UCHP experts recommend reforms to lower Pinoys’ out-of-pocket health spending
MANILA, Philippines — Health think tank Unilab Center for Health Policy (UCHP) released two research papers that indicated the need for reforms in public health expenditure, including the state insurer’s benefit payments system, to lower the Filipinos’ out-of-pocket medical expenses. UCHP is a program of Unilab Foundation (ULF).
In the first study conducted by Prof. Orville Solon, Prof. Alejandro Herrin and Dr. Michael Mo, the experts looked into the Philippine National Health Accounts (PNHA) from 1991 to 2022 to see the trends and impacts of government reforms to improve health spending.
The PNHA is being collected annually since 1991, although this is the first instance where a time analysis for 30 years (1991-2022) is made.
“The National Health Accounts is a rich resource of information, and seeing how our actions and decisions impact the Filipino household is important in calibrating policies and programs,” said Dr. Enrique Ona, chairman of the Advisory Council of the UCHP and a former Health secretary.
The results of the 30-year health data were unveiled in an executive symposium attended by representatives from the national government, local governments, Congress, health care providers, patients’ groups and other key stakeholders in the health sector recently at the Sheraton Manila Bay.
This is part of UCHPs commitment to provide the forum for an exchange of ideas for better implementation of the country’s Universal Health Care policy.
Total health expenditure
The review showed that total health expenditure (THE) increased in nominal terms from only P40.3 billion in 1991 to P1.1 trillion in 2022, or an average yearly growth of 10.95%, which is comparable with other economies in the ASEAN.
“However, after correcting for inflation or what we call real terms, health spending grew by an average of 5.84% per year. But considering that the population grew from P62 million in 1991 to P112 million in 2022, health spending for every Filipino increased by an average of 3.90% every year,” the researchers noted.
The study showed that the increase in spending is indicative that reforms such as earmarking of sin tax revenues contribute to the steady rise in government spending. The national and local governments contribute about 30% to the THE.
Out-of-pocket spending remains high
Still, private out-of-pocket payments (OOP) have been consistently the biggest component of healthcare spending through the years. In 2022, for instance, OOP accounts for 45% of the country’s total health expenditure.
Studies indicate that Filipinos spend more for inpatient care than outpatient services. Thus, efforts to decreasing OOP should be directed at reducing expenses for inpatient care.
A step toward the right direction in addressing this is the DOH’s initiatives of opening Bagong Urgent Care at Ambulatory Centers (BUCAS) across the country, as this will not only address physical accessibility but financial accessibility as well. The government also intends to open several Super Health Centers to augment the health delivery system.
An alarming discovery in the research is the diminishing share of local government units in the THE, especially in recent years, despite the devolution of health services. This trend should be brought to the attention of local governments to ensure the devolution of health services is maximized.
The share of PhilHealth in THE is currently at 14%, with the ideal 30% target within reach once the recent pronouncements of the president in his third State of the Nation Address to increase the state insurer’s spending are implemented.
Among the new benefits the president cited in his SONA are increasing benefits for stroke, pneumonia and for common cancers such as colon, breast, lungs, liver, ovary and prostate.
Private health insurance providers contribute about 10% to the THE.
PhilHealth reforms
The second research, also unveiled during the UCHP-organized symposium, reviewed the benefits payment system of PhilHealth and how it can be improved for better utilization of its funds.
According to the UHC law, PhilHealth should be paying using a mechanism known as diagnosis-related groups (DRGs). Currently, hospitals are paid through case rates. While case rates are simpler, DRGs are more nuanced considering complexities such as co-morbidities.
The research was made by Dr. Valerie Gilbert T. Ulep, Senior Research Fellow of the Philippine Institute for Development Studies (PIDS), who studied other countries like Thailand, Australia and Germany that are successful in implementing DRGs.
The study notes that in shifting from case rates to DRGs, it would be better for the Philippines to have an independent arm’s length agency that will oversee the release of payments to PhilHealth partner-institutions.
“The resulting global review of best practices showed that the establishment of an accurate and transparent methodology provides for a credible and collaborative engagement among concerned stakeholders. In the countries studied, independent technical institutions with the sole objective of overseeing provider payments were established,” the researchers noted.
“There’s Thai Case Mix Center in Thailand, the Independent Health and Aged Pricing Authority in Australia and the Institute for Hospital Administration in Germany. They ensure that the process has a pool of experts that are neutral and shielded from interference.”
The Philippines can learn from these experiences on who should administer DRGs. PhilHealth is currently vested with the mandate of raising premiums, defining benefits and paying for them. This may be the opportune time to review such an arrangement, the UCHP experts added.
Ruben Basa, program director of ULF, said the UCHP will continue to build on these studies, including an annual review of the Philippine National Health Accounts to track progress in health spending. The UCHP is also set to release two more studies that will help the government achieve impactful universal health care for Filipinos.
“The UCHP is committed to continuing the discourse and discussion on universal health care as we intend to demonstrate that it can be done at the LGU level. We aim to demonstrate universal access to health services, one LGU at a time,” assured Basa.
Editor's Note: This press release for Unilab is not covered by Philstar.com's editorial guidelines.
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