Decentralisation and its Implications for Reproductive Health: The Philippines Experience

Abstract

Decentralisation is one of the most common health sector reforms initiated in developing countries in the 1980–90s. Although decentralisation is often politically driven, it can significantly improve health sector performance. However, the early phase of the Philippines experience indicates that decentralisation in and of itself does not always improve the efficiency, equity and effectiveness of the health sector. Instead, it can exacerbate inequities, weaken local commitment to priority health issues and decrease the efficiency and effectiveness of service delivery by disrupting the referral chain. Such effects pose a particularly serious threat to accessibility and delivery of reproductive health services, some of which (e.g. family planning) are controversial and thus susceptible to local pressures, and others of which (e.g. emergency obstetric care) require a functioning and effective health system. Moreover, those undertaking decentralisation need to take account of the impacts of non-health factors as well as other reforms that interact with decentralisation to affect accessibility, affordability and quality of services, including for reproductive health. The Philippines experience also demonstrates that authority should be shared between the centre and local units in order to achieve national health objectives and respond to local health needs. Adjustments must be made during implementation to correct for both emerging and pre-existing problems.

Résumé

La décentralisation est l'une des réformes de la santé les plus fréquemment lancées par les pays en développement dans les années 80–90. Bien qu'elle soit souvent une mesure politique, elle peut relever les performances du secteur sanitaire. Néanmoins, la première phase de l'expérience aux Philippines indique que la décentralisation n'améliore pas toujours l'efficacité et l'équité du secteur de la santé. Au contraire, elle peut exacerber les inégalités, affaiblir l'engagement local envers les priorités sanitaires et saper l'efficacité des services en bouleversant les systèmes d'aiguillage des malades. Ces effets menacent particulièrement les services de santé génésique, dont certains (p. ex. la planification familiale) sont controversés et donc sensibles aux pressions locales, et dont d'autres (p. ex. les soins obstétriques d'urgence) exigent un système de santé efficace. De plus, les responsables de la décentralisation doivent tenir compte de l'impact des facteurs non sanitaires ainsi que d'autres réformes qui agissent avec la décentralisation et modifient l'accessibilité aux services, le fait qu'ils sont ou non abordables et leur qualité, y compris pour la santé génésique. L'expérience philippine montre aussi que l'autorité doit être partagée entre le centre et les unités locales afin d'atteindre les objectifs nationaux et répondre aux besoins locaux. Pendant la mise en œuvre, des ajustements doivent corriger les problèmes émergents et préalables.

Resumen

La descentralización es una de las reformas del sector salud más comunes que se inició en los paı́ses en desarrollo en los años 80 y 90. Si bien la descentralización es a menudo impulsada por motivos polı́ticos, puede mejorar significativamente el desempeño del sector salud. Sin embargo, la fase inicial de la experiencia filipina indicarı́a que la descentralización por sı́ sola no siempre mejora la eficiencia, la equidad y la eficacia del sector salud. Al contrario, puede exacerbar las inequidades, debilitar el compromiso local con los temas de salud prioritarios, y disminuir la eficiencia y la eficacia de la prestación de servicios al interrumpir la cadena de remisión. Dichos efectos constituyen una amenaza especialmente grave al acceso y a la prestación de los servicios de salud reproductiva, algunos de los cuales (la planificación familiar, por ejemplo) son controvertidos y por lo tanto susceptibles a presiones locales, mientras que otros (la atención obstétrica de urgencia, por ejemplo) requieren un sistema operativo y eficaz. Se debe tomar en cuenta el impacto de factores no relacionados con la salud tanto como otras reformas que afectan el acceso, el costo y la calidad de los servicios, incluyendo la salud reproductiva. La experiencia filipina demuestra además que se debe compartir la autoridad entre el centro y las unidades locales para lograr los objetivos de salud nacionales y responder a las necesidades de salud locales. Se precisa hacer ajustes durante la implementación para corregir los problemas emergentes y anteriores.

