A young worker diligently paying his PhilHealth contributions found relief in his coverage when dengue struck. His hospital bills were manageable, allowing him to recover without financial strain.
For his lolo, however, the story was different. Years earlier, a bout of pneumonia led to a hospitalization that nearly wiped out the family’s savings.
These contrasting experiences highlight the progress made and the persistent gaps in the Philippine healthcare system—a reality that underscores the need for initiatives like the Health Economics and Finance Program (HEFP).
Launched by the Philippine Institute for Development Studies (PIDS), the Department of Health (DOH), and Philhealth, the HEFP aims to tackle the systemic issues hindering the full realization of universal healthcare in the country.
Addressing these challenges is vital as PhilHealth, the national health insurer, grapples with persistent issues undermining its effectiveness.
“PhilHealth’s declining financial leverage over hospital revenues threatens its ability to drive efficiency, quality care, and patient financial protection. Our analysis of PIDS hospital financial statements reveals a downward trend,” Dr. Valerie Gilbert Ulep, Senior Research Fellow at PIDS and Program Director of the HEFP, said during the launch on Thursday, March 20.
Problems in costing practices, payment design, and rate-setting exacerbate the situation, resulting in inaccurate payment rates, unpredictable healthcare costs, and institutional mistrust.
“For patients, this translates to lower financial protection,” Ulep added.
With growing public demand for universal healthcare, balancing limited fiscal resources with the delivery of quality services remains a significant challenge.
Ulep stressed the need for critical reforms, including establishing a clear system for patient classification, developing a robust payment formula, and ensuring accurate and transparent data.
The HEFP addresses these challenges by promoting collaboration and advancing evidence-based research.
“The HEFP is an invitation and opportunity to strengthen collaboration and engagement for health financing research with implementing partner agencies and stakeholders—beneficiary and patient groups, medical societies, healthcare professionals and facilities, local governments, as well as other development partners and research institutions,” PIDS President Dr. Aniceto Orbeta Jr. said, emphasizing HEFP’s mission.
Orbeta underscored the complexities of implementing the Universal Health Care (UHC) Act, highlighting the need for collective efforts.
“UHC cannot be accomplished in isolation by researchers in front of a computer screen providing motherhood statements and simplistic recommendations,” he explained.
In support, National Economic and Development Authority (NEDA) Secretary Dr. Arsenio Balisacan Jr. further stressed the urgency of data-driven health reforms.
“Given the scale of challenges in this sector, the need for evidence-based health reforms has never been more urgent. The creation of the HEFP not only addresses this need for high-quality research but also stands as a testament to the sector’s importance and the commitment to data-driven policy integration,” he noted.
Meanwhile, PhilHealth President and CEO Dr. Edwin Mercado shared how research partnerships will shape the institution’s priorities.
He highlighted that the agency is collaborating with PIDS to identify 10 to 20 most cost-effective health benefit packages, building on the initial set of benefits already drafted.
“We are shifting PhilHealth’s direction towards a more value-based approach where we will prioritize high-burden and high-cost diseases. However, we can only identify these priorities through rigorous studies and research,” Mercado explained.
The HEFP will focus on three key areas: provider payment reform, strengthening data-driven systems, and forward-looking research for policy reform.
Provider payment reform aims to address high out-of-pocket expenditures, which remain a significant driver of poverty among Filipinos.
Strengthening data-driven systems involves collaborating with PhilHealth to develop and institutionalize better costing standards while transitioning into diagnosis-related groups (DRGs) as envisioned in the UHC Act.
Forward-looking research, on the other hand, will explore innovative financing models like a global budget and assess claims data for better decision-making.
Ulep underscored PIDS’ dedication to fostering a culture of impact evaluation. “In collaboration with various agencies, we have assessed key programs, including Pantawid Pamilya, social protection, education, agriculture, and infrastructure, leading to meaningful policy changes,” he said.
Ulep highlighted that the HEFP builds on this legacy, paving the way for deeper insights and solutions in the health sector.
Watch the recording of the launching at https://bit.ly/pidslive032025.###
