was particularly the case for
immunizable diseases. However, other
communicable diseases like influenza
and
typhoid
fever
had
shown
increasing morbidity rates for the
F Page 14
DEVELOPMENT
RESEARCH
NEWS
14
November-December 1995
particular, about 66 percent of urban
poor respondents insisted that only
EPage 13
sick persons should consult doctors.
This attitude is alarming because it
severely impairs the effectivity of
public health information campaigns
Table 2
which are largely based in medical
Disease Morbidity Trend
facilities.
In
addition, houseDiseases showing the trend
Disease morbidity trend across three periods
holds (especially
1965-1975 1975-1985 1985-1990
in rural areas)
may hold on to
Varicella, schistosomiasis, dengue fever,
bronchitis, filariasis, diarrhea
no trend
increase increase
values and beliefs
which
hinder
Diphtheria, poliomyelitis, whooping cough,
access
to
approtetanus, gonococcal infection,
priate
medical
TB (all forms), malignant neoplasms
no trend
decrease decrease
attention.
Hepatitis, syphilis, malignant neoplasms,
Not
only
pneumonia, measles, malaria
increase increase decrease
are
households
unaware of the
Influenza
decrease decrease increase
relative benefits
Typhoid fever
increase increase increase
between
home
remedies
and
Adopted from Sarol (1994).
facility-based
care. They may
also be unaware
younger age groups. Older groups, on
of their own abilities to finance medical
the other hand have been increasingly
care
expenditures.
Respondent
afflicted by chronic and degenerative
households with members working in
d i s e a s e s . Disease morbidity rates tend
the wage and salary sector were
to be similar for males and females but
generally unaware of their entitlement
marked differences were observed
under Medicare.
between the sexes for gonococcal
Lack of knowledge required to
infections and syphilis. There was a
make home-based health care services
decrease in cases among females.
more efficient and effective.
About
38 percent of urban poor respondents
believe that when one is sick, antibiotics
The Challenge of Health...
HOUSEHOLDS AND THE HEALTH
CARE SYSTEM
H
ouseholds assume a key role in the
health system. They are the
ultimate source and beneficiary of
the total resources available in the
system. However, there are a number
of problems which impede their
maximum and efficient use of the
resources in the system, viz:
Lack of information needed to
make
appropriate
decisions
on
spending and health care demand
patterns. Majority of the respondents
interviewed perceived that medical
practitioners should be consulted only
when one is not feeling well. In
Health care facility
Change in
travel time
Poorest
Quartile
should be taken right away.
There
have been several reported cases when
antibiotics were taken even in instances
when it is not appropriate to do so, as
in the case of dealing with the common
cold.
Lack of accessible and affordable transport facilities that would
allow better access to health care
facilities. From a survey of the three
major rural poverty groups in Misamis
Oriental and Southern Bukidnon, it is
observed that on average, small
farmers reported more ailments per
household relative to the landless
workers and fishers. Nonetheless, it is
the landless families who reported
having made more consultations in the
month prior to the interview. This
pattern might be explained by the fact
that families of landless workers
usually had access to clinics located in
the sugar or rubber plantations where
they worked. On the other hand, small
upland farmers were usually situated
in isolated areas where travel is
difficult.
Similar observations are made for
demand for outpatient care. The rate
of consultation is found to be highly
responsive to travel time, all other
Table 3
Effects of an Increase in Travel Time
on the Likelihood of Choosing a Health
Care Facility, by Income Group
Second
Third
Fourth
Richest
Quartile
(I n p e r c e n t)
Private clinic
from 0 to 1 hour
from 1 to 2 hours
from 2 to 3 hours
-23
-105
-119
-21
-73
-109
-18
-64
-97
-21
-25
-112
-20
-70
-115
Public clinic
from 0 to 1 hour
from 1 to 2 hours
from 2 to 3 hours
-38
-24
-16
-31
-26
-17
-74
-49
-33
-33
-34
-23
-6
-21
-11
Hospital
from 0 to 1 hour
from 1 to 2 hours
from 2 to 3 hours
-13
-47
-71
-18
-65
-97
-21
-75
-112
-21
-77
-116
-30
-106
-159
Source: Bautista (1993).
