Health maintenance firms earn 40% more last year

MANILA, Philippines — Net income of the country’s health maintenance organizations (HMO) amounted to P937.5 million in 2017, 40.44 percent higher than the P667.5 million in 2016, according to the Insurance Commission (IC).

Insurance commissioner Dennis Funa attributed the positive performance to the higher revenue generated by the industry, rising by 11.53 percent to P36.83 billion from P33.02 billion in 2016.

Fees paid by HMO members for the coverage of their health care benefits and related administrative costs amounted to P35.43 billion, accounting for 96.2 percent of total.

Expenses for the delivery of health care benefits and claims, such as medical services and hospitalization amounted to P29.27 billion.

Overall assets of the HMO industry likewise grew by 19.85 percent to P32.91 billion in 2017 from P27.46 billion a year ago.

The Insurance Commission (IC) took over the supervision of the HMO industry in 2015 pursuant to Executive Order 192.

 “Since the IC assumed supervision over HMOs, we issued numerous regulatory issuances including rules on licensing, minimum capitalization and financial capacity requirements, product approval and manual of examination,” Funa said.

However, the insurance chief reiterated there is a need for more regulations concerning different aspects of the operations of HMOs in the country.

In line with this, Funa said the IC recently adopted a manual of examination for HMOs, intended as a guide in the examination of the financial conditions of HMOs.

He said the goal of the IC in the future is to issue a Standard Chart of Accounts (SCA) for HMOs, which will serve as the financial reporting framework for the industry to ensure transparency in their financial conditions and the consistent application of existing regulations.

 “The objective of establishing an SCA is to provide a uniform and comprehensive chart of accounts to improve financial collection, reporting, accuracy and comparability. The SCA will also provide a logical framework in the determination of the allocation and use of funds of HMOs in compliance with the rules and regulations promulgated by the IC,” he said.

Funa also said the SCA for HMOs would serve as a tool in the conduct of a comprehensive study on health care industry in the country.

 “In addition to the SCA for HMOs, the IC is set to issue rules on investment and valuation standards for HMO reserves within the year,” Funa said.