AIIB - Asian Infrastructure Investment Bank

04/11/2024 | Press release | Distributed by Public on 04/10/2024 20:38

Delivering Universal Health Coverage: Infrastructure Matters


Universal Health Coverage (UHC) is a crucial foundation for economic growth and social equality and is central to achieving Sustainable Development Goal 3 (SDG3).1 However, its implementation is often stymied by a web of intricate challenges.

Many health ecosystems in Asia remain highly constrained and struggle to meet people's needs and reduce health inequities. Health infrastructure in many parts of Asia is inadequate, below global averages and World Health Organization recommendations. This includes gaps in the supply of primary healthcare facilities, hospitals, medical and nursing colleges, especially in more remote areas; and the need to increase access to digital infrastructure, diagnostic facilities, pharmaceuticals and medical equipment. This issue is compounded by a shortage of healthcare workers and a lack of manufacturing capacity for essential medicines, vaccines and ancillary supplies. Disparities in service quality further affect the delivery of services, with urban centers often outpacing rural areas, an inequality exacerbated by logistics-inefficient supply chains limit the timely distribution of essential medical supplies.

To truly champion effective implementation of UHC, a blend of comprehensive strategies, astute investments and collaborative efforts across sectors is vital. Making progress towards UHC commitments requires addressing all determinants of health, which include social and environmental determinants, as well as the health system itself. Health is influenced by many infrastructure sectors, such as energy, transportation, water and sanitation infrastructure. By promoting cross-cutting interventions, we can shape and achieve optimal health outcomes.

The Philippines and Its Efforts to Achieve UHC

The Philippines serves as a compelling case study in the quest for UHC. With its diverse population, unique geographical considerations, and a healthcare landscape that reflects the opportunities and challenges of emerging economies in the region, the Philippines offers valuable lessons for its neighbors. From an infrastructure viewpoint, the accessibility of quality healthcare services remains a critical challenge, characterized by geographic and economic disparities.

Life expectancy in the Philippines has witnessed a commendable rise since the 1980s, but recent years have seen a pause in this momentum.2 Child health indicators, including neonatal and infant mortality rates, show a slow but steady decline. However, maternal mortality displayed a concerning uptick in 2020,3 potentially linked to the disruptions caused by the COVID-19 pandemic. On the infectious disease front, while overall control remains firm, there are alarming regressions like the re-emergence of tuberculosis in 20213 and polio in 2019.4 Women's health, especially concerning maternal mortality and contraceptive utilization, calls for intensified focus, as the adolescent fertility rate remains considerably high. Heart disease, diabetes, and cancer are increasingly becoming the leading causes of mortality and morbidity, signaling a shift from infectious diseases and posing new challenges for the healthcare system. Another health indicator of concern is stunted child growth and development, "which are result of poor maternal health and nutrition, inadequate infant and young child feeding practices, and repeated infections interacting with a variety of other factors over a sustained period."5 The Philippines records higher rates of child stunting than neighboring ASEAN countries.6 The country is also prone to natural disasters such as typhoons, earthquakes, and volcanic eruptions, which also strain its healthcare infrastructure. The COVID-19 pandemic further exposed the vulnerabilities women face, both in terms of limited access to health services, including reproductive health, and gender-specific violence.

In 2019, the Philippines enacted the Universal Health Care Act (2019 Act), aiming to provide all Filipinos with access to affordable, high-quality medical care. The 2019 Act establishes a framework that facilitates healthcare services from preventive care to palliative treatment. While the law covers a myriad of aspects, including insurance, primary care and pharmaceuticals, one crucial component relates directly to healthcare infrastructure. Specifically, Section 11(f) of the UHC statute earmarks a segment of its surplus revenues, which exceed the current year's operational expenses, as reserve funds dedicated to infrastructure development. This provision signifies the nation's commitment to strengthening the foundation upon which healthcare delivery stands.

However, despite the significant strides the Philippines has already made towards UHC, its health sector still grapples with funding constraints, inconsistent service quality, and inefficiencies in system management.

Supporting Infrastructure Across the Health Value Chain

Recognizing the critical role of financial backing in bolstering healthcare infrastructures, the Asian Infrastructure Investment Bank (AIIB) collaborated with the Asian Development Bank to co-finance the Build Universal Health Care Program in the Philippines. It aims to strengthen the country's public health system following the pandemic and enhance its readiness and adaptability to unforeseen health emergencies, taking into account gender-specific health issues and climate change on health.

