PhilHealth payment scheme raises patients’ hospital bills–PIDS study

The current payment scheme being employed by the Philippine Health Insurance Corp. (PhilHealth) has caused more Filipinos to spend more for inpatient medical needs, according to a study commissioned by the government’s think tank.

In the study commissioned by the Philippine Institute for Development Studies (PIDS), author Hilton Lam recommended that PhilHealth adopt the global budget payment (GBP) system instead of continuing the use of the case-based payment (CBP) scheme.

“As CBP replaced the fee-for-service, it was found out that the amount reimbursed by PhilHealth from the case rates was not sufficient to cover hospital expenses. Majority of the admissions, in which patients shoulder the remaining expenses not covered by the CBP scheme, goes to balance billing,” Lam explained.

Lam pointed out that additional drawbacks of the CBP scheme such as high administrative cost of screening cases and potential decrease in quality of care due to providers avoiding complex cases or not giving the appropriate level of care.

He said using the GBP as an alternative-payment mechanism will help improve efficiency and decrease transaction costs. This should be implemented together with an efficient and improved CBP and strict implementation of the no-balance billing (NBB).

The GBP system, formulated in 2012, covers all PhilHealth members in nonprivate accommodations. However, it has not been implemented due to lack of hospital capacity particularly on information systems.

However, Lam believes this scheme is a potential cost-containment mechanism that can be used to support the Department of Health’s Kalusugan Pangkalahatan, or Universal Health Care program.

Under the GBP, government hospitals will submit their applications to be considered under the program with priority given to facilities that meet certain criteria.

These criteria include those with at least 90-percent bed capacity dedicated to nonprivate accommodations, centers of quality and referral hospitals, hospitals connected to the eClaims facility and local government unit hospitals implementing province-wide programs to ensure high PhilHealth enrollment.

“Unlike the CBP, GBP would be a prospective-payment mechanism in which hospitals would be given funds to cover future claims. This prospective mechanism could cut administrative costs and make payment to providers more efficient by giving funds in advance to avoid reimbursement delays,” PIDS said.

Apart from using the GBP, the study urged the PhilHealth to update the costing of case rates. This can be done by determining the approximate fair market price and monitoring indicators of hospital performance and quality of care.

Lam also proposed that PhilHealth look into the investment needs of hospitals to comply with global budget requirements.

He added that PhilHealth should monitor the indicators for efficiency and quality of care under the GBP. Possible indicators include bed occupancy rate, readmission rate, length of stay, frequency of complications and compliance to CPGs.

Lam said the electronic database can be used for real-time monitoring aside from the planned biannual
facility assessments.

“There should be an analysis of the investment needs of hospitals to comply with the global budget requirements. Based on the assessment of PhilHealth, hospitals cannot comply with the technology requirements of the GBP. If PhilHealth still plans to implement GBP, hospitals should be given adequate preparation time and resources to meet these requirements,” Lam said.

In 2011 PhilHealth started implementing the CBP system in lieu of the traditional fee-for-service in paying hospitals for a group of materials and services required for the treatment of a certain conditions.

Currently, the CBP covers 23 of the most common conditions and procedures, which represent 50 percent of total claims to PhilHealth. The goal of the CBP is to increase cost efficiency and transparency in provider-payment mechanisms.

Out-of-pocket medical expense in the Philippines is still quite high. In 2013 Filipino households spent P296.5 billion for out-of-pocket health expenses.

This was based on the Philippine National Health Accounts (PNHA) released by the Philippine Statistics Authority (PSA) in 2015.

PSA data showed that this represented 56.3 percent of the total health expenditure worth P526.3 billion in 2013.

Data also showed that per capita health expenditure at current prices was registered at P5,360 in 2013, a 9.8-percent increase, from P4,881 in 2012.

The PSA said that at constant 2006 prices, per capita health spending rose by 6.6 percent to P4,000 in 2013, from P3,752 in 2012.

Due to this, the government missed its target of reducing out-of-pocket health expenditures to 45 percent in 2013.

The government also missed its target of increasing spending on health as a percentage of total government spending. –Cai Ordinario, Businessmirror