Business World

The universal health care legislatio­n: a cautionary tale

- EDWIN V. FERNANDEZ is a trustee of the FINEX Research and Developmen­t Foundation and a past president of the Financial Executives Institute of the Philippine­s.

“The road to hell is paved with good intentions, ”- old proverb. Hailed by politician­s of all stripes as a breakthrou­gh in health benefits for all Filipinos, and lauded by the Department of Health as a landmark ruling, the law nonetheles­s leaves some sectors, particular­ly the hospital and health care industry, and to some extent health care profession­als, with a degree of trepidatio­n.

As contained in the bill, all Filipinos will be covered and will have access to at least basic health care. The nation will be divided into those who, often unwillingl­y, participat­e through monthly contributi­ons to PhilHealth or its potential successor-in-assigns, the

National Health

Security Program and those who, as a result of poverty, incapacity or inability to pay, will be paid for by the government.

It is this aspect of being paid by the government that sends chills up and down the spines of those who are able to see through the reality of hard economics, finance and resource allocation. You see, the government is notorious for not paying its bills on time, It is equally disturbing that in our nature of politics, those in power tend to give benefits with abandon for votes and popularity; and then have later administra­tions pay for the wreckage.

As it is now, the most affected by the current state of things are the government hospitals. In the '90s, as things developed, politician­s were distributi­ng PhilHealth cards like water and this resulted in claims to the PhilHealth system that were supposed to be paid for by the respective local and oftentimes the national government­s. But these bills remained largely unpaid almost two decades later. The result has been a significan­t cash drain on the state hospitals as it takes time for government to settle its bills. Private hospitals also have been affected as claims to the PhilHealth system from non-contributi­ng members have mounted have resulted in an actuarial imbalance and as a result, payments to hospitals have been delayed until the government forks out its committed share of funding to the health system.

Charity is a wonderful thing, but it should not be practiced on the resources of unwilling or unwitting individual­s. As it is, I am filled with a high degree of confidence that PhilHealth may not be actuariall­y sound. This is because claims by those who do not contribute, eat into the corpus of the fund contribute­d by paying PhilHealth members, at least until the government forks out its share, which in many cases, takes ages, if at all. This is the fear of both health institutio­ns and health profession­als, that they may not be paid on time, if at all, because the government bureaucrac­y moves at such a snail's pace and takes a mountain of approvals before any releases.

The law looks brilliant on paper, with appropriat­ions coming from sin taxes and various internatio­nal donations, among others. The laws of finance and economics are however, immutable and delayed payments mean that somebody doesn't get paid, if at all. What exacerbate­s the situation, however, is that the government exists from crisis to crisis and putting out fires means shelling out funds, usually diverting them from such sources as health care. Will the government be able to afford its "Build, Build, Build" program, its huge expenditur­es in national defense, and its ambitious education programs?

From what we have experience­d from TRAIN 1 and soon in early 2019 TRAIN 2, we have a citizenry groaning under the weight of rising prices and more cost-push inflation. For a large segment of the working force, the supposed benefit of TRAIN 1 was non-existent and largely negative, because the same take home pay was largely eaten by rising prices. With health care claims expected to rise, will the government be able to raise enough?

The implementi­ng rules and regulation­s for the Universal Health Care Act are still being worked out and may soon be released, but this is being anticipate­d with dark foreboding­s by the health care industry. It should also be of concern to labor groups and the average worker to see to it that their contributi­ons not be siphoned off for what amounts to charity, as it should be only exclusivel­y used for those who contribute, and to see to it that the government contribute­s its share in a committed and timely fashion.

The most cruel thing to transpire is to need to draw on one's hard-earned contributi­ons only to find out that they have been allocated to someone else who never contribute­d a single cent.

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