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SPEECH OF SECRETARY FRANCISCO T. DUQUE III, MD, MSC. DURING THE
PROFESSIONAL ENRICHMENT SEMINAR FOR SSS PHYSICIANS TO BE READ BY
PHILHEALTH SENIOR VICE-PRESIDENT EDUARDO BANZON
June 8, 2006 (3:30 PM)
Subic International Hotel, Subic bay, Freeport Zone, Olongapo City
Theme: Medical Benefits: Essential and Compassionate Service to Members
THE FUTURE OF THE HEALTH SYSTEM IN THE PHILIPPINES
Greetings (VIPs)
My colleagues in the profession, honorable guests, ladies and gentlemengood afternoon to
everyone.

Thank you for this kind invitation to address all of you in this very auspicious gathering. I am
truly honored to join the Medical Group of the Social Security System and all of your members
from all over the country to talk about the formidable health challenges of our nation.
It is definitely not a simple task to give you a peek of the future of the Philippine health system
especially since all of us understand that we are in a very critical period where we face
unparalleled challenges in the health sector. Indeed, the political noise and the static that now
overhangs the economy seem only to mirror the thorny crisis we now face as health workers.

We have been a signatory to the UN Millenium Declaration in 2000 and there, we promised to
achieve the 8 ambitious millennium development goals within the decade. Almost halfway
through the timeline (2000-2015), however, we know that an enormous task still lies ahead
even in meeting the goals that directly relate to health. Much remains to be done in curbing
the tide of high maternal and child deaths. A large segment of our poor remain unprotected
from the catastrophe of preventable and curable deaths. The old and familiar threats of TB and
malaria remain an unfinished business. More importantly, poverty still hangs as our most
resilient foe largely inseparable from the spiral of deaths and diseases in the country.

With these old problems still unsolved, new threats emerge demanding a major overhaul in the
health system such as the emerging pandemic of Avian Flu and HIV/AIDS which can literally
wipe our country out of the world map. Lifestyle diseases are also on the rise killing the
vitality of even our young and most productive people.

Still other major forces surface necessitating the action of more than the health sector: 1) the
unprecedented globalization and dissolution of borders between and among nations 2) the
explosive urban growth and industrialization with their unique and modern health concerns 3)
the rising cost of health care coupled with the increasing expectations of clients from the health
sector, and 4) the most pressing issue on brain drain subjecting entire health systems to
potential collapse.

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These are serious problems we should urgently face as we reflect on where we are now and
comprehend what may be in store for the health sector at least within the medium term.

Beyond focusing our lens on the trials that confront us, I would like to take this opportunity to
tell you about the exciting reforms we are doing in the Department of Health. Yes, many
things are being done at the moment to overcome our health challengesa lot of reforms are in
the pipelineand I can truly say that we are riding a wave of optimism that we can definitely
prevail over the blows that threaten to topple the lives and health of our people.

In the past year, we have engineered and fine-tuned the Fourmula One for Health as our
vehicle for change. All of our resourcesour collective energies in the Department were
mobilized and put into high gear so that we can trek new directions and usher in what we
envision as the golden era for the Philippine health sector. Fourmula One is designed to
implement critical health interventions with speed, precision and effective coordination to
achieve its three main goals of better health outcomesa more responsive health systemand
equitable health care financing!

Four wheels move our F1 vehicle: 1) health care financing, (2) health service delivery, (3)
health regulation, and (4) good governance.

First, under Health Financing our target is to foster greater, increased and sustained
investments in health. Since, the budget deficit in the health sector has been a nagging problem
that severely prevents our health programs to take off, we really have to rationalize our
spending and make the most value out of every cent. Hence, we have been fixing our
finances and eliminating budgetary inefficiencies through more clever ways of prioritizing,
reallocating, and sharing of funds with all potential sources. Part of the strategy is to target key
health programs where we can achieve the most efficiency gains and which can trigger a
magnificent chain reaction across the health sector.

Here, let me just highlight the role of social health insurance as a major driver for health
reforms. We have seen how the pioneering efforts of Philhealth have set the stage for a
performance-driven financing system within just a decade of its creation. Both private and
government hospitals have raised the bar for quality and socialized their fees to enjoy quality-
adjusted Philhealth reimbursements.

For 2005, the National health Insurance Program (NHIP) estimated membership coverage
reached about 64%. This translates to about 54 million beneficiaries of the NHIP. We have
also remained loyal to our mandate of universal coverage with a special bias for the poor.
Under the Sponsored Program, there are now 12M poor Filipinos protected from major health
catastrophes that drive them deeper into poverty. The Sponsored Program now has a wider
reach currently being implemented in 68 provinces, 116 cities, and 1,376 municipalities
nationwide.

