By NIEL LIM
INCITEGov
The Philippine Health Insurance Corp. (PhilHealth) has missed the Dec 2010 target mandated by law for it to provide universal health coverage to Filipinos, as health experts say the agency is poorly managed and consequently unable to deliver quality health care to those who need it most.
Former and current officials said the agency has been hobbled by a “conservative mindset” as well as a “sluggish” executive committee, that the agency has fallen short of its mandate to “provide all Filipinos with the mechanism to gain financial access to quality health care services within the first 15 years of its implementation.”
“Dec. 31, 2010 was the milestone set by law that we should have universal health care,” said former health secretary Jaime Galvez Tan. “It has failed and (PhilHealth officials) even twisted the definition. They said that 85 percent is already universal when the law says ‘all Filipinos.’”
There is still some confusion as to what is meant by “all Filipinos.” Technically, it should mean the entire population of 94 million. But the implementing rules and regulations of the law creating PhilHealth lists those who can be members—only those of legal age or 18 years and older, employed, self-employed, overseas workers, retirees.
Eligible for membership are those who can pay the P200 monthly contributions, in exchange for which they get hospitalization assistance such as subsidy for room and board, professional fees, medicines and select outpatient procedures.
The IRR also allows members to declare spouses, disabled children, and parents as dependents or beneficiaries by association. This makes it even harder to determine the exact number of those covered.
Former health undersecretary Alex Padilla, who was appointed by President Aquino to be PhilHealth executive vice president and chief operating officer last year, conceded that the inaccurate number of members is a big problem for the agency. “We’re after universal health care, but if you look at the figures, we can’t even tell how many are actually enrolled,” he said.
Confusing numbers
In 2004, PhilHealth claimed 84 percent coverage. In February 2010, Tan said, it claimed having achieved universal coverage with 86 percent. As of 2009, PhilHealth reported having more than 20 million members.
But PhilHealth figures don’t match information on the ground. Results of the 2008 National Demographic Health Survey showed that only 38 percent of respondents were aware of at least one household member being enrolled in PhilHealth. A 2010 Social Weather Station survey on health care services and financing showed only 36 percent of respondents having PhilHealth coverage.
To make matters worse, the national government gave out PhilHealth cards with short-term coverage or good only for one year in 2004, the year Gloria Macapagal Arroyo ran for president. This has added to the confusion on the exact number of members, since many of those who received the cards were not able to pay the insurance premium after the government subsidy expired.
Local government officials have followed Arroyo’s lead and have taken to distributing PhilHealth cards to their constituents during election campaigns or special occasions.
But the disputed figures are just one of PhilHealth’s many problems. PhilHealth is also suffering from an identity crisis, its critics said, with the board treating the agency like a private health insurance company stingy in giving out benefits, rather than as a government-run social health insurance upholding citizen’s right to health and health care.
Last year, President Aquino gave PhilHealth a new three-year timetable to institute reforms, and set another deadline—2016 or five more years—to ensure universal health coverage.
Informal sector
Padilla said PhilHealth is trying to increase enrollment in the program, but is reluctant to get more members from the informal sector. The informal sector refers to persons who are neither indigent nor employed by an agency that automatically deducts the premium from their income. They include a wide range of income earners from the fishball vendor to the practicing doctor or lawyer.
Padilla laments that the agency considers the informal sector as the “biggest bleeder” because, unlike the indigent, they know more about PhilHealth benefits and are inclined to take full advantage of it.
“Usually, the informal sector are your entrepreneurs, they are your professionals. In short, they are usually the ones in the upper levels of the social class who also know more about the benefits,” he said.
A former senior vice president of PhilHealth, who asked not to be named, validated Padilla’s observations. The source also said the PhilHealth board and president are afraid to spend the reserves, “that’s why it is often called an HMO (health maintenance organization) or commercial health insurance.”
The former PhilHealth official said board members’ conservatism prevents the agency from performing its functions as provided by law. “Many officers do not understand the concept of social health insurance and financial protection,” the source explained.
PhilHealth currently has at least P110 billion in reserves. The fund increases by some P3 billion every year since the agency’s premium collections are usually higher than its benefit spending. Padilla said, however, that last year “our benefit payments were higher than our collection.”
But a conservative mindset is apparently not the only problem with the PhilHealth board.
“The execom (executive committee) is not functioning. Most of the decisions of management have no real evidence, no consultation and are not transparent,” said the former PhilHealth official, who also claimed that decisions were usually made by those close to the president or whoever has the “loudest voice” in the meeting.
“One SVP is a loan shark charging three percent a month and the president would rather travel than stay in the office,” the source added.
Out-of-pocket burden
A study on health financing conducted by Tan, Ramon Paterno and Chrysanthus Herrera of the National Institute of Health of the University of the Philippines, Manila, noted that Filipinos’ out-of-pocket expense for health care has increased from 45 percent in 1998 to 54 percent in 2007.
PhilHealth’s share in the national health expenditure has increased at a very slow rate from about 4.5 percent in 1995 to 8.5 percent in 2007.
