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For a healthier nation

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Although the public and the private sectors have made tremendous progress in improving the health of Filipinos, many of whom are now enjoying longer and healthier lives, they are still facing key challenges.

There’s the perennial shortage of skilled health care professionals. One Department of Health (DoH) study showed that there were only 3.5 doctors for every 10,000 people in the country. An oft-cited cause of the shortage is the inadequate number of students taking up medicine and other health degrees, precisely because they can be prohibitively expensive.

Paolo F. Borromeo, president and CEO of Ayala Healthcare Holdings, Inc. (AC Health), a health care portfolio company, told BusinessWorld in an interview that one of the ways to address the problem is to create incentives and scholarships.

In June of last year, the Commission on Higher Education made it possible for medical students to study for free at eight state universities and colleges under the P317.1-million student financial aid fund.

This laudable move serves another purpose: stem brain drain. The beneficiaries are obliged to work for a year in the country for every year that they receive a cash grant.

“This program is another attempt by a developing country to prevent doctors and nurse from emigrating as soon as they are trained, highlighting the growing tension between the national and the global need for health care workers,” The Economist Intelligence Unit said in an article about brain drain.

Health care spending is another area in which the country still needs improvement. But Oxford Business Group (OBG) noted that health care spending in the country has actually increased over the past decade, though not as fast as it has in other Asia-Pacific nations.

Last year, the Philippine Statistics Authority reported that the total health expenditures in the country grew by 10.5% from P593 billion in 2015 to P655 billion in 2016. That amount represented 4.5% of the country’s gross domestic product. Likewise, per-capita health spending of Filipinos rose 8.7% to P6,345.

Household out-of-pocket payment accounted for 54.2% of health spending, surpassing government schemes and compulsory contributory health care financing schemes (34.2%) and voluntary health care financing schemes (11.6%). Most of the out-of-pocket payments went to hospitals, pharmacies and providers of preventive care.

OBG noted that under the Health Care Financing Strategy 2010-2020, the government aims to increase health expenditure to 4.5% of GDP. And while it has achieved that, it has quite a long way to go before it reaches another goal: bring down out-of-pocket health spending as percentage of total health expenditure to 45%.

The group said the considerable cost of health care for ordinary Filipinos has long been the concern of the government. The establishment of Philippine Health Insurance Corp. (PhilHealth), by virtue of the National Health Insurance Act of 1995, was intended to reduce out-of-pocket expenditures and address inequities in health care financing, it added.

OBG pointed out that President Rodrigo R. Duterte’s administration had renewed the government’s commitment to achieving universal coverage from roughly 92% by prioritizing the poor and the marginalized.

The cost of medicine has, OBG said, traditionally been one of the largest out-of-pocket costs for Filipinos. But the passage of the Generics Act of 1988, which requires medical practitioners to write prescriptions using generic names (they can include brand names, if they so desired), among other things, has helped rein in costs.

Mr. Borromeo noted, however, that there are preconceived notions and biases against generic drugs that hinder them from being widely embraced. The most common misconception is that they are not effective, even though they contain the same active ingredients as their branded counterparts. Consumers can also get up to 80% savings from purchasing generic medicines.

Shady, short-lived enterprises that peddled generic medicines in the past surely did not help dispel that popular misconception. “Back in the day, in the early 2000s, there were many fly-by-night pharmacy companies, which shut down fairly quickly,” Mr. Borromeo said.

Generika Drugstore, one of the brands that AC Health owns, combats the biases by ensuring that the quality of its products is not compromised. “At Generika, every medicine that we source, all the suppliers that we use are all FDA-certified,” Mr. Borromeo said, referring to the Food and Drug Administration.

When it comes to increasing access to a wide range of health care services, especially of the individuals working in the private sector, health maintenance organizations (HMOs) play a vital role.

Christian Cristobal, senior vice-president for sales and marketing at PhilCare, an HMO established in 1982, said in an e-mail to BusinessWorld that he had been part of different discussions with the Insurance Commission, hospitals, medical associations, and even other HMOs that aimed to explore ways in which they could link together to improve the welfare of the people they were serving.

He also cited the importance of regulation. “With this, HMOs now compete in terms of how much value they offer to customers and what needs they address with their offerings. There has been a clamor to shift towards this direction, as it guides organizations to provide sustainable programs to the market,” he said.

The power of technology is also being harnessed by health care providers to make their services much easier to access. AC Health, for instance, has recently invested in the online pharmacy start-up MedGrocer.

Through that platform, anyone can order the medicines they need online and have them delivered. Mr. Borromeo said they make sure that the site is easy and intuitive to use, from uploading the prescription to finding the required medications. “It has to be very simple and very easy,” he said. “The moment it becomes clunky, you lose a customer right away.”

MediLink Network, Inc. (MediLink) has been helping health care companies, particularly HMOs, be more efficient in delivering their services through technology since its establishment in 1999. For instance, it has guided hospitals and clinics toward a paperless requesting process for medical services.

MediLink also offers services with features that thwart fraud. “Electronic processes that improve efficiency and prevent fraud will help to reduce avoidable costs and free up funds for health care services and medicine that benefit patients,” the company said in an e-mail. The tech-focused company is also planning to launch mobile apps that will enable users to assess their health risks and enroll in health management programs.

PhilCare has already developed an app of its own. “You no longer have to fall in line to get your Letter of Authorization (LOA), you simply use our HeyPhil app, a voice-enabled app developed entirely in-house. HeyPhil quickly pulls up a selection of health care providers based on your location, your plan and the services the provider offers,” Jaeger L. Tanco, president of PhilCare, told BusinessWorld in an e-mail.

“And since the service is mobile based, you can get your LOA anytime of the day. Just present the digital copy to the PhilCare clinic or Quick Assist Center at the hospital HeyPhil recommended to you.” He added that this 2018, technology would play a bigger part in every health organization’s strategy.

For companies like AC Health, which owns and operates online and offline platforms, an omni-channel approach may be best. “I believe in the omni-channel approach where you have technology solutions that then complement the brick-and-mortar facilities,” Mr. Borromeo said.

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