Don’t end PhilHealth, help improve its structure and services instead
This is in reference to the editorial “End PhilHealth monopoly” (9/23/22). While I concur that employees should have the option to choose their health insurance provider, it would be irresponsible to agree with all the statements of said article.
The country’s social health insurance (SHI) program is run by PhilHealth. The main characteristic that sets SHI apart from private health insurance (PHI) is that enrollment and premium payments are required. Benefits, which are frequently created based on legal obligation, are only available to citizens who paid the required premium. Thus, comparing PhilHealth to PHI and health maintenance organizations using the same criteria and business model is incorrect and unjust.
PhilHealth performs risk pooling and divides “income” between the wealthy and the less wealthy, the young and the old, and the healthy and the less healthy. In the first quarter of 2022, 23 percent of beneficiaries were deemed to be indigent, and 19 percent of the total benefit expense was paid to them. With the passage of the Universal Health Care (UHC) Act, PhilHealth is now tasked with providing financial risk protection for ALL Filipinos which can only be accomplished by raising the direct contributors’ premium rates. Therefore, the persistent calls for higher government subsidies for the poor and sponsored members are justified by the need to prevent significant and unfair premium increases.
Article continues after this advertisementAccording to estimates, PhilHealth’s support value (i.e., the total amount of reimbursements PhilHealth has paid out relative to a patient’s total hospitalization expenditures) was around 66 percent in 2019. This means that for every P100 in hospitalization costs, the corporation has to pay out roughly P66.
Despite this, it’s crucial to also recognize the fundamental flaws in PhilHealth’s provider payment systems. The benefit packages provided by PhilHealth are not only limited, but the payouts are occasionally insufficient to cover actual health care-related expenses and may not take into account patient-paid indirect health care expenditures.
Instead of advocating for the removal of PhilHealth’s monopsony power as the nation’s strategic purchaser, we should focus on the problems that impede PhilHealth from achieving its goals.
Article continues after this advertisementI humbly suggest that the government do the following: (1) employ more people with backgrounds in SHI and health economics than business; (2) improve IT infrastructure to automate the collection and processing of claims to shorten turnaround times; (3) make sure that benefit amounts accurately reflect the true average of health care costs, which may vary across regions; (4) raise sin taxes to fund government assistance for the poor and sponsored members; and (5) review and modify the Commission on Audit’s auditing procedures to ensure that they support the objectives of the various provider payment mechanisms required by law.
PhilHealth cannot be expected to compete with commercial insurance providers merely because their objectives and nature of business are different. PhilHealth must have the resources it needs to carry out its mandate if we want it to contribute to the solution to our long-standing problems in health.
REINER LORENZO J. TAMAYO
College of Public Health
UP Manila
rjtamayo@up.edu.ph
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