Health Financing in the Philippines

Study Notes

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.

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.

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.

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.

**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.