Keynote Speech of Roberto M. Pagdanganan at 47th PCHA Convention
Century Park Hotel, 12 November 2022
Roberto M. Pagdanganan
Chairman, Digihealth Philippines, Inc.
Chairman, Medicines Transparency Alliance, Philippines
I would like to thank the Philippine College of Hospital Administrators, especially my esteemed friend, Dr. Mar Hernandez, the President, and Sister Adelina Javellana, the Vice-President, and Convention Chairman, for inviting me as keynote speaker in this 47th Annual Convention of the PCHA. I feel so honored to be with the distinguished leaders and decision-makers of this highly respected and prestigious organization. It is indeed a great privilege to be with the present-day heroes of our society!
Truth be told, I was pleasantly surprised when I received the invitation letter from Sister Adel. Then I got a confirmatory call from Doctor Mar who suggested that I talk about transformational governance in health care, amidst the many challenges arising due to natural and man-made disasters.
I would therefore be happy to share with you the perspectives of a concerned Filipino citizen with more than three decades of continuing advocacy for access to quality and affordable medicines and healthcare for all Filipinos. I started to embrace this health advocacy when I served as governor of Bulacan for 12 years and President of the League of Provinces for three terms. Among the most heart-rending experiences, I have had was whenever a constituent had to sell his carabao or tricycle or even mortgage his house to loan sharks, to pay for medical bills when a family member got afflicted by a catastrophic illness. My healthcare advocacy has since grown stronger through the years, seeing its tremendous impact on our people’s lives.
We will first take a cursory look into the contemporary history of our country’s healthcare system. Then, we will assess the prevailing situation. Thereafter, we will explore the most effective way moving forward, to attain the best possible health outcomes, through “Transformational Governance in Philippine Health Care System”.
At the outset, I would like to emphasize that the only consideration we have is to find effective ways by which all of us can work together to help achieve our common aspiration for a healthy and progressive Philippines. There is definitely no intention to lay blame on anyone nor to profess to know the answers to the many questions we have on this very important aspect of our lives.
BRIEF CONTEMPORARY HISTORY OF HEALTH CARE IN THE PHILIPPINES
The 1987 Philippine Constitution provides under Article ll, Section 15, that, “The State shall protect and promote the right to health of the people and instill health consciousness among them.”
The Department of Health (DOH) is mandated to provide national policy direction and develop national plans, technical standards, and guidelines on health. It is responsible for ensuring access to basic health services to all Filipinos through the provision of quality healthcare and regulation of providers of health goods and services.
In 1969, Philippine Medical Care Commission (Medicare), was created with the passage of the Philippine Medical Care Act. Medicare-covered government and private workers, anchored on the programs of the Social Security System and Government Service Insurance System for their respective memberships.
In 1991, R.A. 7160, The Local Government Code was passed which devolved health services to local government units (LGUs): provinces, cities, and municipalities.
About 27,000 healthcare personnel were transferred to LGUs, together with the responsibility of operating provincial, district, and city hospitals, as well as rural health units.
In 1995, R.A. 7875 was enacted creating the Philippine Health Insurance Corporation (PhilHealth), mandated to provide health insurance coverage and ensure access to cost-effective and quality healthcare services for all Filipinos, in 15 years.
On February 10, 2004, R.A. 9241 was signed into law by President Gloria Macapagal- Arroyo amending R. A. 7875, strengthening the PhilHealth structure.
In 2011, PhilHealth started its shift from fee-for-service to case-based payments.
In 2012, R.A. 10351 was passed into law earmarking 80% of incremental revenues from taxes on alcohol and tobacco to health, including premiums for indigents.
On June 19, 2013, President Benigno S Aquino signed into law R.A. 10606, or National Health Insurance act of 2013, amending R.A. 7875, which expanded health benefits and provided mandatory coverage to all citizens, especially senior citizens and the poorest of the poor.
On February 20, 2019, President Rodrigo R Duterte signed into law, R.A. 11223, also known as the Universal Health Care Act, earmarking 50% of the government share from the income of gambling operations and 40% of the charity funds from the state lottery, for health insurance.
