philippines' health system and financing (2015)

PhilippinesHealth System and Financing

Karlo Paolo P. [email protected]

October 30, 2015

KSP – ADB Universal Health Coverage Regional ForumAsian Development Bank, Manila, Philippines

Contents

• Introduction

•Strategic purchasing• Benefit coverage

• Payment system for health providers

• Contractual relations with providers

• Review and assessment / quality of care

•Challenges and Policy Recommendations

KSP – ADB Universal Health Coverage Regional Forum

GDP and Health Expenditure• The Philippines’ economy

enjoyed continuous growth since 2009 and will continue to do so in the coming year (ADB projection at 6.3% in 2016).

• Health expenditure per capita is also increasing but not at the same pace as the country’s GDP growth


Leading Health Problems (1990-2013)

• The Philippines is in epidemiological transition; Disease of both communicable and non-communicable in cause are simultaneously affecting the population.

• Communicable disease continues to decline but non-communicable diseases are emerging;

• Lower respiratory infection decreased 68% from 1990;

• 43% and 48% increases in ischemic heart and cardio-vascular diseases were noted from 1990 data. (170% increase in diabetes)


Leading causes of disability-adjuster life years in 2013 and percent change, 1990-2013

Source: http://www.healthdata.org/philippines

Key health reform milestones (1)


Year Milestone

1979Adoption of the primary health care (post alma ata convention on PHC)

1987Reorganization of the Ministry (later Department) of Health through EO 119

1991 Devolution of health services (RA 7160 - Local Government Code)

1995National Health Insurance Law creates the Philippine Health Insurance Corporation (Philhealth) with a mandate to expand health insurance coverage to all Filipinos

1999 The Health Sector Reform Agenda (HSRA) was initiated

2005The FOURmula ONE (F1) for health was initiated; follow-up to the reforms made after the HSRA

Health services delivery / organization- Major reforms in health

service delivery in the past

2-3 decades shaped the

current health system in the

Philippines.

- Devolution of health

services and the creation of

Philhealth were the two

critical reforms that

happened in the 90s.

Key health reform milestones (2)


Year Milestone

2010Universal Health Care restructures premium payments for the poorest income quintiles comprising 40 percent population (UHC - Aquino Health Agenda)

2011Universal Health Coverage (locally: Kalusugan Pangkalahatan) launched; DOH DO 2011-0188

2011Universal Health Care restructures benefits through the No Balance Billing Policy for designed case rates (initial 23 case rates)

2012Sin Tax Law was enacted through RA 10351 restructuring the excise tax on alcohol and tobacco products

2013Second amendment of the National Health Insurance Act of 1995 through RA 10606

2013 Philhealth shift of provider payment from FFS to Case-based payments

Health financing and UHC- The country’s road to UHC

started to take form in 2010, with

the movement to insure the

poorest Filipinos (40%).

- Following the extensive attention

to UHC, the DOH’s KP/UHC policy

and the No Balance Billing (NBB)

policy was launched in 2011.

- Succeeding reforms include

additional financing for health (sin

tax), shift to case payments, etc.

Health system organization


Region* BHS RHU Hospital Total

CordilleraAdministrative Region (CAR) 792 98 58 948

National Capital Region (NCR) 493 20 216 729

Region I (Ilocos Region) 1,158 150 125 1,433

Region II (Cagayan Valley) 1,336 97 97 1,530

Region III (Central Luzon) 1,858 290 218 2,366

Region IV-A (CALABARZON) 2,373 232 263 2,868

Region IV-B (MIMAROPA) 1,103 82 66 1,251

Region V (Bicol Region) 1,144 135 122 1,401

Region VI (Western Visayas) 1,878 147 95 2,120

Region VII (Central Visayas) 2,025 160 111 2,296

Region VIII (Eastern Visayas) 900 152 84 1,136

Region IX (Zamboanga Peninsula) 732 92 68 892

Region X (Nothern Mindanao) 1,304 122 110 1,536

Region XI (Davao Region) 1,118 69 114 1,301

Region XII (SOCCSKSARGEN) 1,095 53 107 1,255

Region XIII (CARAGA) 685 82 59 826

Autonomus Region in Muslim Mindanao (ARMM) 452 133 44 629

TOTAL 19,994 1,981 1,913 23,888

* Provinces of Negros Island Region still part of regions VI and VII (Established: May 21, 2015)

Source: National Health Facility Registry v2.0 (Accessed Sept. 30, 2015)

• Primary health facilities (BHSs & RHUs) are

maintained by Local Government Units

(LGUs).

