Health Sector Reform Agenda

Health Sector Reform Agenda Convergence Strategy and Best

Practices

Studies of Eight Convergence Areas

University of the Philippines National Institutes of Health – Institute of Clinical Epidemiology (UP NIH-ICE)

September 2002

A publication of Management Sciences for Health–Health Sector Reform Technical Assistance Project (MSH-HSRTAP). This publication was made possible through the support provided by the United States Agency for International Development (USAID), under the terms of Contract No. HRN-1-00-98-00033-00.

UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

HEALTH SECTOR REFORM TECHNICAL ASSISTANCE PROJECT (HSRTAP)

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Health Sector Reform Technical Assistance Project

TABLE OF CONTENTS Foreword ...........................................................................................................5 I CAPIZ (REGION 6) ....................................................................................6

1. Socio-Economic Profile ......................................................................6 2. Health Status .....................................................................................6 3. Background of Health Sector Reform.................................................8 4. Gains In Health Financing ................................................................ 10 5. Gains in Hospital Reforms................................................................ 16 6. Gains in Drug Management Systems............................................... 22 7. Gains in Inter-Local Health Systems ................................................ 28 8. Gains in Public Health Reforms........................................................ 33 9. Best Practices .................................................................................. 35 10. Lessons Learned.............................................................................. 38 11. Conclusion and Recommendations.................................................. 39 Appendix 1. List of Key Informants................................................... 40

II NUEVA VIZCAYA (REGION 2) ............................................................... 41

1. Socio-Economic Profile .................................................................... 41 2. Background of Health Sector Reform............................................... 42 3. Gains in Health Financing ................................................................ 44 4. Gains in Hospital Reforms................................................................ 48 5. Gains in Drug Management Systems............................................... 51 6. Gains in Inter-Local Health Systems ................................................ 55 7. Best Practices .................................................................................. 56 8. Lessons Learned.............................................................................. 57 9. Conclusion ....................................................................................... 57 Appendix 1. List of Key Informants. .................................................. 58 References....................................................................................... 59

III PANGASINAN (REGION 1) .................................................................... 60

1. Socio-Economic and Health Profile .................................................. 60 2. Convergence Experience ................................................................. 60 3. Gains in Health Financing ................................................................ 63 4. Gains in Hospital Reforms................................................................ 68 5. Gains in Drug Management Systems............................................... 73 6. Gains in Local Health Systems......................................................... 79 7. Best Practices .................................................................................. 81 8. Lessons learned............................................................................... 82 9. Conclusion ....................................................................................... 82 Appendix 1. List of Key Informants. .................................................. 83 References....................................................................................... 84

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IV MISAMIS OCCIDENTAL (REGION 10) ................................................... 85 1. Socio-Economic and Health Profile .................................................. 85 2. Health Sector Reform....................................................................... 86 3. Gains in Health Financing ................................................................ 87 4. Gains in Hospital Reforms................................................................ 91 5. Gains in Drug Management Systems............................................... 96 6. Gains in Inter-Local Health Systems .............................................. 103 7. Gains in Public Health Services ..................................................... 109 8. Best Practices and Lessons Learned ............................................. 111 9. Conclusion and Recommendations................................................ 112

Appendix 1. Key Informants and FGD Participants ....................... 113 V BULACAN (REGION 3).......................................................................... 115

1. Socio-Economic and Health Profile ................................................ 115 2. Convergence in Bulacan ................................................................ 117 3. Gains in Health Financing .............................................................. 118 4. Gains in Hospital Reform ............................................................... 119 5. Gains in Drug Management ........................................................... 124 6. Gains in Inter-Local Health Systems .............................................. 125 7. Updates on the Bulacan Convergence Initiative ............................. 132 8. Best Practices ................................................................................ 134 9. Convergence Concerns.................................................................. 136 10. Conclusion and Recommendations................................................ 137 References..................................................................................... 139

VI SOUTH COTABATO (REGION 11)........................................................ 141

1. Socio-Economic and Health Profile ................................................ 141 2. Convergence In Health Reform...................................................... 143 3. The Convergence Strategy ............................................................ 145 4. Gains in Health Financing Reforms................................................ 146 5. Gains in Hospital Reforms.............................................................. 150 6. Gains in Drug Management Systems............................................. 152 7. Gains in Local Health Systems Development................................. 154 8. Best Practices ................................................................................ 157 9. Lessons Learned............................................................................ 157 10. Conclusion and Recommendations................................................ 159

Appendix 1. Local Health Accounts, 1998, South Cotabato............ 160 Appendix 2. South Cotabato Provincial Hospital, Occupancy Rates and Budget, 1990-2000.................................................................. 161 Appendix 3. Norala and Sto. Niño Health Budgets, 1998-2001. ..... 162 Appendix 4. List of Interviewees.................................................... 163

VII NEGROS ORIENTAL (REGION 7)......................................................... 164

1. Socio-Economic and Health Profile ................................................ 164 2. Health Sector Reform..................................................................... 164 3. Gains in Health Financing .............................................................. 164 4. Gains in Hospital Reforms.............................................................. 176 5. Gains in Drug Management Systems............................................. 185 6. Gains in Inter-Local Health Systems .............................................. 190 7. Best Practices ................................................................................ 201 8. Conclusion and Recommendations................................................ 201

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Appendix 1. Key Informants and FGD Participants........................ 204 VIII PASAY (NATIONAL CAPITAL REGION) .............................................. 205

1. Socio-Economic and Health Profile ................................................ 205 2. Convergence in Pasay ................................................................... 205 3. Gains in Social Health Insurance ................................................... 206 4. Gains in Hospital Reforms.............................................................. 208 5. Gains in Drug Management Reform............................................... 210 6. Gains in Inter-Local Health Systems .............................................. 210 7. Best Practices ................................................................................ 214 8. Lessons Learned............................................................................ 215 9. Conclusion and Recommendations................................................ 216

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FOREWORD The convergence strategy initiated by the Management Sciences for Health-Health Sector Reform Technical Assistance Project (MSH-HSRTAP) with funding from the United States Agency for International Development (USAID) is the main strategy of the Philippine Government's Department of Health (DOH) to address the challenges of health sector reform. Convergence is an attempt to bring together the local political leadership, the health sector, and the community to collaborate toward better health. The convergence approach aims to synchronize and strengthen social insurance, hospital reform, drug management, inter-local health zone, and public health networking at the local level. The strategy aims to create synergy among the health initiatives of LGUs, the DOH, the Philippine Health Insurance Corporation (PHIC), and the community. The goal is better health service delivery, coverage and equity, quality, efficiency, and improved private participation. The strategy is being piloted in strategic LGU sites. MSH-HSRTAP has directly assisted eight LGUs: Pangasinan, Nueva Vizcaya, Bulacan, Pasay City, Capiz, Negros Oriental, Misamis Occidental, and South Cotabato. This publication compiles into one volume eight separate process documentation studies of the convergence experience in these eight LGUs.

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Health Sector Reform Technical Assistance Project I

CAPIZ (REGION 6) 1. Socio-Economic Profile Capiz Province has a population of 624, 469. It consists of 16 municipalities, 472 barangays and 1 city (Roxas). The province has eight government hospitals (one provincial, four district, and three community). Provincial and district hospitals are secondary health facilities. In addition to government health facilities, there are three private hospitals operating in the province. With a steadily increasing total population and population density, Capiz has the third largest population in Region 6, although the growth rate has declined considera-bly over the latter half of the past decade. In 1998, Capiz had the highest poverty incidence (59.7%) in Western Visayas.

Table 1. Selected Socio-Economic Indicators. Indicator 1990 1995 2000

Total Population (in ‘000) 584 624 648 Rank in Region 6 3rd largest 3rd largest 3rd largest Population Growth Rate 1.731 1.262 0.793 Rank in Region 6 2nd fastest 4th fastest 6th or slowest Population Density 221.8 237.2 258.4 1990 1994 1997 Human Development Index 0.451 0.525 0.543 Rank in Region 6 5th or lowest 4th of 5 5th of 6 Life expectancy at birth Not available 62.6 64.6 Rank in Region 6 4th of 6 4th of 6 School Enrollment Rate Not available 74.35 85.82 Rank in Region 6 5th of 6 1st or highest Real per capita income (at 1994 prices) Not available 9399 15206 Rank in Region 6 5th of 6 4th of 6 Poverty Incidence* 63.4 (1991) 59.8 Not available Rank in Region 6 Highest Highest

Source: "Time to Act: Needs, Options, Decisions," in State of the Philippine Population Report 2000, Commission on Population, January 2001, pp. 83-87; 11980-1990, 2 1990-1995, 3 1995-2000. *Philippine Human Development Report 1997. 2. Health Status The mortality rates for infants, young children and birthing women have slightly decreased over the first half of the past decade. The mortality rates are still high compared with national rates for the same period.

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Table 2. Selected Health Indicators. Indicator 1990 1995

Infant Mortality Rate* Rank in Region 6 Philippine IMR

64.11 3rd of 5 56.69

57.01 3rd of 5 48.93

Under- 5 Mortality Rate* Rank in Region 6 Philippine U5MR

91.96 3rd of 5 79.64

80.42 3rd of 5 66.79

Maternal Mortality Ratio* Rank in Region 6 Philippine MMR

215.07 3rd of 5 209.00

191.44 4th of 5 179.74

* Source: "Time to Act: Needs, Options, Decisions," in State of the Philippine Population Report 2000, Commission on Population, January 2001, p 88. Some bright spots can be seen in nutrition indicators. In terms of second and third degree malnutrition among children, the prevalence rates in Capiz are among the highest in Region 6 and seventh highest nationwide (1998 National Nutrition Survey). The prevalence of anemia among young children, pregnant women, and lactating women is lower than the national figures, however. Except among lactating women, the prevalence of vitamin A deficiency is also lower than the national rates.

Table 3. Nutritional Status, 1998 (from the 5th National Nutrition Survey). Indicator Capiz Region 6 (mean) Philippines (mean)

Children under 5 years Underweight Wasted Stunted Vit. A deficient & low Anemia Prevalence

36.6 6.6

41.4 13.4 21.7

39.6 9.9

37.1 40.9 32.1

32.0 6.0

34.0 38.0 31.8

Pregnant Women Vit. A deficient & low Anemia Prevalence

0

45.8

21.0 54.9

22.2 50.7

Lactating Women Vit. A deficient & low Anemia Prevalence

4.7

64.5

13.5 46.5

16.5 45.7

The leading causes of morbidity are still infectious diseases, which reflects the small gains in socio-economic and health development. On the other hand, the prominence of chronic diseases (such as pneumonia and heart diseases) and accidents among the leading causes of death suggest that the province has been also dealing with transition diseases brought about by urbanization and industri-alization. A. Leading Causes of Illness, CY 2000, from Provincial Health Office Data

Causes Total Cases Pneumonia 11,042 Hypertension 8,004 Diarrhea 6,708 URTI 5,524 Cough and colds 4,748

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B. Leading Causes of Deaths, CY 2000

Causes Number Pneumonia 526 Diseases of the heart 465 Hypertension 275 Cancer 225 Accidents 190 3. Background of Health Sector Reform In the second half of 1989, the Capiz Provincial Government launched the Capiz Integrated Health Services Development Program or CIHSDP. This was about the same time that the Health Sector Reform Agenda (HSRA) was also being launched by the Department of Health. Following were the processes that led to the establishment of CIHSDP. In August 1999, the province organized a Strategic Directions Workshop Integrat-ing the Health Care Programs and Services in the Province of Capiz and City of Roxas. This led to the creation of the Capiz Integrated Health Services Council. The Council is chaired by Capiz Governor Vicente Bermejo. Its members included then First District Congressman Mar Roxas, Second District Congress-man Vicente Andaya, Roxas City Mayor Antonio del Rosario, City Board member Antonio Arciga who chaired the Health Committee, Mayors’ League President Felipe Barredo, Capiz Medical Society President Cesar Yap, Ms. Judy Araneta Roxas, representing the NGO sector through the Dinggoy Roxas Health Program of the GRF, and Rotary Metro Roxas President Angelo Hidrosollo representing the civic club sector. The Technical Committee was chaired by Dr. Jarvis Pun-zalan (the Province Chairman) and the members were Dante Bermejo, Mark Ortiz, Annie Villaruz (GRF), and Dr. Malou Roldan. The Council approved the creation of an individual health card, which would be filled up by a barangay health worker (BHW) for each patient referred to a government physician. It was also envisaged that the mayors and municipal governments would focus on preventive and promotive health services while the governor and the provincial government would primarily support the curative and rehabilitative services. The concept of defining a catchment area for which the four district hospitals would be responsible for health care delivery was also born in this meeting. On November 3, 1999, the Council met with the Management Sciences for Health, which offered a USAID grant through the DOH-MSH Local Government Performance Program (LPP). The USAID grant was intended to promote the Integrated Family Planning and Maternal Health Program. Since sustaining the DOH programs beyond the life span of the grant was a major concern and the HSRA was perceived as a major strategy for strengthening local government capability, grant funds could be used through the DOH-MSH LPP to support the HSRA programs.

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MSH proposed to make Capiz a site for the package of interventions that would consist of the following: health insurance, hospital management or corporatiza-tion, district health systems and drug management. MSH proposed a cost-sharing scheme between the Capiz LGUs and PHIC through which the annual insurance premium of P1,188 per family could be funded. The scheme would allow LGUs to enroll their constituents’ families at initially low cost, but also envisaged that as the financial status of LGUs improved their share could be progressively increased. This scheme gradually would phase out PHIC support.

Table 4. Cost Sharing Scheme of the Indigency Program Premium, Capiz. Term of insurance LGU share of premium PHIC share of premium

1st and 2nd year 10% 90% 3rd year 20% 80% 4th year 30% 70% 5th year 40% 60% 6th year and onwards 50% 50%

On November 12, 1999, Governor Bermejo announced that PHIC would help finance a health insurance program for the indigent population and USAID would “fund organizational activities”. The Governor also announced a budget allot-ment of P30 million for Roxas Memorial Hospital, P12 million for Bailan District and P13 million for Mambusao District. This underscored the higher priority given to these three hospitals over the rest. The district hospitals of Bailan and Mambusao were quickly included in the first demonstration of the feasibility of the CIHSDP. Limited funds also dictated the prudence of first channeling whatever resources were available to these three hospital “showpieces.” On November 17, 1999, senior managers of PHIC, MSH and GRF met with the League of Mayors to introduce the “Medicare Para Sa Masa” Program of PHIC and its critical role in achieving the goals of the CIHSDP and the national HSRA. In a private meeting later in the day, Ms. Annie Villaruz of the GRF met with Dr. Berracochea (MSH), Dr. Reverente (MSH), Dr. Valera (PHIC) and Dr. Jazmine Simon to flesh out the immediate steps needed to operationalize the PHIC-LGU health insurance program for indigents. Included in the action plan were the following processes: • A Memorandum of Agreement to formalize participation in the Program

between Mayors and PHIC would be drafted. • Mayors would remit their share and PHIC would put in their corresponding

contribution to start the program. • A Means Test would be developed by January 2000. The test would be used

by mayors to identify and prioritize the Program beneficiaries among their in-digent constituents.

• Membership cards would be distributed by February 2000 and a general

orientation to the program would be conducted at this time.

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• BHWs would be provided with training materials for orienting the program beneficiaries to the terms and benefit coverage of their Insurance plans.

The Capiz Mayors readily agreed to consider joining the program. Social health insurance and the local health zones thus became the cornerstones of the CIHSDP. On March 22-23, 2001, the Health Sector Reform Convergence Workshop was held at GRF to implement and strengthen health sector reforms in Capiz through detailed action plans. The participants planned to achieve all of the activities within 2001. Subsequently, a Health Needs Assessment and Negotiation Work-shop was conducted on June 27, 2001. This resulted in the identification of the priority health needs of the province and a negotiation for funding and support with the DOH and the provincial government. Some of the programs that were given top priority were TB control, nutrition and the setting up of mother- and baby-friendly hospitals. In a Health Summit held on September 18, 2001, which was attended by Mayors, representatives from DOH, PHIC, NGOs, POs and the private sector, all stake-holders signed a MOA pledging support to the strategies, plans and year 2004 targets outlined by the participants of the Health Sector Reform Convergence Workshop. Moreover, the Provincial Task Force has been active in social mobilization and advocacy prior and during the health sector reforms. 4. Gains In Health Financing

4.1 Policy development activities Even before the launching of the HSRA, the provincial government had already identified PhilHealth as the principal means to support increased health care expenditures. Under Gov. Bermejo’s administration, the Provincial Government had allocated funds for the hospitalization of indigent patients enrolled in the MEDICARE II program of the province. The funds were channeled to main referral hospitals embedded within hospital networks – the provincial govern-ment’s version of the inter-local health zone (ILHZ). The Provincial Government covered the premiums of families who were enrolled in the Indigency Program. Currently, the Medicare para sa Masa Program has been expanded into the PhilHealth Plus Program, so called because it seeks to provide universal cover-age to both paying and non-paying indigent members of participating LGUs. It is an integrated health package consisting of inpatient and outpatient care and technical support. The inpatient curative package that will be provided by PHIC-accredited hospitals consists of the following: room and board, drugs and medi-cine, X-ray and laboratory, professional fees, operating room fees, and regular outpatient services. The outpatient benefit package to be provided by PHIC-accredited hospitals and RHUs consists of the following: primary consults; and, laboratory fees for chest X-ray, complete blood count, fecalysis, urinalysis, and sputum microscopy.

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Currently being developed is an expanded outpatient benefit package that will include health prevention services, health screening and health counseling are the following: visual screening with acetic acid for cervical cancer; regular blood pressure; measurement; annual digital rectal examination; anthropometric measurements; periodic breast examination in the clinic; smoking cessation counseling; and, dietary advice.

4.2 Policy implementation activities Release of PhilHealth Passports. The Indigency Program, re-named the Health Passport Program was launched on September 15, 2000. The President of the Philippines and the president of PHIC personally awarded the “health passports” to the beneficiaries. Selection of beneficiaries. A Minimum Basic Needs Survey was first conducted by barangay health workers. The Department of Social Welfare and Develop-ment (DSWD) screened the candidate families using a Means Test. The list of indigent families was then endorsed to PhilHealth for further and final screening. Health service providers in rural health units and hospitals also encouraged other members of the non-formal sector to be members of PhilHealth. In other places, barangay health workers were tasked with identifying the poorest of the poor population in the municipality. However, their methods were un-documented and not standardized. Some included those community members who were “active” in supporting barangay activities and who were willing to continue paying the premiums should the LGU default. To further document information dissemination activities at the community level, 11 hospital client-respondents at the Roxas Memorial Hospital were interviewed. Nearly all were aware of the Indigency Program in their local health zones and in other LHZs. None of the respondents actively sought for PhilHealth membership. Majority of non-enrollees did not know how to access the Indigency Program. All of the respondents wanted to be members. Some expressed concern at the availability of personal money for premiums, while others were willing to pay for their premiums. Nine of 11 respondents reported that BHWs, social workers, health service providers and the LGUs conducted social health insurance advocacy and promo-tional activities. PhilHealth promotional spots are also aired on radio programs. Fund sourcing. The Governor identified two major sources of funds against which the insurance premiums could be charged: the Provincial Development Fund of P46 million which is 20% of provincial IRA (P979 million) and the munici-pal IRA which ranges from P24 million to P46 million. Local government support. The Governor encouraged the Mayors to support the program by enrolling their constituents using their IRAs to pay for the premiums. The municipal mayors discovered that enrolling their indigent constituents could translate into votes and political support during election because enrolled indi-gent families do not incur out-of-pocket hospitalization expenses. Furthermore, mayors need not shell out money whenever an indigent constituent needed

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health care assistance. If the municipality is not enrolled in PhilHealth, the mayor gets the money to pay the hospital bills of its constituents from his social welfare fund. As of this report, only two municipalities – Dao and Pres. Roxas – have contrib-uted their own funds for the premiums, but the latest update during the feedback session held at the Provincial Health Office on June 21, 2002 revealed four municipalities to include Panay and Pontevedra. Dao finances 427 members while Pres. Roxas funds 385 members. Moreover, DOH representatives already made follow-ups to Local Chief Executives’ promises to provide counterpart for the Indigency Program premiums. Coverage expansion. At present, 526 families per municipality have been enrolled, with Dau and Pres. Roxas even planning to increase their enrollment to 1000. As of April 2, 2002 there are 8,699 indigent families enrolled by the provin-cial government and 812 families enrolled by the municipal governments in the Medicare para sa Masa program. There are 2,402 more families that will be enrolled this year since the provincial government will increase its annual pre-mium contributions from P1.2 million to P1.5 million. Although all 16 municipalities have enrolled members, the roster of participating LGUs that contribute premiums to augment the provincial government‘s funds has not increased over the past year. Interviewed providers voiced out the need to expand social health insurance coverage to include other members of the non-formal sector of the population who are unemployed and non-indigents. The mayor of Pilar was interviewed. Pilar enrolled 900 indigent families in the first batch of Indigency Program enrollment and 700 families in the second batch.

Table 5. Number of Enrolled IP Members by Municipality and Batch. Municipality 1st batch 2nd batch 3rd batch Total Provincial budget (in Pesos)

Cuartero 471 56 73 600 71,280 Dao 520 0 130 650 77,220 Dumalag 456 55 89 600 71,280 Dumarao 358 66 276 700 83,160 Ivisan 177 104 319 600 71,280 Jamindan 216 354 80 650 77,220 Maayon 489 19 142 650 77,220 Mambusao 423 82 145 650 77,220 Panay 411 115 174 700 83,160 Panitan 441 83 126 650 77,220 Pilar 496 0 154 650 77,220 Pontevedra 416 100 184 700 83,160 Pres. Roxas 339 187 80 600 71,280 Roxas City 1 308 157 465 276,329 Sapian 446 78 76 600 71,280 Sigma 425 23 152 600 71,280 Tapaz 0 95 45 140 83,160 TOTAL 6,085 1,802 2,402 10,205 1,499,969

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Release of capitation funds. The first tranche of the capitation fund of P300 per family was given by PHIC to the participating LGUs on March 30, 2001. It would be used to pay the RHUs for delivering the PHIC outpatient benefit package. Savings from the capitation fund could be used to pay salaries and purchase equipment and supplies. The quarterly release of the remaining tranches for 2001 have been delayed so that PHIC now owes the LGUs 3 quarterly releases for 2001 and two quarterly releases for 2002. Utilization of health services. Utilization of services has been modest for the first 2 years. Most members were new and were not fully aware of their benefits and responsibilities. Guidelines in processing their claims were also unclear to them. The learning impact of the orientation lecture made during health passport dissemination seems negligible. Many beneficiaries needed on-site assistance during claims processing prior to hospital discharge. PHIC regional staff had to be physically present in the hospi-tal to assist new members, guide them in claims processing and assert their benefits, particularly when hospitals were indifferent to their insurance status. The 11 interviewees reported enjoying hospitalization benefits from their social health insurance. Their benefits included the following: (a) payment of hospital bills depending on the illness and confinement period (covering medicines, accommodation, laboratory, x-rays, and other medical supplies); (b) reimburse-ment of drugs bought outside the hospital. Four of them made co-payments for charges in excess of PhilHealth coverage. The development of a monitoring tool to document LGU utilization of the capita-tion funds has also been delayed. No system is currently in place to routinely collect data on how much of the capitation funds are being used for health care and how much excess is spent for which items. Premium collection from paying members. Participating LGU officials are quite critical of PhilHealth’s slow pace in promoting social health insurance. This may be due to the inability to designate sufficient numbers of PhilHealth collection centers in the municipalities. LGU officials are considering an alternative solution to address this concern by designating LGU treasurers as collection agents. Accreditation of RHUs. PHIC has developed accreditation standards for the RHUs of municipalities that are participating in the PhilHealth Plus program. Since the PHIC outpatient benefit package includes the provision of laboratory tests and consults, RHUs must have basic equipment and manpower to deliver both services. Technical standards have been set in the areas of general infrastructure, equipment, and clinic staff. a. General infrastructure

• Large clear sign bearing name of RHU and indicating its participation in the Medicare para sa Masa program

• Generally clean environment

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• Adequate lighting • Adequate water supply • Covered segregated garbage • Examination room with provisions for privacy • Examination table with clean linen • Cleansing solution for clinical instruments

b. Equipment

• Binocular microscope • Reagents • Centrifuge • Glass slides and cover slips • Test tubes • Test strips for quantitative urinalysis • Applicator sticks • Heparinized test tubes • Capillets • Blood lancets • Counting chamber • WBC diluting fluid • WBC and RBC diluting pipette • Sucking tube • Decontamination solutions • Thermometer • Stethoscopes • Sphygmomanometer with adult and pediatric cuff • Tape measure • Weighing scale – adult and pediatric • Disposable gloves • Vaginal specula • Lubricating jelly • Disposable needles and syringes • Sharps containers • Sterile cotton swabs • Covered pan and stove • Office supplies • Recording and reporting forms

c. Clinic staff

• Physician • Nurse • Midwife • Medical technologist

Applicant RHUs are visited by the staff of the Accreditation Division of the Regional Health Insurance Office. Accreditation is good for one year and is renewable on the anniversary date.

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Two rural health units (RHUs) were accredited by PhilHealth in April 2001. They received P29,000 from the PhilHealth capitation fund in February 2002. Problems in maintaining accreditations have occurred. Accredited RHUs must have a physician and medical technologist for laboratory services. In the case of Pilar RHU, it lost its physician in the 1st quarter of this year when he went abroad. A visiting physician from Roxas Memorial Hospital and the neighboring RHU in another town within the ILHZ have been substituting for him. The Mayor is still requesting the Sangguniang Bayan for an item for the medical technologist in the regular plantilla.

4.3 Current issues and solutions Need to rapidly increase PHIC coverage. The local PHIC staff and the PHO have jointly launched advocacy campaigns targeting local chief executives and have initiated information dissemination activities to promote program enrollment. They also promoted capitation as an incentive to LGUs to start enrolling their members. The major hindrance perceived is the lack of financial support from PHIC. The PHO is meeting difficulties in requesting for financial and technical assistance from PHIC. Establish a PHIC desk in Bailan District Hospital to facilitate enrollment. This was approved by the Zone Action Team. However, PHIC could not provide the manpower. Difficulties in premium collection. The setting up of local payment centers has been suggested to PHIC.

Table 6. Health financing program updates, identified gaps and propositions.

Activities Expected output What has been done so far?

What are the reasons for the

‘gap’?

What are the recommended next

steps? 1. Health Passport Program (Y2)

Indigent Program: 1st batch Y1= 1st batch Y2 Municipal counter-part funding to enroll additional indigents

1st batch Y2: 8699 families 3 municipalities (Dao, President Roxas and Panay) provided counterpart

Not all LGUs have provided counterpart funding; most have promised to do so next year for the 2nd batch.

PHIC to do something about its' delayed billing (province not yet fully billed for Y1.)

2. Advocacy on Individual Paying Program (IPP)

Increase to at least 500 new enrollees per month to IPP from the current 200-300 per month.

Jan-Aug 2001 claims paid by PHIC to HPP recipients = P1.27 M Setting up of PHIC office at RMPH OPD Limited radio guestings

No funding released for advocacy by DOH. Nothing from PHIC either. No PHIC presence outside of city.

DOH reps to follow-up promises of mayors to provide counterpart. Full blast advocacy targeting informal sector once PHIC fixes its payment scheme involving postal offices. Direct release of funds to province to avoid delays in program implementa-tion.

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‘gap’?


steps? 3. Out Patient Benefits (OPB) implementation

Utilize Capitation Fund (CF) to implement OPB

CF released 3rd Q of this year to 11 municipalities = P496,896 2nd release by next week

Delayed release for 4th Q due to delayed billing and thus, delayed payment by province.

PHIC to improve ID production mechanism. PHIC to improve billing system for province. PHIC to take active role in monitoring of CF utilization, OPB implementation. Kinks in chest x-ray benefits should be ironed out. PHIC to provide some incentives for DSWD personnel, separate from the CF.

5. Gains in Hospital Reforms

5.1 The hospital network system of Capiz The Roxas Memorial Provincial Hospital is a secondary care level hospital with 181 employees, of which 108 are regular employees. It has 100 authorized beds, 80 of which are for non-paying “charity” patients. The hospital is accredited by PHIC and of the P4 million health care expenditures of the hospital, almost half is reimbursed by PHIC. This coverage is targeted to reach 84% in the immediate future. More than 80% of the hospital's annual budget goes to the salaries and benefits of its personnel. In year 2001, expenditures exceeded the annual budget, but were augmented by realignment of funds from trust funds (e.g. medicines, oxygen, ambulance, lab & x-ray fees, ultra sound fees, etc.). There has been no significant improvement in financial management, but hospital income has increased because of PhilHealth reimbursements. For example, patient costs could still not be calculated although the staff has been trained on costing and billing because of lack of computerization of hospital accounts. Mambusao District Hospital (MDH) is a secondary care level hospital with 108 regular and 59 contractual employees. It has 50 authorized beds, 45 of which are for “charity” patients. Bailan District Hospital is a secondary care level hospital. Details on this hospital can be found in the section on Inter-local Health Zones.

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5.2 Policy development and implementation. On hospital doctors and staff. Under the new Provincial Government administra-tion, most head of offices and other service providers were trained on Quality Service Improvement Program. At the MDH, the values orientation workshop was conducted to hospital person-nel (through the initiative of the Chief of Hospital) and staff meetings were held twice a month. Systematization of work and patient flow in the Outpatient Department. Interde-partmental meetings to standardize work processes, reduce redundancies and simplify tasks were conducted. Upgrading of personnel salaries. Training programs – the local administration is very supportive of conducing capability building for health service providers. Networking schemes. NGO volunteers from Gerry Roxas Foundation comple-menting hospital staff in providing services. Volunteer consultants and health workers were recruited (partly through the Gerry Roxas Foundation) and referral networks with other hospitals were formal-ized to make up for lack of specialists (e.g., Bailan District Hospital refers to pathologists in other hospitals for autopsy services). Staff items from the regional and national levels. Capiz had recommended and requested training for dental/oral surgery in the Philippine General Hospital. On hospital facilities. In the case of RMPH, Physical facilities enhancement – upgrading of radiology and reproductive departments, physical environment is clean and orderly, adopted the 5S and the Quality assurance program committee is very active. They started a program to improve the parking area, conducted quarterly evaluation and gave awards at the end of the year. In the case of MDH, Rehabilitation program for the hospital buildings, beginning with the Outpatient Department building in the 2nd quarter of 2000. Signages were provided to guide patients. Upgrading of RMPH facilities and equipment (e.g. x-ray equipment from Makati Medical Center, television sets from St. Lukes Hospital for clients/patients waiting especially at the OPD). In MDH, old x-ray machines were acquired and rehabili-tated with financial support from the LGU. LGU support has increased for the provision of hospital needs, such as labora-tory equipment, hospital supplies, etc.

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Formations of mergers or alliances. A complementation program to share manpower, laboratory and equipment with deficient district hospitals is in prac-tice. Formations of mergers or alliances. On hospital finances. The MOOE budget for 2001 was P2,453,900 while salaries was P13, 635,473. Funds are retained in the hospitals for ambulance, X-rays and laboratory tests. The PHIC reimbursements for operating room, supplies and drugs did not go to the hospital, but to the Provincial Governor Office. Users fee utilization in Capiz is fixed, not graduated. In Bailan District Hospital, the DOH has been helping them through the Health Development Fund. For example, Bailan will receive P2 M for the rehabilitation of their Infectious Disease Building. The Governor also gave them money for the construction of a chapel and Ms. Roxas gave P2 million for facilities upgrading and supplies. On hospital management. Policy directive from the governor, which separated the Provincial Hospital from the Provincial Health Office in terms of fiscal man-agement, administration and operations. Adoption of systematic hospital billing and collection procedures after MSH HSRA-TAP provided technical assistance. Innovative financing schemes through PhilHealth Indigency Program, which increased hospital income. Hospitals can better recover costs of caring for indigent patients from LGUs. Systematization of drug procurement, inventory, and distribution processes to increase the variety and availability of essential drugs. Drug companies were also approached for donations of drug samples. Implementation of new policies covering ambulance use, number of patients and patient flow. Province-wide policies in drug procurement and distribution were adopted to facilitate delivery and payment for drugs. Creation of the Provincial Therapeutics Committee and the Provincial Drug Formulary to standardize drug selection and ensure appropriateness to local disease burdens. Adoption of parallel drug importation, and the PHO has been into pooled procurement. At the pharmacy level, drugs were sold on credit to indigent patients. Creation of a grievance committee in Bailan District Hospital to accept and act on hospital service complaints.

5.3 Program outcomes On hospital doctors and staff. Hospital staff members have better morale with more compassionate attitudes towards hospital patients. Less absenteeism among hospital personnel.

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On hospital patients. More efficient processing of ambulatory care patients led to shorten waiting times. Based on the client exit interviews conducted by the quality assurance program committee, higher satisfaction with the quality of service provided by doctors, nurses and other health service providers has been reported. Physicians practicing in Capiz Emmanuel Hospital reported a reduction in the number of outpatient consults and procedures over the past year and more importantly, a reduction in the number of indigent patients who are forced to seek confinement only to abscond later. They attributed this trend to improvement in the image and performance of RMPH. On administration of hospital. Increased turnover of drugs in the pharmacy, more regular replenishment of drug stocks, shorter delivery times and reduced fluctua-tion in supply through shorter waiting times for drug delivery. The pharmacy now has wider range of coverage with more stocks of essential drugs Remedial measures have been instituted by the Bailan District Hospital griev-ance committee to address complaints On financial viability of hospital. Cost recovery, although still inadequate, has been improved by the institution of a better billing and collection system. The hospital has increased its collection although the new billing and collection system has not yet been implemented due to lack of computers. Increased hospital income from PhilHealth; the cost of caring for indigent patients could be recovered by the Indigency Program so that LGUs can now pay their bills. Ninety percent (90%) of hospital income is retained for hospital operations. Of the programs and schemes in RMPH, the following had the greatest impact on increasing hospital revenues: upgraded hospital equipment like x-rays and laboratory services; availability of drugs and medicines in the hospital pharmacy; improved/better services provided by hospital staff; and, cleanliness of hospital premises. Of the programs and schemes in MDH, the following have made the greatest impact on increasing hospital revenues: laboratory and radiology services; availability of essential drugs and medicines in the pharmacy; and, the 5S program.

5.4 Areas for improvement Service expansion. RMPH is technically a secondary hospital, although it has some tertiary hospital capability. The governor, though, is reluctant to allow it to apply for tertiary hospital status, possibly because of the financial burden of supporting its expanded operations. The district hospitals are just as reluctant to expand its services, concerned that its facilities could not be improved in the

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immediate future. For example, only minor surgical procedures are performed in Bailan District Hospital; although it has operating room facilities for Caesarian section, most of its deliveries are normal and surgical deliveries are referred in nearby private hospitals. There is a general hesitancy to grant hospital privileges to private specialists and sub-specialists, which can augment its services. This is less marked in RMPH where ENT surgeons and ophthalmologists can perform surgical procedures than in the district hospitals. Governance. Hospital administrators are marked by commitment, compassion and willingness to innovate and learn. Their abilities to network with potential providers of technical and financial resources are being honed by the current administration and some concrete proof of their abilities to raise funds can already be seen in all of the hospitals. Facilities are being improved, rooms are being renovated, structures are being added, and the inventory of hospital devices and drugs is being augmented. More importantly, hospital personnel are being engaged and challenged to improve the quality of the services they pro-vide. Morale is high. However, hospital administrators still need to learn how to base their policies and decisions on sound administrative, financial and medical information. Quality assurance programs have not gone beyond 5S and measuring patient satisfac-tion. The ability to measure individual performance and the bases to reward the staff is lacking. Systems to track staff load, competencies, and training needs have not been worked out. Systems to prevent and identify medical errors, to improve patient and staff safety and to alert the staff on adverse drug reactions and “near misses” are not in place. Systems to measure the appropriateness of clinical practice and utilization of hospital resources and then to institute correc-tive measures and act upon the results of these measurements are still in their infancy. Perhaps skills in conflict resolution, negotiation and confronting medical errors need to be developed. Information management. The level of documentation is poor and even patients’ records are inadequately filled up. Some prescriptions are not in generic form. There is also scanty documentation of financial performance, which can be used to track, improve and project hospital sustainability through time. There is a tendency to equate information management with computerization. While the latter would certainly facilitate the use of data for decision-making, developing a culture of evidence surely can begin with paper-based systems in which each piece of information has a definite contribution to policy making. Private-public sector partnership. Although the hospital administrators recognize the potential role of the private sector in improving their financial status and quality of their services, the issue of partly or completely privatizing the hospital is still a major sticking point. The governor is hesitant to endorse the corporatization scheme because in his view it will certainly cause insecurities among health service providers. Before this is implemented, the question of how much will be subsidized by the private sector needs to be answered. How much will go to equipment and other support for hospital operations? Moreover, medical staff turnover is rapid and tighter control of drug quality.

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According to one district hospital officer, corporatization of the hospital is an “irritant”. The informant feels that the private sector will just harvest the goodness that was sown by the public sector. As he said, “iba ang nagbayo, iba ang nagsaing at kumain” ["someone else profited from your labor"] thus it would be unfair. “Why give the money of the people to be handled by a corporation? Addressing public health needs will just be unduly delayed and immediate decision further compromised.” On the other hand, private physicians in Capiz Emmanuel Hospital point out that the fear of privatization stems from two main features of the culture of govern-ment service: the lack of accountability and the security of tenure. They pointed out that once government hospitals are privatized and the staff are no longer protected by the Civil Service law, many incompetent or lazy hospital personnel might lose their jobs. Improvement of financial viability. Several administrators have expressed the uncertainty of financial survival. “Paano kung iba na ang Governor at mawala na ang mga Roxas?” ["what if there's a new governor and the Roxas family is no longer around?"] is a question they ask frequently. Although the Governor sanguinely reassured us that the culture of excellence and compassionate service has already been well institutionalized, the possibility of reversing the tide is still too real to most people. About 60% to 70 % of the income of RMPH is from PHIC reimbursements, making it vulnerable to payment policy changes of just one payor of care. For example, whenever PHIC re-classifies patients’ claims from intensive to ordinary, the hospital loses money because it cannot recover anymore the exemptions given to PHIC members. The other major financial arrangement is with the LGUs using their capitation funds to pay for the hospitalization of the members of the "Medicare para sa Masa" (Medicare for the Masses) Program. No increase in budget for the last three years, experienced deficit but hospital operations sustained with limited and inadequate allocation. As mentioned, the trust funds set up for the procurement of drugs under the PDI scheme and aid from the DOH Hospital Development Program for augmenting equipment and supplies are also new but small, and still unreliable sources of funds for hospital operations. The district hospital directors are not foreseeing a more sustained source of funds, such as private wards and user fees. For example, there are no immediate plans to open a private ward in Bailan District Hospital because the concern over private patients using up government funds and the administrative burden of seeing to it that this does not happen weighed more than the potential income that a private ward may yield. The director of Mambusao District Hospital expressed his wish that the pre-devolution system (hospitals be back to national DOH) be brought back because the old system encourages “professional dealings with different levels of health

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offices, more avenues for capability building and promotions and synchronized health activities of the entire district.” Likewise, a municipal health officer had similar misgivings. He prefers the old system, but since “they are already in a new system which they are trying to improve and live with, going back to the old system will create another unwanted upheaval.” He pointed out that the most difficult part is working without resources. The devolution only transferred the “holder of the purse string” to another actor. If before it was the central office (DOH) and the “oppressor was the provincial health officer” now it is the governor and mayors.

5.5 Current issues Difficulties in obtaining Sentrong Sigla certification. Doctors are having difficulty obtaining continuing medical education seminars as required by Sentrong Sigla. The UP-PGH circuit course has been identified as an alternative to DOH-sponsored CME courses. Fiscal autonomy. The Governor has allowed hospitals to use their incomes in spending for their needs, except for food and accommodation. Hospital incomes go to a trust fund.

Table 7. Hospital Reforms Updates, Identified Gaps and Propositions.



‘gap’?


steps? Quality Assurance All hospitals are

Sentrong Sigla accredited

RMPH already SS certified QA, 5S training CME in connection with UP-PGH Circuit Courses Referral system guidelines already formulated Hospital networking with St. Luke’s and Makati Medical Center

Other hospitals with equipment, manpower and processes deficiencies

Attention to be focused on achieving SS accreditation for hospitals. Follow-up steps should be initiated to institutionalize referral system.

6. Gains in Drug Management Systems The Governor noted that drug purchases account for 65% to 75% of total hospital procurement. Lowering the costs of drugs while maintaining their quality there-fore made a lot of sense to him and explains the ready political support, which drug management reforms have enjoyed in Capiz. With the politically sensitive issue of maintaining a constant supply of cheap and effective drugs, several drug management policies were created, including bulk

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bidding, parallel drug importation, and additional funds from the provincial government to refund the cost of drugs given to for non paying indigent patients.

6.1 Creation of drug formularies The Provincial Drug Formulary was created by the Provincial Therapeutics Committee (PTC) with the Provincial and District Hospitals. The Formulary was intended to assemble a list of essential drugs on which the Chiefs of Hospitals could base their purchase requests to the Provincial LGU for parallel drug importation and pooled procurement. The essential drugs list for bulk bidding was finalized in April 2002. The Provincial Therapeutics Committee is composed of the Provincial Health Officer and representatives from the four district hospitals. Drug selection is based on the top 20 conditions managed by the district hospitals. The Hospital Therapeutics Committee of Zone 1 is composed of the pharmacist, dentist, chief of district hospital and an internist of the Bailan District Hospital. The district hospital chief’s functions are purely ministerial and he allows doctors to choose the drugs based on the Philippine National Drug Formulary (PNDF). The Committee deleted anti-malarial and anti-schistosomial drugs. It meets once a month while the ILHZ Board meets quarterly. In case the requested drug is not available, it is bought through emergency purchase. There is no budget for drugs; revolving funds are used to pay for drug procurement as well as laboratory, x-ray supplies, and the ambulance service.

6.2 Parallel drug importation Policy development. During a meeting between Dr. Jarvis Punzalan and Dr. John Wong of MSH, the former asked the latter how Capiz could join the parallel drug importation (PDI) scheme of the government. Dr Punzalan was subse-quently referred to BFAD Deputy Director, Kenneth Hartigan-Go. The policy of parallel drug importation was then conceived as a strategy for providing afford-able drugs to the indigent patients who were enrolled in the Health Passport Program. Dr. Punzalan then approached the Governor for funding and promised that PDI would lower the prices of drugs. He assured the governor of votes in the coming elections from beneficiaries who are asthmatics and cardiac patients. This was a clear example of how health development initiatives could be promoted by framing them in ways that are understandable and useful to political leaders. The following guidelines governed the sale of parallel imported drugs: • The maximum mark-up is 30% of purchase price. • Drug sales were on a strictly cash basis only. • Valid prescriptions are required for every drug sale.

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• The maximum number of drugs that can be bought is one month’s supply for nifedipine, glibenclamide and salbutamol or a week-full course of cotrimoxa-zole.

• Income from drug sales is deposited in a special trust fund and subsequent

purchases are charged against this fund. These guidelines ensured that prices were standardized and mark-up was not excessive, that costs from drug purchases could be recovered, that drugs would not be resold in other drug outlets or hoarded, and that funds for drug purchases could be sustained. The drugs selected were those that were used for chronic diseases or for common acute infections. This assured that patients with com-mon medical conditions, particularly those who need maintenance supply of medications would be most benefited by price reduction. Another assurance is that the drugs selected would have a constant market. Policy development did not involve much consultation with stakeholders. The need to capitalize on the political exigencies that were deemed favorable to drug management reform seemed to have overruled lengthy consensus building. By and large, however, the technical expertise of the health sector managers, particularly the Assistant Provincial Health Officer contributed a lot in crafting drug policies that were feasible, enforceable and encouraged rational drug use. The provincial government opened a trust fund for parallel drug importation. Seven drugs were purchased from India. Four drugs – nifedipine (Adalat), glibenclamide (Daonil), cotrimoxazole (Bactrim) and salbutamol (Ventolin) – were purchased by the Provincial Office through the Philippine International Trading Corporation of the Department of Trade and Industry after drug samples passed testing by the Bureau of Food and Drugs. The budget came from funds for the operationalization of the inter-local health zone amounting to P500,000 and another same amount from the 20% develop-ment fund of the province. Five drugs are currently available in all District Hospitals located in the center of the ILHZ and in the Provincial Hospital: Bactrim, Adalat Retard, Ventolin Inhaler, Daonil and Neobloc 100. The initial delivery was made to the pharmacies of the central hospitals of the 5 inter-local health zones on March 2001 and was completely sold in less than one month. Subsequent deliveries showed the same trend. After 3 months, gross sales reached P200,000 and net profit was P46,000. The table below shows the marked difference in retail prices at the government hospital pharmacy and a private pharmacy. A comparison of retail prices between parallel imported drugs and regularly sourced drugs (see box) shows the considerable price reduction afforded by PDI.

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Comparative Drug Price Drug Name PDI price Regular price

Nifedipine 30 mg tab 5.90 34.15 glibenclamide 5 mg tab 3.15 7.75 co-trimoxazole 800/160 mg tab 5.20 24.00 salbutamol 1000 mch inhaler 198.00 294.75 At the Bailan District Hospital, PDI drugs are available. A therapeutics committee consisting of an internist, the Chief of Hospital, pharmacist and dentist has been set up. There is no budget for drugs, only a revolving fund. If the patient cannot buy a drug, financial support is asked from the Mayor who gets it from the Social Welfare fund. About 20% of the IRA goes to health, which covers drug and salaries. The Assistant PHO reported that the potential for lowering drug prices is great. For example, quite serendipitously, he was able to convince a medical represen-tative of a multinational drug company to sell the provincial government branded cefuroxime for P150 while it was being regularly sold at P450 elsewhere. Appar-ently, the quotas of medical representatives are in number of units sold and not drug sales. Hence, selling drugs at a loss seemed justified if they could win the provincial purchase. This shows that multinationals are capable of lowering their drug prices for certain drugs. Other distributors of branded equivalents of PDI drugs are willing to lower prices, but not as low as the PDI drugs. Hospital clients’ perspectives. A survey of 106 hospital clients at the Roxas Memorial Provincial Hospital found that information about the parallel imported drugs came from doctors (52%), radio (26%) and friends/relatives (21%). The prescriptions came from government (59%) and private physicians (41%). First time buyers (49%) and repeat buyers (93%) found the drug effects to be similar to other locally sold drugs. About 45% had favorable comments about the scheme. Drug price effects. Prices have not really gone down because only hospitals can avail of the scheme. Thus, drug prices outside for the same drugs remained the same. The Chief of Bailan District Hospital feels that prices have been kept constant among the municipalities and RHUs in the ILHZ. Some drugstores simply stop selling the branded equivalents of the PDI drugs until the supply of the latter is exhausted. This causes a fluctuation in drug supply and prices, which imperils reliable access to drugs by the indigent population. Many patients still prefer branded drugs like Neobloc and were forced to buy at regular prices when the PDI Neobloc ran out of stock. Sustainability. Cost recovery is also problematic even if drug sales are strictly on cash basis. This is attributed to the medication needs of indigent patients who could not even afford to buy the PDI drugs, but should be filled. Although profits from the sale should augment the fixed P3 million principal, funds for replenishing drug stocks might be reduced by bad debts incurred by hospitals. This threatens the constant availability of drugs and the steady demand for them. Since the drugs under PDI are sold like consignment drugs, they must be paid in cash at once. This poses a problem for the PHIC patients whose bills are to be reim-

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bursed and not paid at once. Some hospitals buy their own PDI drugs for the PHIC patients, so that drug reimbursements from PHIC are then credited back to the hospital. Drug supply and availability. Delayed drug delivery is one of the current prob-lems, although government bureaucratic processes may largely account for this rather than the lack of money to buy drugs. The Assistant PHO placed great importance on this critical problem. Delivery is usually delayed for almost three months and this may be due to the delay in the drug screening procedures of BFAD. Private hospitals and pharmacies are also adopting parallel drug importation with Indian drug companies. This could erase whatever advantage public hospitals have in terms of drug price competitiveness. If the market for regularly priced drugs shrinks, private drug companies might reduce their stocks, thus decreasing the overall range and availability of drugs. This would adversely affect consumers who do not have access to the parallel imported drugs. Driving out private drug companies would reduce competition and encourage the production of poor quality drugs. Reasons for the inadequacy or undersupply of drugs in hospital pharmacies include the following: the drug supply is good for only 30 days; and, fast turnover of drugs since neighboring areas/provinces purchase drugs in Capiz (the prov-ince is the source of cheaper and quality drugs). Drug quality concerns. Lack of confidence among providers and the general public on the quality of government-purchased drugs is a constant source of concern. BFAD certification requirement delays delivery of parallel imported drugs. The hospital hopes that BFAD can offer a training workshop to make them capable of testing the quality of their generic drugs. For example, a rapid test, such as a dissolution/ disintegration test, physical weight or a bioassay test can be conducted. Guideline for choosing drugs should also be established. Lack of facilities and skills for basic drug testing creates persistent doubts about the quality of parallel imported drugs. The provincial government has set up a special committee that checks on the quality of PDI drugs in addition to the routine checking of quantity of drugs purchased. This is perceived as an important measure to compensate for the slowness of the BFAD bioassay processes. Hence, the Drug Inspection Commit-tee was organized and functional in all hospitals to ensure quality of purchased drugs. As a result, training opportunities are being explored to enable the hospitals and the province to employ simple quality checks to screen out inferior drugs. They requested training on basic drug testing. Two of the 3 municipal health officers in Bailan ILHZ do not have confidence in the quality of generics. One physician allegedly left a capsule form of a generic antibiotic together with another branded preparation. The next day, the latter has dissolved but the generic form was still intact.

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Safeguards against potential abuse. Although prescriptions are required for every drug sale, there was no way to ensure that even those who can afford regularly priced drugs were not availing of the PDI drugs. Worrying too are unconfirmed reports of PDI drugs being resold in drugstores that are partly owned or operated by government hospital staff. Program issues. The support of physicians must be gained through assurance of high drug quality. Concerns about the quality and safety of Indian drugs persist and abet the public perception that they are “second-class” medicines. Physician involvement in drug selection and in other policy matters should be routinely sought. Unless providers “buy in” to the program, the utilization of these parallel imported drugs might remain largely limited to inpatients and to a small proportion of the poor. Information about the program must be widely disseminated through media to create client demand. Constant monitoring of drug supplies and utilization is required to prevent running out of stocks. Delayed drug delivery is one of the current problems and early reordering can help provide adequate lead-time, so that drug supplies and costs do not markedly fluctuate.

6.3 Pooled procurement Policy development. Policies for pooled bidding and procurement have been developed for drug purchases by the government hospitals. The Governor was able to find P3 million for the project as a “single shot” deal, that is, future bulk purchases should be made from revolving funds set up from the P3 million grant. The Governor did this by an intricate process, which ran this way: about 20% of the IRA goes to health. There is a projected IRA and actual IRA. The projected IRA is usually set higher than the actual. The difference between the two is provided by the Governor and is given to the municipality, which wants to join pool procurement. The P3 million grant is estimated to cover 65%–70% of the total drug requirement of the province. The local PCSO has also offered funds for bulk purchases of drugs. Hospitals in each ILHZ can join the bulk bidding by submitting their priority drug list to the Provincial Office. Only BFAD accredited suppliers are allowed to bid. Policy implementation activities. As of this report, the provincial government has not yet made any bulk purchase. Some ILHZ staff worry that bulk purchases may ruffle the “mayors.” Mayors prefer different drug suppliers. A district hospital officer feels that drug procurement will just create an irritant for the mayors. He has decided not to enforce this method in order to avoid losing their cooperation. Program issues. Differences in drug requirements between RHUs and hospitals. Questions on efficacy and safety of drugs procured through bulk bidding could discourage physicians and consumers from using them.

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The lack of systems to routinely monitor drug safety prevents regular quality checks on drugs purchased by bulk bidding. The hospitals do not have adverse drug reaction monitoring systems. However, Dr. Albania, the Officer in charge of RMPH said that the Therapeutics Committee has an adverse drug reporting system. Reports are received by the nurse who gives it to the doctors. In turn, the latter submit it to the Therapeutics Committee and the BFAD representatives. However, no feedback is given by BFAD. The most recent event they reported involved cefotaxime, which caused cyanosis in an infant. Drugs under PDI are considered not essential by the district hospitals.

Table 9. Drug Management Systems Updates, Identified Gaps and Propositions.



‘gap’?


steps? 1. Parallel Drug Importation

Procurement of affordable, high quality medicines

Budget: P500T - DOH P500T - LGU Two deliveries of 4 medicines so far this year; third procure-ment on the way Guidelines for program implementation already formulated.

It takes 3 months for PITC to deliver to province. There’s a clamor to increase choices of drugs for PDI. Private pharmacy outside hospitals. PDI for Medicare patients.

PITC to stockpile own stocks of PDI so procurement and delivery process can be shortened. Expand program to involve private sector. Province to consider program as an economic enterprise.

2. Pooled Procurement

Government hospitals to pool together annual procurement plans for pharmacies

Annual procurement plans already prepared.

Funding support to implement program.

Province to provide an initial infusion of funds to jumpstart the program.

7. Gains in Inter-Local Health Systems

7.1 The Inter-local Health Zones The Inter-local Health Zones of Capiz are clusters of LGUs within the catchment areas of its five major hospitals. Each zone is similar to the district health system during the pre-devolution era, which the Capiz government wanted to reinstate as a means of bridging the gap in health care delivery between the provincial hospital and the rural health units.

