The government is ill-prepared to implement an ambitious universal healthcare law. President Rodrigo Duterte’s order to suspend legal and state-sanctioned gambling operations just made it worse.
By next month, Republic Act 1103 or the Universal Healthcare Law will take effect as the Department of Health is set to release its implementing rules and regulations. The law expands an existing state insurance system by removing membership requirements and registering all Filipinos upon birth.
At the onset, the law will automatically make 2 million more Filipinos qualified for health benefits. The benefits to be provided also expand from existing discounts of up to 30 percent in hospitalization costs, to a wider range of services that cover consultation, confinement and even medicines.
While the transition to a bigger government healthcare program is not immediate, the government has prepared budget allocations totaling P1.4 trillion to finance the program over the next five years. Among the funding sources is the Philippine Charity Sweepstakes Office (PCSO).
PCSO and healthcare
On Friday night, Duterte addressed the nation and ordered police and the military to shut down all PCSO-regulated gambling centers, including lotto and small-town lottery outlets due to alleged corruption. He did not cite evidence, but told Filipinos that he would not honor any court order that would stop him from closing government gambling shops. Interestingly, the order was made late at night and before weekend, when courts are closed and unable to accept pleadings.
On Saturday, Malacañang said Duterte would soon name names of those allegedly involved in corruption in PCSO. To be fair, such allegations are not new. In numerous instances, Sen. Panfilo Lacson, who was police chief during the Estrada administration, had alleged that STL operations were just a front to the illegal jueteng syndicate which, in the first place, STL tried to dismantle.
But while there is basis for Duterte’s new allegations, what the chief executive failed to mention was how PCSO’s operations are also benefiting millions of Filipinos who have no access to affordable and quality healthcare.
In 2018, PCSO data showed that 528,190 Filipinos benefited from P8.68 billion in medical assistance from the sweepstakes office. The amount financed all healthcare services such as consultation, laboratory tests and medicine purchases.
What’s more this individual medical subsidies come on top of 9,231 patients who benefited from PCSO’s medical and dental missions, as well as more than 13,000 people who sought doctor’s advice during PCSO outreach programs.
Falling short?
Poor Filipinos lining up to get assistance in PCSO offices is a typical scenario, because the healthcare system does not provide quality and affordable healthcare. The Universal Healthcare Law aims to change that, and reduce Filipinos’ out-of-pocket healthcare spending to 50 percent of total health expenditures from 53 percent in 2017. While that essentially means that Filipinos would still have to dip in their pockets to shoulder half their medical costs, it would be an improvement long overdue.
However, with Duterte’s abrupt decision to close PCSO operations, the benefits promised by universal healthcare are now at risk of falling short.
In 2018, net receipts from PCSO gaming programs totaled P63.56 billion, 30 percent or P19.07 billion of which under the agency’s charter should go to the charity fund. Under universal healthcare, 40 percent of the charity fund is earmarked for the program. Without legal gambling operations, revenues will not be raised, leaving universal healthcare underfunded.
As it is, even considering PCSO contributions, universal healthcare already faces a funding gap, and Duterte’s sudden decision to stop PCSO gambling schemes risks worsening the lack of funding. Finance department data showed that in 2020 alone, with PCSO backing, the healthcare program is still short of P62 billion in budget.
The gap is forecast to widen to P109 billion by 2024. That is even considering about P402 billion in revenues from higher tobacco excise taxes starting next year. On Thursday, Duterte signed Republic Act 11346 that enables a fresh hike in tobacco taxes to fund universal healthcare. A day after, he removes essential funding to the program by ordering PCSO operations to stop.
Funding an ambitious healthcare-for-all program is crucial since the law also mandates that over time, more diseases get covered and subsidized. In a tweet on Thursday, Sen. Juan Edgardo Angara Jr said higher tobacco taxes are needed to ensure that the Philippine Health Insurance Corp. (PhilHealth), which will implement the healthcare law, will be able cover “all ailments” from just the present seven common diseases it fully subsidizes for the poor, including diabetes and hypertension.
Faster distribution
Apart from hospitalization, the law mandates medicine subsidies to be distributed even in private pharmacies and hospitals once the government has contracted their services. While this helps in the distribution of medicines to avoid letting drugs expire in warehouses as state auditors observed last year, the project would be costly and constrain the budget as more diseases and beneficiaries get covered. Without PCSO funding, subsidizing medicines will be more expensive, and filling up empty medicine cabinets more difficult. As of 2013, the latest data, only about 40 percent of public hospitals have sufficient medicine stocks.
The PCSO charity fund also finances the upgrade of decrepit public health facilities. In 2018, the office gave out P42.8 billion to three public hospitals in Benguet and Albay in Bicol to purchase medical equipment, a crucial investment ahead of the implementation of universal healthcare.
The government has been notoriously bad on investing in new facilities despite funding availability. Last year, budget figures showed that only a third or P9.89 billion were disbursed out of the P30.27-billion Health Facilities Enhancement Program under the Department of Health (DOH). In 2017, only 23 percent of funds were spent, while only 30 percent were utilized in 2016.
If any, PCSO was not only able to spend more on health facilities than DOH, it was also able to disburse funds faster. Ahead of universal healthcare implementation, the government can also rely on PCSO as a distribution agency that delivers benefits directly to the poor who need healthcare the most.