Mg 200908171 Health Insurance and Government FailureBienvenido Nonoy Oplas, Jr.Introduction This paper is a follow up to my earlier paper, Improving access to good health care: More private and cooperative HMOs, Dont expand PhilHealth that I presented last June 30, 2009, in a 3CPNet forum.So the main arguments there will no longer be repeated here.A few issues will only be added or expanded here.1.PhilHealths bloated claim of membership coverage Table 1.Philippine Health Insurance Corporation (PhilHealth) members, 1stquarter 2009, in million:
Sector Members Beneficiaries Private employed 6.58 27.95 Sponsored program (indigents) 3.39 17.08 Individually-paying 3.09 14.61 Overseas program 1.90 8.35 Government employed 1.88 8.85 Lifetime members 0.89 0.69 TOTAL 17.24 77.38 source: Stats & Charts, PhilHealth, 1st Quarter from the paper presented at the Social Dialogue on Health Care sponsored by PHAP (Pharmaceutical and Healthcare Association of the Philippines) and CHAT (Coalition for Health Advocacy and Transparency), PRRM, Quezon City, August 17, 2009
President, Minimal Government Thinkers, Inc.
Comments, The 77.4 million projected beneficiaries represents nearly 84% of the 92 million Philippine population early this year.But can 84 percent of all Filipinos, more than 4 out of 5, proudly declare that they are covered by PhilHealth? The answer is No.
Why? PhilHealth made fuzzy if not lazy mathematical procedure of assuming that each and every member, paying by themselves or by their employers or by the politicians, has about 3.5 dependents on average.So each member is multiplied by 4.5 beneficiaries on average, and PhilHealth came up with 77.38 million Filipinos covered by the government health insurance program.Below is the multiplier implied by PhilHealth for each sector.That is, number of members per sector multiplied by this number below, and you get the number of beneficiaries per sector in the above 4.71 Private-Employed
x 4.24 Sponsored Program
x 5.04 Individually-Paying Persons (IPP) x 4.73 Lifetime Members
x 1.68 Overseas Workers Program
X 4.39 Total
x 4.49 But not all PhilHealth members are married and have children and dependents.Many members are single, or maybe married but have no children or only 1 or 2 children.And not all singles can declare their parents as dependents unless the latter are without regular jobs and above 60 years old.They also cannot declare their grandparents, young nieces/nephews, or retired siblings as dependents.
So most singles who are PhilHealth members have no dependents actually.In my case, we are 3 in the family (me, my wife and my daughter) but in the PhilHealth statistics, they assume there are 4.2 of us in my household.My sister and her husband are both PhilHealth members, they have 2 children, so there are only 4 of them.But PhilHealth assumes there are 8.5 of them in their household
Another way of double-checking this claim of covering nearly 84 percent of all Filipinos, is to compare PhilHealth membership with the labor force data by the National Statistics Office (NSO).The latest labor force survey by the NSO was April 2009.
3 Total employed (fully employed and under-employed) Filipinos as of April 2009 was 35 million.
So PhilHealth members (17.2 million) are only one-half of all employed Filipinos.If we deduct those in the sponsored program, the 3.39 million indigents who are mostly unemployed, there are only 13.85 million paying members.This number is only 40 percent of all employed Filipinos.So how could 40 percent of all employed Filipinos cover 84 percent of the entire population? 2.Health inequity not addressed by PhilHealth According to former DOH Secretary Alberto Romualdez, of the top 10 hospitals in PhilHealth claims, there is only one government hospital there, the rest are private hospitals.This implies that the middle class and even upper class of Philippine society who are PhilHealth members are the ones who maximize the benefits of hospitalization claims.
This is a bit ironic since the government health insurance is a social and political program that is expected to benefit the poor and the indigents (those in the sponsored program) the most.And since the poor would usually go to government hospitals and not the big private hospitals, it was also expected that government hospitals would be among the top claimants in PhilHealth claims.Seen from this angle, it can be inferred that PhilHealth has not only retained, it may have even exacerbated the health inequity in Philippine society.
But this may not be entirely correct.If we compare PhilHealth collections vs.payment, the bulk comes from and goes to, those employed in the private and government sectors.But nonetheless, the indigents and the individually-paying people claim about twice their payment and contribution to PhilHealth.Those employed in the private sector effectively subsidize these two groups.In the first quarter of this year, they contributed 60 percent of PhilHealth collections but got only 45 percent of benefit claims.See table below.
Table 2.Premium collections and payment by sector, 1st Quarter 2009
Premium collections Benefit payments Sector Amount, P Mill % Amount,
P Mill % Private 3,574 60.1 1,883 44.6 Government 1,186 19.9 946 22.4 Indigent 502 8.4 670 15.9 IPP 485 8.2 591 14.0 OFW 199 3.3 129 3.0 Total 5,946 100.0 4,219 100.0
4 3.PhilHealth in a way is a social project with political goals Government health insurance is a social and political program meant to reduce health inequity in society.
The agency tasked to implement it is PhilHealth, a government corporation.Since it is a political creation, its leadership and administrators are answerable and accountable to the high political leaders of the country.
So while the officials of PhilHealth maybe answerable to me and the several million others who contribute monthly