PhilHealth Watch 14: Not Yet 85 Percent Coverage

* This is my article yesterday in the online magazine, 

http://thelobbyist.biz/index.php/perspectives/less-government/item/142-universal-healthcare-and-philhealth
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Universal health care (UHC) is a noble goal and I fully support it. Everyone will get sick somewhere in his/her lifetime so everyone must have a health insurance. It does not mean though that UHC should be implemented only or dominated by the government.

In the Philippines, there are no government carinderia or restaurant corporation, or a government grocery or supermarket corporation, or government tilapia or poultry or vegetable corporation, and yet people are eating. So the food sector is a prime example that it is possible to serve the public even if there is zero or little government involvement in direct service provision. The key is product and price differentiation, market segmentation, which allows various food producers and suppliers to serve various food consumers with different taste, preference and budget.

UHC is attained if at least 85 percent of the total Philippine population is covered by the Philippine Health Insurance Corporation (PHIC or PhilHealth). Since its creation in 1995 and despite various schemes from various administrations (Ramos, Estrada, Arroyo, Aquino), PhilHealth has not attained that 85 percent beneficiary coverage. Last year though, PhilHealth reported that it has finally achieved the UHC coverage.

 

Source: Dr. Eduardo P. Banzon, PhilHealth SHiNES, presented at the Asian Institute of Management, November 26, 2012

I think there is something wrong with the above numbers. PhilHealth assumes that most if not all members have dependents – legitimate non-working spouse, legitimate children below 18 years old, and parents above 60 years old. This is not true.

Many members either do not have any dependent yet, or have just one or two. For instance, parents who are either below or above 60 but still working are PhilHealth members themselves and cannot be declared as dependents. If they have three children who are already working and have no families yet, then that is equal to five members and all have no dependents.But for PhilHealth , there are 10 to 15 people who are covered or enrolled as beneficiaries already. I think this is dishonest math.

In the above table, PhilHealth made the following multipliers: formal government x 3; formal private, OFWs and lifetime, x 2; IPP x 2.3; Sponsored NHTS x 4.2, Sponsored LGUs x 3.7. So the 29.28 million members translate to 81.63 million people or an average multiplier of 2.8.

If we compare labor force data from the National Statistics Office (NSO), there is a big discrepancy with PhilHealth data.

As of October 2012, there were 40.43 million Filipinos in the labor force, of which 37.67 million were employed and 2.76 million were unemployed. If we just take the employed people as possible PhilHealth members, there should be 37.7 million PhilHealth members.

This already shows an 8.4 million discrepancy with actual or registered PhilHealth members. If the 2.6 million OFWs are not included as they are not included in the NSO labor force survey data, plus the 0.6 million lifetime members (mainly the senior citizens and retirees), the discrepancy goes up to 11.6 million people, even assuming that the very poor, sponsored individuals are all employed, which is not the case.

One way to correct this possible dishonesty in beneficiary coverage is for PhilHealth to give a health card not only to registered members but also to all their declared dependents. So that even babies and children should have their own health cards too, to be presented to hospitals when they are confined.

On another note, the Department of Health budget has been ramping up recently, rising by around P10 billion a year from 2010 to 2013, mainly to expand PhilHealth coverage of more than 5 million poor households who are also in the CCT program of the DSWD.

On top of that, the mandatory contributions for each member have been hiked except the lifetime members who pay none.

 

Then the hike in Sin Tax law or RA 10351 was recently enacted. These three moves – hike in regular DOH budget, hike in PhilHealth mandatory contributions, and higher revenues from higher taxes on tobacco and alcohol products – mean even bigger money and role for government in healthcare.

While “better government healthcare for the poor” looks promising, promises are often different from reality. We go back to the above discussion in the food sector where there is not a single government corporation or agency involved in direct provision of food to the people and yet people are eating.  The trick is competition among various food providers and suppliers, they bend backwards if needed to attract more consumers. Competition is absent when government monopolizes a service, like healthcare.

One alternative scheme that can reflect the reality in the food sector, is for government to shift to health voucher system. Not this year or the next, but a possibility that the DOH and PhilHealth can consider in the near future. We will discuss this proposal in another paper as it will require some elaborate explanation.

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These two tables below are part of Dr. Banzon's presentation but not included in the article above. It shows PhiliHealth funding with and without the Sin tax money as there was some uncertainty yet in late November whether the sin tax bill will become a law or not. With the enactment of the law (RA 10351) in mid-December 2012, they will be using the second table for PhilHealth spending this year and succeeding years.

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See also:
PhilHealth Watch 10: Hospital Bill Deductions, December 29, 2011
PhilHealth Watch 11: Is PHIC an Insurance Company?, June 12, 2012
PhilHealth Watch 12: Assistance to Leptospirosis Patients, September 03, 2012
PhilHealth Watch 13: SHInES on Social Solidarity, November 26, 2012

PhilHealth Watch 13: SHInES on Social Solidarity

PhilHealth President, Dr. Eduardo "Dodo" P. Banzon, gave a nationwide lecture via teleconference this afternoon (2-5pm). It's the PhilHealth SHInES (Social Health Insurance Educational Series) at the Asian Institute of Management (AIM) in Makati and to aired live at Central Philippine University (CPU) in Iloilo City; Silliman University in Dumaguete City, USEP in Davao City, Ateneo De Naga in Naga City, and  SPU in Tuguegarao City. The Zuellig Center at the AIM organized the forum.

My events alarm failed to remind me of this important forum, I realized it only past 5pm when I saw the email invite from Zuellig Center. Oh my, signs of ageing I guess.