Table 10. Identified problems in the local health system. Identified problems Proposed solutions

Non-functioning ILHZs Organize and formalize ILHZs Non-functioning local health boards Strengthen advocacy by DOH to local chief executives Inadequate management information systems technology

Purchase computers

Inadequate infrastructure support Request for LGU and foreign funds Inadequate manpower training Conduct training on QSIP and computer use Inadequate financial support to BHWs Allocate funds for BHW year end incentives and

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honoraria Inefficient reporting CIHSDP Partisan politics Organize ILHZs Inadequate role clarification among ILHZ stakeholders Organize ILHZs and referral system

Plans were developed to address four major strategies, namely: a. Upgrading of facilities

• Procurement of equipment for hospitals, RHUs and BHSs • Rehabilitation of hospitals, RHUs and other facilities • Construction and expansion of facilities for Sentrong Sigla certification

b. Advocacy and networking

• Orientation meetings for LGUs, NGOs and people’s organizations • Reorientation of Local Health Boards (LHBs) • Consultative workshops with ILHZ members for planning and policy for-

mulation

c. Capability building and organizational strengthening

• Synchronization of inter-sectoral activities • Needs assessment • Continuing computer training

d. Monitoring and evaluation

• Quarterly meetings of ILHZ Board • Documentation of ILHZ activities • Multi-sectoral forums and dialogues among stakeholders

7.2 The organization structure of the ILHZ

The ILHZ Management Board is the policy making and coordinating body of the ILHZ. It is composed of local executives representing the provincial and partici-pating municipal governments, the Provincial Health Officer, the Municipal Health Officers of the participating municipalities, the Chief of Hospital, the president of the Association of Barangay Chairmen and non-voting members from represen-tatives of PhilHealth, NGO, and the Director of DOH Center for Health Develop-ment Office VI. The mayor of the municipality where the district hospital is located chairs the Board. Within each ILHZ, LGUs collaborate with other government and non-government organizations in promoting health through sharing of resources and consensus building. The five inter-local health zones (ILHZs) are Bailan, Roxas City, Mambusao, Tapaz and Dao. Zone Management Boards oversee and monitor the implementation of the policies and programs of their respective ILHZ. The Board takes over the functions of the Local Health Board, which has not met for

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the past two years. It also liaises with the CIHSC and manages the provision of local resource to provide counterpart to external resources raised by the Council. The ILHZ Action Team implements the inter-zonal activities outlined in the Integrated Health Work and Financial Plan prepared by the ILHZ Management Board. It is composed of the Chief of Hospital, the Municipal Health Officers, medical officer and chief nurse from RHUs and DOH representatives. It assesses health needs, plans programs, defines clinical services and develops manpower-pooling systems within the ILHZ. The Action Team meets every month and the Board meets every three months. The honorarium for this meeting is P300 per month per day with an additional P6,000 for the officer-in-charge. The view from Bailan. The Bailan district is the pilot site of the ILHZ. It is made up of the municipalities of Pontevedra, President Roxas, Pilar and Maayon. The total population is pegged at 206,081, which includes part of Panay, Panitan and Jamidan. The latter has the biggest landmass, but it is mostly uninhabited forest. The Bailan District Hospital used to be the Capiz Provincial Hospital. It was established in 1975. A Rural Health Unit in Bailan ILHZ serves 10,000 to 20,000 population. The Baranggay Health Station serves a population of 2,000 to 3,000. So far, the District Hospital has availed of funds for rehabilitation of facilities. This is the direct result of implementation of the key strategies of the HSRA Convergence Workshop in March 2001. Its Medicare ward of 15–20 beds has increased its occupancy rate to 86% to 90%. It has no budget for drugs. Drug procurement is based on a revolving fund. The hospital charges minimal fees for services, mainly to change the “dole out culture” among its clients. Its chief believes that clients value more of the services when they pay for it, no matter how small the price. The goals for quality management are based on the Sen-trong Sigla criteria. Doctors are now the hospital managers. Unlike before, it was the administrative officer who acted as “hari-hari” or manager of hospital. The MHO reaches the clients through a regular radio program of Bombo Radyo. Through the program, he shares and airs health advice weekly. The local health board is functional. It facilitates budget allocation, reviews and endorses policies, guidelines and health related programs. Likewise, a grievance committee is created for the ILHZ. This body provides the venue where mayors among themselves can air their concerns and problems. The need for office space has been communicated to the DOH. A proposal has been prepared and submitted to the DOH representative. The activities of the zones are integrated. Mayor Tumlos of Bailan has been very supportive. The hospital director recognizes the help of NGOs. However, he feels that NGOs have their own hidden agenda. They are expected to help the health sector if this would be advantageous to their cause. Religious groups have also assisted a lot in improving the quality of health services. BHWs are particularly effective in their roles as frontline service providers at the grassroots level. They receive some honoraria from the barangay depending on the IRA.

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Some of the important changes that have been made on health operations are the following: • Strengthening of referral system • Sharing of resources • Manpower complementation, resources and responsibilities (e.g. now they

have no problem on medico legal) • Medical doctors have additional honorarium from requesting LGU • Better working and personal relationships among doctors, local chief execu-

tives (LCEs) and health service providers in the local health zone • Clearer responsibilities of every unit (e.g. district hospital) • Reduction of drug price in Provincial and District Hospitals, but not in RHUs

and BHSs Among the most important achievements of the Bailan ILHZ is the establishment of a functioning patient referral system. Patients can be properly triaged and referred at every health care level by clearly delineating the cases that can be handled by barangay health stations, rural health units, municipal, district and provincial hospitals. As more primary cases are handled at the community level, hospitals ultimately would be busy only with patients who really need secondary and tertiary care. Rapidly falling monthly referrals to RMPH have been docu-mented for the second half of 2000. Furthermore, patients who bypass secon-dary hospitals in favor of the provincial hospital can be channeled back to improve their finances. Medico legal cases are referred to hospitals with appro-priate personnel. This minimizes complaints. Another example of resource sharing is the borrowing of the ambulance. Referral guidelines for the ILHZ have been adopted. The referral system flows as follows:

Barangay Health Station Rural Health Unit District Hospital Provincial Hospital A referral slip is issued to the client by the health service provider of the barangay health station (BHS) for the rural health unit (RHU). District hospitals (DH) receive referrals from RHUs. From district hospitals clients are referred to the provincial hospital. After providing the service to the client, the referral slip is returned to the referring health facility. The view from Pilar. The mayor of Pilar was also interviewed for validation. Pilar has been a beneficiary of grants from the United Nations Population Fund (UNFPA) and the Japanese Organization for International Cooperation in Family Planning (JOICFP). It is the pilot municipality of the Early Childhood Develop-ment Program (DSWD). Inclusive of the program are distribution of medicines and construction of barangay health stations. It was the pet program of the

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Governor and Ms. Judy Roxas. There is a Medicare Community Hospital, which is under the provincial LGU (it is not Sentrong Sigla certified). The doctor in-charge of the hospital has a problem in coordinating with the Mayor. Some clients are not satisfied with the services provided in said facility. The LGU also has a program for drugs/medicines assistance in the office of the Mayor. It has not availed of the pooled procurement of drugs. Mayors disagree with pooled procurement done at the provincial level because they have their own drug suppliers. An LADP scholarship for Mayors sponsored by the DILG has developed the self-confidence of Pilar Mayor. Examples of resource sharing abound. The acting Pilar MHO is being “bor-rowed” from one of the rural health physicians of President Roxas to make up for the recent departure of the Pilar MHO. Ambulances are also shared. The ILHZ has also attracted external funding, specifically for the reproductive health and TB programs of the Zone. Politically, the ILHZ has enhanced cooperation and coordination among municipalities. It has increased the clout of the Zone Board in the CIHSC because it now represents a larger constituency. The mayor also noted that with the initiation of the Bailan ILHZ, the municipalities have obtained several important benefits: • The initiation of the PHIC Indigency Program resulted in faster processing

and reimbursement of claims. • The adoption of parallel drug importation with consequent reduction of drug

prices in hospitals. • Rehabilitation of small hospital. • Upgrading of barangay health stations, of which 2 BHSs are Sentrong Sigla

certified. • Strengthened cooperation and complementation among members. Every-

body cooperates during their local health zone meetings where they level off issues and concerns.

7.3 Current issues

Role of NGOs. The role of non-government organizations is one of the issues raised in the inter-local health systems. This has not been clear by health sector reform advocates and implementers. Common health fund. The common health fund for the inter-local health zone is also another identified concern of stakeholders. Like in other convergence sites, this matter is relative to common health fund management and utilization.

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Table 11. Inter-local Health Systems Updates, Identified Gaps and Propositions.



‘gap’?


steps? Inter-Local Health Zones Organization

Five (5) ILHZs to be organized

Five (5) ILHZs management structure organized MOA signing done involving all LGUs of the province

No doable models for sharing of resources

Institutionalize referral system within ILHZ. Collation and analysis of reports and other health data at ILHZ level for faster action. Operationalize ILHZ offices.

8. Gains in Public Health Reforms Although not a focus of the MSH-HSRTAP activities, public health programs are expected to improve by strengthening the health system’s performance. In Capiz, initial plans included activities for the Rabies Program as part of the Panay Island’s rabies-free campaign. However, not much progress has been made in this regard, partly because there is lack of manpower to pursue all the HSRA activities. Through parallel initiatives, reproductive health with UNFPA, nutrition with the Early Child Development Program (ECD) and the TB Programs through World Vision have ongoing interventions that are building upon the strengthened local health system structures and the cohesive provincial government health pro-gram. An important public health intervention is the accreditation of rural health units with the Sentrong Sigla Program. This has stimulated the upgrading of facilities and revitalized local health staff. Sixteen SS certified RHUs are geared towards PhilHealth accreditation to qualify as service providers of the PhilHealth Plus Program for outpatient benefits. Only Dumarao RHU is not Sentrong Sigla certified. The next challenge will be the maintenance of standards through constant monitoring and assessment. The allocation of funds in the annual budget of Roxas City is typical of most devolved facilities. More than 80% is budgeted for paying personnel services. This leaves virtually nothing for capital expenditures and facility expansion. The annual income in year 2000 was over P3 million and increased to over P4 million the following year. In the case of Bailan, personnel services constitute 90% of annual expenditures. The budgets for 2000 and 2001 had not increased despite heavier client demand for services.

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Table 12. Annual budget of Roxas City. Category Y 2000 Y 2001 Y 2002

Personnel Services 22,016,100 24,684,347 25,742,011 MOOE 4,831,400 4,831,400 4,831,400 TOTAL 26,847,500 29,515,747 30,573,411

Table 13. Annual budget of Bailan.

Category Y 2000 Y 2001 Y 2002 Personnel Services 17,058,206.40 17,058,206.40 – MOOE 3,078,515.82 3,078,515.82 – TOTAL 20,136,722.22 20,136,721.22 –

Increased funds for health care delivery. The provincial government had P76 million deficit when Governor Bermejo assumed his post. This was addressed through strict and sound fiscal management of the PLGU administration. After a year, the Provincial Government then had P33 million excess funds. It also availed of P12 million in countryside development funds facilitated by Senator Osmeña. Networking and alliance building with national stakeholders and partners has been a strategy to recover LGU deficit. St. Lukes Hospital Board Chair is a good friend of Secretary Roxas. He was invited to Capiz and his visit resulted to some sisterhood arrangements with local hospitals. Enhanced rabies program. Region 6 is high in rabies incidence. This makes urgent the provincial LGU’s rabies campaign and service delivery program. Regular vaccination for dogs has been conducted province-wide in collaboration with the Provincial Veterinarian Office. They conduct regular monitoring and treatment for dog bites at hospitals and rural health units.

Table 14. Public Health Updates, Identified Gaps and Propositions.

Activities Expected output

What has been done so far?

What are the reasons for the ‘gap’?


steps? Sentrong Sigla Accreditation of RHU

All RHUs are SS certified by 2004

16/17 main RHUs certified 1/2 RHU2 certified CHO SS certified

Last RHU is too small and at present state cannot be SS certified.

Renovation of Dumarao, Hipona (RHU2) health center Start with level 2 SS accreditation of RHU. Start with BHS SS accreditation.

TB Control Program

TB not anymore a leading cause of mortality and morbidity in the province

Province the World Vision learning center for DOTS in the country.

Private and hospital physicians are not implementing program guidelines.

DOTS training of private and hospital physicians IEC campaign targeting these physicians

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Activities Expected output

What has been done so far?

What are the reasons for the ‘gap’?


steps? Bisita sa Pamilya survey

Baseline health survey of households in the province

13 municipalities and city already done with survey and finalizing encoding.

DOH delayed release of counterpart funding covering remaining 3 municipalities

Finish survey this year and encoding by January 2002 Link survey results to province’s GIS

9. Best Practices

9.1 What went right – the benign dynasty One political color: “One word from the Roxases” is all that is needed for all local chief executives and their constituents to move and work together. Devolved health care programs typically have been at the mercy of political shifting sands. Capiz is no exception. In this instance, health care has benefited from the support of the old and landed families of the province. The very visible presence of Ms. Judy Araneta Roxas during the inception meetings of the CIHSDP sent an unmistakable message to all local government officials. This time around, health comes first. More important is that her family put their money where their collec-tive mouth is. They contributed significant amounts of money for hospital opera-tions and mobilized the GRF and its wide network of NGOs through the Dinggoy Roxas Health Program. They exploited their political connections to access foreign and national aid for Capiz. In all activities that need community mobilization and support, the provincial and local government units coordinate with the Gerry Roxas Foundation headed by Ms. Judy Roxas. According to key informants, “all mayors are dependent on Ms. Judy Roxas for support and networking with NGO to complement for the LGUs development programs and/or activities.”

9.2 Technology transfer through the nationalistic technocrats A scion of this political clan is now the Trade Secretary. He is in a position to access much-needed external grants and investments that would have otherwise been unavailable to Capiz. Evidence that supports increased access to external resources includes the yearly P1 M grant for 12 years from Senator John Os-meña. The St. Lukes Hospital Board Chair helped set up a sister hospital ar-rangement with RMPH with equipment donations. Access to external experts has led to acquire skills and competence in managing health care. The quality assurance program in RMPH is one of the tangible effects of USAID’s GOLD Project. The other is the operational Geographic Information System through computer technology and data generated from community surveys. It maps disease outbreaks and occurrences.

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9.3 All-out support from Governor Vicente Bermejo and the LGU officials The overwhelming votes that re-elected the governor can be partly traced to the success of CIHSP. It is a clear demonstration that good health care is good politics. The most significant enabling factor of the HSRA convergence strategy imple-mentation is the political will and support of the Provincial Government Admini-stration to Capiz health development programs. Health is the flagship program of the current provincial administration, recognizing that good health is essential to increased economic productivity. Since 95% of incoming transactions at the Provincial Capitol are health-related business, the provincial government has also sought to maintain efficiency and transparency in all its business transac-tions. The governor said, “he was elected because of the health issues.” Their party had a workshop (SWOT analysis) when he was asked to run for governor. In their analysis, the former governor’s strength was his popularity being a doctor doing medical missions. Then it turned out as his weakness when he was in the provincial seat because he neglected the health sector. This has been a call and challenge of the current administration, which the governor shared with the municipal mayors - to be sensitive to the needs of the health sector. The governor’s good management could be attributed to his educational and work background. He is a BS. Biology graduate and used to be a mayor of Panay. He became a banker because it is the family’s business. He is astute in choosing people. Complementary to the provincial administration’s good man-agement is the competence of key staff. The executive assistant has a master’s degree in Community Development. An information technology expert from the Gerry Roxas Foundation now works in the Governor’s Office as IT consultant. He is responsible for the Geographic Information System. A quote from the Governor for the employees: “I am not asking you to vote for me, just do your work well and that’s more than campaigning for me.” The Governor also cited that “he is development oriented but also political in certain decisions, rating 70:30 of being developmental and political.” His admini-stration adopts the “integrated goal for development,” whereby initiatives and interventions are undertaken in a participatory and well-coordinated manner. The governor emphasized the essence of stakeholders’ ownership in develop-ment initiatives. “What is important is the sense of ownership of all stakeholders.” This ensures institutionalization of current development initiatives way beyond the terms of the present leadership.

9.4 Entrepreneurship and innovation The provincial government inherited P76 M deficit from the previous administra-tion. This was addressed through strict and sound fiscal management, network-ing and alliance building with national stakeholders and partners. After a year, the Provincial Government was able to have P33 M excess funds. Some of the

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sources of funds and technical expertise that the provincial government has been able to access are the following: • Medical outreach programs providing surgical missions • Capizeños, a civic organization that supports Capiz development initiatives • P12 M grant per year for 12 years from Senator John Osmeña • AusAID grant of P24 M • World Bank • USAID • Philippine Charity Sweepstakes Organization for indigent patients • Internal Revenue Allocations • The PHIC Indigency Program and capitation funds Administrators of RMPH and district hospitals have also shown great initiative and long-term commitment in raising resources for their cash-strapped hospitals. Riding on the influence and political connections of the local government spon-sors, these physicians and staff have made the transition from clinicians to entrepreneurs and marketing agents. They build alliances with external donors and networks with private civic groups and NGOs. Some of the equipment in the government hospitals are even technically more advanced than those in private hospitals. This is a success indicator of their efforts to seek out donors, adapt and refurbish donated health technologies and exploit the unique opportunities that the current political tide have presented them.

9.5 Technical support The presence and constant support of the Gerry Roxas Foundation has been a critical element to the success of the CIHSDP. GRF provides technical resource in documenting, monitoring and evaluating the interlinked processes of health sector reform and grassroots involvement. Few convergence areas have had access to centers, such as these that are involved in both participatory research and development work. The GRF does not only provide the venue, administrative staff and technical support in the conduct of the HSRA workshops. It also served as a portal for policy dissemination and implementation through its extensive network of grassroots organizations. The Management Sciences for Health has also been instrumental in catalyzing some of the health sector reform initiatives. Left on its own, Capiz would have probably taken longer to mature. After phase-out of the GOLD project, facilitators who provided technical assistance for USAID funded projects (GOLD and the LPP with Dr. Jose Rodriguez) provided avenues for linkages with MSH. It paved them to conceptualization and adoption of the Capiz Integrated Health Services Program (CIHSP) prior to the Health Sector Reform Agenda interventions.

9.6 Social health financing The entry of the Philippine Health Insurance Corporation in 1999 created the impetus that was sufficient to push health sector reform in Capiz. It became the lynchpin of the entire initiative to improve equitable access to health care, the carrot that spurred local government involvement and the main purchaser of health care from hospitals and RHUs. Since most of the municipalities in Capiz

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are fifth class, those who could not afford it have always felt the need for basic health care services acutely. This shows that no amount of improvement in the facilities of the hospitals would impact on health outcomes unless people are empowered to seek care. Insuring the most indigent segment of the population through the Medicare para sa Masa program is therefore critical in increasing the buying power of the masses. However, LGU involvement had to be secured. Otherwise, PHIC alone could not sustain the program. The scheme of gradual withdrawal of national government premium support is aimed at painlessly bringing in more funds from the LGUs. The capitation program further advanced this idea as LGUs became stewards of public funds from which both health care and health care facilities can draw financial support. This does not only empow-ered LGUs to ration care as they saw fit, but also provided incentives for efficient allocation of funds. Any extra funds after health care purchases are left to the LGUs to dispose. 10. Lessons Learned

10.1 The neglected private sector The private health sector in Capiz is still small but nevertheless unregulated. The potential for variations in care exist. Variations in drug costs and drug supplies have already been observed across the private-public sector interface. These observations include the studies in DOTS (directly observed treatment strategy) for TB and government physicians complying with guidelines while private physicians do not. The patients needing advanced care are being referred from district hospitals to some private hospitals also suggest a double standard of care that prejudices those who can ill-afford to pay for health services. Differences in costs of procedures, particularly those that are reimbursed by PHIC have also been noted. Since much of the health sector reform initiatives did not involve the private health facilities, their staff has remained largely uninformed and uninvolved. The lack of opportunities for institutional collaboration between private and govern-ment facilities has worsened the situation. The mistrust of privatization and the hesitancy of government hospital administrators to face the challenge of attract-ing and maintaining private practitioners within their staff are barriers to sectoral partnerships. This is indeed unfortunate since private-public health sector part-nerships will likely be crucial in ensuring sustainability and institutionalization of the gains of HSRA long after the current crop of leaders would have been changed.

10.2 Unintended effects of health sector reform Much has already been said about the inadvertently negative effects of the parallel drug importation program on drug supply, costs and market competition, the painfully slow administrative processes of PHIC and the way some LGU officials are capitalizing on the Medicare para sa Masa program to make political hay. Such adverse effects may have been entirely unforeseen. However, the health sector and the Capiz government seem to be powerless at this stage to counteract them. It is possible that in due time, solutions to these problems could be formulated and tried out. Such solutions will have to confront the forces that

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generate these ill effects. These will require even more political and economic management skills than what has been required to institute HSRA in the first place.

10.3 QA and not QA The state of understanding and implementation of quality assurance in health care has not matured since the GOLD days. Very little has happened beyond inquiring about patient satisfaction and the 5S program. Real quality assurance is about total quality management. It is about establishing a culture of measure-ment and evaluation against a set of valid standards. Such a culture necessarily covers everybody within the health care facility as the performance of both the leaders and the staff come under scrutiny. Transparency and accountability have not yet taken root in all levels of the health care team. Policies to safeguard patients’ rights and to enforce organizational ethics have yet to be enunciated and implemented. There is hardly any evidence that the habits of evaluating medical care with an eye for preventing inappropriate management and medical errors have taken root. Patient referrals are made but probably without any intent to provide continuity of care across cares settings. 11. Conclusion and Recommendations Three particularly stand out among the best practices in reforming the health sector in Capiz: the social health financing program, the drug management program and the inter-local health zones. These programs are all in their infancy. Much have to be done to ensure their institutionalization and survival. Learning from what went right and addressing the problems that beset the programs will take even more political will once the novelty of HSRA has waned. Three recommendations stand out from the rest: • Involve the private health care sector through constant dialogue, collaborative

programs and mutually satisfying institutional partnerships.

• Constantly advocate for the drug management and social health financing programs among all stakeholders, transfer fiscal and managerial responsibili-ties to LGUs and further explore external sources of long term financial sup-port.

• Institute total quality management among the hospitals through constant

training and technical support.

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Appendix 1. List of Key Informants. 1. Vicente Bermejo, Governor, Province of Capiz 2. Gideon Patricio, Mayor, Municipality of Pilar 3. Gil Aquino, Pilar Administrative Officer 4. Milagros Balgos, M.D., PHO Consultant on Drug Use and Monitoring/former

Provincial Health Officer 5. Bofil, M.D., Executive Assistant of the Governor for Health 6. Reuben Coñada, Pilar Treasurer 7. Raymundo Oblegar, Pilar Budget Officer 8. Alicia Ocbeña, Admin. Officer of Roxas Memorial Hospital 9. Evelyn T. Albaña, M.D., Chief, Roxas Memorial Hospital 10. Gelson Albaña, M.D., Chief of Mambusao District Hospital 11. Gualberto Bernas, M.D., Chief, Bailan District Hospital 12. Dante Galbines. M.D., Asst. Chief of Roxas Memorial Hospital 13. Jarvis Punzalan. M.D., Asst. PHO, HSRA Advocate 14. Clarita Barogo, Client 15. Marlene Bernales, Client 16. Gina Casidsid, Client 17. Gendel Casipe, Client 18. Candida Catalan, Client 19. Elizabeth Dangan, Client 20. Trinidad del Rosario, Client 21. Armida Jeriza, Client 22. Melinda Martinez, Client 23. Magdalena Matias, Client 24. Merlita Ordas, Client 25. Violeta Bones-Javier, M.D., IM-Pulmo 26. Ricardo Dimayuga, M.D., General Surgeon 27. Pilar Posadas, M.D., visiting physician from the Municipality of Pres. Roxas 28. Maura Rotulo, Service Provider 29. Milagros Sison-Viloria, M.D., IM-Gastro 30. Primo Urquiola, M.D., OB-Gyne 31. Jeannette Uygen, M.D., OB-Gyne

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Health Sector Reform Technical Assistance Project II

NUEVA VIZCAYA (REGION 2) 1. Socio-Economic Profile Nueva Vizcaya had a total population of 366,962 in 2000, a household population of 74,402 and an average household size of 5 persons. About 39% of the population belong to the younger group (<15 years). A third live in the urban areas of Bayombong, Solano and Bambang. Administratively, the province of Nueva Vizcaya belongs to Region 2. It is divided into 15 municipalities and 275 barangays. It has one lone congressional district. The economy is basically agricultural with rice, onions, mangoes and vegetables as the main produce. The province is also known for its rattan products and rare species of orchids. Nueva Vizcaya is a 2nd class province with an income of P290,600,076.00 in 2001 Nueva Vizcaya has 1 regional hospital, 1 provincial hospital, 3 district hospitals, 1 municipal hospital, 15 rural health units and 108 barangay health stations. It maintains 97 doctors, 10 dentists, 118 nurses, 128 midwives, 35 nursing aides, 16 medical technologists, 25 sanitary inspectors and 1,200 barangay health workers. The province also has 1 private hospital and medical clinics that are concentrated in the Bambang-Bayombong-Solano towns. The province has about 333 traditional birth attendants (hilots). The following were the vital health indicators in 2001:

Life expectancy 66.63 male 69.8 female Crude birth rate 2.8 per 1,000 population Crude death rate 20.5 per 1,000 population Infant mortality rate 7.41 per 1,000 livebirths Maternal mortality rate 0.26 per 1,000 livebirths

The leading causes of morbidity are communicable diseases (2582.1 per100,000 population), cardiovascular diseases (2488.3 per 100,000 population) and influenza (1996.43 per 100,000 population). Majority of the people in Nueva Vizcaya die of cardiovascular diseases (80.97 per 100,000 population), pneumo-nia (49.4 per 100,000 population) and cancers (31.8 per 100,000 population).

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2. Background of Health Sector Reform

2.1 Devolution and Pre-Convergence The provincial government’s openness to the idea of participatory governance made Nueva Vizcaya, one of the six pilot sites of GOLD in 1995. This multi-sectoral program provided assistance to the provincial government during devolution, particularly on organizational development, planning and budgeting among others. In 1996, a societal mission-vision was developed for the province. Each department also had formulated its own specific vision-mission statement, which are now conspicuously displayed in each provincial office. During the last year of GOLD (1998), the governor requested for GOLD assistance on health management owing to the numerous complaints being received by the gover-nor’s office. GOLD then focused on capacity building, specifically in the training of trainors on organization development and quality assurance. This later led to the establishment of the Quality Services Improvement Program (QSIP) in the hospitals.

2.2 HSRA Convergence Strategy In 2001, the Management Sciences for Health-Health Sector Reform Technical Assistance Project (MSH-HSRTAP) came to the province to introduce the concept of convergence in health sector reform. The key informants surmised that Nueva Vizcaya was chosen as a convergence site because (a) it was a Galing Pook awardee in 2000, (b) it was cited for its outstanding local health board in 1995 and 1996, and (c) it performed well in the GOLD project (e.g., pioneered in barangay planning and budgeting; formulated the training modules for QSIP which was adopted in other sites). The first convergence workshop was conducted at Villa Margarita Resort, Bayombong in July 2001. The workshop aimed to: • Identify health-related problems/issues in Nueva Vizcaya and the actions

taken; • Orient key technical players on the HSRA, Health Passport Initiative and the

Convergence Strategy; • Develop targets for Nueva Vizcaya by 2004 in the area of social health

insurance, local health system, hospital reforms, drug management and pub-lic health;

• Develop a draft convergence plan for Nueva Vizcaya; • Determine the next steps to sell the program to the LGUs; and • Organize the Nueva Vizcaya Health Sector Reform Advocates There were about 95 participants in the workshop, which included the Chiefs of Hospitals, Provincial Health Officer, Municipal Health Officers, local government officials, representatives from the Department of Health, Philippine Health Insurance Corporation, Center for Health Development (Region 2), MSH and NGOs. The attendance of Health Secretary Manuel Dayrit, M.D., and Philippine Health Insurance Corporation (PHIC; PhilHealth) President Francisco Duque III. M.D., made the convergence workshop in Nueva Vizcaya a memorable event.

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The Health Summit was also held along side the July workshop. The attending local executives agreed on the targets set earlier by the workshop participants.

Table 1. Issues Addressed During the First Convergence Workshop in July 2001. Identified issues/problems Actions taken Vision for 2004

1. Social Health Insurance Lack of local advocacy LGU financial constraints LGU political intervention in the selection of indigents ineligible health facilities for (OPD) accreditation No PhilHealth service office (province) and service desk(municipality) Low benefits provided by PHIC

Advocacy to municipal officials Regional PhilHealth office conducted IEC through radio Provincial government counterpart of PhilHealth premium Gave feedback to Provincial and Municipal DSWD Requests for provincial PhilHealth from central office Pilot testing of PhilHealth

Full awareness about social health insurance All 15 municipalities enrolled in the Indigency Program with full LGU financial support Creation of a screening committee with proper classification of indigents/100% of indigents covered Establishment of PhilHealth provincial and municipal service offices Upgrade benefits provided by PhilHealth

2. Hospital reforms Hospital budgetary problems Patient financial resources Weak referral system Poor utilization of hospital resources External factors affecting hospital care

Lobbying to local boards Strategic planning and annual budget review Re-designed procurement system Utilization of hospital income (NVPH) Increase service fees Enrolment in the indigency program Advocacy on cost-sharing of resources IEC campaign Outreach activities Health board agenda

Institutionalization of QSIP in all hospitals All hospitals able to generate and utilize revenues All public hospitals PhilHealth accredited Budget increase based on needs identification Upgrading of NVPH to tertiary level

3. Drug management system High costs Delayed procurement and delivery Unnecessary and soon-to-expire drugs Inadequate funds for drugs

Direct purchase Creation of special procurement team Early submission of the annual procurement plan A.O. empowering departments to reject donated expiring drugs

Establish a cost-efficient drug procurement system Increase allocation for drugs by 50% from 2001 level Integrate 15 RHUs in the Provincial Therapeutic Committee

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Identified issues/problems Actions taken Vision for 2004 Increase funds for drugs

4. Local Health System Inadequate information education campaign Low budget for health services Weak referral system Politicized health services Poor planning integration at the municipal level Provincial health system differently organized

Household teachings, networking, tri-media campaign, program reviews Fund raising, augmentation from CHD, proposals submitted to different funding agencies, increase in budget through LHB Development of referral standard form, dialogue with hospitals and RHUs Strengthening LHB, focus on GSIP, establishment of selection/promotion board, multisectoral involvement Strategic LGU planning, setting of deadlines

Establish 2 functional ILHZs All RHUs Sentrong Sigla and PhilHealth accredited Functioning referral and networking system

In April 2002, the MSH initiated a program called Lakbay Aral. The purpose of this program was to expose local HSRA advocates to the results and processes used by other convergence areas in their pursuit of health sector reform. About 20 people from Nueva Vizcaya went to Capiz and saw for themselves the health developments in this area. Half of the participants were funded by MSH, the others were sent by the provincial government. The key informants who partici-pated in the Lakbay Aral were very appreciative of their experiences that they expressed to have more of these type of learning opportunities. The lessons learned were in the areas of interpersonal relationships, human resources, material resources, service delivery, management and social health insurance. The group has submitted a report to the governor but discussions about which issues to replicate in Nueva Vizcaya will still be done. 3. Gains in Health Financing

3.1 Status of implementation As of May 2002, all the 15 municipal LGUs in Nueva Vizcaya have participated in the PhilHealth Indigency Program. For 2002, PhilHealth has targeted 20% of the total indigent households, of which 97.7% have actually been enrolled. Some

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municipalities like Bagabag and Bambang have exceeded their target for 2002. About 69% of the 18,000 indigent households targeted for 2004 have been covered. Except for Bayombong, Kasibu, Solano and Villaverde, the rest of the municipalities are now sharing 20% of the insurance premium. Four municipalities (Aritao, Bambang, Dupax del Sur, and Bagabag) have signed a contract with PhilHealth for Phase II OPBP. These municipalities have Phil-Health-accredited RHUs but PhilHealth is still waiting for the remittance of the premium payment to qualify them for the capitation scheme.

Table 2.Status of PhilHealth Implementation (as of June 2002). Municipalities Class # of Enrollees

(as of July 2002) Target HHs for 2002

(Phase I) 1 Alfonso Castaneda 5th 82 164

2 Ambaguio 5th 218 436

3 Aritao 4th 731 1220

4 Bagabag 4th 1158 1244

5 Diadi 5th 429 528

6 Dupax del Sur 4th 984 1000

7 Dupax del Norte 4th 930 930

8 Kayapa 4th 360 720

9 Quezon 5th 430 454

10 Sta Fe 5th 1500 1500

11 Bambang 3rd 1595 1592

12 Bayombong 3rd 1000 845

13 Kasibu 4th 480 480

14 Solano 2nd 731 1,040

15 Villaverde 4th 245 245

16 Barangay Poblacion North, Solano 2nd 50 50

Total number of current members 12,159

Total number of potential members 12,448

In terms of health provider accreditation, the only private polyclinic in Nueva Vizcaya has already been certified by PhilHealth. Except for the Kasibu Municipal Hospital, all other government hospitals in the province have received PhilHealth recognition.

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Table 3. List of PhilHealth- Accredited Hospitals and Clinics, Nueva Vizcaya (as of July 2002).

Name of hospital Type of hospital Category

Medical Missions Group Private II

Veterans Regional Hospital Government III

Nueva Vizcaya Provincial Hospital Government II

Kayapa District Hospital Government I

Dupax Sur District Hospital Government I

3.2 Process of implementation According to the Region 2 PhilHeath manager, it was not easy convincing the LGUs to participate in the Indigency program. Aside from the financial aspect, many of the mayors were not aware of the social health insurance. Admittedly, one reason was PhilHealth’s inability to provide adequate information to the LGUs owing to the distance between Tuguegarao, where the regional office is, and Nueva Vizcaya. To make the program more responsive, PhilHealth estab-lished its provincial service office in Nueva Vizcaya in February 2002. Since then, massive information on the PhilHealth thrusts and programs were effectively disseminated to the LGUs. There were individual visits to the LGUs. The strategy was to identify a point person who is close to the Mayor, convince this person about the PhilHealth indigency program, and then approach the Mayor through this contact person who, in turn, helps in endorsing the program to the local executive. A plus factor for the Indigency Program was the support provided by the provin-cial government in terms of office space, moral support, resolutions adopting the program as well as allocation of funds for the program. Among the barrier factors were the (a) financial constraints of LGUs, (b) indigency program not being a priority of the LGU, and (c) identification of indigents. There were issues in the implementation of the Indigency Program in indigenous communities. Indigenous households cannot satisfy PhilHealth’s requirements of a marriage contract and a birth certificate because these practices are not within the tribal culture. This creates a problem for PhilHealth in Nueva Vizcaya be-cause of the large proportion of the indigenous population in the province. There were also issues related to the selection of indigent beneficiaries where mayors and barangay chairmen tend to select their friends and relatives as indigent beneficiaries. Based on interviews with the Municipal Social Worker of Bagabag, the following processes were followed for the selection of indigents:

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Figure 1. Steps in Selecting Indigent Beneficiaries.

According to the MSWD, an eligible household must have: an annual income of P8,000 or less; an unemployed family head; a large household size; and, pres-ence of out-of-school children. Indigent cardholders interviewed in Bagabag confirmed the conduct of the house- to-house interview by the MSWD. The beneficiary-respondents also admitted that they were not initially aware of the benefits and procedures of being PhilHealth members. A number did not know that they could be reimbursed for medicine costs. Others learned that they could avail themselves of free health service only during time of release from the hospital. In such cases, the families have already spent some amount of money for the hospitalization of their kin. For Phase II OPBP, the absence of medical technologists in many RHUs, which should have qualified them to become Sentrong Sigla and PhilHealth, accredited institutions, served as an impediment. Nevertheless, an arrangement with PhilHealth was made for neighboring RHUs to share one person in charge of laboratories. The PhilHealth office in Nueva Vizcaya will be conducting orientation programs to NGOs like the Rotary Club for possible sponsorship in the outpatient benefit package, and to business establishments for the health insurance of their em-ployees.

3.3 Progress of implementation A summary of the accomplishments in social health insurance/ health financing vis-à-vis some indicators of improvement is shown below (as of July 2002):

IEC by PhilHealth to LGU Barangay chairman recommends indigents

MSWD conducts verification through a survey using MBN, observation, and interviews in the barangays

Submission to PhilHealth (PHIC procedures)

Finalize data submitted for mayor’s approval

IEC by PhilHealth to LGU Barangay chairman recommends indigents

MSWD conducts verification through a survey using MBN, observation, and interviews in the barangays

Submission to PhilHealth (PHIC procedures)

Finalize data submitted for mayor’s approval

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Table 4. Summary of Accomplishments in Social Health Insurance/ Health Financing vis-à-vis Indicators of Improvement, Nueva Vizcaya, July 2002.

Indicators of Improvement Accomplishment

Percent of indigents currently enrolled 97.7% of targeted indigent households in 2002;

69% of the 18,000 indigent households targeted for 2004

Percent of LGUs participating in the Indigency Program

100%

Number of PhilHealth -accredited hospitals and clinics

4 of the 5 hospitals/polyclinics (1 private, 4 government)

Percent of RHUs accredited by PHIC 4 of the 15 RHUs (27%)

Funding of premium (ratio of Prov:Mun:PhilHealth For 11 municipalities: 80:10:10

For 4 municipalities: 90:5:5

Social marketing of PhilHealth Active with the establishment of a provincial service office

Utilization According to the chiefs of hospitals, the PhilHealth Indigency program is a major source of income for the hospitals.

Percent of RHUs receiving capitation 0% but expects to start as soon as remittance is given by end of July

Utilization of capitation funds Not applicable

Non-PHIC financing schemes none

3.4 Gaps and problems As far as the 2004 vision is concerned, about 31% of the targeted indigent population has still to be covered. Eleven of the RHUs still need to be PhilHealth-accredited to qualify them for the capitation program. Similarly, one government hospital needs to be accredited by PhilHealth. A culture-sensitive policy must be formulated by PhilHealth to ensure that the indigenous population (“poorest of the poor,” “most marginalized sectors of society”) is covered by the government health insurance. 4. Gains in Hospital Reforms

4.1 Status of implementation Several changes and improvements during devolution were implemented as part of the hospital reforms. For one, the Bambang District Hospital was designated as the Nueva Vizcaya Provincial Hospital (NVPH) when the former provincial hospital based in Bayombong was re-nationalized in 1995. Second, hospitals were given autonomy in governance since 1995-96. Previously, the provincial and district hospitals were under the supervision of the Provincial Health Office (PHO), today, they are accountable to the Office of the Governor. Preventive health became the major thrust of the PHO, while hospitals took charge of the curative health services.

49


Another major development in hospital reforms was the establishment of the Quality Services Improvement Program (QSIP) in 1998. The QSIP has 5 mem-bers, including the chiefs of hospitals. It formulates the internal policies of each hospital, takes charge of organizational development and quality assurance, monitors the implementation of these policies and makes recommendations to the Provincial Health Board if the policy affects the whole province. Service audit teams (SAT) in each hospital were also organized. Aside from the upgrading of hospital equipments and facilities, and cleaning and beautification of the hospital premises, inter-hospital sharing of manpower and material resources was also considered a major development in health service delivery. The provincial hospital shares its facilities, manpower and supplies with the 3 district hospitals, and vice versa. MSH has conducted training workshops on 5S and drug management review for the hospital staff.

4.2 Process of Implementation The following steps were pursued by the Service Audit Teams to improve the hospital: From a review of the hospital systems, vision-missions were formulated. Then, a planning session was conducted to set up the specific objectives and action plans. The implementation of the plans were monitored and evaluated through customer satisfaction surveys and public consultations.

Figure 2. Action Steps to Improve Hospital Systems.

In February 2002, mayors and barangay officials were invited to attend a public consultation meeting. In their situational analysis, the participants perceived NVPH as “clean”, “accessible”, “with available water and well-kept surroundings”, “respectful staff” and where “barangay official recommendees were well taken cared of”. The problematic issues related to the lack of specialists, lack of medi-cines/selling of medicines by doctors, poor facilities and equipments, non-implementation of hospital benefits for barangay officials, among others. Some recommendations were suggested to resolve these issues.

Review hospital systems Formulate visions / missions

Conduct planning sessions

Monitor and evaluate Implement plans

Review hospital systems Formulate visions / missions

Conduct planning sessions

Monitor and evaluate Implement plans

50


\Customer satisfaction surveys (both from staff and patients/watchers) were also done to identify strong and weak areas in the hospital system. In March 2002, the hospital staff did an evaluation of the NVPH. The “good” points were the increas-ing hospital budget, cleanliness and beautification of the hospital. The “bad” points included: lack of computer training for administrative personnel, poor dietary program for patients, poor waste management, complaints against some hospital personnel and complaints against the hospital leadership. Similarly, the referral system with the Rural Health Units was strengthened. In a meeting with MHOs, there was an agreement that 2 referral slips will be issued to the patient by the RHU. The RHU is to pick up from the hospital the feedback slip. However, the key informants reported that up to the present, this referral system has not been working as desired. Hospital income retention scheme is currently being discussed by the QSIP. A drug supplementation program is also being proposed. A pharmacy cooperative will be established either within the provincial hospital or outside the premises of the hospital. The drug supplementation program will provide drugs and medi-cines that are not sold in the hospital pharmacy. This plan will still be discussed by the provincial health board. The chiefs of hospitals expressed excitement about the financial management training that will be conducted by MSH.

4.3 Progress of Implementation The QSIP was instrumental in enhancing the image of the hospitals and their respective personnel through quality standard protocols and customer satisfac-tion surveys. Developed protocols to remind the personnel of their tasks and responsibilities were posted in strategic places within the hospital. These proto-cols include admissions, disease management, supply management, recording and ER management. Feedback on the 5S was positive. The key informants claimed that the training on 5S changed their attitudes about work, aided them in systematizing and “cleaning up” their tasks and made them “constructively critical” about their relationships with their co-employees and clients. As a result of better working conditions, provincial hospital revenues increased from P2.7 million in 1997, to P3.3 million in 1998, P4.2 million in 1999, P4.6 million in 2000 and P5.5 million in 2001. Hospital income in the district hospitals has also exceeded their yearly quota in 2001. The key informants attributed the increase in revenues to the acquisition of new equipments, QSIP, increase in number of indigents and the campaign made by the province regarding hospital charges.

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Table 5. Hospital Revenues of District Hospitals, Nueva Vizcaya, 2001. Hospital Target for 2001 (PhP) Actual Revenues (PhP) Excess (PhP)

Kasibu MH 300,000 326,000 26,000

Kayapa DH 500,000 579,000 79,000

Dupax Sur DH 1.4 M 1.7 M 3 M A summary of the accomplishments in hospital reforms vis-à-vis some indicators of improvement is given below (as of July 2002): Table 6. Summary of Accomplishments in Hospital Reforms vis-à-vis Indicators of

Improvement, Nueva Vizcaya, July 2002. Indicators of Improvement Accomplishments

Establishment of financial management systems

0%

Income generation Provincial hospital revenues increased from 4.2 m in 1999, 4.6 m in 2000 and 5.5 m in 2001. Hospital income in the district hospitals have exceeded their yearly quota in 2001

Income retention 0%

Income utilization 0%

Fiscal autonomy 0%

Quality assurance Upgrading of facilities, cleaning and beautifying the surroundings, regular conduct of customer satisfaction surveys and public consultations, application of 5S

SS/PHIC facility upgrading All 4 government hospitals are SS-accredited. Except for Kasibu, all other hospitals are PHIC accredited.

Upgrading in hospital classification 0%

Technology transfer Simultaneous training on 5S and drug review in all 4 hospitals

Networking with private sector 0%

4.4 Gaps and problems From the list of accomplishments, some gaps and problems in implementation can be identified. Gaps in financial management are obvious as there has been no training of hospital staff in this aspect. A good financial management system can improve further the income generating capacity of the hospitals. Upgrading of the facilities and eventually a better image for the hospital are also dependent on improved hospital income. Efforts should be made to commence training on financial management for hospital leaders and staff. 5. Gains in Drug Management Systems Before 2000, drug purchase in Nueva Vizcaya was included in the procurement of provincial supplies by the General Supply Office (GSO). This procedure was regarded as long and arduous. Numerous complaints from the health sector

52


were received especially with regard to the timely delivery and high costs of drugs and supplies. In December 2000, the governor issued Executive Order # 145 creating the Provincial Committee on Awards (PCOA) to handle the procurement of drugs, supplies and equipment for the provincial health office and the 4 hospitals. PCOA is composed of the Provincial Administrator as chairman, and the provincial treasurer, budget officer, accountant, provincial health officer, chiefs of hospitals, general services officer and PCOA-Technical Committee (PCOA-TC) head as members. A representative of BFAD and the Commission on Audit were desig-nated as observers. A provincial pooled procurement program in Nueva Vizcaya is therefore in place. Municipal LGUs have not yet availed themselves of the pooled procurement. Recently, the Provincial Therapeutics Committee (PTC) composed of chief of hospitals was re-activated.

5.1 Process of implementation The pooled procurement process in Nueva Vizcaya starts with a purchase request (PR) from the PHO and the 4 government hospitals. The PCOA-TC provides these units with the Uniform List of Drugs (ULD), a consolidated list of previously purchased drugs and supplies. The Provincial Health Office (PHO) and hospital therapeutics committee of each hospital (HTC) go through the list and notes which of these drugs and supplies will be needed for the next quarter. The HTC may also indicate which other drugs not found in the ULD may be needed to be purchased. The PR will then be forwarded to the PCOA-TC for consolidation. Once consolidated, the PCOA-C makes a Price Quotation Form. The form is sent by fax to the drug suppliers in Nueva Vizcaya and Manila to be filled up by the latter, or the team goes to Manila to do the canvassing of drug prices. Normally, about 15 drug manufacturers, distributors or retailers are consulted. Once the prices are in, an Abstract of Price Quotation, which includes the list of drugs to be procured together with their quoted prices is made. The whole group of PCOA members then meets to determine adequacy of funds vis-à-vis amount of drugs to be procured by PHO and the 4 hospitals. They also decide from which supplier to purchase the drugs. The supplier with the lowest price is taken except if complaints against the quality of drugs given by this supplier in the past were previously lodged. In which case, the award is given to the supplier with the second lowest price. Once approved by the whole team, the PCOA-TC prepares a Purchase Order (PO) and a request for Cash Advance, which are then signed by the governor. The PO is then faxed to the winning supplier to make sure that stocks are ready once the PCOA team goes back to Manila to pick-up the goods. Back in Nueva Vizcaya, the boxes of drugs are immediately distributed to PHO and the 4 hospitals.

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Figure 3. Process Flow of Drug Procurement.

An interview with the Chiefs of Hospitals showed a positive regard on the system of drug procurement by the province. They commented that the present system has solved the problem of delay in the delivery of drugs and medical supplies (drugs are delivered in the same quarter unlike before when 1st quarter PRs are delivered in the 3rd quarter). They had occasional problems with the quality of some drugs, but according to them the PCOA-TC has shown responsiveness with regard to their complaints. They hoped that the reactivation of the Provincial Therapeutic Committee would help solve the problem on the quality of drugs procured. Other key informants however expressed concern about the system of procure-ment because “they are not following COA procedures.” The governor and the provincial administrator were quick to say that their legal office approved the present system. Still others worried about the possible loss that may result by

PCOA-TC sends a list of drugs &

supplies to PHO and hospitals

PHO & 4 hospitals assess the list vis-à-vis drug needs &

submits PR to PCOA-TC

PCOA-TC consolidates

requests & makes Price Quotation

PCOA-TC sends fax to drug

supplier or goes to Manila to canvass

PCOA-TC makes an Abstract of

Quotation

PCOA-TC team meets to discuss

availability of funds & winning drug

supplier

PCOA-TC makes PO; also requests for Cash Advance

Governor signs PO & requests for

Cash Advance

PCOA-TC sends PO to winning

supplier(s) via fax

PCOA-TC team goes to Manila to

purchase the drugs & medical

supplies from winning supplier

PCOA-TC team distributes drugs & supplies to PHO &

4 hospitals

PCOA-TC sends a list of drugs &

supplies to PHO and hospitals

PHO & 4 hospitals assess the list vis-à-vis drug needs &

submits PR to PCOA-TC

PCOA-TC consolidates

requests & makes Price Quotation

PCOA-TC sends fax to drug

supplier or goes to Manila to canvass

PCOA-TC makes an Abstract of

Quotation

PCOA-TC team meets to discuss

availability of funds & winning drug

supplier

PCOA-TC makes PO; also requests for Cash Advance

Governor signs PO & requests for

Cash Advance

PCOA-TC sends PO to winning

supplier(s) via fax

PCOA-TC team goes to Manila to

purchase the drugs & medical

supplies from winning supplier

PCOA-TC team distributes drugs & supplies to PHO &

4 hospitals

54


having the PCOA team carry a large sum of cash about PhP800,000 per travel while doing their purchase in Manila. The province is hesitant to participate in the parallel drug importation (Pharma 50) since “current costs of drugs and medicines are similarly cheap.” Some key informants observed a policy conflict between the government’s generic drugs policy and the parallel drug importation because the latter pushes for branded drugs. They were questioning its legality in reference to the generics law. Other developments include: procurement review workshop – November 2001; Drug Use review - December 2001 until first quarter of 2002; and, Orientation of PDI – last quarter of 2001.

5.2 Progress of Implementation A decrease of at most 45% in the prices of some drugs was noted between the 2nd and 3rd quarter purchase in 2002. A random sampling of drug prices is shown below.

Table 7. Comparison of Drug Prices, Nueva Vizcaya,- 2nd and 3rd Quarter, 2002. Name of Drug 3rd Qtr (Peso) 2nd Qtr (Peso) Decrease in drug price (%)

Salbutamol nebulas 2mg/2.5ml 23.20 23.20 –

Ampicillin 500mg mg vial 11.00 11.00 –

Chloramphenicol 250 cap 1 gm vial 93.00 125.00 (32.00)

Ascorbic acid 500mg tabl 92.00 100.00 (8.00)

Paracetamol 100 mg/ml 9.75 10.50 (0.75)

Penicillin G Na 1 million units 10.50 11.00 (0.50)

Gentamacin sulfate 80 mg vial 10.00 9.20 0.80

Rifampicin 200 mg susp 60 ml 43.50 42.00 1.50

Methylergometrine maleate 200 mg amp 28.00 28.00 –

Hydrocortisone vial 35.00 62.48 (27.48)

ATS 1500U 85.00 85.00 –

Nalbuphine 10 mg amp 88.70 136.00 (47.30)

Cefuroxine 750 mg vial 140.00 140.00 –

Mefenamic acid 500 mg tab 85.00 90.00 (5.00)

Cotrimoxazole 400 mg/80 mg tab 90.00 90.00 –

Amoxicillin 500 mg cap 175.00 185.00 (10.00)

A summary of accomplishments in drug management is given below (as of July 2002).

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Table 8. Summary of Accomplishments in Drug Management vis-à-vis Indicators of Improvement, Nueva Vizcaya, July 2002.

Indicators of Improvement Accomplishments Functioning therapeutics committees With newly reactivated provincial therapeutics committee

With functional hospital therapeutics committee

Pooled drug procurement program With pooled drug procurement program

Reduction in costs of drugs Reduction in costs of drugs by at most 45%% in 3rd quarter compared to 2nd quarter prices

Assurance of drug quality Training in drug utilization review

End-user complaints are acted upon by PCOA

Timely delivery of drugs Delivered within the quarter

Purchase from accredited suppliers Procures from DOH accredited suppliers

Provincial drug formulary None

Inclusion of municipal LGUs in pooled drug procurement

0%

5.3 Gaps and problems To ensure the purchase of quality drugs, the PTC should become fully functional. A provincial drug formulary should also be created. As in many other provinces, the inclusion of the municipal LGUs in the pooled procurement program is still absent. 6. Gains in Inter-Local Health Systems Nueva Vizcaya maintains a single inter-local health zone (ILHZ) with the Provin-cial Health Board as the governing body. Stakeholders in Nueva Vizcaya decided not to organize more than one ILHZ because 1) the present system of having expanded provincial health board is already effective, 2) referral hospitals are concentrated in one area, 3) linkages, coordination and communication among RHUs and the district/community hospitals are functioning and 4) population of Nueva Vizcaya is small.

6.1 Process of Implementation The governor stressed that convergence occurs within the Provincial Health Board (PHB). All health issues are discussed and resolved through the PHB. The current Provincial Health Board, now called the Expanded Provincial Health Board (EPHB) is composed of 45 members from different relevant departments and LGUs. The expansion from the original 5 members as mandated by the Local Government Code was for the purpose of formulating effective, efficient and timely health policies and programs. The expansion also made health decision-making participative and consultative since the inclusion of MHOs from the 15 municipalities made sure that voices from the grassroots are heard, thereby making the implementation of the policies more effective at the municipal and barangay levels. The board has since become the policy making body for

56


health in the province. The Department of Health proclaimed the Nueva Vizcaya Provincial Health Board as the Most Outstanding Health Board in 1995 and 1996.

6.2 Progress of Implementation A summary of accomplishments in inter-local health zones is shown below (as of July 2002):

Table 9. Summary of Accomplishments in Inter-Local Health Zones vis-à-vis Indicators of Improvement, Nueva Vizcaya, July 2002.

Indicators of Improvement Accomplishments Number of ILHZs established vs. targets One ILHZ out of the 2 ILHZs targeted for 2004

With signing of MOA No MOA

With District Health Board With Expanded Provincial Health Board

Sharing of non-monetary resources Sharing of resources among provincial and district hospitals; no sharing between hospitals and RHUs, or among RHUs.

Functional referral system Not fully functional

Networking (NGOs, private sector, inter gov’t agency)

Exist through the EPHB

Cost sharing 0%

Common fund 0%

6.3 Gaps and problems The provincial government seems bent on maintaining only one ILHZ because of geographical, demographic and administrative reasons. A more formal mecha-nism like a MOA to cement the relationships may be needed to foster coopera-tion and sharing among municipal LGUs. The key informants suggested that a district hospital be established somewhere in the north. They were eyeing at the DOH building in Diadi. However, the costs of establishing a district hospital need to be considered. 7. Best Practices Among the HSRA convergence components in Nueva Vizcaya, best practice can be seen in the are of social health insurance. All 15 municipalities of the prov-ince are now participating in the PhilHealth Indigency Program. Eleven are on their third year; four are in the first year of implementation. Nueva Vizcaya is also one of the few provinces that have started getting access to PhilHealth’s Out Patient Benefit Package with the MOA signing between PhilHealth and four municipalities in May 2002. Actual implementation of the capitation scheme is expected to commence in early August 2002. The provincial drug procurement program can also be considered as best practice since it has solved the problem of delay in the delivery of drugs to the hospitals. Moreover, the Expanded Provincial Health Board is also recognized

57


as a good example of participatory governance. The present system of local health governance institutionalized several programs and activities like the QSIP and PCOA. NGOs and groups like the Association of MHOs, Kabalikat, and other civil society groups also got the chance to contribute to improving the health of the people. 8. Lessons Learned There are several lessons that can be learned from the experience of Nueva Vizcaya in health sector reform. One, a dedicated service-conscious political leadership is an essential compo-nent of any health reform. Nueva Vizcaya has a governor who is pioneering, committed, transparent and consultative. Two, the shape and content of HSRA reforms vary in each locality depending on ecological and social factors as well as felt needs and motivations of the local governments. Nueva Vizcaya has shown distinctiveness in the way they look at ILHZs and implement their drug procurement system. The EPHB has also been proven to be of utmost value in the management of health in the province. Three, with an expanded PHB, health decision-making has become consultative and participatory. Four, sustainability of health reforms should always be factored in. The governor assured sustainability by creating a system of governance (e.g., EPHB) in the event of change in political leadership. 9. Conclusion The selection of Nueva Vizcaya as a convergence site is laudable in the sense that it can be a model for the implementation of HSRA in small, less populated areas. Its mechanisms for reform are simple and pragmatic. These include its system of drug procurement, the expanded provincial health board, and the format for a province-wide ILHZ. Overall, the implementation of the various components of the HSRA in Nueva Vizcaya is improving except perhaps for the establishment of two ILHZs as envisioned for 2004. The present thinking is focused on making the province-wide ILHZ more functional through the EPHB. HSRA Convergence has been very helpful in – • Emphasizing the integrated, collaborative character of health sector reform; • Providing direction to the ongoing health reforms in the province; and, • Systematizing the details for the implementation of health reforms. In the words of the governor, the HSRA convergence cemented the loose ends of the reforms that the local government has been endeavoring to put in place.

