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Philippine Institute for Development Studies

Evaluation of the Potentials of Private Insurance Industry as a Source of Health Care Finance in the Philippines Health, Education and Welfare Specialists, Inc. DISCUSSION PAPER SERIES NO. 95-08

The PIDS Discussion Paper Series constitutes studies that are preliminary and subject to further revisions. They are being circulated in a limited number of copies only for purposes of soliciting comments and suggestions for further refinements. The studies under the Series are unedited and unreviewed. The views and opinions expressed are those of the author(s) and do not necessarily reflect those of the Institute. Not for quotation without permission from the author(s) and the Institute.

June 1995 For comments, suggestions or further inquiries please contact: The Research Information Staff, Philippine Institute for Development Studies 3rd Floor, NEDA sa Makati Building, 106 Amorsolo Street, Legaspi Village, Makati City, Philippines Tel Nos: 8924059 and 8935705; Fax No: 8939589; E-mail: publications@pidsnet.pids.gov.ph Or visit our website at http://www.pids.gov.ph


PHILIPPINE INSTITUTE 2/F PhilCotton Bldg. Pasig, Metro Manila June

30,

FOR

DEVELOPMENT

STUDIES

1994

EVALUATION PRIVATE

OF THE POTENTIALS INSURANCE

OF

INDUSTRY

AS A SOURCE OF HEALTH CARE FINaNCE.IN

Part Part

l_

Main

Report

II:

Case

Reports

Prepared Health, "

THE PHILIPPINES

by

:

Education and Welfare =EWSPECS, Inc.

Specialists


EXECUTIVE EVALUATION OF THE INDUSTRY AS A SOURCE

Ke_

Policy

I.

2.

Questions

POTENTIALS OF HEALTH

Investiqated

and

SUMMARY OF PRIVATE CARE FINANCE

Why

Thez

HEALTH INSURANCE IN THE PHILIPPINES

are

Important

The study was designed firstly, to investigate whether health insurance can be a significant source of health the Philippines; and secondly, to determine how private can be regulated and promoted as an industry.

and how private care finance in health insurance

The study is important in view of the projected need to raise more resources for health care in order to cope with rising costs and increased demand for services. Health care costs are expected to rise because of: (i) the pursuit of the global goal of health for all by 2000; and (ii) the changing epidemiologic/demographic patterns characterized by rapid population growth and rising incidence of chronic, degenerative diseases and traumatic injuries which generally require more costly care. On the other hand, traditional sources of health care funds, namely tax revenues and family health spending, are not expected to grow as much as needed to finance the cost of providing the required levels and quality of health care.

Previous

Works

Related

to

Policy

Questions

Investiqated

3.

Earlier, outreach initiated delivery

4.

In the early 1980s, it became evident that the expansion of health services to peripheral areas required the mobilization of additional resources for the sector. This led to more serious efforts to develop alternative modes of health care financing and to investigate the major sources of health care funds and their levels of contribution to the overall health care expenditures in the country.

_L

I_iS.! _%_;_i_ i

health programs had focused on extending to peripheral areas through the community-based by private sector, and the restructured public system introduced in the mid-1970s.

Attempts to estimate health care expenditures from revealed that private health insurance made very little the overall health care funds, but has experienced growth in the past few years.

health service health programs health service

various sources contribution to rather dramatic

_iii_'_i!ii_i ' A background investigation made by Rhais M. Gamboa attempted tO define _i_!_;_i_i and classify the various forms of health insurance in the country. Mr. i_Gamboa's classification was used as take-off point for this study.

__&i_es.earch

was

Carried

Out

_'e_!Phiiippine Institute for Development Studies (PIDS) pre-selected the _i_Pi6-regions and provinces to be covered by the study based on a 2_ii_aged socio-economic stratification of regions and of provinces within _ilecÂŁed regions. In all, the study covered 4 regions and 6 provinces _hini_i_3 of the selected regions. Each region/province represented _usi?_levels of socio-economic development _sterlisting

of

firms

en_aged

in

some

form

of

health

insurance

er


Executive Summary

Page 2

Mr. Gamboa's classification was attempted in all sample regions and provinces. For each firm masterlisted, a set of secondary data was collected from available sources, mainly reports and/or registration documents. Prom the masterlist, a purposive sample of firms representing the largest and the smallest in each category was selected for an in-depth case study. Both primary and secondary data were collected. However, because of time and data constraints, not all • desired information could be gathered.

Principal

Findinqs,

Conclusions

and

Recommendations

9.

The masterlist of firms showed that private health insurance tended to be urban-based and to favor the more economically developed areas. Commercial indemnity insurance firms and health maintenance organizations (HMOs) were all based in Metro Manila although they had branch offices in some provinces and cities. Branch offices were generally merely marketing arms as most management decisions were made in the Metro Manila headquarters.

I0.

Plans and benefits offered tended to be curative, physician-focused and hospital-oriented for the commercial indemnity insurance and HMOs. Employer-provided benefits and community-based insurance tended to focus on primary care, often using pare-professionals as primary providers, but some large firms also provided a wide range of medical and hospitalization benefits. Community-based insurance schemes provided the least benefits, and were often unable to provide adequate coverage for the cost of hospitalization.

11.

Benefits were generally provided on a cash-reimbursement basis for commercial indemnity insurance and on a direct service provision basis for HMOs, some employer-provided benefits, and some community-based insurance scheme. Some employer-provided benefits and community-based insurance schemes provided medical loans to members as needed.

12.

Targeted beneficiaries for commercial indemnity insurance and HMOS generally belong to the corporate sector, the employed and the high/middle income bracket. They also tended to have longer years of schooling. Most were enrolled through corporate accounts or group insurance. Targeted beneficiaries for employer-provided 'health care also covered the corporate sector, but generally included a wider range of income groups, with low and middle-income rank and file employees as the dominant groups. Community-based insurance schemes generally coveredthe low-income families in organized communities.

!3.

Premiums charged for health plans offered varied widely. For commercial indemnity insurance, it ranged from a low of P25 per annum to a high of P48,000, with the mean computed at P4,049. HMOs offered plans with premiums ranging from a low of P600 per annum to a high of P34,800, with the mean computed at P5,858. Employer provided benefits had a premium range from P240 to PI,500 per annum, with a computed mean of P698. Community-based insurance schemes had premiums ranging from P8 to Pl,200 per_annum, with a computed mean of P201. In general, higher benefit _ceilings went hand in hand with higher premiums. _<,/.._...J._ ...

_!Available data on number of enrollees was incomplete as some private _i_insurance firms could not, or would not, provide information on actual '_i_ership at specified reference " periods. In all, 9 commercial i_Lndemnity insurance reported having 8,669 enrollees in 1991. The same _e r of HMOs reported having 133,900 enrollees in the same year, While _i_0_her 9 firms with employer-provided benefits reported coverage for _141671 members. Seven community-based insurance schemes reported a


Executive

15.

Summary

The sample following

Page 3

of members who characteristics:

responded

to the

incomes ranging from P800 response of P200,000;

structured

a.

Monthly outlier

b.

Mean income per income at P4,000,

month estimated at P7,!15, and modal income at P6r000;

c.

Incomes below respondents;

P5,000

d.

Mean

e.

Majority (55%) were enrolled through their 23% were persuaded by friendsagents, voluntarily enrolled;

household

size

of

per

to P70,000,

month

for

interviews

with

had the

an

median

47%

of

5; employers, and 21%

16.

Very little organized datawere available from the insurance firms on the service utilization patterns. The survey of members, however, showed that 70% of members had availed of offered benefits at least once sincethey enrolled, with 58% reporting to have availed of benefits more than once. Of those who availed of service benefits, 40% reportedly were fairly satisfied, 30% were very satisfied, 9% were not satisfied, and 21% did not make any comment.

17.

The operations of most commercial indemnity insurance and HMOs were highly centralized, with field/branch offices only processing the application for membership or enrollment and the filing of claims. In the case of employer-provided benefits, the health insurance operations were often integrated with the overall operating budget of the firm, hence financial data could not be segregated for analysis. Communitybased health insurance schemes often had crude records of financial transactions, but keep no records on the types of health services used, or the causes of consultation or hospitalization.

18. i i

Premiums and benefits were often determined through actuarial computations in commercial indemnity insurance firms and HMOs. In employer-provided benefits and community-based insurance schemes, consultative processes were often the basis for determining premium contributions and benefits to be provided.

i_9. _L_

Commercial indemnity insurance plans do not usually restrict enrollees' choice of service providers as long as those chosen are licensed physicians or health facilities. HMOs, employer-provided benefits, and community-based insurance schemes often provided primary care through in-house providers, with referral support provided by a network of accredited or retained providers. HMOS generally had a wider selection iof accredited providers, while employer-provided benefits and community::i!5asedschemes often had a relatively smaller network of accredited .... _!pfoviders.

_ i:_," _: e rczal " DQ_.;_ _:Comm indemnity insurance firms and HMOs often followed rigid _ii;_;_Standards of financial control and cost-containment. These include: i_(il)iscreening of applicants for adverse selection; (ii) setting limits _nd:exclusions on benefits provided; and (iii) assessment of claims to _etect frauds and misrepresentation by enrollees or providers. HMOs, _ployers, and community organizations, on the other hand, often _p_oyed primary health care providers to extend first level care and _!Jystematically refer cases to higher level or specialist care and


ExecutiveSummary

Page 4

hospitalization health insurance of averting the

based on assessed medical need. Most community-based schemes provided preventive or promotive care as means need for more costly curative care.

21.

