Worker shortage, rising costs to slow healthcare growth
The expansion of the country’s healthcare industry may slow this year on rising costs and shortage of medical practitioners even as the demand for health services among Filipinos is on an uptrend.
Based on the latest report of global management consulting firm McKinsey & Co. the growth in the Philippine healthcare industry may slow to 2.8 percent this year from 6.6 percent in 2023.
McKinsey said there is an increasing demand for healthcare due to the growing prevalence of chronic conditions among Filipinos such as diabetes, hypertension, heart disease, cancer, respiratory and kidney disease.
About 60 percent of all mortality in the country is caused by chronic diseases, burdening not just Filipino families but the entire healthcare system.
The World Health Organization earlier estimated that the economy is suffering more than P750 billion yearly from chronic diseases.
However, the demand is not met with the appropriate health services needed.
“Healthcare demand could grow, although the quality of care may be strained as the health worker shortage is projected to increase over the next five years,” McKinsey said.
It said that the supply-and-demand gap in nursing alone is expected to reach a shortage of approximately 90,000 nurses by 2028.
Even the Department of Health said that it would take roughly 12 years to fill the shortage among nurses and a longer period of 23 years for doctors.
Ironically, the Philippines is suffering from a shortage of medical workers even as the country is also among the top suppliers of nurses and doctors abroad.
Further, McKinsey said another factor straining healthcare is the higher than anticipated benefit utilization and rising healthcare costs.
“While it is helping to meet people’s healthcare budgets, it may continue to drive down profitability for health insurers,” McKinsey said.
True enough, the health maintenance organization (HMO) industry suffered a higher net loss of P2.15 billion as of end-September last year as benefits and claims by its members soared.
Benefits and claims released by HMO firms jumped by 28 percent to P40.92 billion from January to September 2023 from P31.93 billion a year ago.
In order to unlock growth in healthcare, McKinsey said there should be more effort in consolidating healthcare systems, rationalizing copayments and pushing for digitalization.
“Programs to attract talent and the release of benefits could also increase the supply of healthcare workers,” it said.
On the upside, pharmaceuticals manufacturing is expected to rebound strongly with a 5.2- percent growth this year from just 1.9 percent in 2023 as more people become health conscious.
McKinsey emphasized that consumers are using more over-the-counter medication and placing more beneficial value on organic health products, such as vitamins and supplements, which could impact demand for prescription drugs.
“Businesses operating in this field may end up benefiting from universal healthcare policies,” McKinsey said.
“If initiatives are implemented that integrate healthcare systems, rationalize copayments, attract and retain talent and incentivize investments, they could potentially help to strengthen healthcare provision and quality,” it said.