SURVEY OF HEALTH FINANCING SYSTEMS FOR ACCESS TO MEDICINES BY THE POOR IN RURAL AND URBAN PHILIPPINES A Research Study Funded by MeTA Philippines May 2010 MARCIA FERIA MIRANDA PHILIPPINES EXECUTIVE SUMMARY This survey covered the various health financing schemes accessed by the poor in the Philippines in paying for their medicines. Results show that majority of the poor finance their medicine purchases through donations from formal or non-formal charities, family or friends. The inadequacies of these mechanisms lead to increased poverty and poor health outcomes. Policy recommendations to help improve financing medicines for the poor include expanding services and funding for public health facilities; heightening awareness of low-priced quality generics; implementation of innovative and non-traditional mechanisms; establishment of formal transparent health financing schemes in the local level; expansion of Philhealth benefits to include outpatient benefits for chronic diseases and emphasis on preventive medicine through microsaving and health education and promotions. BACKGROUND The Philippines spent 3.8% of GDP on health in 2008, below the 5% level recommended by the WHO. Of this, government’s share is 32.9% or 1/3 of total health expenditures. Private out- of-pocket expenses represent 57% of total. Close to 28 million Filipinos lived below the poverty line (2006). Poverty incidence stood at 32.9%, up from 30% in Major unexpected sicknesses require costly hospital care. Chronic illnesses and even recurrent acute health problems can create a major financial drain on household resources. Poor families suffer the most from inadequate access to healthcare. Catastrophic medical spending drives them to even deeper poverty. Health financing is 1 of 4 pillars of health sector reform. The objective is to reduce high out- of-pocket expenses of households and increase the shares of the national government and Philhealth. MeTA Philippines engaged a Consultant to conduct a survey on various health financing schemes accessed by the poor. The survey covered selected sites in the NCR and Region 6. OBJECTIVES Identify public and private health financing mechanisms that are currently available to the poor Review selected health financing mechanisms and identify the key success factors relative to each Develop policy recommendations for improving the availability and accessibility of health financing for the poor FINDINGS AND RESULTS ATTITUDE AND EXPERIENCE OF THE POOR IN ACCESS TO MEDICINES 1 out of every 3 respondents believe that medicines are expensive Almost 1 out of every 5 borrows money to fund medicine purchases Majority (76%) are aware that generics are available 80% were not aware of government price control or price reduction programs Close to 50% cannot buy medicines because they have no funds Close to 2/3 were aware of the Philhealth program; only 16% knew about private health insurance schemes 86% were interested in joining Philhealth; half believe they can pay PhP 100 monthly for membership Half of the respondents want public health centers to give away free medicines and assist in providing funds to buy medicines Over 1/3 believe they should work harder and increase their incomes to be able to purchase medicines CONCLUSIONS Majority of the poor do not use formal mechanisms. They finance their own purchases & supplement them through donations from formal or non- formal charities & from family & friends. Services and funding for public health facilities must be expanded. But the problem of stock-outs of medicines must be resolved. Generics are no longer viewed as ineffective. Government must heighten awareness about its price reduction programs. There are examples of innovative and non-traditional mechanisms that can be used as models: Schemes put in place by LGUs Non-profit foundations that provide medical assistance to indigents Micro-insurance and microfinance schemes RECOMMENDATIONS Encourage local governments to establish formal transparent health financing mechanisms to replace current systems of patronage and dole outs Urge introduction of new Philhealth benefits for medicines through an outpatient package for chronic diseases Promote community-based health equity funds to be administered by specialized NGOs Promote microsaving products to support preventive health care Launch health education and promotions campaigns in poor communities on means to access medicines Recommend that PCSO build, fund and operate more charity outpatient clinics, hospitals and hospice wings for the poor; eliminate non-medical projects for funding FURTHER READING Lavina, Shiela Marie S., Pilot Implementation of Philhealth Outpatient Benefit Package: Results of Formative Phase in Selected Provinces in Region 6 and 8. GTZ Philippine Health Sector Reform and Population Management Program. Manila, November Vialle-Valentin, C., Ross-Degnan, D., Ntaganira, J., Wagner, A., Medicines coverage and community-based health insurance in low-income countries. Health Research Policy and Systems Vol 6 No ` MAJORITY OF THE POOR ACCESS FORMAL CHARITY / WELFARE MECHANISMS (60%) OR DOLE OUTS FROM FAMILY & FRIENDS (44%) OTHER PUBLIC FUNDING MECHANISMS: Philippine Charity Sweepstakes Office (PCSO) Philippine Amusement and Gaming Corporation (PAGCOR) Conditional Cash Transfer Program (DSWD) TYPOLOGY OF HEALTH FINANCING MECHANISMS FOR ACCESS TO MEDICINES PUBLIC HEALTH FACILITIES ARE THE PREFERRED SOURCE OF THE POOR FOR MEDICAL SERVICES AND CARE HEALTH FINANCING MECHANISMS USED BY THE POOR TO ACCESS MEDICINES PHILHEALTH ACCOUNTS FOR ONLY 9% OF TOTAL HEALTH EXPENDITURES DISTRIBUTION OF HEALTH EXPENDITURE BY SOURCE OF FUNDS PHILIPPINES, 2006 MAJORITY OF RESPONDENTS USE THEIR OWN SAVINGS (55%) OR RESORT TO BORROWING (34%) SELF-FINANCING STRATEGIES BY THE POOR TO ACCESS MEDICINES MOST OF THE POOR (76%) HAVE PHYSICAL ACCESS TO PUBLIC HOSPITALS WITHIN 5 KM RADIUS / 1 HOUR FROM RESIDENCE PHYSICAL ACCESS TO HEALTH CENTERS AND HOSPITALS MAJORITY OF THE POOR (64%) BELIEVE THAT DRUGSTORES OR HEALTH CENTERS GENERALLY HAVE STOCK AVAILABILITY OF MEDICINES