The health insurance _ industry is seen by insiders as a growing enterprise because rising medical care costs exert pressures on the population to seek financial relief through health insurance. The pace of growth, however, will reportedly depend largely on economic progress and consumer education on the value of health insurance. Many industry leaders felt that the health insurance industry would also be promoted by general improvement in the business environment as well as by direct government incentives to support the industry, or to remove existing obstacles to the growth of the industry. Premium taxes, value added tax, and high tariff on imported medical facilities and supplies were cited as obstructive of growth because they make health insurance unaffordable to many.

22.

Presently, it is estimated that at most, only lO per cent of the population could afford to enroll in health insurance plans offered by commercial indemnity firms and HMOs. Employer-provided benefits have the largest prospects for coverage because they have the potential to reach all the formally-employed and their dependents or an estimated maximum potential coverage of 60 to 70 per cent of the population. They also have the least probable organizational and overhead costs because their operations could be integrated with those of the principal business of the firm, they could use payroll deduction as a collection scheme, and they could exert better controls over employees to discourage fraudulent practices. Community-based insurance schemes, on the other hand, seem to be best suited for those in the informal sector who are unemployed or self-employed in small business ventures, and are fairly well organized. Community-based insurance schemes, however, require intensive technical and organizational development inputs which, presently, only a small group of NGOs are committed to. They could, therefore, not be expected to expand coverage very rapidly. At best, they could be expected to cover no more than I0 per cent of the population.

23.

If each category of health insurance could reach its projected maximum outreach potential, an estimated 20 per cent of the population will probably still not be covered by any health insurance scheme. These could be targeted for government subsidy, either through direct health care provisions or through premium subsidy.

24.

At

_

optimum

coverage,

commercial

indemnity

insurance

and

HMOs

could

.i..... probably raise an estimated P2.4 to P3 billion a year for health care financing, assuming a minimum premium contribution of Pl,O00 per month pe r member, and assuming further that 40 to 50 per cent of premium costs could be directly allocated for health care provisions. _51_

;iEmpl0yer-provided benefits, on the other hand, could probably raise an estimated P5.5 billion per year for health care financing, assuming that i_a_minimum premium contribution of P240 per employee per year could be ililmet_aside as health care fund for employees and their dependents. _i_Community-based insurance schemes may be able to raise an estimated P106 _imillion to P530 million per year for health care financing, assuming _ii%hat each targeted family could contribute from P20 to PI00 per family _r_ year. _he =ealization _owever, hinges

of the above potentials on the full development

for raising of the health

health care funds, insurance industry


Execut|ye Summary

Page 5

in the Philippines. At present, the industry faces many problems and constraints that hinder its full development. The major problems identified are: (1) lack of adequate economic base because of the high prevalence of poverty among Filipinos; (ii) lack of appreciation of the value of health insurance, or of risk-sharing among the population at large; (iii) stiff competition for a very small market; and (iv) lack of a coherent government policy on health insurance. The absence of â&#x20AC;˘ suitable hospitals also serve as a deterrent to the development of health insurance in rural areas. Industry leaders feel that government support and incentives may be needed to assist the industry expand it6 current coverage. 2_.

Government could assume a significant role in realizing the potentials of private health insurance as a source of health care financing in 2 ways: (i} by creating a supportive environment for business development, or (ii) by directly providing incentlveQ/ support for health insurance development.

28.

The following incentives for business development are recommended: (i) instituting improvements in the infrastructure for telecommunications to minimize delays in processing of documents/ papers and facilitate field level decision making without having to forego with essential control measures from the head offices of commercial indemnity firms and HMOs; (il} expanding use of information technology and _mmunication facilities to facilitate the retrieval and management of data that serve as orÂŁtical basis for planning and policy formulation; and (iii) promotion of low-cost technologies that would minimize occupational hazards so that more workers could qualify for health insurance coverage and premium costs could be kept low and affordable.

29.

Recommended incentives for the development of the health insurance industry are as follows: (i) intensification of public education, advooacy, or information dissemination on the value of health insurance; (il} exemption of health insurance from premium taxes, or offering tax credits for family expenditures in buying or enrolling in health insurance schemes; (lii) provision of technical assistance in training a corps of prospective health insurance professional, managerial and technical staff who can promote effective health insurance management and ensure a balance between the efforts to contain cost and the need to provide appropriate health and medical care for all insured members; (iv) exploring the possibility of a tle-up between public tertiary hospitals and private health insurance firms in areas without qualified private hospitals; (v} encouraging employers to engage in some form of health insurance schemes for employees and their dependentst (vi) dissemination of information and technology on innovative communitybased insurance schemes, particularly in areas where there are already well-organized groups; (vii} promotion of income-generatlng projects designed to improve the fÂŁnancial viability of community-based insurance schemes; (viii} provision of adequate referral services through public :hospitals to support the service delivery provisions by community-based health insurance scheme; and (ix} developing a suitable regulatory _schemeto protect the public from undesirable practices and promote the ii'_age of the health insurance industry as a legitimate business.


Evaluation as a

Executive Table of

summary Contents

Part

Main

I:

of Source

BACKGROUND

II.

RESEARCH

III.

POLICY

RELEVANCE

IV.

REVIEW

OF

VI.

EMPIRICAL

.

Market

STATEMENT STUDY

...............

1

...................

2 3

in Health Service Delivery and Financing ....... of Health Care Financing .............. Insurance as Means of Health Care Financing ..... ...................

3 6 7

....

13

.......................

14

.............. ......................

....

15 17

.....................

18

AND

RECOMMENDATIONS

Potentials

of

21 26 36 37 43

......

..........

Various

Types

46 of

Health

Insurance

. .

Commercial Zndemnity Insurance and HMOs ....... Employer-Provided Health Benefits ......... Community-Based Health Care Financing Schemes .... for

Commercial Indemnity Insurance and HMOs ...... Employer-Provided Health Benefits ...... Community-Based Health Care Financing Schemes

4_ 48 48

Providing

Fund

for

Health

Adequate/Appropriate

Care

46 47 47 47

for

Generating

46

....

Potentials

Health

Commercial Indemnity Insurance and HMOs ....... Employer-Provided Health Benefits ...... Community-Based Health care Financing Schemes

Potentials I.

18 20

Health Plans .......... Profile of Insured'Me_ers/Enrollees" . Service Utilization ................. Organizational Set-Up ........... Perceptions on Industry Prospects ......

Potentials

1. 2. 3. D.

1

Masterlist .............. In-Depth Study ...............

i. 2. 3. C.

of

......................

Sampling Design Data Collection

I. 2. 3. S.

THE

FRAMEWORK

CONCLUSIONS A.

OF

LITERATURE

i. 2. 3. 4. 5. VIII.

Contents

FRAMEWORK

FINDINGS A. B.

Table

Insurance Industry %he Philippines

in

............................

Trends Sources Health

ANALYTIC

VII.

of Private Finance

OBJECTIVES/PROBLEM

V.

A. B.

Potentials Health Care

Report

I..

A. B. C.

the of

for

Commercial

Containing Indemni_y

costs

of

and

HMOs

Medical ........

Care

....

_ . . care

....

.

48 48 48 49 49 49


2. 3. E.

Constraining i. 2. 3.

F.

References Part

II:

Factors

Health Benefits Health Financing to

Expansion

Support

to

Services

Expand

Market

Coverage

. ...... . .

50 50

. .

50

.

50 50 50

. ...... .......

.........

51

Commercial Indemnity and HMOs ............. Employer-Provided Health Benefits ........... Community-Based Health Financing Schemes .......

Recommendations/Options

for

Government

............................... Case

of

Schemes

Commercial Indemnity and HMOs ........... Employer-Provided Health Benefits . . Community-Based Health Financing Schemes

Required i. 2. 3.

G.

Employer-Provided Community-Based

Reports

..........................

Interventions

51 51 51 ....

5i 53 57


ACRONYMS

ACP AIDS BHW CARE CEA CBC. CBHP CT CV DMP DOH DOLE ECG ER GAP GSPA HAMIS HEW SPECS HMO _ HRD IBRA ICU IGP LOA LOI LOS NCR NGO OPC PA PCHRD PDMP PE PHC PHCFP PHILDHRRA. PIDS PMSU RUV SA SAHMO SEC,, STD TFAP TIN TPL UNZCEF UPHMO UPHS USAID UTI VAT WHO

Annual Contingent Profit Acquired Immune Deficiency Syndrome Barangay Health Worker Cooperative for American Relief Everywhere Collective Bargaining Agreement Complete Blood Count Community-Based Health Program Computerized Tomography Contract Value Dependents Medical Plan Department of Health Department of Labor and Employment Electro Cardiogram Emergency Room Group Association Plan Group student Personal AccidentInsurance Plan Healthand Management Information System Health, Education and Welfare Specialists Health Maintenance Organization Human Resource Division Institution Building and Resource Accessing Program for Women Intensive Care Unit Income Generating Project Letter of Authorization Letter of Instruction Length of Stay National Capital Region Non-Government Organization Out-Patient Consultation Personal Accident Philippine Council for Health Research and Development Philippine Airlines Dependents" Medical Plan Physical Examination Primary Health Care Primary Health Care Financing Project Philippine Partnership for the Development of Human Resources in Rural Areas Philippine Institute for Development Studies Primary Medical Services Unit Relative Unit Value Statement of Account San Antonio Health Maintenance Organization Securities and Exchange Commission Sexually-Transmltted Disease Targetted Food Assistance Program Tax Identification Number Third Party Liability United Nations Children's Fund University of the Philippines-Diliman Employees' Health Maintenance Organization University of the Philippines Health Service United States Agency for International Development Urinary Tract Infection Value Added Tax World Health Organization


PART

MAIN

I

REPORT


Io

BACKGROUND

Health care in the Philippines has traditionally been financed by tax revenues in the case of public services, and by market generated fees-for-service in the case of prlvately provided care. As shown in Table 1 below, health insurance contributed only 7 per cent to the overall financing of health care in 1985 and 1988.