DEVELOPMENT
RESEARCH
NEWS
factors held constant. Thus, many
individuals in need of medical attention
opt not to access services because of
the time and transport cost involved in
visiting an outpatient clinic. For
example, by changing travel time from
two to three hours, those who would
have otherwise visited a clinic would
opt not to (Table 3). This response is
true for households from different
income groups. In contrast, demand
for hospital care services is much less
sensitive
to
travel
time
and
transportation
cost.
What
might
happen is that household members
requiring hospital care are likely to be
admitted regardless of distance to the
hospital. Even poorer families behave
in the same way, but only after the
illness
has
become
severe
and
unbearable.
Incompatibility of work and
social time schedules with service
hours, especially of public health care
providers. For most communities,
public health clinics are accessible only
in town or municipal centers. Such
clinics are usually open during regular
working hours on weekdays only.
Moreover, the presence of medical
doctors tends to be irregular. The usual
practice is to designate a particular
day when a doctor would be present.
This creates scheduling problems
especially for families with working
parents. In urban poor communities,
the preferred schedule would be after
office hours.
For rural-based households, the
most convenient day is the traditional
market day. To save on travel time and
transport cost, many rural households
prefer that rural health centers be open
on that same day. In the rural
communities surveyed, the market day
is usually Friday. It is during this day
that
residents
from
the
remote
barangays go to the town proper to sell
their produce and buy what they need
for the following week. Free dental
services and immunizations, however,
are provided in public clinics only on
Wednesdays.
For many of these
households, free dental services and
15
November-December 1995
vaccinations are not enough incentives
for them to spend extra time and money
Table 4
to travel to the town center.
How Hospital Costs are Financed by
The burden of financing health
Inpatient Care Users, by Region
care services . The
average
houseAll
NCR
Region 2 Region 7 Region 10
hold
monthly
(I n P e r c e n t)
income of Filipinos
Family savings
59
55
74
60
65
is
quite
low
Loans,
sale
of
property
33
31
19
34
51
compared to the
Gifts and transfers
16
21
7
6
18
cost of medical
Employment benefits
4
4
2
1
9
care. The average
Private insurance
2
2
0
4
0
Medicare
21
12
19
38
31
cost of outpatient
Others
1
2
0
2
0
care
including
professional fees,
diagnostics
and
Source of basic data: 1991 DOH-PIDS Household Survey.
medicines is about
2 to 5 percent of
average family income. The average expenditures are unanticipated, the
cost of hospitalization is 33 times larger consumption pattern of households are
than what the average Filipino earns in likely to be severely disrupted. Our
a year. For poorer households, the concern here would be the effects on
burden of paying for health services is food consumption, housing and other
heavier not only because their incomes related expenditures which help build
are low, but also because the flow of the health stock of other (especially
income is very irregular.
younger) household members. In effect,
Capacity to finance health care paying for the medical needs of a sick
services . The burden of paying for family member can jeopardize the
health care services is dealt with by the future health and well-being of other
household in a number of ways. First, household members.
it can endure illness and not seek
Investment in human capital is
medical attention. Or, the household disrupted . Majority of households with
can choose to buy less expensive but hospitalized members used their family
perhaps
low
quality
services. savings to finance the cost of hospital
Otherwise, the household is forced to services (Table 4).
