On Distant Shore – What’s wrong with PhilHealth?


By Val G. Abelgas

“So young, yet so corrupt.”

Thus said Mayor Arsenio Lacson of the then 23-year-old Councilor Ernesto Maceda as he was fighting graft and corruption in Manila where the “Arsenic” was mayor from 1952 to 1962. That admonition was never proven, of course, and Maceda went on to become senator for many years and closed his political career as Senate President.

The remark would most certainly also fit an institution like the Philippine Health Insurance Corp. (PhilHealth), which was created in 1995 and at 26 years old, has been at the center of numerous scandals since 2007, when it was just 12 years old.

The mess at PhilHealth came to the fore again last week when seven hospitals in Iloilo City said it would cut off ties with the state health insurance agency starting next month over unpaid claims amounting to over P545 million. That would mean even PhilHealth members would have to pay the full hospitalization bills to the hospitals.

Earlier, the Private Hospitals Association of the Philippines, the Philippine Medical Association, and the Philippine Hospital Association warned that their ties with PhilHealth was on the verge of collapse after it suspended payment of claims to the hospitals over allegatiuns of fraud. PhilHealth already owes hospitals more than P80 billion, according to PHA.

The hospital administrators said it is another excuse by PhilHealth officials to delay payment of claims, which were mostly for services rendered to Covid-19 patients. Hospitals have been hard-pressed to provide medical services to thousands of Covid-19 patients with their limited resources that have now been further depleted by the non-payment of their claims.

And yet, PhilHealth was able to provide cash advances under the agency’s Interim Reimbursement Mechanism (IRM) to several favored hospitals, including those in Davao, home province of President Rodrigo Duterte, last year even before they could provide the services. The Southern Philippines Medical Center in Davao City, for example, received the biggest amount, with P326 million. Another hospital in Davao, the Davao Regional Medical Center in Tagum City, got P209 million.

Congressional investigations revealed later that as of June 9, 2020, PhilHealth had released more than P14 billion under the IRM to different hospitals and clinics all over the country – when it should have taken effect only on June 11.

And yet, PhilHealth has refused to pay the $545 million for services already provided by the seven Iloilo hospitals. Why? Is it because Iloilo is the home province of administration critic and opposition leader Sen. Franklin Drilon?

The Iloilo hospital administrators have been trying to collect from PhilHealth for several months now, and all they got are excuses like “lacking supporting documents and signatures, etc.” We all know that bureaucratic red tape breeds corruption, and it seems PhilHealth thrives in corruption.

PhilHealth was created in 1995 to implement universal health coverage in the Philippines by providing health insurance coverage to Filipinos who don’t get medical benefits from their employers. A monthly premium of P1,800 is shared by the employee and the employer, while overseas Filipino workers, self-employed individuals and domestic helpers pay the full premium.

What started as a well-intentioned program has in a few years become a milking cow for many corrupt doctors, hospitals and health facilities obviously in connivance with some PhilHealth officials and employees.

According to an article in Spot.com, as early as 2007, PhilHealth has been embroiled in corruption scandals. In 2007, a congressional hearing revealed that some hospitals and health care facilities had been overcharging PhilHealth for services rendered. One eye doctor claimed and was paid P16 million for an astounding 2,017 eye surgeries in one year. A hospital in Davao was claimed to have charged PhilHealth for services to patients who were later found to be non-PhilHealth members.

In 2014, an employee who exposed anomalies in the agency’s Davao regional office was fired allegedly for incurring too many absences.

In 2015, the health secretary at the time allegedly diverted P10.6 billion of the PhilHealth budget to fund barangay health stations, rural health units, national government hospitals, and mobile dental vehicles. Also in 2015, at least six facilities made PhilHealth members undergo unnecessary cataract surgery even without informed consent, which led to bigger claims from the state-run insurance agency.

In 2019, PhilHealth was alleged to have made overpayments of up to P154 billion for patients supposedly stricken with pneumonia from 2010 to 2018—with up to 757,000 claimants in 2018 alone when the Department of Health had not made any declaration of pneumonia outbreak.

That same year, President Duterte ordered PhilHealth executives to submit their courtesy resignations after reports that the health agency allegedly paid out billions of pesos for dialysis of non-existent or dead patients.

An investigation by Rappler, which cited Commission on Audit documents, found that a ranking PhilHealth official spent at least P627,293 of agency funds on accommodations, flights, and terminal fees on travels between her home in Bohol and her office in Pasig City in 2017 at a time when the agency reported P8.92 billion in losses.

In June 2019, the Department of Justice indicted the owner of a dialysis center and two whistleblowers for 17 counts of estafa through falsification of official documents. The charges stemmed from an investigative report by the Philippine Daily Inquirer that said PhilHealth approved and released payments for dialysis treatments of patients who are already dead and patients who were yet to complete treatment.

Another major anomaly identified during a Senate investigation was the alleged bloating of PhilHealth’s proposed information technology (IT) budget for 2020, which at P2.1 billion was P734 million more than the amount recommended by the Department of Information and Communications Technology (DICT).

The list goes on and on. Suffice it to say that PhilHealth is treading the path taken decades ago by Bureau of Customs, Bureau of Internal Revenue, the Department of Public Works and Highways, and other government agencies that have long gained notoriety for graft and corruption.

That allegations of anomalies are coming at a time of a national emergency when every available resources should be directed at ending the pandemic make it even more a matter of major concern. A review of its systems and personnel must be carried out before it is too late.