Unhealthy mess

Assuring proper healthcare for the people had always been an afterthought in the national budget.

The worst part is that our healthcare system is private-sector-oriented, profit-motivated so we end up paying out-of-pocket for most of our healthcare needs. And if you happen to be poor, living from hand-to-mouth, a medical emergency or a catastrophic disease like cancer or stroke might as well be a death sentence.

We are always told that the budget allocated for DOH is too small to take care of actual needs.

They have significantly increased the DOH budget since the pandemic but a good part of that was lost to corrupt deals like Pharmally.

Worse, DOH underspends its meager budget. Rep. Joey Salceda said “the fiscal resources for health are not fully exhausted. The absorptive capacity of the DOH to spend it in full typically falls short. There’s usually around 40 billion in excess funds that can be used to support a more aggressive seniors health insurance system – apart from the excess reserve funds of PhilHealth.”

Surprising to learn PhilHealth has excess reserve funds. After all, PhilHealth has failed to provide the universal healthcare it was created for. It had been plagued by financial scams, the most recent of which was during the Duterte watch. It barely covers the hospitalization costs of citizens and does almost nothing for preventive medicine or keeping healthy citizens healthy.

Senior citizens with growing health needs can’t depend on PhilHealth for support.

The Ibon think tank points out that the PhilHealth budget has been consistently growing since 2018. Yet, PhilHealth is unable to deliver promises of accessible health services for all.

For 2024, PhilHealth was given an additional allotment for the improvement of benefit packages in addition to the subsidy for health insurance of Filipino indigents.

The government has put much premium on the
universal health care (UHC) framework, which is simply a prioritization of health insurance rather than direct health services. PhilHealth has always been hyped as a purchaser of health services for the Filipinos, and is promoted as a solution to the issues of inaccessibility and unaffordability of healthcare. But the 2022 Philippine National Health Accounts (PNHA) shows that despite its expanded resources, PhilHealth has barely increased its share in the total health expenditure (THE).

“In 2022, it only accounted for 13.6 percent share in THE, much lower than the 19.4 percent share in 2015. This is questionable since the program has been allocated higher budgets and has been collecting larger premium contributions annually, especially since 2018. In 2022, the agency was able to collect a total of P136.7 billion from direct contributors and an additional P80.1 billion in subsidies for indirect contributors. These were much larger than its 2021 collections.”

Worse… earlier this year, the Department of Finance released Circular 003—2024, which orders unutilized funds of PhilHealth worth P89.9 billion be returned to the Unprogrammed Appropriations of the national budget.

This goes against the spirit of the Universal Health Care (UHC) Law or Republic Act No. 11223, which, in Section 11, states that “...whenever actual reserves exceed the required ceiling at the end of the fiscal year, the excess of the PhilHealth reserve fund shall be used to increase the program’s benefits and to decrease the amount of members’ contributions. No portion of the reserve fund or income thereof shall accrue to the general fund of the national government or to any of its agencies or instrumentalities, including government-owned or controlled corporations.”

Further, the excess PhilHealth funds that will be returned to the unprogrammed fund of the national budget are revenues from taxes on tobacco, vapes, alcohol and sugar-sweetened beverages, which are by a Republic Act specifically earmarked for health programs.

Why does PhilHealth even have excess funds? It must be because, like DOH, it is not doing its job well enough. Stranger still, the premiums of direct contributors increased this year for the first time since the COVID-19 pandemic, and benefit packages have not sufficiently been expanded to reduce out-of-pocket expenditures, especially for the poorest of the poor.

Dr. Tony Leachon, former President of the Philippine College of Physicians is right. “Excess funds should not be directed to unprogrammed appropriations within the national budget when PhilHealth has been ineffective at carrying out its mandate of ensuring affordable, acceptable, available and accessible healthcare services for all citizens of the Philippines. PhilHealth must be held accountable for its gross negligence and inefficiency.”

Finance Secretary Ralph Recto should revise the DOF Circular to comply with the spirit and letter of the laws that he helped pass as a legislator. So should the Office of the Government Corporate Counsel, instead of attempting to do legal acrobatics to justify a bad decision.

The reality is, the largest sources of health financing are compulsory contributory health-care financing schemes. In other words, what looks like government funding for healthcare still comes from our pockets.

The Philippines falls behind its ASEAN counterparts in critical health outcomes and access indicators. This is according to a discussion paper published by the government think tank Philippine Institute for Development Studies (PIDS). The paper points out that “this reflects the longstanding challenges in terms of health financing, health service delivery, governance and health human resources.”

A World Health Organization (WHO) report showed that our country spends only about 1.5 percent of our gross domestic product on health, which is significantly lower than that of Thailand, Vietnam, Singapore and Malaysia. We also lack human resources with a significant number of government health facilities that do not have even a nurse or a midwife.

Unhealthy people can’t help grow the economy. In light of the people’s unaddressed health needs, why is DOF moving excess funds from PhilHealth to the General Fund? Better question, why does PhilHealth, if it is doing its job, have excess funds?

This is an unhealthy mess.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco.