Underperforming PhilHealth favored over public services in gov’t health budget – IBON

September 21, 2022

by IBON Foundation

Research group IBON said that the Marcos Jr administration’s proposed 2023 budget neglects direct health services and programs that are accessible for ordinary Filipinos, especially the poor. This, despite the decades-long decline in government concern for the public health system which has been further burdened by the pandemic crisis. The group said that the new administration continues this neglect by choosing to allot even more funds for health privatization and the underperforming Philippine Health Insurance Corporation (PhilHealth).

IBON said that there is only a negligible increase in the proposed budget for the Department of Health (DOH) despite its heavy responsibility for direct services and programs. On the other hand, reflecting the new administration’s continued misprioritization of privatized health care, the PhilHealth budget is set to receive a hefty increase.

The DOH is getting its smallest budget increase in years. For 2023, the proposed DOH budget of Php191.2 billion is just a measly 4.1% or Php7.4 billion increase from 2022. This is much smaller than recent increases in 2021 (by 33.6% or Php33.9 billion) and 2022 (by 36.3% or Php48.9 billion). It is also not even one-third of the 15.9% annual average growth rate for the health department’s budget in the 10 years prior to the pandemic (2010-2019).

A closer look at the DOH budget also shows that the government is still failing to give importance to much-needed direct health services and facilities with decreasing allocations for important programs and subprograms, said the group. These cuts are under the DOH-Office of the Secretary (DOH-OSEC) Php190.8 billion budget.

The budget for the Public Health Program, which encompasses several disease prevention and management programs, was slashed by 8.4% including its subprograms like Family Health (by 16.7%) and Prevention and Control of Infectious Diseases (by 41.6%). The Epidemiology and Surveillance Program, which is vital for the prevention and control of outbreaks and other public health threats, was defunded by 17.8 percent. The operations budget of the National Reference Laboratories under the Health Facilities Operation Program (HFOP), which is crucial in the detection and monitoring of people’s health outcomes, was also cut by 13.9 percent.

IBON noted that the HFOP budget will go up by 13% with increases in Personnel Services (69% of HFOP budget) and Maintenance and Other Operating Expenses (30%). However, only 1% of the HFOP budget will go to Capital Outlays which is important for much-needed facility rehabilitation and construction and equipment purchases. As it is, only five (5) out of 91 DOH-supported facilities will receive direct allocations for their Capital Outlays. The rest will have to go through the Health Facilities Enhancement Program (HFEP) to request funds for their infrastructure and equipment needs.

HFEP is a DOH banner program and will get a huge chunk of the DOH-OSEC budget (12.1% or Php23 billion). However, IBON said that this is not enough to address the lack and poor quality of the country’s public health facilities. For instance, only 21.3% or Php4.9 billion of the HFEP budget will go to the construction of new Barangay Health Stations (BHS) and Rural Health Units (RHU). Of this, just Php427 million will be used to build 242 BHS and Php4.5 billion for 324 RHU or Super Health Centers.

This is a far cry from the basic health facilities backlogs that need to be resolved, said IBON. As reported in the Field Health Services Information System (FHSIS) 2021, only half of the total barangays in the country have their own BHS. This means that there is a backlog of at least 20,000 BHS nationwide. Every Filipino should ideally have access to an RHU within 30 minutes but, according to the DOH, only half of the population was able to achieve this. The 2023 HFEP also does not allot a budget for Motor Vehicles for health units and facilities, and the allocation for Medical Equipment purchasing decreases by 14.1 percent.

On the other hand, the government’s flagship health program PhilHealth is getting one-third (32.5%) of the health sector budget, or the second largest share, despite its underperformance. The proposed PhilHealth budget increases by a huge 25.3% (Php20.2 billion) to Php100.2 billion compared to the increase of 12.1% (Php8.6 billion) in 2022. This is almost triple the 8.6% average annual growth rate for the agency’s budget in the past five years (2018-2022). This will mainly go to the private sector, the group said.

IBON however pointed out that PhilHealth’s benefits are overstated with reported claims not actually reaching a significant portion of the Filipino population. In 2021, PhilHealth reported having covered almost 100% of the Filipino population with 98 million registered members and 10.4 million claims successfully paid. However, the total amount of claims paid actually even fell 7.8% between 2020 (Php95.8 billion paid) and 2021 (Php88.3 billion). This casts doubt on whether there were any improvements in how households still account for health expenses out-of-pocket, at 44.7% in 2020.

The group also noted that it is likely that mostly profit-driven private rather than public hospitals and facilities have benefited from PhilHealth. For instance, of the 1,889 total PhilHealth-accredited hospitals in 2021, 59.1% or 1,117 were private while only 40.9% or 772 were government. In terms of other facilities, for example, of the 2,754 accredited Maternal Care Package (MCP) Providers, 58.7% or 1,617 are private while 41.3% or 1,137 are public. Of the 492 accredited Free-Standing Dialysis Clinics, 98.4% or 484 are private while only 1.6% or 8 are government.

Looking at distribution of claims, IBON observed that the majority of claims paid by PhilHealth went to hospitals (78%), Free-Standing Dialysis Clinics (8%) and MCP Providers (5%). Since most hospitals and these facilities are private, this could mean that many of the claims paid by PhilHealth went to the private sector.

IBON said that the new administration is failing to address poor quality and lack of health services and facilities, especially for poor Filipinos, by limiting funds for these and prioritizing allocations for the underperforming and privatized PhilHealth. The group said that the government should substantially fund health services and programs that will urgently address the issues that the health system has been facing for decades.