Joint Learning Network for Universal Health Coverage

Philippines: PhilHealth

75 million

Funding

Member contributions
Formal Sector
Premiums

Population Covered

All populations

Service delivery system

Both Public & Non-state

Institutional structure

Centralized
Central Government
Central Government
Central Government
Central Government
Reform summary: 
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The Philippine Health Corporation, or PhilHealth, was created in 1995 with the aim of placing a renewed emphasis on achieving universal coverage. In 2000 and 2005, additional reform efforts were outlined to make decentralization and health insurance reform work more effectively, including an expanded government subsidy for the enrollment of the poor, the creation of local health service delivery/planning units to reduce fragmentation, and a stronger DoH role in regulation.

The Philippine Health Corporation, or PhilHealth, was created in 1995 with the aim of placing a renewed emphasis on achieving universal coverage. In 2000 and 2005, additional reform efforts were outlined to make decentralization and health insurance reform work more effectively, including an expanded government subsidy for the enrollment of the poor, the creation of local health service delivery/planning units to reduce fragmentation, and a stronger DoH role in regulation.

Since PhilHealth’s creation, several developments have occurred in terms of expanding both the breadth and depth of health coverage. In terms of the population coverage, PhilHealth now has four categories of enrollees encompassing nearly the entire population:

  • Formal sector
  • Indigents that are financed by central and local governments
  • Retirees (non-paying members) who have already paid 120 months of membership and are 60 years or older
  • The individual paying program (IPP) for those not eligible for the other three categories. Although treated as a separate program, the Overseas Filpino Workers (OFW) program can be considered as part of the IPP category.

Since 1995, several improvements have been made to the benefits package and delivery system. For example, PhilHealth now has an Outpatient and Diagnostic Package limited to indigent enrollees. This new addition creates nearly comprehensive coverage for the indigent category of beneficiaries. All other beneficiaries have access to nearly comprehensive services, as well, excluding some outpatient care.

In terms of the delivery system, since the private sector is a major player in the delivery of health services, PhilHealth has introduced an accreditation program for private hospitals.

In 2000 and 2005, changes were implemented as a series of incremental reforms to improve the existing systems without fundamentally changing how health financing and delivery works in the Philippines.

Some of these incremental reforms include:

  • Expanded central government subsidy for the enrolment of the poor to encourage acceleration of efforts for universal coverage
  • Creation of local health service delivery/planning units to reduce fragmentation in health services delivery
  • Stronger DoH role in regulation, including the implementation of performance-based grants to LGUs

Some key reform indicators to date include:

  • Estimated coverage is 83% as of June 2009
  • Average period for payment of providers is estimated at 70 to 75 days from the time claims are received. The law requires PhilHealth to reimburse providers and/or members within 60 days but this has not been complied with prompting a recent move as of December 1, 2009, to implement a “simplified reimbursement scheme” wherein 75% of the claims amount is reimbursed after a rapid assessment of member and provider eligibility and the remaining 25% reimbursed after detailed review of the claims.
    • On average, 90 out of every 100 claims are paid, 3 to 4 are denied, and 6 to 7 are returned to health care providers for incomplete information
  • Based on 2008 claims reports, 28% of claims were submitted by public providers and 72% by private providers
Funding: 
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Funding for the scheme varies based on the population covered, although the majority of funds flow from general taxation. Premiums for the formal sector are set by law to be up to 3% of monthly income. Premiums for both the poor and the informal sector are 1,200 pesos annually (about 25 USD).

Funding for the scheme varies based on the population covered, although the majority of funds flow from general taxation. Premiums for the formal sector are set by law to be up to 3% of monthly income. Premiums for both the poor and the informal sector are 1,200 pesos annually (about 25 USD). However, the cost of insurance for the poor is fully subsidized by the central and local governments.