Primary health services (Immunization,

basic maternal and child health

programs, and others) are provided in

primary health facilities.

• 36% of Hospitals are located in 3 regions

alone. The remaining 64% are shared by the

other 14 regions.

Less populated regions / rural areas may

have lower physical access to hospital

facilities.

Health Financing (1): Total Health Spending


Composition of Total Health Expenditure in the Philippines

• Private Health Expenditure in the

Philippines increased at a much faster rate

compared to government health

expenditure from year 2000-2013.

• Private Health Expenditures in the country

are primarily sourced from Out-of-pocket

(OOP) spending; Only around 5% of the

population are covered by PHI (pro-rich).

• Social Insurance coverage increased since

2008 but not as fast as the expansion of

private spending (Shrinking government

share in spending).

Health Financing (2): OOP


• Out-of-pocket spending in the Philippines

continued to increase surpassing OOP in

Indonesia and Vietnam since year 2000.

OOP spending in the Philippines compared to Indonesia &

Vietnam, 2000 to 2013

• Since 2005, OOP spending in the

Philippines remains to be more than 50%

of the country’s total health expenditure.

• Compared to Indonesia and Viet Nam,

OOP in the Philippines is highest (2013).

Health Financing (3): Population coverage


• Members from the (1) Private Sector, (2)

Sponsored category continues to

increase from 2011-2015.

Registered Members (Primary)

Membership Category 2011 2012 2013 2014 2015* Trend Remarks

FS - Private 8.85 9.61 10.3 11.00 11.33 Increased

FS - Government 2.01 2.03 2.07 1.95 1.98 Decreased

Sponsored** 9.57 8.29 9.61 19.08 20.59 Increased

IP - Informal*** 4.34 5.06 5.38 2.48 2.58 Decreased

Lifetime 0.57 0.66 0.77 0.93 0.96 Increased

OWP 2.57 2.84 3.14 0.96 1.09 Decreased

TOTAL 27.91 28.49 31.27 36.41 38.52

Philhealth Population

Coverage82% 84% 79% 87% 88%

Notes:

Source: 2011-2015 Stats and Charts, http://www.philhealth.gov.ph/about_us/statsncharts/ (Accessed 10/01/2015)

* 1st Semester of 2015 (June 30, 2015)

**Sponsored for 2014 & 2015: Total members from Indigents, Sponsored Members & Senior Citizens

***Informal for 2014 & 2015: Total members from Informal Sector, Household Help, Enterprise / Driver, Self-Earning individuals,

Organized Groups

Senior Citizen: Accounts for 18.5% and 23.3% of total sponsored members in 2014 and 2015

• Members from the informal sector

(individually paying, household help,

drivers and organized group) and

government employees (formal sector)

decreased in 2014 and 2015.

Philhealth Members

• 88% of all primary members are from the

Formal Sector and the Poor (sponsored)

– Missing middle?

• Population coverage (Philhealth

computation): 88% in 2015

Health Financing (4): Population coverage (con’t)


• Population coverage from household surveys

may also reflect household’s awareness of

their insurance status = more household are

aware of their insurance status in 2013.

Philhealth Coverage from National Household Surveys, 2008 & 2013

2008 2013

Lowest 19.60% 61.60% 42%

Second 28.60% 55.60% 27%

Middle 35.30% 52.20% 17%

Fourth 48.20% 59.40% 11%

Highest 57% 72.70% 16%

Note:

*Absolute increase = 2013 coverage - 2008 coverage

Source: NDHS 2008, 2013

Population CoverageIncome

quintile

Absolute increase*

in percentage

(Baseline 2011)

• Population coverage significantly

increased from 2008 to 2013 especially for

the lowest and second lowest quintile

(poorest and next poorest); This reflects

improvements Philhealth coverage for the

poor.