On July 25, 2019, R.A. 11346 was signed into law, which further increased the excise tax on tobacco and heated tobacco and vapor products for UHC purposes.
On October 10, 2019, DOH Secretary Francisco Duque lll signed the Implementing Rules and Regulations for RA11223, but its implementation was deferred due to the COVID-19 Pandemic.
THREE IMPORTANT QUESTIONS BEG FOR ANSWERS:
Twenty-seven years after the enactment of R.A. 7875, creating PhilHealth, the passing of two laws amending the same and significantly increasing the budget allocation for health care;
1.) What has been achieved?
2.) What is the current state of the Philippine Health Care System?
3.) What is the best way to attain the universal health care objectives, moving forward?
The COVID-19 pandemic wrought havoc on our economy and forever changed the way we live, the way we work, the way we play, and the way we deal with health issues in order to survive.
As of November 10, 2022, more than 638 million total cases and 6.6 million total deaths have been recorded by the Worldometer Data. In the Philippines, the total cases and total deaths tallied were more than 4.01 million and 64,291, respectively.
The good news is that there has been no surge in the number of cases and deaths reported since President Bong Bong Marcos issued Executive Order No. 7 last October 28, 2022, allowing the voluntary wearing of face masks in indoor and outdoor settings, while reiterating continued implementation of minimum public-safety standards.
Credit must be given to our present-day heroes: healthcare professionals, healthcare workers, and the resiliency of the Filipino people, for the more favorable health outcomes on COVID-19 management, compared with a number of other countries in the world.
But much more must be done to achieve Universal Health Care and access to cost-effective, quality healthcare for all Filipinos. We are at a crossroads of transformation and that common concern, I believe, is the reason why all of us are here today.
Together, let us now evaluate some IMPORTANT INDICATORS IN THE PHILIPPINE HEALTH CARE SYSTEM, analyze what must be done to rectify what must be rectified, and take advantage of opportunities for improvement, moving forward.
1.) UNIVERSAL HEALTH INSURANCE COVERAGE: From all indications, the entire population has been covered by health care insurance, including indigents, persons with disabilities, senior citizens, and migrant workers. It can be said that there is already Universal Health Care coverage in the Philippines in terms of enrollment into the program. But the question is: Has healthcare become accessible and affordable, and are we achieving the desired health outcomes?
2.) MEANWHILE, the DOH BUDGET has increased almost twenty times from PHP9.46 BILLION in 2001 to PHP183.38 BILLION In 2022.
3.) The Total Health Care Expenses (THE), increased from PHP198.398 billion in 2005 to PHP526.342 billion in 2013, and PHP1,158.142 billion in 2021.
4.) Significantly, the Out-of-Pocket Expenses (OOP) as % of THE remains very high as shown in the Chart, ranging from 50% to 57% of THE, during the period 2005 to 2019. The lower percentage from 2020 to 2021 was due to the huge increase in government spending due to the COVID Pandemic. In absolute terms, the OOP increased from about PHP100 billion in 2005 to PHP480 billion in 2021.
IRONICALLY, THE HIGHER THE BUDGET BEING ALLOCATED FOR HEALTH CARE, THE HIGHER THE FILIPINO PEOPLE SPEND OUT-OF-POCKET! THIS HAS PUSHED MILLIONS OF FILIPINOS INTO POVERTY.
The high OOP in the Philippines has been mainly because of the focus on curative, rather than preventive and promotive healthcare. PhilHealth reimbursement system was based on Fee-For-Service, from 1995 to 2011. It was only in 2011 that PhilHealth shifted to Case-based payment.
The recently published DOH Philippine Health Facility Development Plan 2020-2040 (DOH PHFDP 2020-2040), stated that “the Philippine health system remains hospital-centric with hospital care accounting for 50%of total health spending and primary care accounting for only 4%.”
Thailand, on the other hand, which enacted its National Health Insurance Act in 2002, seven years after PhilHealth was created by virtue of R A 7875, has consistently focused on preventive health care and a DRG-based reimbursement system. As a result, Thailand was able to reduce its OOP from 34.2% of THE in 2001 to only 8.67% in 2020!
