Over the years, governments across emerging markets have realised how critical universal healthcare coverage is for their population. While some countries have taken the challenge head-on, others have followed a wait-and-watch policy to see how such systems are being implemented, and gradually adopted a system that is based on the good practices of several healthcare plans.
In recent years, several Southeast Asian countries have adopted different forms of universal healthcare plans for their countries. Universal healthcare-related policies and delivery mechanisms were largely based on existing healthcare systems, a result of gradual development (based on local factors and priorities). Therefore, while theoretically universal healthcare exists (wherever applicable), it differs in terms of the actual benefits (e.g. quality and range of services and monetary advantage to patients).
We review these plans across a few Southeast Asian countries, to understand their infrastructure and design, and available opportunities for healthcare service providers, medical device manufacturers and pharmaceuticals companies. As part of this series, we start with Philippines, where about 80% of the population is currently covered under the universal healthcare plan, called PhilHealth.
This article is part of a series focusing on universal healthcare plans across selected Southeast Asian countries. The series also includes a look into the plans in The Philippines, Cambodia, Vietnam, Indonesia, and Thailand.
The Philippines is a lower-middle income country with a population of about 97 million. In spite of a strong focus on healthcare services, inequality in terms of healthcare access to various socio-economic groups and regions remains a persistent issue. Achieving universal healthcare access for all its citizens is a key objective of the government’s National Objectives for Health (2011-2016) program, and the government aims to fulfil three primary goals through this program – 1) financial risk protection; 2) better health outcome; 3) responsive healthcare system.
The first step towards universal healthcare was the launch of Medicare (1969), which provided health insurance to formal sector (public and private) employees. Coverage was extended to the poorer section of the population and the informal sector with the creation of PhilHealth (Medicare was merged with it) in 1995.
As of 2013, more than 80% of the country’s population was covered under the national health insurance program PhilHealth. The government aims to provide 100% coverage by 2016.
For a private sector healthcare player (pharmaceutical company, medical device manufacturer, or healthcare service provider), a country with 100% insured population presents strong incentives in form of greater access to diverse sections of the population with varied service and product needs, which will inevitably drive sales. However, to maintain the effectiveness of universal healthcare coverage, the government needs to work beyond simply the numerical (on paper) coverage of its population under the health cover to ensuring informal sector participation in the scheme, consistency in service delivery at primary care level, and adequate coverage of diseases.
The long-term success of social health insurance (and related with it, the prospects for healthcare sector stakeholders) will be determined primarily by how PhilHealth has been designed and what emphasis is being laid on infrastructure.
We take a closer look at these two critical aspects of the universal healthcare program.
|Healthcare Service Delivery
|Overlaps in the referral system
Variance in quality of healthcare service delivery
|Healthcare Insurance Financing
|Co-payment (Reimbursement) System
|Reimbursement System for Drugs
|Enrolment and recognition of actual beneficiaries by group
Inadequate monitoring of service delivery
Opportunities for Healthcare Companies
Healthcare Service Providers
Significant Public Private Partnership (PPP) opportunities in exist in Philippines’ healthcare sector, to raise the level of services and to extend the coverage
Currently, only a 700-bed orthopaedic centre is being operated under the PPP model, and according to Philippine’s Health Secretary, there is significant opportunity for the PPP model in all DOH managed hospitals
The only roadblock for the adoption of PPP model is the perception of it being a move towards privatization of healthcare services (given that private sector already dominates the healthcare space in Philippines)
Medical Device Manufacturers
Public hospitals (especially those under LGU administration) usually are short of resources for the procurement of medical devices (mostly imported), which constraints them in providing patients with critical diagnostic services; this remains an area of concern as available devices will be inadequate to meet the 100% population coverage target of PhilHealth
At the same time, the demand for devices remains robust, and growth is expected on account of increase in the number of people under coverage as well as greater availability of healthcare services across the country. In order to further boost demand, medical device companies could explore ways to finance the purchase, so as to motivate hospitals to purchase equipment
The DOH has also hinted that critical equipment, such as CT scans and MRI machines, can be procured under a PPP model, providing an alternative option for device manufacturers to widen their presence
In the current scenario, scope for pharmaceuticals companies is limited to medicines used for inpatient treatment. Sales potential is likely to increase as the government introduces zero co-payment policy for 25 health conditions for the sponsored category beneficiaries
Also, with the proposed widening of treatment coverage to include conditions such as hypertension and diabetes (was expected to come into effect in October 2013) which affect about 20% of the adult population, sales prospects is likely to improve
A Final Word
Philippines’ universal healthcare plan, PhilHealth, provides a strong foundation for access and quality enhancement of healthcare services to its population. With coverage of about 80% of its population currently, the country’s healthcare policy has tried to provide equality of service delivery to its citizens, and covers a range of common diseases and inpatient treatments. While there are obvious concerns around inadequate hospital facilities and diagnostics equipment, issues with accurate entitlement of benefits and inadequate monitoring of service delivery, the country’s healthcare administration is working with private partners to strengthen the system and focus on providing quality healthcare to its citizens.
From the perspective of healthcare industry participants, hospital services companies perhaps have a higher potential for growth in view of the shortage of hospital facilities across the country, while drugs companies must continue to rely on limited access to inpatient treatment facilities, providing drugs for the most common diseases (perhaps, also the cheaper product variants of their portfolio).