For example, according to the

American Productivity & Quality

Center (APQC) (formerly, American
Productivity & Quality Council),1
controllable manufacturing costs
are 10% lower at centralized versus
decentralized manufacturing
organizations. Centralization
can bring with it many benefits:
cost savings, standardization,
and sharing of best practices.

Good evening, ladies and gentlemen. I am Faharra Lantud Vamena, and I, along with
my team, represent the centralized healthcare system. The subject of healthcare has
grown significantly in importance over the last few decades in the Philippines. The
nation has undertaken multiple rounds of reform to fortify its healthcare system.
In 1991, the Philippines embraced decentralized health governance through the
enactment of the Local Government Code. However, in practice, the decentralization
of healthcare governance has not been fully realized due to budgetary constraints.

As stated by Benjamin E. Diokno from the School of Economics at the University of

the Philippines, even after two decades, Local Government Units (LGUs) have become
increasingly reliant on the Internal Revenue Allotment (IRA). A body of evidence
indicates that there has been no marked improvement in the delivery of local public
services. The proportion of local budgets allocated to devolved functions has
declined due to a gradual trend towards re-centralization of health and social
welfare responsibilities, an increasing reliance on centrally controlled funds
instead of local funds. Thus proves our point why centralized healthcare system is
much better.

introduced a social health insurance programme – PhilHealth – in 1995, and has

actively pursued universal health coverage since 2010. As a consequence of its
focus on the health sector and general socioeconomic development, Philippines has
achieved significant improvements in life expectancy and immunization coverage, as
well as a twofold reduction in infant and
under-5 mortality.

"How can you say that the Decentralized Healthcare system can have a positive
impact on the local government"
According to a recent assessment conducted by the World Bank in their Public
Expenditure Review (WB-PER), it has been observed that the process of
decentralization in the Philippines has not significantly contributed to the
reduction of regional inequalities. In fact, it appears that decentralization might
be amplifying these disparities instead, as indicated in the World Bank report from
2011 (page 82). This situation is noteworthy, especially considering that the
internal revenue allotment system, while mildly equalizing, does not appear to be
effectively addressing these disparities. It is important to note, however, that
the 1991 Decentralization Act did not explicitly state the promotion of development
in underdeveloped regions as its primary objective. Another study found that growth
in provincial income after decentralization has had a weak impact on poverty
reduction, suggesting that LGUs have been unable to translate growth at the
provincial level into poverty reduction through more effective service delivery
[Balisacan, Hill, and Piza 2008].

"Centralized health care system"

health policy development and the development of a quality strategy, to make sure
that patients across the country can expect the same conditions of access, coverage
and service delivery. Public health institutes, health technology agencies and
other regulatory agencies are also preferably placed at national level, even if
they have decentralized offices at regional and local levels. At regional or local
level, empowerment of providers will not yield benefits if they are not aligned
with national policy, which is often the case because of a lack of transparency and
accountability between central and subnational organizations.

To achieve uniform conditions of access, coverage, and service delivery, it's

imperative that health policy development is carried out at the national level.
This is because a centralized approach allows for a unified vision and standardized
guidelines that can be applied uniformly across the entire country. When key
institutions like public health institutes, health technology agencies, and
regulatory bodies operate primarily at the national level, it ensures that
healthcare standards are consistent and not subject to significant regional
variations.

health policy development and the development of a quality strategy, to make sure
that patients across the country can expect the same conditions of access, coverage
and service delivery. Public health institutes, health technology agencies and
other regulatory agencies are also preferably placed at national level, even if
they have decentralized offices at regional and local levels. At regional or local
level, empowerment of providers will not yield benefits if they are not aligned
with national policy, which is often the case because of a lack of transparency and
accountability between central and subnational organizations.

"Geographical"
As per the assessments made by trading economics global macro models and analysts'
expectations, it is anticipated that the population of the Philippines will reach
114 million by the conclusion of 2023. Alongside this population growth, there is a
corresponding increase in the prices of goods and services, commonly referred to as
inflation. Furthermore, this population growth is accompanied by the persistent
expansion of diseases.

In recent years, the government has allocated more resources towards healthcare, as
indicated by larger national and local budgets designated for health initiatives,
increased payouts from the National Health Insurance Program (NHIP), and
investments in the country's healthcare infrastructure and technology (THE). Data
from the Philippine Statistics Authority (PSA) additionally highlight a concerning
issue: approximately 1.5 million Filipinos have fallen into poverty due to the
exorbitant costs associated with healthcare emergencies. This represents one of the
detrimental consequences of the decentralized healthcare system. To effectively
address this challenge, it is imperative to recognize that this system requires not
only adequate funding but also the judicious allocation of these resources.