Next, we go to the second wheel of Fourmula One which is Health Regulations. This is
where we want to assure our people the highest quality as well as affordability of health goods
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and services. What we want to happen is to eliminate the bottlenecks that clog our regulatory
processes. Improving governance and maximizing efficiencies in our system will mean more
products entering the market. This will boost competition among the different market players
and hence, effect a significant drop in the exorbitant price of essential drugs and medicines that
directly threaten the lives of our countrys poor.

In the past year, we have exerted vast efforts in improving governance and speeding up
regulatory processes in BFAD. There is the Automation Project due for completion this year
and this is expected to minimize red tape and graft and corruption as well as improve frontline
transaction services. Here, we can picture a web-based, on-line facility with the capability to
streamline and hasten inter-agency processes.

In the pursuit of equity, especially for the poor, we have also expanded access points for low-
cost drugs and other essential health products through programs such as the Botika ng
Barangay and Botika ng Bayan in coordination with PITC. There are now 6,708 BnBs
dispersed nationwide, which have made 42 essential drugs cheaper by up to 80% largely for
the benefit of our indigent patients. Still, many more reforms are in store to eliminate the
bureaucratic layers that slow down our regulatory processes. In order to harmonize our
regulatory activities and facilitate the speedy licensing of health facilities, a one-stop shop
shall be set up. Specific regulatory powers shall also be farmed out to regional offices and local
government units to increase overall efficiency.

Next, we proceed to the third component of F1 which is Health Service Delivery. This is very
important because this is where we can definitely accelerate our race towards the MDGs by
curbing the unnecessary deaths and suffering from our most important public health threats.
What we intend to do is to scale up initiatives for these diseases, widen access to essential
health services especially for the poorand undertake disease-free zone initiatives that will
mop up public health threats such as malaria, filariasis or leprosy, for example. With the
same force and intensity, we are also determined to confront the rising problem of
noncommunicable diseases and the emerging threat of Avian Flu and hope to meet our targets
and secure the best health outcomes for our people.

Finally, Good Governance is needed to enhance the performance of the entire health sector.
And this is difficult to exercise especially on top of our difficult mandate in the DOH to steer a
highly decentralized and fragmented system. But nevertheless, we are always relentlessly
working hard to come out strong, responsive and equitable in meeting our challenges.

We are not entirely empty-handed, however, in pursuing this great race. Right now, all road
signs are pointing to one direction and that is the way FORWARD. Once again, DOH has
been recognized as the # 1 government agency most transparent in our efforts to fight
corruption. We have been rated as the most sincere line agency in beating inefficiencies based
on the latest report of the Presidential Anti-Graft Commission. The SWS survey done in the
third quarter of 2005 also revealed a high net satisfaction rate for DOH at 70% with Philhealth
following closely behind at 69%.
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A major pillar of Good Governance is harnessing the power of our workforce to play a role in
achieving the best health outcomes for our people.whether they are at the frontlines in our
communities or whether they choose to pursue career paths abroad. And this is where we need
your hand as equal partners and defenders of health. We absolutely need the support of a
strong and competent workforce to raise our systems performance and face our challenges
head on.
Our own country experience in managing our health workforce is unique because we face
paradoxical shortages and imbalances. Every year, we produce nurses and other health workers
in armies and droves, many of whom leave the country to work abroad. Our own doctors are
even retraining as nurses to respond to the relentless demand for nursing services globally.
In the next 20 years, the global demand for our workers is not seen to diminish as we foresee the
emergence of more formidable health threats shared across country borders. Hence, we shall
continue to subsidize the health care needs of other countries unable to cope with their human
shortages. In return, we shall receive millions of dollars in remittances but this is at the cost of
losing priceless human investments. The economic perks of outmigration unfortunately do not
impact and benefit the health sector to at least allow us to restock our workforce. In truth, the
massive and uncontrolled exodus of our health workers is a frightening assault for a developing
country such as the Philippines, which has along way to go to achieve its health targets.
Hence, we have come up with both stop-gap measures and long-term solutions to effectively
tame the outflows of our health workers. Foremost is the Human Resource Masterplan for
Health, which was unveiled during the first-ever Human Resources for Health Summit in the
country, held in March of this year. The Master Plan shall be the roadmap of every Filipino
health worker so that he can help make our health system work and bridge the deadly gaps in our
services. We are most certainly appealing for your help so that together we can carry the
unforgiving burden of brain drain in the Philippines. Help us transform our challenges into
opportunities so that we can enhance governance and drive up efficiency in our system.

Challenges will always crop up but the important thing is that we remain hopeful and resilient.
The sustainability of the health sector gains in the past year rests on how you respond, how we
work together and how we strengthen the arsenal of health services for the Filipino people.
Together, we can take on a bullish stance to meet the challenges. We can build a unified and
responsive health system. We count on you as partners, so that Fourmula One, our racecar,
can speed forward and bring us to our health goals.
Thank you at mabuhay kayong lahat!
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