Perennial PhilHealth reimbursement woes call for review of its financial capacity

Published November 8, 2021, 12:12 AM

by Manila Bulletin

As the overall nationwide outlook on COVID-19 continues to improve, it is time to pay attention anew to the call of hospitals for decisive action by the Philippine Health Insurance Corporation (PhilHealth) on the long-delayed reimbursement of their claims. 

Last Nov. 3, only 1,591 new cases were logged, the lowest since February.  To their credit, the hospitals have gone on a higher profile in bringing their case to the public only after coping with the peak demand for critical treatment of COVID patients during the upsurge triggered by the deadly Delta variant.  

Apparently weary of previously unmet demands, some hospital owners declared that they are now considering disengaging themselves from PhilHealth.  This scenario would be clearly disadvantageous to the general public whose health needs the government has vowed to safeguard through the enactment of an expanded Universal Health Care Act (UHC).  According to the UHC’s implementing rules and regulations, most of the expanded benefits were required to have been put in place two years after its enactment, or since February 2021 — but these have been stalled by the government’s preoccupation with COVID containment.

Recall that aside from private hospitals, health frontliners also expressed dismay at the long-delayed payment of their hazard pay and increased allowances under the Bayanihan laws.  It was not until they took to the streets to air their demands that concrete action was taken by the authorities.

According to the Private Hospitals Association of the Philippines Inc. (PHAPI), its member-hospitals that are planning to cut ties with PhilHealth are from Metro Manila, Iloilo, Cagayan Valley and General Santos City.  In mid-October, the House of Representatives also noted the high level of unsettled claims of hospitals operating in the Ilocos and Cordillera regions and urged PhilHealth to settle the claims expeditiously. 

Senator Juan Eduardo Angara has asked the Anti-Red Tape Authority (ARTA) to look into PhilHealth’s reimbursement processes and find out why these do not seem to be responsive to the hospitals’ needs.  Moreover, he said, the national government granted PhilHealth a P70-billion subsidy last year to enable PhilHealth to process recent claims.  Some critics suggest that PhilHealth seems to be using a “stretch the payables to the maximum level” approach — a well-known ploy of savvy business owners whose market growth ambitions far surpass their financial capacity.  But this is far from desirable, considering the deleterious consequences on hospitals whose resources have been severely strained by the COVID’s onslaught. 

On closer review, there is need to beef up PhilHealth’s capitalization due to the wider breadth of its coverage under the expanded UHC.  As noted in a recent study, PhilHealth cannot yet be considered a strategic purchaser of services, mainly because it accounts for a small share of total healthcare expenditures while out of pocket spending continues to be the dominant source of financing for health care. 

The current period of low COVID risk is an opportune time for taking stock of what needs to be done to strengthen the healthcare system and fortify its capability for taking on future challenges.