"Negative impacts"
Poorly-optimized policy design – Policy design severely impacts the transition from
a centralized to a decentralized model. This makes sense – policy design outlines
which decisions and programs will be passed down to local entities and which will
remain under central control. Getting these determinations right can make or break
a decentralized healthcare system.
Incompatible policies between local and national entities – Even if there’s a
proper allocation of policies—this doesn’t prevent friction between local and
national healthcare standards. For example, in the U.S., the Dobbs v. Jackson
decision overturned Roe v. Wade, leaving many organizations (and individuals) with
inadequate support and direction. These tensions can be amplified by the fact that
local officials may change offices frequently. When this happens, their healthcare
systems may experience sudden swings in policy. Additionally, these issues can
heighten when centralized policies guarantee services or benefits above what local
entities can afford. For instance, in the Philippines, healthcare staff were
promised benefits under central labor agreements that their local governments
couldn’t provide.
Inadequate funding –
For a decentralized healthcare system to work, it needs both adequate funding and
the proper allocation of those funds. It also needs to set budget minimums for
crucial services. Unfortunately, some decentralized systems have faced financial
gaps when the promised policies aren’t feasible from a fiscal perspective. Zambia
and South Africa suffered from two fiscally inadequate policies and left their
healthcare systems struggling to provide sufficient care for their populace.
Inadequate management –
When a healthcare system transitions to decentralization, many people are placed
into positions of authority without proper training. For instance, local healthcare
managers may not have enough experience to make serious decisions about systematic
policies. When this transition happens too quickly, the new governing bodies can
often enact poor policies unintentionally.

"Pandemic Contribution"
"How can a decentralized system be able to adopt to wild scale diseases or
pandemic?"
During the recent outbreak, we confronted one of the most challenging periods in
our lives, the COVID-19 pandemic. The implementation of a decentralized healthcare
system exhibits bias, particularly in areas where healthcare resources, including
materials and personnel, are scarce. This has resulted in certain provinces and
cities facing resource limitations when trying to access proper healthcare support.
As a consequence of this unequal distribution, healthcare facilities in these
regions are currently unable to fulfill the demand for critical resources and
advanced medical care. This issue warrants immediate attention, as healthcare
resources play a crucial role in preventing, controlling, and mitigating diseases
on a broader scale. An illustrative example is the COVID-19 pandemic, during which
our nation found itself unprepared to handle a large-scale health crisis. The
impact extended beyond the capital city, affecting remote rural areas that were far
from healthcare facilities. Consequently, both rural and some urban areas in our
country had to establish makeshift medical facilities. According to a report from
rappler.com on Monday, April 26, the number of COVID-19 cases had exceeded the
healthcare system's capacity, leading healthcare facilities to convert tents into
emergency treatment centers. This predicament primarily arises from the financial
constraints faced by local governments. Why? It is primarily attributed to their
independence, which, while enabling them to respond swiftly due to their proximity
to patients, does not negate the fact that they still require support from higher
authorities to secure the necessary resources.

However if we apply a centralized healthcare system the support needed by the local
government can be covered not only that but manpower can also improved. Since this
is also a problem especially in remote areas where manpower is scare. For instance,
local healthcare managers may not have enough experience to make serious decisions
about systematic policies. When this transition happens too quickly, the new
governing bodies can often enact poor policies unintentionally. According to a
study conducted in canada by Robert william smith and others, a study focusing on
the response of three provinces to the Pandemic The more centralized public health
systems in Québec and Alberta were noted to be in a better position to launch and
coordinate province-wide response measures during the early part of the COVID-19
pandemic compared to the more decentralized system in Ontario. Specific
facilitators thought to contribute to effective responses included faster
provincial decision-making, information flow from provincial to regional actors,
clearer roles and responsibilities among health system actors, and greater ease in
redirecting resources from across the health system to support public health
functions. A lack of timely guidance from provincial leaders such as the provincial
CMOH and a fully operational provincial health coordinating structure was described
as impeding effective COVID-19 responses in Ontario. In Alberta and Québec, aspects
of provincial public health legislation were described as expediting decision-
making and creating a clear cascade of authority from Minister to CMOH to MOHs.
Participants described how public health and emergency response legislation

On the other hand, the adoption of a centralized healthcare system can address
several critical issues, including providing support to local governments and
enhancing the healthcare workforce, particularly in remote areas where personnel
shortages are prevalent. For instance, local healthcare administrators in such
regions may lack the necessary experience to make informed decisions regarding
systematic healthcare policies. When the transition to a centralized system occurs
too rapidly, it can inadvertently lead to the implementation of suboptimal
policies.

A study conducted in Canada by Robert William Smith and his colleagues, focusing on
the responses of three provinces to the COVID-19 pandemic, provides valuable
insights. It was observed that provinces with more centralized public health
systems, such as Québec and Alberta, were better positioned to initiate and
coordinate comprehensive, province-wide response measures during the early stages
of the pandemic compared to the more decentralized system in Ontario. Effective
responses were facilitated by factors like quicker provincial decision-making
processes, streamlined information flow from provincial to regional stakeholders,
well-defined roles and responsibilities among healthcare system participants, and
the flexibility to reallocate resources from various parts of the healthcare system
to support public health efforts.

Conversely, Ontario faced challenges due to a lack of timely guidance from

provincial leaders, including the provincial Chief Medical Officer of Health
(CMOH), and the absence of a fully functional provincial health coordinating
structure. In Alberta and Québec, aspects of provincial public health legislation
were credited with expediting decision-making and establishing a clear hierarchy of
authority from the Minister to the CMOH to the Medical Officers of Health (MOHs).
Participants in the study highlighted how public health and emergency response
legislation played a crucial role in facilitating effective COVID-19 responses in
these provinces.