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Local Governments' Health Financing Initiatives: Evaluation, Synthesis and Prospects for the National Health Insurance Program in the Philippines

The Philippines has pursued a radical program of devolution giving local government prime responsibility for health care. At the same time the National Health Insurance Program (NHIP) aims to expand coverage of health insurance to the poor. This paper examines the allocative and internal efficiency of provincial government-sponsored health insurance programs. The study showed that performances of the two health programs were strongly influenced by the simplicity of administration, proximity of facilities, pricing, innovativeness, skills, and social/political dynamics. The household survey showed that members were from the relatively lower economic classes. This evidence was also cited by the service providers who viewed their participation in the programs as their form of service to the poor. Members were generally satisfied with the benefits offered by the program and appeared willing to pay for higher benefits. There was evidence of relatively higher use rates by members compared to nonmembers. Cost-sharing mechanisms between households and local government units increased the probability of retention and expansion of membership, as supported by the Guimaras Health Insurance Program experience. Relative efficiencies abound, from the relatively lower costs of operation of private and urban services to the shorter processing time of payments due to proximity of the program staff and members. One major constraint of the larger program, the Bukidnon Health Insurance Program, was the large subsidy support provided by the provincial government. Its complex system of benefits and payment to providers created systemic problems more difficult to recognize and solve. The provincial experience can prove useful to the NHIP, especially in the task of financing health care for the indigent or informal sectors. In the absence of a national financing policy on the provincial schemes, the study can assist the decision to integrate provincial schemes into the NHIP as part of a multi-tiered strategy to provide universal coverage. The NHIP may opt to replicate the provincial health insurance models in other areas as an interim strategy towards the achievement of universal health care.


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