Among these
cope with the cost of care by reducing households, it was reported that the
current consumption and investment “savings”
used
were
actually
(sacrificing children’s schooling), by earmarked
for
children’s
college
foregoing future income (by borrowing education, investment in productive
or selling productive assets), or by assets, or the family business. By
tapping social networks, if available.
sacrificing savings, the household, in
As shown in Table 4, households effect, lessens the opportunities for their
rely mainly on their own resources to children to have a better future.
finance medical services. UnfortuCapacity
to
generate
future
nately, this approach to financing health income is reduced . Next to family
care expenditures will likely have savings, another major source of
adverse effects on the future well-being financing hospital services was loans
of households.
and sale of property. Personal assets
Current consumption is dis- sold included animals (with a mean
placed by large expenditures on value of P2,858), household appliances
health . It was previously suggested (mean value of P1,520), land (mean
that average hospitalization cost is value of P40,306), and jewelry (mean
more than 400 percent of monthly
family income.
Since large health
F Page 16
DEVELOPMENT
RESEARCH
NEWS
The Challenge of Health...
EPage 15
value of P1,733).
Among rural
households surveyed, the typical items
sold included farm animals, farm
implements, agricultural produce, and
even land itself. Because of the urgency
of the situation, families are likely to
dispose of their assets well below their
market value.
Social institutions as health
insurance
B
eyond one’s capacity to self-finance,
a household can rely on social
institutions
which
pool
a
community’s resources and spread the
burden of health care expenditures. In
a way, institutions like family networks,
community organizations, religious
associations, and charitable organizations
perform
insurance-like
functions. Only a small portion of a
group of individuals linked by familial,
ethnic, religious or even work relations
will require medical attention in a given
time period. And given the nature of
illness and disease, it is unlikely that
the group can identify with certainty
which members will eventually require
health services. The social institutions
which provide insurance services to
individual
households
include:
extended
family
networks
(i.e . ,
remittances, gifts, and transfers);
informal community social networks
(i.e . , paluwagan); organized community schemes (i.e . , health cooperatives);
social networks (i.e . , church, charitable
institutions); and employment-based
networks
(i.e . ,
labor
unions,
employers).
Implications on health care
utilization patterns
G
enerally, respondents expressed
more
confidence
on
health
professionals
rather
than
traditional healers. Of all individuals
who had complaints regarding their
16
November-December 1995
of the regression analysis undertaken
by the project.
As noted, household composition
represents a significant determinant of
facility choice. Patients
Response to
Poorest
Second
Third
Richest
belonging to households
health complaint
Quartile
Quartile
with a greater number
of children below 15
Consulted doctor
160
261
287
338
years are more likely to
Consulted other
health professional
28
15
8
8
seek care from a public
Consulted traditional
clinic whereas patients
healer
30
14
19
12
from households with a
Self-care
305
375
399
328
greater number of adults
Total number
over 14 years are less
of r espondents
475
629
662
633
likely to seek care from a
public clinic.
Source of basic data: 1991 DOH-PIDS Household Survey.
Patients with more
years of schooling are
health, only three percent consulted a more likely to seek care from a private
traditional healer while 47 percent clinic. One possible explanation is that
consulted
a
health
professional. more educated individuals are more
However, the type of provider chosen likely to be employed in the formal
varied for households belonging to sector, and most employed individuals
different income classes. In particular, have access to some kind of private
among
individuals
who
seek health insurance as part of their
consultation, those with higher incomes compen-sation package. Usually, these
tend to choose doctors over other health private health insurance plans cover
consultations
with
professionals like nurses and midwives outpatient
accredited private clinics. This line of
(Table 5).
Effects of socioeconomic factors . reasoning could likewise explain why
Families discriminate between public patients from households with a greater
and private medical health providers. number of adults are less likely to seek
Most
respondents
expressed care from a public clinic. More adults
preference for private medical facilities in the household could mean more
because these were perceived to be of working members who have access to
better quality. However, the facility private insurance plans that include
actually utilized by the poor turns out dependents in the coverage.
