Health Financing in the Philippines

Health Financing in the Philippines

• Various Financing Sources
  • Government: National and local governments contribute significantly to healthcare financing.
  • PhilHealth: A social health insurance program that provides coverage for medical expenses.
  • Private: Includes individual and employer-based health insurance plans, as well as Health Maintenance Organizations (HMOs).
  • Out-of-Pocket: Many Filipinos rely on direct payments for healthcare services.
  • Other: Includes private health insurance, donor funding, and alternative sources.

Private Health Insurance

• Individual: Individuals can purchase insurance plans for themselves and their families.
  • These plans offer coverage for hospital expenses up to a certain limit for one year.
  • The individual pays a premium to the insurance company in exchange for coverage.
• Employer-Based: Companies provide health packages for their employees.
  • Examples include internal hospitals, medical facilities, and hospital referral systems.

Health Maintenance Organizations (HMOs)

• Prepaid Model:
  • HMOs operate on a prepaid basis, where members pay a premium for access to a comprehensive healthcare program.
  • The program typically includes medical services like doctor consultations, diagnostic tests, hospitalization, and preventive care.
• Cost-Effective Model:
  • Designed to manage healthcare costs effectively through a "package of benefits" that encourage efficient resource use.
  • HMO members often utilize a specific network of healthcare providers.

Types of HMO Plans

• Preferred Provider Organization (PPO):
  • Allows access to any provider within the network, without needing a primary care physician referral.
  • Payment is negotiated between the HMO and the provider, with charges to members capped by the PPO.
• Exclusive Provider Organization (EPO):
  • Members can only use providers within the network.
  • Requires choosing a primary care physician and a hospital.
  • Referrals to other network physicians are permitted, with emergency care covered outside the network.
• Capitation:
  • Insurers/employers pay a set fee to providers for all necessary care per enrolled member.
  • Providers must manage costs efficiently to avoid financial losses.
  • Emphasis on primary care physicians as gatekeepers and reducing hospitalization.
• Point-of-Service (POS):
  • Combines features of PPO and HMO plans.
  • Allows members to use both in-network and out-of-network providers.
  • Employs a primary care physician to refer members to specialists, including those outside the network.
  • Covers most out-of-network costs when a referral is made.

Challenges in Hospital Financing

• **Limited Fiscal Space: **
  • Insufficient budget allocation to the health sector hinders full implementation of the Universal Health Care (UHC) Act.
  • A gap exists between allocated budgets and actual expenditures, limiting the reach and quality of healthcare services.
• Fragmented Funding:
  • Unequal distribution of healthcare resources across different regions contributes to disparities in service availability and access.
• High Out-of-Pocket Spending:
  • PhilHealth coverage doesn't cover all medical expenses, particularly for medications outside the Philippine National Formulary (PNF).
  • Patients often pay out-of-pocket, placing a financial burden on households.
• Underinvestment in Primary Care:
  • Despite overall increases in health spending, primary care receives inadequate investment.