Share of Financing

Health in the

Table 1 Insurance in Philippines,

Health Care 1985 & 1988

1985 Total

Health

Exp.

•Public

Sources

Family

Exp.

Private

(%)

(%)

Ins.

Compulsory

(P)9.831

(%)

Ins.

(%)

1988 B

13.645

38

50

55

43

1

2

6

5

B

r-'

Source:

Hearth Sector Financing in the Ph_t.;

Seton,'et.

al.

Current trends suggest that the traditional sources of health care financing may not grow as much as needed to cope with rising health care costs in the country. The depressed economy limits the possibility of increasing tax revenues, while prevalent poverty constrains the growth of family spending for health care. Compulsory insurance, has likewise been constricted by its inability to expand coverage to the non-formal sectors. Private insurance, on the other hand, while contributing a fairly small share of total health care expenditures in 1985 and 1988, has experienced rather dramatic growth between 1985 and 1988. For this reason, private insurance has stimulated interest among policy makers and industry watchers. For one thing, the fairly small present coverage of health insurance indicate that there is a lot of room for growth and expansion of the industry. Secondly, numerous initiatives have been made in the recent past to develop the middle and low-income market for health insurance. This study, therefo=e, took a closer look at the operations of the private insurance industry and investigated the range of operational approaches as well as the challenges facing the industry.

If.

RESEARCH

OBJECTZVES/PROBLEM

STATEMENT

The study assessed the potentials of the private insurance industry mean8 of generating funds for health care, and as a tool for making health affordable and economical to a wider segment of the Philippine population. J_¢Ifically, ._'.... .

the

study

1.

What types Philippines?

2.

Who were the insurance?

_..

What

factors

attempted of

health

intended

influenced

to

answer

insurance

and

actual

the

the

following

benefits

decision

of

questions:

were

beneficiaries

as a care

available

of

individuals

in

available

to

the

health

enroll

or


HEWSPECS-PIDS Basettne $t_

on Private

participate

Hearth Insurance

in health the

Page 2 .

insurance?

characteristics

4.

What were insurance?

5.

What types these types unpopular?

6.

What factors contributed to of a health insurance firm threatened the viability of

7.

What why?

8.

What factors were benefit packages?

9.

What insurance options were available for the poor and income? What were the prospects for developing an insurance for the poor and the low income?

the low scheme

i0.

What measures h_d health insurance? work?

through did not

of health popular?

benefits

of

insurance What types

offered

by

the or the

health

considered

individuals

who

were dominant were unpopular?

financial company? same? insurance

in

or popular? Why were why were these types

were

fully

premium

The answers to the above questions were expected to shed options that may be adopted to stimulate and/or regulate health insurance as an industry in the Philippines.

III.

POLICY

OF THE

utilized

and

costs

and

health care costs worked and what

policy private

RELEVANCE

in health

and managerial viability conversely, what factors

determining

been tested to contain What specific measures

enrolled

light on the growth

the of

STUDY

The need to develop innovative means of financing health care in the Philippines has been recognized as early as the late 1970s when the Philippine Government embarked on a "Primary Health Care Financing Project" in collaboration _with the United States Agency for International Development (USAID). The project was conceived principally as a way of testing alternative means of generating health care funds from sources other than the traditional tax alloca_ion and fees-for-servlce. Even in those early years, it had already been foreseen that the global goal of health for all would require the mobilization of more resources than what has been available from traditionalsources. The national aspiration to achieve health for all has not diminished •despite the relatively poor economic performance in the 1980s and early 1990s. The Department of Health has continued its search for alternative means of _alslng health care funds and promoting efficient use of available resources for :health. Recently, a project agreement was signed between DOH and USAID to _plement the•Health Finance Development Project which, among others,• seeks to pEOmote effective policy on health care financing and to support experimentation • hd demonstration projects to develop alternative schemes of health care _.L_ancing. This study is expected to contribute to the national policy formulation _Qf_QEt of the DOH by generating information on private health insurance _E&tlons in the country and identifying the factors and conditions that may __e or constrain their growth and development as health care financing _/_t,tlons. The findings of the study could guide the DOH in adopting _0p_late policies to regulate or support the development of the health _l_=e,lndustry. The develo ment of the health insurance industr on the _h&"d•t•••_ould generate additional resources for health ca;s and all_wthe DOH


HEWSPECS-PIOS BaseLirm Study _n Private

to re-allocate interventions.

IV.

REVIEW

A.

available

OF

HeaLth insurance

public

resources

Page 3

to

more

cost-effective

and

Financing

health

LITERATURE

Trwnds

in

Hgalth

Service

Delivery

Health care in the 1960s and the 1970s focused principally on the provision of health service facilities, through public or private institutions, in order to improve physical access to health care. The thrust was to set up health facilities in strategic areas, which in the case of private sector, tended to be urban-based because market conditions were supportive, while government was expected to take care of remote, rural areas where privately provided services were inadequate or inexistent.

i

Trends in external assistance to health during these periods reflected this philosophy. Both bilateral and multilateral donor agencies provided technical and financial assistance to improve facilities and services in the rural areas, leading in 1975, to the restructuring of the Philippine health system, which was supported through a project funded by the World Bank, and included provisions for the construction of main health centers and barangay health stations throughout the country. The re-structured health system resulted in the deployment of midwives as multi-purpose health service providers at the village level. This was intended to bring health services closer to the people. Another local initiative designed to address the inadequacies in village health services was the experimentation by non-government organizationsto implement Community-Based Health Programs (CBHP) in the early 1970s. The CBHPs mobilized the community to take an active role in decisions regarding their health problems. Their main objective was to educate communities to identify their own health problems and needs and to determine the most affordable and indigenous means of addressing their health concerns. CBHPs encouraged community participation through collective problem identification and action planning, and may have been patterned after the Chinese model of health delivery utilizing "barefoot doctors" (Maayo, 1983). Despite their laudable objectives and the dedication by which they were implemented, the CBHP did not make a significant impact on the nation's health status because of its limited coverage, even though the Rural Missionaries of the Philippines adopted it as a national approach in 1975. Towards the end of 1970, it became evident that many people, particularly in third world countries like the Philippines, were still not getting adequate and appropriate health services, and that in many cases, the obstacles were not _ua_ the absence of facilities or providers of services, but the increasingly pEohlbitive cost of health and medical care. This was largely brought about by the following: 1.

the undue preference, by both the providers and users of services, for secondary and tertiary levels of health care which were costly and often, not the most cost-effective means of addressing the prevailing health problems;

2

the failure to services, often tied up in the

provide because provision

adequate preventive scarce publicand of secondary and

and health promotive private resources were tertiary care, coupled


HEWSPECS-PID$ Basetine Study on Private

HeaLth Insurance

Page 4

with the users' general lack of more cost-effective public immunization, sanitation, etc.;

appreciation and low demand for health interventions, such

the as

3.

the declining economic growths, particularly in third world countries, which when coupled with increasing debt burdens and rising population, severely constrained the amount of resources available for health care, both at household and national levels;

4.

the increasing dependence technology which were not economic capacities of the society; and

5.

the rising infectious problems_ resources

on health professionals and health always attuned to the real needs and poor and the less educated members of

proportion of chronic, and parasitic diseases giving rise to higher available were severely

degenerative conditions, even as remain significant public health cost medical care at a time when constricted.

Partly in response to the above problems, several community-based health projects similar to the CBHP were'also initiated in other countries. These were probably the forerunners of the primary health care movement which culminated in the International Conference on Primary Health Care held from September 6-12, 1978 in Alma Ata, USSR. The conference participants, observing that the state of health in the third world was deteriorating, thought it necessary to define an innovative strategy to close the gap betweenthose who could afford high standard health care and the poor who were often underserved and unserviced. The conference proclaimed the primary health care strategy as the essential approach to improve the health situation around the world. (WHO and UNICEF, 1978) The Alma Ata Declaration defined primary health care as : "essential health care ...made universally accessible to individuals and families in the community through their full participation and at a cost that the community and country can afford ... It forms an integral part of both the country's health system, of which it is the central function and main focus of the overall social and 'economic development of the community". (Fry and Hasler, 1986) The Philippines as PHC) through Letter No. 949, 1979).

adopted the Primary Health Care Program (popularly known of Instructions No. 949 issued on October 19, 1979. (LOI

The PHC approach called for the organization of PHC committees at all levels, i.e., national, regional, provincial, municipal, and barangay or village level. It also entailed the deployment of barangay health workers (BHWs) throughout the country. The BHWs were essentially community volunteers who were _aLned to provide basic health care and to facilitate the delivery of basic health services. In addition to technical training, BHWs were provided with |ervice kits which enabled them to provide first aid measures for primary cases. Their primary role, however, was to provide health education and to serve as llnk between the health service delivery system and the community. ....... _..... Despite the adoption of low-cost and cost-effective technologies, the PHC |_Eategy still required the mobilization of enormous amounts of manpower, B_erlal and financial resources if the goal of health fo_ all by year 2000 were _Q!_be attained. In addition, the emerging demographic and epidemiologic _am|ÂŁtion was expected to bring about increased and rising health care costs due fr,_' ithe following. !i_0 '.... increased population

life which

expectancies could increase

and corresponding the demand for more

aging of the costly secondary


HEWSPECS-PIDS Basetine Study, on Private

and

tertiary

Hearth %nsurance

Page 5

care;

2.

the epidemiologic transition prevailing ailments towards diseases;

which could more costly

3.

technological advances in medicine which could require investments in research and development, acquisition equipment, training of skilled manpower, and discarding technology/equipment;

4.

increasing probability of provlder-induced skills required for diagnosis and sophisticated; and

demand as technology treatment become

5.

rising consumer educational and

expected

demand brought socio-economic

about _ by status.

change chronic

the and

character of degenerative

added of new of old

improvements

and more

in

A clear need to search for methods/ways of financing health care services emerged and became a popular subject for discussion. (Fry & Hasler, 1986). cognizant of this need, the Philippine government entered into a project agreement with the USAID for the latter to provide financial and technical assistance to the former in undertaking researches and experiments on alternative health care financing schemes. The project, which became known as the Primary Health Care Financing Project (PHCF), supported selected primary health care services and provided grants for research and experimentation to improve the financial viability of the health care system. Implemented in July 1983, it became a major force in building interest in health care financing An the country. (Alfiler, 1986). Subsequent estimates of the funds for health organized to look trends in health

studies (Intercare, 1987 & RTI/UPSE, i991) also generated health care expenditure and identified the major sources of care in the Philippines. â&#x20AC;˘ Public discussions and fora were into the policy and program implications of the prevailing care delivery and their financing.