Effects of insurance coverage . Social
to be different from what they
insurance
is
a
popular
preferred. In particular, consultations health
in private clinics were substantially component of health financing reform.
less for poorer households (the number By introducing a national health
program,
the
entire
of consultations in public clinics insurance
declined as incomes increased). Thus, population is organized into a single
even if the poor really prefer to consult pool where resources and risks are
in a private facility, their budget only shared. Furthermore, social health
insurance programs aim to maximize
allowed them access to public clinics.
subsidization
in
terms
of
Choice of health care provider cross
contributions
among
also
varied
among
households. premium
Specifically, educational level, age, households belonging to different
gender, and household composition income classes. With a single national
are found to significantly influence the pool of resources, it is hoped that the
choice
of
consultation
facility. financial barriers to health services
by
individual
users
are
Observed differences are shown in faced
reduced.
However,
Table 6 which summarizes the results substantially
Table 5
Health-seeking Patterns,
by Income Group
DEVELOPMENT
RESEARCH
NEWS
17
premium contributions and health
benefits to be provided need to be
carefully designed so that increases in
health care utilization rates are not
excessive.
What needs to be done
Based on the above, there is a
need to address the following concerns:
z There is a need to provide
households with better information so
that home-based care can become more
efficient and effective. This can assist
in preventing the excessive use of
facility-based health care services
which can be caused by an expanded
social health insurance program.
z Physicians
and
medical
facilities need not be present in all
communities for access to health care
to improve. In efforts to facilitate access
to services, improvements in transport
facilities should be taken more into
consideration since it may be more
effective than the dispersion of health
care facilities in various locations.
z The timing or schedule of
service delivery in public health
facilities (especially public clinics) need
to be made more compatible with the
schedule of economic and social
activities of households so that
accessibility is improved.
z Strengthening social institutions, which serve to pool resources
and share health risks, will help reduce
unmet needs as well as other welfare
losses associated with self-financing.
Furthermore, in introducing social
insurance programs, one has to
carefully consider how these would
complement existing social institutions
with similar functions. Organizing a
program which will only substitute for
family and other social networks
should be avoided.
z Health insurance benefits must
be carefully designed in order to avoid
excessive use of expensive services.
The use of copayment, expenditure
ceilings, utilization limits and the mix
of services covered need to be explored
to
help
curb
observed
adverse
responses to insurance.
z Extensive and intensive social
marketing campaigns need to be
undertaken if social insurance were to
become attractive especially to poor
and rural households. Observed low
willingness to pay for insurance also
means that collecting contributions is
likely to be difficult or costly.
z Socialized pricing of publicly
provided services has the potential of
allowing limited public budgets to be
effectively targeted to special groups
of beneficiaries. As richer households
switch to the private sector when the
price of public services are raised,
poorer households can be better served
by existing capacity and resources.
PROFILE OF HEALTH CARE PROVIDERS
A
n inventory of the existing stock of
medical personnel reveals serious
shortages
for
several
health
manpower categories. Supply projections also suggest that shortages are
Table 6
Effects of Noneconomic Factors on Choice of Medical Provider
Variable
Level of education (years of schooling)
Illness severity (days sick)
Age of patient
Sex of patient (male as default)
Number of children in the
household (age less than 15)
Number of adults in household
Private clinic
Public clinic
Hospital
positive
no effect
negative
positive
no effect
no effect
no effect
negative
no effect
no effect
positive
no effect
negative
positive
positive
negative
negative
no effect
November-December 1995
likely to increase in the coming years.
For manpower categories where there
seem to be sufficient supply relative to
standards
and
requirements,
the
problem is that they are unevenly
distributed across regions and health
facilities.
Profile and supply of physicians
C
ensus data show that majority of
the current stock of physicians are
young professionals, about 60
percent of whom are less than 40 years
of age. The present population is almost
equally distributed between the two
sexes, unlike in the early 1900s, when
the profession was largely dominated
by men and the women constituted a
mere 2.5 percent of the population.
The employment rate among
doctors is estimated to be about 97
percent. Of those employed, 93 percent
are working in urban areas, and mostly
serving in hospitals. Among the doctors
serving in the public sector, 72 percent
work in hospitals. Despite pronouncements about the priority given to public
health programs, only 28 percent are
practicing as field service doctors based
in rural health units. This pattern holds
true for all regions but is more evident
in Metro Manila.
