House Panel works to curb decreasing share of LGUs in healthcare funding

CEBU, Philippines — Local government units (LGUs) share in the Philippines' overall health expenditure is declining, which urges the House Committee on Health to propose a mandate for an automatic 5% allocation to a special health fund as one of its new measures to address the issue.  

Health Committee Chair Representative Ciriaco Gato Jr. mentioned that the issues relating to inadequate health financing continue to impend the health network of the country despite the existence of the Universal Health Care (UHC) Act, which was signed into law in 2019.

The statement of Gato centers on one of Unilab Center for Health Policy (UCHP) studies titled, "Philippine Health Sector Performance: An Analysis Using the National Health Accounts of 1990-2022" by Dr. Michael Mo, Dr. Orville Solon, and Dr. Alejandro Herrin, emphasizing that diminishing health spending of LGUs is a major challenge to realizing universal healthcare.

The study also shows that from 1991 to 2022, out-of-pocket payment (OOP) has been consistently the biggest component of healthcare spending. In 2022, the biggest contributors to health spending were OOP (45%), national government (21%), social health insurance (14%), and local government (10%).

Gato assured that the House Committee on Health will consider UCHP's findings on government health expenditures and integrate them into policymaking to meet the World Health Organization's goal of allocating 5% of GDP to total health expenditure.

He added that UCHP's recommendations are vital to review strategies for reducing out-of-pocket expenses and enhancing spending efficiency.

In response, Gato stated that the House Committee on Health is pushing for measures to strengthen the special health fund under the UHC Act by requiring mandatory contributions from LGUs, ensuring sufficient resources for healthcare, including human resources.

"At present, the Department of Health and PhilHealth admitted during recent committee meetings that contributions to the special health fund by municipal and city LGUs are voluntary. Corollary to this, the committee is also deliberating on House bills that seek to amend the pertinent provisions of Republic Act 7160, otherwise known as the Local Government Code, on health financing. I wish to inform you that the committee is inclined to come up with legislative measures mandating LGUs to allocate 5% of their income for health," Gato told during UCHP symposium. 

Gato said that revising Philhealth's benefits payment system is another way to achieve universal healthcare for Filipinos as adopted in the study titled, "Provider Payment Governance in the Philippines: A Proposal," by UCHP researchers, led by Dr. Valerie Gilbert Ulep.

The said study commissioned by UCHP emphasizes the need for an independent arm institution to oversee the release of payments to PhilHealth partner institutions.

It is part of the discussions at the 1st Unilab Center for Health Policy Executive Symposium, which aims to explore evidence-based solutions for improving the Philippine healthcare system as it transitions to Diagnosis Related Group systems under the UHC Act.

Gato said the study provides a clearer picture of the provider payment system in the country and how it can be developed to better respond to the needs of Filipinos. 

"Rest assured, that the committee will take into account this suggestion to establish a new system or a separate entity that sets case rates similar to models in other countries. I believe that this proposal can be included in the ongoing deliberations on the roles and responsibilities of PhilHealth and the Health Technology Assessment Council," stated Gato.  

These two studies were presented during the first-ever UCHP Executive Symposium held at Sheraton Bay Manila last August 2, to address the existing and critical issues in the Philippine healthcare system.

Gato expressd appreciation to UCHP, a project launched by the Unilab Foundation, for conducting the two studies. He highlighted that their findings and recommendations are crucial for promoting evidence-based and data-driven policymaking, which is essential for realizing the goals of the UHC Act.

Editors Note: This press release for Unilab is not covered by Philstar.com's editorial guidelines.