Key Words:

• decentralisation
• devolution
• reproductive health services
• health sector reforms
• Philippines

Decentralisation is one of the most common health sector reform interventions introduced in many developing countries during the 1980s and 1990s. Decentralisation is often politically driven, though the theoretical arguments advanced for decentralising health care include: (a) increasing local ownership and accountability; (b) improving community participation and responsiveness to local needs; (c) strengthening integration of services at the local level; (d) enhancing the streamlining of services; and (e) promoting innovation and experimentation.^{1 2}

Decentralisation is defined as the transfer of authority and responsibility for public functions from the central government to (a) peripheral departments within the same agency (deconcentration), (b) intermediate and local government (devolution), or (c) quasi-independent government organisations (delegation).¹ Depending on the types and scope of functions transferred, as well as the level or agency to which the functions are transferred, different political, fiscal and administrative arrangements develop. It is only recently that lessons from decentralisation in the health sector are emerging, particularly in terms of the effects on efficiency, equity and effectiveness. Much less is known, however, about the effects on reproductive health services.

The focus of this paper is on decentralisation of the devolution type that occurred in the Philippines almost a decade ago. There has been considerable debate in the literature as to whether a measure such as decentralisation that profoundly affects the health sector can be classified as a true reform if it is not introduced to address specific health sector issues. In the Philippines, the decision to devolve responsibility for the delivery, management and financing of health services to local government units did not explicitly consider the implications of devolution for the health system. Unfortunately, many reforms have been introduced in countries without sector-specific analysis prior to their launch,³ and this also occurred in the Philippines.

The Philippines undertook a radical programme of devolution in several sectors, including health, and its experience provides an important chance to understand the opportunities and challenges involved. The Philippines experience demonstrates that decentralisation profoundly affects and is affected by all aspects of health sector functioning. This paper examines issues relating to service delivery, health sector financing, institutional capacity, changed relationships between central and local levels, health personnel, quality of care, and representation at the local level that followed devolution. It assesses the implications of devolution for reproductive health outcomes, and identifies the features that made the implementation of devolution more successful in some local units than others. The Philippines experience clearly demonstrates the need for long–term country commitment when introducing reforms such as decentralisation, as well as the importance of maintaining a focus on the objectives of equity and effectiveness, in order to capture gains in health outcomes, including in reproductive health.

Background

The Philippines is an archipelago of over 7000 islands with a population of approximately 76 million people and a population growth rate of over 2%. It is a lower middle-income country with a GDP of US$1,050 per capita, with wide inter-regional variations in income. The literacy rate is over 95% for both men and women. It has undergone considerable urbanisation, with around 59% of the population now living in urban areas.⁴

Despite a strong tradition of universal public education and a democratic political system, socio-economic development in the Philippines has proceeded more slowly than in neighbouring countries of South-East Asia. Some explain these trends as partly due to the powerful influence of the Catholic Church (83% of Filipinos are Catholic). Church officials are strongly opposed to contraception and abortion and only tolerate “natural” family planning methods, which greatly reduces women's decision-making capacity over their fertility. Political commitment to addressing gender inequities has also been uneven, for example, even though more women than men hold college degrees, women's earnings are only 50% of men's.⁵

History of devolution

During the Marcos regime in the 1970s and early 1980s, the Philippines was highly centralised politically, though limited deconcentration was allowed. When democracy was restored in 1986, the new administration strongly believed that political decentralisation was key to re-democratisation. Initially, further deconcentration occurred, and by 1990, health budgets were released directly to the district level and district and provincial health officials were largely exercising administrative authority over health operations at their respective levels. However, the national administration remained committed to the principle of devolution. After a prolonged debate that lasted nearly five years, the Local Government Code (LGC) was passed in 1991, calling for the devolution of significant service delivery functions, responsibilities and financial resources to the country's 77 provinces, 60 autonomous cities, 1,548 municipalities and 42,000 barangays (villages).⁶