Strategic purchasing


Benefit coverage | Payment system for health providers | Contractual

relations with providers | Review and assessment / quality of care

A. Benefit Coverage (1)


In-patient benefits

• Shift from FFS to All Care Rate (ACR)

• More pronounced benefits (ACR)

• Philhealth covers in-patient medical and

surgical cases as identified in the recently

launched All Case Rate (ACR) payment

system (2013).

• In Government hospitals, a No Balance

Billing (NBB) policy was implemented

(2011) for medical cases among the

sponsored members.

• This was further expanded to accommodate

the ACR transition; 48% of government

facilities on NBB (Philhealth, 2015)



• Out-patient benefit packages are designed

per specific services provided in out-

patient facility. For example, RHUs can be

accredited in one or all of the PCB

(Tsekap), MCP, TB-DOTS, Malaria, etc.

In-patient benefits



Out-patient benefits

• Out-patient benefit packages for RHUs/HCs (OPB, MCP, TB-DOTS)

• Other OP benefits (ASC, RT, OBT, DC)

• Other accredited out-patient services by

Philhealth includes (1) Ambulatory

Surgical Clinics (ACS) [private facilities],

(2) Dialysis centers (DC) [private & public];

Others: Outpatient blood centers and

Radiotherapy



• Philhealth’s Z-Benefit package covers selected

medical cases (cardio-vascular diseases, cancers,

etc.) that have the potential to cause

catastrophic spending.

In-patient benefits



Out-patient benefits

• Out-patient benefit packages for RHUs/HCs (OPB, MCP, TB-DOTS)

• Other OP benefits (ASC, RT, OBT, DC)

Z-benefit package

• Catastrophic care packages (Implemented in selected Hospitals)

• Only available in selected accredited facilities;

which is still very limited (e.g. CABG Surgery

coverage is only covered in three hospitals in the

country – 1 each in NCR, Region VII and Region

XI)

• Z-benefit provides the most generous coverage

of Philhealth in selected accredited institutions

(e.g. single claim can reach 550,000 Php).



• Philhealth’s total benefit payment

increased most significantly for the

Sponsored and the Informal Sector.

• The notable increase in the informal

sector benefit payment should be

further evaluated (e.g. Possible

adverse selection - is the payment

driven by z-benefit reimbursements?)

• Considering the number of registered

members, Philhealth still seem to be

paying more for members in the

Formal and the Informal Sector

Sector 2011 2012 2013 2014

Percentage change

in payment

(2011 baseline)

4-year Total Share

FS - Private 12,222.20 13,379.00 14,208.96 18,015.57 47% 57,825.73 27%

FS - Government 5,964.30 6,846.30 7,161.01 8,494.05 42% 28,465.66 13%

Sponsored** 7,338.10 12,094.60 17,971.59 25,558.16 248% 62,962.45 29%

IP - Informal*** 5,826.40 9,622.90 10,410.54 19,245.64 230% 45,105.48 21%

Lifetime 2311.90 3,689.70 4,144.83 5,611.94 143% 15,758.37 7%

OWP 1,222.00 1,578.10 1,662.56 1,250.06 2% 5,712.72 3%

TOTAL 34,884.90 47,210.60 55,559.49 78,175.42 124.10% 215,830.41 100%

Note:

*Total benefit payments (January 1-December 31) in 2011-2014

Percentage change in payment = (2014 sector payment - 2011 sector payment)/2011 sector payment

Share = four year total (sector) / four year total (all sector)

Source: 2011-2015 Stats and Charts, http://www.philhealth.gov.ph/about_us/statsncharts/ (Accessed 10/01/2015)

***Informal for 2014 & 2015: Total members from Informal Sector, Household Help, Enterprise / Driver, Self-Earning individuals, Organized

Groups

**Sponsored for 2014 & 2015: Total members from Indigents, Sponsored Members & Senior Citizens

B. Payment system for health care providers (1)


Government Facilities

Private Facilities

Budget

PHIPremium (Pro-Rich)

Philhealth

Premium

Government Subsidized Group

Free

NBB?

