Has health sector reform run its course in the Philippines? The landmark Universal Health Care (UHC) law of 2019 was the culmination of two decades of health sector reform initiated by the late Health Secretary Quasi Romualdez in 1998.
But Congress is moving to amend the law before its full implementation. The House of Representatives and the Senate are now scheduled to start deliberations to amend the law, supposedly to correct “weaknesses” inflicted by legislators. This comes after the same legislators deprived PhilHealth of the funds to implement key elements of the law from 2023-2025.
To make matters worse, Congress diverted the sin taxes intended for UHC implementation to patronage programs that covered fewer, but more favored patients. By waging war on so-called “excess funds” in PhilHealth, Congress made it impossible for PhilHealth to implement fully the Konsulta package for primary care when it forced it to cough up P89.9 billion in 2024 to cover nonhealth related infrastructure projects.
Former Health Secretary Francisco Duque signed the implementing rules and regulations (IRR) of the UHC Law in late 2019, a few months before the COVID pandemic. He announced then that it would take at least P300 billion a year for UHC to be effective, on top of the current health sector resources. That was what it would take to bring down the out-of-pocket health costs of Filipinos close to 30% from 49% in 2019.
Secretary Duque intended much of that increased spending for UHC to go to primary care and increased value of health benefit packages, which were only covering one-fourth of hospitalization costs. Under the UHC law, the comprehensive out-patient benefit at the primary level of care will be rolled out two years after the implementation of UHC.
However, the Philippine Statistics Authority (PSA) reported that in 2023, only 6.6% of health spending went to primary care, much of it coming from local governments. Curative care spent in hospitals was the most expensive part of healthcare, at almost 38%, and medicines accounted for almost 32% of health costs.
FILIPINOS OUTPACE GOVERNMENT SPENDING IN HEALTHAll of this health spending came up to P11,083 per Filipino in 2023. Despite the implementation of UHC, government (national, local and PhilHealth) covered only 42.6% of that, or P4,721 on average, for every Filipino. On the other hand, every Filipino spent P4,920 from his/her own pocket, more than what government could provide.
Compared with 2022 out-of-pocket spending, Filipinos have actually outpaced government spending:
In 2023, only two-thirds of PhilHealth’s budget allocation was released for indirect/indigent members, but the claims of indirect members exceeded PhilHealth’s allocation, resulting in a deficit for PhilHealth.
The continuing decline in PhilHealth’s budget is an imposition by Congress, which is seemingly unaware of the Department of Health’s (DoH) requirement of at least P300 billion per year for UHC. But the DoH and the old leadership of PhilHealth failed to explain this to Congress.
UHC amendments will dismantle and weaken the implementation framework of UHC.
The bicameral conference committee of Congress will soon convene to reconcile the House and Senate bills. The approval of a reconciled bill will then be submitted to the President for signing into law.
The bicam is a spectacle where Congress seeks to “solve” the problems it has caused by defunding the social health insurance program.
Further, the amendments that have been proposed are clearly toxic to UHC implementation. The amendments will result in every LGU running its own health system, reduce the capacity to sustain the funding of health systems by reducing premiums, weaken regulatory systems that could lead to inflation of health costs, and reduce the paying members and increase nonpaying beneficiaries.
Amendment A: Section 20 on the special health funds will be amended to add 1,400 municipalities and 111 component cities as special health fund holders. That will increase their number more than 10 times, from 115 health systems (82 provinces and 33 highly urbanized cities).
The UHC was intended to be managed by 115 local health systems in the entire country. Adding over 1,500 independent health systems will result in duplication of infrastructure, a larger health workforce and loss of economies of scale.
Amendment B: Section 10 on premium contributions will see the Senate reduce the premium from 5% to 3.25% starting in 2025.
This amendment will reduce the capacity of social health insurance to fund primary care and limit the expansion of packages, which will result in congestion in hospitals and increasing morbidity and mortality in the population.
Amendment C: Section 34 will restrict the health technology assessment to a recommendation that may be ignored by DoH or PhilHealth.
This amendment will increase the discretion of DoH and PhilHealth to introduce new products, diagnostics and procedures without the benefit of health technology assessment. This will result in the vulnerability of the health system to inflation of health costs. It may also cause potential harm for patients, if the market is flooded with products with unproven claims that escape health technology assessment.
Amendment D: Section 4 (f) increases the eligible age of dependents to 23 from 18. This will have the twin effect of reducing paying members and increasing the number of nonpaying dependents. The current 2024 membership data of PHIC at 58.7 million members and 44 million may see equal numbers of members and dependents as the number of Filipinos between the ages of 18 and 22 is 10 million.
After defunding social health insurance, Congress is making PhilHealth’s situation worse. When even the Philippines’ draft voluntary national report on sustainable development goals (SDG) shows that SDG 3 (on ensuring lives) is regressing, what Congress is doing to further emasculate PhilHealth and UHC must stop.
Jeepy Perez, a doctor, specializes in public health administration and primary healthcare, and worked with nine Health secretaries and three Economic Planning secretaries. He was undersecretary for population and development and executive director of the country’s Commission on Population and Development until his retirement in September 2022. He occasionally writes for Action for Economic Reforms.