The rationale for devolution was threefold. First, the Philippines has substantial spatial variations in physical conditions, economic circumstances and social attributes. The LGC reasoned that some types of services could be better delivered by local authorities, who could take into account these differences and provide services that suited local needs and preferences better than the central government, which was predisposed to provide a uniform bundle of services throughout the country. Second, less national government intervention would make it possible for local residents to hold locally elected officials accountable for their actions. Third, a higher degree of local autonomy, and therefore local participation in collective decision-making, would help to reduce political alienation among residents and policymakers outside Metro Manila.⁷ In other words, decentralisation was expected to improve the efficiency, equity and effectiveness of the devolved sector. The specific sectors identified to undergo devolution were health, agriculture, social services, highway and public works maintenance and construction, and environmental protection. The LGC was particularly significant for the health sector, given that health services accounted for about 65% of the total cost of devolved national government functions.

Even though devolution received strong support at the legislative level, there was considerable resistance from the Department of Health (DOH), which had not participated in the discussions until very late in the process. The resistance stemmed both from a fear of losing control over the health sector and the likely reduction in the terms of the employment contracts of central health workers.⁸ Devolution meant the transfer of authority from career civil servants at the regional, provincial and district health offices to elected officials in provincial, city and municipal governments. Many DOH officials believed that the deconcentration that had already occurred was sufficient to secure the advantages of decentralisation. There were also concerns about the lack of institutional capacity at local government level to assume responsibility over the huge financial, capital and physical resources of the health sector. However, the DOH did not voice its concerns during the public hearings conducted by Congress as part of the legislative process and as a result lost an important opportunity to shape the process (Capul R. Personal communication, 2002), which was set in motion in early 1992 and completed over an 18-month period.

Delivery of health services

The organisation of the public health system was dramatically affected by decentralisation. Prior to devolution, the multi-tiered public health system was funded and managed by the DOH, and tertiary health care facilities were located at the national and regional/provincial levels. The primary health care system comprised rural health units which provided maternal and child health care, general outpatient and dental care, family planning and nutrition advice, control of specific diseases, health education and environmental sanitation. Each rural health unit was responsible for 3–4 barangay health stations set up to serve surrounding villages, and each barangay health station was staffed by a trained midwife and several locally recruited volunteer health workers. The district level provided the primary referral infrastructure, while secondary referral facilities were located at the provincial and city levels.⁹ District health teams provided regular supervision to rural health units and barangay health stations, and a national training plan provided in-service training to health staff at all levels. There was no comprehensive reproductive health programme in place and individual services were organised along vertical lines, such as family planning and maternal and child health.

Under the LGC, in less than two years approximately 95% of its facilities, 60% of its personnel and 45% of its budget were transferred from the DOH to local government. Local government units consisted of provinces, cities and municipalities; the new division of responsibilities between them and the central DOH is summarised in Table 1.

Table 1 Division of health sector responsibilities following devolution

Government level	Responsibility
Central and Regional DOH	– Health policy setting
	– Regulation and quality assurance
	– Training and technical supervision
	– Retained hospitals (tertiary referral care)
	– Funding and technical assistance for national disease control and health service programmes associated with international agreements
	– Monitoring local government performance
Provinces	– Provincial and district hospital services (primary and secondary referral care)
Cities	– Hospitals in highly urbanised areas, excluding National Capital Region (secondary referral care)
Municipalities	– Primary health care functions, including delivery of nationally retained disease control and health service programmes
	– Supervision of barangay health stations
Barangays	– Outreach functions, including services provided at barangay health stations

A major unintended consequence of devolution was the disruption of the technical linkages between the rural health units at the municipal level and the primary and secondary referral facilities at the district and provincial levels. The delivery of services such as antenatal, obstetric and post-partum care suffered, since their effectiveness depended on a functioning referral system. In addition, centrally-run health programmes had been planned and financed by the DOH without taking into account the changed relationship between the central and lower levels of the health system. Under devolution, these health programmes now had to be delivered through devolved facilities and personnel that were under the control of local government units. For example, the DOH continued to distribute all contraceptives (pills, injectables, intra-uterine devices, and condoms), which were almost totally donor-funded, from central to local level. Yet the delivery of services providing contraceptives had shifted to municipal government (for clinic-based and community-based methods) and provincial government (for hospital-based methods). If a local government unit decided for political reasons (e.g. due to local Catholic Church pressure) not to provide contraceptive services, women in that locale were effectively denied access to methods. Disruptions could also occur if the municipal government disagreed with the provincial government.

