MANILA, Philippines — Medical costs in the Philippines are expected to post a double-digit increase this year, the second highest in the Asia-Pacific, according to a survey conducted by global advisory, broking and solutions company WTW.
The WTW Global Medical Trends Survey found that health care benefit costs in the Philippines are expected to rise by 18.3 percent this year, the second highest growth in the Asia-Pacific, next to Indonesia where medical costs are projected to go up by 19.4 percent.
While the projected growth in health care benefit costs in the Philippines for this year is lower than the 19.3 percent in 2024, WTW expects the rate to remain elevated over the longer term.
Increased use of health services, rising hospital and clinic costs, as well as higher professional fees and frequency of diseases were cited as factors driving up medical costs in the country.
WTW said losses incurred by the health maintenance organization (HMO) industry in the Philippines nearly tripled to P4.269 billion in 2023 from P1.433 billion in 2022 due to the substantial increase in claims and benefits paid.
To address the continuous increase in utilization, the HMO industry has been adjusting pricing assumptions annually.
WTW also said medical inflation in the country, which has been hovering between 15 percent and 18 percent over the last three years, rose to 19.3 percent in 2024.
“Although reports indicate that HMOs are recovering in the first half of 2024, ongoing negotiations between two HMO associations and various doctor groups regarding a potential 80 percent to 150 percent increase in professional fees are still driving the projected double-digit medical inflation projected for 2025,” Nel Badal, head of Health & Benefits at WTW Philippines said.
Given the higher costs of medical services and procedures, insurance claims being filed in the country have now surpassed the pre-pandemic levels of 2019.
WTW said insurers are facing heightened increases in both utilization and unit prices.
In the Asia-Pacific, nearly three in five insurers attribute the increase to an even split between unit cost and utilization.
WTW cited medical practitioners’ recommendation to avail of many services (79 percent), including overprescription of both medications and diagnostics, as a top internal factor leading to higher costs.
External factors cited as pushing up costs include higher cost of new medical technologies (73 percent); the continued pressure placed on private health care providers with public health care systems being overwhelmed (40 percent); as well as the lack of cost sharing in plan design (39 percent).
“Continued pressure is being placed on private health care providers in the Philippines. Although the rise in availability of telehealth and other virtual care offerings is expanding access to health care in the Philippines, it also contributes to increasing costs. Coupled with the shortage of manpower in the health care sector in the country, the double digits trend of medical cost increases remains and is expected to rise in the near future,” Badal said.
For a more cost-effective health care system that ensures quality care at an affordable price, she said there is a need for individuals, health care providers and the government to come up with sustainable solutions.
“Cost sharing aimed at apportioning medical costs between insurers and members can also help to manage costs. This will help to minimize overuse and overprescription of care,” Badal said.