As of 2019, the Philippines had a higher OOP as % of THE of 48.456% than Indonesia (34.76%), Malaysia (34.57%), Vietnam (42.95%), Thailand(8.67%), and even Singapore (30.15%).
5.) Perhaps one of the most visible indicators of the effectiveness of a country’s healthcare system is its DATA ON MORBIDITY AND MORTALITY.
In 2020, statistics showed that the top killer diseases in the Philippines are heart disease (288 deaths per day), cancer (182 dpd), cerebrovascular diseases which caused 176 deaths per day, diabetes (109 dpd) pneumonia (94 dpd) hypertensive diseases (87 dpd) respiratory Tuberculosis (62 dpd), COVID 19 (57 dpd).
The Philippine Statistics Authority recently reported that “deaths due to COVID-19 accounted for a total of 10,226 deaths or 6.5% of the total deaths from January to April 2022”. This means that 93.5% of total deaths during that period were due to non-Covid causes.
There were many reported cases of people needing urgent procedures, who could not be admitted to hospitals during the surge of COVID Cases. Many others opted to stay at home for fear of infection. One wonders how many lives could have been saved if patients with diabetes, hypertension, cancer, or other illnesses were given proper treatment.
6.) Another worrying Philippine health statistic is TUBERCULOSIS! According to the STOP TB OPERATION launched by the WHO in 2014, as many as 70 to 85 people die every single day due to the same illness that killed President Manuel L. Quezon on August 1, 1944. That was 78 years and 104 days ago when there were no effective antibiotics available for Tuberculosis! Today, medicines are available free of charge.
The WHO initiated 1995, a program called TB DOTS (Tuberculosis Directly Observed Therapy- Short Course), which was adopted by the Philippine DOH in 1996. TB DOTS provides free screening, treatment, and medicines to TB patients! The program has been successfully implemented in many countries, some even poorer than the Philippines. Yet, the number of people being treated under this program in our country as shown in the Chart is not even half of the people infected with the TB virus. In fact, only one out of six patients infected with Drug Resistant TB virus is being treated.
Consequently, in 2020, the WHO rated the Philippines as the third country in the world with the highest prevalence rate of TB Cases, after Lesotho and South Africa, with more than one million active TB cases! The Philippines is one of the few countries where TB cases continue to increase every year. I am sure you will agree with me that we do not deserve such a distinction!
Allow me to briefly share a personal experience on this subject. When I was a 22-year-old Management Trainee at Unilever Philippine Refining Company, I was diagnosed with incipient tuberculosis. Our good company physically prescribed the necessary treatment while I continued to work. After 90 days of taking daily doses of antibiotics and by the grace of God, I was healed.
Nowadays, due to antimicrobial resistance, patients undergo as long as nine (9) months of treatment with stronger antibiotics and that is why I am personally very passionate about this Anti-TB Advocacy!
7.) HEALTHCARE FACILITIES
The DOH Philippine Health Facilities Development Plan (PHFDP) 2020-2040 reported that the Philippines has presently, 105,000 hospital beds and a bed density of 1.2 per 1,000 population, similar to the poorest countries in the world.
The PHFDP also stated that there are present, 3,900 primary care facilities of which 2,600 are Rural Health Units/Health Centers. Only 50% of Filipinos have access to an RHU/HC within 30 minutes of travel time. The country needs an additional 2,400 RHU/HC by 2025.
Furthermore, out of the 42,046 barangays, only about 50% have Barangay Health Stations.
8.) HEALTH CARE PROFESSIONALS (HCP)
Despite the big number of HCPs graduating every year, the Philippines is still not able to meet the ideal ratios of doctors and nurses to the population.
Most physicians are concentrated in highly urbanized cities and relatively rich provinces.
The shortage of nurses is aggravated by the big demand for Filipino nurses abroad.
9.) BARANGAY HEALTH WORKERS (BHWs): The BHWs are the front liners in the barangay in providing basic health education and primary health care services. They link the community with the local leaders and health professionals. We need twice as many of the current number of BHWs to meet the required number in the 42,000 barangays all over the country.