Viewing health care as a commodity subject to market forces tempered by societal values, Dr. Dieter K. Zschock, in his book Health Care Financing in Developing Countries, oompared it to other goods and services which individual households and many public and private organisations are willing to pay for out of their incomes or revenues. (Zschock, 1979). Being a market commodity, the cost (or price) of health care is determined supply and demand factors. The supply of health care is determined by the oportion of national income devoted to health care. This includes the cost cuffed by the government and private sector when they engage in health care le_vlces provision. by

_?i_i!:ii!i_:Health expenditures vary from country to country depending on how much they _i_Ue health care. A large proportion of private health expenditure has been kVOted to the provision and/or consumption of curative services. Preventive care _|; however, been preferred in the public sector by virtue of its being more _j_meffective. Nevertheless, because of the large cost of maintaining public _%p_tils, curative care also used up a large proportion of public expenditure

ÂŁ_,health.

_ilHealth care demand, on the other hand, is determined by the following: (1) _/_:iItatus, income and education; (2) consumer and provider perspective; (3) _,_ii,_accesslbillty of health care; and (4) quality and quantity of health


HEWSPECS-PIDS Baseline Study on PriVate Health %nsurence

Page 6

The health status, income and education of an individual influence his demand for health care services. The current state of one's health determines demand to seek medical care. A person's educational attainment and knowledge about health care also increases demand for specific health services such as immunization and consultation, among others. However, income and lack of education place certain limits on the level of health care an individual will be iQoking for. Thus, poor people who are quite often ill may not buy the type of health care needed but will have to settle for what they can afford, or forego buying needed health services to purchase other basic necessities. The provider or practitioner of medical care prescribes the type and level of health care an individual must receive, thus exerting great influence over the level and composition of demand. (Zschock, 1979) A consumer, however, also exercises some degree of influence on health care demand when he decides on whom he will consult and whether he will follow the medical advise given to him by a health, provider. Physical and financial access to the providers of health care affects level of demand by an individual. A person's perception of how much he will as well as how far in terms of physical distance he will travel influences frequency by which he will seek medical care.

the pay the

Quality and quantity of services •available • also influence the demand for medical care. New demands are expected with the introduction of new types of health care services, e.g. ultrasonography, magnetic resonance imaging, etc. One indirect measure of quality is the degree by which a service is being accepted or utilized by both providers and users of health services. Another indicator is its impact on the overall health status of the community. The supply of, and demand for, health care exert a strong influence methods of health care financing. Increased demand creates a simultaneous for the most suitable means of its financing.

B.

Sources

of

Health

Care

Financinq

The sources of health care financing are conventionally divided broad categories: public and private sources. Public sources are those through the government system while private sources are those coming private sector. Public i.

2.

sources

include

on the need

into two generated from the

•the following:

Tax revenues that support health care, which types: (a) duties on imports and• exports; business transactions; and (c) income taxes.

generally (b) taxes

Domestic and international borrowings that augment supporting health care. This is usually referred financing" because this scheme spends funds that future time, have to be repaid.

are on

of three domestic

tax revenues in to as "deficit will, over some

3. ••

sales tax, which is an important source of health local government. These include taxes imposed liquor, cigarette or other luxury items.

care funds for the on items such as

4_,_

Social insurance, which is a mandatory means of supporting health care. certain amount of payments or contributions expressed in percentage of wages are required from either the employees or


HEWSPECS-PIDS BaseLine SCudy On Private

HeaLth Insurance

Page 7

employers to augment the financial support countries have adopted this type of health health benefits, social insurance includes and old age. 5.

for health care. Many care financing. Besides pension for disability

Lotteries and betting, which are taxed to contribute to the funds earmarked for health care. In the Philippines, the Philippine Amusement and Gaming Corporation and the Philippine Charity Sweepstakes Office appropriate a certain portion of their income for health projects.

Private

sources

consist

of

the

following:

i.

Direct household expenditures, which are direct out-of-pocket payments of individuals for services rendered by medical practitioners. This comprises the fees-for-service which the consumers of health care pay as a price for goods purchased.

2.

Charitable contributions, which consist of cash or inÂąkind made by philanthropic individuals, groups, or institutions UNICEF or other grant-providing organizations.

3.

Direct employer financing, which are medical benefits given to employees. Private businesses sometimes provide for their employees' medical needs either by contracting private health organizations and practitioners or by establishing in-house health facilities and hiring medical professionals to render health care.

4.

Private health insurance, which may be operated either for profit or non-profit and for individual or groups, and are financed through regular premium collections from members/enrollees.

5.

Communal self-help, which are community efforts or schemes of providing low-cost health services. Several schemes are currently being tested throughout the world. These schemes are primarily directed at helping the poor segment of a country's population such as the urban poor, low-income farmers and fishermen, etc. Community organization is adopted as an approach in empowering the community to take actions regarding their health needs.

donations such as

As shown earlier, tax revenues and household spending constitute the major sources of health care financing in the Philippines. Tax revenues are generally used to finance publicly provided services, while proceeds from household spending (or user charges) are used to finance the operation of private service institutions. Health insurance, on the other hand, is a minor, though growing Iource of health care finance. The current interest in private health insurance as a source of health care ZLnance in the Philippines reflects the realization that the traditional sources, _L.Q0, taxes and user fees, are already approaching their maximum limits, and _refore may no longer be a reliable source of additional funds to support _t_UEe health care needs/demands.

C.

_Generally, __ing __ual

Health

Insurance

as

Means

of

Health

Care

Financinq

insurance is defined as a "social device to reduce risk by independent exposures". (Dickerson, 1958) Insurance decreases risk by spreading the risk among groups of individuals or


HEWSPEC$-PIDS Sssetine Study on,Private

Hestth Insurance

organization.

the

The

sharing

of

risks

Page B

is the

essence

of

insurance.

Health insurance is defined in Mr. Rhais Gamboa's Background Paper on Health Insurance in the Philippines as "a means of prepaying for health care and spreading the risk of substantial medical care costs across a pool of potential patients". Two essential elements of health insurance are described in this definition, namely: (a) prepayment; and (b) risk-sharing. Health insurance is a mechanism by which individuals agree to regularly pay a certain amount (called premium) in order to be able to pool funds for payment of cost of sickness in some future time. It is a scheme by which those fortunate enough to be healthy at a given _ime pay for those who are sick, with a clear understanding that should those who are well now fall sick later on, their costs will in turn be covered. (Abel-Smith, 1986.) The reduction of risk by means of combination becomes more important and effective among groups of population who could not afford and immediately pay the cost of getting sick. For the purpose of this study, private health insurance refers, in a generic sense, to all privately organized mechanisms wherein payment for specified health services are assured through a mechanism of prepaid, risk sharing among the groups covered by the service. This includes the following types and categories described by Mr. Gamboa in the above-cited paper: 1.

2.

3.

Commercial a.

domestic

b.

foreign

c.

life

Health

health

nonlife

insurance

insurance

insurance

nonlife

maintenance

insurance

companies companies

companies

Organizations

(HMOs)

a.

investor

and

insurance-based

b.

investor

and

hospital/clinic-based

c.

community

d.

employer-initiated

based

Employer-providedhealth

benefits

a.

health

benefits

as

b.

health

benefits

voluntarily

N.B. a benefits, 4.

indemnity

a result

of

CBA

provided

third type, i.e. legally mandated health is covered separately in another study.

Community groups

level

a.

urban

b.

internal

c.

indigent

d.

farmers

insurance/financing

poor refugees

by

socio-economic

population


HEWSPECS-PIDS Baseline Study on Private

e.

fishermen

f.

hinterland

HeatCh Insurance

Page 9

communities

Commercial indemnity health insurance firms refer to those providing health and accident insurance. Their present coverage is limited to the upper income bracket. The economically disadvantaged majority remain uninsured (Merrin, i_89). In 1985, the total benefit payments made by commercial indemnity health insurance was only about 1 per cent of the country's health care expenditures. (INTERCARE, 1987). The health maintenance organization, or HMO, is a scheme combining the provision of services with its financing. Gamboa (1991) identified 3 types of HMOs in the country, i.e., investor-based, community-based and employerinitiated. Investor-based MMOs are profit oriented, generally located in urban centers and generate most of its income from corporate accounts (Manila Chronicle, 1992). A recent estimate pegs the membership size of all profit-oriented HMOs in the country at less than i% (Picazo, 1990). The only community-based HMOs recorded in the Philippines are the experimental HMOs developed with support from USAID through PCHRD. Two such HMOs are presently operating - UPHMO and SAHMO. The UPHMO operates in a corporate community while the SAHMO operates in a regular household community. Both are non-profit organizations operated in the same manner as the investor-type of HMOs. Unlike commercial indemnity insurance, HMOs have more cost-effective means of controlling provider abuses, without curtailing the provision of necessary â&#x20AC;˘ health services. A comparison of the service utilization rates among UPHMO and SAHMO members with the norms prior to HMO operations showed: (1) a marked increase in service utilization rate; (2) shorter length of stay in hospitals; and (3) lower cost of overall consultation â&#x20AC;˘ and hospitalization. These are positive indicators of the HMO's potential as a mechanism for making health care available and affordable. An important insight gained from the experience is the limited replicability of the scheme. The HMO is appropriate only for those population groups who have some capacity to pay the regular contributions. Poor people cannot benefit fully from such a scheme unless there are added provisions such as livelihood projects and sponsorship to help them defray their membership casts. One other lesson learned is that the MMO cannot spontaneously develop in a community setting. Its organization and growth requires nurturing. Technical assistance is needed in drawing up implementation guidelines. Marketing support is necessary to draw members while information and education are needed to promote an appreciation of the benefits offered and the managed care approach to doing it. Vigilance is crucial to ensure that it is guarded against adverse =election and inappropriate and costly utilization patterns. Zmployer-initiated HMOs are those organized by companies for the benefit O_ their employees and dependents. This is exemplified by the Philippine _Inee Dependents Medical Plan (PDMP) established in early 1988. The PDMP is t_ Only one of its kind in the country. The employer-initiated HMO is similar _@ cho community-based HMO in the sense that it is established in a corporate _unlty, is non-profit, and offers lower fees for membership. The difference _LOUln the fact that members of PDMP enjoy subsidy from the company. The PDMP K_WOa the dependents of regular employees of Philippine Airlines. _ _ !_.., ..: , ..., , _i...