The absence of powerful central mechanisms to influence local government to invest in priority programmes was also a major handicap for service delivery at the local level. “Comprehensive Health Care Agreements” were intended to provide an opportunity for the DOH and local government units to negotiate priority health investments on an annual basis. However, these agreements were rendered ineffective because they did not include incentives or punitive measures to ensure local government complied with the agreements. For example, when some local government units succumbed to local pressure and stopped providing contraceptive services, the centre was unable to compel them to do so, even though these had been identified as priority services under the Health Care Agreement. Another major flaw in the Comprehensive Health Care Agreements was that they were between the province and the DOH, yet the producer of the deliverables was the municipality. Provinces were expected to negotiate performance agreements with their municipalities, but this often did not happen. Moreover, though the Philippines endorsed the ICPD agenda in 1994, a comprehensive women's health and development policy to provide direction to decentralised units was not adopted until 1998.

Financing of health services

Historically, spending on health care has been low in the Philippines, both in absolute terms as well as in comparison with countries of similar levels of income. In 1991, national health expenditures were about 2.7% of GNP from all public and private sources, and though national health expenditure increased significantly in the mid-1990s, they were still low at about 3.5% of total GNP in 1998. Though local governments as a whole increased their health spending over the five-year period following devolution (when both national and local government contributions were considered), government spending in 1998 still accounted for only about 40% of total health expenditure. In other words, private spending for health care constituted the majority of health care spending. Analysis of health expenditure patterns in the Philippines revealed the following:

• government spending on health had a strong bias towards spending on personal curative health care services rather than public health care services;

• private spending for health care was used mainly to buy curative health care services;

• social insurance covered only a small part of the population and provided limited benefits; and

• private insurance was expensive and so covered only a small part of the population, mainly through health maintenance organisations.^{8 10}

This bias toward curative health investments, which is observed in both public and private expenditure patterns in the Philippines both before and after devolution, undermines reproductive health services that are largely preventive in nature. Further, global evidence indicates that individuals make out-of-pocket payments mainly for curative, not preventive, care. It is therefore the responsibility of governments to ensure pro-preventive care spending of public monies. Unfortunately, this did not happen in the Philippines. Also, despite the reorganisation of the social insurance programme in 1995 to include insurance for the indigent population, insurance coverage of the poor for basic health care was extremely low.

Devolution resulted in distortions of public financing at the local level because the resource allocation formula only considered the population size and land area of local government units. As a result, poorer local governments were disadvantaged due to their limited ability to generate revenues at the local level. Also, the cost of devolved functions was not taken into account when calculating central allocations to local governments.⁹ Such an allocation formula meant that provincial and municipal administrations, to which much larger numbers of facilities and staff were devolved, received lower allocations than cities and barangays, which bore a smaller share of the burden of devolution. It has been argued that post-devolution allocations of funds should not be judged based on pre-devolution patterns of spending, since there is no evidence to show that pre-devolution allocations were optimal. Even so, it is clear that the revenue allocation formula was simplistic and did not attempt to optimise public health spending in the devolved setting. In addition, since the central allocations were largely not earmarked, there was considerable discretion in a local government unit's ability to redirect resources, either towards or away from the health sector. Moreover, when approved budgets at the national and local level did not complement each other for services that required co-financing between local and national governments, disruptions in service delivery occurred. This was because local government units adopt their local budgets, including health budgets, in October of each year, while the national government budget, including for the DOH, is normally approved no earlier than December of each year.