10.) PHILHEALTH REIMBURSEMENT This has been a continuing concern among hospital administrators. Because of alleged delays in reimbursements, the operation of many hospitals has been adversely affected; some smaller hospitals have reportedly closed down.
WHY THE NEED FOR TRANSFORMATIONAL GOVERNANCE IN THE PHILIPPINE HEALTH CARE SYSTEM?
Because based on the indicators cited above, we need qualitative change and re-orientation in our healthcare system and processes!
MAINTAINING THE STATUS QUO IS NOT AN OPTION, AND WILL HAVE THE FOLLOWING CONSEQUENCES:
1.) MILLIONS OF PEOPLE ARE BEING DRIVEN INTO POVERTY!
The WHO estimates that “high out-of-pocket expenses drive as many as 100 million families in the world into poverty every year”. It may be concluded that the Philippines has a significant share of this figure, based on our very high out-of-pocket healthcare expenses.
2.) UNITED NATIONS EXPERTS ON NON-COMMUNICABLE DISEASES (NCDs), CITED THAT 1 OUT OF 3 FILIPINOS DIES BEFORE THE AGE OF 70 DUE NON-COMMUNICABLE DISEASES CALLING THIS CRISIS “AS A PERFECT STORM THAT THREATENS TO UNDERMINE ALL THE PROGRESS MADE IN RECENT YEARS AND THE DREAMS OF ALL FILIPINO FAMILIES IN THE COUNTRY.”
STATISTICS SHOW THAT THE NUMBER OF YOUNG PATIENTS SUFFERING FROM NCDs HAS BEEN STEADILY INCREASING.
3.) TUBERCULOSIS IN THE PHILIPPINES IF LEFT UNCHECKED WILL INFECT MANY MORE MILLIONS. UNLESS DRASTIC MEASURES ARE UNDERTAKEN, THE SEVERELY INFECTED ONES WILL PROBABLY REACH THE POINT OF INCURABILITY. AS THE REFRAIN OF AN OLD SONG PUT IT, “THEY WILL LIE THERE AND JUST DIE THERE”.
HOWEVER, BREAKING THE STATUS QUO IS NEVER EASY!
I recall my experience when I was tasked by the PGMA to lead the government efforts in promoting the use of generic medicines in 2005. At that time, more than 16 years after the enactment of the Philippine Generics Act in 1988, the market share of generic medicine was a measly 4%. We launched the Botika ng Bayan program and an aggressive marketing campaign in partnership with the private sector. In the process, I even got sued for alleged patent infringement when we imported sample tablets of a medicine that was selling for an equivalent price of PHP8 per tablet in India but was being sold for PHP45 per tablet in the Philippines. The case was eventually dismissed but not before I was called to testify at the witness stand of a Regional Trial Court for the first time in my life. That only encouraged us to persist in educating the public about the benefits of generic medicines.
Today, with government support, and the participation of the private sector and all stakeholders, the market share of generic medicines is more than 70% by volume.
LOOKING AHEAD AND MOVING FORWARD, THERE ARE GOOD REASONS TO BE OPTIMISTIC!
PRESIDENT BONG BONG MARCOS, in his first State of the Nation Address on July 25, 2022, said that “the need for a stronger health care system is self-evident. “We must bring medical services to the people and not wait for them to come to our hospitals and health centers.”
GUNDO AUREL WEILER, FORMER WHO REPRESENTATIVE IN THE PHILIPPINES, on April 7, 2019, World Health Day, said,
“Let’s get smart about health spending. We know that investing in UHC is the best buy for the Philippines as it will result in people becoming healthier and more productive citizens. Health for all must be by all national leaders, local governments, the private sector, civil society, and health workers. We must all commit to strengthening primary health care as a foundation for UHC.”
The UHC Act, R.A. 11223 of 2019, if implemented well and soon, can help us overcome the challenges discussed above, significantly reduce out-of-pocket expenses and bring about better health outcomes for the Filipino people!
