PhilHealth: Teetering on bankruptcy?
THE signs are disturbing.
For years, the Philippine Hospital Association (PHA) has been complaining about delayed payments by the Philippine Health Insurance Corp. (PhilHealth), even threatening a boycott of PhilHealth which has not gained root as, by number, many hospitals, clinics and patients depend upon the PhilHealth benefits to help defray their medical bills.
In response, PhilHealth has shot back and has stated that many hospitals and clinics have filed incomplete, inadequate and even fraudulent claims.
In its original form PhilHealth’s predecessor organization, Medicare, worked just like a conventional HMO or health maintenance organization. All private and government sector employees contributed to the fund and when medical treatment was needed, the medical reimbursements were taken from the Medicare fund and disbursed accordingly to health providers.
In 1994 and 2012, amendments were made to the National Health Insurance Law (Republic Act 7875) through Republic Acts 9241 and 10606 expanding coverage to all Filipinos. In a paroxysm of compassion and good old fashioned trapo politics, the law was expanded to include virtually every Filipino, no matter if they did not have any means to contribute to the fund.
In the amendments, the sectors that could not contribute at all would have their premiums paid for by the concerned local governments, and the national government through the Department of Social Welfare and Development ( DSWD) and direct contributions from the government through the national budget.
The aims and objectives of PhilHealth about covering every Filipino is ambitious and noble but at the end of the day quixotic, giving politicians of every stripe a battlecry for promises that are likely to be unfulfilled. The harsh law of economics will always rear its ugly head and in the end, the reality of the law of supply and demand will always prevail.
Medical care, like any other commodity or service is a limited good. The realities of resource allocation are faced every day by medical practitioners. In short, somebody has to pay for the services and medicines expended. If I had one million pesos would I rather spend it on a cancer patient or on a newborn with serious birth defects? The reality is that this is a world of limited resources and it is likely that the situation will boil down to an either-or choice.
This, I believe was the genesis of the financial dilemma of PhilHealth. National and local governments are notorious for not paying their bills on time and politicians of all types have had a field day distributing PhilHealth cards like water. Of course, these newfound members of PhilHealth are in the strata of society most in need of medical care and therefore, an avalanche of claims against the system has probably ensued. These in turn placed pressure upon hospitals to honor the PhilHealth cards and therefore increase the number of money claims against the system.
The financial outcome as a result of this scenario, has been inevitable. With mounting claims against the system and payments of premiums by the government delayed or nonexistent, the fund carefully built up by the sweat and labor of millions of employees was depleted and the national health system (composed of hospitals and clinics, both private and public) placed in jeopardy as a chain of unfortunate events from the inability of PhilHealth to pay its obligations on time cascaded down to the various health care facilities throughout the land.
I believe the sad fact is that the cash contributions of paying members are today subsidizing the free entry of the nonpremium paying members, as the various instrumentalities of government delay or outright refuse payment of their share of the premium payments as required by law.
Hardest hit by this are the government hospitals that are already underfunded to start with. Yet the government is planning financial outlays in the billions of pesos to fund flighty projects as the rehabilitation of drug addicts and the return of armed rebels who take the money and go back to the hills.
This situation is injustice of the highest degree. People pay to the system so that they can obtain benefits that are due them and not to forcibly subsidize the benefits accruing to those who have no contribution to the system but who extract a lot of benefits.
WHAT ARE WE TO DO?
We must amend the law so that we create a separate entity for the fully subsidized health care beneficiaries, which rightfully should be the subject of direct government funding. The temptation is too high to grab the contributions of paying members from the kitty and have the government entities pay later, if ever. This is a case of politicians practicing charity on someone else’s money.
We should carry out a financial and actuarial audit of the fund IMMEDIATELY. I suspect the gap between the payments and receipts is already very serious. I also believe that financial shenanigans are taking place, which contribute to the cash shortage.
We must immediately stop the honoring of cards issued by nonpaying government entities, until they update their payables.
National government should immediately pay any shortage in the fund’s resources to enable the health system to function properly, otherwise, it will die a slow but sure death and hospitals will be forced to reject PhilHealth claims because entertaining them will result in further losses. My guess is that P35 billion will simply be a drop in the bucket after a due diligence audit has been conducted.
For far too long, politicians have been squandering our taxes and now they are actually practicing charity with our hard earned money. We should all be concerned that our PhilHealth contributions are being utilized to practice charity and the ultimate result is that when we need it, the money is all gone.