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Appendix 1. List of Key Informants. 1. Governor Rodolfo Q. Agbayani 2. Dr Pinky Torralba 3. Provincial Administrator, Nueva Vizcaya 4. Provincial Health Officer, Nueva Vizcaya 5. Head of the Provincial Committee on Awards-Technical Committee 6. Assistant to the Head of the Provincial Committee on Awards-Technical

Committee 7. Manager, PhilHealth Region 2 manager 8. Service Desk Officer, PhilHealth, Nueva Vizcaya 9. Office-in-Charge, Nueva Vizcaya Provincial Hospital 10. Chiefs of District Hospital 11. Selected staff members of Nueva Vizcaya of Provincial hospital 12. Mayor, Bagabag Municipality 13. Municipal Health Officer, Bagabag Municipality 14. MSWD, Bagabag Municipality 15. PhilHealth beneficiaries, Bagabag Municipality

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References Daniel E., Rosario D., Bayle B., Padilla L., Almirol B. Nueva Vizcaya Beckons. Bayombong, Nueva Vizcaya, 1997. Lakbay-Aral Terminal Report, n.d. Nueva Vizcaya Health Sector Reform Convergence Workshop Output (Tulong-Sulong sa Kalusugan) Management Sciences for Health, 2001. Site Plan for the Province of Nueva Vizcaya (Update of the HSRA Convergence Workplan January-June 2002). Management Sciences for Health, 2001. Participating municipalities for the MOA signing, Province of Nueva Vizcaya, Philippine Health Insurance Corporation Bayombong Service Office, 2002. Status of Indigent Program Enrollees, Nueva Vizcaya (as of May 2, 2002), Philippine Health Insurance Corporation Bayombong Service Office, 2002. “Medicare para sa Masa” Barangay Sponsor, Nueva Vizcaya. Philippine Health Insurance Corporation Bayombong Service Office, 2002. Public Consultation Report, Nueva Vizcaya Provincial Hospital, Feb 27, 2002. Quality Service Improvement Program Staff Consultation Report, March 1, 2002.

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Health Sector Reform Technical Assistance Project III

PANGASINAN (REGION 1) 1. Socio-Economic and Health Profile With a land area of 536,818 hectares, Pangasinan is among the largest prov-inces in the Philippines. In 2000, the province had a total population of 2,434,086 with 477,819 households, 55% of whom lived in the rural areas. The population is mostly working age (15-64 years). Thirty-nine percent of the population belongs to the younger age groups. Pangasinan is classified as a first class province, with an average family income of P8,371, average family expen-ditures of P6,758.17 and annual regional per capita poverty threshold of P11,975.00. The employment rate in 2000 was 88%. Pangasinan has 51 hospitals, 72% of which are privately owned. It has 6 district health offices, 68 rural health units, 414 barangay health stations, 52 botika sa barangay and 486 family planning clinics. Public hospitals are maintained by the provincial government while rural health centers as well as the city health offices are under the jurisdiction of the mayors. The district health offices are maintained by the provincial government. The following are the vital health indicators in 2001:

Crude birth rate 20.6 per 1,000 population Crude death rate 4.5 per 1,000 population Infant mortality rate 12.3 per 1,000 livebirths Maternal mortality rate 0.18 per 1,000 livebirths Overall malnutrition rate 5.9% with 95% moderately malnourished

2. Convergence Experience In 1996, Pangasinan was chosen to become a model for the LGU Performance Program (LPP) on family planning (Family Planning Technical Assistance Pro-ject) by the Management Sciences for Health (MSH) under Dr. Jose Rodriguez. Pangasinan’s successful collaboration with the Catholic church in implementing the family planning program was replicated in 20 LGUs in the country. In late 1998, MSH technical assistance branched out to hospital reforms. Then with the opportunity, Pangasinan preferred to prioritize hospital reforms than develop inter-local health zones because hospitals are under the control and management of the provincial government. The provincial hospital in San Carlos City became the pilot health facility for such interventions and as part of the

61


hospital reforms. A pooled drug procurement program for the hospitals was developed. In 2001, the Health Sector Reform Technical Assistance Program (HSRTAP) of MSH under Dr. Benito Reverente, continued the health reforms in Pangasinan. Using a convergence framework, the first orientation workshop was held at the Star Plaza Hotel in Dagupan City on March 7-8, 2001. The workshop was attended by 48 people: 27 from the provincial and municipal LGUs, 5 from DOH, 6 from PhilHealth, 2 from the Futures Group Inc., and 8 from MSH. Its purpose was to disseminate information about the convergence strategy, advocate the need for health sector reforms, and address various issues and concerns about the implementation of the HSRA convergence. As outputs, the participants identified the problems of the health sector, analyzed the actions that have already been taken, and developed the vision for health for 2004. Benchmarks, strategies and plans of action were also formulated during the workshop. As a follow-up activity, a Health Summit, was conducted in October 2001 to orient the local government executives on HSRA convergence.

Table 1. Issues Addressed during the First Convergence Workshop in March 2001, Province of Pangasinan.

HSRA component Identified problems Actions taken Vision for 2004

Hospital Reforms

- Dilapidated facilities - Sustainability of hospital

reforms - Lack of manpower - Need to increase

utilization of hospitals - Additional MOOE funding - Poor quality care

- Partial repair/request for funds

- Continuous GAC monitoring improved billing and collec-tion procedure

- Maximized utilization of manpower

- Partial upgrading of equipments

- Automatic 10% increase in MOOE funds by LGUs

- Implement quality assurance program

- All hospitals SS and PhilHealth accredited

- Fully autonomous provincial hospital

- All 5 district hospitals financially viable

Social Health Insurance/ Health Financing

- Lack of qualified/ accredited health service providers

- Health as low priority of local chief executives

- Lack of understanding of health insurance

- Identification and communi-cation of need to Governor

- PhilHealth presented Indigent program to SBS/SP

- Governor’s commitment for 3000 indigent households

- Tri-media campaign

- Coverage: 85% indigent population

- All LGUs with Indigent Program

- Expand benefit package - Increased awareness - 85% of public and private

health service providers accredited

- Increased share of health insurance in provincial health care expenditures

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HSRA component Identified problems Actions taken Vision for 2004

Drug Management

- Irrational drug use - Delivery of drugs not

according to priorities - Perception of poor quality

of drugs procured - High drug prices in RHUs - No clear cut PHIC protocol

on reimbursements - Non-compliance with

PHIC rules and regulations (generic O.R. and incom-plete diagnosis)

- Hospital and Provincial TCS selects and reviews, respec-tively, the type of drugs to be procured by hospitals in accordance with the Provin-cial Drug Formulary

- Memo to suppliers to deliver within 10 days after receiving POs.

- Purchase from qualified and accredited drug suppliers

- Random sampling testing of drug deliveries

- Tender management at the provincial level

- Procurement thru bidding - Development of standard

treatment protocols - PHIC protocol on payment of

"generic" drugs

- Cheap, appropriate, safe, effective drugs available thru Provincial Pooled Procure-ment Program- all 48 cities and municipalities, provincial bidding, municipal procure-ment

- Computerized procurement system

- Functional Therapeutic Committees in all hospitals

Local Health System

- Fragmentation of health services

- Inadequate management system

- Poor quality of services - Career pathway disruption

- Orientation of LCEs regarding health system

- Introduction of inter-local health zone system

- Installation of CBHMIS - Lobby more funds - Availability of computers and

training of staff on IT - Seminar workshop on Total

Quality Management - Value formation seminars - QA for health personnel - Referrals to DBM, CSC re:

salary grades and appoint-ments

- CME seminars

- 6 ILHZ functional - All catchment municipalities

with indigent program - With MOA’s signed - Management -structure in

place - Integrated planning - Information system - Referral system - Human resource program

From key informant interviews, it appeared that not all Mayors were receptive of the HSRA convergence because of differences in development priorities and availability of budget. In the case of the pooled drug procurement, their conten-tions were: (a) inadequate budget, and (b) late deliveries of drugs from the province. MHOs and other health workers were receptive of the HSRA conver-gence because they felt that the district health system before devolution is being revived. It provided a venue where their work-related concerns can be ad-dressed. Another HSRA workshop for civil society was subsequently conducted in Febru-ary 2002. The purpose of the workshop was to disseminate information about the

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health sector reforms being implemented in Pangasinan and to get the coopera-tion of the NGOs in implementing these reforms. A Provincial Advocate Group (PAG) was organized in May 2002. The group goes from one municipality to another to sell the concept of HSRA convergence The PAG is divided into three teams: think tank team (to generate goals and strate-gies), resource team (to provide relevant information to think tank team as well as to LGUs) and spokespersons team (to talk to the targeted clients). 3. Gains in Health Financing

3.1 Status of implementation Even before convergence, PhilHealth was already lobbying to the Mayors for the social health insurance of their constituents. It was during the Health Summit in Pangasinan in October 2001 when PhilHealth introduced the Indigency Program to the LGUs. Pangasinan has lagged behind other provinces in Region 1 in the implementation of the Indigency Program. Out of the 48 municipalities and cities of Pangasinan, only 7 LGUs had current indigent membership. The latest statistics (as of July 2002) show a total of 8,869 families or approximately 20% of the 35,000 to 50,000 estimated total number of indigent families in Pangasinan have already been enrolled. Eighteen of the 48 LGUs have signified their intentions to sign a MOA with PhilHealth and the provincial government in April, 2002. A meeting with the second batch of 28 LGUs was scheduled for August 2002. Nevertheless, the Philhealth Manager claimed that Pangasinan has one of the “best of Phil-Health social health insurance in the Philippines” with Dagupan City having the highest utilization rates. The PhilHealth manager emphasized that hospital reforms should go hand in hand with advocacy for social health insurance. As of July 2002, 44 of the 51 hospitals and clinics in the province have already been accredited by PhilHealth, which include 12 of the 15 government hospitals (including Region 1 Medical Center).

Table 2. Status of PhilHealth Implementation (Medicare para sa Masa) Pangasinan (as of July 2, 2002).

Municipalities # of targeted enrollees (families)

Date of effectivity Remarks

1 Dagupan City 4,852 490 157

0/16/98 6/16/00 3/16/01

Current membership

2 Sto Tomas 500 10/1/00 Current membership

3 Asingan 750 1/16/01 Current membership for 500 enrollees; 250 enrollees to be shouldered by provincial government

4 Bolinao 250 2/16/01 Current membership for 150 enrollees; 100 enrollees to be shouldered by provincial government

5 San Carlos City 1000 3/16/01 Current membership

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Municipalities # of targeted enrollees (families)

Date of effectivity Remarks

6 Alcala 1000 4/16/02 Current membership ; appropriated P242.513 as per Res No 05-s-2002

7 Laoac 220 Not ascertain Current membership 8 Mapandan 1000 9 Mangaldan 1000 To issue certificate of availability of funds 10 Binmaley 1000 Requesting to enroll 500 more enrollees 11 San Fabian 1000

12 San Manuel 500 Appropriated P40,000 as per Res No 10-s-2002

13 Bayambang 1000

14 Basista 500 Appropriated P30,000 as per Res No 198-s-2002

15 Aguilar 500 Requesting to enroll 200 more enrollees 16 Bugallon 500 Requesting to enroll 500 more enrollees 17 Natividad 500

18 Urdaneta City 500 Requesting to enroll 500 enrollees instead of 1000 because of budgetary constraints

19 Labrador 500 20 Dasol 500 21 Sual 1000

Total number of current members 8,869 Approx. 20% of the 35,000-50,000

estimated total indigents in Pangasinan

Table 3. List of PhilHealth-accredited Hospitals and Clinics, Pangasinan (as of July 2, 2002)

Name of hospital Type of hospital Category Alaminos Doctors Hospital Private I Asingan Medicare and Community Hospital Government I Banez Clinic Private II Bayambang District Hospital Government II Bolinao Medical and Community Hospital Government I Cuison Family Clinic and Hospital Private II Dagupan Doctor Villaflor Memorial Hospital Private III Dagupan Orthopedic Center Private II Del Carmen Medical Clinic and Hospital Private I Don Amadeo Perez Sr. Memorial Hospital Private II Don Marcelo Chan Memorial Hospital Private I Eastern Pangasinan District Hospital Government II Espinoza-Rosario Hospital Private II Holy Child General Hospital Private II Labrador Community Hospital Government I Lopez Family Clinic and Hospital Private I Luzon Medical Center Private II Mangatarem District Hospital Government II Medical Centrum Dagupan Inc Private II Nazareth General Hospital Private II Nuestro Senor Sto Nino Hospital Private II Pangasinan Center for Family Medicine Inc Private III Pangasinan Doctors Hospital Private II Pangasinan Medical Center Private III Pangasinan Provincial Hospital Government III Perpetual Help Hospital Private I Pozurrobio Municipal Hospital Government I Prudencio Medical Clinic Private I Ramos Nursery and Children's Hospital Private I Region 1 Medical Center Government III

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Name of hospital Type of hospital Category Rosario-Trino Medical Clinic Private I Saballa-Rosario Hospital Private I San Antonio de Padua Hospital Private II Specialists Group Hospital and Trauma Center Private III St Lucy’s Cataract and Laser Eye Center Private ASC Stella Maris Hospital Private II Sto Nino Hospital Private I Umingan Medicare and Community Hospital Government I Urdaneta Sacred Health Hospital Private II Velasquez medical Clinic Private I Villasis Polymedic Hospital and Trauma Center Private II Vigen Milagrosa Medical Center Private III Western Pangasinan District Hospital Government II Zaratan-Jimenez Clinic Private I

3.2 Process of implementation Lately, PhilHealth has focused on the selling of social health insurance to the different municipalities. PhilHealth uses 3 types of strategies. The investment perspective, which states that the premium per month (i.e., P118/ month) can be applied to the whole family, the political perspective states that the mayor’s investment can gain for himself/herself political mileage and the vice perspective, which states that the personal burden of politicians in providing health assistance to their constituents can be minimized. PhilHealth also applies “psychology” by sensing the needs of the Mayors (“give them what they want to hear from you.”). Apparently, all Mayors in Pangasinan are convinced of the importance of the Indigency Program except for some forms of resistance, which were perceived to be financial. As an alternative approach, PhilHealth convinced the Mayors and the Sangguniang Bayan (SB) to realign their budgets allocated for emergency purposes into social health insurance premium appropriation. However, even with this strategy, LGUs found it difficult to follow PhilHealth’s suggestion be-cause of the natural disasters that often visit the province. While some key informants would like to think that health is not really in the priority agenda of some LGUs, others believe that the implementation of the Indigency Program was also delayed by difficulties in identifying the indigent population.

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Figure 1. Standard Process of Selecting Indigent Beneficiaries, Pangasinan.

Some indigent beneficiaries were found to be personal and political recruits (e.g., blood relations, party mates, friends). One of PhilHealth’s limitations was insuffi-cient manpower to handle huge volume of clients from the region as well as the unavailability of accredited health providers in eastern and western Pangasinan. What made these 18 mayors finally decide to join the Indigency Program? Apparently, the provincial intervention of sharing the premium with the municipal LGUs “broke the camel’s back”. The total premium per indigent family is P1,188 per annum. For 1st-3rd class LGUs, the said amount is equally shared by Phil-Health and the LGU at 50:50 sharing arrangement. The 50-percent share of the LGU is further equally subdivided into provincial and municipal shares. For 4th to 6th class municipalities, the sharing of premium is graduated: 90:10 for the first year; 80:20 for the second year; 70:30 for the third year till PhilHealth and the LGUs have equal shares of 50:50 in the 5th year. Mayors found this arrangement more viable except that problems may be expected to arise once premiums are raised in the second to the fifth years. For sustainability purposes, the provincial government made sure that there is a resolution that (a) authorizes the governor to enter into an agreement with PhilHealth; (b) authorizes, upon approval of the Sangguniang Panglalawigan, the appropriation of an annual allocation of funds for the provincial share of the insurance premium. There is a view that the involvement of PhilHealth in the HSRA convergence should not be limited to the Indigency Program. It should be universal coverage

PhilHealthorients LGUs

Once LGU agrees, the local Social Welfare

Office conducts household survey

using Minimum Basic Needs (MBN)

Social Welfare Office selects a specified

number of indigents based on results of

MBN survey

PhilHealth assessment /

evaluation based on set

criteria

PhilHealth gives individual forms to

identified indigents in the list

Social Welfare Office endorses the list of indigent families to

PhilHealth for further screening & matching

PhilHealth submits list of qualified indigent families to LGU for

funding & coverage by the Indigency Program

LGU enrolls selected

indigents & pay their premiums

PhilHealthorients LGUs

Once LGU agrees, the local Social Welfare

Office conducts household survey

using Minimum Basic Needs (MBN)

Social Welfare Office selects a specified

number of indigents based on results of

MBN survey

PhilHealth assessment /

evaluation based on set

criteria

PhilHealth gives individual forms to

identified indigents in the list

Social Welfare Office endorses the list of indigent families to

PhilHealth for further screening & matching

PhilHealth submits list of qualified indigent families to LGU for

funding & coverage by the Indigency Program

LGU enrolls selected

indigents & pay their premiums

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catering to all sectors. The convergence should cut across all members, “other-wise class distinction is being promoted”. Another come-on for Mayors is the idea of capitation. The RHU will receive capitation money from PhilHealth in the amount of P300 x number of enrolled indigents, given on a quarterly basis. Eighty percent of the capitation fund can be utilized for medicines, supplies and equipment. Ten percent can be appropriated as incentive for the health center staff. The remaining 10% can be used for non- medical services. The RHU should be PhilHealth-accredited in order to qualify for the capitation scheme. In May-June 2002, 5 RHUs qualified for PhilHealth accreditation. These RHUs are in Sto. Tomas, Basista, Alcala, Mangaldan and Laoac. However, these RHUs are not still receiving capitation. As a rule, capita-tion can be availed three months after the RHUs PhilHealth accreditation. In the case of Mangaldan, ID distribution shall be done on July 2002. There seems to be some confusion with regard to capitation. The PhilHealth manager noted that there are no distinct rules and guidelines regarding capita-tion. For example, the Central PhilHealth Office says that PhilHealth funds should be released to the RHUs, but politicians insist that funds should be released to the LGUs. A hospital capitation proposal was presented to the governor and the Sang-guniang Panlalawigan in which hospital budgets will be used to buy insurance premiums. The capitation payments can then be used for the operations of the hospital. However, the use of hospital income to buy insurance premiums was perceived to be “risky” because of concomitant changes in the financial system if adopted. However, a provincial ordinance for capitation is under study.

3.3 Progress of Implementation So far, the following have been the accomplishments in social health insurance and health financing (as of July 2002).

Table 4. Summary of Accomplishments in Social Health Insurance/Health Financing vis-à-vis Indicators of Improvement, Pangasinan, July 2002.

Indicators of Improvement Accomplishment Percent of indigents currently enrolled 8,869 families or approximately 20% of estimated total number

indigent families in the province Percent of LGUs participating in the Indigency Program

7 of the 48 LGUs (12.5%)

Percent of PhilHealth –accredited hospitals and clinics

44 of the 51 hospitals (86.2%) including 12 of the 15 government hospitals (plus Region 1 Medical Center)

Percent of RHUs accredited by PHIC 5 of the 48 RHUs (12.5%) Funding of premium (ratio of prov:mun:Philhealth

For 4th-6th class municipalities; 5:5:90

Social marketing of PhilHealth Active: First batch of 18 municipalities have signed MOA; 2nd batch of 28 municipalities will meet in Aug 2002

Utilization Dagupan City has the highest utilization rate in the entire country. Percent of RHUs receiving capitation 0% Utilization of capitation funds Not applicable Non-PHIC financing schemes 0%

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3.4 Gaps and problems The gaps and problems in the implementation of the social health insurance in Pangasinan are summarized below. • 80% of total indigent families still to be covered • 87.5% of 48 LGUs has still to participate in the Indigency Program • 14% of 51 hospitals and clinics still to be accredited including 3 government

hospitals • 90% of 48 RHUs still to be accredited by PhilHealth Much still needs to be done to increase the coverage of the Indigency Program and to make it more functional.

3.5 Propositions/suggestions • Stronger advocacy to LGUs • Upgrading of district hospitals • Increase PhilHealth’s human resource capabilities 4. Gains in Hospital Reforms

4.1 Status of Implementation The Pangasinan Provincial Hospital (PPH), with its 150-bed capacity, was the target for hospital reforms even during the time of the LPP in Pangasinan. It was formerly the San Carlos District Hospital but was designated as the provincial hospital in 1997 after the former provincial hospital based in Dagupan City was re-nationalized. An interim committee composed of the Governor, member of the Sangguniang Panglalawigan, Provincial Health Officer, Population Officer, DOH representative, Chief of Hospitals, member of the media and NGO representative, was organized as the consultative body for hospital reforms. This group, many of whom are also members of the Provincial Health Board, formulated the policies for hospital reforms. Within the hospital, a Quality Assurance Committee (QAC) was created to oversee the implementation of the hospital reforms. Similarly, Quality Im-provement Teams (QITs) were established in each hospital departments and sections. The Pangasinan Provincial Hospital has maintained its classification as a tertiary health facility. It has visiting consultants from Villaflor Hospital (a private hospital in Dagupan City). It has also links with NGOs such as Rotary club for the polio campaign and the Engender Health for voluntary sterilization and management of post-abortion complication cases.

4.2 Process of Implementation At the beginning of the health initiative, a situation analysis was conducted by the PPH hospital staff to determine the problems that needed to be addressed. Using

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the Monitoring, Training and Planning (MTP) modules, the staff identified the following issues: • low morale/motivation of staff and other employees • need to improve quality of care • poor income generation • low cost-efficiency To address the first issue, 5S technology seminars were conducted in all hospital departments. The seminar emphasized order and discipline in work. As a result, the hospital staff and employees developed higher motivation, stronger self-discipline and better relationships with patients and co-employees. The 5S was later institutionalized through the “Best Hospital Department Award”. The creation of the QAC ensured that quality health services are provided by the hospital. In each department, there is a functional QIT that takes charge of identifying the problems confronted by the department. The QITs meet monthly to discuss the issues, make plans and solutions and submit their proposed plans to the QAC. The QAC also meets monthly to monitor the submission of QIT reports, and to provide more viable solutions to the issues at hand. For example, the committee implemented color-coding as a means of controlling visitors and watchers of patients in the hospital. Among the various concerns of the hospital, shortening patient waiting time at the emergency ward was found most tenable. A time and motion study involving a review of emergency room (ER) policies, physical set-up, flowchart, and functions of hospital staff was conducted. As a result, the ER was separated from the OPD and a unidirectional flow of patients was implemented. Treatment flowcharts and time indicators were adopted while manpower was maximized. The outcome was the shortening of patient waiting time from 30 minutes to 5 -10 minutes. Increasing hospital revenues was also a major concern. To generate higher income, a more efficient system of billing and collection of fee was instituted. The criteria for the availment of social services were reviewed, new policies on patient classification and discharge were adopted, and cost analysis was performed in each hospital cost center. For example, hospital clients were provided with annual ID cards, which classified them according to their ability to pay. Hospitals cost centers were given budget ceilings for operations and excess expenditures were noted. Prescribed drugs were sold at the 24-hour hospital pharmacy. All these interventions resulted in an increase in hospital revenues from P2.4 million in 1998 to P10.5 million in 2000. Currently, the provincial hospital makes use of a portion of the income to upgrade its facilities and shares its revenues with the other 14 hospitals in the province. To address low cost efficiency, several interventions were established, such as the development of a formulary. Hospital therapeutic committees were formed to determine the kinds of drugs to be purchased. Procurement of drugs and supplies was centralized (i.e., Provincial Pooled Procurement Program) and a

70


constant monitoring of cost centers to ensure the efficient use of drugs and supplies was observed.

Figure 2. Average Monthly Collection ('000), Pangasinan Provincial Hospital, 1999-2002.

In July 1999, a Big Bang Day for the hospital was conducted resulting in better image for the hospital, cleaner hospital environment, and satisfaction and better work ethics among the employees. Other hospital reforms at the provincial hospital involved physical changes in the hospital environment like fencing, expansion of the ICU, renovation of the admitting area, putting a covered walk between admitting area and ER as well as some purchase of equipment and supplies for the laboratory. Patients who could not afford to pay were given the option to help in the beautification and cleaning of the hospital. Preventive and promotive health programs are now also being implemented. Regular customer satisfaction surveys are conducted to gather important feedback regarding policies and its implementation. Recent discussions centered on plans to corporatize the provincial hospital or to make it a government foundation. There was hesitance on the part of the provin-cial government for reasons that are legal and political. The province, instead, proposed a 5-year experimental implementation for the corporatization (fiscal autonomy is the preferred term) of the hospital. (If the move is successful, then (it) will be adopted; if not, it will go back to the usual management system). As part of the move for fiscal autonomy, a hospital income retention scheme was proposed to the provincial government where 50% of the excess income be reverted back to the hospital. However, this did not push through because of budget cuts in the internal revenue allotment (IRA) of the province. Currently, the province is looking at the way the Negros Oriental HSRA is implementing its hospital income utilization scheme. There are other issues related to hospital reform in the provincial hospital:

173 190 175 218351 301

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• There is now a resolution that allows hospital doctors to do private practice after office hours.

• PPH is preparing the wards for indigent patients under the Indigency Pro-

gram. Pay wards are also being improved. Currently, district hospitals are being groomed to replicate the success of PPH. The MSH facilitated the technology transfer in Bayambang and Western Pangas-inan District Hospitals. PPH staff conducted 5S and QA seminars in the Urdaneta District Hospital. Hospital reforms at the Bayambang District Hospital are being implemented. The hospital created its Vision-Mission statement where the hospital will become a “center of wellness”. Values formation workshops were conducted to develop committed and motivated health staff. Transparency was an essential component of management. The key informant was quick to add that these two reforms were hospital initiatives. On the other hand, the MSH provided trainings and assistance to the Bayam-bang District Hospital with regard to the following: • Establishment of 5S and Quality Assurance programs • Creation of a hospital therapeutic committee • Financial management • Information management After the devolution, the Bayambang District Hospital maintains an informal relationship with the rural health centers. Resources from the district hospital were shared with the RHUs like kelley pads, cord clamps and Betadine. Dental chairs were procured through NGO’s and other foundations. In general, there was no resistance from the MHO’s regarding the maintenance of the pre-devolution relationship. The resistance came from the Mayors but “it was neces-sary to play politics with the mayors to win their cooperation”. At the Western Pangasinan District Hospital in Alaminos, a Quality Assurance Committee (QAC) has already been established. MSH provided trainings on 5 S, problem management and financial management. So far, the QAC was able to accomplish the following: (a) hospital problem identification, prioritization of identified problems and charting of solutions; (b) efficient system in monitoring patients and watchers through provision of IDs; (c) improvement of the system of billing and collection of fees; (d) organization of a Hospital Therapeutics Commit-tee (although not yet as functional as desired); and, (e) cleaning and beautifica-tion of surroundings. There were observations that the reforms at the Bayambang and Western Pangasinan District Hospitals are “snail-paced” as compared to the develop-ments at the PPH when it was just starting. A key informant from one of the targeted districts claimed that it was because “what has been done to the provin-cial hospital in the past is not being done in the district”, referring to the support given to the PPH by the province and MSH-USAID. (“There is no regular monitor-ing from MSH”).

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In the Urdaneta District Hospital (UDH), a seminar on 5 S was conducted in September 2001 by MSH and PPH. Immediately after, these nine committees were organized: Quality Assurance, Therapeutics, Disaster Control, Grievance and Promotions, Infection Control, Management Staff, Outreach Program, Voluntary Blood Donation, and Waste Management. The initial achievements at the UDH include: • Establishment of hospital cost centers (e.g. OPD services). • Collection of hospital fees • Converting unpaid hospital bills of indigent patients into services rendered to

the hospital, mostly in the cleaning and beautification of the facility The hospital has increased its income – from P700,000 in 1998 to P1.2 M in 2000. The Urdaneta District Hospital has also: • Allowed the practice of private doctors/specialists in the hospital. The MOA

was signed between the Chief of Hospital and Private Practitioner/Consultant. • Allowed the regular monthly visit of a surgeon from the Regional Hospital to

provide surgical services to patients. • Improved the image of hospital (e.g. staff attitude, cleanliness and beautifica-

tion). The Chief of Hospital required all staff to do something for beautification (e.g. planting) at least five minutes before reporting to their official station.

• Acquired funds from the province for the renovation of some parts of the hospital.

• Requested the Provincial Government to have their share of the hospital’s excess income. They were required by the LGU to submit a proposal/plan indicating the details of fund utilization.

• PhilHealth Indigency Program is still in the MOA signing stage.

4.3 Progress of Implementation The following have been the accomplishments in hospital reforms (as of July 2002).

Table 5. Summary of Accomplishments in Hospital Reforms vis-à-vis Indicators of Improvement, Pangasinan Provincial Hospital, July 2002.

Indicators of Improvement Accomplishments Establishment of financial management systems

- Training on financial management - Establishment of cost centers - Improvement of billing and collection - Review of patient classification - Systematic record-keeping

Income generation - Increase in hospital income from 2.4 M in 1999 to 10 M in 2000 Income retention - Proposal was approved by the governor but still to be

implemented Income utilization - Some income were used to 1) upgrade facilities; 2) purchase

drugs 3) as incentives to hospital personnel in the form of monetization of credit leaves; 4) share funds with 14 other hospitals

Fiscal autonomy - Under experimentation

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Table 5. Summary of Accomplishments in Hospital Reforms vis-à-vis Indicators of Improvement, Pangasinan Provincial Hospital, July 2002.

Indicators of Improvement Accomplishments Quality assurance - Training on 5S; improved work attitudes

- Establishment of a QAC Committee - Establishment of QITs in each hospital department - Establishment of hospital therapeutic committee - Improvement of operational systems - Upgrading of facilities - Improvement of surroundings - Pooled drug procurement - Increase in cost-efficiency in all departments

SS/PHIC facility upgrading - PPH is SS and PHIC-accredited; some district hospitals are not PHIC-accredited

Upgrading in hospital classification - PPH already a tertiary level hospital Technology transfer - Technology transfer in 3 district hospitals Networking with private sector - Has work agreement with Villaflor Hospital and NGOs like the

Church, Rotary Club and Engender Health

4.4 Gaps and problems The major gap in the implementation of hospital reforms in Pangasinan relates to the establishment of full fiscal autonomy for the provincial hospital. While hospital income increased five-folds since 1999, much of the money goes back to the province. Another setback relates to the upgrading of the district hospitals to make them Sentrong Sigla and PhilHealth accredited.

4.5 Propositions/suggestions Implementation of the hospital retention and utilization scheme. 5. Gains in Drug Management Systems

5.1 Status of Implementation Problems related to limited financial resources, shortages of drugs and supplies in government hospitals, varied prices of drugs purchased by the health and non-health sectors in many LGUs, as well as non-compliance to the Philippine National Drug Formulary (PNDF) prompted the province of Pangasinan to create and implement a Provincial Pooled Procurement Program (PPPP) in 1998. The purpose was to ensure quality and procure drugs systematically at lower costs. With the help of MSH, the provincial government organized a series of meetings with hospital chiefs, General Services Office (GSO) staff, hospital staff, and suppliers to draft a provincial pooled procurement system. Hospital (HTC) and provincial therapeutics committees (PTC) were organized. The HTC reviews the annual procurement plans of the 14 hospitals and oversees the quality of drugs delivered to these health facilities. The PTC in turn, reviews the drugs requested by the hospitals to be purchased and sees to it that drugs procured are in accor-dance with the provincial drug formulary (PDF), which is a subset of the national drug formulary (PNDF).

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5.2 Process of Implementation The provincial pooled procurement scheme abides by the following process. The process starts with hospitals preparing their annual procurement plans using VEN and ABC value analysis. The hospital staff makes use of their morbid-ity/mortality statistics to determine common cases treated in the hospital after which they assess these cases based on standard protocols and clinical practice guidelines. They, then, use the VEN analysis to classify the drugs according to their therapeutic value (vital, essential and non-essential). Vital drugs are given priority in the purchase. The ABC value analysis determines which of the pro-cured drugs have highest costs. Class A products are those that make up 75% to 80% of total costs; Class B products represent the middle 10%-15% while those in the C category represent about 10%. Since Class A items are expen-sive, highest priority is given to their management. In July of each year, the hospitals then submit their annual procurement plans to PTC and GSO. PTC reviews the plans for compliance with PDF, checks specifi-cations for the bid and forwards the approved plan and specifications to GSO. The GSO consolidates the plans from 14 hospitals, prepares and processes all tender documents and undertakes the bidding process. The Provincial Pre-qualification, Bids and Awards Committee (PBAC) select the winning bids based on price, lead time, product quality, and past supplier performance. The entire bidding process is completed by the end of the year. Then the GSO notifies hospitals about the winning bidder/s. In the last Mondays of every quarter, purchase requests from each hospital are submitted to the GSO coordinator where this office prepares purchase order (PO). Purchase requests are based on the hospital procurement plan, inventory management spreadsheets and availability of funds as evidenced by a bank statement or deposit slips. The LGUs provide the funds for medical supplies (General Fund), which in many cases are dependent on the timely release of the LGU’s IRA; funds for the purchase of drugs come from the Trust Fund (financed by the sale of drugs in each hospital). The hospital supply officer, therefore, prepares two sets of purchase requests: one that is charged to the General Fund, and the other, to the Trust Fund. The quantity requested for a particular product follows a formula where the maximum stock level (MSL), stock on hand and stock on order is taken into consideration. The GSO consolidates all purchase requests from the 14 hospitals. Each winning supplier will receive a number of POs depending on the Purchase Request (PRs) of the 14 hospitals. The GSO issues the POs to the suppliers selected by the PBAC, and to the second supplier if the first supplier is unable to deliver. Signed by the Governor, the POs are ready for pick up by the supplier 5 working days after the PRs are received by the GSO.

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Figure 3. Process Flow for Hospital Procurement, Pangasinan, 2002.

Hospital Supply Officer

PTC/General Services Officer

Provincial Budget Office

Prov Accounting Office

General Services Officer


Prov Treasurer’s Office

Accredited supplier




Prov Governor’s Office

PREPARES PURCHASE REQUEST (PR)

COUNTERCHECKS PR FOR DRUGS, SUPPLIES, EQUIPMENTS

CONTROLS PR, CHECKS ON AVAILABILITY OF APPROPRIATION

OBLIGATES FUNDS (CHARGE TO HOSPITAL ACCOUNTS

PREPARES AND NUMBERS THE PURCHASE ORDER (PO) BIDDING

DELIVERS SUPPLIES TO HOSPITALS

ACCEPTS, INSPECTS DELIVERY, PREPARES VOUCHERS

PROCESS VOUCHERS FOR PAYMENT

PREPARES CHEQUE

APPROVES AND SIGNS CHEQUE

RELEASES CHEQUE TO SUPPLIERS

PREPARES ADVICE OF RELEASE TO BANK

Approved PR

Obligated PR

Numbered PO

Stocks and supplies delivered

Signed vouchers (complete attachments)

Signed vouchers

Prepared cheque

Approved cheque for release

Encashed cheque

Payment account

Approved PR

Purchase Requests (PR)


PTC/General Services Officer



General Services Officer



Accredited supplier




Prov Governor’s Office

PREPARES PURCHASE REQUEST (PR)

COUNTERCHECKS PR FOR DRUGS, SUPPLIES, EQUIPMENTS

CONTROLS PR, CHECKS ON AVAILABILITY OF APPROPRIATION

OBLIGATES FUNDS (CHARGE TO HOSPITAL ACCOUNTS

PREPARES AND NUMBERS THE PURCHASE ORDER (PO) BIDDING

DELIVERS SUPPLIES TO HOSPITALS

ACCEPTS, INSPECTS DELIVERY, PREPARES VOUCHERS

PROCESS VOUCHERS FOR PAYMENT

PREPARES CHEQUE

APPROVES AND SIGNS CHEQUE

RELEASES CHEQUE TO SUPPLIERS

PREPARES ADVICE OF RELEASE TO BANK

Approved PR

Obligated PR

Numbered PO

Stocks and supplies delivered

Signed vouchers (complete attachments)

Signed vouchers

Prepared cheque

Approved cheque for release

Encashed cheque

Payment account

Approved PR

Purchase Requests (PR)

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The supplier then picks up POs within 5 working days. The suppliers are given up to 7 days to deliver the goods to the hospital. The supply officer and hospital auditor inspects the medical supplies while the pharmacist and the hospital auditor inspects the delivered drugs. The Supply Officer prepares the Receiving and Inspection Report and submits a copy to the GSO within 24 hours from receipt of deliveries. The Supply Officer also submits the voucher, signed by the hospital chief, accountant and auditor, to the GSO within 48 hours. Papers are forwarded to finance section. If the products are unacceptable, the end user (pharmacist or medical technologist) submits a completed Product Problem Report Form to the HTC and GSO. The HTC documents and researches the complaint and informs the GSO of the batch number (Figure 4) The LGU pays the suppliers on a quarterly basis after having the documents pass through relevant departments in the LGU.

Fig 4. Action Steps for Suspected Quality Problems, Pangasinan, 2002.

With the pooled procurement program in the 14 hospitals, drugs were bought at much reduced prices, about 46.5% on the average lower in 2001 compared with 2002 prices. It was noted that drug suppliers have dropped their prices in order to compete with the parallel drug importation. Quality drugs were assured because only bids of suppliers accredited by DOH were entertained. Hospital staff learned to prioritize their drugs into vital, essen-tial and non-essential. There was proper procurement of drugs by the GSO using a new set of drug supply contract and bidding documents as well as the avoid-ance of the more expensive emergency purchase of medicines and supplies. Hospitals learned to make use of a common inventory control system, which aids in what drugs to order, when to purchase the same and how many of the said drug should be ordered.

Complaint from hospital

staff

Hospital Therapeutic Committee documents and researches the complaint

Informs hospital pharmacy of the problem/ identifies batch number

GSO informs other hospitals

who received the same batch of

stocks

Informs GSO of the Batch number

GSO sends samples to

BFAD

GSO informs supplier

Supplier replaces batch in

question

Complaint from hospital

staff

Hospital Therapeutic Committee documents and researches the complaint

Informs hospital pharmacy of the problem/ identifies batch number

GSO informs other hospitals

who received the same batch of

stocks

Informs GSO of the Batch number

GSO sends samples to

BFAD

GSO informs supplier

Supplier replaces batch in

question

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Table 6. Comparison of Drug Prices, Pangasinan, 1999-2002.

Name of Drug 1999 2000 2001 2002 2001-2002 % decrease in drug price

Salbutamol nebulas 2mg/ml 36.00 20.00 25.00 16.62 50% Ampicillin 500mg mg vial 35.00 14.00 14.40 10.60 36% Chloramphenicol 1 gm vial 80.00 23.93 21.90 13.75 59% Ampicillin 1 gm vial 109.00 65.00 30.00 14.50 107% Paracetamol 30 mg amp 32.00 18.05 23.00 16.50 39% Oxytocin 10 U amp 78.00 25.20 23.75 18.00 32% Gentamacin sulfate 80 mg amp 89.00 14.20 12.50 9.50 32% Hyoscine N-butyl bromide 20 mg amp 47.00 30.00 20.00 13.75 45% Methylergometrine maleate 200 mg amp 60.00 14.10 22.00 16.50 33% ATS 1500U 55.00 50.00 117.50 110.00 7% Nalbuphine 10 mg 79.80 85.00 91.20 60.00 52% Cefuroxine 750 mg 360.00 128.35 157.00 70.00 124% Mefenamic acid 500 mg cap 500.00 166.66 124.50 92.00 35% Cotrimoxazole 400 mg/80 mg cap 634.00 69.00 117.00 92.00 27% Amoxicillin 500 mg cap 850.00 179.49 222.00 187.00 19%

As expressed by the GSO, there were still delays in the delivery of drugs by the supplier despite the installation of a systematized procurement system. In many cases, the winning supplier/s did not have immediate stocks. Delays were also caused by the inability of the hospitals to submit their requests on time. While the procurement system was considered “ideal”, district hospitals claimed that (a) requested drugs and medical supplies are not delivered in full, (b) some drugs have doubtful quality (although still subject to testing, the results of which takes time), and (c) procurement is based on lowest bids, not on the quality of drugs. The Provincial Health Office has thought of ordering their drugs via the parallel drug importation scheme (PDI). A trial purchase was made in the early part of 2002 but delivery took a longer time ("we ordered in January; the drugs came in June"). The province has not mainstreamed the LGUs for pooled procurement (“Drug is the biggest policy of LGUs”). The Governor did not purposely convince the Mayors to join the provincial pooled procurement because of political reasons. Mayors have their own suppliers of drugs. Drug procurement has been done every quarter at the municipal level. RHUs rely on BFAD accreditation of supplier as their basis for assuring the quality of drugs. There is a common practice in many LGUs where RHU patients get their drugs from the Municipal Hall rather than from the RHU. In Bayambang, for example, the MHO prescribes the drugs to the patients, then the patient goes to the Social Welfare Office to get an approval of indigency, then proceeds to the Office of the Sangguniang Bayan – Chair on Health Committee where the drugs are dis-pensed. To assure safety and regulate the validity of drug dispensing, the patient is asked to go back to the RHU for further instructions on the intake of medicine. The risks involved in this practice are 1) when the patient does not go back to the RHU for final MHO approval and 2) when the wrong, inappropriate drug is given to the patient. The PHO is trying to suggest a win-win strategy, proposing that all vitamins will be taken cared of by Mayors while drugs and medicines will be handled by MHOs.

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Figure 5. Process Flow of Drug Prescription, Bayambang RHU, 2002.

5.3 Progress of Implementation The following were the accomplishments in drug management as of July 2002.

Table 7. Summary of Accomplishments in Drug Management vis-à-vis Indicators of Improvement, Pangasinan, July 2002

Indicators of Improvement Accomplishments Functioning therapeutics committees - With functional provincial therapeutics committee

- With functional hospital therapeutics committee Pooled drug procurement program - With pooled drug procurement program Reduction in costs of drugs - Reduction in costs of drugs by 46.5% in 2002 compared to

2001 prices Assurance of drug quality - Training in drug utilization review

- Drugs purchased according to PDF Pharmacists assure quality of drugs Conducts testing of drugs

Timely delivery of drugs - Still problematic Purchase from accredited suppliers - Procures from DOH accredited suppliers; procures some drugs

from PDI Provincial drug formulary - Existing PDF; based on PNDF Inclusion of municipal LGUs in pooled drug procurement

- 0% but there is continuing advocacy

5.4 Gaps and problems • Problems related to quality of some drugs • Delay and non-full delivery of drugs to the hospitals • Inclusion of municipal LGUs in the provincial drug procurement

5.5 Propositions/suggestions • More intensive training on quality control of drugs • More intensive advocacy of pooled drug procurement to municipal LGUs • More stringent criteria in the selection of bidders to include adequacy of

stocks • Thorough study of benefits derived from PDI

Patient consults MHO

MHO instructs patient on proper intake of

medicine

MHO prescribes medicine

Patient goes to SWO

Patient goes back to RHU

SWO gives certificate ofindigency

Patient goes to SB Chair for Health

and get medicine

Patient consults MHO

MHO instructs patient on proper intake of

medicine

MHO prescribes medicine

Patient goes to SWO

Patient goes back to RHU

SWO gives certificate ofindigency

Patient goes to SB Chair for Health

and get medicine

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6. Gains in Local Health Systems

6.1 Status of Implementation In Pangasinan, the old district health system is being maintained despite devolu-tion. Relationships between the district office and member LGUs are present though informal with no MOA to cement these partnerships. The six district health systems are sustained mainly through funds from the provincial govern-ment. The Bayambang Health District (BHD) is the pilot area for the Interlocal Health Zone. The Bayambang District Health District includes the following LGUs: Bayambang, Basista, Alcala, Malasiqui, Sto Tomas and Bautista. It was chosen because it was able to maintain informal relationships with its catchment munici-palities. A MOA has already been drafted but is still under study by the provincial government. Another consultative meeting with LGUs and health workers will be conducted on July 2002 to discuss the ILHZ framework for Pangasinan.

6.2 Process of Implementation Meetings with MHOs and Mayors were done regularly at the Bayambang Health District (BHD). The District Hospital has continued to share with the RHUs whatever resources it gets from external donors (e.g. PCSO). The LGUs and the district hospital have been complementing each other in terms of manpower resources, medicines and supplies. RHUs refer their patients to the District Hospital. Local executives in the district have already discussed the possibility of forming an ILHZ. A MOA has already been drafted and is still under study by the provin-cial government. There is a plan to organize a District Health Board with the District Hospital Chief as Chair and Mayors, MHOs and an NGO as members. The political dynamics of having two congressmen within the health district was perceived both as a positive and negative factor for the ILHZ governance. The RHUs within the district are Sentrong Sigla accredited, but there is still a need to upgrade their facilities. At the Bayambang RHU, the laboratory is being improved to get PhilHealth accreditation. RHU 1 sought assistance from the PCSO for facility upgrading. However, they have difficulty recruiting a medical technologist because they could only promise P7,000 a month as remuneration for the medical technologist. Aside from Sto Tomas, a 4th class municipality who has enrolled its constituents in PhilHealth way back in 2000, the Mayor of Bayambang was among those who planned to enroll 1000 families in the PhilHealth Indigency Program with support-ing Sangguniang Bayan resolution. An NGO was willing to cover the premium for 1,000 indigent families years before but PhilHealth did not agree because of the absence of guidelines. Indigents at the Bayambang LGU were identified through the Office of the Municipal Social Welfare. The Mayor created a committee composed of the

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MHOs, social welfare workers and Barangay Chairmen to do the selection of indigents. A Minimum Basic Needs survey was conducted to identify indigent families based on DSWD criteria, then the list was submitted by the Social Welfare Officer to the Office of the Mayor and PhilHealth. The criteria for selecting indigents are based on socio-economic indices, such as, household income (ultra poor – P5,000 and below monthly family income for a minimum of 6 children; poor – P5,000 to P6,000/ monthly income); families with irregular income; and type and physical structure of the house (temporary, small, and the like). Based on PhilHealth policy, 20% to 25% of the population represents the target coverage for the Indigency Program. However, the LGU cannot afford to cover the premium of about 10,000 indigent families. Instead, the LGU opted to enroll 10 percent of its indigent population (or 1,000 families). So far, about 773 indigent families in Bayambang were identified and additional families are being recruited to complete the target of 1,000 indigent beneficiaries. The factors that facilitated LGU involvement in social health insurance were: • Health was a political promise of the Mayor in the last elections • Governor’s support to LGUs for the Indigency Program • Sangguniang Bayan resolution to support the social health insurance imple-

mentation • Three barangays allocated budget from their IRA for the social health insur-

ance premium of their constituents • It was a way of minimizing the burden of LGU in assisting indigents for their

hospitalization • Incentives related to capitation. If the RHUs will be PhilHealth accredited,

they will receive P600,000 capitation fund from PhilHealth out of their P1,200,000 premiums/investment.

Among the HSRA reforms, the ILHZ was the least developed in Pangasinan. The key informants felt that the Negros Occidental model was quite difficult to adopt in Pangasinan. Unlike Negros Occidental, Pangasinan does not have the financial resources from the DOH Regional Field Office, equivalent of their premium from the LPP Base Grant and a counterpart from the Provincial Gov-ernment. The availability of these funds enticed municipal LGUs in Negros Occidental to invest for their own interlocal health system. Resistance on the part of the Pangasinan local executives was partly financial and partly political. Mayors were perceived to have other priorities. They have their own turf and seemed more interested in developing a health facility that they could call their own “legacy to the people” (e.g., building a community hospital or buying their own drugs and supplies). For political reasons, even the Governor does not want to impose on the mayors the idea of cost sharing. Instead, the Governor would like to strengthen integrated planning, referral systems as well as information systems.

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6.3 Progress of Implementation The following were the accomplishments with regard to the establishment of inter-local Health Zones in Pangasinan (as of July 2002).

Table 8. Summary of Accomplishments in Inter-Local Health Zones vis-à-vis Indicators of Improvement, Pangasinan, July 2002.

Indicators of Improvement Accomplishments Number of ILHZs established vs. targets - Identified 1 out of 6 potential ILHZs; Bayambang District Office

not yet fully functional With signing of MOA - No MOA signing yet With District Health Board - Still in the planning Sharing of non-monetary resources - Sharing of supplies, drugs and manpower among LGUs in the

Bayambang district; other district offices (e.g. Western Pangasi-nan District Office) claimed to have the same arrangement

Functional referral system - Functional with some feedback mechanisms Networking (NGOs, private sector, inter gov’t agency)

- NGO in the planned District Board; assistance from PCSO

Cost sharing 0% Common fund 0%

6.4 Gaps and problems The establishment of an ILHZ is perhaps the biggest gap in the implementation of HSRA in Pangasinan. Only one ILHZ has been identified yet it has not started functioning as desired. The biggest stumbling block relates to the type of ILHZ to be established in the province. The ongoing deliberations have delayed the signing of the MOA. As expressed by the governor, integrated health zone planning will be the main core of the collaboration. The implementation of a cost-sharing scheme among member LGUs may have to remain in the background.

6.5 Suggestions • Develop a more relevant ILHZ framework for Pangasinan. 7. Best Practices Pangasinan’s strengths are its hospital reforms, specifically in terms of quality assurance and revenue generation. Another strength is its pooled drug procure-ment program for government hospitals, which resulted in significant cost savings for the province. The discretion and prudence being shown by the provincial government in instituting the health reforms was well noted. While it might have delayed the implementation of some of the HSRA Convergence components, the circum-specting attitudes of the provincial officials provided some assurance that the health initiatives are sustainable and culture-sensitive. To pursue health reforms in Pangasinan, the following are in the pipeline:

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• A consultative meeting with LGUs and health workers in July 2002 to discuss the ILHZ framework for Pangasinan.

• A meeting with 28 LGUs in August 2002 to discuss participation in the

PhilHealth Indigency Program. 8. Lessons learned • There should be a prime mover who could motivate people, initiate the

activities and sustain the momentum for reforms. In the case of Pangasinan, the prime mover is the Governor.

• Even if there is a prime mover, the role of an external body like MSH cannot

be at all ignored. MSH has provided substance and direction to HSRA. • The motivations and the political will of the local governments to implement

health sector reform is very crucial. Mayors and the local council are the final decision-makers for any reform that is implemented in their locality.

• Competent and committed technical people and dedicated, reform-oriented

program managers are needed for the successful implementation of reforms. In Pangasinan, the provincial HSRA advocates served as a major push factor for the reforms to trickle to the grassroots.

• For reforms to succeed, the approach should be consultative and participa-

tory. The local culture as well as the sentiments of the local people should be considered. The provincial government and PhilHealth showed sensitivity in dealing with the mayors and local health workers (e.g., drug procurement, social health insurance). At the same time, MSH was very careful not to im-pose any intervention that the locals may not consider suitable to their condi-tions (e.g., corporatization, ILHZ)

• Patience and a well-thought out strategy can bring about a more positive

impact in the long term. The Governor was restrained and deliberate in his ways. He made sure that health reforms can be sustained.

9. Conclusion Great strides have been attained to improve the health system in Pangasinan. The implementation of the HSRA has brought about quality and cost-efficiency in the provision of health services at the provincial hospital. While the HSRA Convergence emphasized the integrated character of the 5 HSRA components, much has still to be done to make the blueprint work in Pangasinan.

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Appendix 1. List of Key Informants. 1. Chief Nurse (San Carlos Provincial Hospital) 2. Chief of Bayambang District Hospital 3. Chief of Urdaneta District Hospital 4. Head of GSO 5. Indigent patients (San Carlos Provincial Hospital) 6. Management financial analyst (San Carlos Provincial Hospital) 7. Mayor, Bayambang 8. Medical Social Worker (San Carlos Provincial Hospital) 9. MHOs, Bayambang RHU I and II 10. MSWD, Bayambang 11. PhilHealth Region I manager 12. Provincial Health Officer 13. Provincial Planning Officer 14. Sanggunian for Health Bayambang 15. Supply officer (San Carlos Provincial Hospital)

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References "Pangasinan Health Sector Reform Convergence Workshop Output." Manage-ment Sciences for Health, 2001. "Site Plan for the Province of Pangasinan (Update of the HSRA Convergence Workplan January-June 2002)." Management Sciences for Health, 2001. Livebirths, Total Deaths, Infant Deaths and Maternal Deaths, Province of Pan-gasinan, 2001. Facts and Figures, CY 2000 Pangasinan. "Comparative Results Hospital Income January 1999-March 2002." Slide pres-entation. "Philippine Health Insurance Corporation Indigent Program Unit Medicare Para sa Masa. Total Members per Municipality per Effectivity Dates." "Pooled Pharmaceutical Procurement in Pangasinan." Technical Notes 2, 2001.

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Health Sector Reform Technical Assistance Project IV

MISAMIS OCCIDENTAL (REGION 10) 1. Socio-Economic and Health Profile Misamis Occidental is one of Mindanao’s 22 provinces. The province had a year-2000 population of 489,000. It consists of 14 municipalities and three cities. The leading causes of morbidity in the province are diseases of the respiratory tract, i.e., acute respiratory infection and bronchitis, tuberculosis, and pneumonia. Influenza and diarrhea register significantly lower averages for the past five years compared to respiratory illness. Respiratory problems increased significantly in 2001 from 3,195 per 100,000 from 1996-2000 to 8,867 per 100,000 in 2001. The influenza rate increased from 1,221 per 100,000 in 1996-2000 to 2,091 per 100,000 in 2001. Overall, morbidity increased significantly in 2001.

Table 1. Ten Leading Cause of Morbidity: Comparison of Five-Year Average (1996-2000) and Year 2001, Misamis Occidental.

5 Year Average Year 2001 N Rate N Rate ARI/Bronchitis 8,387 3,195 23,931 8,867 Influenza 3,204 1,221 5,643 2,091 Diarrhea 3,177 1,210 3,584 1,328 Wounds/Injury 4,011 1,528 3,290 1,219 Pneumonia 2,301 877 3,280 1,215 CVD/HPN 457 174 2,129 789 Peptic Ulcer Disease 253 97 672 232 UTI 317 121 756 280 PTB 450 171 435 161 Accidents/Violence – – 416 154

Number and rate per 100,000 population. Source: Provincial Health Office, Misamis Occidental Over the past five years, cardiovascular diseases followed by pneumonia have been the primary causes of death in the province. Cancer is the second leading cause of death during the period 1996-2000 and fell to third during the year 2001. The other causes of mortality are relatively similar between 1996-2000 and 2001. In terms of infant mortality, there is a general trend of decline from 1996 to 2000. The lowest rate noted is at 7.27 per 1,000 live births. In 2001, it increased to 8.65 per 1,000 live births, but the level was still less than the 1996 figure. This trend is also similar to maternal mortality where there is a general decline. The lowest is 0.21 per 1,000 births in 2000, which slightly increased to 0.23 per 1,000 births on the following year.

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There are 31 hospitals in the whole province (7 public, 24 private). The provincial and municipal government also operate a combined total of 14 rural health units and 77 barangay health stations.

Table 2. Ten Leading Cause of Mortality: Comparison of Five-Year Average (1996-2000) and Year 2001, Misamis Occidental.

5 Year Average Year 2001 N Rate N Rate CVD/CHD 251 336 Pneumonia 177 169 Cancer 194 93 PTB 80 79 Renal Disease/Failure 31 63 Accidents/Violence 72 59 Bleeding Peptic Ulcer 28 26 Liver Disease/Cirrhosis 16 25 Diabetes Mellitus 20 22 Septicemia 12 11

Number and rate per 100,000 population. Source: Provincial Health Office, Misamis Occidental.