There were several adverse implications for the financing of reproductive health services, which were either exacerbated by devolution or not addressed at all during the decentralisation process. First, a study done on decentralisation and local government spending showed that local government units with higher percentages of women of reproductive age were associated with lower levels of per capita funding of health and family planning. This may have been due to their having a perverse incentive to substitute central level funding that is provided in a vertical manner for maternal health care and family planning in place of their own expenditure on these activities.⁷ The lack of coordination between national government and local government spending for health has meant under-spending on some priority health services essential to women's health. Second, with the increasing feminisation of poverty, greater reliance of the health care system on out-of-pocket payments, which are regressive in nature and reduce access of the poor to health services, disproportionately punishes women. Third, the national health insurance benefits package discriminates against the reproductive health needs of women since it does not cover basic reproductive health care, such as normal deliveries. Furthermore, many women work in the informal sector and do not have access even to this limited form of insurance. All this indicates that devolution was not accompanied by supportive policies, such as legislated cost-sharing schemes between central and local government, development of regulatory and financing policies for moderating reliance on out-of-pocket payments, and development of health benefit schemes protecting the vulnerable through risk-pooling mechanisms.

Institutional capacity

A major obstacle to the successful implementation of devolution was the limited institutional capacity at both the local and central levels to fulfil their obligations following devolution. The rapid rate and scope of devolution in the Philippines exacerbated this situation. Also, all local governments were not uniformly situated in terms of their technical and managerial capacity both to effectively deliver services and manage the funding of health care in their jurisdictions. As a result, the larger and economically better-off local governments were better able to cope with the increased demands imposed by devolution, while poorer local governments with low institutional capacity were overwhelmed by the additional demands that devolution imposed on them. Similarly, central and regional health departments were not re-oriented to focus on their devolved responsibilities of policy-making, standard-setting and providing the necessary technical supervision, training and other support services to local government.⁹ This lack of capacity-building prior to devolution not only created differing levels of health service delivery between different local government units, adversely affecting health equity, but also reduced the effectiveness of the stewardship role of the DOH during this turbulent period. Information from studies of public health programmes suggests that the fragmentation of local health networks and difficulties in managing centrally-run public health programmes might have rendered funds for public health less effective. For example, a project targeted at promoting women's health and safe motherhood was able to spend less than a third of its funds during the period covering two-thirds of its project life.¹⁰

Health personnel issues

The Philippines health workforce, both public and private, is composed predominantly of women, with the exception of physicians. Prior to devolution, the remuneration of public health workers was generally higher than their counterparts in the private sector and included higher benefits and incentives.⁸ Following devolution, public health workers were grouped into those working under the DOH and those devolved to the local government units. The LGC required local governments to retain all devolved personnel and adhere to a unified civil servant pay scale, though the revenue allocation formula from the centre to local units did not take into account the actual facility and personnel costs imposed on local government units. To allay the fears of health workers, a Magna Carta for Health Care Workers, legislated in 1992, provided increased salary for rural health workers, but no corresponding budgetary allocation was made for local administrations. Local administrations were unable to fulfil these financial obligations and, as a result, health workers in the devolved setting received as much as 40% lower benefits than those in the non-devolved setting.⁸ There was also a loss of a clear career path for health workers (since prior to devolution, a municipal health worker could follow a path that led to provincial, regional and even central positions). The loss of benefits and career path caused demoralisation among the devolved workers, which in turn adversely affected the quality and effectiveness of service delivery, including in the reproductive health services.

In addition, integration of services at the local level meant that frontline workers, mainly midwives, who earlier provided limited family planning and maternal and child health services, were now expected to provide a broader range of reproductive as well as other health services, such as malaria and tuberculosis care, thereby expanding their workload. Coupled with problems such as the non-availability of supplies and non-payment of travel allowances, their ability to meet the reproductive health needs of the population they served was strained.