A tally of physicians by type of
specialization was generated using
Medicare accreditation records. The
tally shows that there are similar
patterns of concentration in the same
rich regions as with doctors in general.
Of the total number of specialists
recorded, 73 percent are found in
Regions 3, 4, and Metro Manila.
Production of physicians . Inputs to
the production of medical professionals
are determined by the number of
freshmen enrollees in medical schools.
This figure is affected by the quota
imposed
by
the
Association
of
Philippine Medical Colleges and the
National Medical Admission Test. Up
to 4,500 students enter medical schools
each year. Of these entrants, about 60
F Page 18
DEVELOPMENT
RESEARCH
NEWS
The Challenge of Health...
EPage 17
percent are able to graduate and take
their licensure examination. Aside from
the annual increment, the total stock of
medical professionals is also determined by decrements due to deaths,
retirements,
and
permanent
and
temporary migration. About 4 percent
of the average annual stock is estimated
to leave the country as contract workers
while less than 1 percent of the average
annual stock permanently migrate to
other countries. Based on these trends,
the number of physicians posted in
1987 is estimated to increase by about
77 percent in the year 2000.
Estimating physician supply needs .
Health manpower needs, meanwhile,
were estimated using two techniques.
One is the standard manpower to
population ratios and the other is the
Modified
US
Graduate
Medical
Education National Advisory Council
(GMENAC) Requirements Model. The
first technique identifies a suitable
proportion of health manpower to a
specific population size while the
GMENAC
model
uses
subjective
normative standards based on the
projected morbidity of the population
at risk and some experts’ opinion on
the proper utilization of services
deployed against its morbidity.
The GMENAC model was used
to project supply requirements for
major
specialties
like
surgery,
cardiology, pulmonology, etc.
For
other specialties like nuclear medicine,
occupational/industrial
medicine,
manpower needs were estimated on
the basis of either standard manpower
to population ratio, laboratory needs
or linkage to institutions employing
them. Computation of the required
number
of
nurses
followed
the
framework of the GMENAC model
but was based on the number of patients
received in the hospital, clinic, or rural
health unit.
A comparison of the net stock
18
November-December 1995
with the standard requirements per
work setting reveals a shortage of
physicians in hospitals, schools, rural
health units, and industrial establishments. The existing number of
medical specialists in all fields except
in internal medicine falls short of the
Philippine Medical Association (PMA)
recommendations. Based on GMENAC
requirements, a similar observation can
be made that the number of general
practitioners and specialists is lacking.
However, no shortages are reported
in
fields
such
as
p u l m o n o l o g y ,
pediatrics, surgery, and
infectious diseases.
Profile and supply of
dentists
U
licensees determines the inflow to the
total stock of dentists, and the number
of permanent emigrants and OCWs
determines the outflows from the stock
of dentists. Over 1,500 dentists are
estimated to be permanently residing
abroad while about 3 percent of the
total stock (over 500 dentists) are
assumed to be working as OCWs.
Under the medium assumption, the
number of dentists in 1987 is projected
to increase by 92 percent in the year
2000.
Table 7
Profile, Stock and Flow of Selected
Health Manpower (1990)
Physicians Dentists
Nurses
Midwives
nlike
medical
doctors, nearly
two-thirds
of
Profile and Stock
Age: less 40 years (%)
59.73
68.9
87.9
82
dentists
who
are
Marital: Married (%)
67.3
56.1
57
59.3
actively working are
Gender: Female (%)
48.8
63.3
90.9
99
female.