Table 3. Six-Year Trend of Infant and Maternal Death 1996 to 2001, Misamis Occidental.

Infant Death Rate Maternal Death Rate N Rate N Rate 1996 55 10.4 3 0.57 1997 42 8.56 4 0.82 1998 38 8.42 2 0.44 1999 38 7.78 3 0.61 2000 34 7.27 1 0.21 2001 38 8.65 1 0.23

Number and rate per 1,000 Birth/Deliveries. Source: Provincial Health Office, Misamis Occidental. 2. Health Sector Reform The province of Misamis Occidental took up the challenge of decentralization by considering health as a main concern. The provincial government conceptual-ized the a set of flagship programs collectively called CHAMPS, which stands for "Competence, Health, Agriculture, Maintenance of Peace and Order, Preserva-tion of Environment and Social Services." With health as a flagship program, financial allocation from the provincial government was secured. This resulted into renovation of public hospitals and health centers. One positive indicator was the significant improvements done on the structure and facilities of the Misamis Occidental Provincial Hospital. With investments on structure and improvement in the quality of its services, the hospital won the Sentrong Sigla Award with a cash prize of P2.4 million. This cash prize was used for further renovation and addition of new facilities. The Misamis Occidental Provincial Hospital is now very competitive with the private health sector. With the success demonstrated by this strategy, other government hospitals in the province are also undergoing significant improvements.

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The initial experience of the province in implementing health programs in a decentralized setting is very favorable. The province is one of the pilot conver-gence sites under the Health Sector Reform Technical Assistance Project. The project is designed to provide assistance and guidance to the local government to ensure that health sector reform initiatives are directed towards a common goal. A convergence workshop was held in the province in August 2001. Its objectives were to: (a) discuss the problems of the local public health sector, (b) agree on a set of targets for each health sector reform area (HSRA), (c) identify the strate-gies to attain the targets, and (d) develop an action plan for each strategy. In general, the workshop objectives were attained. It ended with the development of an action plan and identification of HSRA advocates. The workshop was facilitated by Management Sciences for Health (MSH). It was participated by different LGU stakeholders (like the Mayors, Sangguniang Bayan members, Integrated Provincial Health Officer/s and key management personnel, Chief of Hospitals/representatives, City and Municipal Health Offi-cers/representatives and other LGU top officials), Undersecretary Fernandez, DOH National representatives, Director Fuentes (CHD X), CHD X key personnel, PhilHealth executives, and NGO representatives.

Table 4. Total LGU vs. Health Budget Allocation and Expenditures, Misamis Occidental (1999-2002).

BUDGET ALLOCATION EXPENDITURES YEAR Total PLGU

(PhP) Total Health

(PhP) Total PLGU

(PhP) Total Health

(PhP)

1999

230,590,373.00

58,712,280.00

163,967,790.11

55,428,959.52

2000

263,000,000.00

64,409,801.00

224,916,575.44

61,560,159.18

2001

284,555,000.00

71,218,385.50

293,208,311.06

69,962,636.19

2002

295,905,000.00

74,996,493.00 – – Source: Provincial Budget Office. 3. Gains in Health Financing With regard to health financing, the province has set the following targets: • 85% of the target population are covered by social health insurance in 2004,

of which 40% (40,000 HH) are indigents, 35% are employed and 20% are individual paying members

• RHU accredited per municipality • Collection centers (banks and other units) identified and established in

strategic sites/every city or municipality

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• Efficient and prompt processing of claims by PhilHealth and providers (in 30 days)

• Quality health services available and accessible for social health insurance

members and dependents

3.1 Indigent Program The PHIC oriented all the municipalities and cities of Misamis Occidental to the PHIC Indigent Program. All have expressed support to the program. As of November 2001, 7,440 indigent households had already enrolled in the program. In December 2001, a total of 5,814 identification cards were issued to Indigency Program enrollees. The PHIC also oriented the local government officials about the “capitation scheme.” The scheme entitles an accredited Rural Health Unit a subsidy from PHIC at an amount of P300 per enrolled member of the indigent program in their locality. Thus, for a municipality with 1,000 enrollees, the RHU will receive P300,000 per year. Such fund can be used for improving its services. In Misamis Occidental, there are 7 out of 17 towns that have indigents enrolled into the program. As of April 2002, more than 9,000 households have been enrolled. The program hopes to reach the target of 20,000 households enrolled by the end of the year and 40,000 for 2003 approximately 85% of the indigent population of Misamis Occidental. According to the PHIC Indigent Program Unit of Region 10, it will most likely achieve this target because of the following factors: (a) aggressive promotion of the program package, (b) good relation with the local leadership, (c) proper understanding of local needs and culture (since most members of the unit came from the locality) and (d) the current cost of health services. Enrollment of indigents to the program is cited as among the significant activities with effects on the convergence. The number of enrollees to the program de-pends on the discretion of local chief executives. Lopez Jaena LGU enrolled 2,000 indigent families while Calamba enrolled 100 indigent families to the program. All LGUs in the Oroquieta ILHZ decided to enroll in the program. Other than the PHIC and LGUs, the Social Welfare Office has also been conducting information dissemination and advocacy for the PHIC Indigent Program. They are marketing the social health insurance by encouraging patients to enroll.

3.2 Rural Health Unit Accreditation The Quality Assurance and Accreditation Unit of PHIC Region 10 has informed all the rural health units of Misamis Occidental the necessary requirements for accreditation. Accreditation is necessary so that the unit can avail of the “capita-tion” payment scheme of PHIC indigent program. Based on the initial evaluation of the rural health units, the most common missing requirements are some laboratory equipment, like the centrifuge and the regular medical technologist. In some areas where there is 1 medical technologist

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serving 3 municipalities, the RHUs within the catchment area are constrained on said requirement and cannot be accredited by the PHIC. PHIC X is strict in following the national policy. It is not flexible, even if the utilization rate of labora-tory service in RHUs is low compared to hospitals. According to the PHIC Quality Assurance and Accreditation unit, accreditation approval is fast as long as the facility meets all the requirements. Thus, hospi-tals, city and rural health units are upgrading their facility for accreditation. Long before, Calamba and Plaridel RHUs had submitted their application to PHIC, but they are still waiting for the approval. According to PHIC representative, ap-proval of first application is at the national office, which prolong the processing time and cause delay in approval of applications. Approval of accreditation renewal is at the regional office. At present, there are 7 out of 17 accredited RHUs in Misamis Occidental.

3.3 Capitation Fund The capitation fund calculated at P300/member of the Indigency Program is released every quarter vis-à-vis LGUs lump sum payment of premiums. This is an issue between accreditation and indigency program enrollment. PHIC Re-gional and Provincial Offices have no control on it since the national guidelines indicate that capitation fund release will be based on quarterly monitoring. Moreover, for LGUs that have no accredited health facility/unit, the capitation fund will be given to the provincial or district hospital. This agitated an issue on the cost and return of premiums for some LGUs, but for others, they treat it as a subsidy on top of their health budget. A suggestion was presented to focus group participants with PHIC representa-tives on the utilization of capitation fund to augment Indigency Program cover-age, procurement of equipment and medicines for patients. The City Health Office of Oroquieta is PhilHealth accredited, but it has not received the capitation fund. It is still on process according to latest update from PHIC personnel during the focus group discussion. Oroquieta is on a losing end if the LGU dwells on the cost of Indigency Program premiums and capitation fund issue. PHIC is also processing the capitation fund for Bonifacio at P120,000 per quarter.

3.4 Patient’s Experience of Indigent Program The patient’s experience of the benefits of the indigent program was also deter-mined by conducting patient interviews. Of 4 clients interviewed, 2 were non-members of PHIC. One was an Indigency Program member and the other was a paying member. All were aware of PhilHealth, but non-members were not knowledgeable of PHIC programs. One informant heard about PHIC on TV. Except for the IP member, the informants have never heard of the Indigency Program in their area. One of them had heard it in Oroquieta City yet did not know about the details of the program. IP member’s knowledge about PhilHealth is the free hospitalization benefits “when sick, during emergency and accidents.” He did not know the cost of premium because it was the LGU who paid for it. For

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the paying PhilHealth member-informant, the premium is affordable because it is an automatic payroll deduction, although she did not know the exact amount. Services availed by social health insurance member-informants were hospitaliza-tion benefits, which included free room accommodation, doctor's fees, ultra sound and x-ray services and refund of medicines purchased outside the hospi-tal. For the paying client, it was their first time that they availed of their social health insurance. They spent out of pocket for medicines purchased outside the hospital pharmacy. However, they were aware that PHIC would reimburse them. PHIC non-members did not approach their political leaders to avail of social health insurance. One informant wanted to avail it but she could not afford to pay the premium. The other informant expressed a capacity to pay the premium. The IP member was aware of MOPH only as a service facility of PhilHealth, but the paying member was aware of other facilities accredited by PHIC. Informants preferred government hospitals because the cost was lower compared with private facilities. The IP member was satisfied with the services of the Indigency Program. Satisfaction was expressed in terms of financial assistance for hospitalization, which lightens their financial burden, free medicines, quality time and service given by services providers, and clean facility and equipment.

3.5 Identified Problems of the PHIC Indigent Program The following are identified as problems associated with the PHIC Indigent Program: • The first is the slow and lengthy application process. PHIC personnel are in a

hurry to get LGUs’ application, but approval and ID distribution have always been delayed. This worries local officials because it harms their credibility as well as the credibility of the program. The double survey (DSWD entry inter-view and PHIC means test survey) could be the main contributor to this lengthy process. Perhaps, there should be only one standardized survey.

• The second is the discrepancy in accomplished application forms, which

delays the process. Application forms are not properly filled up. • The third is inadequate information given to IP members about available

services, facilities, benefits and other program information.

3.6 Policy Directions of the Province on PHIC Indigent Program An interview was also done with the current provincial governor regarding his policies on health financing. According to the Governor, “he is ashamed and at the same time challenged by the situation that Misamis Occidental is behind and slow in the Indigency Program.” He would like to lobby to President Arroyo for walk-in clients social health insur-ance on the premise that everybody has the right to be treated, and when sick,

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he/she should be admitted to the hospital. This was based from his observation of PHIC’s policy for enrolling indigents, which he described as “strict bureauc-racy.” The Indigency Program application process is long and tedious. There is a need for alternative and radical innovations to cut the bureaucracy and red tape, not only in health but also in other development sectors like agriculture. PhilHealth insurance is the second issue that the Governor would like to lobby to President Arroyo on the contention that 60% of the province’s population is poor. Thirty five thousand households are targeted for Indigency Program coverage. Records show that there are 18,000 household-enrollees of the program. The Governor decided that the Provincial Government would pay the premium to facilitate and fast track Indigency Program implementation. If they wait for Municipal LGUs counterpart, it will result to sluggish program implementation. The Provincial Government will cover all the premiums in a cost-sharing scheme of 90:10 (10% being the LGU counterpart). However, the Governor does not like the policy on step increment in the cost-sharing scheme. “It is just an entice-ment.” From his viewpoint, medicines or health should be “service” and must not be mixed with “business.” Eighty-five percent to 90% percent of patients are indigents, which resulted to a big drain of the province’s financial resource. The Governor wanted to convert indigents to paying patients through the Indigency Program. He is thinking of a certain credit facility so that indigents can avail credit assistance to buy for medicines. The Governor agreed on the concept of sustainability of health services. He said, “nothing here on earth is free, everything has a price, and that’s the es-sence of accountability and responsibility.” It is his challenge to change the attitude of his people into empowered constituents. In Women’s Health program assisted areas, there is P500 – P1,000 financial assistance for hospitalization. 4. Gains in Hospital Reforms There are two key elements of hospital reforms being done in the province. One is quality improvement and the other is financial sustainability. These two areas or reforms in the hospital have gained much attention in the province and support from the political leadership. Hospital improvement is considered as a top priority by the political leadership in the province. It has set these two targets: • Self-sustaining hospital operation through generation and retention of hospital

income • Upgraded diagnostic and therapeutic capabilities of six (6) public hospitals It was found out during the interview with hospital management staff that there are also other sources of funds for hospital operations other than the provincial government. The Misamis Occidental Provincial Hospital for instance has operat-ing expenses of P23 million, vis-à-vis an income of P3 million. The Provincial

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Hospital income is 13% of the total budget. Apparently this indicates a big deficit of LGU’s investment over time. The prevailing scenario has implications on perennial budget limitations and inability to self-sustain hospital operations. Like many LGUs, Misamis Occidental depends on the Internal Revenue Allotment (IRA). To avoid total dependence on the provincial government, the management staff of the provincial hospital taps other donors like NGOs and civic organizations (e.g., People Helping People). The latter is a private initiative composed of private practitioners, government employees, LCEs and religious groups. It is headed by the NGO representative in the Oroquieta Health Board. It receives donations from the United States, which it has used for hospital equipment and beds. Another hospital, the Calamba District Hospital, is a secondary care facility. It has a 50-bed capacity similar to the MOPH. There are 6 semi-private and 11 Medicare beds. The rest are charity beds. The hospital is run and served by 52 employees who also educate their patients. The budget in 2001 was P11,722,420. It has an income of P1.9 million, approximately 16% of the total budget. Hospital income is low because 80% of patients are indigents. Occu-pancy and service fees are very minimal.

4.1 Strategies to Increase Hospital Revenues One of the key elements in hospital reform is the issue of financial sustainability. A basic research on MOPH’s financial data was in preparation for the costing program designed to increase revenues for the district hospital. One way of increasing revenue is through charges, but the political leadership is not comfortable with the idea. Both the MOPH and Calamba District Hospital collects charges and fees for semi-private rooms. Medicare room is charged P220/day, semi-private/non-Medicare patients at P100/day and free of charge for the ward. Any additional increase in hospital fee for services must be approved by the Sangguniang Panlalawigan. This causes difficulty to increase revenues through charges. There was a resolution proposed to the Sangguniang Panlalawigan to increase hospital fees/charges, but the Governor and the Sangguniang Panlalawigan did not approve it. The Provincial Government determined Service fees and room rates. This is supported by legal mandates, such as the Sangguniang Panla-lawigan resolution and Executive Order. Aside from the legal mandates, the hospital management has difficulty in increasing service fees because most patients are indigents. Additional private rooms are the most common response of informants to increase hospital income. Another strategy to increase revenue is to increase utilization of hospital services as an avenue of improving hospital operations. However, hospital management and health providers are constrained on their inadequate regular budget. In line with this strategy the hospital management had submitted a facility-upgrading proposal to the Provincial Health Board for possible funding, which includes additional private rooms.

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It was also raised in the discussion with the management staff of Calamba District Hospital and the members of the Calamba District Health Board that another way of increasing revenue is to encourage enrolling indigents to PHIC Indigent Program. One of the problems in hospital income is the issue of collectibles. The very slow rate of processing and reimbursement by PHIC is a problem. This problem is shared by both the Misamis Occidental Provincial Hospital and the Calamba District Hospital. Their experience revealed two to six months for processing and reimbursement. Document deficiencies, slashing and denying of claims were observed to be minimal. Based on PHIC policy, it takes 60 days of processing for reimbursement from the date of beneficiary discharge. At the regional level, the PHIC reduced the processing timeframe to 30 days. It will still go through the usual accounting procedure. Although processing time is reduced, the regional office is bounded to some constraints, like limited available funds and delayed fund transfer from central to regional office. Another attributing factor pointed out in the delay of reimbursement is the delay in postal services. The hospital has undergone significant physical improvements and because of this it became more competitive with the private sector in terms of income and revenues. There are more private rooms built and the old “Medicare” facility is refurbished. These attract the employed sector to be admitted in the hospital, thereby increasing revenue. In the case of paying client-member, they heard feedback that clients prefer the MOPH private rooms than private hospitals. However, they need to make advance reservation due to very limited rooms. It was suggested that it would be better if Medicare ward has private or semi-private rooms. The hospital started charging other services like issuance of medical certificates, increased its laboratory charges to levels competitive with the private sector but affordable to the middle income and with subsidy to the indigents.

4.2 Strategies to Decrease Operations Costs Misamis Occidental Provincial Hospital functions as a 130-bed capacity facility vis-à-vis a 100-bed budget. Average rate of occupancy is 30-35 patients per day, but on the date of visit, it registered 69 occupants. A strategy adopted by the hospital to decrease operations cost is to limit the number days of stay of patients in the hospital. In terms of decreasing operations cost, the hospital is also actively pursuing its participation in the Parallel Drug Importation Program of the Department of Trade and Industry and the Department of Health. It has already placed a bulk order together with the other members of the district health zone. lt also adopted guidelines that shorten hospital stay and ensure efficient delivery of health services for admitted patients. A ceiling for subsidy to charity patients is now in place to decrease operations cost. So far, these strategies have been successful because of social preparation and information campaign to patients.

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With these efforts to achieve financial sustainability, there is still much to be desired. There is still a perceived need to external source of funding. Charitable organizations and non-governmental agencies are now being tapped to help further improve the operations. A proposal was already made to use hospital income to augment its operations cost instead of reverting the income back to the provincial government. Basic quality improvement training using the 5S technique was conducted for key officers of the provincial health office and provincial hospital. It directed at reorienting the work ethics of health personnel to complement the physical improvements done for the hospitals. Its consequences are enhanced staff competence, maintained hospital cleanliness and compassionate care to pa-tients. The overall result revealed increase in morale of staff and perceived improvement in services by the patients. The Governor has expressed plans of buying CT scan equipment. To date, no hospital in the province has a CT scan. The Governor, however, supports HSRTAP’s suggestion for the province to initially conduct a market study. This is to ensure that the province will be able to recover its planned investment, con-sidering that there are reports that other private hospitals also have plans of acquiring it.

4.3 Quality Improvement Strategies Aside from the physical improvements of the hospital, the MOPH also underwent significant training for the quality improvement of its services. They have adopted the 4Cs of quality assurance:

Conducive facility Competent staff Compassionate management and staff Courtesy

Other activities related to quality improvement are: • Ensuring availability of consultants per department • 3 – 4 days confinement of patients to avoid congestion • Do away unnecessary examinations • General rounds in the facility every Wednesday • Regular conference with hospital management and staff (“no holds bar”) • Come up with standard treatment guidelines • PA system and television set showing health video programs and promotions

as information media for hospital clients/patients.

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A feedback system from the patients regarding their experience in the hospital has also been set up. They try to learn what patients want and institute the necessary changes through the suggestion box, one on one contact with pa-tients, direct or individual feedback from people who are empowered in airing their concerns directly or in media/radio program, feedback from the Mayor and Dr. Conor (consultant) and Peoples Organization feedback (e.g. Women’s Organization). Feedback from the suggestion box accounts a small percentage, which usually reveals complaints like "hospital is dirty", "don’t like the nurse" and "don’t allow religious group singing during siesta time". Hospital management seemed to have difficulty in getting direct feedback from patients because of the latter’s reservations. They heard complaints from the radio program especially on "no available medicines in the hospital pharmacy". Complaints from the public radio program do not come frequently There is also a hospital grievance committee. Health educator and program officer also conduct survey and rounds in the hospital. It was emphasized that information should be given properly and in the right time to resolve high expec-tations from the people. One patient interviewed said, she was quite satisfied with the facility and its services. The quality of service provided is characterized as accommodating and good. Service providers are facilitative, the facility is clean, and equipment is available. However, some drugs were not available in the hospital pharmacy, which forced them to use their money. Furthermore, the hospital has a limited number of doctors, which caused longer waiting time and delay in admission. Only 1 doctor did the rounds. Non-PhilHealth member-informants revealed their satisfaction in terms of the following: • They were attended immediately by service providers (“alisto ang mga

doctors ug nurses” – "the doctors and nurses were alert") • Available drugs in hospital pharmacy, in case not available – the doctor

provided them with medicines • Clean facility • Accommodation is okay and they were provided with materials • Laboratory and other services provided are okay • No problem during discharge of patients, especially with indigent certification

from the LGU and Social Welfare Office

4.4 Overall Assessment of Hospital Reforms Hospital reform interventions under the HSRA technical assistance have been focused first on the Provincial hospital. It started replicating in other health

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facilities. Based on actual observation, in-depth interviews and focus group discussion, Misamis Occidental is strong in hospital reforms at provincial and district levels. Proposals and strategies presented to minimize or close the gap between limited budget and income to sustain hospital reforms include lobbying to the Sang-guniang Panlalawigan (SP) to allocate the users fee or hospital income back to the hospital through a trust fund that will be utilized for other operations costs and reimbursements. Dr. Conde requested the HSRA visiting team to include users fee utilization for hospital operations in the recommendations. Hospital man-agement wanted to improve facility services and make it competitive with private facilities. Implement parallel drug importation and pooled procurement to reduce drug cost are proposed. This will increase the number and volume of available drugs and offer cheaper price to patients. Another area for improvement is in terms of adopting the service program (e.g. indigent patient’s watcher/relative renders janitorial service/s in lieu of cash payment). This should be integrated in watchers class. This will result to reduc-tion in personnel services for facility maintenance. So such cost cutting mecha-nism will be a saving in operations cost that can be utilized to augment drug or other hospital operations requirements. In this way, there is no money lost, but gain in service and augmentation of other budget items, especially for drugs. Most likely, it will have a rippling effect on increasing hospital revenues. Lobbying to Local Chief Executives and Provincial Administration to increase budget allocation and allow increase service fee collection are also proposed (e.g. additional private rooms, increased charge of hospital services). When asked about what made hospital reforms successful in Misamis Occiden-tal, the Oroquieta District Health Board cited the following factors: • Political will and strong support of Local Chief Executives (both in previous

and current administrations), of which health has been a development priority of the province. Basically, this attributes to the finding that Misamis Occiden-tal is strong in hospital reforms at provincial and district levels.

• Positive attitude and openness of hospital management and staff to adopt changes/reforms.

• Technical assistance of MSH on quality assurance and hospital reforms.

• Cooperation of clients and service providers. 5. Gains in Drug Management Systems In the area of drug reforms, an orientation-workshop on the different ways of shortening the procurement process and the significant features and advantages of pooled procurement and the parallel drug importation program was done. A therapeutics committee training was also conducted with participants coming

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from the different government hospitals therapeutics committees and local health zones. The training resulted in the organization or reactivation of therapeutics committees in all government hospitals in the province and subsequently in the different local health zones. With regards to drug management reforms, the province had set the following targets: • Creation of hospital and provincial therapeutic committees • Capacity building through training • Creation of provincial formulary • Creation of drug procurement committee

5.1 Drug Procurement Just like in other provinces or hospitals, drug procurement in Misamis Occidental entails a long process. Before devolution, the province had no problem on drug procurement because it purchased drugs directly from the sole distributor with the lowest price. After devolution, the drug procurement process takes longer, about 25 working days or more. The average time flow from the requesting office to PGSO is 2 weeks or 10 working days. COA guidelines indicate 10 days allowance prior to bidding. However, the PGSO shortened it by conducting an open bidding every Friday. It takes another 5 working days after bidding up to delivery of purchased drugs/supplies. It takes months for the hospital to receive the requested drugs and supplies from the start of the procurement process. Aside from policy regulations there are also other problems such as availability of funds for the purchase and disapproval of requests. If the Administrative Officer disapproves drugs/supplies purchase request due to unavailable budget, the purchase request is left on the drawer. Their experiences show that drug pro-curement requests were disapproved even if justifications were made. Some-times justification is okay with certain minimal allowance (for instance, if the allowable procurement quantity is pegged at 250 but actual request is 300). Another reason for delays in drug procurement is the practice of pharmacists to request only when there is “zero” stock level. The PGSO has already notified the pharmacists to practice proper inventory operations and timely request for drug and supply procurement to prevent shortage and stock out. Aside from the long process, there are also other concerns like the cost and quality of drugs. The lowest bidder policy is sometimes not followed by PGSO on the basis of some supplier’s credibility. Negotiated bidding will only be practiced when and if 2 successive open biddings failed. PGSO is doing follow-up calls to suppliers to ensure that stocks are available even if the purchase order is still on process. Requested drugs/supplies are delivered within one week after the bidding.

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According to the PGSO, the specification of drugs in prescriptions and purchase requests either branded or generics also facilitates the process of drug procure-ment. Branded drugs are really more costly than generics. Incomplete drug specifications from the requesting party (e.g., not specified if it is a 250 mg or 500 mg Amoxicillin) have been a problem of PGSO. This also stretches the process-ing time. The PGSO encountered “fly-by-night” suppliers. In 1994, the province had a bad experience in bulk procurement, which resulted in an accumulated inventory of expired drugs because the doctors did not prescribe those drugs. It was a big loss to the LGU. Findings also show that the PGSO has not thought of any other strategy of reducing drug cost aside from PDI and pooled procurement.

5.2 The Hospital Therapeutics Committee The Hospital Therapeutics Committee meets as the need arises. Topics of discussion during meetings are as follows: • Pharmacy requirements • Policies on proper drug management and procurement • Seminar on proper drug management and procurement • Essential drug list. Each doctor submits list of preferred drugs used for their

prescriptions. Hospital Therapeutics Committees have been organized in MOPH and in Calamba District Hospital. The Hospital Therapeutics Committees of both hospi-tals have failed in convincing doctors to adhere to the principles of the Generic Law. In the two hospitals, doctors prefer branded drugs in their prescriptions to patients. Their preference is based on their clinical practice with the perception (undocumented) that generic drugs are less reliable in terms of quality than the branded. The IPHO and Chief of Hospital convinced the doctors to prescribe generics instead of branded drugs. However, doctors have strong position on preferred drugs. They had discussed generic drug prescription but doctors have no confidence on the quality of generics. Based on their experience, branded drugs are more effective based on patient’s shorter recovery period. In fact, they practice double dosing for gener-ics as alternative of branded drugs. They also anchor on the contention of questionable sources of generic drugs. Furthermore, doctors have the prerogative to prescribe drugs of their choice because the Governor had promised to purchase preferred drugs prescribed by doctors. This is based on their professional capability and medical expertise. Seldom those doctors prescribe generic drugs, if not there is a preferred drug in the prescription. In other words, generic prescription with specified brand has no substitution. Doctors and members of the Therapeutics Committee are not sensitive on drug price, but on the quality of drugs. Doctors refuse to accept and prescribe drugs, which are not of their preference.

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Figure 1. Schematic Flow of Drug Procurement Process.

10 days

Hospital Therapeutics Committee

Composed mostly of doctors from each department, administrative officer and chief nurse. The committee is responsible of identifying and approving essential drugs for procurement based on the Philippine National Drug Formulary, PHIC list of accredited drugs and doctors preference for prescriptions.

Hospital Pharmacy/ist

Responsible of pharmacy operations, conducts inventory management and informs the Hospital Therapeutics Com. on the critical stock level and need to purchase drugs. Waits for the approval of the Therapeutics Com. before preparing the final list of essential drugs for procurement.Submit drug request (EDL) to IPHO supply officer.

IPHO Supply Officer

Prepares purchase order and other related documents. Process and route purchase order with attached documents to Administrative Officer for budget allocation approval, prior to the signature of IPHO. Endorses procured drugs to IPHO pharmacist.

Provincial General Service Office

Process purchase request from the IPHO. Requires recommendation of the Therapeutics Committee, specification of brands & drug source.After final approval, conducts pre-bidding qualifications.Screens bidders and conducts final bidding. Procurement of requested drugs and supplies.Endorses procured drugs and payment charges to IPHO Supply Officer.

IPHO Administrative Officer

Validates, approves/disapproves purchase request based on available budget and payment charges. Returns papers to Supply Officer

Integrated Provincial Health Officer

Approves and endorses purchase request.


Validates approval of purchase request based on available budget and payment charges.

Provincial Treasurer Office

Validates and prepares fund allocation for purchase order and payment.

Provincial Governor

Validates purchase request.Final approval/disapproval of purchase request and payment.

15 days

10 days

Hospital Therapeutics Committee

Composed mostly of doctors from each department, administrative officer and chief nurse. The committee is responsible of identifying and approving essential drugs for procurement based on the Philippine National Drug Formulary, PHIC list of accredited drugs and doctors preference for prescriptions.

Hospital Pharmacy/ist

Responsible of pharmacy operations, conducts inventory management and informs the Hospital Therapeutics Com. on the critical stock level and need to purchase drugs. Waits for the approval of the Therapeutics Com. before preparing the final list of essential drugs for procurement.Submit drug request (EDL) to IPHO supply officer.

IPHO Supply Officer

Prepares purchase order and other related documents. Process and route purchase order with attached documents to Administrative Officer for budget allocation approval, prior to the signature of IPHO. Endorses procured drugs to IPHO pharmacist.

Provincial General Service Office

Process purchase request from the IPHO. Requires recommendation of the Therapeutics Committee, specification of brands & drug source.After final approval, conducts pre-bidding qualifications.Screens bidders and conducts final bidding. Procurement of requested drugs and supplies.Endorses procured drugs and payment charges to IPHO Supply Officer.

IPHO Administrative Officer

Validates, approves/disapproves purchase request based on available budget and payment charges. Returns papers to Supply Officer

Integrated Provincial Health Officer

Approves and endorses purchase request.


Validates approval of purchase request based on available budget and payment charges.

Provincial Treasurer Office

Validates and prepares fund allocation for purchase order and payment.

Provincial Governor

Validates purchase request.Final approval/disapproval of purchase request and payment.

15 days

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Another contention on doctors’ preference as cited by the PGSO is “the need of medicines is one thing that one cannot dictate.” Patients rely on doctors’ pre-scription/s even if drugs are expensive. There are also instances wherein pa-tients prefer branded drugs in doctors’ prescription or even over-the-counter purchase. Hence, doctors’ requests for drugs are based on their preference of quality drugs, which are expensive. They are not too sensitive on affordability of drugs and the patients’ financial capacity. In such manner, it can be deduced that doctors have strong influence on the kind of drugs to be purchased and are the ones dictating drug procurement. In order to solve problems related to drug prescription, the therapeutics commit-tee plans to adopt hospital formulary and treatment guidelines. Members of said committee are about to finish the treatment guidelines and hospital formulary. They based it on existing guidelines, which they adapted from guidelines of the World Health Organization and their records on morbidity and mortality. With regards to the issue on doctors’ preference in drug prescription, the Provin-cial Therapeutics Committee chair is banking on parallel drug importation and the committee’s advocacy in prescribing generic drugs. Likewise, “she has been convincing her colleagues little by little to adopt the Pharma 50 program of the DOH (now known as "Gamot na Mabisa, Abot-kaya” or "Effective, Affordable Medicine" program). There is a campaign for the public pharmacy initiated by the Provincial Government. The informant has a drastic plan to overhaul the Hospi-tal Therapeutics Committee by changing its composition for an empowered and active membership. There are also attempts to organize an ILHZ Therapeutics Committee in Calamba District Health Zone. The plan is still being developed and the commit-tee is not yet functional.

5.3 The Public Pharmacy A Provincial Therapeutics Committee was organized to take charge of the public pharmacy. Its main function is to oversee, establish guidelines and manage public pharmacy operations. They perceived parallel drug importation as “a big help to lower drug price.” They adopt the “per demand procurement,” which will be usually done every quarter. As of this time, they have not been planning to venture on bulk purchase, but would like to coordinate with the ILHZ Board for pooled drug procurement. The committee meets bi-monthly, but there were series of meetings in the process of conceptualization and organization stage. The hardest part as well as challenge of the committee is “how to get things started for public pharmacy operations.” The Provincial Therapeutics Committee composition registers 3:3 ratio of doctors and non-doctors. The public pharmacy is envisioned to operate like a business venture with no credit policy to maintain financial sustainability. It has a seed money of P700,000. The Department of Health gave P100,000, which encouraged Oroquieta City and the Provincial Government of Misamis Occidental to allocate a share of P300,000 each for the initial capital. It is a trust fund managed by the Botica Provincial Task Force under the chairmanship of Dr. Rachel Micarandayo. Although it is a trust fund, it is subject to the same processes, although not as lengthy as that of

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the Provincial Hospital pharmacy. Replenishment of stock is late, depending on availability of funds, inadequate budget and supply is not proportional to demand requirements. The public pharmacy will be under the direct supervision of the Provincial Hospi-tal pharmacist, Ms. Rosario L. Mejia. A DOH paid pharmacist and a province paid clerk will be responsible in the operations. The Provincial Therapeutics Committee still needs to identify the business manager who will oversee the inventory, financial reports and the business operations status. During the discussion about the public pharmacy, the following were identified as potential problems: • Replenishment problem or reorder and procurement of drugs and supplies • Delayed PhilHealth reimbursements • Senior citizens privilege, which is a 20-percent discount on drugs and sup-

plies purchased; the public pharmacy mark up is only 10% (this was based on the result of their survey of pharmacies, indicating a usual mark up of 12%-15%

Solutions were also discussed for the possible problems that will be encountered by the public pharmacy. Some of the possible solutions discussed are: • No credit policy except for PhilHealth and adopt ceiling on allowable drug

purchase • Pooled procurement by coordinating with the DOH regional office or through

the Provincial Therapeutics Committee with the ILHZ Board (just get the or-ders and needs of different RHUs) and through the parallel drug importation program

• Impose utilization of generic drugs on stock to avoid expired inventory. • Adopt a running inventory/checklist of essential drugs posted in nurses’

stations and different departments. Pharmacist should make the list and double efforts in reminding and posting of drug inventory. Moreover, distrib-ute the checklist/running inventory during grand rounds every Wednesday.

• Adopt hospital formulary and treatment guidelines. They are about to finish

the treatment guidelines and hospital formulary. They based it on existing guidelines, which they got from WHO and their records on morbidity and mor-tality.

• Inform doctors about PhilHealth drug guidelines. • Open to external technical assistance on drug and hospital management

inclusion of Administrative Officer, Supply Officer and client representative/s in Provincial and Hospital Therapeutics Committees

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• Stop misinforming or influencing the perception of patients on branded and generic drugs. There is a need to inform patients on available, alternative, and/or generic drugs.

• There is a need to review policies and convince doctors to prescribe generic

drugs

5.4 Problems and Solutions Associated with Drug Management System • Inadequate budget for medicines and supplies has always been considered a

perennial problem. Availability of funds/ceiling has been a problem in pro-curement. As of the second quarter, the IPHO was utilizing the third quarter budget. The pharmacy cannot cater and meet the demand requirement be-cause of limited funds. Quantity of drug purchase is based on available funds as reflected on the annual procurement plan.

• The long bureaucratic process, which accounts to lengthy processing with

many validation and signatories (from 37 to 29 signatories). The problem in drug procurement is not on the concerned people involved in the whole proc-ess, but the tall bureaucracy and process.

• Procurement thru open bidding also attributes to delays in serving the pur-

chase request. Sometimes there is only one bidder, so another open bidding has to be conducted. A negotiated bidding will be adopted after 2 successive failures in open bidding.

• Doctors’ preference on branded drugs in their prescriptions, especially for

antibiotics. Apparently this defines the gap in meeting drug requirement vis-à-vis limited budget because branded drugs are expensive. It consequently lim-its the quantity and variation of drugs for procurement. In a way, it is also a hindrance to bulk procurement.

• Communication gap between requisitioning and processing officers. The

pharmacist had emergency request since year 2000, but did not receive the order. Only to find out lately that it was waived due to unavailability of alloca-tion as validated by the IPHO Administrative Officer. It’s only now that they are aware of the scenario on the actual drug procurement process.

To address the problems considered above there is a need to lobby for increase in drug fund allotment to meet demand requirements. The Supply Officer also suggested to minimize or shortened the bureaucracy in the drug procurement process. Involvement of stakeholders in the Therapeutics Committee with the inclusion of Budget and Supply Officers, and Peoples Organization/s representa-tive/s to level off economies of scale in drug procurement. With multiple mem-berships, availability of members to attend meetings is an apprehension. This can be offset through advance scheduling and proper notice. The PGSO per-sonnel are willing to spend time every month to attend Therapeutics Committee meeting. A regular monthly meeting is deemed necessary for Therapeutics Committee to level off issues and concerns on drug management system.

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Advocacy on the utilization of drugs available in the pharmacy and prescribe generic drugs have to be done. This will cut costs both for the health facilities and patients while increasing the quantity and variation of available drugs in hospital pharmacy and city/rural health units. This entails strong advocacy, political will and determination of facility management on changing service providers’ and patients’ unfavorable perception on generic drugs. 6. Gains in Inter-Local Health Systems With regard to the local health systems, the province has set the following targets: • Four inter-local health zones established with effective and efficient local

health system. Reorganize functional management structure and technical committee.

• Signing of MOA and launching of Inter-Local Health Zone (ILHZ). • Conduct quarterly meeting by ILHZ. • Conduct year-end program review by zone. Prior to the HSRTAP, Misamis Occidental has already organized a province-wide health board composed of the different sectors, like the provincial government, hospital management staff, public health officials, social services and various non-government agencies. This board is responsible for planning and implement-ing the health programs of the provincial government. The Provincial Government formalized its commitment to fully support the inter-local health zone through Sangguniang Panlalawigan resolution, which author-ized the Governor to enter into a Memorandum of Agreement with Municipal LGUs and other health sector reform stakeholders. The Governor issued an Executive Order to LGUs regarding the organization of the inter-local health zone. Four inter-local health zones with effective and efficient local health system have been targeted in the health sector reform convergence. The inter-local health zone adopts the collective approach and networking to improve the health system and condition of the people through appropriate health programs and better services and facilities. Even if the President does not have the program on reducing drugs cost and increasing the coverage of the Indigency Program, still the Provincial, City and Municipal LGUs have prioritized health in development program. The perception of LCEs is that “healthy people are associated with progress and less complains from them.” Organizing the inter-local health zone was a felt need of LGUs and health service providers after and during the devolution. It was not a forced issue from the national to operationalize a local health system. Their experiences on decen-tralization of health services, of which LGUs and health providers were unpre-pared on drastic changes in protocols and management functions, necessitate collaborative efforts to improve delivery of health services. LGUs had difficulty in meeting budget requirements for health programs and services. Thus, there is a

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need for complementation of resources (financial, manpower, facility, equipment, logistics and others) among LGUs within the health district. Moreover, doctors were unprepared as managers. Before the Convergence activity, Misamis Occidental already formed the District Health Boards in 1999. It is separate from the Provincial Health Board. Local stakeholders are in the stage of developing a structural organization of the ILHZ when the convergence strategy was introduced. The Oroquieta District Health Board meets every two months, while the Calamba District Health Board meets as the need arises. The Technical Management Committee is to be organized as a separate body to provide recommendations to the District Health Board. Said committee will be composed of MHOs, medical technologists, IPHO man-agement and selected staff. The local health board is effective in making resolutions for the implementation of different public health programs. The board also requested PHIC to minimize document requirements, shorten the application and reimbursement processes. Misamis Occidental PHIC Field representatives feed forward the request and concerns of LGUs and health providers to PHIC higher authorities. At the regional level, PHIC authorities expressed commitment to facilitate and cater field (ILHZ board/LGUs) requests. Initiatives of the local health board for public health programs include partnership with NGOs, advocacy through IEC, facilitate the implementation of vegetable gardening/ FAITH program and barangay self-sufficiency program. For the self-sufficiency program, every barangay adopted the cooperative system in planting trees, vegetables and other income generating crops. Proceeds will go to the barangay for health facility improvement, medicines and other needs. Oro-quieta’s initiative will be adopted by the provincial government. Replicability potential of said initiative in Lopez Jaena is positive but requires advocacy and program marketing. The Oroquieta Health Board is willing to share their experi-ence to other LGUs. It was also revealed that the Mayors gave P30,000 for the self-sufficiency program. Trees along the highway are part of the self-sufficiency program. The Oroquieta City Health Board has expanded its membership. It includes representative from other offices, namely: Agriculture, Social Welfare, Budget and Department of Environment and Natural Resources. It was during this stage that the convergence strategy for the Health Sector Reform Agenda was intro-duced to the province.

6.1 The Oroquieta District Health Zone The Oroquieta District Health Zone (ODHZ) is composed of Oroquieta City, the municipalities of Aloran, Pana-on, Jimenez, and Lopez Jaena. The Memoran-dum of Agreement is accomplished on March 22, 2002. This signifies the intention of the different member municipalities to share health and social re-sources and explicitly allocate funds that can be used for the operations of the district health zone. From the various ILHZ’s in the province, the ODHZ was chosen as the model zone because of the commitment and interest shown by the participating LGUs. The Technical Management Committee is managing the

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zone. It is composed of key members of the district health board. The district health board meets every 3 months to discuss current implementation of projects and future plans. The willingness of the LGUs to commit its resources and openness to undertake developmental activities are crucial elements that could facilitate the attainment of reform objectives and targets in the pre-defined geographic area, like in this case the ODHZ. One initial sharing of resource project is the drug-sharing scheme for patients admitted at the Misamis Occidental provincial Hospital. Certain amount of dugs are allocated to admitted patients referred by the differ-ent municipalities of the district health zone. In terms of resource contribution, the different member municipalities agreed to different financial contribution scheme depending on the income of the municipal-ity. Before Health Sector Reform Agenda intervention, the province had organ-ized and started operating the local health district system, which is now termed as inter-local health zone. There was a Memorandum of Agreement, which stipulated P200,000 revolving fund contribution per municipality. This was based from the previous commitment of the former governor to give P1 million to supplement medicines and other needs for hospital operations. Although the monetary contribution was not realized, still the inter-local health zone has been functioning without the cash or revolving fund. For them, “the cash could have been a big thing if it was realized.” Oroquieta City will contribute a larger amount compared to Aloran, a 5th class municipality. The DOH also pledged a certain amount to make the operation of the district health zone successful. The district health zone is strongly supported by the provincial government and city government of Oroquieta. At present a minor problem being sorted out by the district health zone is to develop policies of fund disbursement that will not be against COA rules. The district health zone also serves as the venue for inter-LGU collaboration on health activities. Development issues and concerns like increasing membership to the PHIC Indigent Program, bulk procurement of drugs and implementation of DOH program activities at district level are being discussed in a collective man-ner. The active participation of the DOH representative has facilitated smooth implementation of DOH programs (e.g., the renewed polio vaccination campaign, non-communicable diseases programs, etc.). The district health zone has also started formulating the referral system to facilitate admission of patients to health facilities within the district. The referral system was developed with technical assistance from MSH. A referral form is already designed and tested during the last two months. It was considered to be relatively successful. There were no reports of professional conflicts between staff of health facilities since the implementation of the referral form. Another activity being done by the district health zone is sharing of resources and inter-RHU support so that all health care facilities in the zone will be PHIC and Sentrong Sigla accredited. This was considered a priority in order to ensure the delivery of quality health service in public health and hospital facilities within the zone.

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6.2 The Calamba District Health Zone

The Calamba District Health Zone is younger than that of Oroquieta. It is organ-ized based on the old district health system/zoning. There are five member-LGUs, namely: Plaridel, Calamba, Baliangao, Sapang Dalaga and Concepcion. Organization of the ILHZ Board is one of highlights of convergence. The local health board started its organizational phase last year. The board met three times last year and had met once in this year last May 13. In principle, the Board agreed to meet every quarter, but attendance of Local Chief Executives was a concern at the same time a limiting factor in the convergence meeting. Municipal Health Officers attend regularly during meetings and would echo whatever information and concerns to their respective LCEs. The Memorandum of Agreement is not yet accomplished. In principle all LCEs are supportive and amenable to the convergence. There are still lacking signa-tures of some LCEs. The delay of MOA signing is attributed to non-attendance of Mayors during ILHZ Board meetings. The District Health Officer is taking the challenge to facilitate MOA signing by going to different LGUs/LCEs, despite constraints on mobility and available staff to do the legwork. The District Health Officer was committed to accomplish the MOA within the month of May. Another factor that delays the accomplishment of the MOA is the standard monetary contribution of P200,000 per LGU (formerly agreed prior to the conver-gence strategy intervention) for their revolving fund, regardless of classification and size. The Local Chief Executive of a 6th class municipality requested to other member-LGUs of the ILHZ to lower their contribution, but the members disap-proved it. This is another issue that the ILHZ Board is facing. The Local Chief Executive is in turn hesitant to give the contribution because it would turn out that the LGU would be doubling its investment while they will be enrolling to the Indigency Program. Another contention of the said LCE is the limited funds of the LGU as a 6th class municipality. In the case of another LGU, the LCE is willing but there is a faction of the Sangguniang Bayan who is responsible for the approval of fund allocation and disbursement. While other LGUs are willing to share the agreed contribution of P200,000, still the ILHZ Board has not decided on who will and where to keep the money. However, they managed to continue their convergence activities even without the revolving fund and accomplished MOA. Based on the latest development of the ILHZ, the Board will meet once a month. Points of discussion during previous ILHZ Board meetings are: • Medical outreach (Surgical Outreach Mission), which was already done. • Contribution per LGU for their revolving fund (please refer to above discus-

sion). The original intention of the revolving fund is for the improvement of the District Hospital. There was a commitment of P1,000,000 from the former Provincial Administration for the revolving fund of the health zone, but they have not received it.

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PHIC is willing to enroll all indigents but it has to be LGU initiated. Thus, there is a need to strengthen the Inter-local Health Zone. The challenges for the younger Calamba District Health Zone are to: • Prepare plan of activities / program of activities for one year to entice enthu-

siasm, commitment and priority of Local Chief Executives to convergence activities and programs.

• Convince the LCE of a 6th class municipality to hire a doctor for the RHU.

Although said municipality is used to the situation of no doctor at the RHU, but the service providers are overloaded with responsibilities, especially those cases requiring the technical expertise of a doctor. Likewise, the peo-ple are relatively deprived of such service provision.

6.3 Favorable Outcome of the Inter-local Health Zones

Sharing and complementation of resources is a significant convergence under-taking of the inter-local health zone. This has been facilitated with a functional ILHZ Board; otherwise, it could have been difficult. The inter-local health system further helps and facilitates sharing of resources. LGUs resource complementa-tion is classified as follows:

a. Monetary/cash contribution for the ILHZ revolving fund. Member LGUs of the Oroquieta ILHZ decided to put up standing fund. Aloran and Lopez Jaena LGUs pledged P200,000 each, Panaon with P100,000 and Oroquieta City with P500,000. They have not set a target for the remit-tance/collection of monetary pledges. Likewise, they are still confused on fund management as to where to put the money and to which or whom to give the amount. They have not decided on the details of fund utilization. So there is a need to convene all Mayors to deliberate on said matter. In their last meeting, there was a proposal to create a fund management committee and refer to COA for technicalities.

b. Sharing of medicines/supplies and other logistics.

LGUs health providers are accustomed to borrowings or sharing of vac-cines, medicines and other supplies in case one RHU lacks or run out of stock. Another example is the Calamba District Hospital counterparts for drugs, medical supplies and other logistics during the Surgical Outreach Mission.

c. Complementation of manpower and other services.

Member LGUs practice complementation and sharing of manpower and other services. Like in the case of Jimenez Medicare Hospital, which has 2 doctors, the MHO of Panaon complements service duty if one doctor is not available or absent. For medico legal cases, the MHO of nearby municipality takes the responsibility if the assigned MHO in the area is not available. The ILHZ convergence resolved

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the medico legal issue and concern in the past, which was basically jurisdictional in nature. Strengthening of the referral system is another major collaborative activity of the inter-local health system. The Misamis Occidental Provincial Hospital (MOPH) is the co-referral facility for all district and community hospitals, as well as from the CHOs/RHUs. Jimenez Medicare Hospital, which is a PhilHealth accredited facility, is also a referral unit in the LGU, but it is only a 15-bed hospital. Establish and develop medico legal guidelines. Medico legal was the “battle-ground” between hospitals and rural health units. Issues and concerns in the past among field and hospital doctors on medico legal is now resolved. Empowerment of political leaders and their constituents through social prepara-tions for local development has also been noted to be an important effect of the district health zone. With the inter-local health zone, LCEs revealed that they share a common thrust on the empowerment of political leaders and their con-stituents. This is an indirect, yet salient strategy in the course of convergence. It would develop the capabilities of local officials and service providers to be more grounded and responsive in implementing appropriate development programs and meaningful initiatives. It is also in the same context that the people in the communities are capable and empowered as stakeholder and participant of local development. It is very important, lest critical to change the conventional devel-opment paradigm to progressive. Hence, it takes a lot of concerted efforts to make the constituents as participants and stakeholders of local development, instead of mere beneficiaries or recipients of any development program.

6.4 Factors for Successful Implementation of Inter-local Health Zones During the interview with the key members of the district health zone, the factors that led to the successful implementation are: (a) strong will of the stakeholders to serve the people of Misamis Occidental, (b) presence of people with technical knowledge and expertise, (c) unified vision since all local executives in the zone belong to a single political party, and (d) social preparation of all the stakeholders including patients. Support of political leaders and political will of LCEs and health service providers are cited as facilitating factors of the health sector reforms in the province. Competent and service oriented health officials and service providers are among the key factors of the province’s health reforms. Technical assistance provided by the Management Sciences for Health is also considered to be important. The partnership of the town of Lopez Jaena with Consultants from the Department of Family and Community Medicine of the UP College of Medicine is also considered to be helpful. Political maturity and cooperation of local chief executives, program managers, health providers and other stakeholders in their efforts toward local development. The province is cited as “very fortunate” on this aspect. Political color is neither an issue nor a deterrent in the HSRA convergence. One good thing in Misamis Occidental is the maturity level and oneness of political leaders in implementing

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local development priorities and programs. Although Mayors do not belong to the same political party, still they exemplified unity and cooperation towards a common vision and direction of local development, which is “for the people.” This also makes Misamis Occidental as one of the pilot sites in Mindanao for health development programs even then. Multi-sectoral membership of the local health board facilitates implementation of health development programs. Likewise, adequate social preparation is consid-ered important.

6.5 Unresolved Issues for the Inter-local Health Zones Despite the encouraging success pointed out previously, there are some chal-lenges for strengthening of the inter-local health zones in Misamis Occidental. There is a need to do the following: • Strong lobbying for increase in health budget from the LGU. • Convince LCEs to implement the Magna Carta. During the Health Summit,

the LCEs made a commitment to fully implement the Magna Carta. For Panaon LGU, capitation is an option to solve the Magna Carta issue.

• Strengthen the ILHZ with strong commitment and priority of local chief

executives. • Convince the LCE of a 6th class municipality to hire a doctor for the RHU to

provide what is due and better health services to the people. • Adopt a participatory development approach in strengthening the local health

system, wherein patients/clients and other stakeholders will have representa-tion, responsibility and ownership of any initiative, program or activity. Pro-grams and activities of the ILHZ should be grounded on community-based needs in order to come up and implement appropriate and meaningful inter-ventions/activities that would ensure sustainability, desired outcomes and im-pact of health sector reforms.

• Institutionalize health information system in every LGU, inter-local health

zones and the province. 7. Gains in Public Health Services Most of the target set by the province related to public health services is also related to the target set for creating a functional inter-local health zone as dis-cussed earlier. Some additional targets but may be related to the ILHZ are: Upgrading of RHU facilities, Integrating RHU and hospital services, and Training of RHU personnel. The province is still implementing the DOH programs. During devolution the implementation of some of these programs was slightly affected. For example, the availability of vaccines for the EPI and anti-TB drugs for the NTP was very low immediately after the devolution. Local health facilities (hospitals,

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CHOs/RHUs) continue to implement the DOH regular public health programs on Expanded Program on Immunization (EPI), Nutrition, Family Planning, National Tuberculosis Program (NTP), Communicable Diarrheal Disease (CDD), Cardio-vascular Disease, Acute Respiratory Infection, Maternal and Child Health, Leprosy, Sexually Transmitted Diseases, Cancer Control Program, Environ-mental Sanitation and Breastfeeding. As implementers of public health pro-grams, they receive supplies/logistics on national grant programs, trainings and technical assistance from the Department of Health. These programs are more on preventive than curative. Bulks of health providers’ workload are on Maternal and Child Health, EPI, breastfeeding, FP, NTP and consultations. The creation of the district health zones lead to revival of the public health programs and services. Through the health zones, implementation of new programs like the “Patak Polio” program and the personnel training for the new Visual Screening Program were done with ease. The municipal health officers are also going to barangay health stations to perform preventive and curative services. During their trip to the barangays they also take the opportunity to conduct information and education activities. One example is their promotion of the local government programs like the “Food Always in the Home” program and the “Plant a Tree Grow with Me” campaign. These programs being promoted in coordination with the local government units are very good example of the cooperation of political and health leaders in the province. Such activity also becomes a well-rounded approach to health promo-tion, integrating socio-economic and environmental concepts in health care. Implementation of public health programs should be associated with socio-economic programs to ensure sustainability and impact.

7.1 Routine Activities of Rural Health Units Oroquieta City Health Office has 4 doctors, and one of them handles consultation and IEC. There is a television set for IEC while clients are waiting for their turn. Normally, it takes 4 hours for consultation service in the facility. Most clients come to the health center in the morning, so the doctor usually does fieldwork in the afternoon. Each barangay is visited once in two weeks. However, it rela-tively depends on the availability of medicines because it is useless to go to the barangays without medicines. The mentality of rural folks is always to expect consultation service with free medicines every time the doctor visits the barangay. It has been a common notion that doctors go to the barangays for curative services, when in fact should also visit there for preventive service or program. In the case of Oroquieta, doctors also go to puroks and households in different barangays to conduct IEC and attend BHWs regular meeting. They have three purok-household classes in a month. Lopez Jaena has only 1 doctor, 7 midwives plus 1 casual serving 28 barangays. So the midwife to barangay ratio is 1:4, which is quite low. It has implications on

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the availability, quality of time and service provided per area. Health programs promotion is done during cluster meetings. There is no resistance from the church or any religious sector on Family Planning program (NFP and modern methods). They have no target for FP and NTP programs, so now there is no issue on coercion of clients. Misamis Occidental experienced failures on implementing NTP utilizing relatives as patient partner for TB patients. Thus, they find it more effective to implement the program with BHWs as patients partner. Oroquieta City gives a P200 honorarium for BHWs on top of the barangay honorarium. Lopez Jaena gives the lowest because their BHWs receive only P75 from the barangay. Honorarium of Aloran BHWs ranges from P100 – P200. It depends on the capacity of the barangay. BHWs have health card, which is also coined as amelioration card. The BHW can avail a maximum of P10,000 hospitalization benefit at the Misamis Occidental Provincial Hospital. Their other incentive is free CBC service. BHWs gathering and convention is supported by the local government. Training support for BHWs is also provided by local health offices. 8. Best Practices and Lessons Learned Overall, the best practice that can be considered in the experience of Misamis Occidental is in the area of hospital reforms. The initial financial support from the provincial government allowed significant improvement of the Misamis Occidental Provincial Hospital in terms of structure and facilities. With the improvement in facilities, the hospital became more competitive with the private hospitals. Further quality development and services improvement led to increase in revenues. With the potential being seen by the political leadership, increasing financial support resulted to more improvements. It eventually paid off for the province when the Misamis Occidental Provincial Hospital won the Sentrong Sigla Award two years in a row (hall of fame). The prize money of PhP2.4 M was later used for further improvements. Now, the Misamis Occidental Provincial Hospital can be consid-ered as the best hospital in the province and is now considered to be better than its private counterparts. The integration of health, social and economic programs led to a holistic ap-proach in providing health care. Health workers when they visit their respective barangays also promote social programs like the FAITH and ANT program of the provincial government. Their initial participation in an environment program called “Plant a Tree Grow with Me” fostered better relationship with the political leader-ship of the province. With this partnership, health was considered as one of the priority program of the political leadership as evidenced by its key program - the “CHAMPS.” It serves as the guiding principles of the province’s style of leader-ship. It stands for Competence, Health and Education, Agriculture, Maintenance of Peace and Order, Protection of Environment and Social Services - the priority action areas for the political leaders of the province. With this integrated ap-proach to health care the province was able to attract external financial assis-tance to its programs like the DOH Matching Grants, AusAID and other charitable organizations.

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A unified political leadership was also pointed out as the reason for successful implementation of the health sector reform in the province. The experience of the smooth implementation of the Oroquieta District Health Zone can be attributed to a common objective of the political leaders of the different member municipali-ties. Their willingness to share resources and contribute financial assistance to the ILHZ consequently boosted the morale of health workers. Issues and con-cerns are resolved. They give their best in serving not only the health needs but also the social needs of their constituents. 9. Conclusion and Recommendations With this initial experience, the implementation of the health sector reforms will be easy in the province of Misamis Occidental. In fact, with the initial social preparation undertaken by the province, the “convergence strategy” for health sector reform may have just formalized what is already in place. There are some areas for improvement, though while the improvement has been enormous. The question of sustaining the achievements becomes of paramount importance. Financial sustainability of health programs maybe jeopardized if the political leadership continue to believe that health services should be provided free for everybody. Public sources of funding are very limited. Budgetary deficit has always been a complaint of most health units. The province may consider imposing charges on its health services. The annual hospital income is only about 10% of its annual operations expense. Increasing revenues may be the only way to sustain quality health services. There must be a more efficient way of implementing the PHIC Indigent Program. The double-checking of the included indigents by the DSWD and PHIC may be seen as redundancy. While it is true that misclassification may be seen in about 10%, this is a small proportion considering the delay of the provision of health services to those who need them most. The PHIC Indigent program may also be a solution to the limited budgetary allocation for the rural health units. The capitation fund that will be given to the RHU will surely be a significant augmentation of its operating cost and improvement of services.

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Appendix 1. Key Informants and FGD Participants. PHIC Region 10 1. Mr. Madet Bataran, Jr., Indigency Program Unit Head 2. Dr. Diomel A. Anuta, Accreditation Unit Head 3. Datu Masiding M. Alonto,Jr., AVP/Regional Manager IPHO 4. Dr. Jose Conde, Officer-in-Charge/Chief of Provincial Hospital 5. Dr. Rachelle Micarandayo, Public Health Officer I 6. Mr. Arturo Batoy, Supply Officer 7. Mrs. Rosario L. Mejia, Hospital Pharmacist 8. Dr. Griselda Santamaria, Chair, Provincial Therapeutics Committee Governor’s Office 9. Gov. Loreto Leo S. Ocampos, Provincial Governor and Chair of the Regional

Development Council Oroquieta ILHZ 10. Hon. Leonardo R. Regalado II, Chair/Mayor of Aloran 11. Hon. Melquiades D. Azcuna, Jr., Mayor of Lopez Jaena/President of Mayors

League 12. Hon. Catalina Mangubat – Sanggunian Bayan member/Chair, Health

Committee of Panaon 13. Dr. Blanche Flores, DOH Representative/City Health Officer, Oroquieta City 14. Dr. Lita Paroan – Municipal Health Officer, Aloran 15. Dr. Arden Mangubat, Municipal Health Officer, Panaon 16. Dr. Bernardita Gaspar, Municipal Health Officer, Lopez Jaena 17. Ms. Eloisa Taban – Philippine Health Insurance Corporation Misamis

Occidental Service Officer 18. Mr. Elijah Beleno D. Demetrio II, Philippine Health Insurance Corporation

Misamis Occidental Service Office 19. Ms. Erlinda Maturan, City Health Office Nurse Calamba ILHZ 20. Dr. Rodolfo A. Nazareno, Chief of Calamba District Hospital/Health District

Officer 21. Dr. Rachel Micarandayo, Public Health Officer I 22. Dr. Rogelio Yap, Municipal Health Officer, Plaridel 23. Dr. Annie Bacarro, Municipal Health Officer, Calamba 24. Hon. Roldan Chion, Mayor, Concepcion 25. Mr. Reo Durac, Administrative Officer, Calamba District Hospital 26. Ms. Naome Jumalon, Chief Nurse, Calamba District Hospital 27. Ms. Jeme Dora Olandag, Nurse, Calamba District Hospital 28. Ms. Sirena M. Dalogdog, Midwife, Calamba District Hospital 29. Ms. Teresita Lumantas, Public Health Nurse, Sapang Dalaga 30. Ms. Julieta Awa, Public Health Nurse, Concepcion 31. Ms. Stella Armada, Public Health Nurse, Baliangao

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Clients 32. Ms. Fely Caboral, Jimenez 33. Ms. Corazon Marcelino, Oroquieta City 34. Mr. Marcelino Lumanog, Lopez Jaena 35. Ms. Milagros Catane, Oroquieta City Provincial Social Welfare Office 36. Ms. Narda P. Umandam, Provincial Social Welfare Officer I Provincial General Services Office 37. Mr. Cesarito N. Chiong, Provincial General Services Officer 38. Mr. Crispolo Secang, Assistant Provincial Gen. Services Officer 39. Ms. Candelaria Andoy, Supply Officer IV

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Health Sector Reform Technical Assistance Project V

BULACAN (REGION 3) 1. Socio-Economic and Health Profile Bulacan has 53 municipalities and 1 city. Most of the municipalities belong to the third to first class range with only Bustos and Pandi remaining as fourth class municipalities. The total population is 2,229,266 as of the 2000 Census, growing at a rate of 4.02% annually. There are 463,886 households with an average household size of 5. The rapid increase in population and high density has brought about an increase in unemployment rates and environment related problems. Correspondingly, there is an increased demand for bigger expenditures for social services, particularly health services. The high incidence of poverty results in an increased dependency on public health services. Drug addiction, violence against women, and child abuse have become public health issues and the health sector realizes the need to address such multifarious concerns.

Table 1. Provincial Administrative Profile. District Municipality # of barangays Ave. annual income (PhP) Classification

Bulacan 14 12,862,704.00 Third Calumpit 29 16,111,767.00 Second Hagonoy 26 28,607,966.42 First Malolos 51 36,581,570.49 First Paombong 14 16,582,736.05 Second

1st

Pulilan 19 16,176,226.12 Second Balagtas 9 18,072,640.91 Second Baliuag 27 32,333,285.75 First Bocaue 19 21,085,214.64 First Bustos 14 11,193,671.11 Fourth Guiguinto 14 14,602,604.74 Third Pandi 22 10,192,342.69 Fourth

2nd

Plaridel 19 19,800,429.05 Second Angat 16 13,108,781.37 Third Doña Remedios Trinidad 8 14,315,531.70 Third Norzagaray 12 23,546,412.27 First San Ildefonso 36 17,152,558.40 Second San Miguel 49 22,989,231.07 First

3rd

San Rafael 34 14,994,824.58 Third Obando 11 12,779,211.36 Third Marilao 16 25,746,549.89 First Meycauayan 26 54,021,142.25 First San Jose del Monte 59 35,430,882.87 First

4th

Sta. Maria 24 28,725,274.71 First

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The major causes of infant mortality in the province are birth injury, pneumonia, congenital anomalies and prenatal morbidity. The mortality and morbidity profiles of Bulacan show the simultaneous incidence of infectious and lifestyle diseases, a clear indication of the interface of traditional and modern diseases that present a difficult challenge to the health sector in the province. There is a strong private sector in Bulacan that assists the public sector in the provision of health services. The active participation of the health private sector decreases the burden of the public sector in ensuring good health.

Table 2. Bulacan Selected Socio-Demographic and Economic Indicators. Indicator 1990 1995 2000

Total Population (in ‘000) Rank in Region 3

1,505 2nd largest

1,784 1st

2,230 1st

Population Growth Rate Rank in Region 3

3.22 1st or fastest

3.24 1st

4.90 1st

Population Density 573.4 679.8 738.6 1990 1994 1997 Human Development Index Rank in Region 3

0.790 1st or highest

0.763 1st

0.700 2nd

Life expectancy at birth Rank in Region 3 Not available 68.6

2nd highest 69.8 2nd

School Enrollment Rate Rank in Region 3 Not available Not available 92.22

1st or highest Real per capita income (at 1994 prices) Rank in Region 3

Not available Not available 26,141

2nd highest

Poverty Incidence* Rank in Region 3

20.4 (1991) 6th or lowest

17.3 6th

Not available

Source: Time to Act: Needs, Options, Decisions, State of the Philippine Population Report 2000, Commission on Population, January 2001, pp. 83-87; 11980-1990, 2 1990-1995, 3 1995-2000. *Philippine Human Development Report 1997.

Table 3. Leading Causes of Morbidity and Mortality 2000. Morbidity Mortality

Diarrhea Acute Respiratory Infection Pneumonia Influenza Diseases of the Heart Pulmonary TB

Heart Diseases Cancer Pneumonia Pulmonary TB Cerebro Vascular Accidents Accidents

Table 4. Selected Health Indicators.

Indicator 1990 1995 Infant Mortality Rate* Rank in Region 3 Philippine IMR

43.85 2nd lowest

56.69

34.83 lowest 48.93

Under- 5 Mortality Rate* Rank in Region 3 Philippine U5MR

58.96 2nd lowest

79.64

43.11 lowest 66.79

Maternal Mortality Ratio* Rank in Region 3 Philippine MMR

188.7 2nd lowest

209.00

149.07 2nd lowest

179.74 Source: Time to Act: Needs, Options, Decisions, State of the Philippine Population Report 2000, Commission on Population, January 2001, p. 88.

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Table 5. Nutritional Status, 1998. Indicator Bulacan Region 3 (mean) Philippines (mean)


21.8 5.1 21.1 41.8 35.6

26.7 5.9 23.3 45.4 30.5

32.0 6.0 34.0 38.0 31.8


39.5 56.6

24.7 55.0

22.2 50.7


31.6 51.2

17.2 44.2

16.5 45.7

Source: 5th National Nutrition Survey.

Table 6. Profile of Provincial Health Facilities. No. of government hospitals 8

No. of private hospitals 57

No. of rural health units 57

No of barangay health stations 318 2. Convergence in Bulacan Bulacan Governor Josie de la Cruz has shown support for the provincial health program through “Sulong pa Bulacan para sa kalusugan” ("Bulacan, go forward further in health"). The phrase indicates that there is a continuous effort to meet health goals. For 2002, budget of approximately P200 million that represented 20% of the total provincial budget was allocated for health. Dr. Manuel Roxas III, a former undersecretary for health, serves as consultant for health. Together with the staff of the Provincial Heath Office headed by Dr. Carlito Santos, the DOH and the NGOs formed a group of health sector reform advocates to push for programs in the areas identified in the convergence strategy. The team is tasked with improving the local health system to achieve the provincial health sector goals within the framework of the health sector reform agenda. Prior to the inauguration of the convergence strategy, Bulacan was one of the lead provinces that supported the reintegration of the health system through the establishment of inter-local health zones (ILHZ). The restoration of the features of the district health system became evident with the establishment of the unified local health systems that sought to integrate the public health services and hospital services in a district that serves as a catchment area for the health needs of communities located in member municipalities. The support of local government units was an important component of the concept. To initiate the process, Region 3 Center for Health Development (CHD)

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led by Dr. Ethelyn Nieto offered a P1-million grant to LGUs in the region that would organize themselves into an interlocal health zone under its local health assistance and development program. The Baliwag Unified Local Health System was organized in 1999 with a grant of P1 million from Region 3 CHD and the amount was matched by a P3-million grant from Bulacan Governor Josie de la Cruz. The amount was used to reno-vate the Baliwag District Hospital that served as a core referral hospital with a network of rural health units (RHUs) in surrounding municipalities. The forma-tion of a district health board was conceptualized and a draft memorandum of agreement was prepared for signing by member mayors in the catchment area. A convergence workshop was held at Hiyas ng Bulacan on June 7-8, 2001. Bulacan is one of the pilot sites under the two-year Health Sector Reform Tech-nical Assistance project (HSRTAP) funded by the United States Agency for International Development (USAID). The workshop succeeded in generating interest among major stakeholders that included 72 representatives from the national, regional, and local health workers, PHIC representatives, municipal/city public officials and support institutions, and health NGOs. With the use of participatory mechanisms, the various stakeholders crafted targets, strategies and health plans that were doable. The workshop defined the policy environment by identifying problems and issues that affected the local health sector. The participants were briefed about the basic concepts of current initiatives that included the Health Sector Refom Agenda, the Health Passport strategy and the Convergence Strategy. Together they defined the vision for Bulacan in the HSRA areas that became the basis for a draft convergence plan that included strategies to be used. The Bulacan Health Sector Reform Advocates would serve as strategy champions. 3. Gains in Health Financing Bulacan is among the provinces that supports the Indigent Program of the Philippine Health Insurance Corporation (PhilHealth) through its social marketing initiative and with the support of the Department of Health have encouraged local government units to enroll their indigent constituents. Governor Josie de la Cruz responded by conducting a province wide selection of indigents through its Provincial Social Welfare and Development Officer (PSWDO). The Provincial Government also released an executive order encouraging the mayors to commit some budget to the program and even promised that the province would subsi-dize some amount. The Governor gave the PSWDO the task to oversee the selection of indigents and the office conducted surveys utilizing volunteers called “Lingkod Lingap sa Nayon” and local mother leaders. They used the Minimum Basic Need (MBN) survey form and identified pertinent information to be used as criteria. Initially, the province enrolled about 4,515 indigents representing all 24 towns/cities. Not to be outdone, congressmen followed by subsidizing their own indigents in their districts and they have enrolled 1,120 Bulakeños. Some

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mayors also provided some funds for the program by initially enrolling some 570 indigents. A total of 11,809 Bulakeños have been enrolled.

Table 7. Status of Indigent Program in Bulacan (May, 2002).

Number of enrolled indigent members/no. of towns/city Total

By the Province By the City/Municipality By the Congressman

6,665 (24 towns/city) 2,952 (6 t/c) 2,193 (12 t/c) 11,809

By 2004, Bulacan is targeting to cover 252,000 households or 52% of the total population of 485,000 with social insurance broken down as follows: • 40,000 families - 50% of indigents • 53,000 families - 25% of the informal sector • 159,000 families - 90% of the formal sector The targets will be achieved through social marketing and advocacy by Phil-Health that has created an Indigent Program Unit that is responsible for encour-aging LGUs to enroll their indigents with PhilHealth. LGUs are encouraged to make their facilities Sentrong Sigla certified and PhilHealth accredited to enable them to access PhilHealth funds through reimbursement of hospital expenses and provision of capitation to RHUs. As of July 2002, San Jose del Monte and Norzagaray are willing to enroll indigents with PhilHealth as their RHUs have been Sentrong Sigla certified by the Region 3 CHD but PhilHealth has not yet officially approved their accreditation. 4. Gains in Hospital Reform

4.1 Public-Private Sector Cooperation The provision of hospital services in Bulacan is shared with a strong private sector. By virtue of its proximity to Manila, Malolos and many parts of Bulacan are highly urbanized and provide attractive opportunities for private investments in the provision of health services. The province is the site of many private hospitals with Malolos itself as the location for numerous private secondary hospitals and a private primary hospital. In addition, there are private laborato-ries and private health practitioners who are able to support their activities from user fees charged from their patients. Health seems to be a viable business in the densely populated sections of Bulacan. Among the important functions of the Provincial Health Board is to review and approve proposals from the private sector to operate health related services. Some private organizations including medical societies and health cooperatives offer to purchase and operate expensive hospital equipment under a profit sharing scheme with the provincial hospital. The Provincial Health Officer has established linkages with some private hospitals in Malolos regarding some laboratory procedures.

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As an example, the provincial hospital has forged a memorandum of agreement with the Sacred Heart Hospital and the Santos Clinic to perform some laboratory procedures for their patients. Indigent patients referred to these private facilities by the PHO are charged lower rates. But first, the PHO visits the facilities that wish to provide their services before they are accepted as service providers for patients of the provincial hospitals. With the approval and encouragement of the Provincial Health Board, the PHO actively networks with the Bulacan Medical Society, the Association of Municipal Health Officers of the Philippines (AMHOP) and other NGOs who are willing to work with the provincial public health sector. The Governor actively solicits the support of private individuals and health groups to work with the province in the health delivery sector. Bulacan's public hospitals are distributed in the various parts of Bulacan to serve the needs of both urban and rural population. The public hospitals continue to prepare their own budgets subject to the approval of the Office of the Governor and the Sangguniang Panglalawigan. The Bulacan Provincial Hospital is a 200 bed tertiary hospital that is evolving into a Bulacan Medical Center with a new building with 40 private beds to compete with private hospitals at the same time that it maintains the old building to service indigent patients.

Table 8. List of Licensed Private Hospitals by Category, 2002. Hospital Category Bed capacity Municipality

1. AMOS Hospital Primary (P) 15 Norzagaray 2. B. A. Hospital Secondary (S) 10 Meycauayan 3. Castro Maternity Clinic P 12 Baliuag 4. Community Medical Clinic P 12 Balagtas 5. De Castro Medical Clinic P 10 Baliuag 6. De Jesus Hospital S 14 Baliuag 7. De Leon Medical Center S 60 Paombong 8. Dr. Yanga’s Clinic & Hospital S 50 Bocaue 9. Ed & Tita Cruz Maternity and Surgical Hospital S 22 Sta. Maria 10. Emmanuel Hospital P 20 San Miguel 11. FM Cruz Orthopedic & General Hospital S 15 Pulilan 12. Grace Memorial Maternity & General Hospital S 20 Balagtas 13. Gubatan Clinic P 6 Balagtas 14. Holy Family Hospital S 25 Balagtas 15. J.N. Gran General Hospital S 25 Calumpit 16. Jesus of Nazareth Hospital Guiguinto 17. Jesus The Good Sheperd Hospital S 10 Pulilan 18. Lozada’s General & Maternity Hospital S 25 Meycauayan 19. Ma. STMA. Dela Paz Hospital S 25 Marilao 20. Malolos EENT Hospital S 10 Malolos 21. Malolos Maternity S 11 Malolos 22. Malolos San Ildefonso County Hospital S 14 Malolos 23. Malolos San Vicente Hospital S 10 Malolos 24. Marcelo Hospital S 20 Baliuag 25. Marcelo-Padilla Children’s and Medical Hospital P 6 Plaridel 26. Mateo’s Diagnostic Hospital S 15 Sta. Maria 27. Medical Center San Miguel Inc S 25 Guiguinto 28. Mendoza General Hospital S 23 Sta. Maria 29. Mt. Carmel Clinic S 25 Bocaue

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Table 8. List of Licensed Private Hospitals by Category, 2002. Hospital Category Bed capacity Municipality

30. Nazarenus Clinic and Hospital P 15 Meycauayan 31. Our Lady of Salambao Hospital S 14 Obando 32. Padriguilan Maternity and Medical Clinic S 6 Meycauayan 33. Plaridel County Hospital S 25 Plaridel 34. Poscablo Clinic and Hospital SS 16 Pandi 35. Roquero Hospital S 25 San Jose Del Monte 36. Sacred Heart Hospital S 43 Malolos 37. Sagrada Familia Hospital S 10 Baliuag 38. Saint Michael Clinic & Maternity Hospital P 6 Malolos 39. San Agustin Hospital S 10 Hagonoy 40. San Diego General Hospital S 20 Plaridel 41. San Roque Hospital S 12 Malolos 42. Santiago Hospital P 10 Baliuag 43. Santos Clinic Inc S 10 Malolos 44. Santos General Hospital of Malolos S 25 Malolos 45. St. Annes S 6 Balagtas 46. St. Martin of Tour Hospital S 15 Bocaue 47. St. Mary’s Hospital S 25 Sta. Maria 48. St. Michael’s Family Hospital S 25 Marilao 49. St. Paul Hospital Tertiary (T) 50 Bocaue 50. St. Vincent EENT Hospital S 16 Bustos 51. Sta. Ana Hospital P 15 Hagonoy 52. Sta. Cruz Hospital S 16 Calumpit 53. Sta. Dolorosa County Clinic P 8 Norzagaray 54. Sto. Nino Clinic P 18 Bustos 55. Tolentino Clinic P 8 Baliuag 56. Montefalco Medical Center T Meycauayan 57. Our Lady of Mercy Medical Center T Pulilan

Table 9. Provincial Government Hospital Profile, (1994-1999).

Occupancy Rate Ave. # of Out-Patients

Ave. # of In-Patients Hospitals Bed

Capacity 5-Yr Ave. 1999 5-Yr

Ave. 1999 5-Yr Ave. 1999

Bulacan Provincial Hosp. 200 72.63 69.00 191 249 138 138 Calumpit Distric Hosp. 50 74.01 54.43 114 150 37 27 Emilio Perez Dist. Hosp. 50 58.59 75.00 111 152 31 37 Gregorio del Pilar Dist. Hosp. 50 66.16 107.85 108 119 21 29 Baliuag District Hosp. 75 49.06 87.32 107 149 38 66 San Miguel Dist. Hosp. 50 52.44 70.42 99 125 26 35 R.M. Mercado Memorial Hosp. 100 74.98 112.81 159 211 75 112 Sapang Palay Dist. Hosp. 50 86.71 91.60 158 191 43 46 Felix T. Reyes Memorial Hosp. 10 56.94 60.00 11 11 6 6 TOTAL 635 67.78 80.94 1,059 1,357 416 496

All district hospitals serve as the catchment areas of the unified local health systems or the interlocal health zones except for the Calumpit maternity hospital that remains as a specialty hospital. In support of the integration of the local health system initiative, district hospitals are being upgraded to make them Sentrong Sigla certified and PhilHealth accredited. The Baliuag District Hospital has 11 private rooms within its 75-bed capacity and has a total of 90 persons to comprise its personnel. As it is also able to generate its own income from user fees, such funds have helped sustain its health services.

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As of 2002, the Sapang Palay District Hospital has been transferred to the city government and has become the Ospital ng Lungsod ng San Jose del Monte and the Felix T. Reyes Memorial Hospital has stopped operation.

4.2 Financial Flexibility The provincial government has realized the income potential of the provincial hospital as well as district hospitals and has set income targets for each hospital to achieve. In 2001, an income target of P18 million was set for the provincial hospital and the target was exceeded by P2 million. Income from the private wards is an important cost recovery scheme for the maintenance of quality care in provincial hospitals. It becomes relatively easier for the PHO to make financial requests from the provincial treasury, given the income generated through hospital operations. Hospital chiefs and top management in the PHO are encouraged to perform well as they are given incentives like trips abroad and service vehicles. They are given support to develop professionally through Lakbay Aral trips that enable them to attend local and international conferences and short-term training. The motto in the hospital is “best quality, cheapest pay” and that is achieved through a cross subsidy strategy of socialized care. Private room charges are competitive with the private sector while the service wards continue to accept indigent patients. Each department in the provincial hospital is given the task of preparing its budget that it presents and defends before the PHO. The practice gives the various departments the opportunity to participate in the budget proc-ess and makes them conscious about the importance of cost effectiveness and cost containment. Through its income, the hospital is able to acquire new equipment, hire consult-ants from Manila and the private sector, construct buildings and increase bed capacity and develop its capability to become a teaching hospital. At present, the provincial hospital has residents in the Obstetrics-Gynecology and Pediatrics departments while the departments of Medicine and Surgery have been identified as the next areas of specialization. At present, all hospital income are remitted to the provincial government where their values and origin are properly recorded. There is a move among hospital chiefs to make a request for the provincial government to allocate all hospital income for the use for the operation of each hospital. MSH has also introduced the use of a costing software and the hospital staff are in the process of adjusting data collection techniques as inputs for the program. The process is capable of providing valuable information towards improvement of financial operation of hospitals for efficient and quality care.

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Table 10. Comparative Income and Budget of Hospitals, 2000-2001. 2000 2001

Hospitals Bed Capacity Budget

(PhP) Income (PhP)

Budget (PhP)

Income (PhP/%)

PHO 200 79,431,510.00 14,930,622.79 (17%) 87,767,880.00 20,324,526.90 (23%) RMMMH 100 26,509,109.00 13,033,755.43 (49%) 34,194,330.00 13,945,197.65 (41%) BDH 75 17,083,360.00 6,871,828 (28%) 23,590,638.00 8,132,852.00 (34%) SPDH 50 15,315,339.00 4,353,001.70 (28%) 16,461,604.00 3,961,452.80 (24%) EPDH 50 13,344,543.00 3,318,578.15 (25%) 15,780,975.00 3,670,860.15 (23%) SMDH 50 13,804,568.00 2,947,686.50 (21%) 15,873,104.00 3,251,008.92 (20%) CDH 25 12,880,519.00 2,785,529.85 (22%) 11,027,503.00 3,079,668.75 (28%) GPDH 25 11,148,668.00 1,864,915.48 (17%) 11,184,571.00 2,140,164.96 (19%) TOTAL 575 189,517,616.0 50,105,917.81 (26%) 215,880,605.00 58,505,732.32 (27%)

Quality standards are being developed at the provincial hospital and district hospitals. At the provincial hospital, rating systems are being developed for each section and are to be piloted during the latter part of 2002. At the Baliuag District Hospital, the district core referral hospital, quality improvement of health services is being undertaken by strengthening specialty clinics in Medicine/Internal Medicine; supporting the formation of various health clubs like the Happy Hearts Club, the Pulmo Club and the Diabetic Club; strengthening home based nursing care where nurses are given the opportunity to follow up their patients in the community; medical and surgical outreach missions; inviting consultants from the Jose Reyes Memorial Medical Center in the fields of medicine, pediatrics and neurosurgery; and making low cost medicine available. To improve its service to its patients, the Bulacan Provincial Hospital and all district hospitals launched a public excellence program by conducting training workshops and focusing on service orientation by its human resource depart-ment. A client feedback mechanism has also been established by placing suggestion boxes in different departments and conducting exit interviews among patients. The governor also monitors the quality of provincial services including health by setting up a “Isumbong Mo kay Josie” ("Tell it to Josie") section as a feature of the Bulacan website. As resources are being increased to upgrade hospital facilities, their occupancy rate has also significantly increased due to improved service, facilities and equipment.

Table 11. Comparative Occupancy Rate by Hospitals, 2000-2001. Hospitals Bed Capacity Occupancy Rate

2000 2001 PHO 200 57.29 84.81 RMMMH 100 138.25 119.69 BDH 75 93.32 101.63 SPDH 50 102.00 108.00 EPDH 50 70.70 67.59 SMDH 50 65.21 87.26 CDH 25 90.79 85.03 GPDH 25 87.55 99.41

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4.3 Hospital Personnel Profile

The hospital personnel profile of the Bulacan Provincial Hospital corresponds to Sentrong Sigla and PhilHealth standards for a tertiary hospital. The personnel profile of the Bulacan Provincial Hospital is shown in the succeeding table.

Table 12. Bulacan Provincial Hospital Personnel Profile. Total No. of Personnel 328 *Medical Pool 10 Plantilla Positions 312 *Nurses (Medical Pool) 5 Total No. of Med. Pool 16 Admin Officer 1 Doctors 56 Record Officer 1 Vacant Position (Anes.) 3 Cashier 1 Nurses (plantilla) 73 Supply Officer 1 N.A. (Plantilla) 46 Clerk 14 Med Tech 7 Account Clerk 1 Med. Lab. Tech 4 Computer Operator 1 Dentist 5 Engineer 1 Dental Aide 1 Planning & monitoring/ evaluation staff 0 Pharmacist 4 Medical Officer VI 1 Midwife 1 Midwife 2 Utility Worker 56 HEPO 1 Driver 7 Statistician 1 Social Worker 2 Nut. Diet 2 Nut. Dietitian 2 Nurse IV 2 Cook 3 Computer Operator 1 Radio tech. 5 Engineer 1 Med. Eqpt. Tech. 1 Sanitary Inspector 1

*Medical specialists and nurses who are members of the pool perform the work of relievers in any provincial hospital where they are needed. Once the need for their services in any provincial hospital has been established, they may be assigned permanently to an identified location. 5. Gains in Drug Management To ensure proper drug purchase, management and supply, a therapeutics committee has been set up in all public hospitals in Bulacan. In principle, all departments in the hospital are represented in the committee that takes care of identifying needed drugs, setting quality standards and making sure that they are in accordance with the National Drug Formulary. The committee meets every month and makes recommendation for drug purchase. A Provincial Therapeutics Committee (PTC) has likewise been organized made up of all district hospital chiefs and they meet on quarterly basis to monitor the work of district therapeutics committees. This body has the function of making policy recommendations related to drugs. Subcommittees have been created to check the quality of drugs that are being offered or have been delivered by

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suppliers. The PTC also takes care of formulating a provincial drug formulary based on the national drug formulary. The Assistant PHO for hospitals acts as chair of the PTC. The order for drugs from the various district hospitals are consolidated at the PHO and forwarded to the Provincial General Services Department that conducts bidding for the bulk purchase of drugs. Through the bidding process, the prov-ince is able to buy drugs at the cheapest price made possible by volume dis-counts through bulk purchase. However, sometimes the supplier for the lowest bid is not able to supply all the requirements and hospitals are forced to purchase drugs at higher prices. The General Services Department is responsible for the purchase and procurement of drugs based on a list given to them by the PHO and the hospitals. They do bulk purchase in order to get the best/lowest cost for the drugs they purchase. They follow the COA rules when it comes to purchases and they make requests for bids from accredited suppliers. Bulacan was able to allocate money for the parallel importation as per request of Malacañang but they said that they have given their request as early as February but in May, they have yet to receive word regarding they status of the said purchase request. They were informed that this kind of purchase takes a long time (6 months) and the money they have allotted can no longer be touched even if it does not earn any interest. The province has availed of the services of the Department of Trade through its parallel drug importation scheme. The drugs on the parallel importation list are mostly tablets and capsules. The Assistant PHO for hospitals sees the need for high demand hospital items like intravenous drugs and antibiotics, which are expensive items in the local market. But these are commonly used and needed by hospital patients. The delay in the parallel importation scheme of purchase of drugs for the hospitals has discouraged LGUs from making subsequent orders. The hospital also derives income from drug sales as 20% is remitted back to the provincial coffers while 80% is utilized as revolving fund to be used as seed fund for drug procurement by the hospital. The use of the fund while originally in-tended for medicines has been expanded to include other important hospital needs. Again, the 80% retention fund allows for fiscal flexibility for hospital operations. Hospital chiefs are gladdened by the measure. There is a move to retain all 100% of drug sales and to use this money as revolving trust fund for drugs. Under this scheme, the province need not allocate any budget for drugs as the funds grow and become capable of meeting the hospital’s drug require-ments. 6. Gains in Inter-Local Health Systems A situation analysis of the effects of devolution manifested the effects of fragmen-tation as evidenced from the lack of coordination between the hospital and the public sector, the breakdown of the referral system, the disintegration of the health management information system, drug procurement problems, the lack of joint planning and training of personnel. Fragmentation affected health care delivery characterized by the low quality of health services at the local setting.

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The province of Bulacan suffered from the same fragmentation brought about by devolution as the hospitals were under the responsibility of the provincial gov-ernment while the rural health units and the barangay health stations were under the responsibility of the municipalities. But the provincial political leadership was also quick to adopt measures intended to address such fragmentation. Governor Josie de la Cruz provided the leadership to initiate the organization of interlocal health zones in Bulacan.

6.1 Bulacan Unified Local Health System The components of the UHLS as specified by the Center for Health Development in Region 3 consists of (a) district hospital serving different municipalities, (b) two-way referral system, (c) technical supervision of district health office over RHUs, (d) personnel complement, (e) continuing education to ensure competent personnel, (f) district health board, (g) facilities and equipment, (h) partnership with LGUs, (i) community participation, (j) health information system, and (k) CHD technical supervision over district hospitals. The Baliuag Unified Local Health System (BULHS) is composed of the munici-palities of Angat, Baliuag, Bustos, Dona Remedios Trinidad (DRT) and San Rafael. Baliuag and Bustos belong to the second congressional district while San Rafael, Angat and DRT are part of the third congressional district of Bula-can. The BULHS was organized in 1999 by virtue of a memorandum of agree-ment unifying the five municipalities, the province and the DOH Regional Health Office 3 (BUHLS, 2000). The unified health network includes the 75-bed Baliuag District Hospital in Baliuag, four RHUs in Baliuag, two RHUs in San Rafael and one RHU each in the towns of Bustos, Angat and DRT. The Baliuag Unified Local Health System Board is made up of the Provincial Governor as chair, the District Health Hospital Director as vice-chair, the mayors of five participating municipalities (often represented by their municipal health officers), the provincial DOH representative, a representative from the Sang-guniang Panlalawigan, and a representative from NGOs. The District health board meets quarterly and approves the Integrated BULHS health plans from disparate municipal and district hospital plans. It prepares a strategic plan that becomes the basis of an investment plan. It also takes up ongoing concerns within its catchment area. The municipality of Baliuag that serves as the core of the BULHS is a first class town with a land area of 4,505 hectares and a population of about 110,000 and 20,708 households. The Baliuag UHLS has a population coverage of approxi-mately 277,384 people composed of 46,767 households in 1999 (BULHS,1999 ). Baliuag is the site of about 30 private clinics and 4 private hospitals. After BULHS, the Sta. Maria Unified Local Health System was organized in 2000 and four more are being organized in the catchment areas of Malolos, Bulacan, Hagonoy and San Miguel to complete the organization of the province of Bulacan into interlocal health zones. Interlocal health zone workshops were held on July 4, 2002 and drafts of letter of commitment have been prepared. The stake-holders consider a letter of commitment as a document that has better chance of getting approved due to its flexibility and adaptability.

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6.2 Roles and Functions of Key Players

The major stakeholders signed a Memorandum of Agreement in the Baliuag Unified Local Health System on July 21, 1999. The signatories were the mayors of the participating municipalities, the governor of Bulacan, Region 3 CHD director, the PHO, the Baliuag district hospital chief and the congressman for the first district of Bulacan. The document stipulates the roles and functions of the various stakeholders. According to the MOA, the District Health Board is be the coordinating authority that shall perform the functions such as the identification and prioritization of health needs or problems of the catchment municipalities/ barangays and the district hospital; resolve problems emanating form health services; review and approve the work and financial plan of the Unified Local Health System; facilitate release of funds from the Governor’s Office; approve requests for construction/ repair of the health facilities within the catchment areas and formulate or renew existing policies within the catchment areas. It also serves as the source of funds for the system. The Municipal and Provincial Health Boards, on the other hand, maintain their functions. However, the policies, problems or issues that cannot find local solution shall be brought to the Provin-cial Health Board for discussion and action. The Province under the governor is responsible for administrative supervision and guarantees the provision of the MOOE, the creation of policies and stan-dards and performs monitoring and evaluation functions. Governor Josie de la Cruz matched the initial grant of P1 million from the CHD with a grant of P3 million to upgrade the Baliuag District Hospital. Her initiative was crucial to the start up of the unified local health system initiative in Bulacan. The fund was in addition to the regular budget that the province provides for the operation and maintenance of all hospitals. The Provincial Health Office operates the Provincial Hospital and oversees the public health programs as well. The Provincial Health Officer acts as provincial hospital chief with two assistants, one for hospitals and another for public health. The PHO exercises supervisory functions over the unified local health system as the Assistant PHO for hospitals monitors hospital operations while the Assistant PHO for public health works with the MHOs to monitor public health concerns. The Assistant PHO for public health is a new creation and came as a result of the Unified Local Health System (ULHS) initiative where the PHO involvement in public health has become an important area of concern for the province. In the ULHS, the District Hospital/ District Health Office acts as the core of the catchment area. It provides hospital services to its clients, leads the training and continuing education of personnel at the district, municipal and barangay level. It is the coordinating center of activities in within the catchment area. The services at the district hospital include preventive, promotive, curative and rehabilitative functions. According to the respondents from the Baliuag district hospital, they perceived the services available as being geared towards the curative aspect. While Medical, Pediatric, OB- GYN services are commonly availed by in and out-

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patients, the hospital also renders surgical, family planning, laboratory and x-ray services. The Municipal government, with its Barangay Health Stations and Rural Health Units, provide for basic and public health services and refer cases to the District Hospital or to other appropriate health facilities when needed. It is likewise responsible for networking with other stakeholders, social mobilization, monitor-ing and evaluation, creation of policies and standards, provision of the MOOE and other funds, and promotion of the Health Information system, research and development. The most common primary services availed by the clients at these levels include the following programs: Expanded Immunization, Maternal and Child Health, Nutrition and Family Planning. There are also other locally initiated programs that are participated in by the communities. Among these are the Zero Waste Management Project, Friendly Hearts’ Club for the Cardio-Vascular Disease Control and Prevention Program and Stress Management. The Center for Health Development of Region 3 played a crucial role in the establishment of the Unified Local Health System in Bulacan. Regional Director, Dr. Ethelyn Nieto championed the establishment of ULHS areas in the region in 1998 that included the provinces of Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, and Zambales. Baliuag ULHS was one of six UHLS pilot areas in Region 3. The goal is to improve health care delivery systems in communities through community participation, sharing of resources and expertise and an effective collaboration among local government units. The objectives include the follow-ing: • To provide an efficient, workable district referral system • To develop a health information system suitable to the needs of the district

hospital and catchment municipalities • To create a district health board to oversee ULHS implementation • To develop LGU capacity to improve health care delivery system through

effective collaboration among LGUs • To strengthen the technical capability of district hospitals and RHUs in district

catchment areas and • To upgrade district hospitals and RHUs through the provision of necessary

equipment The Department of Health as represented by the Regional Health Office 3 or the Center for Health Development 3 provides the technical supervision, training and planning. Its expansive role includes the monitoring and evaluation, formulation/ renewal of policies, protocols and standards, promotion of Health Information System as well as research and development. In 2000, CHD in Region 3 was able to extend assistance to 15 district hospitals and 49 municipalities by awarding P 6 million to the 6 pilot district hospitals as incentive for reorganizing their services to serve the district. In addition, P 10 million was provided to cover the costs of supplies. In terms of technical assis-tance, they have provided for staff training, facilitated the drafting and implementation of a MOA to create the BULHS, advocated for the need for the UHLS, facilitated planning for future activities of the UHLS and conducted orientation on the implementation of the referral system.

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They have also advocated for the ULHS to provide financial, logistic and techni-cal support to upgrade services in the local health facilities. The CHD has given P50,000 for each RHU in the ULHS to upgrade its facilities in addition to medi-cine to augment the supply available in the RHU. This has earned the recogni-tion of the Sentrong Sigla movement. The CHD has also worked for the approval of a Regional Development Council (RDC) Executive Committee Resolution No. 03-16-99 endorsing the ULHS to the RDC.

6.3 Operations of the ILHZ The Unified Local Health System District Health Board has conducted quarterly meetings since its establishment in July of 1999. Health officials including the District Chief of Hospital, DOH Representatives, Municipal Health Officers and Public Health Nurses and Hospital Administrative Officer regularly attended district health board meetings. These regular meetings resulted in forging bonds among the various health personnel. Whereas before, MHOs hardly knew and coordinated with one another, now at the district level, they discuss common health concerns and share resources. Among the topics tackled during meetings were annual health plans, resource generation through fund raising activities, planning activities, presentation of results of health programs and accomplishment reviews of the performance of the ILHZ units. One effective means of raising funds is the sponsorship of Prince and Princess of Nutrition where parents of children candidates solicit monetary contribution for their children to earn the titles at stake. During district board meetings, commitments also were forged to enhance the role of the Baliuag District Hospital in providing health services. In September 13, 2000, the members of the District Health Board identified the Nutrition Program as its flagship project for the Baliuag Unified Local Health System. In relation to this commitment, the Administrative Officer of BDH has pledged to support Bethlehem, a charitable institution in Baliuag, and its nutrition activities though monitoring of rehabilitation program and check-up of children by BDH doctors. In the municipality of Bustos they have initiated a Sikap Angat Program, a primary health care partnership project between the local government and non-government organizations in the community. They targeted third degree malnour-ished children with the help of private organizations. Each organization adopts a family with a third degree malnourished child. The Catholic Women’s League (CWL) and the Department of Education (DECS) have given support to the program in the form of food assistance to children and giving jobs to parents. Volunteer health workers help implement the improvement of the health man-agement system, one of the policies instituted by the municipality of Bustos. This is done through the barangay health workers (BHW) who monitor exten-sively the solid waste management program. RHU health programs such as EPI are also utilized as results are regularly reported to midwives. An RHU staff conference is conducted every Monday to discuss problems of every barangay within the municipality.

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At the Provincial level, the Governor has appointed Dr. Manuel G. Roxas as over-all Health Consultant for Bulacan. The governor is committed to improving the health in Bulacan as manifested by the budget allocated to health, incentives given to provincial health professionals, support for District Hospitals, focused targeting of health beneficiaries, and PhilHealth benefits for indigents. This same commitment is not seen at the municipal level. Some mayors of municipalities under the BULHS are not actively participating in the health activities as evi-denced by their frequent absences in meetings. Some local officials are not interested and are not familiar with concepts related to the formation of interlocal health zones. Thus, policy making in relation to health and the BULHS is per-ceived to be a difficult task, despite the initial steps to pursue the goals of the BULHS.

6.4 Common Funds and Resources There is sharing of resources among member municipalities in the Baliuag ULHS in terms of sharing equipment, ambulance and a referral system. Financing that is provided at the local level from the municipalities seem to be provided in kind: medicines, transport money or donation of equipment. Local support in terms of line budget items i.e. MOOE support was not evident. Support for personnel services is provided by the municipalities and the province in terms of providing honoraria for contractual employees and volunteers, as well as salaries of personnel with plantilla items. At the district hospital the various municipalities and the province also maintain an open account system where indigents referred by local officials are given the hospital care they require and the municipality concerned is later billed for the service. Senator Ople has set aside a portion of his Countryside Development Fund (CDF) for Hagonoy residents where Mayor Ople may charge the hospitali-zation of his constituents to this fund. Already, municipalities are entertaining the idea of reserving a number of beds for their indigents at the district or provincial hospital.

6.5 Human Resources in Public Health The provincial government has created the position of PHO I for public health in 2001 to address public health concerns and take a leadership role for the imple-mentation of public health programs. The newly created office also takes care of coordinating public health concerns as epidemics are monitored, and assistance in terms of medicines and equipment are provided by the province. The provin-cial thrust in public health is to improve the quality of care by encouraging Sentrong Sigla certification among RHUs and barangay health stations. In Bulacan, as of May 2002, 51 rural health units and 76 barangay health stations are Sentrong Sigla certified.

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Table 13. Field Health Workers – Service Workers by Category, 1999. Position Number Percent

MHO/Rural Health Physician 57 7.92 Public Health Nurse 68 9.44 Rural Health Midwife 440 61.11 Sanitary Inspector 47 6.53 Medical Technologist 27 3.75 Public Health Dentist 57 7.92 Dental Aide 23 3.19 Nutritionists 9 1.25 Non-Technical Personnel 19 2.64 TOTAL 720 100.00

6.6 Referral System Workshops in the referral system have been conducted as part of the regular activities of a unified local health system. The referral system will help coordi-nate the work of the various parts of the system. Primary health care is provided at the barangay health stations and the rural health units, secondary care at the district hospital and tertiary care at the provincial hospital. There is now better understanding and implementation of the referral system as a result of the unified local health system concept. The MSH has conducted the most recent referral system workshop with the end in view of developing a referral system manual. A technical working group has been identified and has been given the task of preparing the draft of the manual for Bulacan.

6.7 Management Information System The Field Service Health Information System (FSHIS) is being utilized as a means of getting information from the various communities. The report is done monthly and consolidated quarterly to get updated information about health concerns. At the same time, the Provincial Epidemiology Service Unit (PESU) organized in 1995 continues to monitor epidemics through weekly gathering of information from hospitals.

6.8 Fostering Community Participation The Baliuag District Hospital as well as the MHOs in the district actively solicits community participation. Support form NGOs come in terms of donations for medicines, equipment, and organizing medical missions. Good health has also become a community concern and various groups have organized aerobic sessions, ballroom dancing and disease awareness and prevention activities organized by groups like the Happy Hearts Club, Diabetic Club, etc. At the province-wide level, civic organizations like the Rotary Club, Lions and other organizations adopt projects to help improve the health of people. Various

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types of health facilities in the province become the beneficiaries of initiatives of civic organizations. 7. Updates on the Bulacan Convergence Initiative

Table 14. Reform Area: Local Health System. A. Strategy: Upgrading of all government facilities (SS Standards)

Activities Expected Output Status 1. Inventory of health facilities and manpower capabilities

Master list of health facilities and manpower

On-going

2. Identification of resources (local and national)

Work and finished plan identified approved

Done

3. Allocation of funds by the LGUs in the Local Health System

Budget endorsed and approved by legislators

Not yet done, only budget from DOH

4. Upgrading of health facilities Upgraded government facilities 57 RHUs 8 Hospitals

39 RHU Sentrong Sigla certified 7 Hospitals SS certified

B. Establishment and strengthening of ULHS Activities Expected Output Status

1. Total participation of LGUs in LHS Advocacy on ULHS 2 ULHS district functional Advocacy on 4 ULHS on-going

2. Local health planning per district LHP Conducted plans for 6 districts, medium-term planning two weeks ago

3. Endorse local health plans and budget to SP/SB

Local health board resolution signed by LCE

Only 2 municipalities signed the LHB plan

4. Implementation of functional referral system in all districts

Referral system in place 2 district referrals in place

5. Establishment of health management information system in all systems

Established guidelines for HMIS Not yet done

6. Development of maintenance of database of health facilities

Established guidelines for HMIS On-going

C. Strategy: Sustaining quality health service in Bulacan Activities Expected Output Status

1. Development of performance indicators

Protocol for performance indicator system

Done

2. Ordinance from SP/SB earmark-ing income from PHIC (health)

Resource generation from social insurance for quality service

Done (province and 2 towns)

Table 15. Reform Area: Social Health Insurance. A. Strategy: Social marketing and advocacy

Activities Expected Output Status 1. Issuance of MCs from LGUs >LGU compliance

>Budget allocated Done in at least 6 towns/city

2. Conduct of IEC/Seminars >70% LGUs under servicing >90% clientele awareness >100% congressmen >75% NGOs/COs

>On-going (at least for LGUs, congressmen and clientele, not yet measured)

B. Strategy: Expansion of resources Activities Expected Output Status

Lobbying for more sponsorship NGOs Private corporations

3 NGOs/municipalities to 5 indigent families/year 10 corporation

No private/NGO sponsorship yet

2. Partial subsidy scheme 9300 indigent HH starting to pay partial subsidy

–

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C. Upgrade health facilities (Quantity and Quality) Activities Expected Output Status

1. Government health facilities SS certified

8 RHUs SS certified Done

2. Regular monitoring by PHIC and DOH

All PHIC facilities and HC Providers accredited

>Done in all PHIC facilities >PHIC conducted inspection in the HCs/RHUs but no accreditation yet

3. Comprehensive referral system MOU between RHUs, private clinics and hospitals fully implemented

Task force established

Table 16. Reform Area: Hospital Reforms. A. Strategy: Enactment of local ordinance on financial flexibility

Activities Expected Output Status 1. Formulate proposal Draft proposal Done 2. Policy advocacy to local health board

Statement of support by LHB Done in the province

B. Strategy: System Improvement Activities Expected Output Status

1. Train budget officer on RA (Responsibility Accounting Tools)

Budget officer trained –

2. Advocate/Echo RA Concerned staff knowledge on RA – C. Strategy: Strategic plan for Infra development for Bulacan hospital

Activities Expected Output Status 1. Organize TWG TWG organized Done 2. Review of related plans Plans reviewed Done 3. Data gathering Data gathered processed and

analyzed On-going

4. Hold planning sessions Framework plan developed On-going

Table 17. Reform Area: Drug Management. Target 1: Availability of low cost, quality, essential drugs. Strategy: Operational/Functional Committees in all government health facilities

Activities Expected Output Status 1. Strict compliance to standard treatment protocols in all govern-ment health facilities

STG completed at provincial district level

Done

2. Creation and maintenance of provincial formulary

Provincial formulary created and maintained

On-going

3. Establishment unified procure-ment system

Trained on new system of all existing districts of ULHS

On-going

Target 2: Improve drug use Strategy: Established drug distribution center

Activities Expected Output Status 1. Advocate for local ordinance resolution for proper drug distribution

Local ordinance resolution passed and implemented

Not yet done

Strategy: 50% Increased awareness of community on rational drug use Activities Expected Output Status

1. KAP/QRS on drugs Baseline data on level of awareness Not yet done 2. Massive mass-based IEC Conducted Not yet done 3. Reproduction, distribution of IEC materials

IEC materials produced Not yet done

4. Community assembly Class/well reformed community Not yet done 5. Mother’s class Assembly of mothers On-going 6. Media Local media promotions Not yet done

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Table 18. Reform Area: Public Health. A. Strategy: A properly managed Unified Public Health System

Activities Expected Output Status 1. Advocacy to LGUs, Pos, OGOs, and NGOs

Increase in budget for public health promotion Proper management of public health Functional Local Health Board

Done On-going Functional- Provincial Health Board and 2 Local Health Board

Capability building of health implementors Reorientation of health workers Rewards/Incentives/Recognition given

HWs reoriented, competent and motivated Outstanding health implementor recognized

On-going Done, on-going Budgeted for this year (2002)

3. Formulation of one Bulacan health plan

One plan formulated and adopted Conducted a medium-term plan for Bulacan recently, not yet integrated though

4.Establish MIS inventory of computers Development of system computeri-zation of health data

MIS in place On-going

B. Strategy: Coordinated operations by health care providers Activities Expected Output Status

Establishment of link-ages/networking Advocacy/Fund sourcing/Service coordination

Networking established Additional funds generated Health activities coordinated

On-going

2. Monitoring/evaluation of health workers

Monitoring and evaluation done Health workers rated

Performance indicators developed

3. Strengthening of referral system Functional referral system established

Functional in two districts

4.Disease reduction services Mortality and Morbidity from communicable diseases reduced

On-going

C. Strategy: Health programs acceptable to all Activities Expected Output Status

1. Improve health services Health services improved Objectives attained

On-going

2. Information, education, communication (IEC) development

IEC disseminated On-going

3. Exit interview of RHU clients Clients satisfaction gauged None 4. Evaluation of health indicators Health indicators evaluated On-going

8. Best Practices

8.1 Hospital Reforms Bulacan represents a different model from other convergence areas because it has a different socio-economic profile. The province has a high rate of urbaniza-tion, high population growth, high population density, and lower poverty incidence compared with the national average. It has a very strong private sector and provision of health care is a viable enterprise in the province. As privatization of public services has become a recurrent theme due to the limited financial capac-

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ity of government to provide for basic services, Bulacan serves as a good model of cooperation between the public and private sector in the provision of health care. Both sectors realize that they serve to benefit from each other’s areas of strengths and weaknesses. The Bulacan Provincial Hospital is able to face the challenge of being competitive with private hospitals in terms of quality facilities and competent medical staff. The new building that houses the private wards is able to offer the convenience and comfort of private health care facility at a cheaper price. It is able to gener-ate income from the private wards to enable it to upgrade its physical plant, facilities, equipment as well as availability of drugs. The concept of socialized care becomes possible with income generated from user fees being used for improved operations to benefit the indigent patients as well. The provincial government watches the financial bottom line of hospital operations and makes a conscious effort to make hospital operations viable by setting income targets that hospital chiefs are encouraged to achieve. Hospital chiefs are better prepared to become good financial managers who should be effective in terms of quality health care delivery and efficient in terms of being able to augment their budgets with income from hospital operations. The provincial government has allowed some mix of market forces to influence hospital operations through an incentive system. Operating heads are provided with incentives to achieve their targets. As a profit center in a limited sense, the hospital chief is given some leeway in the purchase of supplies and equipment badly needed by the hospital. The hospital develops a client friendly atmosphere as client suggestion boxes are distributed in the various departments. Exit surveys and interviews of patients are conducted regularly. Patients with complaints may also inform the governor through the website created for the purpose. Client satisfaction becomes an important factor as the hospital staff tries to improve its services to increase its patient load and correspondingly its income. Non-government organizations like medical societies and health cooperatives make their services available to the public sector under a networking arrange-ment with the hospitals. Indigents are provided the service at reduced fees while those who can afford to pay are charged the regular rates. Private clinics and hospitals also make some of their facilities available to public hospital clients.

8.2 Inter-local Health Systems Bulacan health officials realize that the formation of Unified Local Health System will provide the infrastructure towards the achievement of the goals of health sector reform. As the expansion of social insurance coverage proceeds at a slow pace, they hope that the formation of ULHS will hasten the Sentrong Sigla and eventual PhilHealth accreditation of hospitals and RHUs. As of May 2002, 51 RHUs and 76 barangay health stations have been Sentrong Sigla certified. Bulacan could be considered a model in the improvement of public health facilities. The political leadership in the province and many municipalities give priority to the development of primary care facilities to improve people’s health.

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At the same time, CHD has been creative in providing monetary incentives to push for facility improvement. There is conscious effort to promote a healthy lifestyle in communities through the support given by MHOs and district hospitals for private health clubs, like the Happy Hearts Club and the Diabetic Club. Doctors and their staff from both the hospital and public health sectors initiate activities to promote health as well as educate people about health hazards and healthy lifestyle. Health promotion posters, videos and other materials are readily available in various health cen-ters. While a common fund does not exist, Bulacan has been innovative in sharing resources in terms of an open account system in the district hospital to serve the needs of indigent patients. Service for indigent patients are charged to LGUs that use funds from various sources including municipal budget and CDF to pay the hospitals. Municipalities are already looking at the possibility of buying into hospital operations by reserving and paying for a number of beds for their respective indigents.

