This paper deals with the two-year operations of village drug stores in five barangays in the province of Iloilo. The objective is the testing of the feasibility and effectiveness of health care financing schemes devised and formulated by communities themselves. Following the stages of operations research, (problem formulation, solution development, and solution validation), the establishment of the village drug stores was considered as the response to the community felt need of lack of drugs. In the establishment of the scheme, considerations were given to health problems, resources, manpower, health expenditures, and health seeking behavior. Results revealed that operations research could well be utilized in the extrication and solution of health problems. The study delineated the positive aspects of the village drug store program, the structures and relationships existing in the community that could form part of the program, and the needed modifications for the objectives set.