Quality of health care

Quality of care was just beginning to receive attention as an issue in the Philippines during the early 1990s. Before devolution, the quality of reproductive health services suffered from a number of problems, including lack of integration of the constellation of services, difficulties in follow-up due to inaccessibility of health services and limited outreach to men and adolescents.¹¹ Conflicting technical protocols (e.g. for Pap smears) and the limited scope of quality assurance standards also reduced the effectiveness of these services. Following devolution, there were reports of further weakening of quality of care due to disruption of the referral chain, under-funding particularly of preventive care and priority programmes, low morale of the health force, chronic lack of equipment and drugs at the facility level and poor quality certification of health facilities in both public and private sectors. Seemingly small changes at the local level, such as cuts in travel allowances, which other local government unit employees did not receive, meant reduced supervision and affected the morale of barangay-level midwives.¹² Similarly, since provincial health offices focused on provincial hospitals and district teams no longer visited municipalities, municipal health workers got little help in maintaining the quality of services they provided.¹² In addition, focus group discussions conducted by the DOH showed that patient satisfaction was low due to unavailability of essential drugs (e.g. for reproductive tract infections), negative provider attitudes towards patients and lack of privacy at health facilities.

Local representation in a decentralised setting

Given the high level of devolution in the Philippines, local representation and decision-making provided both opportunities and challenges in the health sector. In cases where local government showed commitment to pursuing health objectives, considerable innovation and resourcefulness was demonstrated in improving health service delivery, financing and management.¹⁰ However, the large number of local government units (over 1,600 in number) made it much more labour-intensive to educate local leaders and officials and promote a commitment to reproductive health among them.

In addition, women's representation in government has always been low, with women comprising less than 10% of elected officials at the national level. Although women are better represented at lower levels of government, they rarely form more than 25% of elected officials. Moreover, though sectoral representation has been specified for women under decentralisation, no sectoral elections have been held.¹³ These factors may have contributed to women's health issues not always receiving the attention they deserve at the local level.

To encourage community participation in the health sector, local health boards were established at the local government unit level. Several local governments used this mechanism to successfully involve the community in local health matters. A study comparing local government units that had functioning health boards to those with non-functioning health boards found that there were more consultations with the community, more fundraising activities, additional health initiatives and higher per capita health expenditures in units with functioning health boards.¹⁴ Since non-governmental organisations (NGOs) often participate in these boards and women form a significant proportion of the leadership in NGOs, local health boards provided an important opportunity to increase the voice of women in local health decision-making. However, for various reasons, few local government units promoted community participation by establishing local health boards.

In this regard, it is also useful to consider initiatives in which non-governmental actors have been pro-active in successfully impacting on local government policies, budgets and strategies. One such example is in Davao City where Development of People's Foundation has conducted community-based training, advocacy and research in reproductive health and influenced local government policy both through continuous dialogue with the administration and by empowering the local populace to change their health conditions. Their work is part of a multisectoral approach adopted by civil society organisations in Davao City for monitoring the implementation of the Women's Development Code of Davao City. Such community-based schemes can go a long way towards improving local accountability and responsiveness.

The unintended consequences of devolution and its implications for reproductive health are summarised in Table 2.

Table 2 Reproductive health implications of devolution

Aspects of health system	Unintended consequences of devolution	Implications for reproductive health services
Delivery of services	– Fragmentation of referral care	– Safe motherhood services adversely affected
	– National government unable to influence local decision-making	– Provision of family planning services is a national priority but not implemented by some local governments
Financing of services	– Non-earmarked transfer of funds	– Some local governments did not invest in priority health areas such as family planning
		– Resource allocation not based on revenue- generating capacity at local level	– Income inequities exacerbated–access to reproductive health services of those in greatest need suffered
	– Curative care bias of government spending not addressed	– Under-funding of preventive reproductive health care
Institutional capacity	– Reorganisation of roles and responsibilities–central and local	– Centre did not provide vision for comprehensive reproductive care to local levels
		– Rapid nature and scope of devolution exacerbated institutional constraints at local level	– Local level unable to effectively manage reproductive health services
Health personnel	– Low morale of health workers	– Quality of reproductive care adversely affected
		– Increase in workload of front-line workers	– Midwives unable to meet the reproductive health care needs of the population they serve
Quality of care	– Loss of integrity of referral care; under-funding of preventive care; low personnel morale; increase in workload of midwives	– Negative implications for quality of care
		– Cuts in travel for training	– Reproductive health skills eroded
	– Supervision by district teams discontinued	– No technical support or quality guidance for devolved workers
Local representation	– Local level susceptible to strong conservative pressures	– Traditionally controversial areas such as family planning and STDs targeted for cuts
		– Local representation of women in decision-making capacities low	– Limited voice for women in decisions taken on reproductive health services
	– Large number of local governments units responsible for service delivery	– Enormous efforts needed to build support for reproductive health care services