_iF_mployer provided health benefits refer to those provided by employers to _eee either as legally mandated, or as part of labor-management collective _&_Lng agreements (CBA), or as a voluntary decision of the management. CBAs _lude employer obligations to provide medical benefits to employees and _= .... q_de_ndents. There is no current esÂŁimate of the relative contribution of


i._¸

XEWSPECS-PIDS Basetine Stuch/ on Private

Hearth Insurance

employer provided health financing schemes to country. However, the INTERCR-RE study (1987) make significant contributions to health care

Page 10

total health expenditures in the found indications that companies financing in the country.

Community-level health insurance refers to a variety of community-managed health financing schemes with elements of risk-sharing and pre-payment. Under such schemes community participation may come in the form of cash or in kind contributions as in the donation of labor or materials. In return the participating conununity members may receive benefits in the form of discounted medicines, interest-free or low-interest medical or hospitalization loans. Some community-level health insurance schemes serve very poor families. Under such conditions, a livelihood component is usually part of the scheme as a means of enabling the poor to pay membership fees. Loans for livelihood projects are also used as come-ons. A recent contest sponsored by DOH and the German Agency for Technical Cooperation uncovered at least 21 community-level initiatives with health insurance components, unfortunately, these entries did not provide adequate information on their collective contribution to the country's total health care expenditures. There is also insufficient information to assess their viability. Nonetheless, experiences here and abroad illustrate that community resources can be harnessed to pay for the health care of its members. In Metro Manila, for instance, a drugstore cooperative is operating in Smokey Mountain which provides contributing members with medicines at 50% less cost than those bought from commercial stores. In various parts of the country there are other community initiatives which provide medical loans to its members_ Monthly membership contributions are varied, ranging from PI.00 to PI0.00. Some also provide

loans

for

livelihood

projects.

The private health insurance industry renders needed services to individuals who, singly, may not be able to afford the full cost of a catastrophic disease. It also serves the health sector by harnessing individual or family savings and mobilizing these as earmarked resources for the direct provision of health and medical services for a given population, i.e., insured member s. Experiences in Korea and other developed countries, however, have demonstrated that health insurance may be abused by both supplier and consumer of services, creating an "induced demand" which result in escalation of health care costs. Thus, while health insurance may be an effective means of raising total health care funds, it may also contribute to cost escalation in health care, thereby negating the impact of gains in resources. Happily, the industry has also developed cost-containment measures to control or minimize "induced _emand" in order to protect its financial viability and, as an externality, also =ontribute to improving the efficiency and effectiveness of health care provision â&#x20AC;˘ In many instances, the availability of third party payment schemes such as haalth insurance contributes to cost escalation by affecting the behavior of consumers and providers alike. With insurance coverage, the behavior of 0onsumers and providers of service have been known to undergo a change prompted _ the guarantee of payment which insurance provides to all parties. This te_ed behavior manifests itself in the form of overutilization of services and _n&pp_opriate use of facilities by consumers as well as overprescriptlon by

l_y=Lelans. ..... _ii_ii_41_Measures to minimize cost escalation come in different forms from different __lOIMl_Of the world. Controlling cost escalation may depend on the particular i_- _h_Gare system operating in a particular society. In Canada, where a N_6_Lied system of health care del_very is in operaÂŁion, cost escalation is !_d_!by a national regulatory system which discourages exorbitant doctors' __ controls technology and facility acquisition of hospitals. Japan has


HEWSPECS-PIDS Baseline Study on Private

Hearth Insurance

Page 11

a uniform fee schedule which pays fixed fees for services regardless of the specialization of provider, how and where the service is performed and quality of care. The Japanese system has been identified as the most significant factor in driving costs down. In both countries, public policy is the main force influencing health expenditures. Procedural mechanisms may also contribute to cost containment. Utilization of services beyond what is medically necessary can be checked with the institution of a "gate-keeper" physician or facility. An individual, if given free choice, would patronize the nearest facility with more sophisticated equipment resulting in more expensive cost of care. The "gate-keeper" can prevent this by differentiation of levels of care, i.e. primary, secondary and tertiary or general and specialty care. Access to higher level care would require referral. The institution of a system of referral has been shown to lessen utilization rates in Korea. "Gate-keeper" physicians are basic safety caps employed by HMOs. Studies from the US have shown that utilization rates of HMO members are significantly lower than non-HMO members with insurance coverage. The tendency of physicians to engage in "procedural multiplication" or the overprescription for services, return visits and the like can also be controlled through the mechanism described above. Overprescrlption is more common where the system of compensation is on a fee-for-service basis operating in a free market. A popular alternative is the adoption of payment on capitation basis. Private sector investments in new buildings and sophisticated technologies can be checked more effectively by a regulatory body. The government plays a major role in ensuring that new acquisitions, whether of buildings or technologies, will not worsen the uneven distribution of health facilities. Sophisticated technologies also contribute to price escalation in health care, because more often than not, they are initially priced high to recover the cost of the research. The problem is more acute in the US where sophisticated equipment proliferate. But the larger issue is how to determine the -appropriateness" and the "effectiveness" of new interventions. Many interventions such as lithotripsy may actually lower the cost of a procedure. The problem arises when new interventions are employed indiscriminately even if there is no clear evidence that it can improve a patient's health. As a countermeasure, voluntary health insurance schemes generally set limits for benefit payments to protect itself from the catastrophic cost of advanced technologies. Adverse selection is another factor that contributes to health care costs paid by insurance. To protect itself from adverse selection, most insurance firms _ exercise selectivity in accepting members. This practice is usually criticized by public health care systems, arguing that private health insurance firms often spend more time, effort and money on deciding who is not to be insured. Consequently, private insurance firms often operate at lower loss r_tlos than public systems. _ In some cases, _norally and directly g_ & sizeable portion _hose already charged

administrative and other personnel costs which do not contribute to the welfare of the insured patient may use of health insurance premium costs, thus raising costs over for direct service provision.

ii:i_ _i The private health insurance industry must strike a reasonable balance i_twQen containing costs and maintaining acceptable standards of quality care. i_ ellmlnation of ineffective, excessive and unnecessary medical procedures is !ill,rime consideration. Some sources of inefficiency that could be avoided by the

..... _:_

excessive

use

of

hospital

services

for

conditions

which

could

be


HEWSPECS-P%OSSaset_ne

Study on Private

efficiently 2.

use

of

Health

managed

Insurance

at

marginally

Page 12

lower

health

effective

facilities

medical

regimen

recommended repeated visits; excessive drugs ; excess ive use of laboratory unnecessary surgical operations; 3.

excessive medical

provision professional

4.

uncalled for and facilities

of physicians' can do the job;

at

lower

such

as

prescribing or x-ray

services and

when

utilization of sophisticated and when simple medical procedures

cost; physician

of expensive services ; and

other

qualified

specialized equipment are sufficient.

The viabilitY of the insurance industry as a source of health care financing is determined by many factors. First, the industry needs a strong economic and industrial base to ensure itself of adequate institutional, financial, and administrative infrastructure needed for efficient operation. Second, it needs to have a sizeable market, i.e., people with adequate savings to make regular small payments and who have a good appreciation of the financial risks involved in non-coverage. Third, it needs to have a reliable and widely dispersed network the benefits and development development One tendency better-off The urban

of health services

of the of the of

the

and medical assured.

insurance country_

nagging

industry

issues

It

service providers is no surprise,

almost

runs

confronting

the

parallel

health

to

favor the urban dwellers, the employed population, thereby raising questions of bias of private health insurance companies

relative access in urban centers manage the industry, e.g. banks, the health provider network needed accessible in the urban areas.

capable of therefore, to

the

delivering that the

socio-economic

insurance

industry

is

its

sector, and the economically equity in service provisions. could be attributed to the

of the necessary administrative communication, transportation, to deliver the health services

etc. are

support to Likewise, also more

As regards the target population of the industry, it has been biased towards regular income earners mainly because of the need for regularity in payment of premiums. Individuals belonging to the higher income group are also relatively low-risk, hence, a desirable client for private health insurance. How the industry could provide services to those individuals with fairly low income and high risk is a continuing challenge. For instance, the elderly, the disabled, and other high risk health insurance coverage. In operations _Qllowing

professionals

order to be a politically of the health insurance considerations :

L.

efficiency, cost-effective health care

2.