So I better write about the event. The objective of this exercise is for PhilHealth together with the Department of Health, further inform the public so that

The country can attain Universal Health Care (UHC) or Kalusugang Pangkalahatan (KP). Through the National Health Insurance Program (NHIP), PhilHealth seeks to provide financial risk protection to all Filipinos and ensure that no Filipino will be afraid of getting sick. There is need for a thorough understanding of the philosophy behind social health insurance – social solidarity and equity.

Dr. Banzon would talk on five presentation Topics:

1. Social Health Insurance and Social Solidarity
2. Legacies of Social Health Insurance
3. Health Inequalities in the Philippines
4. Universal Health Care, Redefined
5. Social Health Insurance Towards Universal Health Care

I think many of those topics are self-explanatory, like UHC, meaning all Filipinos and Philippine-based foreigners, will get government-health insurance at least portions of their total bill when they are hospitalized, which is good. Currently, PhilHealth also gives outpatient coverage for the poor, the CCT beneficiairies. But there are two subjects that I think are misunderstood or misdefined by PhilHealth: solidarity and health insurance..

On social solidarity, for me this is voluntary, it is never done via coercion. Each huge flooding in the Philippines for instance affecting hundreds of thousands of individuals or households, millions of Filipinos and foreigners who were not affected or only slightly affected, would quickly send in whatever resources they have -- canned foods, drinking water, medicines, old clothes, shoes and blankets, construction materials, money, and so on. This is solidarity, spontaneous assistance to the less privilege without coercion or a big agency like the government penalizing people if they will not give anything.

Thus, "social solidarity" cannot apply in the context of government-mandated programs. PhilHealth membership and contribution is not done via volunteerism but via coercion, like membership and contribution in Social Security System (SSS) and housing fund (PAG-IBIG). Whether people like those government services or not, whether they benefit or not, they have to pay a monthly or yearly contribution to the government.

On social health insurance, I do not think that this should imply government monopolization or nationalization of the service, something that is happening in many countries around the world, in both the rich and developing countries.. The important point is that all people, each individual, young and old, rich and poor, men and women, legitimate or non-legitimate children, should have a health insurance card that will cover not only hospitalization or in-patient services, but more importantly, outpatient services. Serious illness and diseases leading to hospitalization can often be prevented if people get treated early enough.

In food, there is no government restaurant or carinderia corporation, or a government supermarket and talipapa. There are a few government restaurants in government schools and offices but majority are privately-owned and operated. And yet people are eating. Why? Because of differentiated pricing, of market segmentation. People can choose to buy or cook food from the cheapest to the most expensive price levels. So the one that gives "food insurance" to the people is access to different food products at different prices for different needs and food taste of different people. There is no single price for each food item.

When government insists on service monopolization, it is courting financial disaster, either for the patient or for the government coffers in the long term, or both. In many countries in welfarist Europe, their public spending for healthcare is among the biggest items in their annual budget, which significantly contributes to their huge public debt and economic instability. A "free" or a heavily subsidized service like healthcare would attract huge demand, which outpaces the supply, always.

Demand larger than supply in healthcare shows in various ways. One is lousy service, say a government physician sees a patient, writes a few prescription and calls the next patient after just one or two minutes. Since government healthcare personnel are on fixed income, whether they treat 10 or 50 or 100 patients a day, the pay is the same. So in cases of high volume patients, the tendency is to cut the quality of service or the average time spent for patient education and preventive healthcare.

Two is modest or good service but patients have to wait for several days or weeks before they can get an appointment with a government physician or other healthcare professionals. If a doctor has to spend at least 30 minutes for each patient and he can spend only five hours a day on consultations as he has other work to do like hospital or school administrative assignment, or teaching in a medical school, or doing a clinical research, or oall of them, then he can see only 10 patients a day maximum. If there are 30 or more patients wanting to get his service, then the other 20 have to wait for days or weeks before the physician can see them.

Three is high number of government physicians and other health professionals to take care of high number of patients to minimize or eradicate long waiting period, but this will result in huge public spending and perennial budget deficit, leading to ever-rising public debt. Healthcare, preventive or curative, is not composed of seeing a physician alone. There are diagnostic tests to take, from urine test to blood test to X-ray to CT scan, etc., and these procedures are more often than not, very costly. So if we add up the professional fee + diagnostic tests fee + other hospital or clinic fee, the cost per patient will easily rise.

In order to avoid these pitfalls and financial catastrophe, both at the short- and long-term, it is important to give huge leeway or room for personal, parental, corporate, and civil society responsibility in healthcare. Government responsibility in healthcare should be a supplement only, not a primary source of financing.

I suggested in my earlier paper,

Socialized Healthcare 11: Private Health Insurance and HC Vouchers (November 16, 2012), that government involvement in healthcare can be in the form of giving people health vouchers, a flat rate per person per head. So instead of creating new government hospitals and spending huge amount for their maintenance, government can give each household a voucher, and the people, rich and poor alike, can choose which among the various hospitals, clinics, HMOs and other health facilities, can give them the kind of healthcare they need. Different HC services for different people with different budget and different health needs. Those who tend to abuse their body, they over-eat, over-drink, over-sit, over-smoke, must get a more expensive health insurance as their HC needs will be higher than the average person.

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See also:
PhilHealth Watch 9: Physicians talk about PHIC, October 16, 2011
PhilHealth Watch 10: Hospital Bill Deductions, December 29, 2011
PhilHealth Watch 11: Is PHIC an Insurance Company?, June 12, 2012
PhilHealth Watch 12: Assistance to Leptospirosis Patients, September 03, 2012

Socialized Healthcare 9: Grassroots Consultation, Insurance for Catastrophic Diseases, October 15, 2012

Socialized Healthcare 10: Peru Doctors' Strike, Health Financing, October 29, 2012