Funding by population is as follows:

  • Formal sector: Employer and the employee split the required premium 50/50%.
  • Indigents: Central and local governments fully subsidize, with local governments contributing (on average) 25% of the premium and national government contributing (on average) 75% of the premium.
  • Retirees: Lifetime free membership for those who are 60 years old and older and have paid 10 years worth of premiums during employment in the formal sector.
  • Non-poor, Overseas Filipino Workers (OFWs), and others not eligible for other three categories: Premiums paid by individuals, referred to as the individual paying program (IPP).

Both national and local governments are responsible for the full subsidy for indigents. A recent policy proposal is for the national government to fully pay the subsidy in order to accelerate the efforts towards universal coverage by enrolling the poorest. However, this proposal has not been approved and the current cost-sharing scheme remains. Currently, the local government identifies and determines who is poor, then enrolls them in the national health insurance program. Once enrolled, the national government is expected to pay its counterpart. The central government cost-sharing percentage depends on the income level of the local government, but on average local governments contribute 25% and the national government contributes 75%.

All premiums are pooled nationally and in effect, there is cross-subsidization across districts. The frequency of premium contributions varies by each population category. For example, formal sector payroll collections naturally occur monthly, while for the non-poor, premium contributions occur based on when individuals seek to enroll. For OFWs, the premium is collected upon departure from the country and then on an annual basis. For the poor subsidized by the government, enrollment occurs annually and the local government pays quarterly while the national government is billed as soon as enough local governments have enrolled their poor. National government payment is dependent on the availability of funds.

Premiums for formal sector are set by law to be up to 3% of the monthly income. However, the current level is 2.5%, applied up to the first 30,000 pesos of income (i.e., all people earning up to or more than 30,000 pesos pay the same premium, while people with salaries under 30,000 pesos pay less). The premium of 1,200 pesos annually for the poor and informal sector has been the same for more than 9 years. The rate for the OFWs was 900 pesos annually until two years ago when it was increased to 1,200 pesos.

Population covered: 
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PhilHealth coverage is theoretically available to the entire population. The enrollment process differs based on the population group. For example, all formal sector workers must enroll at the start of employment.

PhilHealth coverage is theoretically available to the entire population. The enrollment process differs based on the population group. For example, all formal sector workers must enroll at the start of employment. The poor are identified and enrolled by the local government.

The population is tagged to one of the four major population categorizations:

  • Formal sector
  • Indigents that are financed by central and local governments
  • Retirees (non-paying members) who have already paid 120 months of membership
  • The individual paying program (IPP) for those not eligible for the other three categories

The benefits package is essentially the same for each population group. The exception is for indigents and the Overseas Filipino Workers (OFW) who have additional outpatient primary care benefits (with the providers paid by capitation) however these benefits are available only through public providers.

However, the enrollment process for each population category differs. For the formal sector, employees are enrolled upon the start of employment. It is mandatory that all employees enroll in health insurance. No exceptions are allowed for the size of the company. For the poor, the local government determines “poorness” and enrolls those who are determined poor. For the rest of the population there is open enrollment—one can walk into a local enrollment office anytime to enroll.

While enrollment is mandatory only for the formal sector, for the remainder of the population, it is “construed” as voluntary although the law can be interpreted as being mandatory. There is an ongoing debate on the issue of mandated versus voluntary enrollment.

Enrollment in PhilHealth is by family so the premium paid covers the member, the spouse, eligible children (those less than 21 years of age), and eligible parents (those 60 years and above and who depend financially on the member). Given that enrollment is by family, documentation of proof of marriage and birth(s) are required before spouses and children are enrolled. This is a problem for indigenous population as they usually do not have marriage and birth certificates.

While the country has achieved significant strides in moving towards universal enrollment, covering the poor and informal sectors remains a challenge, with methods to enroll these populations through organized groups gaining very little traction. There is much ongoing discussion regarding the need for the central government to finance and/or subsidize the enrollment of the nation’s entire poor population. Leaving financial responsibility for insuring the poorest to local governments, coupled with a refusal to outright declare insurance as mandatory for all populations, makes it nearly impossible for the government to reach universal health coverage. It also forces PhilHealth to invest heavily in marketing campaigns for the program to local governments.