8.3 Drug Management Systems The Bulacan provincial government has allowed retention of 80% of sales generated from drugs for the use of the hospital for its drug and other require-ments. The income that is retained will go a long way to augment the budget of the hospital. The mechanism is another form of financial flexibility to improve hospital operations. Hospital officials are making use of the practice to develop models for income retention. With lessons that they will learn from the drug experience, they hope that they will be able to evolve good practices of financial accountability towards expansion of fiscal autonomy, which the provincial gov-ernment has allowed them to enjoy. 9. Convergence Concerns At a PhilHealth workshop conducted on April 11-12, 2002, Bulacan Governor Josie de la Cruz expressed her apprehension about making further contributions to the indigent program. According to her account, Bulacan paid 8.5 million to PhilHealth but the Bulacan health service only got 2.5 million in reimbursement. She then cited the experience of the municipality of Las Piñas that put their money into facilities development of their health centers rather than to PhilHealth and got better infrastructure. They linked with their private hospitals in the area and set aside a fund that can be used by indigents with some co-payment. They have karaoke for the patients who are waiting to be seen in their centers leading to greater patient satisfaction and perceived better health services. Considering that Bulacan was shortchanged by P6 million, the governor is seriously consider-ing alternative means of spending money to provide for health. In Bulacan, the researchers also found out that while RHUs are Sentrong Sigla certified, they are not yet PhilHealth accredited as of May 2002 and Bulacan indigents cannot avail of the out patient package despite the fact that some of them are card bearing PhilHealth members. Their package of benefits is still limited to hospital benefits while PhilHealth indigent members are already able to

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avail of the outpatient package in areas like Pasay and Bukidnon. It seems that despite the convergence strategy, there is a communication gap in terms of informing the health sector about requirements of the RHU PhilHealth accredita-tion. Convergence advocates in Bulacan in a way feel burdened about the additional responsibility of implementing the convergence strategy. Convergence is seen as a separate and additional program that has to be implemented separate from regular programs. The health staff feels burdened with additional forms and reports that have to be made and meetings that have to be attended. The provincial hospital staff in particular thinks that they are quite adequate and capable in the performance of their functions and they do not learn anything new in the hospital reform component of convergence. At the regional CHD, a staff has observed that there are important programs that have been left out by the convergence strategy. The convergence strategy advocates have conveniently left out the national public health programs that comprise the health sector reform agenda. Bulacan health officials think that the health sector reform agenda is important and the convergence strategy is an effective means to achieve it. They also believe that convergence should be customized to meet the needs of each province. They suggest that some form of social preparation should first be undertaken and preparatory communication should be sent to each province identifying information that will be needed for the workshop. While the conver-gence strategy puts emphasis on the need for data, they felt that they were just made to recall their experiences during the workshop. The timing of the work-shop should also be considered to enable the maximum participation of various stakeholders. Pre-convergence workshops would better prepare the stake-holders to make a commitment to the convergence idea. 10. Conclusion and Recommendations Bulacan has complied with the basic requirements of the convergence strategy. It has initiated the establishment of the unified local health system in Baliuag where reintegration and networking within an identified catchment area is evi-dent. Sta. Maria has likewise been organized and other four sites are being organized. Bulacan is at the forefront of hospital reform initiatives as it has undertaken moves for financial flexibility, facility and quality service improvement even before the convergence strategy. It is also trying to rationalize its drug management program and its officials have allocated funds to enroll Bulacan indigents into PhilHealth. The convergence concept is being introduced ten years after the devolution of health services. Admittedly, it has been ten years late in addressing the prob-lems and implementation issues that resulted from devolution. The health sector leadership has flip-flopped for long on whether to continue devolution or to change gear and revert back to renationalization. Finally, the convergence strategy is an attempt to address the fragmentation of the health sector. It takes political will from all sectors involved in health to support the objectives of con-vergence. It requires social marketing to sell the concept and to convince key players like PhilHealth and the LGUs that convergence will serve their institu-

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tional agenda. Convergence has laudable objectives but its implementation should be customized to suit local conditions. What will work in Mindanao or Visayas will not necessarily work in Bulacan. The policy environment should be properly analyzed to identify factors that will work in favor of convergence and factors that will delay its implementation. Social insurance is an important factor to make convergence successful. The universal coverage by PhilHealth will oil the convergence machinery, as indigents who need it will be covered through enrollment in the PhilHealth indigent pro-gram. PhilHealth additional benefits (both hospital and outpatient package) will make it attractive for health stakeholders to toe the convergence line. Stake-holders will always ask, “What is in convergence that will benefit me?” Local governments will be attracted by the possibility of being able to access the 50% share of the national government for the health of their indigent population. Admittedly, poor provinces have more to gain than rich provinces, as poor LGUs require smaller contribution during the first three years before a 50-50% sharing is required. Poor LGUs have made the suggestion that their PhilHealth contribu-tion should be pegged to the classification of municipality based on income. Rich LGUs should pay more and poor municipalities should pay less. But PhilHealth regional and provincial bureaucrats should do social marketing and be proactive in doing their work in Bulacan. While many RHUs and BHS have been Sentrong Sigla certified, there are no indications that PhilHealth is fast tracking their PhilHealth accreditation. Health officials in Bulacan complain about the slow pace of work among the PhilHealth bureaucracy. The convergence cycle begins with PhilHealth as LGUs are required to upgrade their health facilities to access the capitation fund for RHUs. The sum of PhP300 per indigent enrolled would go a long way to improve the supply of medicines in RHUS, as well as provide additional income to the professional staff. However, enrollment of indigents with PhilHealth should go hand in hand with the start of PhilHealth accreditation process so as not to shortchange LGUs that enrolled their indigents. PhilHealth should be more proactive in promoting their indigent program and work double time to hasten the accreditation process. PhilHealth should also develop a more client friendly orientation to gain supporters of its programs. The drug importation scheme of the Department of Trade also needs to improve its service delivery schedules for LGUs to make repeat orders and for the pro-gram to really create an impact in the reduction of prices of medicines. The organization of unified local health systems in the remaining areas of Bulacan should be hastened as donor and funding agencies tie up grants to the inter-local health zone approach. Already, the Matching Grant Program of USAID makes the organization into inter-local health zones a pre-requisite to access their funds. The ULHS provides the organizational structure to coordinate the various areas of HSRA.

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References The Arayat United Health System in Pampanga. 2001. Management Sciences for Health – Health Sector Reform Technical Assistance Program (HSRTAP). Manila. The Baliuag Unified Local Health System in Bulacan. 2001. Management Sciences for Health – Health Sector Reform Technical Assistance Pro-gram (HSRTAP). Manila. Community-Based Monitoring and Information System: A User’s Manual. 2001. Management Sciences of Health – Integrated Family Planning and Maternal Health Program (IFPMHP). Manila. Comparative Analysis of Five Inter-Local Health Zones: Current Practices, Policy and Program Directions. 2001. Management Sciences of Health - Health Sector Reform Technical Assistance Program (HSRTAP). Manila. Convergence Orientation and Planning Workshop, 19 September 2001, Cebu Plaza Hotel, Cebu City. Philippine Health Insurance Corporation and Department of Health. Philippines. Establishing the Inter-Local Health System in South Cotabato. Integrated Community Health Services Project (AUSAID Assisted). 2000. Depart-ment of Health. Health Referral System Manual, Province of South Cotabato, Philippines 2001. Integrated, Integrated Provincial Health Office, South Cotabato. Philippines. Health Sector Reform Agenda, Philippines (1999-2004), Monograph Series No. 2. 1999. Department of Health. Manila, Philippines. The Integrated Health Planning System (IHPS) Manual. No date. De-partment of Health, Manila. Philippines. King, T.L. No date. Drug Management Systems Reforms. Bureau of Food and Drugs. Quality Standards List for Rural Health Units and Health Centers Level 1, Certification and Recognition Program. 2000. Sentrong Sigla Movement. Department of Health, Manila, Philippines. Sta. Bayabas and CVGLJ: Inter-LGU Health Systems in Negros Oriental. 2001, Management Sciences of Health – Health Sector Reform Techni-cal Assistance Program (HSRTAP). Manila

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Updates from the Field: Best Practices, Using the Community-Based Monitoring and Information System to Help Reduce Unmet Needs. No. 4 Series of 2001. <<http://www.msh.org.ph>> Updates from the Field: Technical Notes, Pooled Pharmaceutical Pro-curement in Pangasinan. No. 2 Series of 2001. << http://www.msh.org.ph>> Updates from the Field: Technical Notes, Setting Up a Community-Based Disease Surveillance System. No. 4 Series of 2001. <<http://www.msh.org.ph>>. Vicente, W.C. No date. Referral System Protocol.

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Health Sector Reform Technical Assistance Project VI

SOUTH COTABATO (REGION 11) 1. Socio-Economic and Health Profile South Cotabato is home to several indigenous peoples such as the T’boli, B’laan, Tagabili, Ubo and Tasaday. Muslim settlers arrived in the 15th century, while migrants from Luzon and Visayas came as part of a government program to develop Mindanao starting from 1939. These later settlements have been fol-lowed by successive migration waves and provide a dynamic force that has been a factor in the growth surge experienced by the province in the last decade South Cotabato lags behind national averages in health. Leading causes of death in the province reflect the state of transition where infectious diseases are competing with chronic and lifestyle diseases within the top ten. It is worth noting that “assault” figures prominently in the top ten causes of mortality for the prov-ince, indicative of the volatile peace and order situation in Mindanao.

Table 1. Selected Socio-Demographic & Economic Indicators. Indicator 1990 1995 2000

Total Population (in ‘000) Rank in Region 11

1073 2nd highest

673 2nd

689 3rd

Population Growth Rate Rank in Region 11

3.37 2nd

4.16 1st

2.24 1st

Population Density 143.7 176.1 243.5 1990 1994 1997 Human Development Index Rank in Region 11

.548 2nd

.586 1st

.532 1st

Life expectancy at birth Rank in Region 11 Not available 64.9

2nd 66.3 2nd

School Enrollment Rate Rank in Region 11 Not available 70.9

2nd 72.0 3rd

Real per capita income (at 1994 prices) Rank in Region 11

Not available 12,285

1st

15,187

1st Poverty Incidence* Rank in Region 11

54.8 1st or highest

41.3 4th or lowest

25.4 4th

Source: Time to Act: Needs, Options, Decisions, State of the Philippine Population Report 2000, Commission on Population, January 2001, pp. 83-87; 11980-1990, 2 1990-1995, 3 1995-2000. *Philippine Human Development Report 1997

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Table 2. Selected Health Indicators: Mortality Rates. Indicator 1990 1995

Infant Mortality Rate* Rank in Region 11 Philippine IMR

51.17 3rd

56.69

55.37 3rd

48.93 Under- 5 Mortality Rate* Rank in Region 11 Philippine U5MR

77.44 3rd

79.64

70.45 3rd

66.79 Maternal Mortality Ratio* Rank in Region 11 Philippine MMR

214.07 1st

209.00

196.97 1st

179.74 * Source: Time to Act: Needs, Options, Decisions, State of the Philippine Population Report. 2000, Commission on Population,2001.

Table 3. Selected Health Indicators: Leading Causes of Deaths. Condition 1999 2000

No. Rate No. Rate Cerebrovascular Disease 211 10.7 108 5.3 Pneumonia 161 8.1 99 4.9 Pulmonary Tuberculosis 72 3.6 85 4.2 Malignant Neoplasms 112 5.7 70 NA Other Heart Disease 8 0.9 56 2.8 Glomerular/ Renal Disease 55 2.8 49 2.4 Ischemic Heart Disease 8 0.4 48 2.4 Septicemia 65 3.3 47 2.3 Assault 108 5.5 36 1.8 Diabetes Mellitus 27 1.4 19 0.9

Source: ICHSP Project Status Report, Dec 2000.

Table 4. Selected Health Indicators: Nutritional Status, 1998. Indicator South Cotabato Region XI (mean) Philippines (mean)


37.6 4.8

45.0 24.1 21.9

32.9 5.3

40.5 35.6 27.5

32.0 6.0

34.0 38.0 31.8


8.9

34.2

21.3 49.5

22.2 50.7


0.4

52.0

11.7 49.4

16.5 45.7

Source: 5th National Nutrition Survey, FNRI 1998. South Cotabato, as a participant in the Integrated Community Health Services Project (ICHSP) was included in the Local Health Accounts pilot phase as one of six provinces where local financial data was collected. Data from 1998 (see Appendix 1) shows that of the P1,041,443,300 the province spent for health care, 74% was spent for personal health care which are predominantly hospital ex-penses, 14.5% on public health care/rural health unit expenses and 11.5% on administrative and other expenses including research and training. Out of pocket expenses account for 64% of personal health care with all forms of insurance covering 10.4% of these expenses. The bulk of insurance coverage came from PhilHealth pegged at 88.6% of all insurance costs. Most of the out of pocket expenses (36%) were spent on government hospitals and medicines (32.5%), 12.5% went to non-hospital presumably private MDs and 9.7% to private hospi-

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tals. Data for the province’s local health accounts for the year 2000 are avail-able, but have not been released as of this time and would be useful in assessing progress in terms of financial goals for HSRA. 2. Convergence In Health Reform Health services in South Cotabato were seriously affected by devolution in 1992. Most of the LGUs were not ready to provide and manage health services. Personnel were demoralized. The referral system disintegrated – “patients would go straight to the hospital without passing the health centers” – and procurement of drugs and medications was affected. The LGUs were not prepared to accept the responsibility. Their health budgets only went to personnel services. As a result, there was physical deterioration of the health facilities and equipment since no funds could be allotted for maintenance and capital outlay. In 1993, the Department of Health (DOH) asked USAID to conduct a rapid appraisal assessment of South Cotabato. The DOH was planning to assist the province by extending technical assistance to strengthen the health delivery system from the barangay level to the hospital through the ICHSP project. Dr. Edgardo Sandig, South Cotabato’s Provincial Health Officer (PHO), believes that the area was chosen for the project because of its big population, relatively good peace and order, reasonably good roads and the presence of an NGO network. A project proposal was prepared by the PHO, consisting initially of infrastructure and equipment needs. At the same time that ICHSP was being readied, LPP was also being launched in the province. South Cotabato was among the first twenty provinces selected for the LPP projects in the Philippines. It was in the last quarter of 1997 that the DOH finally implemented ICHSP in South Cotabato and five other provinces with funding from AUSAID and Asian Development Bank. AUSAID was assigned to finance and assist South Cotabato. By this time, the focus of the project had changed to systems development in order to strengthen the management capacity of the LGUs at provincial and municipal levels. The goal of the ICHSP in South Cotabato was to “promote the well-being of the people of South Cotabato through a sustainable health care delivery system in full partnership with non-government organizations (NGOs) and the community”. It has the following objectives and strategies:

2.1 Objectives • Revitalization of the health system through collaborative health focused

management and delivery of health services within South Cotabato; • Improved access to an appropriate level of health care targeted at services

that have the greatest health benefit for the population as a whole; • The efficient and effective allocation of resources based on strategic devel-

opment plans and networks developed with the private medical and commu-nity-based NGO sector.

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2.2 Strategies • Clustering of municipalities into five Local Area Health Development Zones; • Development of a management structure for LAHDZs and a supportive

management structure at the provincial level; • Provision of a defined minimum package of activity for public health services,

complimentary package of activity for core referral hospitals and tertiary package of activity for the provincial referral hospital;

• Development of a well-functioning and comprehensive health referral system; • Strategically identified development requirements and implementation

schedule for the integrated health system. Sub-systems such as Integrated Health Planning, Health Care Financing, Health Delivery and Referral, NGO/ Community Mobilization, Human Resource Man-agement and Development (HRD), Health Management Information, and Moni-toring and Evaluation were set up, with manpower from the province assigned to these units. A series of planning and consultative meetings were conducted, spearheaded by the PHO and participated in by the LGUs, the Sanggunian Panlalawigan, the private sector, NGOs and the Chiefs of Hospitals of the district hospitals. By June 1999, five Local Area Health Development Zones were organized in the province as the operating mechanism for the integration of the different compo-nents and sub-systems. This preceded the signing of Presidential EO 205, which mandated the organization of Inter-Local Health Zones throughout the country. The LAHDZ vary in terms of the number of component municipalities, the catch-ment population of each core referral hospital and the number and level of hospital services within each area. Catchment areas are generally determined by geography, road networks, transportation and availability of other services. Local chief executives once informed of the goals and planned processes were generally supportive.

Table 5. LAHDZ Areas in So. Cotabato, Their Core Referral Hospitals, and Catchment Areas.

LAHDZ Catchment Areas Core Referral/ District Hospital Upper Valley LAHDZ 1

Lake Sebu Selected barangays of Surallah

Lake Sebu Government Hospital

LAHDZ 2 Norala, Sto. Niño Selected barangays from Surallah, Banga, and Sultan Kudarat

Norala Government Hospital

LAHDZ 3 Surallah Banga T’boli

Lariosa Private Hospital Januaria Private Hospital Edwards Evangelical Hospital

Lower Valley LAHDZ 4

Koronadal,Tantangan, Tampakan Selected barangays from Sultan Kudarat

South Cotabato Provincial Hospital

LAHDZ 5 Polomolok, Tupi Selected barangays from T’boli

Polomolok Government Hospital

* Excluding population of Barangay Ned that currently access hospital services in Sarangani and Sultan Kudarat. Source: (South Cotabato Provincial Health Office, 2000.)

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3. The Convergence Strategy The MSH Convergence strategy was launched in the province on June 14-15, 2001 during the South Cotabato Health Sector Reform Convergence Workshop. The participants to the workshop included Chiefs of Hospitals, Provincial Health Office staff, Municipal Health Officers, local government officials, representatives from the DOH, PHIC, CHD, MSH, NGOs and the private sector. Participants to the workshop identified health problems and issues related to the implementation of health sector reform in the province. Current and planned actions were discussed together with strategies, activities and targets for each reform area for 2001-2004. Norala district (LAHDZ 2) was selected as the convergence area. South Cotabato's Health Sector Reform Targets for the period 2001-2004 are as follows: • Social Health Insurance

- 60% of population Health Passport holder - 50% of Health Passport holders availing of increasing benefits - All health facilities PHIC accredited (4 government hospitals, 11 RHUs)

• Local Health System

- 5 fully functional and provincially integrated LADHZ - All facilities Sentrong Sigla certified: 4 hospitals, 11 RHUs, and 25% of

BHS • Hospital Reforms

- Fiscal autonomy for all public hospitals – income retention, sub-allotment - QA Benchbook fully implemented resulting in quality service provision - Hospitals upgraded – SCPH as medical center, NDH as secondary hospi-

tal • Drug Management

- Pooled procurement system for the province and all municipalities, pro-vincial formulary developed

- Five functional therapeutic committees - Essential and parallel import drugs available at health facilities - Fifty percent increase in knowledge, attitude and skills on RDU by

consumers - Standard treatment guidelines

• Public Health

- All 11 RHUs and 25% of BHS Sentrong Sigla certified - Ninety percent of households with safe water supply and sanitary toilets

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- Sixty percent of health personnel trained on IMCI - Decrease in the number of cases of infectious diseases: TB, DD, ARI,

filariasis - Increasing budget for public health

The Convergence Workshop participants also made pledges and commitments. The LGU representatives (Tampakan Mayor Barroso, Surallah Mayor Bendita, Tupi Mayor Mariano, Norala Kagawad Cerveza) pledged to prioritize health and include budget allocations for enrollment of their constituents to the PHIC Indi-gency Program. Dir. Dolores Castillo of CHD Reg. XI pledged to provide techni-cal and counterpart support to HSRA activities. She promised transparency and equity in the provision of support. Mr. Amario Morales of PHIC promised full support –funds, workforce and effort for HSRA. Dr. Edgardo Sandig of the IPHO said South Cotabato is committed to health reform and to making devolution work in the province. He says the convergence workshop added flavor to some-thing, which already existed. “Parang bibingka na linagyan ng mantekilya” ("like adding icing to a cake"). A Provincial Health Summit was held in July 2001 where the local chief execu-tives signed pledges of commitment to the strategies and activities put together during the convergence workshop. A third summit is being organized for the third week of July 2002 to coincide with the foundation day of the province. Activities by the convergence group cited by Dr. Sandig/Dr. Magan are: assis-tance in health assessment, health planning, drug management (train-ing/workshops), advocacy with PhilHealth and DOH in social health insurance, some activities for hospital reforms like the 5S, monitoring and improving local health systems, Lakbay Aral and regular monitoring/assessment of health situation/management in the province. Dr. Sandig and other health personnel of the PHO/hospital believe that the activities of the MSH are complementary to the programs of ICHSP. They also expressed that some health reforms have been initiated in the province even before the convergence program. However, MSH, according to them, has cemented whatever reforms have been initiated. 4. Gains in Health Financing Reforms

4.1 Social Health Insurance In 1995, the law creating the Philippine Health Insurance Corporation (PHIC) was enacted. The law broadened insurance coverage to include the informally employed and indigent sectors, in addition to the formally employed sector already covered by the then Medicare Commission. PHIC Regional Field Offices (RFO) were established in 1998. South Cotabato was then under the Region 11 office. Advocacy and initial meetings for the PHIC Indigency Program were started by PHIC Central office staff at this time. By 1998, all 11 towns of South Cotabato allotted funds for their indigents but these were not released due to the election ban on certain finances. On August 16, 1999, the Region 12 PhilHealth Office, now known as PhilHealth Regional Office (PRO), was established in Koronadal, South Cotabato. However, the “all

147


out war” in Mindanao affected the drive to increase coverage. Differences of opinion between the PHO and PHIC also needed to be ironed out. After conducting “massive information dissemination”, with focus on the Indi-gency Programs in the local government units, seven towns from South Cotabato had MOA signings in October 1999. These were Banga, Norala, Tupi, Sto. Niño, Tampakan, Lake Sebu, and T’boli. The provincial government, under then Gov. de Pedro, provided P450,000 as initial allocation to be divided equally among each of the participating LGUs, which also provided their counterparts for addi-tional enrollees to the program. In 2000, two LGUs, Banga and Tampakan, signed the MOA for the Out-Patient Benefit Package (OPB)/Capitation Fund program. The two towns have since received their capitation funds. Two more LGUs, Tupi and Norala, signified their intention for the same program. The package requires coordination between the DOH, LGU, and PhilHealth. This is because the LGUs are responsible for upgrading facilities in order to make it PhilHealth accredited. DOH grants the Sentrong Sigla accreditation (which is part of the PhilHealth accreditation requirement) and PhilHealth will provide capitation. Enrollment to the Indigency Program entails a length process that could take as long as 1 to 1 ½ years to complete. This has been met with consternation by local chief executives who have paid the premiums and built up people’s expec-tations. There have been reports of IDs about to expire that have not been distributed. This is a serious hindrance to further expansion because local chief executives are now looking more closely into the returns on their “investments” in health and may decide that there are more attractive uses for their money.

4.2 PhilHealth RHU Accreditation for Outpatient Benefit Package and Capitation

With the assistance of ICHSP, the RHUs have been upgraded starting with those of Norala and St. Niño in the convergence area. At present, 10 RHUs have been accredited and only the Polomolok RHU has not yet received its PhilHealth accreditation. By 2001, all 11 LGUs of South Cotabato have enrolled indigents from their communities. Even barangay chairmen (Norala) tapped their funds to enroll their indigents. However the two LGUs that wanted to participate in the OPB program for RHUs withdrew because they disagreed with the provision on honorarium that gives 10% of capitation funds to the Municipal Health Officer (MHO). This was interpreted as “double compensation” to the MHO who already gets a higher salary than the mayor because of the Magna Carta and other benefits for health personnel. In one town (Norala), barangay chairmen are planning not to renew their enrol-lees next year despite the fact that the MHO has waived her part of the honorar-ium in favor of the LGU. The SB for health has already communicated their queries and objection to the above provision to the PHIC central office. The PHO

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maintains that this should be seen as an incentive for the MHO similar to the sharing of fees under the former Medicare Program rather than as “double compensation.” In June 2001, Pres. Gloria Macapagal Arroyo, in her State of the Nation Address (SONA), announced her target to enroll about 17,000 households in each prov-ince in PhilHealth's indigent program. At present, PRO 12 has accomplished about 58% of its SONA commitment. (PhilHealth staff argue that if their earlier accomplishments were counted, then they have already exceeded their target.) Seven other towns have already applied for the RHU accreditation/OPB program although only four of these have enacted an ordinance in support to the program.

4.3 Facilitating Factors The PhilHealth Regional Office says it has no difficulty implementing the indigent program in South Cotabato. The advocacy efforts of the PHO and partner NGOs has kept the PRO busy trying to cope with the demands for enrollment. The following factors facilitate implementation of social health insurance in South Cotabato: Early and sustained advocacy from several sectors including CHD Region 11, Provincial Health Officer, Provincial Governor and PHIC central office. This is supplemented by active information dissemination of PRO 12 through regular radio programs, newsletter (Sprikitik), LGU orientation, and posters. Consultative fora with stakeholders and translation of materials to the local language have helped communicate goals and processes of the program. There is good coordi-nation with other agencies like DOH, PHO, DSWD and LCEs/LGUs and support from NGOs in advocacy like ICHSP, MSH. Political and technical support starting with the pro-active indigent officer and staff/leadership of the PHIC Regional Manager, together with support from the Technical Working Group (TWG) of the province as well as at the municipal level. In one town (Norala), the TWG meets monthly and has been very instrumental in enticing the mayor and barangay chairmen to provide funds for enrolling indi-gents. Provincial, LAHDZ, and municipal health boards have worked together to pass the needed resolutions and budget allocations. The enabling environment of a relatively stable peace and order situation and good dynamics between the health leaders and politicians. Health workers and local politicians say that “politics is only during the election; pagkatapos ng election magkasama na ulit” ("after the elections, we're all friends again").

4.4 Setting up a User’s Fee System To help ensure sustainability of services, the province implemented a User’s Fee System in 1996. Fees collected for similar services were set based on level of care, so that the lowest cost would be at the Rural Health Units (RHUs), followed by the District Hospitals and the most expensive would be those at the Provincial Hospital. The ordinance implementing this system was hotly debated at the Sangguniang Panlalawigan and in the public hearing that followed. The winning

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argument in favor of the fees, however, was the observation that even those who can afford to pay avail of government health services. The rationale for the fees therefore was for those who are able to pay to do so in order to help support those who cannot. The truly indigent are certified by a social worker and are exempted from paying fees, but only after being informed of the amount that the government has spent for their care. The PHO wants the people to know the extent of support being extended to them. There were initial reports of a reluctance to pay, but with consistent implementation and continuous explanations through the media, these have diminished. Data at the RHU level shows that the fee system needs to be built up for it to substantially contribute to the sustainability of services. At the Sto. Niño RHU, records for laboratory fees from January to May 2002 showed a total collection of P1,040. Income from medical certificates during the same period was P1,360. There does not appear to be a clear-cut accounting system. In the town of Norala, records were not available, although fees have been collected. This is an innovative feature of the HSRA implementation in South Cotabato that needs to be better documented. Health providers have the sense that there has been no decline in service utilization despite the implementation of the fee system, but this needs to be validated.

4.5 Integration of Services, a Cost- and Resource-Sharing Mechanism Since the Norala RHU is walking distance from the District Hospital, one of the ways conceived to make the delivery of services more efficient was the integra-tion of the laboratory services. The RHU laboratory would be integrated with that of the District Hospital. This would minimize duplication of services while still ensuring access to clients. One of the hurdles that had to be overcome was the PHIC accreditation of the RHU, which was required to provide laboratory ser-vices. The PHIC guidelines were modified to accommodate this situation. Under discussion are the handling of income and delineation of lines of responsibility of the laboratory between the RHU and the Hospital management. This same mechanism is under negotiation between the RHU and District Hospital in LAHDZ 1 (Lake Sebu). Negotiations for cost sharing are also on-going with the province of Sultan Kudarat in LAHDZ 4 because the referral hospital (the Provincial Hospital) there serves several barangays of that province.

4.6 Retention of Income The PHO has been advocating for the income retention of devolved hospitals since 1999 in order to augment appropriations for Maintenance, Operating and Other Expenses (MOOE). This is particularly true for the LAHDZ referral hospi-tals whose smaller budgets (compared with the Provincial Hospital) are eaten up by personnel salaries and benefits. The current discussions center on setting up a trust fund where the retained income would be used as a revolving fund for the hospital.

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The PHO, however, realizes that for this scheme to be viable, the quality of services needs to be improved in order to attract a larger client base for the district hospitals. For the last three years, the occupancy rate of the Norala District Hospital has, in fact, been declining. While discussions regarding the financial management of the potential funds from income retention are on going, equal attention to improving the services at the hospital must be given. There is also a need to “market” the district hospitals to encourage utilization. An observation made is that the perennial lack of medicines serves discourages PhilHealth cardholders from patronizing the district hospital. These clients would prefer to go to a private hospital where medicines are always available so that there will be no out-of-pocket expense on their part. The drugs will be charged to their PhilHealth plan. At the Norala District Hospital, because medicines are not available, clients need to buy their own and then have to go through the reim-bursement process at PhilHealth.

4.7 Community-based Health Financing Together with the Davao Medical School Foundation’s (DMSF) Institute of Primary Health Care, the PHO set up the “Barangay Maibo Bulig-Bulong Pro-gram” in Tantangan in 1996. Seed money from the DMSF and contributions from the members help support hospitalization and other health needs. However, this project seems to have been superceded by the PHIC Indigency Project. Members to this community-based financing program avail of their benefits only after PHIC benefits have been exhausted. Some mechanism to link the two insurance schemes should be worked out to improve efficiency and coverage. 5. Gains in Hospital Reforms As of 1998, the province had 22 hospitals, of which 5 are government (4 primary, the District Hospitals, and 1, the Provincial Hospital, secondary) and 17 are private (15 Primary, 1 Secondary and 1 Tertiary). With help from the Investment Plan of the Governor’s office and the ICHSP, government hospital facilities have been upgraded (ER, new OPD building, OR expansion, district hospital renova-tion). The wards have been improved with the help of private institutions. The PHO established an “Adopt a Room” program accessing support from private groups. In the planning stage, with funds already allocated from the province, is the construction of 50 beds for a private ward in the hospital. This is expected to increase hospital revenue. Training programs have been started with the medical internship, Family Medicine Residency programs. Eleven private consultants have been hired on an honorarium basis in Surgery, OB, Pediatrics Medicine, Family Medicine, Pathology, and EENT to augment the hospital staff. The goal is for the Provincial Hospital to be a Regional Medical Center under local government management. The LAHDZ system has facilitated the linkages between the RHUs and the hospitals. User charges, where district hospitals charge lower rates than the provincial hospital and RHUs charge even lower rates than district hospitals for the same services, are expected to decentralize the management of primary and secondary cases and encourage the utilization of the RHUs and district hospitals.

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This is supported by a strict referral policy. The sign “No referrals, No Consulta-tion” is posted in all facilities. According to the MHO and the District Chief, although initially resisted and ignored by the people, the people are now following proper referral. Accordingly, it has had a significant impact on the attitude of the patients and the types of disease being handled at different health facility levels. However, according to the SB for health in Norala, some people still cannot follow the logic of the referral system especially if the patient lives near the hospital. A Quality Assurance program was started last year after the chief nurse, hospital administrator and the chief of clinic attended a training workshop on QA. The following achievements through the efforts of the three-man QA team are: a. Echo of the training to the LGUs/District health b. Establish quality circle in the LGUs/District health and each section of hospi-

tals c. Each section circles identified their problems then present it to a bigger circle

led by the hospital management. The problems identified are prioritized and solutions are discussed

Table 6. Examples of Problems and Solutions Addressed During Quality Circle Discussions.

Problem Solution Long waiting period of patients for consultation in ER and OPD, understaffing and work overload for physicians

Hiring of consultants and doctors; doctors work schedule organized so they come to clinic on time

Delays in operation/procedures in ER/OR due to lack or insufficient supplies

Budget of supplies for the two sections was increased

Lack of anesthesiologist in the hospital Government negotiated with the private anesthesiolo-gists and secured an agreement for government to pay for services to indigent patients for a fixed rate of P2,000.00 per case

d. Inclusion of QA in weekly management meetings e. Values orientation to the staff (with emphasis on being conscientious and

awareness of the needs of the patient/watchers and other staff) f. Emphasized cleanliness in the hospital The QA program has been echoed to the district hospitals but has not yet been implemented outside the Provincial Hospital. The province is supporting the residency training and other higher short course training of hospital personnel to upgrade their staff and as an incentive for them. The PHO is implementing preventive maintenance with support from ICHSP by training maintenance crew in the hospitals as well as in the RHUs. A preventive maintenance team will be pooled in the province and will be provided with

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knowledge and logistics to repair and maintain medical equipment. A workshop and spare parts depot is also being established in the hospital. A mechanism is in place for immediate purchase for spare parts using cash advance for parts not more than P40,000. The development of clinical protocols was started only this year involving all consultants and some MHOs. Each department identified the most common causes of mortality and morbidity and each specialist conducted workshops to develop disease management guidelines. The flow of patients from presentation till admission and discharge is analyzed. Referrals are also discussed in the process; as they are strictly enforced from the BHS, to the RHUs, district hospital and provincial hospital. Treatment protocols are in accordance also with the hospital formulary. The Department of Health with the support of ICHSP included South Cotabato in the implementation of an electronic management information system program. At present the provincial hospital has installed computers in the sections of admis-sion, billing, records, cashier and social services. A central server/office is provided in the provincial hospital. Encoding of the past record is on going and new patients/records are both recorded on paper and in the computer. Double recording is necessary since the program has no back-up capabilities yet. In the district hospitals, a stand-alone computer is installed. Some problems noted with this program are: (a) most staff are not computer literate, (b) no budget for repairs/maintenance of CPUs, (c) No back-up server, (d) duplication of work (double recording), (e) No local technician trained for computer repair, (f) when a computer/program crashed, it took three months before it was addressed, (g) the system is currently limited to the provincial hospital. Initially though its functions/effects are noticeable. Records for the sections with installed programs can be easily accessed and retrieved for patient care or to make reports. Some bills with very minimal assessment but with many services provided to the patient have been monitored. These cases have been brought to the attention of the management because they may not have been assessed correctly. But the program head was not yet satisfied with the project, especially with the current funding support phasing out next year. 6. Gains in Drug Management Systems Dr. Sandig acknowledges the workshops/support conducted by the MSH for the drug management reforms. Procurement of drugs and other health supplies have been fast-tracked by reducing signatories and the process has been streamlined. The Therapeutic Committees have been strengthened. A Hospital formulary was created in accordance with the national formulary. Drugs were classified into VEN (Vital, Essential and Necessary). Through ICHSP, seed money was provided for the Provincial hospital (P300,000) and the district and municipal hospitals (P100,000) for these activities. The province has worked out a bulk procurement system for its hospitals and increased the budget for drugs. In principle, each hospital is asked for a list of

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drugs and supplies it needs for one quarter. The Therapeutics committee of each unit/ hospital assesses its needs. These lists are consolidated and bid out by the provincial government. The results of the bidding are sent back to the hospitals that decide whether the winning brands and amounts are acceptable. Delays occur when the hospitals prefer a more expensive brand than the lowest bid (usually generic), which the Provincial General Services Office will, of course prefer. Meetings and discussions are held to reconcile these differences. Alloca-tions for one quarter are thus usually available about 6 months after they are requested. Until this system can be ironed out, it is unlikely that the RHUs will choose to join in the bulk procurement process since at the moment they are able to secure their needs within a few days of request since they only need a few signatures from their municipal offices. Some LGUs have also expressed their preference for specific suppliers who may not be the same as the provincial suppliers. Other possible interventions to reduce delays would include considering only DOH accredited suppliers in the bidding process, and ordering during the period when there is still budget available for the drugs. The PHO also needs to make the doctors understand that their drug “preferences must match government resources”. Parallel drug importation process has been attempted but delivery has been delayed. It was learned that the problem is BFAD’s requirement of a Certificate of Product Registration (CPR). This is not required in international bidding and the process to secure one is lengthy. This creates a bottleneck, which slows down the parallel import. Orders placed in October 2001 were finally delivered only this June 2002. A Cooperative Pharmacy, a project of the federation of Barangay Health Workers (BHWs) was set up on March 11, 1996. It is located in the provincial hospital itself and is being supported by the province but is run as a private entity. The PHO and other officials were not included in management to avoid conflicts of interest but they may be members of the cooperative. Not faced with the gov-ernment accounting rules, the pharmacy is able to procure medicines in a short time and canvass and secure consignment with drug companies. Being run by a cause oriented group, the cooperative marks up a small profit only, thus lowering the selling price. For example, the private pharmacy sells IV fluids for P70 while the cooperative store prices it at P35 only. If the hospital lacks some supplies they turn to the store, which extends them credit. The store has existed for six years and has provided dividends to its members and even scholarships for the children of BHWs. They also provide health assistance to their members. Faced with a recurrent problem of lack of medicines, a revolving drug fund for hospitals was set up in February 1999 with assistance from ICHSP. The fund provides seed money for the hospitals to secure medicines during an emergency. Patients pay on cash basis. The payment is returned to a Trust Account man-aged by the Provincial Treasurer’s Office so it can be “revolved” when the next emergency arises. However, this is only a back up to the regular procurement process.

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Dr. Sandig says that the drug procurement program has to date not necessarily decreased prices and still needs a lot of work. 7. Gains in Local Health Systems Development Plans for an Integrated Health System had been laid out in South Cotabato long before the health sector reform agenda launched by former Secretary of Health Alberto Romualdez, Jr. in 1998. There were already consultations with the local chief executives and MHOs on improving health care and referrals. These consultations were mostly initiated by the PHO. The PHO believed in the motto “ initiative to initiate.” LCEs were motivated to sign up because of their desire to improve the access and quality of health services at the provincial (“to decon-gest the provincial hospital”) and municipal (“'yung kaya sa RHU, dapat sa RHU na” – "what can be done at the RHU level should be done at the RHU") levels. The Zone formation also created a somewhat bandwagon effect because the mayors did not want to be seen as “napag-iwanan” or left behind by the rest of the province. The potential for attracting donor funding by being a pilot area was also a factor. In 1999, during an LPP Provincial Health Summit, the Local Area Health and Development Zone System for South Cotabato was organized. The LCEs agreed with the option to organize a local health care system in their district. Support from agencies such as AUSAID, the province and DOH was secured and the implementation is on going. The province has well laid out plans for their health system. Roles and responsi-bilities are carefully defined for each level of care and each level of management. Primary, secondary and tertiary packages of care have been described to clarify access, referral and provision of services. What is even more impressive is that all these are documented and disseminated at the RHU, LAHDZ and provincial levels. A Referral Manual has been developed for the purpose. The Manual contains the policies, guidelines, procedures and forms needed for the referral process. Interviews with health providers show that they are aware of these policies and their role in implementing them. They have used the LAHDZ meetings as oppor-tunities to discuss modifications to these policies and thresh out problems and issues that arise during actual case management. However, interest in the LAHDZ needs to be sustained, particularly when exter-nal funding support ends. Already there are reports that some mayors have not been attending LAHDZ meetings because they do not see any benefits going to their municipalities. At least one LCE has complained that some of the promises for their area have not been fulfilled.

7.1 Gathering Data for Decision-making The PHO is completing a study to identify the specific catchment areas of the referral hospitals and RHUs in order to rationalize the areas of responsibility of these units. With this study, they will be able to address the concerns of people from Tupi, for example, who prefer to go to the Provincial Hospital as it is more

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accessible to them than their assigned referral hospital in Polomolok. They will also be able to determine the extent to which a neighboring LAHDZ or province should be involved in cost-sharing depending on the proportion of their constitu-ents who are availing of services in a given health unit. Another study being undertaken is the review of the impact and successes of the health zones. Meetings and resolutions are being documented to determine how responsive the system has been to identified needs and problems. One problem that may need to be addressed is meeting people’s expectations. A health provider in the pilot district claims that the expansion to other districts has contributed to the slowing down of reforms in their area. He is apprehensive that their reform model was not perfected yet but is already being carried out in other areas. Also the support initially aimed for the pilot areas was spread thinly to other districts. Discussions, particularly about funding support and allocation, need to realistically couch so that people will have reasonable expectations of the initiatives.

7.2 Health is Good Politics Most of the health reforms in the province have been made possible through the support of the provincial health board, which conducts discussions of the health issues and recommends ordinances and even funding for health activities. The former governor expanded the health board to fifteen members including other stakeholders for health not identified in the law. It was also instrumental in the following health reforms/activities: formalization of inter-local health zones, indigent health insurance, drug procurement, cooperative pharmacy, hospital infrastructure enhancement (provincial counterpart funding), health summit, health advocacies, increase health budget and hiring of health personnel Health managers believe that the former governor (Gov. de Pedro) supported all the needed reforms in health and other sectors being one of the authors of the Local Government Code when he was in Congress. He wanted decentralization to succeed in his province. Another factor was the multi-pronged strategy employed by the PHO to get the SP members on his side. Dr. Sandig says he makes it a point for health to be always in the news and gives interviews and press conferences on a regular basis. When nothing is happening, he makes things happen, such as the holding of a rally for the recent Garantisadong Pambata campaign to drum up interest in the activity. This brings health concerns to the top of people’s awareness. A second strategy is to give the SP members important roles to play in health activities and decision-making. Each LAHDZ is organized so that an SP member is its head, with the District Hospital Chief as the coordinator. During LAHDZ meetings and functions, Dr. Sandig plays up the role of the SP members, which they recognize as important to their constituency building. The experience of SP Siapno, the author of the controversial User’s Fee Ordinance, who won by more than 20,000 votes during the last elections, shows that “health is good politics”.

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A third strategy is to organize study tours for the SP Board members to “broaden their horizons”. That way, they become advocates for health themselves. The current governor, Gov. Daisy Avance-Fuentes has made health her priority program and has continued and even expanded the health programs of her predecessor. She says she has seen the benefits and determines her “politics based on need and not along party lines”. Her concern, building on the momen-tum generated by the strengthening of local health systems and the hospital reforms, is to provide an integrated preventive health care program that would incorporate strategies for nutrition, immunization, and healthy lifestyles among others.

7.3 The Private Sector The province has tapped its private sector in many ways. Among the most notable has been the involvement of the private hospitals as the referral hospital for the Surallah, Banga, T’boli area (LAHDZ 3). The relationship with these hospitals apparently started even before the HSRA, with lump sum funding from the CHD, Region XI to support the care of indigent patients. The province has also solicited ambulances from the PCSO for these private hospitals. Private practitioners in the province have also been recruited to serve as con-sultants on an honorarium basis to supplement the hospital staff at the Provincial Hospital and the Norala District Hospital. However, even this support may not be enough. The doctor who has been recruited to serve at Norala as regular staff, appears to be having second thoughts and is considering changing to part-time status so he can develop his practice elsewhere. Since the hospital is struggling to be upgraded to a secondary hospital, it is important to attract competent staff to meet the minimum requirements for this level. Other incentives may need to be given. Through a small grants component, the ICHSP provides P 400,000 – 500,000 as support for NGOs to engage in projects on community health development, health promotion, and community mobilization for health. These initiatives in 28 barangays help to broaden awareness regarding health and to engage people in a health activity. Examples of these community-based projects include: Botica ng Barangays, Healthy Barangay Project, IEC campaign for Voluntary Blood Dona-tion, Training on diarrhea management for Cholera-prone barangays, Linis Kalusugan Program, and Iodized Salt Drive among others.

7.4 Health Summits To show the importance of health care in the province, the province through the PHO with the support from the office of the governor launched a health summit in 2000. Now on their third consecutive year of the summit, the activity showcases the best practices in South Cotabato and enjoins all the health stakeholders in working for the health plan of the province. During the summit best practices are awarded and there is keen competition among the LAHDZs for the awards.

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8. Best Practices There are a number of possible best practices for the province of South Cota-bato. The province takes pride in its well-developed LAHDZ system that has operationally led to a better referral system, the integration of services to mini-mize duplication and reduced cost without sacrificing access or quality and closer links between the health sector and other stakeholders. The “secret is in main-taining strong links with the LGUs.” The province also can be cited for its innovations in health financing - the user’s fee system and its aggressive push for the PHIC’s Indigency Program. It may be one of the few provinces where all municipalities have enrolled indigents and where the municipal counterpart matches or exceeds that of the province. There is a strong partnership among the PRO, the PHO and the political leaders of the province that has created a bandwagon for the Indigency Program. The LAHDZ is an important factor in this strong partnership. Other notable consequences of drug management systems intervention is the strengthening the hospital thera-peutics committees and reduction of signatories, which shortened the procure-ment process. While not strictly speaking a best practice in the sense that it is not entirely replicable, the province serves as example of how a dedicated and committed health sector can work in a devolved setting. Under the able stewardship of Dr. Sandig, the province has weathered changes in political leaders, the “all out war” in Mindanao, the Abu Sayyaf terrorism on top of the challenges brought about by decentralization. Data from the Provincial Hospital’s Cost of Operations and Maintenance as well as its utilization rates (see Appendix 2) show how the hospital exemplifies the province’s health sector’s growth since devolution. 9. Lessons Learned

9.1 Roles and Expectations of Stakeholders The PHO has mastered the art of partnership, within and outside the health sector. In its manuals and documents, the roles of stakeholders are explicitly stated. One key stakeholder, however, that is not always considered is the DOH Regional Office. The Regional Office appears to have taken an active role in the early stages of ICHSP implementation when the proposal was being prepared and negotiations with the Central Office and AusAID were being carried out. Its role was identified in terms of providing technical support to the province. However, the physical distance between the province and the Regional Office, and the limited manpower of the region has prevented regular interaction be-tween the two. In the light of South Cotabato being a pilot province for the HSRA, upscaling of the HSRA would have benefited from a stronger participation of the region in the province’s implementation so that the region would also have learned from the process. At this stage of implementation, South Cotabato would now be in the position to help the Regional Office in providing assistance to other areas for HSRA.

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There is a need to clarify and be transparent about fund allocations so that stakeholders are not disappointed. The early promise to provide a certain amount of money to the convergence site that was not fulfilled has led to the disillusion-ment of some of the LAHDZ 2 members. There is a need to renew commitments and rekindle the enthusiasm for the LAHDZ. Perhaps the presentation of data showing the improvements that have resulted from the reforms will help in this process.

9.2 Social Health Insurance A common observation is the lengthy PHIC procedures that lead to delays in utilization of benefits both for the Indigency Program and the Out-Patient Benefit Package/ RHU Capitation Fund Scheme. It is imperative that PHIC shorten the processing time by the decentralization of most functions/processes from na-tional to regional. PHIC stands to lose the momentum and interest of its advo-cates if it does not deliver on time. It will also find it difficult to convince new enrollees as word of mouth spreads about its problems. There is a need to address the concerns regarding the use and monitoring of the capitation fund while there are still only a limited number of RHUs availing of this. The problems will compound as more and more RHUs operate by capitation. PHIC needs to develop and put in place its monitoring and evaluation systems for the Indigency Program and the OPB package as soon as possible. The data generated from this would inform both policy and process as well as provide evidence that PHIC is fulfilling its mandate. Local/ provincial, regional and central PHIC databases need to be electronically linked to facilitate enrollment and availment of benefits.

9.3 Drug Management One of the key challenges to the PHO is to ensure the availability of medicines in the district hospitals. The current mechanisms being used by the province are not sufficient to either bring down drug prices or ensure supply. There is a need to increase the revolving funds for immediate drug procurement. There is a need to re-examine the policy on end-user preference, as this appears to cause delays in the procurement system. The promise of PDI has been delayed in South Cota-bato.

9.4 Link between Systems Improvement and Public Health Programs The Convergence Strategy is intended to bring out improvements in public health program implementation through the strengthening of local health systems, although there is no explicit technical assistance for public health programs. This means that there is a need to allow time for the system changes to take root before public health program changes can be seen. South Cotabato, as one of the pilot HSRA provinces, bears the burden of this expectation. Its local systems have been strengthened and the fruits are being anticipated. The province has set as its public health goals a decline in cases of selected diseases and an increase in the public health budget, aside from

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Sentrong Sigla accreditation of its health facilities and provision of safe water and toilets. The expressed interest of Governor Fuentes in preventive health meas-ures needs to be tapped even as the province builds upon its LAHDZ systems to achieve these goals. The province, through its ICHSP has singled out TB, DD, CVD and Mental Health as sentinel conditions to illustrate the public health effects of these system improvements. Improvements in TB-DOTS Cure Rates (from 38% in 1999 to 70% in 2000) shows that they seem to be going in the right direction but more time is needed to see whether these changes are sustained. The province has expressed the need for better indicators that would reflect the improvements in the health system that has affected public health programs. 10. Conclusion and Recommendations The concept of the convergence strategy is that each of the sector reforms are interlinked within local health systems, such that simultaneous improvements in each reform area would lead to a synergistic improvement in the system that would be greater than the sum of the individual interventions. This vision is on its way in South Cotabato with its strong LAHDZ systems, its burgeoning health finance mechanisms and the continuing quality improvements in its hospitals. However, there is a need to address its drug management problems and strengthen the system links with public health programs. With the phasing out of donor support, South Cotabato has to prove that it has achieved the “irreversible momentum” needed for it to pursue the reforms on its own. The province would benefit from a network of provinces and other local govern-ment units, which have operating ILHZs so that they can continue to share experiences and learn from each other. There is deep appreciation for the “lakbay aral” which has served as both an advocacy and training opportunity. In the same way, the province intends to continue its Health Summits where its municipalities and LAHDZ interact and share best practices and lessons learned. There is a need to continue and strengthen further partnerships outside the health sector including those with political leaders, PHIC, the NGOs and the private sector. This has served the province well and will continue to do so. At the same time, the province needs to rekindle its ties with the DOH Regional Office so that it can both assist and be assisted in HSRA implementation.

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Appendix 1. Local Health Accounts, 1998, South Cotabato.

S o u r c e s o f F u n d s Local Gov’t Mandatory Insurance Private Uses of

Funds Natl Gov’t Prov’l Mun’l Medicare EC*

Local Hlth Insur OOP* Insurance Employer Schools

Total (PhP)

Personal Health Care 1,980,186 43,114,876 77,662,663 71,015,028 4,998,546 0 493,140,588 4,116,970 69,810,334 4,416,308 770,255,499

Government Hospitals 1,322,180 43,114,876 77,662,663 5,529,666 0 176,986,338

Private Hospitals 65,485,362 47,679,639

Non-Hospital MD 658,006 61,656,792

Other Professionals 4,998,546 5,713,058 4,116,970 69,810,334 4,416,308

Dental 14,272,563 Traditional 26,512,205 Home care (Drugs, Med. Durables)

160,319,993

Public Health Care 22,156,804 15,943,348 113,005,379 0 0 151,105,531

Other 16,615,203 19,796,655 62,729,290 12,128,995 769,697 0 0 8,042,430 0 0 120,082,270 Administration 15,519,816 19,796,655 62,729,290 12,128,995 769,697 8,042,430 Research & Training 1,095,385

TOTAL 40,752,193 78,854,879 253,397,332 83,144,023 5,768,243 0 493,140,588 12,159,400 69,810,334 4,416,308 1,041,443,300 *EC – Employees Compensation, OOP – Out of Pocket Source: Local Health Accounts, M. Gorra, HEWSPECS for ICHSP, DOH

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Appendix 2. South Cotabato Provincial Hospital, Occupancy Rates and Budget, 1990-2000.

South Cotabato Provincial Hospital Occupancy Rates, 1990-2000.

South Cotabato Provincial Hospital Budget 2000-2001.

South Cotabato Provincial Hospital Budget, 2000-2001

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

2000 2001

Year

Am

ou

nt

in P

eso

s

PersonnelMOOECapital OutlayTotal Budget

South Cotabato Provincial Hospital Occupancy Rates, 1990-2000

0

2040

60

80100

12019

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Year

Occ

up

ancy

Rat

e

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Appendix 3. Norala and Sto. Niño Health Budgets, 1998-2001.

Total Health Budget of Norala, South Cotabato, By Appropriation, 1998-2001

Health Budget of Sto. Niño, South Cotabato, By Appropriation, 1998-2001

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

1998 1999 2000 2001

Personal Services

MOOE

Capital Outlay

Total

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

1998 1999 2000 2001

Personal Services

MOOE

Capital Outlay

Total

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Appendix 4. List of Interviewees, South Cotabato. 1. Gov. Daisy Fuentes, Governor, South Cotabato 2. Dr. Edgardo Sandig, Provincial Health Officer, Chief of Provincial Hospital 3. Mr. Eduardo Siapno, SP for Health 4. Dr. Louella Estember, Provincial DOH Rep, Chief, Technical Division 5. Dr. Emilio Arenas, Prov’l Dentist, Point Person for Health Planning 6. Ms. Luz Decio, DOH Rep-LAHDZ 3, NGO &Community Dev’t Point Person 7. Ms. Dinah Poral, DOH Rep, LAHDZ 5, Child Health Point Person 8. Mr. John Salcedo, ICHSP, Project Health Officer 9. Ms. Rosalina Jaictin, Human Resource Development Point Person 10. Ms. Lorna Lagos, Health Financing Point Person 11. Ms. Nelvie Capiz, Process Documentor 12. Ms. Lucheria Larong, Midwife 4, Provincial Health Office, Technical Division 13. Dr. Alicia Magan, PH-Chief of Clinics (QA Member) 14. Ms. Brigido Usita, Provincial Hospital (PH) Administrator, (QA Member) 15. Ms. Elena Arciaga, HOMIS 16. Ms. Vilma Ligo, RN , QA Lead person, Provincial Hospital Supply Officer 17. Mr. Ramon Aristoza, PHIC Vice-President, PRO XII Regional Director 18. Dr. Antoinette Ladio, PHIC Accreditation Officer 19. Mr. Amario Morales, PHIC Indigent Officer 20. Ms. Emily Bismar, PHIC Dev’t Management Officer, Indigency Program 21. Ms. Merle Sabog, Head, PHIC Membership & Collection Unit 22. Dr. Gonzalo Braña, Norala District Health Officer 23. Dr. Lamelita Amido, Norala MHO 24. Ms. Elsie Cervesa, Norala Councilor for Health 25. Dr. Ervin Luntao, Mayor, Sto. Niño 26. Dr. Evelyn Diosana, MHO of Sto Niño 27. Hon. Nema Cornejo, Vice-Mayor, Tupi 28. Dr. Apolinar Hatulan, MHO of Tupi 29. DOH Regional Office, Davao City 30. Dr. Mary Joan Bersabe, CHD XI, Chief, Technical Division 31. Dr. Rose Padilla, Regional Point Person for Social Health Insurance

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Health Sector Reform Technical Assistance Project VII

NEGROS ORIENTAL (REGION 7) 1. Socio-Economic and Health Profile Negros Oriental has a population of 1,124,000, a population density of 220 persons per square kilometer, and a population growth rate of 2.03% in 2000. About 95% of its population are Cebuano speaking; the rest speak Hiligaynon (Ilonggo). It has 20 municipalities and 5 cities. Two of the cities are classified as second class and 45% of LGUs are fourth and fifth class municipalities. It is a first class province with an annual income of over P30 million. The average annual family income is P49,403. The average poverty incidence is 40.6%, but there appears to be maldistribution of income as 80% of the population in rural areas is classified below the poverty line. 2. Health Sector Reform Negros Oriental is one of eight pilot sites under the two-year Health Sector Reform Technical Assistance Project (HSRTAP) funded by the United States Agency for International Development (USAID). The experience in this province began with a convergence workshop held at the Bethel Guest House in Duma-guete City on April 19-20, 2001. The workshop succeeded in generating interest among major stakeholders that included 72 representatives from the national, regional and local health agencies, Philippine Health Insurance Corporation (PhilHealth) representatives, municipal/city public officials, support institutions, and health NGOs. With the use of participatory mechanisms, the various stake-holders crafted targets, strategies and health plans that were doable. The workshop started by defining the policy environment and identifying prob-lems and issues that affected the local health sector. The participants were briefed about the basic concepts of current initiatives that included the Health Sector Reform Agenda, the Health Passport Strategy and the Convergence Strategy. Together they defined an HSRA vision for Negros Oriental. This became the basis for a draft convergence plan. A group of Negros Oriental Health Sector Reform advocates was constituted to serve as strategy champi-ons. 3. Gains in Health Financing

3.1 Community Financing - Peso for Health The “Peso for Health Program” was implemented before PhilHealth approached the LGUs. It is community-designed, community-based and community-

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managed. Its implementation started in May 2000. The program aims to mobilize resources for sustainable health services, and strengthen health service delivery through community, LGUs, and hospital participation. The Peso for Health Program is open to any resident person certified by the LGU. Community resources from individual members’ minimal monthly contribution, LGUs’ fund support, and donor contributions are pooled to sustain community health care financing under the Fund Management Committee of the district health system. The Peso for Health Program will get 25% of LGUs’ pledges in the ILHZ. Monthly contributions are based on A, B, and C categories with corresponding benefit packages as shown below.

