PhilHealth policy cannot cover medical expenses

(Second of two parts)

A case-rate system to cover medical costs outlined by the Philippine Health Insurance Corp., or PhilHealth, did not help Aleta Manzano’s aunt, Janet, a newspaper peddler who suffered a stroke.

The family had to pay more than P30,000 a day, inclusive of medicines, room rate and doctors’ fees.

“We also had to pay P12,000 a day in cash on top of the total bill,” said Aleta.

Some hospitals’ drive to earn money takes its toll on the helpless, often penniless, patients.

When Janet had to be placed immediately in the intensive care unit, the hospital told her family it couldn’t admit her without a down payment of P25,000.

“At that moment, we really didn’t have that amount of money. If we’re going to wait for remittances,  that could take a while,” Aleta said, referring to assistance from a relative working abroad.

Fearing Janet would die without immediate attention, Aleta offered her car to the hospital as a collateral, but the hospital refused the key to the vehicle. After phone calls to friends and relatives, the family was able to give the required cash advance. It was all for naught. Janet died after four days in the hospital.

“I personally think that without the delays, my aunt could have survived,” Aleta said.

The grief-stricken family still had to worry about paying the total bill of around P200,000 to get Janet out of the morgue.

Higher casualties

The Manzanos weren’t able to get any help from PhilHealth.  Although Janet was a member, earning roughly P100 a day from selling newspapers didn’t allow her to pay her premium regularly.

Janet is but one of thousands of Filipinos who die of heart and vascular diseases every year, according to official statistics.  These are the leading causes of deaths in the country, based on annual studies done by the Department of Health (DOH).

“We can expect higher mortality rates with the new scheme,” said Dr. Rustico Jimenez, president of the Private Hospitals Association of the Philippines, referring to a major cause of deaths in an increasingly stressful world. “They are scrimping on the patient.”

He also said that with the scheme, doctors would not be compensated well.

“What would happen is that specialists would not accept PhilHealth members anymore and would just let new doctors take over,” he told the Philippine Daily Inquirer.

“I don’t think this policy is going to last. It’s just not viable.”

It’s about time for PhilHealth to change its payment scheme from fee-for-service to case rates, said Dr. Ramon Paterno, a research faculty member at the University of the Philippines-National Institute of Health.

In a fee-for-service scheme, doctors and hospitals tend to order unnecessary medical procedures to maximize PhilHealth’s benefits, he said. “The private hospitals will only capture any increase in ceiling benefits based on PhilHealth’s experience.”

Reducing expenses

Based on PhilHealth’s experience compiled in a study, when the agency increased its ceiling benefits in an attempt to reduce the out-of-pocket expenses of its members, hospitals responded by increasing prices and by maximizing the benefits.

The public’s cash-outs remained the same, according to the study, “The impact of social health insurance in the Philippines.”

“With the case-rate payment scheme, a doctor’s objective is to treat a patient within the fixed amount,” Paterno said. “PhilHealth intended to efficiently allocate its resources but we’re having problems with our doctors and hospitals. They’re worried that their profits would suffer.”

In government hospitals,  meanwhile, the new scheme is implemented with the “no balance billing” policy.

According to this policy, PhilHealth’s sponsored members, the poorest of the poor, should not be charged any amount above the case rates. In essence, they are entitled to free medical treatment in its public health units.

If an indigent, however, is forced to go to a private hospital, this person doesn’t have a choice but to pay the amount  beyond the fixed rates.

“In this country, private hospitals outnumber government hospitals,” Jimenez said.  “Besides, government hospitals can only accommodate so many with its ill-equipped facilities and scarce medical specialists.”

PhilHealth hopes to eventually implement the no balance billing policy in private hospitals.

“As we move forward, we know that we have to offer a rate that the private sector will be happy with,” said Dr. Eduardo Banzon, PhilHealth president.

“We can give incentives like paying hospitals 50 percent if they are willing to do no balance billing,” he told the

Inquirer.

More than payment schemes

These are negotiations that PhilHealth cannot do with a fee-for-service system, according to Banzon.

But the Universal Health Care (UHC) program is more than payment schemes and health insurance, Paterno said. “We cannot even talk about universal health care if we only have P44.4 billion to spend,” he said.

Although the budget for health is about P11 billion higher than last year’s  P33 billion, experts think it is not even half of  UHC’s cost.

Based on the 2007 National Health Accounts, out of the P235-million total health expenditure, 54 percent came from the public’s pockets while the government’s share accounted for 26.6 percent. PhilHealth’s contribution was 8.5 percent.

The health budget should be increased to at least P100 billion to significantly reduce the public’s out-of-pocket medical expenses, said Paterno, who drafted a health financing reform proposal with colleague Dr. Chrysanthus Herrera. The proposal was published in a special issue of Acta Medica Philippina, the national health science journal of the University of the Phililppines-Manila.

Political will needed

“The DOH budget for 2011 should have been  at least P90 billion instead of P33 billion, with the LGU spending P36 billion for a total of P126-billion government share,” according to the proposal.

Starting with the P126-billion target, if the government would consistently increase its budget by 34 percent every two years, out-of-pocket expenses would significantly drop from almost 60 percent to 20 percent in the fourth year,  it added.

Paterno and Herrera also offered an alternative form of funding, a creation of a National Health Development Fund that would add P50 billion to the health department budget.

This fund would provide for the PhilHealth premium of the poorest 60 percent of the population, health infrastructure improvement, wage hike for the government’s health human resource sector, adequate supply of medicines and disaster preparedness, they added.

Chronic under funding is just one of the problems that need to be addressed to give Filipinos a kind of health care that could help them survive an illness—or at least, give them hope.

The current system is still far from the promise of universal health care, Paterno said. “It can be done, it only takes political will, ” he said.

Subsidizing premiums

The case of Manzano, along with that of Joy Araneta, a house help who lost her daughter to ovarian cancer, has prompted proposals to make PhilHealth premiums for the poor “noncontributory.”

Paterno said that the government could subsidize the premiums of the poor, the “near poor” and those in the “nonprofessional informal sector,” like Araneta, pointing out that every Filipino, anyway, paid taxes through the value added tax, or VAT.

He said: “The past experience of PhilHealth, and reports from doctors in the field, have shown that ‘targeting programs’ such as the National Household Targeting System for the Conditional Cash Transfer program, are again encountering the perennial problem of identification of the true poor, resulting in inclusion of the nonpoor and exclusion of the true poor.

“Secondly, even if Joy Araneta is able to scrimp and save for the P100 monthly PhilHealth premium, PhilHealth coverage will not guarantee that she will be able to get the health services she needs for two reasons: PhilHealth presently pays for only 30-50 percent of our hospitalization costs, and she might not even be able to get admitted into a public hospital, as was her experience with Philippine General Hospital.

“Increased national government spending for health is still a necessary first step to decrease out-of-pocket payments for health care and achieve Universal Health Care.”