‘PhilHealth not perfect, has wicked problems’

MANILA, Philippines — Admitting that the Philippine Health Insurance Corp. (PhilHealth) is not perfect, the organization’s president said they have “wicked problems” which cannot be solved even by changing its leadership weekly.

In his opening statement at the public hearing of the Senate committee of the whole yesterday, PhilHealth president Ricardo Morales said the computerization program worth P2.1 billion over three years, which some considered as overpriced, appears paltry.

“PhilHealth is not perfect, but I believe it would take less to fix it than to bury it and create a new organization altogether. The same skills, specialties, processes and organizational structures would be required of any organization that pays for healthcare in any society,” said Morales.

“We are witnessing the 2020 edition of what is turning out to be an annual ‘bash PhilHealth’ frenzy that gets the PCEO fired, executives dragged over the coals, the board replaced and renewed promises of change and reform declared,” said Morales, quoting Albert Einstein’s caveat “of doing the same thing over and over again and expecting different results each time.”

The Senate constituted the committee of the whole to investigate alleged anomalies, including the implementation of the interim reimbursement mechanism, the information and communication technology equipment worth P734 million flagged by the Commission on Audit and the alleged manipulation of its “financial status.”

Morales said the problem of fraud and inefficiencies in PhilHealth have been in the corporation long before he was appointed to its helm and will continue long after he is gone, if the right things are not done.

“These problems are but symptoms of a bigger problem, what management experts call a ‘wicked problem’ – a problem that defies solution or cannot be solved. Unless this wicked problem is broken down and each sub-element addressed in detail, even if the president is replaced weekly, the problem will not be solved,” he added.

He said he fully sympathizes with Sen. Panfilo Lacson and Sen. Bong Go on their assessment that the challenges facing PhilHealth were already “nakakasuya” (distasteful) and “enough is enough.”

In a study completed last December, Morales said the Foundation for the Advancement of Clinical Epidemiology Inc. estimated PhiHealth’s fraud index to be 7.5 percent.

“In other words, of the P136 billion PhilHealth spent last year on benefit payments, P10.2 billion was potentially lost to fraud. Next year, if the right thing is not done, of the P240-billion planned benefit expenditure, this potential loss will balloon to P18 billion. Global average is 10 percent to 20 percent,” said Morales.

“As I have maintained from Day 1 of my tenure, the main solution to this systemic fraud problem lies in a robust, integrated and harmonized information management ecosystem running a clean, complete and updated membership database,” he continued.

Morales noted that only such a system can keep track of the 109 million members, the 40,000 accredited healthcare professionals, the 8,500 healthcare facilities, filing 35,000 claims a day and paying almost P2 billion a week.

“This management team that I had labored mightily to create in the year with this organization is not yet ready to throw in the towel. Reform does not happen overnight and some stability is required for it to take root,” he said, and noted the record will show that his campaign against corruption is not of recent vintage.

Morales said he was also pushing for computerization, saying the information galaxy is a fragmented, aging and over-extended information system running a hundred applications, a database that handles 370 transactions per second ministered by 12 overworked IT professionals, catering to 4,000 internal and 20,000 external users, distributed among 130 offices and branches nationwide.

“This is the same IT team that is supposed to introduce the proposed IT system, including the IT infrastructure to support the ambitious Universal Health Care Law... and then COVID-19 hits. Even under ‘normal’ times, an organization as huge and complex as PhilHealth was never an easy organization to run,” he added.

“This is the strategic shift in outlook I would like the organization to adopt. In information system development of the size and complexity of PhilHealth, the smaller the budget, the bigger the risk of failure,” said Morales.

Not on premiums alone

The government can provide funds to prevent the collapse of PhilHealth, Malacañang said yesterday, as it expressed optimism that the truth about the issues hounding the state insurer would come out.

Presidential spokesman Harry Roque Jr. said he and other authors of the Universal Healthcare Law were aware that PhilHealth would not be able to provide free treatment and medicines if it relies solely on premiums.

“As author of the Universal Health Care, we never, even for one minute, considered that the survival of PhilHealth will solely be by reason of premiums,” Roque said at a press briefing.

“If PhilHealth runs out of money, the government can provide funds. That’s why it is called Universal Health Care, not medical insurance,” he added. – Alexis Romero