Last Wednesday, May 28, I received a message from an officer of the NCR South Branch of the Philippine Health Insurance Corp. (PhilHealth), apologizing “for the late revert on your inquiries on PhilHealth benefit for heart related conditions.” It was in response to a letter I sent to PhilHealth president Emmanuel Ledesma on Jan. 7.
Actually, PhilHealth’s Corporate Action Center had replied on Jan. 16 to my letter to Mr. Ledesma. The writer of the May 28 missive was obviously unaware that the Corporate Action Center had replied in due time to my letter to Mr. Ledesma. It shows how PhilHealth operates. Here is what went on before I received the letter this May.
Upon seeing the PhilHealth announcement in BusinessWorld on Jan. 7 that the benefits for heart disease had increased 15-fold, I wrote to Mr. Ledesma on the same day, asking him how and where I could avail myself of the announced increase in benefits such as subsidized maintenance medicines and regular laboratory/diagnostic tests.
I have been taking a handful of maintenance medicine twice a day, and having blood chemistry tests every four months and 2-D Echo tests every six months. I buy the medicines from drugstores, and get the tests done in private laboratory/diagnostic centers.
I asked Mr. Ledesma if I had to obtain the medicines and avail myself of the laboratory/diagnostic tests services of PhilHealth’s Konsulta, or if I could continue buying the medicines from drugstores and having the tests done in commercial diagnostic centers, with PhilHealth reimbursing me the amount equivalent to the Konsulta benefit package.
On Jan. 16, I received from the Corporate Action Center of PhilHealth some reference files as their reply to my Jan. 7 letter. The files were for Benefits Package for Ischemic Heart Disease – Acute Myocardial Infarction, Implementing Guideline for the PhilHealth Konsultasyong Sulit at Tama Heart Disease, and List of Accredited Konsulta Package Providers for CY 2024.
On Jan. 20, I went to the nearest Konsulta office to avail myself of the announced increased benefits for heart disease. It was not really an office. It was a tent in the parking lot of a shopping mall — the Alabang Town Center, which is just three kilometers from where I live. The staff there received me well and were very courteous and solicitous. But they very nicely informed me that the office didn’t have the facility and capacity to service my needs — free diagnostic tests and medicines. They referred me to another office — on the other side of town — for the diagnostic tests but they said I still have to pay, although at a cost that is less than that of private diagnostic centers. As for the medicine, they didn’t have any of what my cardiologist prescribes, even if some of them are generics.
So, on Jan. 28, I wrote to Mr. Ledesma asking him not to begrudge me for saying his announced expanded benefits for those with heart disease is false publicity and for writing so in BusinessWorld. I didn’t write about it though because the issue had become moot when Mr. Ledesma was replaced as president of PhilHealth.
I never got an answer to my question if I can continue buying the medicines from drugstores and having the diagnostic tests done in commercial diagnostic centers, with me paying whatever is above the cost of the Konsulta package. Just like when I need hospital care and service, I go to a private hospital, PhilHealth pays what it would cost if I were confined in a government-owned hospital and I cover the difference.
Still, there are other issues with this package.
In the first place, PhilHealth’s benefit packages should not be in the form of healthcare services and medicines. PhilHealth is a health insurance company. A health insurance company pays some or all of the insured person’s healthcare costs. It acts as a financial shield, protecting individuals from the high costs of unexpected medical expenses. PhilHealth’s benefit packages should be in the form of money or cash.
Maybe the reply from the officer of the NCR South Branch was a knee-jerk reaction to my May 28 column in which I wrote that Republic Act No. 11223, or An Act Instituting Universal Health Care for All Filipinos, did not really institute universal healthcare when it insured Filipinos with PhilHealth. Universal healthcare means free or affordable healthcare services. This is only feasible if the government owned a sufficient number of hospitals and primary care clinics staffed by healthcare professionals employed by the government.
While the Philippine government owns hospitals and employs healthcare workers, their numbers fall way short of those required to provide the health services needed by the 112 million Filipinos. Many patients are forced to seek medical services in private hospitals. That is why RA 11223 insured all Filipinos in PhilHealth, to defray the cost of medical care. However, according to the findings of the Philippine Institute of Development Studies, PhilHealth pays only 40% of their hospital bill.
In my very recent hospital episode, PhilHealth paid 22% of my total bill, which was net of the 20% senior citizen discount. In previous episodes, before the benefit packages were upgraded, PhilHealth sometimes paid only 8%. That is why I say the country has not really instituted universal healthcare because affordable healthcare is not available to the great majority of Filipinos.
PhilHealth has not been able to defray the cost of a PhilHealth member’s medical bill because it does not have the right people running it. An insurance company in whatever line — life, property, marine, or health — must have an actuary. An actuary is a business professional who uses mathematical and statistical models to assess and manage risk. He analyzes future events and calculates the cost of financing these uncertain events. An actuary should be a wizard in mathematics, statistics, finance, business, and social sciences.
The health insurance actuary calculates the likelihood of future events such as how many PhilHealth members will need medical service and care in the next 12 months and determines the cost of financing those eventualities. The insurance actuary is typically a master in actuarial science.
Several House of Representatives inquiries into the operations of PhilHealth have cast doubt on the competence of the PhilHealth officer called actuary. I have repeatedly asked for her resume, to no avail.
An insurance company must also have a fund manager or must engage a fund management firm. The fund manager is responsible for handling large sums of money, making wise and timely investments, building portfolios, and ensuring financial growth. The typical fund manager possesses as a minimum a bachelor’s degree in economics, finance, and business. He may have gone through advanced studies in financial management or hold a master’s degree in economics and have had significant experience as a trader in a bank. He may even carry the title Chartered Financial Analyst.
The PhilHealth officer who carries the title of Fund Manager is none of those. He even has a confused understanding of “reserve” as used in the insurance business. He was designated Fund Manager because he knows accounting. The PhilHealth Board of Directors must have thought knowledge of accounting is all it takes to be a fund manager.
The Philippine Health Insurance Corp. was created in 1995 to implement universal health coverage in the Philippines. On Aug. 4, 1969, Republic Act 6111 or the Philippine Medical Care Act of 1969, was signed by President Ferdinand E. Marcos, Sr. and implemented in August 1971. Its stated goal is to “ensure a sustainable national health insurance program for all.”
PhilHealth has failed to implement universal health coverage. It has to be reconstituted. The law that created it, RA 6111, must be amended.
The amended law must require PhilHealth to function solely as a health insurance company, not as a provider of medicine and diagnostic test services. The law must also require PhilHealth to hire a certified health insurance actuary and a chartered fund manager. The law should provide that neither officer should assume at the same time the position of chief executive officer or chief operating officer so as to allow them to focus full-time on their job.
Oscar P. Lagman, Jr. was country manager for a multinational health insurance company.