BB

AC

R

AC

R

OOP

PhilhealthPayments

*NBB = No Balance BillingBB = Balance Billing

B. Payment system for health care providers (2)


Philhealth

• from FFS to ACR* (All Case Rates) in 2013

+ NBBHospitals

Accredited Primary Care Facilities (Government)

Accredited Primary Care Facilities

(Private)

Z-Benefit accredited facilities

• Capitation / applicable case rates

• Applicable case rates

• Z-benefit packages (case rate)

*ACR followed cases as identified in ICD-10

ACR vs. DRG = ACR does not have diagnosis related group

C. Contractual relations with providers (1)


• Accreditation of Hospitals are

extensive (Recognition of DOH

accreditation of health care institutions).

• Private-sector dominated (passive

privatization?; May follow inequality in

distribution of facilities (Service delivery

gaps)

• Private hospitals are allowed to

balance-bill patients (no cost ceiling / no

fixed co-pay regulations)

2013 2014 2015 2013 2014 2015

Level 1 437 450 432 262 293 303

Level 2 213 235 246 44 46 49

Level 3 68 67 67 46 48 48

Infirmary 335 336 360 356 351 342

Total 1,053 1,088 1,105 708 738 742

CategoryGOVERNMENT

Source: 2011-2015 Stats and Charts,

http://www.philhealth.gov.ph/about_us/statsncharts/ (Accessed 10/01/2015)

PRIVATE

Accreditation of facilities is important in benefit

coverage – all cases treated in non-Philhealth

accredited health care institutions will not be

covered by Philhealth

C. Contractual relations with providers (2)


• PCB accreditation is relatively distributed

throughout the region (with limitations in

regions I, II and regions in Mindanao)

• TB-DOTS and MCP have relatively wide

distribution; MCP heavily participated by the

private sector (private lying-in clinics) but

problematic regions (low accreditation) still

exist.

• Other accreditation types (ASC and DC) is

heavily concentrated in Metro Manila; Few

accredited facilities in other regions.

Priv Govt Priv Govt Priv Govt Priv Govt Priv Govt

Cordillera Administrative Region (CAR) 3 66 - 100 7 91 1 - 4 -

National Capital Region (NCR) 6 83 - 305 107 10 66 - 72 -

Region I (Ilocos Region) 2 13 - 8 ** ** 3 - 7 -

Region II (Cagayan Valley) 1 ** - 12 23 17 4 - 3 -

Region III (Central Luzon) 1 27 - 101 87 15 12 - 22 1

Region IV-A (CALABARZON) 2 29 - 150 69 23 10 - 19 -

Region IV-B (MIMAROPA) 1 38 - 59 6 35 - - 1 -

Region V (Bicol Region) 5 53 - 81 52 38 3 - 5 -

Region VI (Western Visayas) 4 73 - 70 36 38 4 - 6 -

Region VII (Central Visayas) 8 97 - 123 43 75 3 - 5 -

Region VIII (Eastern Visayas) 1 124 - 139 55 169 2 - 2 -

Region IX (Zamboanga Peninsula) 0 30 - 63 - 18 2 - 1 -

Region X (Nothern Mindanao) 1 2 ** ** ** ** 2 - 3 -

Region XI (Davao Region) 5 2 - 3 7 2 1 - 6 -

Region XII (SOCCSKSARGEN) 1 44 ** ** 10 12 3 - 2 -

Region XIII (CARAGA) 3 34 - 27 5 4 1 - 1 -

Autonomus Region in Muslim Mindanao (ARMM) 0 63 - 70 19 61 - - - -

TOTAL 44 778 - 1,241 507 547 117 - 159 1

* Provinces of Negros Island Region still part of regions VI and VII (Established: May 21, 2015)

** No data reported

Source: Philhealth list of accredited providers as of March 20, 2015 (Accessed Sept. 30, 2015)

TB-DOTS = Tuberculosis DOTS; PCB = Primary Care Benefit; MCP = Maternity Care Package; ASC = Ambulatory Surgical Clinic; DC = Dialysis Center

TB-DOTS PCB MCP ASCRegion*

DC

D. Review and assessment / Quality of Care (1)


D. Review and assessment / Quality of Care (2)


Health Care Provider

Performance Assessment

System (HCP PAS) of 2014

- Provides platform for

Philhealth quality

assessment /

performance

assessment aligned

with the recent shift of

provider payment (FFS

to ACRs).

