Saturday, April 21, 2018
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Passion For Reason

PhilHealth exposes criminal syndicate

I first worked with Dr. Eduardo (Dodo) Banzon when I was writing on the human right to health for an international publication. When we discussed health issues in the Philippines, I was most impressed that he spoke not just as a technically trained doctor but also as an activist immersed in the social context of scientific issues, indeed even the nitty-gritty of legal debates, from the ASIN Law (stands for Act for Salt Iodization Nationwide—did you even know that?) to maternal mortality. Dodo is a UP-educated doctor who took advanced studies at the London School of Economics. I was thus happy to hear that he joined government as PhilHealth president late last year, and not surprised at all that he had to give up a cushy World Bank appointment in order to do that.

Banzon took over as PhilHealth president in October last year, and immediately got together a new management team. By late November, his new team detected a scam that ripped off premium payments for PhilHealth, and by Dec. 7, 2011, he had created an investigation panel, designating a chief anti-fraud surveillance officer to report directly to him and the PhilHealth governing board. They have since called in the National Bureau of Investigation and the Anti-Money Laundering Council to help in the investigation. Banzon has declared “zero-tolerance for fraud.”

In November 2011, the PhilHealth Treasury department detected a discrepancy between the reported collections of one of its accredited banks and the actual cash supposed to have been remitted to PhilHealth. They discovered that employees of a multinational firm paid their PhilHealth premiums, but their check payments were never deposited to the PhilHealth bank account. The checks were diverted to the Tanauan branch of one of the nation’s largest commercial banks and were thereafter laundered through several other accounts.


The scam began around 2009 and stopped significantly when Banzon took over, and the amount siphoned off stands at P140 million and counting. It turns out that the PhilHealth database had been manipulated to conceal the non-payments. The first order of the day was thus to secure the integrity of PhilHealth’s computer database and to conduct internal investigations as swiftly as the law would allow. For the sake of transparency and due process, all fact-finding interviews were video-taped.

This is only the first step: running after the syndicate of insiders and outsiders who conspire to scam the public. The second is to plug these loopholes altogether to stop the hemorrhage of public funds in the future.

I have read recent complaints that PhilHealth is increasing the premiums to be collected from OFWs and that it offers redundant coverage for OFWs lucky enough to get jobs abroad that already offer full medical protection. If PhilHealth succeeds in its hunt for this syndicate and in stamping out corruption, it should be able to perform its mission without hiking OFW premiums. On the other hand, redundancy of coverage is no excuse to be released completely from PhilHealth, and since universal health to be viable needs to be leveraged as broadly as possible across the entire spectrum, premiums can be adjusted to show a nuanced recognition that some OFWs are differently situated.

The ultimate goal is of course universal health coverage for Filipinos, employed or unemployed, rich or poor. The first time I experienced what it means to have full health coverage was when I was writing my doctoral dissertation in the United States, surviving on a grad student’s tight budget but fully covered by the school’s health plan. Until then, I had always assumed that each trip to the doctor or the pharmacy entailed out-of-pocket expenses. When my wife Beth gave birth at the Brigham and Women’s Hospital in Boston, I braced myself for the moment I received the hospital bill. I reserved at least two hours to go over the bill when we checked out. To my amazement, it took barely two minutes and I just had to sign some documents. I learned that with full health coverage, one doesn’t have to be rich in order to have peace of mind that his family’s health needs will be provided for.

Banzon’s quick and proactive response should be gratifying to those of us (myself included) who are subject to regular PhilHealth deductions. Public insurance and pension funds are the most vulnerable parts of the public coffers. Why? Because they are akin to “victimless crimes” where it is difficult to pinpoint a “sufficiently individuated” victim, a casualty who visibly suffers a loss. The strange logic is that because we are all victims, none of us is really hurt. The actual loss is theoretically apportioned over several million subscribers, and the “injury in fact” is miniscule.

Yet the real price is paid by those who are unable to keep up their premiums while P140 million is pocketed by the corrupt, those whose premiums are increased to make up for that loss, and finally by each PhilHealth member who bears the cost of monitoring and regulation, whose premiums, instead of paying doctors and nurses, end up paying lawyers and police investigators.

That is why, in the absence of a visible victim, the real guardian of our premiums at PhilHealth are people who deserve our trust. Since Edsa 1, the thrust of anti-corruption has been to strengthen our institutions and our laws—and rightly so. But we have been at it for more than 25 years already, and perhaps it is time to return to the old wisdom that institutions are run by people, as well as to entrust the public power only to people who have shown themselves worthy of our trust. Kudos to Banzon and his team. I hope they can bring us closer to the dream of universal health coverage for every Filipino family.

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