The
age
Unemployment Rate (%)
3.4
4.6
5.2
6.7
structure
and
reHospital/clinic-based (%)
87.1
83.8
78.1
77
gional distribution of
Rural-based (%)
7.5
8.7
16.8
34.1
dentists,
however,
Regional: Total NCR (%)
42.6
46.5
31.4
16.6
reveal a trend similar
Regional: DOH personnel
to that of doctors, i.e.,
NCR (%)
4.9
4.2
3.6
6.6
Flow of Health Manpower
most dentists are
Production: Range of yearly
below the age of 40
attrition
48.5
33.2
67.1
41.6
and
about
threeSurvival Rate (Average)
65.3
46.2
66.2
54.7
fourths of the total
Licensing Rate (Average)
124.1
91.7
69
74.4
International Outflows:
supply can be found
Permanent Emigrants
25.4
6.2
23.2
1.7
in Regions 3, 4, and
OCWs
3.3
2.8
36.6
30.3
the NCR. Furthermore, as much as 91
Source: Development Academy of the Philippines, 1994.
percent
of
them
locate in urban areas.
In terms of work
setting, about 74 percent of dentists
Standard manpower to popupractice in private hospitals, clinics, lation ratios show a pattern in the
and laboratories, 10 percent in public insufficiency of dentists in work
health care facilities, 4 percent in public places
similar
to
those
where
administration,
and
the
rest
in physicians
are
also
lacking.
undefined business areas.
Moreover, a comparison with the
The number of freshmen enrollees GMENAC requirements reveals an
in dental schools averaged about 4,000 acute shortage of dentists since their
during the period 1983 to 1987. Of stock is consistently less than half of
these enrollees, less than half (46 their requirements.
percent) is expected to grad-uate. As
with doctors, the number of new
DEVELOPMENT
RESEARCH
NEWS
Profile and supply of nurses
A
mong the categories of medical
professionals considered in the
research study, the nurses seem to
be the youngest group, with almost 90
percent below 40 years old. As with
dentists, female nurses outnumber the
males.
The
unemployment
rate,
however, is rather high compared to
doctors and dentists. And of those who
are employed, majority work in
hospitals, clinics and laboratories, with
about half hired by privately-owned
facilities.
In terms of distribution, more
than 80 percent of all nurses practice in
urban areas. Like other medical
professionals examined earlier, nurses
are unevenly dispersed throughout the
country, with one third found in the
NCR and another 20 percent in Regions
3 and 4. Among the nurses working for
the DOH, 67 percent are hospitalbased, while the remaining are working
in community health centers or rural
health units. The same pattern is
observed in all other regions, except
NCR, where the number of nurses in
field services surpasses the number of
nurses in hospital facilities.
Nursing schools have the highest
number of freshmen students, with
over 15,000 enrollees registering each
year. Of those who enroll, about 70
percent are presumed to graduate but
only 49 percent are expected to pass
their licensure examination.
The supply of nurses in the local
market is consistently declining due to
international outflows, especially of
those who are well-trained and highly
specialized.
In 1987, the Philippine
Overseas Employment Administration
(POEA) recorded a deployment of close
to 26,000 nurses, 87 percent of them to
the Middle East. Moreover, in 1990,
over 40,000 nurses migrated to other
countries.
Because of this heavy
outflow, the total number of nurses in
the country is expected to decline from
a level of over 75,000 in 1987 to only
about 54,000 in the year 2000. The
result is an artificial, yet acute, shortage
19
of over 40 percent of the nursing
requirements of the local market.
Profile and supply of midwives
A
s in nursing, the midwifery
profession is dominated by young
(below 40 years old) and female
midwives. They, however, have the
highest unemployment rate (about 7
percent) among all medical professionals. Of those who are employed,
77 percent work in hospital facilities,
with about 66 percent practicing in
urban areas.
In terms of regional
dispersion, only about 17 percent of
midwives work in Metro Manila while
another 30 percent work in Regions 3
and 4. This distribution pattern
suggests that relative to other medical
professionals, midwives are more
evenly distributed across the country.
Next
to
nursing,
midwifery
schools have the highest number of
freshman enrollees, with an average of
about 12,000 entrants per year.
Of
these enrollees, however, 45 percent
are expected to drop out or shift to
nursing. The average licensing rate for
midwives is about 75 percent.