equity, services low-income

which

are

feasible industry

which

refers to health care affordable; refers

to

disqualified

means of health as whole should

the and

the

often

capacity contribute

capacity

and benefits to a wide and the underprivileged

of

of

the to

the

from

available

care financing, take into account

industry the goal

industry

the the

to provide of making

to

provide

range of ' clients, particularly members of society;

the

_ 3. i_

accessibility, which of the population by

refers virtu_

4, _:!

affordability, which refers reach of a wide segment of

to the of its

capacity physical

to the cost of the population;

to reach proximity; coverage and

a wide

being

segment

within

the


HEWSPECS-PIDS Basetine Study on Private

5.

financial operating

Hearth Insurance

Pa_e 13

viability, which refers costs without sacrificing

At the level of the firm, the viability of enterprise is affected by the following factors:

to the benefits health

capacity to to members. insurance

as

recover

a business

I.

the investment environment, formation, market potentials, and competition provided by public sector;

which is a function of capital government restrictions or incentives, free health services offered in the

2.

the organizational and managerial efficiency of the firm, which may be a function of the production process, the pricing mechanisms, the service delivery protocol, and the adopted cost-containment measures;

3.

the socio-economic income/employment levels of consumer

4.

the product quality and its distribution which quality assurance programs, consumer education infrastructure for the delivery of services.

environment which is a function of the prevailing levels of the primary target beneficiaries, the education, and the level of industrialization; may be determined by programs, existing\

An essential requirement for the success of any health insurance firm is a fairly well developed organizational and management machinery to handle the marketing, collection of premiums, accreditation of service providers, provision of prompt and effective medical care to members, processing and payment of claims and containing cost. Also, the viability of health insurance depends on the size of its plan holders, sound cost and benefit packaging, prudent medical practice and careful screening of member application and claims. In principle, the basic nature of health insurance as a risk-sharing scheme is that small amounts of revenues are collected regularly from each member, so that from the pooled funds, the larger cost of illness or injury of any one member at a given time can be paid. Because there are administrative costs of operating insurance systems, low cost services and care of predictable non-catastrophic services should normally not be covered. Thus, careful screening of application and claims is of vital consideration. (J. Akin, 1987).

V.

ANALYTIC

FRAMEWORK

This study investigated the potentials of various types of health insurance +_o firstly, generate added resources for health care financing; and secondly, to p_te efficient, cost-effective, and equitable health care. The analysis _&_mpted to validate claims: i.

2. _ _ _&ii

that health insurance is of health care financing; that care;

health

insurance

a significant,

is oriented

but

to curative,

not

a

sufficient

hospital-based

means

health

that health insurance is an appropriate scheme of health care financing only for particular population groups, but not for others; i.e., it tends to have an urban bias, prefers the employed and


HEWSPECS-PID$ Baseline Study on Private

economically

Health Insurance

productive

Page 14

population;

4.

that health be developed

insurance, as a source of health care financing, should to complement, not replace, other forms of financing;

5.

that health insurance is most viable in an industrial is generally a losing proposition in a predominantly economy like the Philippines.

setting, and agricultural

Being essentially a baseline study, the research initially determined the scope of operation of the various types of health insurance operating in the country; the eligibility criteria for membership; the range of benefits that were made available to and utilized by insured members; the cost in terms of premium per member; and, the geographic spread of health insurance operation. The assessment focused on equity by looking into the segment of the population who were covered by health insurance given the prevailing cost; effect of the insurance on health care provision in terms of the Proportion of preventive services and curative services, type of manpower/facilities being utilized, level of demand for health care, and the proportion of total health insurance premium cost that went to the actual provision of health services. The dynamics of operating a health insurance scheme were also investigated in depth by looking into the organizational, financial, managerial, and technical factors that make for viable health insurance operation at the level of the firm. The assessment focused on efficiency which referred to the relationship between output and input, i.e. maximizing outputs with minimal amount of inputs. This would also refer to cost-containment as a result of minimizing waste. The analysis validated the extent to which health insurance viability is affected by specific measures to provide quality services, contain costs, enhance organizational and managerial efficiency, screen membership application, screen benefit utilization, and improve marketing. Time series analysis of membership growth and financial growth were attempted to assess the general industry trends. Supplemented by informed judgment of key informants from the industry, the future growth prospects of the health insurance industry was calculated, using both quantitative and qualitative analysis. To the extent feasible, variations in performance and growth prospects among various types of health care financing were attempted. Limits to growth were identified for each category of health insurance. Factors that contributed to growth were also identified. Similarly, factors constraining the growth and development of health insurance were identified. The final analysis focused on the various conditions that may propel or inhibit the growth of health insurance in the country. Suggested action by _overnment and by the health insurance industry to promote growth were presented.

Vr _,

z_ xRI CAL FRAMZWORK

Four (4) types of research instruments were developed and tested for the _udy. The first one, a masterlist of firms/ organizations with some form of _l_h:Insurance, was used to generate macro data on the profile of each i_/0_ganization. Aside from the background information about the firm/ _Z&_ion, the profile included data on facilities and assets; financial _i_UBJi'_i/Income;-_ ..... expenditures-. , members/ enrollees in health insurance', and


HEWSPECS-PID$ Basettne Scudy on Private

HeaLth Insurance

Page 15

The other three (3) instruments were designed to generate qualitative information andquantltative data on the operations of purposively sampled firms/organizations with some form of health insurance. The 3 instruments corresponded to the 3 levels of respondents, namely: (1) firm or company; (2) accredited/ company physician; and, (3) insured or enrolled member. The flrm-level instrument covered the following aspects of private insurance operations: (I) Health plans and benefit packages offered and their respective premium costs as well as mechanisms for delivery; (2) Profile of enrolled members (3) Health service utilization; (4) Cost-containment measures; (5) administrative, management and information systems; (6) Performance indicators and financial status; and, (7) Perceptions on the growth potential and requisites of growth of the firm/organization. Interviews with accredited/company physicians generated supplemental information on the service providers' arrangements with the sample firms/ organization regarding patient care protocols and controls as well as on payment procedures; advantages and disadvantages of being accredited; and, recommendations to improve their relationship with the company as well as with the enrollees. On the other hand, interviews with insured members provided background information on the users of health insurance, availment of services and perceived benefits derived from the health insurance.

A.

SampliDq

Desiqn

The masterlisting of health insurance firms/organizations attempted a i00 percent coverage of existing firms/organizations in the sample areas. The Philippine Institute for Development Studies (PIDS) pre-selected the sample regions, representing various levels of socio-economic development, namely: i.

Metro Manila or National Capital Region, urbanized region with unique characteristics regions;

2.

Cagayan

Valley

3.

Central

Visayas

4.

Northern

In each 0@l@cted, one dovalopment. iii:i

Region

2,

or Region

Mindanao

a highly the other

representing

a low-income

region;

7, representing

a high-income

region;

or Region

i0, representing

a medium-income

and,

region.

region, except in NCR, two (2) sample provinces were again prerepresenting a low, and the other a high, level of socio-economic The sample provinces were as follows:

_. _

Quirino Region

2.

Bohol

3. _ :

Surigao del Norte for Region i0.

UILng __ad, __./. _LnQ

or

representing relative to

(low-income) 2; (low-income)

and

and

Cagayan

Cebu

(high-income)

(high-income)

(low-income)

and

Misamis

for

for

Region

Oriental

7; (high-income)

the masterlist, sample firms/organizations for in-depth study were Zn some sample provinces, some health insurance care ories were not Also, those companies with employer-provided benefits and community schemes may not have been fully covered because of _cn_ _


HEWSPECS-PIDS Sesetine Study on.Private

identifying

and

locating

them

Hearth Insurance

for

this

Page 16

study.

Purposive random sampling was used in the selection of firms. The sample was limited to two (2) sample firms per health insurance category per province. The sample represented the smallest and the largest firms in each category based on thenumber of members/ enrollees. If the number of members/ enrollees was not available, the reported annual income and/or assets were used as proxy indicators. The sample commercial indemnity firms were selected using nationwide income data as indicator of company size since financial and membership data were available only at the head office and were not disaggregated by region nor province. Thus, six commercial indemnity firms were selected as sample in more than one sample area. At most, two of the sample firms were selected in five of the sample areas. This provided insights as to the differences or similarities in operations of the different branch offices of the same commercial indemnity firms. Simple random sampling was used in the selection of accredited physicians and insured/enrolled members. For each sample-firm/organization, two accredited physicians and three members/enrollee_ were selected, if applicable. In cases where there were several types of account (i.e., individual, family and group), samples were drawn from each type. For the group insurance, the sample-group was first selected from which, in turn, the sample-respondents were selected. In one case ( in Misamis Oriental) where the health benefit is a rider of only one insurance plan, sample-members were drawn only from among the enrollees in that particular insurance plan. For two of the sample firms, no member was interviewed. One of these firms (in NcR) fully cooperated in the company-level interview but refused to give a list of their enrollees, invoking the policy of confidentiality of client's data. In the second case (in Bohol), there were no enrollees of the health plan which was offered as an optional benefit or a rider to a life plan. While the research diligently used random sampling methods in selecting respondents/interviewees, the sample derived made generous allowances for replacement in case of respondent refusal to be interviewed or failure to reach/locate respondent after 2-3 attempts. For example, to interview one sample firm, 4-5 sample firms were drawn. The first sample firm drawn was the primary sample, while the subsequent ones were replacements in case of failure to interview the primary sample. Replacement samples made up 16 per cent of final respondents interviewed. All of the replacement samples were in NCR. There was, in fact, a series of replacements in NCR with one sample being the eighth _eplacement. A lot of these firms /organizations refused tO participate in the _urvey because, according to them, this will mean laying open their trade secrets which resulted from long years of studies. One manager outrightly refused to Iv_ data since, by her account, she had participated in a similar study before was not given a copy of the results despite several requests for such. _ Because research based on interviews can be expensive and time-consuming, i!W%w_ of compromises had to be made. The first compromise was that the sample I_B_ Was small and the measures were often qualitative, thus the data lent K_§@Ives_more to cross-tabulation than to rigorous tests of hypotheses. The â&#x20AC;˘ e4R_Nd was that the interviews were conducted only in sample firms willing to be _QEWLOwsd and only for data/information that they were willing to spend time _E_QwLng from their records or share with the researchers. The third was that _IIUEWQ_ could cover only those firms and related respondents who were readily _IB_le, i.e., within one hour travel time ÂŁrom the provincial capital and i_,.'_l_c transport was available.