R.A. 11223: THE UNIVERSAL HEALTH CARE ACT OF 2019 will improve and strengthen existing health sector processes and systems by highlighting primary care close to families and communities, a DRG-based payment system, supported by hospitals that are contracted as part of the Health Care Provider Network (HCPN), and making PhilHealth membership automatic for every Filipino.
Section 17 OF UHC ACT OF 2019:
THE DOH SHALL ENDEAVOUR TO CONTRACT PROVINCE-WIDE AND CITY-WIDE SYSTEMS FOR THE DELIVERY OF POPULATION-BASED HEALTH SERVICES. PROVINCE-WIDE AND CITY-WIDE HEALTH SYSTEMS SHALL HAVE THE FOLLOWING COMPONENTS:
A. Primary Care Provider Network with Patient Records accessible throughout the health system;
B. Accurate, sensitive, and timely epidemiologic surveillance systems; and
C. Proactive and effective health promotion programs or campaigns.
AT THIS JUNCTURE I WOULD LIKE TO RESPECTFULLY SUBMIT THE FOLLOWING ACTION POINTS FOR TRANSFORMATIONAL GOVERNANCE IN THE PHILIPPINE HEALTHCARE SYSTEM, FOR CONSIDERATION:
1.) URGENT IMPLEMENTATION OF R A 11223, UNIVERSAL HEALTHCARE ACT OF 2019: FOCUSED ON PREVENTIVE HEALTH CARE AND DIAGNOSIS-RELATED GROUP REIMBURSEMENT SYSTEM TO REDUCE OUT-OF-POCKET EXPENSES
As early as 1978, the WHO INTERNATIONAL CONFERENCE IN ALMA-ATA, KAZAKZTAN, came up with the ALMA-ATA DECLARATION IDENTIFYING PRIMARY HEALTH CARE as the key to the attainment of the goal of Health for All!
As was mentioned earlier, the Philippines passed RA 7875 creating PhilHealth in 1995.
Thailand enacted its National Health Insurance Act in 2002.
The OOP as % of THE in the Philippines was reduced from 54% in 2001 to 48.56% in 2019; while in Thailand, the OOP as % THE was reduced from 34.2% in 2001 to 8.67% in 2019. The major points of difference are, Thailand from the beginning has focused on preventive health care and a Diagnosis-Related-Grouping (DRG) system for payment of services.
The UHC Act which emphasizes preventive health care and the DRG system must be implemented now without any further delay. There must be some important lessons to learn from the Thai experience.
2.) DIGITALIZATION IS THE FIRST SIGNIFICANT STEP IN IMPLEMENTING THE UHC ACT!
The UHC Act mandates that all healthcare service providers must maintain a health information system on enterprise resource planning, human resources, electronic health records, and electronic prescription log, including electronic health commodities and logistics management information.
One of the criteria of PhilHealth in contracting the HCPN is its capacity to manage patient records digitally.
No less than former DOH Secretary Francisco Duque lll declared during a Webinar organized by HealthCore and PVH last September 16-17, 2021, that “ The COVID-19 Pandemic further highlighted the lack of human resources for health along with pre-existing health and social issues. Telehealth was identified as one of the solutions to address this and policy was swiftly enacted to respond to the exigency of COVID-19 response.”
For his part, then DOST Secretary Fortunato dela Pena speaking at the same webinar, said, “ It is globally acknowledged that e-Health in support of the healthcare system has a significant role in accomplishing … universal health care.”
THIS IS EXACTLY WHAT WE ARE ADVOCATING FOR IN OUR TELEHEALTH PLATFORM CALLED THE PHILIPPINE VIRTUAL HOSPITAL (PVH). WE INVITE YOU TO BE OUR PARTNERS IN THIS ADVOCACY.
DIGITALIZATION of healthcare systems is absolutely necessary to comply with minimum components of province-wide and city-wide health systems as specified in Section 17 of the UHC Act.
Digitalization of health care systems will also improve governance, enhance transparency and enable QUICK REIMBURSEMENT MECHANISM FOR SERVICES RENDERED BY HOSPITALS AND OTHER HEALTH CARE PROVIDERS.
