New chief likens PhilHealth to patient needing ‘cure’
The new head of the Philippine Health Insurance Corp. (PhilHealth) has likened the state health insurer to a sick patient and promised to find a cure for the illnesses hounding its financial health, operating efficiency, as well as its insurance coverage and benefits.
Newly appointed PhilHealth president and chief executive officer Edwin Mercado gave the assurance in a press briefing in Malacañang on Wednesday.
Mercado, the former vice chair of the Mercado General Hospital/Qualimed Health Network and a United States-trained orthopedic surgeon, described PhilHealth as an ailing patient that needed urgent treatment.
“As a physician, I look at PhilHealth as someone who is sick and I am looking for a cure. So that’s the first thing I should do—to carefully study what processes need to be changed so that we can carry out President Marcos’ directive to expand the benefits and continue its services,” he said.
Mercado replaced Emmanuel Ledesma Jr. amid a string of controversies, including the transfer of P 89.9 billion in excess PhilHealth funds to the national treasury and the allocation of P138 million for the agency’s anniversary celebration in 2025.
The state health insurer was also deprived of a subsidy from the government that would have covered the benefits of nonpaying members such as the Filipino elderly and indigent citizens.
Cutting patients’ costs
Mercado said his experience “on the other side of the fence” as a doctor and hospital administrator who dealt with PhilHealth would give him valuable insights in improving its insurance coverage and benefits to bring down the “catastrophic” out-of-pocket spending of Filipinos on health care.
He pointed out that Filipinos spend about 45 to 47 percent of their household expenses on health care—much higher than the 25 to 27 percent allocation in “mature” or developed healthcare systems.
He stressed the need to find out which benefits are “very impactful” among Filipinos in order to bring down the costs of health care.
“I will suggest that the 20 or 30 diseases that are more common are not necessarily the ones that cause catastrophic spending. So I will look at the data on what illnesses cause catastrophic spending among Filipinos and we will probably focus on that. We will do targeted or differentiated benefit management,” Mercado said.
He also noted that the objective of PhilHealth is to further expand the benefits without affecting the delivery of other services, “so what we will do first is tackle our financial reporting so that it is cleaner, more standard.”
“We want to standardize our financial reports. It’s difficult to analyze financial reports if the definitions are different. There are standard accounting definitions there, so we will include that so that our reporting is clean and transparent,” Mercado said.
Mercado vowed to thoroughly study PhilHealth’s financial statements from previous years to determine its financial health and see what other steps need to be taken, noting that the agency’s last audited financial statement was for 2022.
“We will prioritize a review of our processes for efficiency because it seems that as of now, we can still plug some leaks and avoid some wastage,” he said, adding that funds saved could be used to further expand PhilHealth’s benefits.
Faster claims payment
He also pushed for the digitization of PhilHealth’s system to efficiently process health claims and flag those that are dubious or questionable.
Recalling his experience as a hospital administrator, Mercado said many of the return-to-hospital claims that were not fraudulent turned out to have only spelling errors or incomplete documents that could be easily complied with.
He said he would look at the possibility of improving or expediting the filing and processing of claims so that the hospitals could be paid on time.
“We will really push for digitization because that’s our long-term solution for claims adjudication. We also need the data from that to determine how much funds we need in planning our budget,” he explained, adding that a digitized PhilHealth would also “self-correct” or mitigate any opportunity for corruption.
The PhilHealth chief also brought up the possibility of giving incentives such as expedited payments to hospitals and health-care providers who comply with the government’s standard of care and have a consistent good outcome of treatment for patients.
He also promised to review the state health insurer’s staff to determine if there is any need to reshuffle the agency’s officials and employees.
