PhilHealth should provide incentives to eliminate out-of-pocket expenses

PhilHealth has instituted a no copayment policy for its benefit packages for the diagnosis and management of COVID-19. The costing of these benefit packages is a result of an iterative process involving data collection, stakeholder consultations, and data analysis. As such, we can say that the “maximum” health care cost for a specific service (e.g. SARS-CoV-2 test) or bundle of services (e.g. management of mild pneumonia) should be the amount reflected in PhilHealth’s benefit packages. Thus, any PhilHealth member availing a benefit package should not have copayment except for amenities or accommodation other than the basic or standard room. However, in some instances, the opposite is true.

The reimbursable amount for PhilHealth’s benefit packages for SARS-CoV-2 test by RT-PCR ranges from 901 to 3,409 pesos, depending on the services covered and whether the equipment and materials are paid for or donated by other institutions. The Philippine General Hospital’s (PGH) published rate for this test is 3,800 pesos. That is 391 pesos more than PhilHealth’s benefit package, assuming that PGH procured its own supplies for the test. Other health care providers charge as high as 8,000 pesos.

PhilHealth members who are eligible for these services may be charged copayment if the service rate is higher than PhilHealth’s benefit package rates. As a result, PhilHealth loses its monopsony power to lower health care costs and out-of-pocket payments. Therefore, I suggest that PhilHealth does not only exercise costing studies to get some price reference for health care services. The Corporation should strive to create incentives for providers to alter their cost structure while at the same time achieving the desired health outcomes. Rather than focusing on average or absolute costs, PhilHealth can look at relative costs and incentives. Indirect costs, such as overhead costs, should also be factored in the equation.

If PhilHealth wants to become the country’s “strategic purchaser” of health care goods and services, its benefit packages should be designed to provide effective incentives to health care providers. During the pandemic, PhilHealth can pay higher rates for COVID-19-related services to incentivize health providers, and eliminate unnecessary copayments or out-of-pocket expenses which are barriers to the utilization of health services, especially among those in the lower-income quintiles.


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