ng premium subsidy for the indigents: an initial look€¢ to look at the initial effect of the...

An Initial Look at the NG Premium Subsidy for the

Indigents Initial Results

Ida Marie Pantig and Valerie Gilbert Ulep

PIDS

Draft PPT June 28, 2013

Background Objectives Analysis, Discussion of Results Medical Cost Ratio Estimation and Projection Findings and Conclusion

Background: Universal Health Care

Three Thrusts:

Financial Risk Protection Improved Access to Quality Hospitals and Health Care Facilities

Attainment of Health-related MDGs

NG allots Php35 billion for premium payment for the Indigents

32,427 42,769 50,442 80,171

11%

28% 25%

44%

0%

10%

20%

30%

40%

50%

0

20,000

40,000

60,000

80,000

100,000

2011 2012 2013 2014

Mill

ions

NG Premium Subsidy in the DOH Budget

DOH Budget NG Premium Subsidy as share in DOH budget

Source: General Appropriations Act

PhilHealth developed new benefit packages with focus on the indigents: • No Balance Billing • PCB1 and PCB2 • All Case Rates

Health insurance coverage is expected to expand:

- 2,000 4,000 6,000 8,000

10,000 12,000 14,000 16,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Thou

sand

s

Sponsored Members

For Sponsored members alone, there was an increase of 5 million members from 2013-2014.

Source: PhilHealth Stats and Charts; GAA

The 5 million increase is just for NHTS… 0.

35

0.62

1.26

1.76

6.26

2.49

4.95

2.72

3.26

5.38

6.05

4.66

3.69

4.45

4.91

4.61

5.16

14.7

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Sponsored Program LGU/Regular NHTS

Health insurance coverage expansion = higher medical care utilization

Source: PhilHealth Stats and Charts; GAA

PhilHealth’s premium collection and benefit payment

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

2006 2007 2008 2009 2010 2011 2012 2013

Premium Collection and Benefit Payout (2006=100)

Premium CollectionBenefit Payout

Source: PhilHealth Stats and Charts

• Are we spending the PhP35 billion allocation to the poor? Are they provided with medical care?

• Are we covering the “true poor?” • Is PhilHealth financially fit to deliver health services to all its

members?

Objectives of the Study

• To look at the initial effect of the national government premium subsidy for the indigents on PhilHealth’s service delivery and finances

Specifical Objectives: • To review and analyze various indicators of PhilHealth on service delivery

for the Indigents and the Sponsored Members • To assess the financial health of PhilHealth through medical cost ratio

estimates • To provide a snapshot of possible scenarios with changes in premium

collection and benefit payout and its impact on PhilHealth’s financial health

Methodology Analysis of data from PhilHealth, literature review, policy scanning, medical cost ratio estimation

Scope and Limitation how the national government subsidy is translated into benefits for the intended beneficiaries actuarial assessment of PhilHealth impact evaluation of the programs/benefit packages for the Indigent and Sponsored members

Membership Structure: Who are eligible?

RA 7875 (1995) RA 10606 (2013) Indigent Identified by the LHIO NHTS-PR as official list of poor HH

Sponsored Marginalized and less privileged families

Not identified as poor in NHTS, but is incapable of paying for own premium; marginalized under the care of DSWD

Formal Employees in both government and private

Informal Workers not covered by formal contracts

Individually-Paying Those who work for themselves Individuals who render services or sell goods as means of livelihood

Overseas Worker Documented/undocumented Filipinos engaged in remunerated activities in another country (RA 9241)

Lifetime SSS and GSIS retirees and pensioners A former member who has reached the age of retirement

Membership Structure: Source of premium?

RA 7875 (1995) RA 10606 (2010)

Indigent Partial subsidy from LGU with counterpart from the national government (NG)

Full NG subsidy for all indigent members

Sponsored Subsidized by another individual/organization

Subsidy from sponsoring individual/LGU/organization/ government office

Formal

Premium payment by member Informal Individually-Paying Overseas Worker Lifetime Non-paying

PhilHealth membership

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2006 2007 2008 2009 2010 2011 2012 2013

Thou

sand

s

Total Members: 31.27 million Total Dependents (actual): 45.63 million Total Members and Dependents: 76.9 million (79% of projected total population in 2013)

31%

17%

33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 2013

Lifetime

Overseas WorkerProgramPrivate

Government

Individually Paying

Sponsored / Indigent


12%

58%

-13%

16% 13%

16% 17%

6% 3% 3%

1% 2%

12% 13% 9% 7%

11% 10% 11% 10% 8%

14% 15% 17%

2010 2011 2012 2013

Sponsored / IndigentIndividually PayingGovernmentPrivateOverseas Worker ProgramLifetime

Membership: Annual Growth Rate In 2013, Lifetime Members

are growing the fastest in terms of membership, at 17%, followed by the Sponsored Members at 16%.

Lifetime Members do not pay premium;

Sponsored Members are entitled to NBB, PCB, etc.