This means that for every P1,000 spent on health care, families shoulder more than half or P540, PhilHealth contributes only P85, while the rest comes from subsidies to hospitals by the national and local governments.
According to the 2010 World Health Statistics, the Philippines spends only about 3.3 percent of its gross domestic product or GDP on health, lower than the World Health Organization recommendation of at least 5 percent of GDP.
Padilla said the increased out-of-pocket expense might have even been caused by PhilHealth policies. “Whereas 15 years ago out-of-pocket payment was 41 percent, now it’s 54 percent. That shows that there has been more prejudice against the public despite the benefits being given by PhilHealth,” he said.
“The conclusion then is that PhilHealth has been giving the wrong kinds of benefits. It’s not hitting the people that it should hit. It’s not helping,” he said.
Health providers benefit
Padilla cited another study last year which showed that health-care providers have increased their charges despite a 35-percent increase in PhilHealth benefits. It was therefore the providers that profited from the increase in benefits by adding these to their cost, he said, adding that the providers got a 35-percent premium “for not doing anything else.”
PhilHealth statistics show that bulk of payments have remained constant over the years: Drugs and medicines take up a third of PhilHealth payments, followed by professional fees at 23 percent, x-ray, laboratory and other fees at 23 percent, room and board at 17 percent; operating room charges at 7 percent.
Notwithstanding the reserves, PhilHealth is not in the pink of health.
In 2009, PhilHealth vice president for actuary Nerissa Santiago said that unless the government pays its P19.2-billion debt to the agency or increases the contribution rate, PhilHealth will go bankrupt by 2016. Although PhilHealth premiums are supposed to be automatically withheld from the salaries of public employees, a number of government agencies failed to remit their collections to the agency.
PhilHealth increased its premium payments last year from P300 to P600 every quarter for new members who are earning P25,000 annually. This, despite the agency’s P110-billion reserve.
According to Padilla, some PhilHealth officials “who refuse to give up many of the reserves” only use the issue of bankruptcy to oppose proposals on increasing benefits.
“That’s really foolish,” he said. “PhilHealth is a very solid organization. It has good investments. In fact, it has too many good investments and it should really be spending more for benefits.”
Tan agrees. “PhilHealth will not be bankrupt,” he said, adding, “No social health insurance has ever been bankrupt because eventually people will bail it out.”
A study by Tan showed that based on PhilHealth’s records, sponsored members or indigents have “much lower utilization rates” compared with other member groups. Many members from the formal sector, or those whose premiums are automatically deducted from their monthly pay, are not aware of what they are entitled to.
This is in contrast to health care providers who enjoy PhilHealth benefits more than its members.
Padilla said PhilHealth policies in the past 15 years have favored health care providers over its beneficiaries and this has led to abuse.
“One good example was when PhilHealth increased the benefits for caesarian births—I think it was raised to P15,000 while normal deliveries were at a low P4,500—there was a sudden spike in caesarian deliveries. It went up by 40 percent, which was astronomically more than the usual and also puts mothers in peril,” he said.
Citing the case as proof that PhilHealth benefits could influence the behavior of health care providers, Padilla said PhilHealth should use its money to “change or mold the behavior patterns of doctors and of institutions,” instead of letting them abuse the system.
Padilla said the current fee-for-service policy, which pays the amount charged by the attending physician for services rendered, is biased in favor of specialists and does not really help PhilHealth achieve its goal of providing health care to the poorest of the poor.
“We have a bias towards specialists. But given the Philippine setting, where 60 percent or more are poor and where most of them are in the rural areas without specialists, you should reimburse the general practitioners even more and you should do it on a premium basis when they’re in the province,” he said.
He said data shows that the current bias toward specialists is even more evident in highly urbanized centers where doctors are reimbursed for treating patients who can afford to pay them. “Our focus should really be on the general family practitioners who are in the rural areas. You don’t need a specialist in those areas because most of the ailments of the poor are really ordinary,” he said.
Based on 2009 data, PhilHealth has more accredited medical specialists (11,909) than accredited general practitioners (11042). Medical specialists charge higher fees than general practitioners.
It has accredited nine out of 10 licensed hospitals, 59 percent of which are private and only 39 percent are public.
Professionals’ complaints
Doctors and hospitals, however, have their own complaints against PhilHealth. Aside from late reimbursements, they say some of their claims are rejected outright by the agency and these could no longer be collected from their patients.
PhilHealth reimburses medicines based on how much hospitals charge for these. While hospitals may not necessarily profit from the reimbursement of costlier medicines, Padilla said the premium given for branded medicines, which are often as effective as generic ones, unnecessarily increases the cost of health care.
“PhilHealth should look for the median price. If PhilHealth thinks that the price should only be P20, they should reimburse the same amount whether the hospital gives a branded or generic medicine,” he said, adding, “And that’s what we need, because hospitals will then veer away from the branded and go into generic and lower costs for the poor.”
“It’s unfortunate, but the hard truth is money talks when it comes to medical or health terms. Literally, you can talk about doctors giving services for free for the poor or trying to cure everyone, but PhilHealth has shown that wherever you put your money, that’s where they go, whether or not it is good or healthy for the public,” he said.