Benefits package: 
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PhilHealth beneficiaries have access to a nearly comprehensive package of services, including inpatient care, catastrophic coverage, ambulatory surgeries, deliveries, and outpatient treatment for malaria and tuberculosis. Those identified as indigent and OFW are also entitled to outpatient primary care.

PhilHealth beneficiaries have access to a nearly comprehensive package of services, including inpatient care, catastrophic coverage, ambulatory surgeries, deliveries, and outpatient treatment for malaria and tuberculosis. Those identified as indigent and OFW are also entitled to outpatient primary care.

More specifically, services included range from:

  • Inpatient care: a.) room and board; b.) drugs and medicines; c.) diagnostics and other services; d.) professional fees and; e.) operating room services.
    • These benefits are subject to some limits, which differ based on the level of the health facility/hospital (level 1 to 4 hospitals and the Ambulatory surgical centers equivalent to level 2 hospitals) and the severity of the cause of admission (case-type A, B, C and D)
    • Catastrophic coverage also subject to limits discussed above
  • Ambulatory surgeries including ambulatory dialysis
  • Deliveries
  • Outpatient malaria and TB-DOTS care

Except for the outpatient primary care that the poor and OFW are entitled to via public providers, there is free choice of providers for beneficiaries, both public and private.

Annual or lifetime coverage limits do exist. These limits are expressed in terms of volumes of services (e.g., days) rather than a peso coverage limit. For example, member households are eligible for 45 days of inpatient admission, sharing 45 days among all household members. Each day of ambulatory surgery counts as a day of admission.

While there is no formal system that sets fixed deductibles or co-payments, health care providers are allowed to charge the patient the balance between the total cost of care and what PhilHealth pay (i.e., balance billing).

There are some waiting periods before beneficiaries can access care; waiting periods differ by population category:

  • Formal sector: 3 months
  • Poor: none
  • Retirees: none
  • Non-poor, OFWs, and others not eligible for other three categories: 9 months for elective procedures and deliveries, 3 months for the rest
Service delivery system: 
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The service delivery system includes both public and private centers; on average, the network is comprised of 61% private and 39% public providers.

The service delivery system includes both public and private centers; on average, the network is comprised of 61% private and 39% public providers. In order to achieve accreditation, all in-network hospitals and day-surgery centers must be licensed by the Department of Health.

The network includes hospitals, day surgery centers, maternity care clinics, midwife-operated clinics, freestanding dialysis centers, physician clinics, dentists doing procedures in hospitals and day surgeries, government-run health centers for primary care benefits, TB DOTS and malaria, and private TB-DOTS clinics.

Non-hospitals and day-surgery centers are not required to be licensed by the DOH; however, all facilities are evaluated by an accreditation team from PhilHealth.

Institutional structures: 
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The scheme is entirely administered by PhilHealth, a government corporation attached to the Department of Health. PhilHealth collects premiums, accredits providers, sets the benefits packages and provider payment mechanisms, processes claims, and reimburses providers for their services.

PhilHealth is responsible for oversight and administration of public sector insurance schemes.

The scheme is entirely administered by PhilHealth, a government corporation attached to the Department of Health. PhilHealth collects premiums, accredits providers, sets the benefits packages and provider payment mechanisms, processes claims, and reimburses providers for their services.

PhilHealth is responsible for oversight and administration of public sector insurance schemes. It has a governing board chaired by the Secretary of Health with representation from other government departments (ministries) and agencies, and the private sector including the OFW sector.

PhilHealth also features a governing board composed of 13 individuals, chaired by the Secretary of Health, with the president and CEO of Philhealth as vice-chariman. The president and CEO have a fixed term of 6 years.

Salaries and other operating expenses are derived from premium payments and the income of the funds under management. PhilHealth can use up to 12% of the previous year’s premium and 3% of the income of the fund it manages towards operating expenses.

For monitoring and evaluation, Congress has mandated the National Institutes of Health (based in the University of the Philippines) to conduct studies that will verify and validate the performance of PhilHealth.