Despite
increasing
migration
abroad, the supply of midwives is
expected to be more than sufficient to
cover overall requirements. However,
the concern is a possible shortage of
midwives available for employment in
public rural health centers since
midwives are increasingly drawn to
jobs in health facilities in urban areas.
The overall picture
A
summary of the characteristics of
the current stock of selected health
professionals is presented in Table
7. Majority of the health professionals
are young (aged below 40) and while
the distribution between male and
female physicians is even, females
dominate the fields of nursing and
midwifery. While employment rates
of health professionals are generally
higher than the rest of the population,
midwives nonetheless have the highest
unemployment
rate
among
them.
November-December 1995
Moreover,
about
80
percent
of
employed medical professionals serve
in hospitals, clinics or laboratories,
half of which are privately-owned
establishments.
Most health professionals are
highly concentrated in Metro Manila
and the surrounding provinces.
A
major threat to local supply is the
international
outflow
of
health
professionals, particularly of doctors,
nurses, and midwives. This affects not
only the quantity of medical workers
but also the quality of medical services
since
the
good,
trained,
and
experienced personnel are the ones
usually lost to other countries, leaving
the medical sector skills-deficient.
Supply shortages are seen in the
groups of physicians, dentists and
nurses while excess supply is observed
in the group of midwives. In terms of
work
setting,
health
manpower
shortage exists in public health, school
health,
and
industrial
health.
Moreover, the supply of nurses will
not be sufficient to meet the standard
personnel requirements in hospitals
by the year 2000.
With reference to physicians,
there is a shortage in the supply of both
general practitioners and specialists.
The
PMA-recommended
ratios,
though, show an abundance of doctors
in the field of internal medicine while
the GMENAC requirements suggest
supply excesses in the fields of
pulmonology, pediatrics, surgery, and
infectious diseases. These imbalances
are projected to worsen by the year
2000, with both supply excesses and
deficiencies continuously increasing. DRN
Support Research
Support
Philippines 2000
DEVELOPMENT
RESEARCH
NEWS
20
November-December 1995
Philippine Institute for Development Studies
NEDA sa Makati Building
106 Amorsolo Street, Legaspi Village
1229 Makati City, Philippines
Private Health Insurance...
EPage 11
particularly among insurance firms
with no medical staff.
z There is a need to forge tie-ups
between public tertiary hospitals and
private insurance firms to provide some
form of health maintenance plan in
areas where there is a dearth of
qualified hospitals. Under the setup,
public hospitals could gain added
revenues
from
employers'
prepayment.
z Lastly, government must promote income-generating projects along
with community-health schemes to
improve the financial viability of
community health insurance. Public
hospitals can also support communitybased health schemes in their respective
areas by providing referral services
STAMP
that are affordable to the community
insurance.
With the recent passage of the
National Health Insurance (NHI) Law,
the private health insurance industry
will most likely be further strengthened.
Since NHI will initially offer the same
package as the current Medicare,
HMOs, commercial indemnity firms
and employer-provided schemes can
continue providing the benefits that
they currently offer, i.e., coverage over
and
above
current
Medicare.
Furthermore, NHI will more likely tap
the various existing community-based
schemes to reach the informal sectors
of the economy and expand coverage
from there. Doing so could make
community-based
schemes
more
viable, since cross-subsidizations can
be promoted among members of
various schemes. DRN
Vol. XIII No. 6
November-December
1995
Editorial Board
Dr. Ponciano S. Intal, Jr.
President
Dr. Mario B. Lamberte
Vice-President
Ms. Jennifer P.T. Liguton
Director for Research Information
Mr. Mario C. Feranil
Director for Project Services and Development
Ms. Andrea S. Agcaoili
Director for Operations and Finance
Atty. Roque A. Sorioso
Legal Consultant
Staff
Jennifer P.T. Liguton
Editor-in-Chief
Wilbert R. San Pedro
Issue Editor
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and
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