PhilHealth Watch 7: Deregulate PhilSick

(Note: Check my previous discussions on the "PhilHealth Watch" series as backgrounder:

Part 1: Claims vs. reimbursement, August 25, 2010
Part 2: Contributions vs. Service, September 24, 2010
Part 3, Market failure vs. Government failure in health insurance, October 13, 2010
Part 4: P110 B excess money, November 04, 2010
Part 5: Healthcare and Civil Society, May 06, 2011
Part 6: Bogus Claims and Robbery, June 15, 2011)

Last Thursday, October 6, there was an interesting forum on the Senate Bill amending the PhilHealth Charter organized by MeTA Philippines, inviting CHAT's NGO leaders. The presenter was Dr. Kenneth Hartigan-Go,  Executive Director, Zuellig Center for Asian Business Transformation, AIM Center for Development Management. and former Secretary of MeTA Philippines. The audience were varied -- from health NGOs, research NGOs (like IBON and MG Thinkers), WHO, PhilHealth, PHAP and a few multinational pharma, and the Phil. Pharmacists Association (PPhA).

Dr. Ken mentioned several issues about PhilHealth and the government-run health insurance system. Among them:

1. Still high out of pocket (OOP) spending,
2. Poor premium collection and poor insurance coverage,
3. Little funds for preventing and primary healthcare,
4. Some effects of devolution of healthcare to LGUs,
5. Accountability of PhilHealth administration
6. High OOP partly due to less essential if not useless health products like cosmetics, vitamins, even unnecessary hospitalization,
7. Possible rise in premium contribution by 3.5 percent or 5 percent for those in the formal sector,
8. Mapping of informal sector by the LGUs.
9. Goal of reducing OOP to 20 percent of total health expenditure (THE) by 2020,
10. Others.

The exchange among participants were rather very spontaneous and lively. I like the term "PhilSick" because one can "enjoy" getting PhilHealth reimbursement only if he/she is already very sick and confined in a hospital. If one is not confined in a hospital, he/she cannot file for claims and reimbursement.

After listening to various exchanges, my time to speak and I focused on the following:

1. We are already double- or triple-taxed on health: (a) income tax and consumption tax (VAT, etc.) to help finance the DOH, its retained hospitals, hospitals and healthcare by LGUs, (b) PhilHealth mandatory contributions, and (c) getting a private health insurance via health maintenance organizations (HMOs) and other schemes.

2. For me personally, the most useless is (b), PhilHealth. I have been working for the past 25 years or so, been contributing to Medicare before (it went bankrupt) now PhilHealth, and I've never been hospitalized all those years. My family members are supposed to be my "dependents" but my wife also has work, so she is also a PhilHealth member. When she gave birth, she was hospitalized of course, she claimed on her membership and the reimbursement was small, something like 1/7 of the total hospital bill.

3. With due respect to the PhilHealth guys in the room, PhilHealth is simply a monster bureaucracy that tends to behave like most bureaucracies - they exist mainly for themselves. See for instance how secretive it is with regards to the perks and bonuses of its Directors, how defensive and jealous it is in limiting membership of the Board to a few, mostly government officials too, people. The regulated sectors and players like the physicians and hospitals, are out of the Board. I also have personal experience in queueing for 2-3 hours just to file for claims, or another 2-3 hours just to get a membership data record (MDR). PhilHealth wants contributions to be sent to them in minutes (one can text his contribution to the bureaucracy) but members have to wait 2 to 3 months or more to get the reimbursement at a smaller amount compared to total hospital bill.

4. Many in the formal sector have to get a private insurance. If I have a persistent fever or bad cough, I cannot just go to any DOH hospital for they are far from my office; I also cannot file for claims with PhilHealth as I don't get hospitalized. I use my HMO card and it's convenient and useful.

5. To attain "universal healthcare" (UHC), it is important that people should have health insurance, whether government-run or private or NGO- or cooperative-managed. Thus, UHC should not mean government health insurance monopoly.

6. Thus, contrary to the advocacy of many in the room asking for bigger but a "reformed" PhilHealth, I think a better alternative is to deregulate the health insurance industry. PhilHealth will not be abolished, it can be retained as a government health insurance corporation but no longer a monopoly and membership to it will no longer be mandatory and by coercion. If PhilHealth sees that they are no longer attracting the public, it will be forced to become efficient and be more sensitive to their contributors and clients.

Personally, I would like to see PhilHealth be privatized and/or abolished, but that's not a realistic scenario. A more realistic one is the deregulation and demonopolization of the health insurance sector. Allow private firms or NGOs to compete among themselves in providing healthcare to the people, both in the formal and informal sectors.

In Switzerland, workers can get a health insurance via their labor union, or the company-sponsored one, or through their village and neighborhood association, etc. So people have many choices in getting healthcare that is tailored for them. There is no PhilHealth-like government insurance monopoly where people are mandated and coerced to become members, even if they are not happy with the amount of forced contribution and its service. See here, Healthcare competition 1: Switzerland, August 28, 2010.