Health financing matters
Business Mirror, An editorial by Dr. Eduardo P. Banzon, President and CEO of PhilHealth: I LIKE superheroes. I think we all enjoyed the latest blockbuster, though I usually prefer characters with less perfect lives. Regardless, it is interesting how their stories always begin with an exercise in self-awareness, where characters devote themselves to discovering their power and gaining mastery over it. Then they are expected to wield that power to great effect and to wield it responsibly. Failing to do so, audiences invariably turn away in disgust. Heroes are built in spectacular fashion and fail in equally spectacular fashion.
They are, in many ways, similar to ourselves and to the organizations we belong to. How well do we know what we are capable of? Are we doing all that we can and should?
In my previous columns, we asked questions central to revitalizing Phil-Health. Bawat Pilipino, miyembro. We asked what it meant to be a member, and we talked about solidarity. Bawat miyembro, protektado. We asked what PhilHealth is working toward, and we talked about financial risk protection. Kalusugan natin, segurado. We asked how we could help address inequities in health. Today we will talk about the power of financing. What effect does financing have on the health system?
Well, what happens when parking fees become fixed rates? Mallgoers know what to expect—whether they stay for eight hours or two—and plan their expenses better. In the same way, with a per-case payment scheme, patients know exactly how much help they can count on from PhilHealth—regardless of what kind of hospital, room, or doctor they patronize—and plan better. Clarity empowers.
What happens when Cebu Pacific offers seats for fixed and dramatically lower prices? Pakyawan. More travelers frequent the skies and the company willingly trades higher profit margins for larger sales volumes. In the same way, the No-Balance Billing or Walang Dagdag Bayad policy allows patients to avail themselves of health-care services and pay nothing above the case-payment rate. Financial access creates demand.
It also directs it: Where PhilHealth coverage goes, to a large extent, customers follow. And as PhilHealth designs benefit packages in ways that push providers to follow standards and correct patients’ health-seeking behavior, patients are assured of complete care and are encouraged to maintain healthy lifestyles and seek appropriate care.
What happens when employers offer higher salaries to night-shift employees or give performance bonuses? Workers take difficult hours and go the extra mile. In the same way, differential-case payments can encourage providers to meet higher-quality standards and set up shop in challenging areas. And how will providers behave when PhilHealth pays a large portion of their income? Financial incentives shape supply.
They also build it: What is the effect of bank loans for companies? What will the effect of global payment schemes be on health-care providers that need to invest in their facilities?
PhilHealth is a payer. Money for the supply side is an opportunity; it incentivizes supply. Money for the demand side is an enabler; it creates a demand. The next question is what kind of supply and demand do we need to create in order to realize better health outcomes?
Responsibly using PhilHealth’s power as the biggest payer in health care means using it to steer the industry toward greater efficiency, equity and security. It means using its buying power to compel providers to control costs and offer more accessible and higher-quality services. It means using its resources to help the supply side make large capital investments. It means creating payment schemes that make financing simple and predictable to customers.
PhilHealth has one deliverable to society: Financial risk protection—that every Filipino can get financial assistance, have access to excellent providers where health care is paid for, use the assistance when needed, and receive significant support. How well do we at PhilHealth understand what we are capable of? Have we used our power to great effect and do we use it responsibly?
Reform and transformation assume that something is worth all the trouble, that a hero wasting away can be a hero, nonetheless. Heroes fail in spectacular fashion because they were built in spectacular fashion. For the same reason, they can also succeed spectacularly. PhilHealth can deliver