Since its establishment in 2016, AIIB has supported infrastructure projects with major public health benefits. Working with partners, AIIB has financed water and sanitation systems (e.g., in Uzbekistan, Bangladesh, Egypt and Pakistan), waste management infrastructure (e.g., in India and Bangladesh), and energy (e.g., AIIB energy projects in various Members), in addition to health infrastructure projects (e.g., in Indonesia and Cambodia). In response to the COVID-19 pandemic, AIIB established the COVID-19 Crisis Recovery Facility which included a significant focus on health, and later in 2021, created the Social Infrastructure Department.

In developing economies like the Philippines, there are areas where AIIB and other international development organizations can make a meaningful difference by helping to close the financing gap for health infrastructure. For example, the number of hospital beds per 1,000 population in the Philippines is relatively low, standing at 0.89 at the national level,7 far below the OECD average of 4.6. While the World Health Organization does not have a set standard for this indicator, increasing this number to 1.5 nationally would bring this indicator more in line with regional peers.8 Based on estimates from construction costs of several general hospitals in Manila, addressing this gap could amount to approximately USD20 billion. However, this investment would greatly contribute to the effective implementation of the UHC objectives in the country as well as strengthen its capacity to respond to unexpected challenges such as natural disasters and future pandemics.

Inequitable access and disparities between urban and rural areas continue to be a central concern. Metro Manila, which is the national capital region and largest metropolitan area in the Philippines, has the greatest density of hospitals, while more minor clusters appear in smaller-but still very urban-cities like Cebu, Iloilo, and Davao. In contrast, provinces like Palawan, Agusan del Sur, Surigao del Sur, and coastal municipalities of Cagayan, Isabela, and Aurora have a relative dearth of hospital facilities.9 Several rural areas have relatively high population density (~100 to 300 people/km2) yet have only one or two-if any-hospitals, demonstrating the serious limitations for healthcare accessibility in rural Philippines. Given the rising cost of providing health care and competing fiscal priorities, financing support from multilateral actors and the private sector is critical for the provision of health services for all to promote healthy living, prevent illness, and treat sickness and disease.

In addition to the relative paucity of facilities themselves, the doctor-to-patient ratio is much lower in rural areas10 compared to urban. "Brain drain", where qualified healthcare workers leave the country for better career prospects abroad, exacerbates the existing gaps in healthcare provision. In 2018, nearly 20,000 Filipino nurses sought employment overseas.11 While impossible to eliminate, losses due to brain drain could be addressed by creating opportunities for job advancement through the establishment of innovation clusters. Additionally, the pool of skilled healthcare workers in the Philippines could be increased by the establishment of medical colleges and training centers, cross-cutting with existing medical schools.

Outside of healthcare facilities and human resources, investing in medical production facilities could support national objectives like lowering individual healthcare costs while also enhancing the Philippines' ability to withstand climate-related challenges by ensuring consistent availability of crucial medical supplies. Healthcare supply chains can also be bolstered; presently, there are limited facilities for the manufacture and distribution of essential medications in the Philippines. Constructing centralized medical warehousing facilities in key locations like Manila, Cebu, or Davao can act as hubs to efficiently distribute medical supplies across the archipelago through regional distribution centers.

AIIB recognizes that health, infrastructure and sustainable economic development are interconnected. Economic activity and development depend on healthy people who in turn have higher rates of labor force participation and productivity. Well-designed infrastructure, including health infrastructure, underpins development, healthy populations and wellness, and is critical to building resilience to shocks such as pandemics and climate change. Thus, AIIB is committed to helping its Members achieve their UHC objectives for a healthier, and more equitable future. Through continued efforts from national governments and purposeful support from AIIB and other development partners, the goal is to work toward the establishment of high-functioning healthcare systems that serve all equitably and efficiently.

8 Hospital beds per 1000 for Malaysia: 1.9 (2017), Singapore: 2.5 (2017), Thailand: 2.1 (2010), Vietnam: 2.6 (2014). Sourced from The World Bank Open Data, most recent year of data used.