HEWSPECS-PIDS BesetineStudy

B.

Data

on Private

Heetth Insurance

Page 17

Cqllection

The data collection consisted of two phases: the first one to masterlist firms/organizations with some form of health insurance and the second to undertake an in-depth study of sample firms/organlzations selected from the masterllst. In both phases, a combination of records analysis and collection of p_imary data was undertaken. The initial masterlist was drawn up using secondary data/information supplemented by ocular survey of business establishments in the sample areas. Specifically, the masterlist of commercial indemnity firms and health maintenance o___anisations (HMOs) in the National Capital Region was culled out from the: (i) annual report of the Insurance Commission; (2) registry of the Securities and Exchange Commission; (3) list of top 1,000 corporations in the Philippines; and (4) telephone directory. The masterlist of institutions in Cagayan, Quirino, Cebu, Bohol, Misamis Oriental and Surigao del Notre were obtained through actual verification visits of each firm/organization listed as branch offices of NCR-based companies; search of other institutions listed in local telephone directories and ocular survey of business establishments in sample areas. The

masterlist

of

companies

with

employer-_rovided

health

benefits

was

prepared after a review of the Collective Bargaining Agreements (CBAs) filed at the Bureau of Workers' Welfare and regional offices of the Department of Labor and Employment (DOLE). This was supplemented by a random on-site search of firms/ institutions known to have voluntarily provided health benefits for employees beyond those required by law. Lastly, the masterlist of community-based orqsnizations with health insurance scheme Was drawn up through consultation with central and field offices of the Department of Health, coalition or federation of non-government organizations (NGOs) and review of various directories of NGOs. Actual data collection for the in-depth study were done through direct Interview t review of records (mostly annual reports); and, self-administered response to the questionnaire. During the initial visit, the questionnaires were discussed briefly with the head of the firm/organization or a designated staff. In all sample firms/organizations, at least one week was required to cull _a_t the necessary data from existing records which were off-limits to outsiders. The HMOs took almost two months to process the data on members' service _ization. After the statistical data had been prepared, only then were the _9_earchers able to interview the officials and staff regarding the qualitative [

[:_i! Similarly, most of the physicians asked that the questionnaires be left for ilH_-Idministration. An appointment for a second-visit is immediately set with ii_E_gpondent. During the second visit, the researcher edited the accomplished _nnaIEe so that any lacking/inconsistent/ unclear data were outrightly I_CF_@d or verified. In many cases, direct interviews were done during the [__wlslt for those unable to accomplish the questionnaire in the interval

_ere/enrollees _0_ilbY ____the_in-depth _L___"_Orlpremium __/wer,

were

interviewed

either

study, financial paid, claims paid, usually

in

the

,

aPP Ointment-

nationwide

data income

rather

thah

first

visit,

or

in

the

. such and

as the total amount of expenditures were readily

disaggregated

data.

Very

few

'


HEWSPECS-PIDS BaseLine Study on Pr|vaCe Health Insurance

Page 18

sample firms/ organizations had a breakdown of statistical data by geographic area. Also, there were no processed data on the profile of the members or enrollees. Likewise, only the number of claims are usually recorded but the details on the utilization such as the causes of sickness or type or benefits availed of (e.g., hospitalization or consultation) were not specified in reports. To get these details would entail tedious review of the individual policies or the members' records which, in any case, was not permitted because of the alleged cQnfidentiality of member records.

VII.

FINDINGS

A.

sample 2-

A total areas.

Masterlist

of 1,045 firms/organizations Their distribution among

the

with health plans sample provinces

were listed in all is shown in Table

Expectedly, NCR had the largest number of health insurance firms/ organizations for all categories, with 794 firms representing 76 per cent of the total. Not all types of health insurance firms were found in each sample province. Quirino which represented a low-income province in a low-income region did not have a single branch office. In Bohol, there were only 2 branch offices. In the other sample regions, there were more insurance in high-income provinces (i.e._Cagayan, Cebu and Misamis also the regional centers, hence, more urbanized.

firms/organizations Oriental) which were

Specific to commercial indemnity firms, more than three-fourths were nonlife insurance category. There were also more domestic non-life insurance firms than the foreign non-life firms. Only NCR and Cebu had foreign non-life insurance firms. Outside of NCR, all listed commercial indemnity firms and HMOs were actually branch offices of NCR-based establishments. In the course of the masterlisting, it was only in Cebu where an insurance firm not based in NCR was found, but said firm did not offer any health plan even as a rider, thus, was not Included in the masterlist. The Securities and Exchange Commission (SEC) had o_lier noted that little, or almost no, insurance firms originated outside NCR h@_ce, all were registered in the SEC-NCR office. -

Outside of NCR, HMOs were listed only in Cebu and Misamis Oriental both of _h_C represented high-income provinces in their respective regions. It was _h_r noted that only insurance-based HMOs operated in Cebu and Misamis _@_al. No HMOs were registered in Cagayan which represented a high-income _nGt iln a low-income region. Inquiries with key informants of sample HMOs _l@d_that no branch offices were opened in Cagayan, Quirino, Bohol and ihE_gIQ_:del Notre because there were no hospitals qualified for accreditation. ............. !_he absence of a m_mw_l that there were j..... _head

commercial indemnity no HMO members/enrollees

insurance or HMO in those areas

did not mean, since accounts

through ag째ntsbrokors. gentsorbrokersdeal directly Enrollees in areas where there were no branch offices of

office.

seekcarein theotherprovisoes wheretherewerea0 redlte


HEWSPECS-PIDS Basetfne

Study on Private

Heatth,lnsurance

P_ge 19

Table Number

Category

of

2 :

Health Insurance By Category and

Firms/Organizations Sample Areas

Reg. 2 Cagayan

NCR

non-life non-life

4 6

85 7 23

36 2 9

1 1

20 1 3

3 2

149 i0 44

Insurance-based

-

9

3

-

2

1

15

Hospital-based Employer-Initiated community-based

-

4 1 i

.... ....

-

-

-

4 1 1

CBA Voluntary

1 -

659 1

121 -

-

23 -

1

804 2

D.

1

4

1

-

8

1

15

2

57

8

I, 045

A.

Com

Dom. For. Life B.

C.

Cebu

Reg. 7 Bohol

Mis

Reg. Or.

10 Sur.

TOTAL N.

Indem.

HMO

Employer-Provided

community-Based TOTAL

12

794

172

Companies with employer-provided insurance schemes were found in NCR, the del Norte. Though not representative Morte had one company which voluntarily legally mandated. Most

of

the

health

insurance

health benefits high-income sample of a high-income offered health

data

required

for

the

and community based provinces and Surigao province, Surigao del benefits beyond those

masterlist

were

not

available from secondary sources particularly in the case of those companies with _ployer-provided health benefits. The company identification data on commercial _emnity insurance firms and HMOs were readily available from the SEC and those Qn employer-provided health insurance from the DOLE. Data on capital stocks, _0Qts and income of commercial indemnities and HMOs were likewise readily lw_ilable from the SEC. But these information applied to their nationwide _Eat_ons since the financial data were generally not disaggregated by aphic area. The health insurance data for companies with employer-provided _h benefits were neither available from DOLE nor SEC records. The number of _e_i/enrollees ii_

_hoee

_i_i_%_.I _ __

of of

_!_i!_Although _h_aB were

the the done

the

commercial

employer-provided masterlisting through actual

indemnities/HMOs health

benefits

were

not

were

available

of health insurance firms visits of the companies,

available

in most

the of

in

from the

SEC

CBAs.

other sample the data were

_i_Z&Llable in the branch offices but were alleged to be available only in _Eeapective head offices in NCR However ...... , as p reviousl y mentioned , data at _i._a_: offices were not disaggregated by region or province. To get the __ilnformation by province, the individual records of the olic holders

hiv" had

to be reviewed

P

Y


'HEW$PECS-PIDSBasetine Study on Private

Hearth Insurance

Page 20.

In terms of the length of operations, majority of the commercial indemnity firms had been in operation for more than 20 years. This did not mean, however, that the health plans/s had been offered for the same length of time. A lot of firms offered health plans at a much later date. Most HMOs and community-based insurance schemes had been only about ten years. The longest in operation among the insurance started in 1971. With regard to the area of coverage, the commercial HMOs, expectedly, had a wider reach. Majority of them or the whole country.

in operation for community-based

indemnity insurance and covered several regions

In terms of ownership, all commercial indemnity insurance firms, HMOs and companies with employer-provided health benefits were registered in the SEC as corporations, with majority of them having an authorized capital stock ranging from Pl million to P20 million. The community-based health schemes were offered by non-profit organizations or foundations. In 1990, majority of the insurance firms/HMOs registered a gross revenue ranging from P21 million to PI00 million. Net income for the same year was, however, less than P1 million for most of the insurance firms/HMOs. Financial data on the other companies and community-based organizations were not available. In terms of medical facilities, most commercial indemnity insurance firms/ HMOs owned a clinic. A lot of companies with employer-provided health benefits also had their own clinics since the provision of some basic health services for employees is legally mandated. Notably, most of the sample community-based organizations also had their own clinic, which may be attributed to the fact that most of them were fnitiated by physicians. Most of the commercial indemnity insurance firms/HMOs did not keep a summary record of their members/enrollees. At best they processed financial data particularly the annual total collection and total claims. In a lot of companies, only the number of policyholders were listed and, in the case of most group accounts, the total number of members/enrollees could not be readily determined.