Provider payment mechanisms: 
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Provider payment methods differ based on the type of care delivered. Fee-for-service reimbursements are used for inpatient care, most day surgeries, and ambulatory procedures, while primary care providers are reimbursed based on a capitation system.

Provider payment methods differ based on the type of care delivered. Fee-for-service reimbursements are used for inpatient care, most day surgeries, and ambulatory procedures, while primary care providers are reimbursed based on a capitation system. For TB-DOTS treatment, malaria care, deliveries, surgical contraception, and cataract surgeries, a case-based payment methodology is utilized.

There is no formal system that sets fixed deductibles or co-payments for beneficiaries, but health care providers are allowed to “balance bill”, charging patients the balance between what PhilHealth pays and the total cost of care. This is atypical of most government health programs around the world and can lead to abuse by providers (e.g., overcharging) and thus limited access for the poorest. At the same time, balance billing allows providers additional cost recovery in the case that the reimbursement for services does not cover their cost.

Quality: PhilHealth currently leverages internally developed quality standards. A new set of standards called the “PhilHealth Benchbook” was implemented starting January 1, 2010. The Benchbook was developed by PhilHealth with the assistance of various international health partners and several rounds of consultations with health providers.

The previous and new quality standards are overseen by PhilHealth. The new quality standards focus on the following domains of quality of care: patient rights and organizational ethic, patient care, leadership and management, human resource management, information management, safe practice and environment, and mechanisms of improving performance. With the implementation of the new standards this year, hospitals can now be accredited for up to 3 years compared with the previous practice of annual accreditation. PhilHealth has accreditation staff who physically check and verify compliance. PhilHealth has also set peer review committees essentially composed of health care providers who review specific cases.

PhilHealth has been planning to implement quality-based purchasing but has not executed on this plan as of December 2009.

Performance-based Payment: PhilHealth has been developing incentive payments but this work has been focused on payment to health care professionals and not for health facilities. Doctors are usually independent free agents who ‘practice’ in hospitals. Even government physicians who are salaried are allowed to engage in private practice. Thus, PhilHealth payments are split for health professionals and health facilities and efforts to implement case payments essentially focus on bundling the payment for the health facilities.

Among PhilHealth’s work in incentive-based payments is a scheme that has been piloted in 30 local government hospitals since 2002 but has not been scaled up. The scheme is called the Quality Improvement Demonstration Study (QIDS). It utilizes clinical vignettes to measure quality of care. If a hospital passes a set quality of care index score, the payment for physicians is increased. Clinical vignettes focus on the management of illnesses of children less than six years of age.

Another incentive scheme is increased payment for health professionals practicing in areas where there is a lack of doctors.

Claims Processing: The claims processing procedure is still a manual operation. Electronic claims submissions have long been planned but have not been implemented. Hospitals or members fill out claims forms that are then submitted to PhilHealth within 90 days from hospital or health facility discharge. Two forms are usually submitted: First, a form that documents who the member is and premiums paid; and second, a form that details the service provided. Claims are submitted to 17 regional claims processing centers. These centers initially review if the claims are eligible. Review is inputted manually with a number of data encoded into the claims processing information system. Once the claim is approved for payment, checks are prepared for the signature of regional heads. Electronic reimbursements have been planned but have not yet been implemented.

Monitoring and evaluation: 
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PhilHealth conducts its own monitoring and evaluation, though the law mandates that the University of the Philippines' National Institutes of Health also engages in monitoring of the scheme.

PhilHealth conducts its own monitoring and evaluation, though the law mandates that the University of the Philippines' National Institutes of Health also engages in monitoring of the scheme. Evaluations on the PhilHealth program are ongoing.

The Department of Health (to which PhilHealth is an attached agency) already conducts monitoring and analysis of various data, including number and value of claims filed, number of accredited providers, number and value of premiums paid, number of members, etc. There are attempts to expand beyond the above ‘traditional’ performance metrics and go deeper on each.

A group of USAID cooperating agencies has just completed one study (results not yet publicly released). The study looks at many aspects of the program, including financial risk protection, public awareness, coverage, benefit delivery ratio, and availability of providers.

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