The Universal Health Care (UHC) Bill was signed into law by President Rodrigo Duterte in February 2019, with the implementing rules and regulations approved in October by Francisco Duque III, the secretary of health. This set the stage for 2020 to be the Philippines’ first year of UHC. Although many stakeholders knew that the system would need time to mature, the unexpected arrival of the Covid-19 pandemic in the first quarter of the year drastically shifted health and economic priorities.
In mid-2019 the Department of Finance estimated that the first year of UHC would cost P258bn ($5.1bn). With the government’s resources expected to cover P195bn ($3.9bn), some lawmakers during this period pushed for reform that would raise so-called sin taxes on tobacco and alcohol to close the gap, as well as fund initiatives such as health facility upgrades and medical personnel training.
While such taxes were increased, and levies were applied for the first time on e-cigarettes and vaping products at the beginning of 2020, the strict lockdowns imposed in response to the pandemic lowered revenue from these sources. Tobacco and alcohol were hit on the supply side by disruptions to manufacturing operations. These products were also affected on the demand side by the imposition of restrictions on movement and business operations, as well as localised alcohol bans and a protracted curfew. The value of sin taxes collected fell from P161.8bn ($3.2bn) for January to August 2019 to P140.1bn ($2.8bn) for the same period in 2020. Collections rose after restrictions began to ease, but the government expects full-year collections to be less in 2020 than those in 2019, at P203.9bn ($4.1bn) compared to P227.1bn ($4.5bn).
The Philippine Health Security Corporation, known as PhilHealth – the national health insurance provider – took a leading role to ensure uninterrupted care during the pandemic. PhilHealth paid for the full cost of treatment for all patients in the initial phase of the crisis, and in mid-April launched newly recomputed case-rate packages to cover treatment while also ensuring the sustainability of the system. The provider also agreed to cover 100% of treatment costs for the personnel of medical institutions, including volunteers and non-health staff such as janitors and security guards. Meanwhile, a support package for Covid-19 testing was released in early June, with payments ranging from P900 ($17.90) to P3400 ($67.20) per test, depending from where the materials were sourced.
Until August 2020 Covid-19-related care under PhilHealth was paid for through an interim reimbursement mechanism (IRM), which was designed to provide hospitals with an emergency cash advance in the case of unanticipated events such as pandemics. A total of P30bn ($596.7m) was allocated to the fund, with all public and private hospitals, clinics and other medical institutions eligible for reimbursement within five days of the receipt of an approved IRM application.
The first P1.6bn ($31.8m) under the programme was released at the end of March, and P15bn ($298.3m) had been released to over 700 facilities by the end of July. However, PhilHealth announced the suspension of the IRM in mid-August amid allegations of irregularities in the system.
Recognising that the pandemic brought economic hardship for many in the country, in June 2020 PhilHealth extended the deadline for self-paying individuals and employers to pay their mandated premium contributions to the insurer. While the pandemic took priority in the health care space during UHC’s debut year, as Covid-19 is brought under control the challenge going forwards may not be competing health priorities, but rather financial constraints as the wide-ranging economic impact of the pandemic is anticipated to be felt into 2021.
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