Bracket Premium/month Benefits

Category A 1.00 P200 benefit package for drugs/medicines plus discount in diagnostic services and other medical facilities

Category B 5.00 P1,000 benefit package for drugs/medicines plus discount in diagnostic services and other medical facilities

Category C 10.00 P2,000 benefit package for drugs/medicines plus discount in diagnostic services and other medical facilities

Drugs are prioritized in the coverage of the benefit package. Any remaining amount from the ceiling set per bracket will be utilized for hospital bills. The patient will pay only half (50%) of the excess bill. This covers all hospital services like medicines, inpatient and outpatient services/laboratory, diagnostic services (e.g., newborn screening), room accommodation, and emergency transport from the District Hospital to the Negros Oriental Provincial Hospital (NOPH). Identifi-cation cards are distributed to individual members. The card is non-portable and color coded by municipality (yellow, blue and green IDs). A member can avail of the benefit package only after six months and when the accumulated contribution has been paid. Barangay health workers (BHWs), barangay officials, and assigned health workers of the program are the collectors of members’ monthly contribution either cash, in kind or in service. The Fund Management Committee has P5,000 in petty cash every week. Expenses or charges from 2001 to the present has amounted to over P100,000. With 10,000 members, they now have P38,000 in the bank. Cash inflow vs. outflow is break-even. The program targets to reach P200,000 or 50,000 enrollees which is the critical mass. When they reach the critical mass, they would like to include OPD in the benefit package. Based on a rough estimate, the average cost per patient is approximately P900. This indi-cates that health care cost is almost doubled from January 2001 with an average of P500 for Bracket B. Latest records show approximately P650 out-of-pocket payment per member, mostly on obstetric and sometimes medical cases. Program records also reveal that health care cost of members normally did not

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exceed the ceiling of the benefit package. Members have difficulty making the yearly payment, especially if the family has many members enrolled in the program. The advantages of the Peso for Health program are the following: • less bureaucratic • genuinely autonomous • community-based, owned and managed • cost sharing or responsibility sharing • accessible, available, acceptable and affordable • people empowerment is assured The problems and limitations of the Peso for Health program include: • Miscommunication between members and program implementers. This is

relative to limited funds to produce information materials like a brochure. • Irregular collection of monthly contribution of members. Not all contributions

are collected by BHWs regularly, and there are cases when the remittance is in lump sum. Sometimes there are members who pay in advance, depending on the availability of cash.

Other provisions or policies of the program that are worth noting are: • For three months delay in the payment of contribution, the member can only

avail of 50% of the benefits; • Six months delay in payment means dropping of membership and requires

re-enrollment; and, • Benefits can only be availed of if the enrollee has been a member for six

months. There is a six-month grace period prior to availment of the benefit package because: (a) this is a counter strategy to patients taking advantage of the benefit package; (b) this helps to accumulate funds on the assumption that the number of enrollees is increasing; and, (c) this makes sure that funds will not be ex-hausted. There are many PhilHealth members who are Peso for Health members, but in the community, indigents depend on Peso for Health Program for health care financing. There is no double membership in the Indigency Program and Peso for Health Program since PhilHealth's Indigency Program is not present in Sta. Bayabas ILHZ.

3.2 PhilHealth Indigent Program The target of the Indigency Program (IP) is that by year 2004, 25% of all LGUs will be enrolled in the program. As of May 2002, PhilHealth records show that 10

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LGUs have enrolled in the program, which indicates 40% accomplishment of the target number of LGUs. The program was presented initially at the regional level, which was attended by members of the Regional Development Council, DOH VII and Provincial Health Officials and Social Welfare Officers. The program was also presented to the League of Mayors at the provincial level, to the Sangguniang Panlungsod (SP) / Sangguniang Bayan (SB), Committee on Health, Health Officers and other LGU personnel assigned by the local chief executive to take charge of the program. Usually, the Municipal Health Officers (MHOs) took the responsibility of initiating the adoption and facilitating program implementation in the LGU. In Negros Oriental, the IP premiums are covered by municipal LGUs (MLGU). There is no provincial LGU (PLGU) counterpart due to differences in political party affiliation. The PLGU also wanted MLGUs to take the initiative in lobbying for the PLGU’s counterpart. The Governor is very supportive of the Indigency Program but he has no control of the Sangguniang Panlalawigan. Majority of the SP members do not belong to the same political party. This was cited as a limiting factor in facilitating SP resolution to support legally the provincial gov-ernment’s partnership. It also entails cost sharing with municipal and city LGUs and the national government through PhilHealth. PhilHealth key informants revealed, “although advocacy was properly handled, the former Vice-Governor who was the presiding officer of the Sangguniang Panlalawigan had his own program called Valencia Program, which he wanted the province to adopt.” Amlan’s enrollment to the program is an exemption because it has a counterpart from the province. It had successfully lobbied with the provincial government. Their resolution was passed after the May election last year, which was timely then since the former Vice-Governor did not win in the election. PhilHealth then suggested to the PLGU to make one resolution for the adop-tion/implementation of the Indigency Program in Negros Oriental. However, the provincial administration prefers to do it on a per LGU basis like what Amlan did. While there was some delay in acceptance of the PhilHealth indigent program in some municipalities in Negros Oriental, the experience in the municipality of Bindoy was different. In August 2001, the Management Sciences for Health facilitated the Health Sector Reforms orientation in Binata health district. Social health insurance was one of the priority interventions, which in turn encouraged Bindoy’s Local Chief Executive and other local stakeholders to adopt the pro-gram. However, they found it difficult to market any program if constituents have to pay. This perception was based on their unfavorable experiences with Phil-Health’s services (e.g., very bureaucratic, policy restrictions, issues on late reimbursements, low utilization rate, etc.). To counter this, the Mayor and the officer in-charge of the Indigency Program of Bindoy took the lead in conducting IEC in different barangays with other local stakeholders, health workers and barangay officials. Advocacy through informa-tion dissemination per barangay has been effective. Indigency Program cover-age, entitlements, benefits, processes, and cost sharing schemes were the focus

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when conducting IEC. Another strategy of the LCE in marketing the program is to emphasize to the constituents that health is not only a concern but also a responsibility of every individual. This has helped to persuade the people to contribute 50% of the total premium to sustain the program. Another issue is that of affordability and sustainability. To address this, the Mayor of Bindoy conducted a comparative study on cost sharing for the Indigency Program premium and capitation fund within a six-year period. It was presented to the different stakeholders in Bindoy and other LGUs in the health zone. Bindoy relies on different fund sources for the Indigency Program premiums. These sources are the Municipal LGU (20% development fund), Barangay Internal Revenue Allotment (1% of Barangay IRA), Provincial LGU and house-holds (enrolled indigent families). The proposed cost-sharing scheme of Bindoy applies to other 4th – 6th class municipalities because of the following features: • At P118.80 annual premium per enrollee, the Provincial LGU covers 50%

share at P59.40 in the first year. The remaining half is equally divided by the Municipal and Barangay LGUs.

• In the second year, the household-enrollee will have to contribute 50% of the

total premium while counterparts from the three LGUs (province, municipal and barangay) will be reduced to half of its first year share.

• To meet the premium contribution of P237.60 per enrollee for year 3, all

counterparts from the four fund sources will be doubled (HH = P118.80, PLGU = P59.40, MLGU and BLGU = P29.70 each).

• Sharing scheme for year 4 will reflect the same amount of HH contribution in

year 3 (P118.80) but it accounts one third of the total premium (P356.40). LGUs’ (province, municipal and barangay) counterparts will be doubled based from year 3.

• Household contributions for succeeding years 5 and 6 remains the same, but it will account 25% (year 5) and 20% (year 6) of the total contribution. LGUs’ shares will be increasing.

3.3 Enrollment in PhilHealth Indigent Program

It took almost a year for most LGUs to accomplish the MOA from the time that the LGU passed the resolution. In the case of Zamboanguita (the first LGU to implement the IP), it only took two months to have their MOA signed. The normal timeframe after the MOA was signed to validation (verifying the list) is six months. Zamboanguita did the shortest period in four months. PhilHealth provides family data survey forms (FDSFs) to LGU thru the Social Welfare Office (SWO). FDSF is patterned after the existing DSWD form. There is only one form used by PhilHealth and SWO in identifying qualified indigents. PhilHealth hires enumerators, usually BHWs to administer the FDSFs in the barangay. The survey is under the supervision of the Social Welfare Officer and the Barangay Chair. For LGUs that conducted their own survey, they just trans-

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ferred their data to FDSFs and have their list of indigents. Certification of the Social Welfare Officer is sufficient for PhilHealth. Thus, there is no need to conduct another household survey. There are patients who approached to in-charge of the social health insurance (IP) for membership inclusion.

Figure 1. Schematic Flow and Estimated Timeline of the IP Application Process.

Verifying the list to ID generation/distribution took four months when the IDs were generated at the National Office. Recently, IDs have been made at the Regional Office, which shortened the timeline to three weeks (e.g., in the case of Bindoy). Bindoy targeted around 4,000 enrollees for this year with budget augmentation from the Binata ILHZ common health fund. As of June 2002 data, the LGU enrolled a total of 1,902 indigent families from all (22) barangays. Enrollment was carried on three batches with a total payment of P225,957.60 made to PhilHealth from the Municipal and Barangay LGUs share. A total of 196 applica-tions have been submitted to PhilHealth for approval. The provincial counterpart (P200,000) is not yet released, but it will be used for additional enrollment to meet this year’s target.

Table 1. Status of Indigency Program Enrollment, Contribution and Capitation Fund Received as of June 2002, Bindoy, Negros Oriental.

Batch no. No. of enrollees Validity date Amount paid to PHIC (PhP)

Capitation fund received (PhP)

1 784 2/16/02 – 2/15/03 93,139.20 107,146.67 2 898 4/16/02 – 4/15/03 106,682.40 3 220 6/01/02 – 5/31/03 26,136.00 Total 1,902 225,957.60 107,146.67

* Capitation fund received – initial and 2nd quarter of 2002. Source: Bindoy LGU Indigency Program TWG record. The benefit package offered to indigents under the program are categorized as regular benefits – refers to hospital benefit package that includes room accom-modation, medicines, laboratory and x-ray services, doctors’ fee with certain ceiling and the outpatient benefits are provided at the RHU level.

PHIC LGU/SWO SWO PHIC/LGU PHIC

PHIC PHIC LGU

HH survey (FDSFs)

Listing of qualified indigents

MOA signing ~ 1 year

Validation 4 - 6 months

IP enrolment/ID distribution3 wks – 4 months Billing

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The PhilHealth National Office is also into private sponsorship. The Regional Office already identified and communicated potential benefactors including congressmen for sponsorship strategy. All congressmen in Cebu are interested, but only the second district has started implementing. So far, there is no re-sponse from private benefactors. Policy restrictions limit PhilHealth to alternative ways in expanding coverage like allowing qualified indigents/clients to cover the P120 premium payment. The staff cannot do it since billing has to be done by LGUs as stipulated in the national policies and guidelines. Clients who do not qualify in the program will be classified as individual paying members with a monthly premium of P100. There are four LGUs in Negros Oriental (Amlan, Bindoy, Dauin and Zamboan-guita) that enrolled in the Indigency Program with a total of 6,063 active mem-bers. Three (3) LGUs are still in the survey stage of the application process and there are nine (9) LGUs with MOA on IP-OPB having a total commitment of 14,372 households.

3.4 PhilHealth Rural Health Unit Accreditation Most LGUs wanted to avail of the out patient benefits (OPB) because of the capitation fund from PhilHealth to LGUs with accredited RHUs. Hence, LGUs wanted their RHUs to be PhilHealth accredited. PhilHealth representatives have visited and pre-assessed all RHUs in Negros Oriental. Now, they are working on the requirements for accreditation. During the interview, some reasons for the delay of the approval of accreditation were as follows: • Policy restriction on equipment and laboratory apparatus limits accreditation

approval of CHOs/RHUs, while only 10% - 20% of patients availed of labora-tory services of the out patient benefit package due mostly from non-compliance with equipment and laboratory apparatus requirements, such as: centrifuge, test tubes for laboratory exams, urinalysis, CBC, fecalysis equip-ment, etc.

• Another identified problem on accreditation is the failure of LGU-RHU appli-

cants to comply with the requirement on one medical technologist per facility. Region VII is flexible on this particular requirement. The accreditation unit al-lows complementation of medical technologists among LGUs within a health zone. This is based on transitory provisions of the policy, which are applica-ble to hospitals and inter-local health zones. This has been to the advantage of Negros Oriental. With the ILHZ, LGUs can share the services of the medi-cal technologist, facilities and equipment within the catchment. This could be possible through a referral system. So, the medical technologist requirement is no longer a “must requirement” as long as they have an ILHZ, which has a referral facility (e.g., another RHU).

• A MOA is a requirement for accreditation. Accreditation application may start

as long as the Mayor signifies intention, even if there is no list of indigents.

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The MOA could be accomplished at the same time with accreditation applica-tion as long as the LGU has started the process of accomplishing it.

Up to the present, Negros Oriental has three (3) accredited RHUs in the munici-palities of Ayungon, Bindoy, and Amlan. Willingness of the political structure, LCEs and health providers, particularly the Municipal Health Officers to upgrade the facility and comply with accreditation requirements, is considered as the main factor that facilitated accreditation. Policy restrictions on the part of PhilHealth, like strict implementation and compliance to accreditation standards, the top-down approach in policymaking and implementation, were identified as the main barriers to facility accreditation. However, the respondents agreed that some RHUs were liberally approved by PhilHealth even if they failed to comply with equipment and laboratory require-ments. Such consideration is based on the assumption that the capitation fund will be utilized for procurement of lacking equipment/laboratory apparatus. The structural improvements of Amlan and Bindoy RHUs in the BINATA ILHZ are worth noting. Bindoy invested P200,000 in year 2000 and another P100,000 in the following year for RHU rehabilitation and upgrading of facility and equipment. The buildings were repainted, tiled flooring, new windows, landscaped RHU area, television, video-audio and karaoke sets used for IEC while clients are waiting. This shows significant improvement in providing access and better health ser-vices to the people.

3.5 Capitation Fund Amlan is a fifth class municipality that was already accredited by PhilHealth and is now entitled to the capitation fund of the PhilHealth indigent program. The Municipal Health Officer admitted that they needed the fund badly because there was a cut in health budget caused by slashed internal revenue allotment of last year. Although she did not have a breakdown on the proposed expenditure for the fund, she believes that the fund will be helpful in terms of the following: • Additional budget for medicines • Upgraded facility • Better and more services available to people The LGU enrolled its indigents on February 15, 2002 and the RHU is also PhilHealth accredited. In April 2001, the MOA was signed and the Provincial Government gave a counterpart, but it was withheld due to the election bond. The approach of Amlan was quite different from other RHUs in terms of payment for the IP enrollees. Each indigent member is required to give a counterpart of P60 on installment at P10 per month for the premium to ensure sustainability of the program. Said mechanism also inculcates responsibility and ownership of each member. The LGU has a trust fund. They had a program before where people who want to be covered by the health support program contribute P10 per month. It will be used to sustain the Indigency Program if in case the LGU cannot afford to cover the premium.

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It took about two months for the approval of Amlan’s application for RHU accredi-tation. They applied last March 2002 and just received the PhilHealth accredita-tion certificate during the third week of May. The LGU has not received the capitation fund and based on PhilHealth feedback, it is still being processed at the regional office. They have not set the details on capitation fund utilization, but will prioritize procurement of drugs and equipment. They still have to comply the centrifuge and equipment requirements. The LGU is aware that the capita-tion fund is for health services. So deviating from the utilization of said fund is very remote. Amlan RHU also continues to provide innovative services and introduced charges to these services to maintain sustainability of their operations. Innova-tive programs include women’s health, newborn screening, rehabilitation, acu-puncture and laboratory services like blood typing, blood count, blood sugar, urinalysis, cholesterol and sputum microscopy. They charge P40 for blood sugar and P70 for cholesterol examinations. They continue to provide consultation and medical services with minimum of 30 patients per day for consultation. There is no service charge for consultation, but they accept donations for facility mainte-nance. For minor surgery service, they charge or require the client to provide their own supplies for sutures. To formalize charging for services, the MHO submitted to the LGU a proposal on the collection of minimal fee for services availed by non-members of the Indigent Program of PhilHealth. Amlan has a track record of being recognized for their innovative services. The LGU received the Sentrong Sigla P1 million cash award prize. They used it in supplementing other health resource requirements. Seventy percent (70%) of the amount was used for drug procurement and the remaining funds for facility maintenance and repair. Another innovative and community-based program implemented was the “Singko [Five Centavos] for Health Program” for medicines. It was patterned after the “Peso for Health Program.” Each individual member contributes P5 per month. This is equivalent to P1,000 -ceiling of the benefit coverage for medicines. Now, they adopt a new policy with a ceiling of P250 for first year of membership and P 500 for the second year. They had experienced before that funds were ex-hausted because members bought medicines for three months and they discov-ered dishonesty of some members. Another is the Hospitalization Program, which gives P2,000 subsidy for indigents. LGU health program stakeholders are planning to establish a cooperative phar-macy. Prescriptions will be issued to clients but direct it to the pharmacy in order to provide cheaper drugs and avoids dishonesty of Singko for Health members. Returns or consequences of their local efforts and health development initiatives are: (a) minimized dole out at the RHU level (e.g. transportation fare of clients covered by health providers), and (b) reduced RHU referrals to hospitals. A similar experience can be seen in Bindoy. Just like the standard application procedure for accreditation, the LGU complied and submitted the requirements on November 25, 2001. It was not difficult for them to comply the requirements

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since their facility was already upgraded and SS certified, the RHU has an existing laboratory and medical technologist. RHU accreditation approval was in January 2002. The LGU already received P107,146.67 as initial and 2nd quarter capitation fund on May 29 this year for the first 784 enrollees. What is certain in terms of its utilization and management for the moment is to follow the standard appropria-tion guideline set by PhilHealth, such as: • 20% for administrative cost (half of it or 10% of the total fund will be given to

the doctor and the other 10% will be shared among the medical technologist, nurse and midwives), and

• 80% for drugs, supplies and equipment The LGU has not prepared the capitation fund utilization and program plan. So, the money is still intact. Hopefully within the third quarter of this year, the LGU will be able to prepare the program plan indicating the utilization and manage-ment of the capitation fund after the supplemental budget of P400,000 for equip-ment from the Congressman and another P400,000 for medicines will be exhausted. The P400,000 allocation for equipment will be used for the procure-ment of semi-automated analyzer, equipment for microscopy procedures and other laboratory equipment.

3.6 Patient’s Experience on PhilHealth Indigent Program Records show a high utilization rate based on number of households enrolled in the Indigency Program and indigent benefit claims. The total LGU investment is P254,640 for 2,122 households at P120 LGU counterpart for the premium per household. LGU investment is about 35% of members utilization cost, which is pegged at P730,011.65. Thus, there is no negative perception or losing end concept of LGUs on their investment to the program. On the contrary, it would mean loss for PhilHealth. The data further indicate that PhilHealth reimbursement is calculated at 68% of actual hospital charges (P1,073,249.47). This accounts for 32% loss or deficit of the claimant facility. Interviews with patients admitted at Negros Oriental Provincial Hospital was also done. The PhilHealth member informant did not know the cost of his premium since it is the employer who pays it. One of the non-PhilHealth members had heard of PhilHealth in the hospital but did not know its details. The informant has limited knowledge on his benefits as a member. He cited hospitalization benefits like room accommodation and laboratory service fees, but he was unaware of the details of social health insurance coverage and members’ benefits. Most of them are aware of available health facilities accredited by PhilHealth. Government and private hospitals (District, Provincial and Medical Center) were enumerated as service providers accredited by PhilHealth. The respondent expressed dissatis-faction of PhilHealth’s ceiling for patients’ benefits, especially for medicines. Hospital pharmacy only allowed P1,700 for medicines and P250 room rate per day. He wanted that the ceiling and coverage be increased to minimize their financial burden on hospitalization.

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Two of the respondents have never heard of the Indigency Program and Phil-Health promotional activities. The other one had heard about it over the radio but not in Siaton. One non-PhilHealth member respondent wanted to enroll in PhilHealth social health insurance but cannot decide to be an individual paying member because she wants to consult first her husband. The other non-member wants to avail social health insurance but cannot afford to pay the premium. When she was informed about the Indigency Program, she wanted to avail it because hospitalization cost (particularly on medicines) is very expensive and too heavy for their pocket. Room accommodation and doctors fee are free. The hospital accepts donation but they buy medicines in hospital pharmacy and pay laboratory fees. Overall, PhilHealth members expressed dissatisfaction of the benefit package. In Bindoy, people are no longer afraid to go to health facilities for treatment. They are aware of the social health insurance coverage, the benefit package and their entitlements. Hence, there is a gradual positive shift in their perception and practice on health care. Before they used to go to the RHU or hospital for severe illness or condition, but with the Indigency Program membership, they are aware of their entitlements and services, which consequently enabled them to avail both preventive and curative services. Constituents/IP enrollees’ reactions: • Very happy • Very grateful/thankful • Proud (it was their first time to have an id) • There were questions on renewal and when others can avail the program There are other LGUs in Negros Oriental that have a community based health insurance scheme. Ayungon has an endowment plan for indigent patients. It also has a community-based health financing program called “Sustainable Health Care Initiative of the People” or SHIP. The local officials under Mayor Edcel Enardecido initiated the program in 1999. It is the response of local officials to urgent needs for medicines and other health needs of their constituents. It is supported by two legal mandates, the SB Resolution No. 146 and Ordinance No. 8, which stipulates the adoption of a health care program – SHIP. Target beneficiaries are all Ayungon residents from three months old and above. Non-residents but working in the municipality either government or private employee may join the SHIP. Monetary involvement includes a lifetime membership of P20 and P50 for the annual contribution. Benefit package of the SHIP health care financing program; • Free consultation by the MHO or any government doctor • Free medicines of not more than P1,000 prescribed by the physician at the

OPD or during admission availed only once a year

3.7 Problems on the PhilHealth Indigent Program Sustainability of the Indigency Program depends on utilization rate and the same membership over time. If utilization is low, it implies loss of LGU investment and a problem of the LGU. If utilization is high, it becomes a problem of PhilHealth. The experience of Bago City on low utilization rate based on actual servicing

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(P950,000 for two years) vis-à-vis the LGU investment for the Indigency Program (P6 million) also influenced the reluctance of Sta. Bayabas to adopt the program. Based on statistics, there are roughly about 4,000 admissions in all district hospitals and health providers have an apprehension that it would be a losing investment for LGUs to join the Indigency Program since the utilization rate is low. Thus, they are not receptive to the program. There is no program sustainability if PhilHealth relies only on members’ contribu-tions. So, it is up to the national office on how to invest and implement mecha-nisms to sustain the program. The regional office is not allowed to invest, but being in the forefront of program implementation. It should be responsible of taking the initiative/s in developing sustainability mechanisms. The fund for the indigent program also depends on the timely remittance of the national govern-ment’s share. Limiting factors in implementing and sustaining the Indigency Program are: (a) lengthy application process / red tape. It takes about 1½ years for LGUs to enroll their indigents to the program. This will have an implication on indigents’ timely service utilization, (b) lack of manpower for groundwork activities and monitoring. PhilHealth’s present structure limits extensive promotion and coverage of the Indigency Program, (c) management and implementation of the program is only at the Regional Office. Thus, the service or field office has no direct involvement and hands on of the program. Although all (7) staff of the Indigency Unit in the Regional Office are capable of presenting the program, still the ratio of staff over LGUs coverage is 1: 19, which is apparently high. There are areas where telecommunication and email are not available. So, physical presence of IP Unit staff is needed to follow-up LGU application and other program implementation activities. Ideally, there should be one service office for every ILHZ. This connotes additional staff requirement for ILHZs as PhilHealth desk officer or contact person. There are also other con-cerns that PhilHealth representative should address. However, field staff has/have some limitations and restrictions in program implementation. They need approval from the regional office. PhilHealth representative was hesitant in going with health providers, when in fact they should exert more effort in promot-ing the Indigency Program. Some key informants made a comment that “PhilHealth’s information campaign strategy is ineffective or inappropriate in a sense that they were so aggressive in membership campaign while the infrastructures are not ready.” Fund source of LGU for IP premiums is another big concern and issue of pro-gram sustainability. Cost sharing scheme can be a hindrance to program sus-tainability. Can the LGUs afford, especially if reclassified into higher income class? Income classification of municipalities is not based on total income of LGU but on per capita income, which is population based. With the 50:50 cost-sharing scheme, the LGUs might discontinue their enrollment in the program. Financial incapacity of some LGUs to enroll all indigents and sustain program membership may result to political liability of the LGU. Hence, the program could not be sustained.

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Unfavorable political environment is also a critical factor that attributes to Indi-gency program implementation and its sustainability. Differences in political party affiliation among local leaders at the provincial, city and municipal LGUs also affect the status and development of Indigency Program in Negros Oriental. Opportunity of politicians to take advantage of the program by issuing medicines charged to PhilHealth reimbursement. The Indigency Program has political connotations. Sometimes, LGUs feel that it becomes an obligation of the LGU/LCE to pay the excess bill of indigent PhilHealth member when hospital-ized. This is a way of strengthening the dole out system, unless health is linked with socio-economic programs toward the direction of a holistic development approach. There has to be a livelihood program component to complement Indigency Program’s sustainability. The Provincial Administration’s perception is that the Indigency Program is subsidizing PhilHealth members in the employed sector. Now the LCE would like to do it the other way – let PhilHealth members of the employed sector subsidize the indigents. This is another adverse perception of PhilHealth social health insurance. Other LGUs were encouraged to enroll in the Indigency Program because of the capitation fund. Some health providers prefer local/community health insurance for accessibility of funds, ease in processing and shorten the bureaucracy. The convergence strategy does not necessarily make things work on improving and sustaining the social health insurance. The key informant could not cite signifi-cant effect or impact of the convergence on this particular reform component. It may not work because of the attitude of politicians. 4. Gains in Hospital Reforms Negros Oriental is one of the few provinces that have allowed public hospitals to retain their income for their use. Aside from the regular budget allocation from the province, the income earned by hospitals from user fees are plowed back to the hospital for their maintenance and operating expenses. At the outset of devolution when there were insufficient funds for hospital operations, then Governor Macias explored the possibility of allowing hospitals to keep their income. Provincial funds for hospitals were reduced to one half and there was need for an innovative scheme to be able to maintain hospital operations. Appropriate local legislation was passed - allowing the provincial treasurer to keep in trust funds generated by the hospitals at the provincial and district and community levels. Up to the present, user fees are remitted to the provincial treasurer and an accountant is assigned to keep records and keep track of all hospital remittance forwarded to the Provincial Treasurer. The hospital makes periodic requests for release of funds and a budget sub-allotment is prepared and approved by the Sangguniang Panlalawigan. Each hospital has its own board that decides how the funds are to be spent. The creation of hospital boards also prepared various sectors of Negros Oriental society for participation in district health boards. The hospital board is multi-sectoral in membership and has policymaking as well as financing functions. It approves the work and financial plan prepared by the hospital staff and dis-bursement by the province is in accordance with the approved plan and budget.

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The multi-sectoral membership made hospital operations a joint concern and ensured transparency in budgeting and financing. Collaboration was also easier to pursue as various sectors contribute to meet hospital needs. In the provincial hospital, it is a common practice to donate in kind in the form of hospital equip-ment or undertake renovation of rooms. Hospital officials do not receive cash but simply become the recipients during the turnover of rooms or equipment for hospital use. Private donors, religious groups and organizations like the Rotary Club undertake projects to benefit the hospitals. The Women’s Auxiliary actively solicits donations for the hospital and religious groups like Sinag also do the same simultaneously with the performance of their religious ministry. The idea of inter-sectoral collaboration as espoused in the inter-local health zone concept was no longer a novel idea but an expansion of the hospital board concept. It was no longer difficult for the DOH through the regional office to promote the ILHZ. Various sectors of Negros Oriental society were already prepared and had previous experience with inter-sectoral collaboration. In terms of hospital re-forms, the province had set the following targets for 2001-2004 for its eight hospitals: • Sentrong Sigla and PhilHealth accreditation • Creation of quality assurance committees • Financial autonomy • Availment of sub-allotment scheme • Generation of income equivalent to 40% of MOOE

4.1 Negros Oriental Provincial Hospital (NOPH) The NOPH is the tertiary referral hospital for the province of Negros Oriental located in Dumaguete City. It also serves as the core hospital of the ILHZ com-posed of Dumaguete City and the municipalities of Dauin, Bacong, Sibulan, San Jose, Amlan and Valencia. It is accredited by both DOH and PhilHealth as a tertiary facility. It has authorized capacity of 250 beds. It serves not only the province but also some areas of the nearby provinces of Siquijor, Southern Cebu and Northern Mindanao. It appears that many of their cases may be served by the lower levels of the health system. The referrals received increased from 675 in 1993 to 1,463 (116.7%) in 2000. This reveals 46% increase. It is interesting to note that throughout the period, majority (85% - 95.%) of the cases were referred by other hospitals/centers. The hospital staff reported that many of the cases seen at the outpatient department, as well as birth delivery in the hospitals could be handled by the lower levels of the health system. The facility registers an occupancy rate of 90% in 2001 with an average 5 days length of stay of patients. Total admissions last year was 16,824, out of which medical services accounted for 30% of total admissions. Hospital records shows that pediatrics and under five consultations were highest at the outpatient service department (OPD). Surgical and medical services ranked second and third in the OPD. The hospital had served a total of 68,638 OPD clients (data based on year 2001 record).

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Acute respiratory infection and urinary tract infection rank first in consultation cases. Wounds with minor surgical interventions rank second, followed by ARI with pneumonia. Moderate to severe dehydration secondary to diarrhea is the top leading cause of discharges, followed by ARI with severe pneumonia. Pneumonia ranks third in leading causes of discharges, but it is the number one cause of mortality. Cerebro vascular disease is second followed by malignancies due to cancer. The cost of maintenance is high vis-à-vis the perceived impact of prolonging the life of patients. This is cited as one of the impact programs of the former provin-cial administration, but it also raised a critical issue on sustainability based on economic analysis. From an objective perspective of economics and program sustainability, it is a losing venture of the LGU even if the machines/equipment were donations. The net income for dialysis is only P180-P200 while sustainabil-ity of hospital services is an important consideration for LGUs. Fund allocation for medicines is 25% of total hospital budget. Dumaguete City has an endowment fund from the LGU for indigents’ hospitalization financial assistance. Among the problems identified in Negros Provincial Hospital are: • Personnel management. When they were devolved, they wanted to stan-

dardize operations. However, the Provincial Government cannot afford to hire the desired plantilla positions.

• Inadequate resources for hospital operations and services to meet real

demands of clients. • Despite its problems, the Negros Provincial Hospital has positive attributes: • Utilization of hospital income for its operations. It is now categorized as

restricted fund for facility operations. Although users’ fees were given back to the hospital, the funds were utilized by charging contract services. It should have been used for hospital operations improvement that would focus on maintenance, operations and ultimately provision of better services.

• A Hospital Board sets policy, approves budget and monitors operations. • Complementation from active NGOs and civic organizations.

Renovated private rooms thru the help of Women’s Auxiliary Service, a non-government organization complementing health service delivery.

Networks with Dumaguete and Florida Rotary Clubs. These linkages en-abled hospital management to access seven dialysis machines/equipment. The rationale for acquiring the equipment was based on the life saving impact and specialization of donor. Acquisition of said machines/equipment was during the former Provincial Administration. The equipment caused additional income to the facility, but the charge is low and liquidity of income posed an issue due to many outstanding debts. NOPH charges only P3,500 for first

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use compared to P5,500 (private facility) and P1,800 for re-use. So there is a big difference of service charge between government and the private facil-ity.

• Facilitating factors in implementing hospital reforms are: (a) openness and

cooperation of health management and providers to undertake reforms, and (b) users fee utilization to augment hospital operations. The Provincial Gov-ernment allows hospital income to be used by the facility to augment budget for hospital operations.

• Sustainability through privatization/corporatization is not the goal of hospital

management and staff. They adhere to sub-allotment in order to facilitate operations with some sense of autonomy and fiscal administration. The po-litical leadership somehow supports this view.

4.2 Bais District Hospital

Bais District Hospital is categorized as secondary health facility operating a 50-bed capacity but with a budget of a 25-bed hospital. The facility has increased the number of beds to 150. It is operating beyond its capacity. Occupancy rate is 93%. Hospital budget is sourced from the Provincial Government and Bais City Gov-ernment. Provincial budget has been limited since devolution. At the outset, the former Chief of Bais District Hospital (Dr. Ely Villapando) had convinced Bais LGU to complement funds for hospital operations. Total hospital budget for this year is P20 million. The Provincial Government’s share accounts 55% of the total budget (P11 million), while Bais City LGU contributes P9 million. Hospital income is P 2.4 million, which is 12% of its total budget. Two LGUs within Bais ILHZ pledged a total of P5 million for hospital improve-ment. The Local Chief Executive of Bais City pledged P2 million and P3 million from Tanjay City Mayor. The facility has 12 well-trained doctors, but it is constrained by an inadequate budget for hospital operations. A limiting factor in hospital operations is lack of supplies, which is attributed to inadequate budget. Supplies are not available for local purchase, even if patients are willing to buy it. Bais health providers work with PhilHealth. They exert more efforts compared to PhilHealth representatives. Key informants’ remarks indicated inadequacy of PhilHealth’s advocacy, “mahina [weak] compared to hospitals.” The hospital has adopted some strategies to increase its revenues and achieve sustainability. They are: (a) increase hospital fees/charges (level with PhilHealth rate), (b) billing of patients if they have money, and (c) Medicare para sa Masa or Indigency Program. RHUs are aggressive in promoting the Indigency Program. Most LGUs enrolled their indigents in the program. The District Hospital is banking on the Indigency Program as a means of increasing its revenues. Health providers at the facility are also encouraging indigents to enroll in the program. They are the prime advocates of the Indigency Program in their catchment thru the inter-local health system.

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4.3 Limiting factors in implementing hospital reforms.

• Inadequate budget for facility and equipment upgrading, and other hospital

operations needs and requirements. • Patients’ biased perception and preference. Patients prefer tertiary facility

services especially for major operations. The District Hospital wants to in-crease surgical operations but patients prefer tertiary facility services prevent-ing district hospitals from achieving their health delivery targets.

4.4 Bayawan District Hospital

Bayawan District Hospital is a secondary facility with a 50-bed capacity. The hospital is PhilHealth accredited catering to three municipalities in the southern part of the province. The budget for fiscal year 1999 (P12,424,429) and 2000 (P12,969,605) is almost the same, but there is a big difference from 2000 to 2001 and 2002. Capital outlay allocation for equipment, building and structure in two recent years caused a remarkable leap in hospital budget. Hospital budget for 2001 has increased by almost 42% of previous appropriation, and the increment for 2002 from last year is calculated at around 6%. Appropriation for maintenance and other operating expenses (MOOE) and personnel services has been increasing over the four-year period, except for 2000 budget, which decreased at a very minimal amount. This difference could be explained by the absence of allocation for monetization of leave credits in 2000, which costs more than the overtime line item budget, which the previous year did not have. The average increase of MOOE is calcu-lated at 38% over the period. MOOE allocation for 2002 accounts almost 25% of the total hospital budget. It is 10% higher compare to 1999 statistics.

Fig. 2. Comparative detailed budget of Bayawan District Hospital, 1999–2002.

Source: Bayawan District Hospital.

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,00018,000,00020,000,000

Bu

dg

et (

Ph

P)

1999 2000 2001 2002

Year

Personnel Services

MOOE

Capital Outlay

Total Hospital Budget

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Table 2. Comparative budget of Bayawan District Hospital, 1999 – 2002. Year Budget (PhP)

1999 12,424,429

2000 12,969,605

2001 18,352,887

2002 19,386,781 Source: Bayawan District Hospital. Bayawan District Hospital has a higher budget compared to other hospitals in the province. The hospital has excess funds and the management is thinking of sharing part of it to other health units. This was a result of innovative financing strategy adopted by the hospital. The Chief of District Hospital recognized the “barter system” principle as part of the local culture. Thus, he took advantage of such practice but not thinking then that it would help in their dietary operations. Hospital management accepts goods in lieu of cash payment for hospital bill of patients. With this innovative strategy, the management established guidelines and came up with a list to identify the equivalent cost of local products. The collection of some form of service fees has been established and the medi-cal social worker has been instructed to explain the policy. The policy is no charity or free service, which is based on the premise that “if you value your life, you must be willing to give something.” They developed the promissory note as mechanism for installment/staggered payment of hospital bills or service charges. The hospital adopted a follow-up mechanism to ensure high turnover of promissory note payments. Payment may be made in cash, in kind or service. Payments in kind or goods and services are given their cash equivalence. The hospital staff buys patients’ goods or monetizes the services rendered by a patient’s watcher. An example cited was for caesarian. They ask patients if they can pay in kind like lechon or 10 kilos of sweet potato. This is a local strategy of empowering the clients to be responsible of their health care needs and obliga-tions. If all hospital managers have the same perception on the social responsi-bility of clients for their health care, then the Indigency Program is not an issue or an immediate option to increase hospital revenues while serving majority of indigents. Based on their experience, 70% of promissory notes were fulfilled and accomplished. The “Peso for Health Program,” has been established as a local initiative of hospital management before HSRA convergence. It is a community health care financing program of Sta. Bayabas ILHZ. It is the first district hospital of Negros Oriental that implemented the newborn screening. It is a locally initiated service at a cost of P500. The following are newborn screening related-activities: • Advise patients to follow the steps indicated in newborn screening • Encourage the community on cost sharing for newborn screening • Retrieval of statistics and program • Recording of all in-house deliveries

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The hospital also adopted quality assurance activities and improvements made on the following: (a) implementation of the 5 S, and (b) conduct of monthly client evaluation survey on health personnel behavior and attitude. A patient admitted at the hospital is also interviewed to give feedback about the hospital services. The patients and respondents were generally satisfied with the services provided by the facility. Patients expressed satisfaction for good doc-tors, caring health providers who attended to patients needs, cleanliness of the facility and availability of equipment. Another comment of clients was that most drugs were purchased outside. The challenge taken by the hospital is to continue the social preparation of the patients in Bayawan through health providers’ advocacy. There is a call for strong willed health providers to encourage clients to pay for the services, as well as teach them how to earn money.

4.5 Siaton District Hospital Congressman Lamberto L. Macias Memorial Hospital (Siaton District Hospital) is a secondary facility accredited by PhilHealth and Sentrong Sigla with 25-bed capacity. Occupancy rate is fifty 58%. It has a total workforce of forty-six em-ployees, of which forty-two are permanent. The facility is the lead coordinating partner in the inter-local health system governed by the Siazam ILHZ Board. The hospital has four doctors who served 16,605 patients in 2001. Outpatient services catered to 91% of total clients. Charity patients accounted for about 86%. The cost per patient discharged is calculated at P1,260. The hospital budget has increased over three years but actual expenditures exceeded the appropriation in the last two years. Total hospital budget has increased by 5% from the base year (1999) to 2000 and has doubled in the following year. Actual MOOE in 1999 is 12% of total expenditures, while the succeeding years indicate the same percentage calculated at 17%. Increase in hospital expenditures in 2000 is calculated at 14% from the base year. Opera-tions cost in 2001 has increased by 7% from the previous year. Year 2001 indicated the highest income and its corresponding percentage over hospital operations cost. Increase in hospital income is pegged at 7% from 1999 – 2000 and has declined by 4% from 2000 – 2001. Based on the modal value, hospital income is 12% of the expenditures. Therefore, the gap of income over expendi-tures is high, which has an implication on the sustainability of hospital reforms.

Table 3. Comparative Hospital Budget, Expenditures, Income and Proportion of Income Over Expenditures of Siation District Hospital, 1999-2001.

Year Hospital Budget (PhP)

Hospital Expenditures (PhP)

Hospital Income (PhP)

Income/Expenditures (%)

1999 7,967,287 7,801,909.94 974,370.46 12 2000 8,381,770 8,897,809.54 1,183,170.60 13 2001 9,219,795 9,524,971.20 1,131,539.95 12

Source: Cong. Lamberto L. Macias Memorial Hospital, Siaton.

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Figure 3. Comparative Detailed Expenditures

of Siaton District Hospital, 1999-2002.

The key informant cited that the former provincial administration prioritized health in the development agenda. Health providers gained favorable support as well. The current provincial administration continued previous development efforts. The facility is the only hospital in health zone. Four medical outreach activities were conducted, bringing medical consultation and treatment, circumcision and dental extractions to local communities. It is one of hospital’s support services to rural health units. The hospital pharmacy operates with 10% mark up on the cost of drugs and supplies. Pharmacy income is kept as a trust fund. There is a plan of the ILHZ Board to standardize service charges. The hospital collects lower fees than other health facilities. The issue on sustainability is self-sufficiency, but the key informant’s point of view was that “they need to maintain balance, where the Provincial Government should allocate regular budget and whatever excess operations costs will be covered by the trust fund. It is difficult to adopt privatiza-tion. The facility has not accepted payment in kind because they find it difficult to convert goods into cash. However, they would like to implement the service program and payment in kind. These matters are subject for discussion in their next ILHZ Board meeting. PhilHealth reimbursement is quite okay and up to date based on their normal reimbursement process. They are less likely to complain compared to private health facilities. However, in the case of Siaton, the hospital management is struggling on PhilHealth categorization of health facilities vis-à-vis their compli-ance to all requirements for accreditation, except for the non-functional incubator. The hospital is categorized as primary, so they raised this issue to PhilHealth. The hospital like other hospital in Negros Oriental Has been conducting quality improvement activities like: (a) survey of patients in assessing the quality of

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

1999 2000 2001

Year

Bu

dg

et (

Ph

P)

PS

MOOE

TOTAL

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services provided, (b) health education for patients, which is an activity to attract patients, and (c) cost-cutting measures in operations expenditures (e.g. light and water). During the interview with patients, all respondents were satisfied of hospital services in terms of the following citations: (a) health providers attend immedi-ately to their needs, (b) available medicines in the pharmacy, (c) regular rounds of doctors and other hospital staff to check and monitor patients, (d) good attitude of health providers, and (e) clean facility. However, they made a comment that the hospital lacks the capability for major surgical operations. Likewise one of the informants expressed discontentment of hospital service since there was no regular monitoring and follow up of health providers to patients. In the experience of Siaton, a strong political will of provincial administration to support hospital reform initiative was instrumental in implementing reforms. The former Governor ensured that that hospital income will be given back to the facility for other hospital operations needs and requirements (usually medicines and supplies). The strong cooperation and support of health providers were also considered to be very important.

4.6 Bindoy District Hospital Not to be outdone, Bindoy District Hospital has also made significant improve-ments. The hospital is licensed by the DOH as secondary health facility but accredited by PhilHealth as primary hospital. It has 25-bed capacity, of which 15 are charity beds and ten are Medicare. Occupancy rate is pegged at 67%. Total manpower complement registers 29 personnel, of which 3 are doctors and 5 of the staff accounts to LGU’S augmentation. Like any other government and LGU operated hospitals, majority of Bindoy District Hospital’s clientele are indigents. The improvements done were: • Physical improvement as reflected with the new and spacious OPD and

waiting room, spacious District Health Office, improved ventilation (repaired windows, electric fans, repaired pumping station, repainting of hospital build-ings, rooms were repaired, and constructed new kitchen for watchers).

• 5 S orientation meeting was conducted. • Improved work flow/patient flow thru signages and flow charts in the emer-

gency room and other areas of the hospital. • Acquisition of beds for the recovery room. • Manpower complementation (medical technologist from the RHU also ren-

ders service in the hospital when the facility’s medical technologist is absent). However, this has been practiced even before the convergence.

• Improved hospital services by providing surgical operations, mostly minor

surgeries and seldom for major operations. The hospital management and staff also conducted outreach activities, bringing consultation, dental, and mi-

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nor surgical services in far-flung barangays. These medical outreach activi-ties are part of the hospital’s support mechanisms to inter-local health sys-tems and the convergence, with the support of local chief executives and rural health units.

Revenue enhancement has been one of the objectives of the hospital manage-ment even before the convergence. The dole out system was discouraged but there was minimal increase in hospital income. There was a move to increase service charges and adopt uniform rates for services in all government/LGU-managed hospitals in the province. However, said move was pending due to policy and legal requirements and processes. All hospitals have been allowed to retain and use their income, but experience revealed restrictions to some extent on regular budget appropriation. Matters related to income retention and utiliza-tion have been discussed by the Hospital Board.

4.7 Quality Improvement Strategies In Negros Oriental, all hospitals have systems on quality assurance. All key personnel had attended training on quality assurance intervention. The following activities are undertaken: (a) waste management/segregation of wastes, (b) institution of the 5S approach, and (c) implementation of a Public Service Excel-lence Program (institutional, involving all health service providers to be client friendly, signage/flow charts and shorter waiting time Survey tool for total quality improvement (leadership, client, process improve-ment, standards and measurements). A survey was conducted to patients per section after implementing reform interventions. At first, clients expressed inadequate services, no linens and longer waiting time. Thus, they install televi-sion sets as health information medium for health programs. However, NOPH has only one OPD physician, so this intervention did not actually shorten the waiting time but diverts clients’ patience through health education and other media programs. One client survey done indicated patients complaining about health providers’ behavior or attitudes. But health providers just laughed off the results. There was no follow-up survey that was conducted. 5. Gains in Drug Management Systems The province set the following targets for 2001-2004 to establish an effective and efficient drug management system through the following: • Pooled/bulk procurement • Parallel drug importation • Adequate budget for drugs • Affordable, adequate, quality and timely drugs The budget for drugs and medicines is about P 5.5 million. It is insufficient to meet real demands. The budget is not enough to purchase the annual provincial requirement and budget release is done every quarter. Allotment for the first quarter is usually released in March or early second quarter. The process

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restrains the procurement of drugs and supplies and the problem is most acute during the first quarter. In order to decrease the cost of medicines and supplies, the method and process of pooled procurement is being formulated and refined in the province. Bulk procurement started two years ago for hospitals. They experienced failures before but they’re learning through time and experience. The LGU encountered a problem last year when there was a medical alert on Philippine Pharma Wealth. This in turn encouraged them to facilitate bulk bidding, streamlining the facility and process as well. With the ILHZ, they can expand it to include RHUs whose funds come from the municipalities. To ensure that only qualified bidders participate, some bidding requirements are enforced like: (a) Mayor’s permit, (b) DTI permit, (c) Certification from BFAD, (d) Certificate of Good Manufacturing Practice, etc. The award is usually given to the lowest bidder, but there are also cases where the award is not given to the lowest bidder when consideration is given on the quality of products. The IPHO is making representation with the Provincial Administration for direct purchase of drugs and if through pooled procurement, the process should be revised and shortened. There are also proposals to solve pharmacy inventory stock out. Ideally, the purchase request is prepared and processed when the pharmacy is at the critical inventory level, pegged at 50% stocks. However, procurement based on critical inventory level is difficult to follow in the hospital because of high and erratic demands of patients. One of the problems identified regarding drug utilization is the poor prescription of generic drugs by doctors. Hospital health providers are not patronizing branded drugs but they cater to doctors’ preference based on their clinical experience. Doctors are not favorable to generic drugs because of the following reasons: (a) substandard drugs of fly-by-night suppliers, (b) difficulty of doctors in memorizing the long list of generic drugs, and (c) issue on the length of drug validation if they send samples to BFAD. During the interview however, the respondents agreed that the supposed adverse findings and effects of substan-dard or less quality drugs are undocumented experiences and may just be personal perceptions of clinical practitioners and clients. Doctors do not prefer the lowest bidder after adopting stricter requirements; instead they recommend three branded drugs per illness/disease based on their preference. Doctors have a strong position on their preference, considering that they are in the frontline and if they prescribe substandard drugs to patients who will eventu-ally die; consequently they will take the burden of liability to patients, not anybody else in the Provincial Government. The Provincial General Services Office (PGSO) also gives the benefit of the doubt on this issue because even house-wives and common people have their own preference on the kind of drugs they want to take. However, patient preference is also attributable to doctors’ prefer-ence. The PGSO has no capacity to convince doctors to use less expensive or lower cost drugs because the latter have the medical knowledge and technical capability.

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Another way of procuring drugs at lesser cost is through the Parallel Drug Importation Program of the DTI and DOH. The goal of PDI is good but in reality it takes time before purchase orders are served. Siaton placed two orders but has not received any of their orders. Negros Oriental is discouraged about parallel drug importation due to delayed delivery, which took six months. Bayawan is an exception because they ventured on PDI. They just received their orders. But in other towns, more than 6 months had passed that they have not received drugs ordered through parallel importation. Emergency purchase of drugs is done if the prescribed drugs are not available in hospital pharmacy. The cost is doubled and increases the financial burden of patients. Just like in other provinces, the drug procurement process tends to be a long process. Before, the requisitioning officer decided where to purchase drugs and supplies, even if it is the highest bidder. Most of the hospitals in Negros Oriental including Bindoy District Hospital is into pooled procurement. Drug purchase is based on the annual procurement plan, which is done by quarter, depending on the available/allocated budget. Appro-priation for 2001 and 2002 is just the same at P460,000 per year. Bindoy’s pooled procurement process and experience is the same with the Provincial and other District Hospitals. Bidding is associated with price monitoring viable for 6 months. Each hospital submits purchase request/s to the Provincial General Services Office (PGSO). It took 2 – 3 months that purchase requests are served to the hospital. In principle, bulk procurement is associated with price monitoring. Drug procurement is based on the annual procurement plan of each hospital, the Philippine National Drug Formulary and DOH -BFAD. The annual procurement plan limits purchase of drugs but the LGU is flexible in giving allowance to new drugs.

Figure 4. Minimum Timeline of Bulk Procurement Process at the PGSO.

The minimum timeline of bulk procurement process at the PGSO will take more than 30 days on the average. Sometimes bulk procurement took 4 to 5 months. The most common reason for the delay is in the process of going after the signatories. Before, it took three to four months (3 – 4 mos.) from the start of

Receipt of Purchase Request from IPHO/District

Hospitals

Public Notice for Bidding

Regular Bidding

Emergency Purchase

Purchase Order

10 days

1 - 2 days

10 days

10 days

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drug purchase request to delivery. The whole process is now reduced to two (2) months. The PGSO admitted that they have not perfected the bulk drug purchase. They had several bulk biddings for drugs and supplies of hospitals, but they experi-enced failure due to the following factors/attributes: • Pre-qualification of bidders is patterned from the DOH requirements, which is

not very strict as long as the bidder is DOH accredited. • Doctors’ preference on drug distributors and suppliers. Awarded bidders

were not acceptable by hospital doctors. • The price index they conducted was a failure. The following strategies were identified to improve the bulk bidding process of drug procurement: • Require a certificate of good manufacturing practice to eliminate fly by night

suppliers. • Disallow bidders supplying substandard drugs. • PGSO is in the process of developing stricter guidelines. They will endorse it

to the Sangguniang Panlalawigan for the resolution to make it legal, with a safety net committee that will defend the LGU against suppliers’ accusations on strict bidding requirements.

• Recommendation of the Provincial Therapeutics Committee.

5.1 The Hospital Therapeutics Committee All district and provincial hospitals have their respective therapeutics committee and established hospital drug formulary. Although the hospitals have their existing committee, revitalization was done with the technical assistance of the MHS-HSRTAP. Strengthening of the Therapeutics Committee was legally supported by an executive order, stipulating the organization, functions, respon-sibilities and scope. A training course was conducted. A series of seminars on rational drug use, review on drug utilization and a seminar workshop with 7 points recommendation were conducted as part of health sector reform – techni-cal assistance interventions to improve drug management system. Generic drug utilization was encouraged during the seminar. The committee decides and recommends drugs to be purchased and stocked in hospital pharmacy. It requires doctors to submit the list of drugs used in their prescriptions based on the ten leading causes of mortality and morbidity, as well as the standards on clinical guidelines. Doctors and committee members calcu-late their drug requirement based from the standard clinical guidelines using mortality and morbidity statistics. The essential drug list is a requirement for drug purchase request. The Hospital Therapeutics Committee also initiated a policy

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on routing of prescription through hospital pharmacy. This policy is supported by a Sangguniang Panlalawigan resolution. The Provincial Therapeutics Committee is responsible for rational drug selection and procurement. Majority of the members of the Provincial Therapeutics Committee are doctors. The members of the Provincial Therapeutics Committee are as follows: Chair Provincial Administrator Co-Chair Integrated Provincial Health Officer (Dr. Ely Villapando) Member Prov’l. General Services Officer

Prov’l. Accountant President of the Medical Society Prov’l. Pharmacist Chief of District Hospitals Supervisor of 6 Community/Primary Hospitals (Calamboyan, Amio, Nabilog, Tayasan, Pacuan, Inapoy and Luz Sikatuna) BFAD and NGO representatives.

The Negros Oriental Provincial Hospital Therapeutics Committee is developing the treatment guidelines that will serve as standards on the uniformity of treat-ment and minimize treatment variation. All department heads of hospitals have to sit down for finalizing the treatment guidelines. This is viewed as an improve-ment in effect of capability building interventions (e.g., training). The Bayawan District Hospital Therapeutics Committee conducts regular meet-ing to discuss issues and concerns in drug management system, pharmacy inventory and ensures that the essential drug list is followed. Procurement is based on the PNDF and essential drug list. The hospital drug formulary is also established. Choosing of drug brands is based on the clinical experience of doctors on drugs prescribed for certain disease/s and length of drug’s effect to patients. They purchase branded and generic amoxicillin. Patients’ choice on the brand of amoxicillin prevails even if doctors prescribe and advocate the generics. Members of the Therapeutics Committee prefer branded drugs, especially those who are also connected with the private hospital. They have their own undocu-mented experiences indicating that branded drugs are more effective than generic drugs. As cited by some doctors in local health zones, “drug companies’ promotional strategies have nothing to do with doctors’ perception on branded drug preference.” Promotional activities of drug companies in the area are very minimal since the campaign for generic drug utilization.

5.2 Problems and Solutions Associated with Drug Management System The identified gaps/problems/issues/concerns on drug management system are: (a) lack of drugs and supplies due to limited budget, and (b) lengthy procurement process/tall bureaucracy. The bottleneck in drug procurement was cited at the PGSO. The process involves 56 signatories, which they now reduced to 39. This is indicative of the tall bureaucracy in the LGU, which leads to the delay of drug procurement.

