HMOs financial woes deepen with losses nearly tripling
At A Glance
- The health maintenance organization (HMO) industry reported a net loss of P4.27 billion in January-December 2023, nearly tripling the prior year's losses of P1.43 billion.<br>Healthcare benefits and claims grew by 26% to P55.46 billion from P43.92 billion in 2022.<br>Administrative and commission expenses of HMOs increased by 20% and 10%, respectively.<br>Total revenues for the industry rose by 16% to P66.88 billion from P57.48 billion.<br>Total assets of the HMO sector increased by nine percent to P0.66 billion in 2023.<br>Total liabilities grew by 13% to P50.41 billion, while total equity declined by eight percent to P10.25 billion.<br>Total invested assets decreased by one percent, mainly due to reductions in financial assets and investments in subsidiaries, associates, and joint ventures.
Financial woes of health maintenance organizations (HMOs) in the country deepened last year amid surging benefits and claims, the Insurance Commission (IC) reported.
According to the IC, the HMO industry reported a net loss of P4.27 billion over the period of January to December 2023, nearly tripling the P1.43 billion losses recorded in the prior year.
“The net loss of the HMO industry [was due to] to the big increase in expenses (including income tax), foremost of which are healthcare benefits released to the insuring public,” the IC said in a statement Wednesday, March 20.
Healthcare benefits and claims disbursed surged by 26 percent to P55.46 billion from P43.92 billion in 2022.
Furthermore, HMOs recorded increases in administrative and commission expenses by 20 percent and 10 percent, respectively.
The growth in benefits and other expenses outpaced the industry's total revenues, which posted a more modest increase of 16 percent to P66.88 billion from P57.48 billion.
In 2023, the HMO sector witnessed a nine percent rise in total assets, reaching P0.66 billion, while total liabilities also grew by 13 percent to P50.41 billion.
Total equity, on the other hand, experienced an eight percent decline to P10.25 billion.
Total invested assets registered a one percent decrease, primarily due to reduced financial assets, investments in subsidiaries, associates and joint ventures, as well as investment property.