Adapting to change

Five years after the implementation of devolution, gains in health outcomes at the national level remained unexceptional and in many cases had stagnated. Infant mortality rates stayed at around 35 per 1000 live births and immunisation rates remained static at around 70%. While the burden of childhood and infectious diseases remained high, the incidence of non-communicable and chronic diseases increased. Health gains were not distributed evenly either, and large differentials in patterns of mortality and morbidity existed between provinces as well as between urban and rural residents. Wide differentials also prevailed between socio-economic groups, with the health status of the poor and the less educated comparing unfavourably with that of the non-poor and better educated.¹⁰

The picture was equally disappointing with regard to reproductive health improvements in this period. The use of modern contraceptives only increased from 25% to 28%, leaving an estimated unmet need for contraception of about 20%. Maternal mortality ratios continued at around 200 per 100,000 live births and skilled attendance at birth increased by a mere 3% to 56%. Although there was a reduction in anaemia among pregnant women from 48% to 40%, tetanus toxoid immunisation rates for pregnant women dropped from 42% to 38%.^{15 16} Abortion remains illegal in the Philippines, except when necessary to save a pregnant woman's life and it is estimated that about 80,000 women are hospitalised for complications of abortions annually.¹⁷

In 1998, the DOH conducted a detailed health sector analysis to look at both the unfinished agenda of devolution as well as pre-devolution issues in the health sector that had not been tackled by devolution.¹⁰ In particular, lessons emerging from innovative and good practices of local government units that had more successfully adapted to devolution were closely examined. Based on this analysis and extensive consultation with stakeholders, the Government embarked on a second phase of reforms, to be implemented in the period 1999–2004. The following adjustments are being introduced to address some of the unintended negative consequences of devolution:

• the DOH is being re-oriented and strengthened at both the central and regional levels to better assume its stewardship role;

• the DOH is providing technical assistance and funds to improve institutional capacity at local level to perform devolved health functions;

• the revenue allocation formula is being adjusted to accommodate the differential share of costs of devolved functions assumed by different local government units;

• incentives in the form of matching grants to local governments are being put in place to promote priority health programmes;

• local government units are being interlinked with central financial and technical support to form local health networks to reverse the fragmentation of services; and

• information on how health boards can function effectively is being shared among local government units to encourage more of them to involve local communities in health care decision-making.

Reformers are also looking at a number of issues beyond devolution that have adversely affected the performance of the health sector, including reforming the financing of health services particularly through expanding the social insurance programme and increasing the coverage of indigents under the programme; improving the quality of health care by strengthening accreditation and certification mechanisms as well as building community demand for higher quality services¹⁸; and rationalising hospital management, financing and distribution to better serve the needs of the population.

Conclusions

It is well recognised today that health outcomes are affected by a number of non-health sector factors, and these factors may remain unchanged by devolution. In the Philippines, the conservative nature of church leadership is believed to have affected gender relationships, which has in turn reduced access to the full range of reproductive health services. Political leadership has also fluctuated in its commitment to reproductive health goals; consequently, reproductive health has not been a consistent government priority. These factors have contributed to the limited improvements in women's health status both prior to and following devolution, and unless they are addressed, reforming the health sector will not result in better reproductive health outcomes.

Similarly, decentralisation is just one of many health sector reforms, and both affects and is affected by other elements of health sector functioning. The Philippines experience demonstrates that even though the objectives of devolving the health sector were to improve the efficiency, effectiveness and equity within the sector, many other factors need to be in place to actually achieve these objectives.

Regardless of political, economic and social pressures, reforms should not be initiated without a specific health agenda and rigorous analytical work is needed prior to embarking on reforms. Such an analysis, in the case of devolution, would have helped to determine the processes and functions that should have been decentralised and those that should have been centralised to improve the effectiveness of the health system. In addition, reforms should be carefully monitored in the implementation phase to ensure that the intervention improves efficiency, effectiveness and equity.

