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Salceda on hospitals’ Philhealth holiday: Bad for universal health care, bad for the poor, reveals need for urgent reforms

December 28th, 2021

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) reiterated the need for a Philhealth that “is solvent, can verify and pay claims quickly, and provides adequate financial protection to members” amid a move from private hospitals to declare a five-day holiday from accepting Philhealth claims for deductions.

The tax panel chair and principal author of the Philhealth Reform Act now pending in Congress said this as he questioned whether the move “is consistent with the Hippocratic oath that doctors take.”

“On the one hand, Philhealth definitely has to pay its claims. Even public hospitals like the Bicol Regional Training and Teaching Hospital, had to struggle with funding its operations due to delays in the release of claims. On the other hand, this isn’t the solution to Philhealth’s problems. The poor will not take a holiday from getting sick. Philhealth will not get hurt from this holiday. The poor will,” Salceda said.

“I’m not even sure they can do that legally. Besides, for patients who have no other recourse than Philhealth, it means that private hospitals are effectively turning them down, without having to say so. I don’t think that has any ethical grounding,” Salceda added.

“I would like to remind proprietary hospitals that we gave them a massive tax break under the Corporate Recovery and Tax Incentives for Enterprises or CREATE Law. Don’t act up this way, or I will also have your books checked to see where the tax subsidy went,” Salceda emphasized.

Philhealth in urgent need of reforms

Salceda also said that the ‘quagmire’ reveals the vulnerabilities of the country’s state health insurance system.

“You have a health insurance agency that is not run by the country’s financial managers. It doesn’t have a digitalized and effective claims verification system. The solvency of the fund isn’t certain. The payment of fees is regressive. And there is no compelling mechanism to legally bind hospitals to taking patients with Philhealth membership in. It’s a mess,” Salceda said.

On September 2020, Salceda filed House Bill No. 7578 or the Philhealth Reform Act.

“This bill proposes systemic reforms in the management of the reserve fund, the collection system, the distribution and verification of claims and benefits, and the governance of the agency,” Salceda, the House tax panel chair and former private investment manager said.

Salceda adds that the bill “will make the contributions scheme more progressive, potentially saving working minimum-wage families thousands of pesos annually, and effectively exempting OFWs (overseas Filipino workers) from paying premiums.”

The measure would save minimum wage earners at least P4,800 per year in premiums, he noted.

Minimum wage earners exempt from income taxes would pay P100 in monthly minimum contributions instead of the current P250 to P500 per month.

The bill also makes the Finance secretary chairman of the board of the Philippine Health Insurance Corp. (PhilHealth) with the Health secretary as co-chairman.

“This is consistent with the Medicare model that is typical of developed countries and is also consistent with the nature of the Philhealth as an insurance agency,” Salceda said.

Moves forward

Salceda said that he will call for a hearing on the earmarking provisions of the sin tax laws to see whether they are able to support the payment of Philhealth claims, and whether there is cash from sin tax revenue collections that can be downloaded to Philhealth.

Salceda adds, however, that he wants to make future earmarks to Philhealth conditional on internal management reforms.

“I want to see a single-patient, single-record system and a real insurance management system in place before we infuse any new revenue streams to Philhealth,” Salceda said. (end)

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