Out-of-pocket payments (OOP) in the Philippines remain high despite improved government allocation for health spending.

Unilab Center for Health Policy (UCHP), a program of Unilab Foundation, in  a research paper using  the Philippine National Health Accounts from 1991 to 2022  showed in 2022,  OOP payments accounted  for 45 percent of total health expenditure which is more than twice the limit the government has set of 20 percent under the Health Sector Reforms Agenda (HSRA).

This is followed by the national government, 21 percent; social health insurance, 14 percent and;  local government, 10 percent.

Again, the Philippines failed to meet the HSRA targets where government spending should reach 40 percent and social health insurance, 30 percent of the total health expenditure (THE).

Even with the National Health Insurance Act as amendment failed to boost the Philippine Health Insurance Corp. (PhilHealth) to reach the goal of covering 30 percent of THE.

What is worrying is that local government spending has also lagged behind  national government and social health insurance in THE.

The study said the Philippines’ health spending remains low and in fact has not increased much the past 30 years despite many health reforms, lagging behind its neighbors in Asean.

Spending in 2022  reached P1.1 trillion, an average increase of just 5.84 percent per year since 1991.

“Considering  the population grew from 62 million in 1991 to 112 million in 2022, health spending for every Filipino increased by an average of 3.9 percent every year,” the research said.

Yet, the Philippines has failed to meet the  target set of the World Health Organization that health spending should account for 5 percent of GDP.

The study acknowledged   the increase in spending  such as earmarking of sin tax revenues which it said contributed to the steady rise in government spending.

The research showed the diminishing share of government units in the THE, especially in recent years, despite the devolution of health services. “This trend should be brought to the attention of local governments to ensure the devolution of health services is maximized,” the research said.

It added efforts to decreasing OOP should be directed at reducing expenses for inpatient care.

The research said the Department of Health’s plan to open  Bagong Urgent Care at Ambulatory Centers  across the country will not only address physical accessibility but financial accessibility as well.

The government also intends to open several Super Health Centers to augment the health delivery system.

A second research which reviewed the benefits payment system of PhilHealth
noted that in shifting from case rates to diagnosis related groups (DRGs),  the Philippines should have an independent arm’s length agency that will oversee the release of payments to PhilHealth partner-institutions.

The Universal Health Care law provides that  PhilHealth should be paying using DRGs, a more nuanced  methodology that considers  complexities such as co-morbidities compared much simpler system at present where hospitals are paid through case rates.

The research  pointed out the Philippines can learn from the experiences of Thailand, Australia on who should administer DRGs.

“In the countries studied, independent technical institutions with the sole objective of overseeing provider payments were established,” the research said, adding these institutions ensure  the process has a pool of experts that are neutral and shielded from interference.