Coherent health financing for the COVID-19 response: a perspective from the Philippines
15 May 2020
This piece originally appeared on P4H here
Written by Christian Edward L. Nuevo (ThinkWell, Philippines) with Pura Angela Wee Co (ThinkWell, Philippines), Maria Eufemia C. Yap (ThinkWell, Philippines), and Nirmala Ravishankar (ThinkWell, USA)
MAKING PURCHASING FIT FOR PURPOSE
In the Philippines, the COVID-19 response has called for rapid adaptation of purchasing arrangements. In early 2019, the Philippines passed a Universal Health Care (UHC) Law that envisions the national health insurance agency PhilHealth as the dominant strategic purchaser of individual-based health services while the Department of Health (DOH) pays for population-based health services. Health emergencies present a particularly interesting situation, where services are delivered to individuals, but require significant system-wide mobilization and a consolidated, well-orchestrated response. Existing rules put the response to public health emergencies and disasters under the umbrella of population-based health service and, as such, in DOH’s wheelhouse. However, the COVID-19 response challenges this role delineation. The surge of the disease has demanded the engagement of different types of health care providers, particularly those from the private sector that comprise 65% of providers in the country. To finance services through the greatest number of health providers, PhilHealth was called to step up.
PHILHEALTH’S RESPONSE: BUILDING THE SHIP AS IT SAILS
PhilHealth responded in record time to remove financial barriers to COVID-19 testing and treatment for nearly 93% of the country’s population. As early as February 2020, PhilHealth announced case rates for services related to hospital isolation and for those who develop more severe clinical presentations. In response to the Bayanihan to Heal As One Act enacted in March, PhilHealth declared that it would cover all medical expenses for public and private health workers in case of COVID-19 exposure or any work-related injury or disease during the emergency. In April, PhilHealth released an advisory stating that it will cover the full cost of treatment for COVID-19 patients. Later in April, it released enhanced benefit packages covering COVID-19 services for testing, community isolation and inpatient care. PhilHealth had to work through several thorny issues to roll these packages out, and it envisions more course corrections in the future.
Fragmented and uncoordinated financing of inputs for COVID-19 was one of the main challenges encountered. The Bayanihan Act mandates DOH to procure needed inputs to maximize efficiency and avoid “competition” among healthcare providers. Both public and private facilities are also individually receiving donations from various local entities. Resources pouring in from different channels has made it difficult to monitor who gets what and who needs more. For PhilHealth, this increased the risk that it could be paying for items that have been paid by another entity.
To address this issue, government has required donations for COVID-19 health services to be routed through them. PhilHealth then stratified the rates for testing, deducting the estimated amount of test kits received from DOH and donations. While this was not done for the benefit package for community isolation and hospitals, it represents a good first attempt to streamline payments, which can be improved going forward.
Policies, standards, and treatment guidelines surrounding COVID-19 are changing continuously, which makes it challenging to set the appropriate rate and enforce a standard level of care. PhilHealth opted to pay for its COVID-19 benefit packages via case rates which is its dominant provider payment mechanism. However, the benefit policy explicitly states that the package inclusions and rates shall be regularly reviewed based on regularly collected cost and clinical data.
The inflexibility of payment and contracting mechanisms of PhilHealth also pose another challenge. PhilHealth mainly pays its providers retrospectively through case rates after health services have already been delivered. PhilHealth was already crafting a global budget policy as well as exploring other contracting and prospective payment options before COVID 19 happened. These could have facilitated great support for facilities through upfront payments, while ensuring inputs, processes, and performance are up to standards. Additionally, the benefit packages that have been designed continue to be operated by a mix of paper-based and IT-based systems. The circumstances brought by the pandemic demands quick turnarounds and lean processes considering the skeletal workforce onsite. These tedious requirements can be an actual disincentive to participate. Although PhilHealth relaxed some of these requirements in their COVID-19 benefits, operationalization may still prove to be challenging.
LESSONS FROM THE COVID-19 RESPONSE FOR THE JOURNEY TOWARDS UHC
The ongoing response is revealing the great benefit the country can derive from DOH and PhilHealth working together while exploiting their comparative advantage. As a strategic purchaser, PhilHealth has the capacity to work with a diverse array of providers and clout to shape their behaviour. The capacity of DOH as a national agency to leverage better procurement prices as well as address supply chains is apparent. Bringing together a stronger purchasing role and economies of scale through centralized procurement presents a great opportunity to improve access and rationalize the cost of services in the country. This joint action can build a more resilient health system that can deliver UHC under both normal conditions and during health emergencies like COVID 19.
1. PhilHealth. Circular No. 2020-0004: Enhancement Of Packages Related To Coronavirus Infection. 21 Feb 2020 (cited 30 Apr 2020). Available: https://www.philhealth.gov.ph/circulars/2020/circ2020-0004.pdf
2. PhilHealth. Advisory No 2020-022. 2 Apri 2020 (cited 30 Apr 2020). Available:https://www.philhealth.gov.ph/advisories/2020/adv2020-0022.pdf
3. PhilHealth. Circular No. 2020-0009: Benefit Packages For Inpatient Care Of Probable And Confirmed COVID-19 Developing Severe Illness/Outcomes. 14 Apr 2020 (cited 30 Apr 2020). Available: https://www.philhealth.gov.ph/circulars/2020/circ2020-0009.pdf
4. PhilHealth. Circular No. 2020-0010: Benefit Package For Testing For SARS-CoV-2. 14 Apr 2020 (cited 30 Apr 2020). Available: https://www.philhealth.gov.ph/circulars/2020/circ2020-0010.pdf
5. PhilHealth. Circular No. 2020-0011: Full Financial Risk Protection For Filipino Health Workers And Patients Against Coronavirus Disease (COVID-19). 14 Apr 2020 (cited 30 Apr 2020). Available: https://www.philhealth.gov.ph/circulars/2020/circ2020-0011.pdf
6. PhilHealth. Circular No. 2020-0012: Guidelines On The COVID-19 Community Isolation enefit package (CCIBP). 14 Apr 2020 (cited 30 Apr 2020). Available: https://www.philhealth.gov.ph/circulars/2020/circ2020-0012.pdf