A file photo of a temporary health camp in rural India. In 1993, health care was “devolved” in the Phillipines, meaning all local health programmes were no longer under the supervision of the Department of Health but were placed under the jurisdiction of local officials. Photo: Mint
A file photo of a temporary health camp in rural India. In 1993, health care was “devolved” in the Phillipines, meaning all local health programmes were no longer under the supervision of the Department of Health but were placed under the jurisdiction of local officials. Photo: Mint

Fiscal devolution and health care: lessons from the Philippines

The health sector has the logical and moral responsibility to foster and harness convergence and synergy between other sectors and between local government units: Former secretary of health, Philippines Department of Health

Compared with other countries that have decentralized their health systems, the Philippines’ experience has been the most encompassing so far in terms of scope of devolved functions, degree of autonomy, levels affected, and rate of change. In the era of decentralization and devolution, effective working relationships with the mayor, governor, and barangay (a Filipino term for a village, district or ward) captain have become indispensable. The internal revenue allocation of local governments can be tapped for health and wellness programmes and activities.

Our priority concern should be towards responding to the inequity in health. First, we should re-think the department of health budget; poor provinces should get more while rich provinces should give more. The technical capacities of the Centres for Health Development should be strengthened in the following areas: public health care services, planning, information system, human resource development, health financing, hospital operations and management, community and NGOs, inter-sectoral synergy and inter-local government unit (LGU) collaboration and quality assurance.

The health sector has the logical and moral responsibility to foster and harness convergence and synergy between other sectors and between LGUs. A lack of convergence and synergy results in blind spots in investment planning at the local (across sectors) and national (across sectors and geographic boundaries) levels; inadequate response to major health problems such as malnutrition; and missed opportunities for networking resources and social solidarity among LGUs. LGUs should be supported in improving their efficiency in the use of resources. Linkages should be re-established between the different levels of the health delivery system through expansion of the inter-LGU collaboration through the inter-local health zones.

Mechanisms should be instituted to support Human Resource Development in LGUs through establishment of a replacement pool for health personnel undergoing training and support for the establishment of distance education learning centres in the regions. Local government units should be seen as co-equals; Department of Health (DOH) as servicer of servicers. It should be recognized that LGUs are heterogeneous in terms of economic, political, historical, cultural, and geo-ecological situations. National and regional budgets should further be decentralized to LGUs with equity as a major factor.

All these would lead to a more definite division of roles between the DOH and the LGUs. DOH would be in charge of health policy development: standards, regulations, licensing, health promotion, and advocacy. Tertiary hospitals would serve as major service front liners. DOH should also head national health information systems, epidemiological surveillance, disease registries and health human resource development.

There are also strategies on funds generation that can be employed. Strategic health investment plans can be formulated, bilateral and multilateral governance funds can be tapped and LGU resources can be merged. Income can be gained through establishment of a professionally-managed provincial/city health corporation, local taxation of cigarettes and alcohol, and mobilization of government financing institutions for health resource generation. Proper debt financing and public-private sector financing may also be implemented.

In the Philippines, fiscal devolution and decentralization of health services commenced in 1992 when the local government code was passed by the Philippine Congress and signed into law by President Fidel V. Ramos in 1991. The Local Government Code signalled the legal basis for the decentralization of central political and economic powers to local chief executives. In 1993, health care was “devolved", meaning all local health programmes were no longer under the supervision of the Department of Health but were placed under the jurisdiction of local officials.

As a result of fiscal devolution the Department of Health gave up a total of 4 billion Philippine pesos (PHP) ($84 million) and retained 6 billion PHP. Decentralization of health services resulted in the department of health transferring into the hands of the local governments 46,000 health personnel out of a total of 81,000; 595 hospitals out of a total of 639; all 12,580 municipal rural health units and village health stations.

In the strategic plan for devolution, three major phases were identified: the change-over phase, the transition phase and the stabilization phase spanning over 10 years. However, it has taken a long time to implement the stabilization phase and it continues even till today. Thus, there is an unfinished agenda with respect to devolution in health.

The decentralization of health services in 1993 led to significant health reforms such as the creation of a national social health insurance scheme since 1995. However, till date, only 87% of the population are currently members of this insurance scheme. Second, the sin taxes on cigarettes, tobacco, and alcohol was passed starting 2013. So far, a total of 200 billion PHP has been collected over the past three years (2013-15). Eighty-five percent of these funds are for the exclusive use of the health sector. The remaining 15% goes to local governments producing tobacco.

There were several challenges that had to be contended with. All these persist until today in various degrees. They include: uneven implementation of the salary standardization law especially in local governments; lack of coordination of health services and lack of integration of the referral system between and among the national government, the provincial governments, and the city/municipal governments; politicized selection and promotion of health personnel resulting in demoralization of the health staff especially in local governments; and inequities in the distribution of internal revenue allocation by the national department of finance and the department of budget and management.

The eventual result was the villages and the cities won and the provinces and municipalities lost.

Jaime Z. Galvez Tan was former secretary of health, Philippines Department of Health, and professor, University of the Philippines College of Medicine.

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