PhilHealth must be given a funding boost

PROBABLY the last piece of news anyone wants to hear amid the difficult coronavirus disease 2019 (Covid-19) pandemic is that the government’s health insurance program very likely will have to reduce its coverage for Filipinos. But that, unfortunately, was exactly the message shared by the Philippine Health Insurance Corp. (PhilHealth) to lawmakers on Tuesday.

In the first session of a joint congressional oversight committee on the Universal Health Care (UHC) program, PhilHealth President and Chief Executive Officer Ricardo Morales disclosed that the government-run insurance provider is experiencing a serious financial shortfall, and is recommending a “general delay” of the implementation of the UHC Law.

According to Morales, PhilHealth’s premium collections so far this year are only about 10 percent of the total for the same period last year, due to the enhanced community quarantine that forced many businesses to close and put many people out of work, at least temporarily.

“We have a benefit expense of P52.5 billion and we have collected premium income of P46.5 billion. We are spending 13 cents more per peso per premium collection,” Morales explained to lawmakers in Tuesday’s hearing.

PhilHealth had also earlier announced that it had prepared a P30-billion fund for Covid-19 related coverage.

Due to the financial shortfall, Morales told the hearing that PhilHealth would have a deficit of something “less than P100 billion” in 2020, and that the deficit would persist until 2024.

PhilHealth has also been forced to contend with recent accusations by the Philippine Hospitals Association of the Philippines Inc. (Phapi) of up to P18 billion in unpaid claims to hospitals by PhilHealth, about P14 billion for the year 2018 and P4 billion from claims made last year.

PhilHealth strongly denied Phapi’s allegations in a public response to the allegations, and pointed out that most of the hospitals have for some time actually been working cooperatively with PhilHealth to catch up with accounts.

In his remarks to the joint committee, Morales implicitly placed some of the blame for PhilHealth’s financial woes on Congress, pointing out that the P153- billion subsidy it had requested as part of the 2020 national budget in anticipation of the rollout of the UHC program had been cut by more than half to P71 billion. For 2021, Morales said, PhilHealth would be requesting a P138-billion subsidy.

For at least the rest of this year, however, Morales explained that PhilHealth would have to “realign its budget” to stay afloat, and recommended to Congress that full implementation of UHC be delayed, presumably until next year, if not longer. Morales said that PhilHealth would also like to scale back its primary health care coverage for the time being and focus on “lighter expenditures,” such as organization, accreditation of health care providers and the enrollment of new members.

Lawmakers were not receptive to this idea, however, pointing out that expenditures on primary health care now potentially save bigger costs for urgent care later.

Stubbornness by legislators at this point does not help PhilHealth and does not serve the public interest. Clearly, PhilHealth has been a victim of circumstances, in much the same way the general population has been. Perhaps more so, as it is the agency bearing much of the direct cost of testing and treatment of Covid-19 at exactly the same time its usual revenue streams have dried to a trickle.

Whether Congress likes it or not, the implementation and sustainability of UHC depends on PhilHealth being properly funded and financially stable. It would be prudent, of course, for PhilHealth to review its operations to ensure that its funds are being managed as efficiently as possible, but ultimately, it does need to be given sufficient funds to carry out its mandate. The amount which it can collect in premium contributions is limited by the size of the employed and enrolled population, therefore, it is up to Congress to make up the difference.

Just how that can be achieved, particularly under circumstances where the government is experiencing general financial constraints due to the Covid-19 pandemic, does not have an easy answer, but we urge PhilHealth, Congress, and all concerned stakeholders to work together to find one.