MANILA, Philippines — The health maintenance organization (HMO) industry suffered a bigger net loss of P4.3 billion in 2023, marking the second straight year of a weak bottomline, as benefits and claims by its members soared.
Latest data from the Insurance Commission showed that the HMO sector incurred a net loss of P4.27 billion in 2023, a three-fold increase from the P1.43 billion loss a year ago
This developed even as revenues improved by 16 percent to P66.89 billion as the industry increased its membership fees, which comprised 97 percent of the sector’s total revenues.
Last year’s net loss was attributed to the higher benefits and claims released by 27 HMO firms covered in the report, which jumped by 26 percent to P55.46 billion from P43.93 billion in 2022.
HMO provider Philhealth Care Inc. president and CEO Jaeger Tanco said there has been high utilization especially from the older generation.
“The increase in losses is still because of high utilization last year. Historically the third quarter of the year has high utilization,” Tanco said in a Viber message.
“Hopefully this will start improving this year,” he said.
For the first couple of months this year, a high utilization is still expected as HMO holders catch up on their medical needs after the holiday season.
Similarly, the IC attributed the net loss of the industry to the big increase in expenses, including income tax, largely healthcare benefits released to the insuring public.
HMOs also reported increases in administrative and commission expenses by 19.72 percent and 10.27 percent, respectively.
Fourteen of the 27 HMO firms incurred net losses led by Medicard Philippines Inc. with P2.63 billion. Medicard released the third most number of benefits and claims last year at P9.14 billion.
Maxicare Healthcare Corp. also recorded a P775.66 million loss in bottomline after disbursing P22.17 billion in benefits and claims, the highest among HMOs.
Other HMO firms that suffered losses include Intellicare, Carewell Health Systems Inc., Getwell Health Systems Inc., Medocare Health Systems Inc., MetroCare Health Systems Inc., Pacific Cross Health Care Inc. and Value Care Health System Inc.
Also included are Forticare Health Systems International Inc., Health Care and Development Corp. of the Philippines, Health Delivery System Inc., Insular Health Care Inc. and Optimum Medical and Health Care.
Further, total assets handled by HMOs improved by nine percent to P60.66 billion while total invested assets slightly went down by a percentage to P16.64 billion amid decreases in financial assets, investments in subsidiaries, associates and joint ventures and investment property.