Method Definition

1. Claims / Services

Profiling

review of claims database; detecting “anomalies” in claims per

specific health care provider (e.g. Unusual increase in

reimbursements (volume), length of hospital stay, etc).

2. Medical Audit Reviewing paid claims vis-à-vis standards of practice in the facility

(in-line with facility’s performance commitment).

3. Philhealth Patient

Exit Surveys

Made possible through the PCARES (Philhealth Customer Relations

and Empowerment Staff) deployed in accredited facilities.

4. PCB/Tsekap Client

Satisfaction Survey

Done semi-annually by AQAS (Accreditation and Quality Assurance

Section) / LHIO (Local Health Insurance Office) to selected PCB

accredited facilities and clients.

5. Receiving of member

complaints

investigation of reports from client experience in specific health care

institution.

6. Regular / Routine

Facility Visits

Regular announced or unannounced visits to facilities to check the

facilities’ compliance to performance commitment / standards of

care.

Challenges and Policy Recommendations


Challenges & policy recommendations


1. DOH as steward to respond to supply-side challenges

Gaps in service delivery should be carefully assessed and resolved with the

local government units (DOH as a steward).

• The DOH’s leverage to upgrade facilities in the past years should well translate to:

a) Increase in Philhealth accreditation especially for out-patient benefit

packages - which remains unequally distributed in the country.

b) Improvements in accreditation practices and compliance of facilities that

will complement Philhealth policies (e.g. NBB policy).

Why is there a huge gap in Philhealth accreditation? What can we do about it?



2. Sponsored members: Future dilemma in subsidizing the poor / senior

citizens in the Philippines?

• Currently, the Philippine government provides complete subsidies on Philhealth for

the poor (2011) and senior citizens (2014).

• Trends in population aging predicts increase in the coming years (e.g. 11% of the

population in 2030).

Ageing is still not a major concern in the country today, but will there be enough

fiscal space to accommodate subsidies to the aging population?

Limited fiscal space for subsidies = Competition on shares for the poor / seniors?



3. Philhealth to move from a “passive” to an “active” purchaser

• The increasing reimbursements / payments from Philhealth does not necessarily

equate to the active role of the organization as a purchaser. There is a need to:

a) Move from just reimbursing claims from facilities to determining what

services should be reimbursed and how (Cost-effectiveness, Equity);

b) Stimulate increase in provider performance through effective purchasing

practices (e.g. Further evaluation and strengthening of provider payment

system; improvements in accreditation and reimbursement policies, etc.).



4. Equity in financial risk protection

• Need to improve population coverage in the informal sector (Missing Middle).

• Philhealth is paying more in cases among the Formal and Informal Sector (smallest in

membership base); Potential adverse selection?

• Is the increase in payment driven by z-benefit reimbursements among the informal

sector (membership before utilization)? Effects of complementary PHI?

• Access of the poor and other Philhealth members to accredited facilities in

selected regions remains limited (Insurance payments concentrated in Metro

Manila / Other regions with more accredited providers?).



5. Reduction of OOP payments

How do we curve the increase in OOP spending in Health?

Options to shift OOP payments:

a) Increase general government spending for health

b) Universal health insurance scheme through Philhealth: Emphasis on

improving the role of Philhealth as purchaser, depth of coverage.

c) Better implementation of the NBB policy (co-payment control) in

government facility + possible contracting with / extension to private facilities.

d) Improve Philhealth cost-control strategies in all of its accredited facilities

- including private facility engagement (Lessons from Korea?)



6. Further development of Philhealth’s provider payment system

• Philhealth's All Case Rate (ACR) provides more pronounced benefit packages with

a cost ceiling that is easier both for the facility to bill (reimbursements) and patients to

understand (how much is covered).

• However considering the number of cases (5000+), the ACR may be very similar to

FFS in terms of provider incentives (less incentive to reduce volume = more

claims, more income)

• A DRG-based payment scheme maybe considered – the transition maybe easier

from ACR to DRG as compared to FFS to DRG; should be aimed at reducing volume

+ cost (Pilot test?)

Thank You.

Karlo Paolo P. [email protected]

October 30, 2015

KSP – ADB Universal Health Coverage Regional ForumAsian Development Bank, Manila, Philippines

philippines' health system and financing (2015)

Health & Medicine