Decentralisation should not be treated as an all-or-nothing phenomenon. Instead it should be seen as a means to balance authority and responsibility between the central and local levels to attain both gains in national health priorities as well as responsiveness to local health needs. For example, the neglect of priority services such as family planning, due to ideological differences at the local government level, might have been avoided with better priority setting and sharing of authority between the central and local levels.

Decentralisation in the health sector is particularly sensitive to the degree of devolution that occurs. Extreme devolution (eg. to over 1,600 local governments) can disrupt the integrity of the referral chain that is crucial for the delivery of services such as emergency obstetric care and reduce economies of scale by fragmenting the health system.

All stakeholders affected by the reform process have to be involved in preparatory discussions to help foster ownership of the process and common understanding on the expected outcomes. For example, in the Philippines, even though there was a national level debate at the legislative level on devolution, the dialogue did not involve health workers or percolate to the local level until devolution was already in progress. As a result, there was considerable resentment within the health force and confusion about local government roles and responsibilities during the initial years. This contributed to deterioration in the quality of services and reduced the effectiveness of health interventions.

Capacity constraints often cause serious bottlenecks in service delivery and can threaten the entire decentralisation process. To avoid such a situation, decentralisation should be introduced in a phased manner, and considerable effort needs to be directed at building institutional capacity at both the central and local levels. It is important to realise that reforming the health sector takes time and commitment, and governments that embark on health reforms should be willing to continue with the process and make adjustments based on lessons emerging from their own experience with reform.

Transfer of funding to the local level should be carefully crafted to balance local fiscal autonomy with promotion of more equitable distribution of resources across the country. Using formulae that ignore the cost of devolved functions as well as the revenue-generating capacity of different local government units can only serve to exacerbate inequities in both access and availability of health care delivery.

Decentralisation, like all other health reform measures, is only a means to an end, not an end in itself. Health reformers should be fully aware that key elements of enhanced health sector performance such as quality improvements and integration of services are not automatically addressed by reform measures but need additional measures to be put in place to achieve their objectives.

The Philippines experience shows that delivery, quality and financing of reproductive health services are profoundly affected by interventions such as devolution. In fact, the negative consequences of devolution for reproductive health care were not a direct result of devolution per se, but rather a failure of policy-makers and implementers to prepare adequately for devolution. First, the national government should have defined a core package of reproductive health services to be made universally available and accessible, irrespective of whether the system was decentralised. The absence of such a nationally mandated package allowed local government to ignore reproductive health services if they chose to, exacerbating an already fragile situation. Second, a number of instruments were available to the DOH to make delivering such a package a reality at the local level, even under a devolved set-up, which the DOH did not use during the initial phase of devolution. For example, it could have established cost-sharing arrangements, created influential training and technical assistance mechanisms, established powerful regulatory mechanisms like accreditation, rolled out new health benefit products of the national health insurance programme, and designed and implemented public investment projects focusing on key missing capacities or weak functions of the health system. Third, many opportunities were available to the DOH for establishing new directions in reproductive health care such as inter-local cooperation, coordination between retained facilities and devolved local operations and coordination with the private sector, but such opportunities were not exploited.

By analysing its early experience with decentralisation and refining not only the devolution process but also introducing financing and organisational reforms to address deeply entrenched problems in health sector performance, the Philippines is taking remedial actions to achieve improvements in health over the long-term. However, in relation to reproductive health, sustained political commitment and systematic strengthening of institutional capacity at all levels is essential to translate reform measures into actual improvements in access to, availability and affordability of comprehensive reproductive health services.

Figure 1 Nurse providing antenatal care, Bangkok, 2002

Acknowledgements

My thanks to Mr Mario Taguiwalo, former Under-Secretary of Health, Philippines, and Ms Adrienne Germain, President, International Women's Health Coalition, USA, who provided very useful comments on the draft paper.