Health spending must seek to achieve long-term resilience

Published January 11, 2022, 3:12 AM

by Manila Bulletin

E CARTOON JAN 11, 2022

Health spending has become a vital concern as the coronavirus pandemic rages on, nearly two years after the initial outbreak.

Last week, findings from the 2022 Global Medical Trends Survey showed that employer-sponsored healthcare benefit cost trends are expected to increase by 14.4 percent on average in the Philippines this year. The projected average cost growth is nearly double the global median of 8.1 percent and Asia Pacific’s (APAC) 7.6 percent. The cost of healthcare insurance in the Philippines is projected to further increase this year, surpassing the global average, due to “considerable volatility” caused by the prolonged pandemic, according to a survey of medical insurers.

These findings provide a microcosm of the bigger picture of national spending on health care. In the last quarter of 2021, the Philippine Statistics Authority (PSA) reported that the country’s total health spending in 2020 was 12.6 percent higher than in 2019. This is understandable considering that the coronavirus pandemic triggered a massive national health emergency from March to December 2020. Expectedly, health spending also increased significantly in 2021 during which the pandemic continued to exact a heavy toll.

A look at the Department of Health’s budget for 2022 provides useful indicators on how the government is steering the course of health spending. Aside from addressing COVID-19, the DOH is focusing on full implementation of the Universal Health Care (UHC) Act, building health system resilience, and assistance to local government units (LGUs) for the full devolution of health care. Starting this year, LGUs are getting a larger share of tax revenues collected by the government — and expectedly, the improvement of health care services at the provincial, municipality and barangay levels will receive greater attention.

Although not explicitly discussed in the DOH assessment, it is important to point out that the Philippine Health Insurance Corporation (PhilHealth) is expected to improve its ability to provide meaningful health insurance to the citizenry as part of its mandate under the Universal Health Care Act. Continuing concerns on its ability to reimburse private hospitals must be addressed decisively. As the year began, a few private hospitals signaled their intention to declare a “PhilHealth holiday” but shelved this plan on account of a renewed COVID-19 upsurge.

As the public sector focuses on preventive care, primary care and health literacy, the private sector is geared toward providing specialized services that require significant investments in technology and advanced tertiary care. This opens the possibility for public-private partnerships between national and local government entities on one hand, and private enterprises on the other. The National Kidney and Transplant Institute has partnered with Fresenius Medical Care for the modernization of its hemodialysis unit that is ISO-certified and capable of doing 2,400 dialysis procedures per month. The Asian Development Bank has presented this partnership as a model for replication.

In envisioning post-pandemic scenarios, strengthening the country’s healthcare system definitely ranks as a high priority. Health spending should be channeled toward building health system resilience.