Financial support for members is still low

55% 62%

62% 30% 0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2012 2013

Sponsored Program: Claims and NBB

Number of SP Claims Case Rates NBB

53% 54%

2012 2013

Support Value for All Members


Premium Collection: Largest share from the Private Sector, with Indigents coming in next

0

10,000

20,000

30,000

40,000

50,000

60,000

2006 2007 2008 2009 2010 2011 2012 2013

Current Prices

Sponsored / Indigent Individually Paying / IPP

Government Private

Overseas Worker Program

0

10,000

20,000

30,000

40,000

50,000

60,000

2006 2007 2008 2009 2010 2011 2012 2013

Constant Prices (2006=100)


Government Private

Overseas Worker Program


Benefit Payout is growing faster than PC, again with Private sector and Indigents getting the most


05,000

10,00015,00020,00025,00030,00035,00040,00045,000

2006 2007 2008 2009 2010 2011 2012 2013

Constant price (2006=100)


Government Private

Overseas Worker Program Non Paying / Lifetime

0

10,000

20,000

30,000

40,000

50,000

60,000

2006 2007 2008 2009 2010 2011 2012 2013

Current Prices


Government Private


Who pays? Who benefits?

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Premium Collection


Government Private


2000 2001 2002 2003 2004 2005 2005 2006 2007 2008 2009 2010 2011 2012

Benefit Payout


Government Private


- Sponsored Members - Individually-Paying - Lifetime Members


0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011 2012 2013

PC vs. BP for Paying Members

Premium Collection Benefit Payment

0%5%

10%15%20%25%30%35%

2006 2007 2008 2009 2010 2011 2012 2013

PC vs. BP for Sponsored and Indigent Members

Premium Collection Benefit Payment

If we look closely, is social health insurance really working? In 2009 and 2012, the poor were paying for the benefits of the Paying Members.


Medical Cost Ratio (MCR) estimation

• MCR is an indicator measuring the share of premium revenue spent on medical care and services by the insurance company.

• MCR = Benefit Payment/ Premium Contribution

Ex. An MCR of 85% means 85% of all premium collection is spent on benefits.

Medical cost ratio estimates show that:

0%

100%

200%

2006 2007 2008 2009 2010 2011 2012 2013

MCR by Type of Membership

Sponsored/Indigent Paying All

• Overall, PhilHealth is “financially fit,” with MCR = 100%.

• As for the Paying members, the MCR for 2013 is at 97% (PC is enough to cover for own BP).

• The humps observed above the line from 2010 for the S/I members are good indicators.

What happens next?

Source: Author’s calculation using data from PhilHealth Stats and Charts

MCR in different scenarios (2014-2016):

• Scenario 1: 2014 increase in Premium Collection with Php35 billion from national government

• Scenario 2: No Balance Billing coverage expands to 60%, 80% to 100% from 30%

• Scenario 3: Case Rate covers 100% of all claims, with No Balance Billing coverage expanding to 60%, 80% to 100%

• Scenario 4: Case Rate covers 100% at NBB, while other benefit packages increase 30% for Sponsored Members

• Scenario 5: Benefit expansion for paying members by 50%; full NBB for all Case Rate claims

• Scenario 6: 100% Support Value extended to ALL members

1: 2014 increase in Premium Collection with Php35 billion from national government

• “status quo” • The inflow of huge premium

from the national government drives the MCR down for all members

• Utilization by the Sponsored Members is low

0

1

2

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Sponsored Paying All


2: No Balance Billing coverage expands to 60%, 80% to 100% from 30%

• MCR increases for Sponsored and Indigent members, driving the total MCR up.

• The premium contribution from the national government is sufficient to cover for NBB

0

1

2

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016



3: Case Rate covers 100% of all claims, with No Balance Billing coverage expanding to 60%, 80% to 100%

• The expanded benefit packages for the Sponsored and Indigent members are still covered by the national government premium subsidy

0

1

2

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016



4: Case Rate covers 100% at NBB, while other benefit packages increase 30% for Sponsored Members

• The 30% expansion in benefit delivery for the Sponsored and Indigent Members will take a toll on PhilHealth’s finances, as the benefit payout will be more than the premiums collected.

0

1

2

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016



5: Benefit expansion for paying members by 50% and full NBB for Sponsored and Indigent members

• The cost of delivering expanded benefit package for the paying members cannot be covered by their premium contribution

• NG subsidy is still able to pay for the benefit packages of the Sponsored/Indigent members

0

1

2

3

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016



6: 100% Support Value extended to ALL members

• Full support to hospital members cannot be afforded by PhilHealth at 100% support value, given the current rate of premium contribution

0

1

2

3

4

5

6

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016



Findings and Conclusion

• Government efforts to enrol Filipinos into PhilHealth is recognized. Utilization, should still be increased among the poor; NBB and SV should be expanded to achieve UHC.

• The growing number of Lifetime Members and their share in total Benefit Payments is noted.

• Cross-subsidy was observed in earlier years, where the poor are covering for the benefits of the Paying members.

Findings and Conclusion

• The different scenarios show that: 1. Expanding to full NBB is sustainable, if other benefit packages are kept at

status quo. 2. Setting NBB at 100% and expanding other benefit packages for the

Indigents and the Sponsored Members will put a strain on PhilHealth’s finances.

3. As for the paying members, PC will be enough to cover their BP (MCR>95%)

4. An expansion in the benefit packages for the Paying Members will not be sustainable, as they will need to use up funds from the PC of the poor.

ng premium subsidy for the indigents: an initial look€¢ to look at the initial effect of the...

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