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The mode of procurement through bulk bidding has been a problem. Only 15% of their purchase requests were awarded during their bidding before. It took several months for re-bidding of remaining requests. Thus, the hospital man-agement recommends direct purchase of drugs instead of the normal bulk bidding process. They do not trust some drug companies and prefer direct purchase from credible distributors. Proposals to improve the Therapeutics Committee operations include: (a) multi-stakeholder membership with equal representation of medical and non-medical members in the Therapeutics Committee, and (b) develop a policy to counter doctors’ preference. In Bayawan, they implement the drug utilization program by monitoring doctors’ prescriptions, assess and make feedback. 6. Gains in Inter-Local Health Systems The network of Inter-local Health Zones in the province of Negros Oriental is referred to by its old name "district health system.” As early as 1981, Executive Order 851 created health districts where the district hospital exercised supervi-sion over all field health units. The rural health units (RHUs) and specialized field health units served as the outpatient components of the district hospital. The barangay health stations (BHS) served as extension of the RHUs. The same EO merged the PHO and provincial hospital and integrated the promotive, preven-tive, curative and rehabilitative components of health services. In 1987, the District Health Office (DHO) was created by Executive Order 119 and patterned after the World Health Organization model. The district is defined as "a more or less contained segment of the national health system which comprises a well defined administrative and geographic area, either rural or urban and all institutions and sectors whose activities con-tribute to improve health." The health district system consists of a large variety of interrelated elements that contributes to health in homes, schools, workplace and communities through the health and other sectors. It is described "a smallest manageable health unit in areas small enough to be managed without being hampered unnecessarily by bureaucracy yet large enough to make it feasible to include most of the ingredients required for self reliant health care. (WHO, 1997).” The district health system sought to achieve the following outcomes: • Unity of command • Holistic approach in health care • Two-way referral system • Sharing of facilities in manpower • Constant monitoring and evaluation of service coverage (hospital and public

health) through district wide program review • Updating of health information system • Knowledge by the district health office of the health status of the entire

catchment area • Integrated and realistic approach to planning and program implementation • Allocation of budget for hospitals and catchment RHUs to district health office

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The leaders of the health sector in the Negros Oriental explained that they really never broke away from the spirit of the district system, despite the onset of devolution that has been viewed as responsible for the fragmentation of the local health system. Congressman Emilio Macias II, a doctor by profession and one of the leading exponents of devolution, became Governor of the province during the transition to a devolved setting. He was committed to a strong health sector by virtue of his profession and to devolution as shown by his political record. He would not allow any of these two ideas to flounder as he was convinced that health, his center-piece program, should continue to remain strong. Also, major stakeholders in the health sector of the province who held important positions realized the impor-tance of maintaining links with one another despite the fragmented organizational structure that devolution brought about. Other health professionals (nurses, doctors, etc.) in the province would explain that they had a health sector alliance that included various types of health workers that was organized before devolu-tion and continued to function after devolution. The health sector in Negros Oriental manifests certain characteristics of maturity as evidenced by the close cooperation with their strategic partners. The Goretti Foundation, a church-based NGO together with the provincial government and some municipal governments took note of the need for collabo-ration in health and with encouragement from the DOH undertook advocacy work for ILHZ. Silliman University is also an active partner in community health research and social mobilization. Foreign funding agencies like the Belgian Integrated Agrarian Reform Support Program (BIARSP) and the USAID took interest in the integrated health delivery system and provided some funds for some components of the projects. The Negros Oriental Provincial Health Board passed Resolution No. 5 in 1999 recommending the development of six district health systems province wide and the formation of the corresponding inter LGU District Health Board. Negros Oriental has organized six ILHZs that are also known as district health systems or Inter-LGU Health Systems. The five districts and their corresponding catchment areas and population size as of 2001 are as follows: CVGLJ District Health System (19.7%) a. Canlaon City 44,073

b. Vallehermoso 35,242

c. Guihulngan 1 49,536

d. Guihulngan 2 38,922

e. La Libertad 35,604

f. Jimalalud 25,288

Total population 228,665

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Sta. Bayabas District Health System (17.4%) a. Sta. Catalina 74,833

b. Bayawan City 1 59,588

c. Bayawan City 2 48,729

d. Basay 19,429

Total population 202,549 Binata District Health System (9.8%) a. Bindoy 31,370

b. Ayungon 41,709

c. Tayasan 40,000

Total population 113,079 Mama Bata Pa District Health System (23.9%) a. Mabinay 1 33,999

b. Mabinay 2 33,931

c. Manjuyod 37,773

d. Bais City 71,795

e. Tanjay 1 32,566

f. Tanjay 2 36,693

g. Pamplona 30,777

Total population 277,534 NOPH District Health System (21.3%) a. Dumaguete City 109,427

b. Datuin 22,285

c. Bacong 21,833

d. Valencia 22,816

e. Sibulan 36,658

f. San Jose 17,875

g. Amlan 17,082

Total population 248,026 SIAZAM Inter-local Health Zone (7.76%) a. Siaton 68,794

b. Zamboanguita 21,227

Total population 90,021 Certain mechanisms have been put in place in support of the local health sys-tems. Public health programs are handled by the RHUs and the barangay health stations supported by the municipalities while a community health care financing has been put in place through the Peso for Health initiative. The regulatory and

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technical functions are implemented by the DOH through the regional office that has been renamed as the “Center for Health Development.” The district health system provides the organizational structure for integration of the local health system.

6.1 Organizational Structure and Management Procedures In terms of the organizational structure and management processes, the ILHZ board is the unifying and coordinating body composed of representatives from LGUs that contribute to the health zone operation: • Provincial LGU representative • Sangguniang Panlalawigan (SP) representative of the health zone • IPHO • Municipal LGU • Association of Barangay Captains (ABC) President • DOH representative • Health insurance organization • CHO • MHO • NGO/PO representative According to the standard template of ILHZs in Negros Oriental, the ILHZ or district health board shall have financial and policy-making functions to supple-ment existing LGU policies. New ILHZ policies shall be presented and approved by the provincial health board and the Sangguniang Panlalawigan. It also approves the integrated health work and financial plan. The ILHZ technical committee is composed of the technical staff from the RHU and hospital personnel and assisted by the administrative staff designated by participating LGUs on a part time or full time basis. Other members may include the DOH representative or the patient representative. Technical assistance is provided by the DOH and MSH. Meetings are convened on a monthly basis to discuss the operations of the ILHZ based on the approved health work and financial plan. It initiates a participatory health needs assessment that becomes the basis of an integrated zonal plan for both the district hospital and the RHUs. It also sets minimum standards for health services at all levels in conformity with national health policies. It also plans a system of pooling human resources to attend to leave of absence, retirement, etc. The other local health boards (Municipal Health Board and the Provincial Health Boards) mandated by the Local Government Code continue to exist. The mu-nicipal health boards continue to meet regularly to discuss their internal affairs and support or action needed by the ILHZ. The Provincial Health Board also retains its function mandated by law. The PHO and the SP member in the ILHZ present the district work and financial plan to the Provincial Health Board once a year. There is a separate District Hospital Health Board that is responsible for assuring quality care and services in the district hospitals. It approves the hospital budget and helps the Governor with the financial management of the hospital. It ensures

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the participation and financial support from the LGUs and the community for hospital services. The Inter District Hospital conference and the bi-annual review led by the PHO have become the inter-zonal conference and participation has been enlarged to include public health staff to be able to discuss ILHZ related issues and problems. Issues that cannot be solved locally are elevated to the Provincial Health Board for deliberation. Matters that require action of the Sangguniang Panlalawigan are accordingly elevated to the SP for endorsement or adoption of a resolution. Each LGU member of the ILHZ is expected to implement its share of responsibili-ties contained in the memorandum of agreement (MOA). • The municipality with the help of its local health board is responsible for

formulating and implementing an integrated municipal health plan using the framework identified in the Provincial/District Health Plan and based on analysis of relevant information. It implements projects of the Integrated Dis-trict Health Plan; enforces regulatory measures at the municipal level; man-age, finance and maintain municipal health facilities; promote health together with NGOs and the private sector; and conduct research for improvement of health services. It commits to maintain one functioning RHU per 10,000 to 20,000 population and one BHS for every 3,000 to 5,000 population. It main-tains the road network to facilitate referral among health facilities and pro-vides transportation and communication facilities for emergency cases. It provides financial and technical support for volunteer health workers like BHWs and provides financial assistance to existing health projects.

• The province will formulate and implement the provincial/district policies and

plans in support of national health policies after an analysis of existing health conditions. It provides administrative and technical assistance to district hos-pitals and ILHZs. It manages and finances provincial/district and community hospitals to meet PhilHealth requirements. It collects and analyzes health information from the lower levels and submits reports to the DOH. It pro-motes coordination among various sectors for health promotion. It conducts or promotes training and research for better health services. It provides fi-nancial assistance to ILHZs and conducts semi-annual assessment of ILHZ health programs. It recommends the passage of laws to comply with the Sanitation Code of the Philippines and it improves roads and provides trans-port and communication facilities to improve access to health facilities. It as-sists municipalities to fulfill their health roles.

• The DOH through the Center for Health Development Region 7 and DOH

representatives manages tertiary and specialized health facilities; provides technical supervision of local health services; extends technical, logistic and financial advice to LGUs; formulates and oversees implementation of health regulations; collaborates with other sectors to formulate and implement hu-man resources policies and plans; mobilizes external and internal funding for health development; and conducts/promotes research for better health ser-vices. The DOH through its representatives should maintain constant dia-logue with ILHZs to play a lead role related to technical coordination; establish a trust fund for community health projects from DOH and other agencies; assist the LGUs in generating and allocating resources and find

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qualified personnel for ILHZs; participate in LGU training needs assessments and make the necessary recommendations.

6.2 Management of Health Funds

LGUs shall commit to progressively increase their health budget every year and increase percentage allocated to MOOE, commensurate to the LGU financial position. The LGU will contribute the equivalent of 1% of the 20% economic development fund but taken from the general fund based on budget of the preceding years. The ILHZ board shall establish a common health fund from the LGU appropriation of member municipalities in the catchment area in addition to other funds from other sources like foreign funding. There may also be a health insurance fund, DOH grants, community financing fund and other private sector contribution. All funds may be deposited to the ILHZ account and disbursed in accordance to the integrated work and financial plan. The common health fund should be deposited under one collaborating LGU as agreed upon by participating LGUs and managed by the ILHZ Technical Management Committee. The ILHZ Health Board and the technical manage-ment committee (TMC) shall maintain separate books of account and keep financial records available anytime for monitoring and auditing by an authorized agency. The TMC shall submit a financial statement and narrative report.

6.3 Monitoring and Evaluation The PHO, DOH and an NGO shall perform supervisory and monitoring functions at all levels of the ILHZs. The St. Goretti Foundation, a private entity monitors and evaluates periodically the ILHZ in Bayawan independent of the same func-tion performed by the PHO and DOH. The NGO presumably performs the role of an independent auditor that is capable of assuming an outsider or a client's perspective in making its evaluation. Baseline and other surveys should assess achievement in terms of ILHZ objectives.

6.4 CVGLJ District Health System The CVGLJ ILHZ is made up of Canlaon City, Vallehermoso, Guihulngan, La Libertad and Jimalalud and located in the northern part of Negros Oriental with an extensive land area of 930.4 sq.km. The municipalities/city in the district belong to different income levels with Canlaon as a third-class city; Guihulngan, a second class municipality; Vallehermosa and La Libertad, both fourth class municipalities and Jimalalud, a fifth class municipality and the poorest of all. The top five leading causes of morbidity are ARI, diarrhea, skin disorder, malnutrition, skeletal disorder while the top five causes of mortality are cardio-vascular dis-eases, tuberculosis, pneumonia, malnutrition and hemorrhage. The CVGLJ ILHZ is the first to be organized in Negros Oriental and serves as a model for the other health zones. Initial talks between the health sector and political leaders were held to explore the mechanics of forming an ILHZ. During this period, the Belgian government through its Belgian Integrated Agrarian Reform and Support Project (BIARSP) was looking for a project to fund in agrarian communities. DOH identified Negros Oriental as a possible recipient of

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foreign funding and the possibility of BIARSP funding for the formation of the ILHZ was explored. The local LGUs seized the opportunity to upgrade health facilities in their respective areas. Chair Governor or his representative (automatic) Vice Chair Mayor (chosen) Secretary Elected member Members Other mayors PHO DOH Representative (province) NGO representative PO Representative Executive Director (Health District MANCOM) DAR Representative Belgian Integrated Agrarian Reform and Support Project (BIARSP) Project Management Officer (during project time) The CVGLJ health zone’s vision is to create a healthy and empowered ILHZ community through integrated quality health services that are accessible, afford-able and sustainable have been adopted in other health zones. The composition of its District Health Board has served as model for other ILHZs in the province. The main function of the District Health Board is policy making and overseeing the finances of the district. Its specific functions include: • Setting up a health district organizational chart, • Formulating policies toward an integrated health care system • Approving an integrated health work and financial plan, • Creating a common health fund, • Acting as communication channel for health services, • Appointing or dismissing MANCOM members, • Holding monthly management meetings with partners or as needed for the

proper operation of a health district. The board also takes up matters related to requests for capital outlay (vehicles, renovation, etc.), distribution of ILHZ personnel, training programs and approves the district strategic plan drawn from inputs from its constituent units (hospitals and public health facilities). A district health management committee (MANCOM) has been created to assist the ILHZ board and its members are representatives of various positions from the health sectors The function of the MANCOM is to provide technical assistance to the District Health Board to manage the day-to-day operations of the health services and to oversee the hospital and public health functions as well as activities of the private sector and other government agencies. It also provides advice regarding health personnel matters and manages the health zone trust fund. In addition, the members of the MANCOM are also responsible for the rehabilitation of facilities, community organizing, health information, referral, supervision, monitoring and evaluation, training, drugs and supply management, health insurance and general management.

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The ILHZ board maintains a common health fund derived from BIARSP funds and contribution from the participating municipalities. The CVGLJ district has been registered with the Securities and Exchange Commission and the board has opened a bank account for the common fund. The board has the power to decide how the funds are to be disbursed.

Health District Budget for 2000, CVGLJ District Health System, Negros Oriental, 2000

1. PERSONNEL SERVICES Honorarium for MANCOM for 12 months (12 members) 252,000.00 Honorarium for District board for 12 months (6 members) 86,400.00 Utility worker 25,080.00

Sub-total P 363,480.00 2. MOOE Operating expenses 95,000.00 Purchase of emergency drugs and medicines 120,000.00 Other services 21,520.00

Sub-total P 236,520.00 3. Capital Outlay Health insurance 600,000.00 Drug recycling 1,000,000.00

Sub-total P1,600,000.00 Total P2,200,000.00

Source: CVGLJ Inter-LGU Health Zone Profile, Negros Oriental, 2001 The district hospital is the Governor William Villegas Memorial Hospital and is located in the municipality of Guihulngan. It is accredited by DOH as a secondary hospital, but only as a primary hospital by PhilHealth. It has an authorized capacity of 75 beds but implements only 50 beds because of resource con-straints. The occupancy rate showed a steady decrease from 103 % in 1992, 94.36% in 1995, 80.19% in 1997 and 68% in 2000. The average occupancy rate was 34 patients per day and the average length of stay per patient was 4 days. Some residents in Vallehermosa prefer to go to the San Carlos City Hospital, which is nearer their place than Guihulngan. It is cheaper for them to go to San Carlos and they also think that it has better facilities.

6.5 STA. BAYABAS ILHZ The STA. BAYABAS district covers within its catchment area the municipalities of Sta. Catalina and Basay and Bayawan City. It is located in the southern part of Negros Oriental. The district hospital compound in Bayawan also serves as the district health office. The district's adult population is made up of seasonal agricultural workers or sacadas employed in the nearby sugar facilities, small farmers and fishermen. The ILHZ in STA. BAYABAS was set up by Dr. Fidencio G. Aurelia, the Bayawan Dsitrict Hospital chief. Given his experience in setting up the ILHZ in Guihulngan, he improved on the previous strategies to set up the STA. BAYABAS ILHZ with the use of his social marketing skills. He was successful in making each of the three LGUs pass a resolution to authorize their mayors to join the ILHZ collabora-

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tion. The Sangguniang Bayan of Bayawan, Basay and Sta. Catalina met in joint session on August 8, 2000 at the Bayawan Market Social Hall to adopt the draft of the memorandum of agreement for the creation of the STA. BAYABAS district health system. Subsequently, all the three areas agreed to put up a common health fund with their contribution being determined by their income and type of LGU. Bayawan City contributed P200,000, Sta. Catalina contributed P150,000 and Basay contributed P130,000 with total initial contribution amounting to P480,000. Bayawan City as the site of the district hospital acts as trustee of the fund. The absence of foreign funding at the setting up stage makes the STA. BAYABAS model different from the CVGLJ model. While foreign funding is perceived to have jumpstarted the ILHZ in Guihulngan, STA. BAYABAS has successfully launched its ILHZ by relying on goodwill and funds from the LGUs within its catchment area. Foreign funds came later when the STA. BAYABAS ILHZ has stabilized. The local health fund has been augmented by foreign funds from the Matching Grant Program that contributed P500,000 per municipality to improve family planning and maternal and child health services. The Bayawan District Hospital serves as core referral hospital of the STA. BAYABAS convergence area that networks with RHUs (Bayawan RHU I, Bay-awan RHU II, Sta. Catalina RHU, Basay RHU), their BHS network as well as nearby primary hospitals (Kulombayan Primary Hospital and the Amio Primary Community Hospital). The top five causes of morbidity are gastro-intestinal disorders, bronchitis, ARI, pneumonia and UTI. The top causes of mortality are pneumonia, gastroenteritis, meningitis, and tuberculosis. The District Health Board has the same composition as CVGLJ and is also referred to as the Ex-panded Hospital Health Board. The St. Maria Goretti Foundation has been designated as the NGO representa-tive in the ILHZ board and has been given the monitoring and evaluation func-tion. The health workers themselves do internal monitoring, while Goretti, which looks at the implementation of the health agenda and action plan, also does external monitoring. A Technical Management Committee (TMC) made up of health providers has been formed to be fully responsible for the operational management of the district health system.

6.6 BINATA ILHZ The BINATA ILHZ is composed of three municipalities: Bindoy, Ayungon and Tayasan. The total district/health zone population is 110,165. Their health needs are being served by a district and primary hospitals, 3 RHUs, 30 BHSs and 2 private clinics. Even prior to the formation of inter-local health zones, the features of the former district health system were evident under a devolved setting. The organizational linkages were further reinforced through USAID’s Local Partnership Project (LPP) Matching Grant Program. The formation of the BINATA inter-local health system and the health sector reform convergence strategy enabled the LGUs to commit resources to health as part of a holistic and integrated approach. The local health officers at the province and district levels met with the local chief executives to forge agreements for a better and improved local health system.

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The formation of the BINATA ILHZ was supported by local legislation from each member LGU. Resolution No. 72, series 2000 of Bindoy authorized its mayor to enter into a memorandum of agreement with the provincial government and the municipal governments of Ayungon and Tayasan to form a partnership and cooperate for the establishment of an inter-local health zone. The Sangguniang Bayan from each municipality passed and approved a Board resolution to adopt and support the BINATA ILHZ. Resolution No. 63, series 2001 (Bindoy, ap-pended document) is a legal evidence of LGU’s commitment to an integrated health care system within a health zone. The formal signing of the ILHZ Memo-randum of Agreement was on February 6, 2002. The ILHZ organizational structures were formalized one month after the MOA was signed in March 2002 and 18 members were made to constitute the ILHZ board. Like other Negros Oriental district boards, the overall/honorary chair is the governor while the co-chair/acting chair is the Sangguniang Panlalawigan member. One of the 3 LCEs serves as vice chair while the other 2 are members. The other members are: the Sangguniang Bayan Health chair of the 3 LGUs, Chief of Bindoy District Hospital, MHOs, resident physician of Nabilog Commu-nity Primary Hospital, representatives from the religious sector, IPHO, DOH, Hospital (District chief nurse) and NGO. The board functions as the coordinating and policymaking body of the health zone, while the execution and management of health reforms are under the Technical Management Committee (TMC). The BINATA TMC was formed by the ILHZ Board. It is chaired by the Chief of Bindoy District Hospital, with the 3 MHOs as vice chair and 17 other health service providers from the staff of the hospital and RHUs as members. A common health fund was created with the LPP-MGP providing P500,000 for each member municipality for a total of P1.5 million and a counterpart contribu-tion of P150,000 from each of the 3 municipalities amounting to P450,000. The money is deposited in a trust account of Bindoy, the depository LGU and its mayor and treasurer are authorized by the BINATA ILHZ to do business transac-tions related to fund management and safekeeping. Various local stakeholders of BINATA ILHZ implement the agreed activities. An important activity is the on-going community-based monitoring and information system in every barangay for each LGU. The training of BHWs on the proper conduct of the CBMIS and family planning have been done and has become a continuing activity of the health zone. Part of the common health fund has been utilized for CBMIS training of BHWs. The ILHZ is also responsible for the com-plementation of resources in terms of manpower and services within and among the health zone members. The following constitute the gaps and bottlenecks in implementing the ILHZ: • The hospital is not ready in terms of resources (budget, manpower, logistics,

etc.) to cater to Indigency Program enrollees. • The hospital management does not admit any patient, including indigents,

without any deposit. This policy was adopted by hospital management to en-sure that patients would comply with PhilHealth requirements for the hospital

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to avail of PhilHealth reimbursement. Based on their experience, there were patients that never returned to the hospital to settle their bills.

• Some health providers manifest an indifferent attitude toward patients. It is proposed that there should be an upgrading of hospital facility, equipment and services and additional hospital staff should be hired. There should also be a leveling off among LGUs, the PhilHealth personnel and hospital staff to iron out differences and improve organizational effectiveness. The public health programs in the BINATA health zone have been improved with the accreditation of 3 RHUs by PhilHealth. These public health facilities are able to provide outpatient services to all types of patients including the indigents. The solid waste management program has also been incorporated as part of public health. Furthermore, a community based monitoring information system (CBMIS) has also been put in place to watch out for the outbreak of epidemics and other illnesses.

6.7 Provincial Referral System The first workshop conference on strengthening the referral system was on February 20 –22, 2002. The referral system is one of the nineteen (19) concerns and areas identified for hospital reforms. The objective of the activity was to come up with a comprehensive and improved healthcare delivery system. The most recent update of the draft of the referral system was presented and some important points were discussed. The issues were: (a) flow from MHO to RSI, (b) flow of patients at the BHS and RHU/CHO (change RSI in line with PHN/RHN), (c) policy on direct or walk-in patients from municipalities, a referral is required by Negros Oriental Provincial Hospital and District Hospitals, City and Municipal Health Offices, and (d) flow chart of patient in the ILHZ referred for treatment or laboratory examination and refining the system further to minimize discomfort to the patient. The reason for referral is limited resources and services in a referring unit. One limiting factor cited by the MHO within the Bais ILHZ is the preference of the patient to go to the provincial hospital instead of the district hospital in their ILHZ. They cited comparative advantage of NOPH over the District Hospital in terms of available services, doctors, medicines and supplies. Likewise, it also redounds to patients’ preference. They don’t like transferring from one referral facility to another co-referral facility (e.g., from the District Hospital to NOPH). On the contrary, Bais District Hospital has the technical capability compared to other District Hospitals. It has twelve well-trained doctors. It took time convincing the MHO to change her and clients’ frame of mind on facility preference vis-à-vis the developed referral system. It was emphasized that one of the pillars of the health sector reform is decentrali-zation of health care delivery system. Local health facilities need to be upgraded to solve congestion at the NOPH, which caters referrals from six municipalities within the Dumaguete ILHZ and the whole province. With this strategy the preference of patient to go to the provincial hospital might decline.

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7. Best Practices Negros Oriental sets the pace in the establishment of inter-local health zones as the whole province has been subdivided into 6 zones. Its success in the creation of effective structures in its local health system is due to the following factors: • The legal framework is well defined, as there are resolutions at all legislative

levels from the Sangguniang Panlalawigan to the Sangguniang Bayan to support the health district system and establishment of the Provincial Thera-peutics Committee.

• There is financial support from the LGUs that have contributed to the com-

mon health funds that support the activities of the health district system. There is a tradition and a culture that health is a priority and politicians outdo each other to present more innovative schemes to promote health.

• The various health boards at all levels are operational. The Provincial Health

Board meets regularly to take up province-wide concerns; the health district boards are active and have set up common funds to run their operations; the hospital boards perform policy and financial functions; the local health boards at the municipal level continue to meet to discuss local concerns.

• Hospitals are given some form of financial autonomy as they are allowed to

keep their income. The hospital boards approve a work and financial plan to determine hospital expenditures. The user fees in the hospitals are kept in trust by the Provincial Treasurer and supplemental budgets are approved by the SP to enable the hospitals to access these funds.

• There is NGO and PO support for the ILHZs as shown by their active mem-

bership in the various boards. In Negros Oriental, the NGOs do not only per-form medical missions. The health workers alliance is active in promoting the interests of the health workers while the Goretti foundation performs monitor-ing and training functions. Various rooms in the provincial hospital have been renovated from contributions from civic organizations and private individuals.

• There is community health financing into the health district concept among

the major stakeholders from the form of the Peso for Health. It is an innova-tive program that is affordable and enables poor members who have no money to contribute in kind to pay their monthly contributions. It encourages people to take care of their health, since they are made to cover part of the costs through their contributions.

• Requiring certificate of good manufacturing practice as one of the criteria for

supplier accreditation is considered a good practice in drug procurement to get rid of fly by night suppliers and ensure quality of drugs.

8. Conclusion and Recommendations While Negros Oriental is successful in organizing its inter-local health zones, in achieving some form of fiscal autonomy for its hospitals in doing pooled drug

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procurement and in creating community-based health financing scheme, its weakest link in its convergence strategy is its PHIC Indigent Program.

8.1 Challenges for the PHIC Indigent Program With the successful implementation of small scale and community managed social health insurance in the province of Negros Oriental, there are so many challenges for PHIC. There seems to be a need to establish strong inter-local health zone (ILHZ) interface with PHIC to facilitate a well-coordinated program implementation. The STA. BAYABAS health zone is a strong ILHZ but there is no Indigency Program in the area because there is no guideline interfacing the Peso for Health and Indigency Programs. LCEs are not convinced of the Indi-gency Program. Extensive advocacy on social health insurance/IP coupled with RHU accredita-tion to increase coverage must be undertaken. This challenge requires man-agement complementation between Regional and Provincial Field Service Offices and additional staff to conduct orientation and other information dissemi-nation activities, monitor and follow-up LGUs on their applications. Although PHIC presented the program to all LGUs since 1999, still there is a need for another presentation to the new set of elected officials. Demonstrate success stories to encourage other political leaders is also part of the advocacy chal-lenge. It was also found out that majority of PhilHealth members and beneficiaries are not aware of their benefits and privileges. Hence, there is a call for intensive information dissemination on members’ benefits and privileges. Dr. Espallardo cited a strategy on addressing the aforementioned concern by printing the benefits and privileges of members at the back of PhilHealth member’s identifica-tion card. There is also a need to adopt the bottoms-up approach in program implementa-tion in order to come up appropriate interventions and effective policies. The regional office should not wait for the national office in taking the initiative/s for program sustainability. It should also be allowed to introduce modification into the Indigent Program for smoother and sustainable implementation, such that: • Lobby LGUs’ proposal for amendment of the law on step increment of premi-

ums cost sharing scheme. Majority of LGUs are apprehensive on their ca-pacity to cover the 50:50 cost sharing in the 5th or 6th year. In the case of Cebu for instance, Glaxo Drug Company is willing to cover 2,000 families but the LGU refused it because of sustainability issues/concern.

• Interface mechanism of enrolling Peso for Health members in the Indigency

Program. The District Health Officer of STA. BAYABAS is working on it. Re-insurance schemes should be liberally adopted to supplement and not mo-nopolize social insurance activities.

• Advocate on improvement of health facilities first before Indigency Program

enrollment. It happened in one district that the LGU is entitled to the capita-

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tion fund but the LGU cannot utilize the money because there is no accred-ited facility.

Based on the experience of the province, the strong advocacy of health providers is also instrumental in encouraging the LGUs to participate in the PHIC Indigent Program. At the start, all district hospitals were downgraded by PHIC; thus each district hospital tried to improve and upgrade their facility. It caused strained relationship between PHIC and hospital management and health providers, which affects the attitude and extent of advocacy efforts of health providers on the Indigency Program. In the experience of Amlan, the members’ and barangays’ counterpart for the premium may also be adopted to instill a sense of responsibility to the beneficiar-ies of the program. Bindoy and Amlan indigents and barangays have their counterparts for the premiums in order to sustain the program. The municipality of Bindoy has developed a cost sharing scheme for the next 5 years of imple-menting the PHIC indigent program. The cost sharing scheme was designed to make the program sustainable with emphasis on self-reliance on the part of the patient and local government.

8.2 Policy Directions of the Province on PHIC Indigent Program With the cited scenario, the Provincial Government with City and Municipal LGUs are now conceptualizing their own local health financing scheme (e.g., they generate P15 million and at the same time expanding benefit package). They feel that if they manage their own resources, they can facilitate the process and ease service utilization. This will minimize the lengthy process of PHIC. More-over, the money is with them (PLGU), not with PHIC and will revolve within the province. However, there is an apprehension on the sustainability of local health financing since local investment is limited and rates on investment are low.

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Appendix 1. Key Informants and FGD Participants. PHIC Region 7 1. Ms. Jenet Ann R. Ayson, Indigency Program Unit 2. Ms. Flavia U. Aranas, Indigency Program Unit 3. Dr. Agnes Dizon, Accreditation Unit 4. Mr. William Chavez, AVP/Regional Manager 5. Mr. Paul Oyales, Service Field Officer,Negros Or. IPHO 6. Dr. Ely Villapando, Integrated Provincial Health Officer and Chief of Provincial

Hospital 7. Dr. Virgilio Cines, Chief, Bais District Hospital 8. Dr. Ma. Elizabeth Sedilio, Municipal Health Officer, Tanjay 9. Ms. Emalyn M. Gadingan, Chief Nurse, MOPH PGSO 10. Atty. Ismael Martinez, Provincial General Services Officer STA. BAYABAS ILHZ 11. Dr. Fidencio Aurelia, Chief, Bayawan District Hospital 12. Ms. Flor Pagaduan, Program Officer, Peso for Health 13. Ms. Sabina Valde, Client informant/wife of patient 14. Mr. Leonardo Valde, Client informant/patient 15. Dr. Victor O. Nuico, Municipal Health Officer, Sta, Catalina 16. Dr. Jacqueline Ann Borja, Municipal Health Officer, Valencia 17. Dr. Edalin L. Dacula, RHP, Bayawan 18. Dr. Estephen S. Estacion, Municipal Health Officer, Bayawan 19. Ms. Helen Gagoa, Chief Nurse 20. Ms. Lucia C. Canto, President, Federation of BHWs SIAZAM ILHZ 21. Dr. Sozelon Zerrudo, Chief, Siaton District Hospital 22. Ms. Rica Gaga-a, Chief Nurse 23. Ms. Donna Villadolid, DOH Representative 24. Ms. Jocelyn Ege, Administrative Assistant, ILHZ

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Health Sector Reform Technical Assistance Project VIII

PASAY (NATIONAL CAPITAL REGION)

1. Socio-Economic and Health Profile Pasay City is the third smallest political subdivision in the National Capital Region. It is adjacent to the City of Manila and is bounded to the south by Parañaque, to the northeast by Makati and Taguig and to the west by Manila Bay. In 1995, Pasay City had a population of 408,610 (National CSP statistics up-date). There is considerable movement of migrants into the city's low-income areas. Zone 20 has the highest growth rate, which is due to the proliferation of squatters in the area. Zone 6, a blighted area, has the second highest growth rate. The average Pasay household is 7 persons per household. The city has a total of 73,846 households. 2. Convergence in Pasay The Health Sector Reform Convergence Workshop under the auspices of the Department of Health (DOH) and Management Sciences for Health (MSH), with USAID funding support, was conducted at the Heritage Hotel, Pasay City, on October 11-12, 2001, with the theme "Tulong Sulong sa Kalusugan.” The aim was to facilitate the adoption and implementation of the Health Sector Reform Agenda (HSRA) at the local level. Pasay City is among the advance implemen-tation sites of the HSRA. The workshop focused on the five components of the Health Sector Reform Agenda, which are: • Hospital Reforms • Social Health Insurance • Drug Management • Local Health System • Public Health At the end of the workshop, the Pasay City Mayor and the members of the Sangguniang Panglungsod, along with other stakeholders, pledged to carry out the five reform components for the next three years by signing a Memorandum of Agreement.

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3. Gains in Social Health Insurance In social health insurance, Pasay City, as one of the pilot areas of the Health Passport (now PhilHealth Plus) set the following targets to be achieved by year 2004: 15,000 indigent households enrolled, 100% of business establishments PhilHealth registered, a 20% increase in enrollment in the Individual Paying Program (IPP), expanded benefits to indigents, monitoring system installed in all health centers, and a permanent functional PhilHealth Office at the City Hall.

3.1 Pasay City Health Passport Initiative On December 9, 1997, after a series of meetings with the City Health Officer (CHO) and the Department of Social Welfare and Development (DSWD), the City council passed and approved a resolution (No. 978-S-1997) adopting a National Health Insurance Program R.A. 7875. This became known as the National Insurance Act of 1995. This authorized the appropriation of funds from the city treasury for the development of an indigent health insurance package. Vice Mayor Wenceslao B. Trinidad was authorized to enter into an agreement with the Philippine Health Insurance Corporation. In 1998, the City granted P2 million for the project. This was increased to P4 million in 1999, P5 million in 2001, and P6 million for 2002. The program was piloted in December of 1999. A memoran-dum of agreement was signed in February of 2000 and the program was pro-moted to the public though a launch in June 23, 2000 held at the Cuneta Astrodome with then President Joseph Ejercito Estrada. In this program, the Local Government Unit (LGU) provides insurance premiums with a counterpart contribution from PhilHealth. The package includes an outpatient consultation and diagnostic benefit package that covers primary consultations with general physicians and basic laboratory examinations (i.e. chest x-ray, CBC, fecalysis, urinalysis, and sputum microscopy). This is provided by the different health facilities of Pasay City. After the primary consultation, the enrollee may be referred to a PhilHealth accredited facility if warranted. A referral system has been designed for this purpose. Other LGU support came in the form of institutional development and quality assurance services. Institutional development includes upgrading of facilities (provision of infrastructure and equipment), human resource development and manpower augmentation. Quality Assurance includes certification of health facilities. All Pasay City Health facilities have been certified as Sentrong Sigla awardees. Also, all Pasay City Health facilities are accredited by the PhilHealth. The Health Passport initiative was not without problems. At the start, 1,990 were recruited. DSWD workers did the initial recruitment. However, on validation of the initial enrollees, 77 were found to be unqualified. Recently, the Pasay city treasurer has requested that validation of enrollees be certified by the office of the City Health Officer. The tool used for determining eligibility is the means test. A family data survey form is accomplished. This takes into account the educa-tional attainment, occupational skills, employment status, monthly income, and insurance benefits of each household member.

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Figure 1. Algorithm for Primary Consultation and Referral.

PhilHealth member/dependent

MIDWIFE

PHYSICIAN

NURSE/MIDWIFE MEDICAL TECHNOLOGIST

HOME

* Presents PhilHealth ID card

* Verifies if the indigent is in the list* Gives the family card* Finds the family envelope* Records the member’s chief complaint and vital signs in the clinical record

* Examines and evaluates the patient

* Diagnostic procedure is needed* Fill up request form

* Laboratory procedure is not needed* Needs referral* Prescribes the indicated medicines

* For follow-up/contiuation of management, e.g., dressing of wound, continuation of injection

* Registers patient in the laboratory logbook* Performs the indicated procedure* Gives result to the physician

* With chest x-ray result

* Not for referral* Gives relevant home teachings* Registers the indigent in the Patient Treatment Summary

* Fill up referral slip

* For further evaluation and management

* For chest x-ray

PhilHealth Accredited/ Authorized

Government facilities with x-ray

services

HOME

Admitted (PhilHealth in-

patient packageHOME

Legendbenefit is within the OPBbenefit is available but not within the OPB

PhilHealth Accredited

Hospital

PhilHealth member/dependent

MIDWIFE

PHYSICIAN

NURSE/MIDWIFE MEDICAL TECHNOLOGIST

HOME

* Presents PhilHealth ID card

* Verifies if the indigent is in the list* Gives the family card* Finds the family envelope* Records the member’s chief complaint and vital signs in the clinical record

* Examines and evaluates the patient

* Diagnostic procedure is needed* Fill up request form

* Laboratory procedure is not needed* Needs referral* Prescribes the indicated medicines

* For follow-up/contiuation of management, e.g., dressing of wound, continuation of injection

* Registers patient in the laboratory logbook* Performs the indicated procedure* Gives result to the physician

* With chest x-ray result

* Not for referral* Gives relevant home teachings* Registers the indigent in the Patient Treatment Summary

* Fill up referral slip

* For further evaluation and management

* For chest x-ray

PhilHealth Accredited/ Authorized

Government facilities with x-ray

services

HOME

Admitted (PhilHealth in-

patient packageHOME



PhilHealth Accredited

Hospital

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In addition, disabilities, health and nutritional status as well as immunization status are noted. The total monthly household/ family income, total annual household / family income and the annual per capita income are computed. Previously, if this amounts to P14,000 and below, the family will be eligible for the indigent insurance program. This cut-off was a bit stringent and many house-holds, although poor, were not eligible for enrollment. Recently, the cut-off level has been adjusted to P18,000. For year 2002, the local government increased its contribution to P6 million and its target number of enrollees to 10,000. Because of the active and dedicated staff of the City Health Officer, more than 8,000 new households have already been enrolled within a 6-month period. 4. Gains in Hospital Reforms According to Pasay City General Hospital director Dr. Oscar Linao, convergence efforts in the area of hospital reform have only recently started. Even prior to the convergence meeting, however, the director points out that hospital reform and physical improvement has already been ongoing. The hospital improved from an initial 50-bed capacity to a 150-bed capacity hospital in 1999. As a testimony to an improvement in hospital capability, the hospital was classified as tertiary in August 31, 2000. Events that led to this improvement include the accreditation of the hospital training programs, and upgrading of the equipment and hospital facilities. Pasay City General Hospital boasts of accredited residency training programs in Pediat-rics, and Obstetrics and Gynecology. The departments of Internal Medicine and Surgery are scheduled for visitation and possible accreditation this year. Defi-ciencies in imaging requirements and dialysis have prevented accreditation in internal medicine, but this is being addressed. The presence of accredited residency training programs has been observed to improve patient care and hospital services in general. Along with the expansion of services is a corresponding increase in hospital staff. This currently reaches around 255 and consists of consultants in various special-ties, resident physicians, chief residents, and support personnel.

Table 1. Hospital Personnel. Medical 53 Consultants in various specialties/subspecialties

37 Resident Physicians

4 Chief Residents

Administrative 49 Personnel

Nursing 85 Personnel

Ancillary 27 Personnel

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Upgrading of equipment and hospital facilities is the second strategy that has been instrumental in the improvement of hospital services. The important revenue centers of the hospital have been identified to include the radiology services, the pharmacy, and the laboratory. The procurement of an ultrasound machine in year 2000 significantly increased hospital revenue since all of the hospital's ultrasound examinations could be done in-house. Similarly, in the laboratory, the purchase of culture and sensitivity equipment also increased hospital revenues. The only non-performing cost center is the pharmacy. At the moment, the hospital finds it difficult to improve pharmacy services because drug purchasing is done at the local government level. Other problems were outlined by the hospital director. The most important is the non-issuance of the approved hospital budget. In year 2001, the approved hospital budget was P14 million. Only about P7 million of this was given to the hospital. This led to problems with the procurement of supplies, reagents, and the provision of dietary privileges for the patients and hospital staff. Despite the deficit, the hospital still managed to earn P9 million. Because of this, the director is looking forward to pushing for fiscal autonomy. Representations and consulta-tions have already been made with the Vice Mayor, the city council, and the city treasurer. It is envisioned that the LGU can still provide the budget for operations and personnel services but the hospital should be allowed to manage and re-invest its own income. Lobbying will be done to push for a council resolution in this regard. The hospital is also working on a comprehensive equipment maintenance program. This is done in cooperation with the Arci Cultura Svillupo, an Italian NGO. The NGO has already prepared the necessary documentation of the equipment situation of the hospital. The program still needs to be presented for approval and implementation by the city council. As far as convergence activities are concerned, the hospital is in the process of reviving the Quality Assurance teams and committees of the hospital. Once this is done, there will be problem identification and application of Total Quality Management (TQM) principles to address these problems. At present the infection control committee and the therapeutics committee are practically the only ones that are functional. According to the director, their clientele now has wider coverage. The patient profile of PCGH now includes patients coming from Taguig, Cavite, and Laguna.

Table 2. PCGH Thrust. Development thrust for PCGH. • Fiscal autonomy • Improvement of the pay wards and pay services • Additional medicare rooms for Internal Medicine, Pediatrics and Surgery • Repair of the present imaging facilities • Procurement of another ultrasound machine • Procurement of Computerized Tomography (CT) equipment • Creation of a program or revitalization of the hospital cooperative to ensure availability of supplies and reagents

for the laboratory and X-ray facilities. • Accreditation of Internal medicine and surgery residency training programs for the year 2002.

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5. Gains in Drug Management Reform Based on an interview with Dr. Cesar Encinares, the Health Operations Division chief of Pasay City, a centralized drug procurement program is in place in the city. The local government procurement program, however, only serves to augment the drug supplies provided for by other regular sources. These other sources include the Department of Health, the Sentrong Sigla fund, the Phil-Health capitation fund, UNICEF (which provides vitamins and iron), and the drugs provided under the LGU Performance Program (LPP). Local government procurement, therefore only makes up a small percentage of the total drug supply of the city health system. However, the centralized local government procurement program makes up for all of the drugs and supplies of the Pasay City General Hospital. The presence of a centralized drug procurement program, however, has not resulted in a lowering of drug prices. The City Health Office has enrolled in the parallel drug import program of the Department of Trade and Industry (DTI). However, the list of available drugs for parallel import is limited and as of this report, the hospital's purchase order has not yet been filled.

5.1 Constraints and Limitations First, an active therapeutics committee does not determine the drug needs. At the health center level, the medical staff (more often the physician) determines the needs. In the Pasay City General Hospital, the therapeutics committee is new and not yet fully functioning. This means there is no rational method of determining which drugs are very essential, essential or necessary, or top priority. There is no hospital drug formulary in the PCGH. Second, the drug purchase program has to work within a budget. Thus, even if the health centers and hospital determine a need, if this need is over the budget allocation or cannot covered by the budget, the purchase cannot be made. At the health center level, all the drugs are given for free and the local government purchase makes up only a small proportion of the total drug supply of the center. In the PCGH, the hospital is dependent on the centralized procurement program for its drug supply. The needs of the hospital cannot be met by the budget for drugs and supplies. Given this constraint, the hospital will always lack drugs and supplies. This is one of the arguments for fiscal autonomy. With fiscal autonomy, the hospital will be allowed to manage its revenue centers (laboratory, imaging, and pharmacy). The reinvestment of income derived from the pharmacy will ensure an adequate supply of drugs and reagents. 6. Gains in Inter-Local Health Systems The city of Pasay prides itself on having a very efficient and functional local health system. Local health has always been under the Local Government Unit and has not been affected by devolution. The city has been divided into zones, each of which has a local health center that serves a well-defined catchment

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area. The number of households and members are registered per barangay. The front liners are the Baranggay Volunteer Health Workers (BVHW). The BVHWs take care of the primary and public health needs of each household. They concern themselves with the promotive as well as the preventive aspect of disease such as nutrition, public sanitation, water supply, and specific disease conditions that may arise such as dengue outbreaks. Should there be a need, patients are referred to the Local Health Center using a well-defined referral system. A physician who is directly under the City Health Officer mans the local health center. The BVHWs have undergone training in Integrated Management of Childhood Illnesses (IMCI) in 1999 under a research conducted by Dr. Lulu C. Bravo of the University of the Philippines College of Medicine, sponsored by Arci Cultura e Svillupo . The BVHWs have also under-gone training in the referral system (under a research authored by Dr. Sandra Tempoko) and values formation (under a research by Dr. Jaime Z. Galvez Tan) on the same year. These training programs and the strong Social Health Insur-ance program have contributed to the success of the Pasay City local health system. Equally important in addressing the health needs at the Barangay level is the relationship of the health workers and City Health Office with the Barangay Captains. The CHO conducts community assemblies and maintains a harmoni-ous relationship with the Barangay Captains. It was pointed out by the CHO that the presence of committed and dedicated BVHW is one of the secrets of the Pasay City Local Health system. The BVHWs are volunteers but they have maintained the respect of the community due to their genuine concern and commitment to the promotive and preventive aspect of community health. The City Health Officer oversees 11 health centers, 1 lying in clinic, 1 STD clinic, 1 employees' clinic, and 1 pharmacy. To date, all 11 health centers have been certified by the DOH as Sentrong Sigla awardees. On the first year of the Sentrong Sigla awards, 6 of the 11 health centers of Pasay City were awarded as among the first 45 awardees. The Doña Marta Health Center was awarded as one of last year’s Sentrong Sigla National Awardees and the Kalayaan Health Center has just been named an awardee. The inclusion of 6 Pasay City health centers as Sentrong Sigla awardees in the first year of the Sentrong Sigla program has been hailed as the biggest achievement of the Pasay City Health Office. This is the most number of national awards given to a single city or municipality in the nationwide search for outstanding health facilities with quality health services. Based on an interview with Dr. Pilar Perez, the current City Health Officer, the success of Pasay in upgrading its facilities, services, and personnel can be attributed to its former City Health Officer, the late Dr. Elvira M. Lagrosa. Dr. Lagrosa personally visited the health centers and along with her staff assessed what it would take to make the health centers qualify for a Sentrong Sigla award. The most difficult was upgrading of the infrastructure to provide interview areas and examination areas. With the help of then Mayor Jovito Claudio and a soft loan from the World Bank under the Urban Health and Nutrition Program (UHNP) of the DOH, Dr. Lagrosa succeeded in upgrading all 11 health centers. She made her staff undergo capacity building and provided training for her personnel

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in quality assurance. Dr. Perez also relates the resourcefulness of Dr. Lagrosa in assembling an improvised food testing kit. This remarkable performance by the local health system has been recognized and has led to Pasay being made a pilot area for health reform. This led to the Health Passport program being piloted in Pasay City. The City of Pasay is in the process of planning for the construction of two new health centers, one in the reclaimed area and the other in Villamor village for civilians. In recognition of her achievements and contribution to the overall health of the people of Pasay, the Main Health Center will be rededicated and renamed after Dr. Elvira Lagrosa.

Table 3. Pasay City Health Centers, Addresses and Contact Numbers. Cuyegkeng Health Center Dr. Marylin M. Leoncio

Cuyegkeng St. cor Layug St., Pasay City. 526-5283

Leveriza Health Center Dr. Filipinas C. Vitug

Leveriza St. cor Gil Puyat., Pasay City. 526-5283

San Isidro Health Center Dr. Rebecca F. Bolilia

Dominga St., Pasay City. 931-5275

Main Health Center Dr. Anthony San Juan, Dr. Annabelle M. Espalmado

Pasay City Sports Complex, F.B. Harrison St., Pasay City. 551-1652

Ventanilla Health Center Dr. Mercedes T. Salle-Noble

Ventanilla St. cor. Layug St., Pasay City. 887-54-59

M. Dela Cruz Health Center Dr. Dirk Roland B. Rogasa

M. Dela Cruz St., Pasay City

Doña Marta Health Center Dr. Marie Irene R. Sy, Dr. Manuel Dubungco Jr.

Don C. Revilla St., Pasay City. 851-7804

Malibay Health Center Dr. Alfredo M. Barranco

Malibay Plaza, Pasay City. 854-28-64

San Pablo Health Center Dr. Madonna Felisa C. Abad

St. Peter St., Maricaban, Pasay City. 854-0684

MIA Health Center Dr. Leslie Joy D. Tolentino

Mia Road cor NAIA Avenue, Pasay City. 851-9707

Kalayaan Health Center Dr. Armando C. Lee

Kalayaan Village, Pasay City. 824-55-52

Lying-in Clinic Dr. Eduardo Cabildo Dr. Rudy Rosa Barranco Dr. Francisco Antonio F. Corpuz

Dona Marta Health Complex, C. Revilla St., Pasay City. 851-7804

STD Clinic Dr. Rosalinda L. Mangonon

Pasay City Hall, F.B. Harrison St., Pasay City. 551-4180

Employee's Clinic Dr. Pedro Miguel S. Padpad

Pasay City Hall, F.B. Harrison St., Pasay City. 551-2026

Pharmacy Susana P. Lacuesta

Doña Marta Multi Health Complex, Don C. Revilla St., Pasay City. 851-78-04

6.1 Pasay City Referral System The Pasay City has a functional referral system, which was designed to stream-line the referrals to and from facilities with different levels of care. The referral system was designed with the following philosophy:

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a. Agencies providing health care services can be categorized according to the kind and extent of their resources and facilities and the nature and magnitude of problems each is prepared to handle;

b. It is the responsibility of health agencies to provide the best care, in terms of

quality, within the limits of their resources; c. For maximum efficiency, health agencies providing health care services

should coordinate with each other which includes, among others, agreement on, and arrangement for a clear delineation of areas of responsibility; and,

d. Patients need guidance from the providers of care in the proper utilization of

available resources for health care. Based on the above philosophy, the pro-gram had the following objectives:

• To link consumers of care to the appropriate health service resources; • To ensure continuity of care from one health service facility to another;

and, • To maximize the utilization of existing health agencies and personnel.

The staff of the different health centers of Pasay City along with selected mem-bers from the PCGH underwent training on the referral system in 1998. This was under a research of Dr. Sandra Tempoko from the University of the Philippines Institute of Public Health, sponsored by Arci Cultura e Svillupo. Very important in this referral system is the role of the Baranggay Volunteer Health Worker who would address the primary needs of a family. The BVHW has a gatekeeper function and would advise the patient or his family if there is need for a higher level of care. Under this program, the different health centers would entertain and treat only patients and families who are under their specific catchment areas. Should a patient from another catchment area consult in a different health center, these patients are entertained and given initial treatment but are encouraged to follow-up and seek primary care under the appropriate health facility. Should a patient need a higher level of care, the patient is referred to the PCGH. Under the terms of reference, patients without a referral slip from a health center are generally not entertained in the PCGH, unless extremely necessary. Should a patient need a higher level of care that PCGH cannot provide, this patient is referred to the Philippine General Hospital (PGH). A Memorandum of Agreement has been signed by the Mayor of Pasay City with PGH formalizing the relationship and referral efforts between the City of Pasay and the Philippine General Hospital. This is under the “Ugnayan para sa Kalusugan” program of the Philippine General Hospital. The PGH has similar MOAs with the cities of Parañaque, Muntinlupa, Las Piñas, and Manila. This effort helps to decongest the emergency and outpatient facilities of the PGH. One of the limitations of the program is the inability to monitor the flow of referrals to and from the health centers to the PCGH and the flow of patients from PCGH to PGH. At present this is being addressed by the PGH during its monthly

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meetings with the other members of the alliance. Another limitation is the inability to determine utilization rates and success of the referrals. 7. Best Practices Of the practices that led to the overall improvement of the health of the people of Pasay City, it is recognized that one of the best is the public or local health system. An efficient public health system has been established and in place that addressed the health needs of the barangay. A remarkable feature of the public health system is the presence of committed and dedicated volunteer health workers. It should be pointed out that the success of the local public health system is anchored not only on the volunteer health workers but also on the cooperation and harmony between the City Health Officer and the barangay captains. Related to this is the best practice of making all the health facilities Sentrong Sigla accredited. It was after Pasay City garnered six Sentrong Sigla awards that the city became a magnet for pilot programs in the areas of the Health Sector Reform agenda of the DOH. According to incumbent City Health Officer Dr. Pilar Perez, the credit should be given to the former City Health Officer, Dr. Elvira M. Lagrosa and her dedicated staff. There is no secret in the method used by Dr. Lagrosa in streamlining the local health system. Dr. Lagrosa is described as one who loves to work and her commitment is inspiring. Also, she pays attention to a lot of details and puts her personal touch in everything she does. Her commitment to work has been described as inspiring. The steps employed by Dr. Lagrosa to achieve the Sentrong Sigla recognition include: • Getting the support of the local executives; • Personally visiting all health centers and overseeing training in Quality

Assurance; • Facilitation of renovation of the building (this was done with funding from the

World Bank-funded Urban and Health Nutrition Project (UHNP) of the DOH; • Completion of facilities and testing requirements; and, • Staff development and capability building. The excellent record of the Pasay City Health Office attracted yet another pilot program, the Healthy Passport Initiative of the Department of Health. After realizing that the basic outpatient consultation and diagnostic benefit package could be provided by all of Pasay City’s Health Centers as a result of its Sentrong Sigla awards, it was but natural that Pasay be one of the pilot areas of the DOH Healthy Passport Initiative which is now known as the PhilHealth plus.

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At present, not all of the components of the HSRA have been fully implemented. The Convergence workshop was held in October 2001. Because of the devel-opment of the Pasay City health zones and the Social Health Insurance, how-ever, it will not be difficult for Pasay to achieve the vision of convergence. Perhaps, the component, which needs the most development, is Hospital Re-form. However, local legislation has already been drafted to pave the way for fiscal autonomy in the Pasay City General Hospital. Improvements by way of infrastructure and training programs are already in place. Efforts still have to be made to improve quality assurance and drug procurement. It has been pointed out that despite the equal level of responsibility of the city health officer and the hospital director, there seems to be a discrepancy in the extent of the development of the hospital sector in comparison with that of the public health sector. It should be pointed out that the staff of Dr. Lagrosa has remained intact despite changes in local government and has remained consis-tent in pursuing its vision for comprehensive and equitable health care for the people of Pasay City. In contrast, the hospital director of Pasay City General Hospital has been changed as often as there has been a change in the local executives. This has led to an inconsistency in the thrusts and programs imple-mented by the different administrators of the hospital. Finally, It should be noted that even before the convergence efforts, Pasay has always been outstanding in promoting health and providing services to its con-stituents. The convergence efforts of the Health Sector Reform Agenda of the DOH identified the components that need reform and coordinate and harmonizes the efforts necessary in improving the individual components of the agenda. 8. Lessons Learned Just like the other convergence areas surveyed, Pasay has the three identified key components that make for an effective health care delivery system. These important components include: (a) A very committed and dedicated person and staff who will champion the health of the city or province, (b) a very supportive local executive or health board and (c) the support of an outside agency such as an NGO who can provide support in the form of funding, training and technical support. The committed and dedicated champion of the health care delivery system has been identified as the late Dr. Elvira Lagrosa. Dr. Lagrosa was instrumental in streamlining the local health system, in making the health centers Sentrong Sigla awardees and in lobbying for both the support of the local executives and the funding agencies. There remains consistency in the vision and thrusts as envisioned and outlined by Dr. Lagrosa as she has been ably replaced by her former assistant, Dr. Pilar Perez, the incumbent city health officer. It goes without saying that the LGU support is very evident in Pasay. The health board meets regularly and several legislation and resolutions have been passed in support of the health efforts of the city. Pasay has been described as a magnet for attracting pilot studies, reforms and programs. These programs were piloted and / or supported by both GOs and

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NGOs. The healthy passport was initially a DOH initiative. Examples of NGO support include the renovation of the local health centers by the UHNP, the IMCI workshops, values formation workshops, referral system project and the compre-hensive preventive maintenance program (in PCGH) by the ARCS. The “Ka-patid” NGO provides NGO support in the Pasay City General hospital and of course recently, the MSH is supporting the convergence efforts. 9. Conclusion and Recommendations In conclusion, though the convergence concept has only been introduced quite recently in Pasay City, the city has already had many of the key components in place through its own efforts. The public health system and the social health insurance components need very little improvement. Improvement of the drug management program will not impact on the local health system but should be improved as part of Hospital reform efforts. Hospital reform should be a priority and once this is addressed and improved, convergence will no longer be a concept but a reality.

Documents

Health Sector Reform Agenda