3.) Provide Rural Health Units (RHUs) and barangay health stations (BHS) where there are none and upgrade existing ones. This will enable RHUs and BHSs to provide primary health care services, thus freeing beds and other hospital facilities for patients needing urgent procedures, AND EVENTUALLY FOR FOREIGN MEDICAL TOURISTS.
4.) Provide incentives for upgrading hospitals through tax breaks and appropriate financial facilities. This will enable the hospitals to meet global standards not only for the benefit of Filipino patients but also to attract foreign medical tourists.
FORTUNE BUSINESS INSIGHTS ESTIMATED THE GLOBAL MEDICAL TOURISM MARKET AT USD13.98 BILLION IN 2021 AND IS PROJECTED TO GROW BY LEAPS AND BOUNDS TO USD53.51 BILLION IN 2028!
THAILAND AND MALAYSIA ARE PRESENTLY THE LEADING COUNTRIES IN MEDICAL TOURISM.
THE FILIPINO BRAND OF HEALTH CAREGIVING IS WORLD-RENOWNED. WITH UPGRADED HEALTHCARE FACILITIES AND A PROPER MARKETING CAMPAIGN, WE SHOULD BE ABLE TO GET A GOOD SLICE OF THIS LUCRATIVE MARKET.
5.) LAUNCH THE “END TUBERCULOSIS NOW’ CAMPAIGN!
The Filipino people do not deserve to be tagged as citizens of the third worst country in the world in terms of Tuberculosis prevalence! The situation must not be allowed to deteriorate further as to reach highly dangerous levels of Anti-microbial resistance among millions of Filipinos.
An honest-to-goodness campaign must be urgently implemented to treat all Filipinos infected with Tuberculosis and reduce TB incidence by half within the next 6 years.
- Expand coverage of the DOH TB DOTS CAMPAIGN to maximize reach;
- Mobilize and incentivize Barangay Health Workers for tracing TB patients and monitoring cases.
- Contract and properly compensate PCUs and hospitals for screening, diagnosis, and proper dispensing of medicines.
TELEMEDICINE will be very useful for this purpose.
- Mobilize CSOs, NGOs, and socio-civic associations like Rotary Clubs, Lions Clubs, JCs, and others to participate in the campaign.
6.) POOLED PROCUREMENT OF MEDICINES BY THE HOSPITALS SHOULD BE ENCOURAGED, TO REDUCE THE PRICE OF MEDICINES.
As an integral part of good governance, HIGH ETHICAL STANDARDS in health care must be practiced by all stakeholders, guided by the Mexico City Principles for biopharmaceuticals, to which the Philippines is a signatory.
- Effective Preventive Health Care system enhanced by digitalization minimizes out-of-pocket expenses which will optimize productivity and help attain higher GDP growth;
- Higher GDP growth means a stronger middle class needing efficient, quality health care;
- Preventive health care using upgraded Primary Care Units means more available hospital rooms and facilities for millions of patients requiring urgent and elective procedures;
- Financial incentives like tax exemptions and soft loans will facilitate acquiring high-tech and innovative medical equipment and devices for upgrading hospital facilities;
- Upgraded hospital facilities that meet global standards, will mean better health care not only for Filipinos but will also attract the lucrative foreign medical tourism market;
- Bringing down TB incidence in the Philippines will not only render justice for long-suffering Filipino patients but will also remove the stigma of the Philippines being among the worst countries in the world in terms of TB case prevalence.
Ladies and gentlemen,
Hospital Administration is a most demanding task, indeed. It is toxic as the millennials would put it. It is necessary to operate at a profit and grow the business, while also putting the best interest of patients first.
People’s lives are on the line hence, the best possible health outcomes must be achieved through efficient and effective management systems using the latest information and communications technology.
That is what Transformational Governance in Healthcare is all about. Let’s use it! Let’s apply it! LET PCHA LEAD THE WAY!!! For your healthy bottom line and a healthier Philippines!”
MABUHAY ANG PCHA!!!
MARAMING MARAMING SALAMAT PO!!!