B.

In-DeDth

Study

A total of 50 sample firms/organizations were covered for the in-depth _udy. Table 3 shows the distribution of this 50 sample firms/organizations by _@_ and category of health insurance firm. It was only in NCR where a sample _ &_l types of health insurance was covered. Although 50 sample commercial indemnity firms/HMOs were interviewed, only _/_an_es were actually covered by the study since the branch offices of 6 !_n_os were selected as samples in more than one area. One domestic non-life i_&nce firm and one life insurance firm were covered by the study in all _@_reas except in Bohol and Quirino. Two investor-based HMOs were covered _%_-Ri!?Cebu and Misamis Oriental. As will be presented in the succeeding /_0n0/ this gave some information and insights about the variations in the iB_+_&onB of different branch offices


HEWSPECS+PIOS BaseLine Study on Private HeaLth Insurance

Number

Category

A.

Com

Dom. For. Life

Page 21

of Sample By Category

Table 3 Firms/Organizations and Sample Area

Reg. Cag

NCR

2 Cebu

Reg. 7 Bohol

Mis

Reg. Or.

i0 Sur.

Indem.

non-life non-life

2 2

2 2 2

2 1• 2

1 1

2 1

2 2

-

2 1 1 1

2 .... .... ....

-

2

-

CBA Voluntary

1 -

2 1

2 -

-

2 -

1

D.

1

2

1

-

3

1

6

16

l0

2

i0

6

B. HMO Insurance-based Hospital-based Employer-Initiated community-based C.

Employer-Provided

Community-Based TOTAL

i

Among the 50 sample firms/organizations, the oldest in operation was a foreign non-life insurance firm which was established in 1904 while a communitybased organization in Misamis oriental was the most recently opened in 1992. Half of the sample firms were in operation for I0 years. As to their nationality, only 7 of the sample firms were foreign-owned companies, all of which were commercial indemnity firms. As designed, the in-depth study focused on the following elements of the •health insurance: (i) health plans and benefit packages offered as well as their respective target members and premium; (ii) profile of members; (iii) service _ti_ization patterns; (iv) financial management; (v) administrative, management information systems; and, (vi) perceptions on the growth potential and _t_4_Isites of growth of the industry.

• I.

Health

Plans

"i_ _!_M: __yiteYo_ f ;h;l t_T1;n f ir_Sal_ hC°_aUn_itvYa-biaAe b ° %ga _ei Zoft ib;;eff;er_dfm°red _ _ha form by which they were availed of. Variations in benefit package l_0n_ly resulted in varying range of premium. Premium for the same typ_ of __ p,ckage may further differ depending on the age of the enrollee or the __Qd risks by commercial indemnity firms/HMOs. __! i_ __l_S0 sample firms and organizations offered a total of 363 health plans. __,Om. plans are counted more than once because companies covered in more


HEWSPECS-PIDS Baset{ne Study on Private

than i sample area companies, however,

may may

Hearth Znsurance

offer offer

similar different

Page 22

plans in different branches. combination Of plans in each

The same area.

Majority, or 26 out of the 50 sample firms/organizations, offered multiple or more than 2 types of health plans. The highest number of health plan offered by one company was 48 as offered by an HMO, followed by 30 health plans offered by a life insurance firm. For the commercial indemnity firms, the number of health plans may differ from one branch to another. For example, one domestic non-life firm offered six (6) health plans in NCR and Cebubut offered seven (7) health plans in Surigao del Norte and five 15) in Cagayan and Misamis oriental. The NCR head office did not always offer more health plans than the other branch offices. In the case of a life insurance firm, the NCR office had only one (I) health plan as a principal product while its Misamis Oriental branch office offered two (2) health plans but only as riders to personal accident insurance planS. On the other hand, the investor-based HMOs offered a uniform set of health plans in all their branches. Of the 26 firms with multiple health plans, 20 were commercial indemnity _irms or HMOs which provided a wider choice of health packages designed according :o an applicants' age, desired benefits and the acceptable amount of premium. the other six (6) sample firms which offered multiple health plans were companies _ith employer-provided health benefits. Their health plans varied on the basis _f either status of employment or position in office. Employees in managerial position enjoyed better or higher-cost benefits than the rank and file employees. In some cases, theplans also varied depending on the status of employment with _he regular employees receiving more benefits than casual employees. Eighteen sample firms offered only one type of health plan. were commercial indemnity firms and HMOs, 6 were community-based; employer-provided. The rest of the sample firms (6) offered 2 health

Of this, 9 and, 3 were plans each.

Of the 24 sample commercial indemnity firms, 18 carried health plans as riders to personal accident/motor vehicle accident or life insurance. The other six (6) sample companies offered their health plans as principal products. Of these, five (5) were life insurance firm and one was a domestic, non-life insurance firm. The latter offered the health plan as principal product in 5urigao del Norte. The same company offered health plans only as a rider to personal

accident

insurance

in the

other

sample

areas.

Of the 363 health plans, 181 were offered as principal EM_ctedly, all HMOs except the employer-initiated HMO, accounted for Q_ the health plans (170) offered as principal products.

Eliqibl@

_On

products. almost all

beneficiaries

Eligibility standards for membership in a health insurance plan are usually the calculated health and financial risks, as indicated by any one or

:_i/D_i_he following: (i) work conditions as applicable to employees, (ii) age, i_(_)i_'_dical history and, (iv) the affordability or potential of applicant to Tm_h _premlum/contribution. _ ha ¢ommeFcxal lnd@mnaty xnsurance firms and HMO_ were generally available i_;_ Lndividual or arouD who couid afford-to na the set remium A rou ma !_-_ a n _a family, - association _ y P " g P Y i_ _.... or company-employees Some commercial _ _Irms, however, speclfled an age range of eligible members, usually _ _o_65 years old Other firms also classified the em io ees b __'_:.,}=lass zn accordance with the potential risks to which the member is


HEWSPECS-P[DS Basetine

Target

Seudy on Private

groups

of

Health

Insurance

em_iQyer-prqvided

by their position and status of beneficiaries of employer-provided exclude the dependents.

the

AS to members

e_tended

to

the communitvrbased of the community all

the

was

a wide

health employment health

health organization,

relatives

of

Page 23

the

benefits

were

as previously benefits would

scheme_ but

usually

classified

mentioned. Also, either include or

beneficiaries in all cases,

were benefits

confined were

to also

members.

Premium

There

range

of

premium

among

the

sample

firms/organizations.

Expectedly, the premium of commercial indemnity/HMO, which were mainly profitoriented, were'generally higher than those of employer-provided and communitybased insurance which were welfare-oriented. Higher premium generally meant more, although not necessarily better quality, benefits. The

co_mmgrcial

indemnity

firms

and

HMOs

had

a

schedule

of

fees

which

defined the range of premiums computed according to the preferred type of benefits, desired number of units of services subject to a maximum limit and, in some cases, based on the age of the applicant. Premium costs are usually based on actuarial computations and industry comparison. Since the health plans differed across branch offices, their corresponding premiums also varied. On

the

other

hand,

the

premium

for

employer-provided

health

benefits

came

in the form of company appropriation. Seven companies appropriated a fixed budget which was estimated based on benefit ceilings and total number of employees. One company appropriated a fixed annual budget, the amount of which was based on a study of a similarly-designed health benefit package. Two companies did not appropriate a specific amount for from the overall administrative funds whenever claims established a formula for cost-sharing with employees, premium

or

in

the

cost

of

actual

services

health care were made. either in

but could draw Some companies the cost of the

used. t

Contributions made for community-based health plans were often based on the member's perceived affo£dability level which, in most cases, was agreed upon during community consultations, one community organization was able to eatabllsh the affordability level after a survey of household income and expenditures. Another organization conveniently scheduled the collection of m_mbers' contributions after harvest time. Two community organizations linked Oh@it respective health plans to income-generating projects (TGP). One of them @ll@¢ated 50 per cent of the IGP interest earnings for the health plan while the 01_h@r one set aside i0 per cent of the IGF net income as members' contribution.

@@he

fit

Packaqe

insurance _i_n_l@rvices. _@d by i!i_ed_ture

generally

For each of these the type of procedures item (e.g., medicines,

=_:_,_AZI types ___@:,_bensfits. __;i(inner

covered

any

one

or

both

in-patient

services, the benefit package (e.g., diagnostics, ambulance professional fees).

of

and

may be services)

insurance firms/organizations set ceilings or maximum Ceillngs may be applied either to a specific limit); to the whole benefit package (outer limit); or

cost itemboth

covered __out

of

the

14

sample

non-life

insurance

firms

out-

further or by

of or

only


Health Insurance

Page

12_l

HEWSPECS-PIDS BaseLine Study on Private

hospitalization services. Moreover, these hospitalization benefits were limited only to the treatment of injuries due to personal and/or motor vehicle accidents. Three nOn-life insurance firms offered a comprehensive package which included out-patient consultation, diagnostic services and hospitalization services. Said services were likewise limited only to those needed for the treatment of injuries caused by personal/motor vehicle accidents. One non-life insurance firm only reimbursed the cost of drugs and medicines for the treatment of injuries due to personal accident. The non-life insurance firms generally provided the benefits to their members in the form of cash reimbursement, hence they often did not see the need to accredit service providers. Neither did they impose restrictions as to where or from whom the members could consult or avail of medical services. There were, however, defined ceilings for service cost per accident which usually consisted only of an outer limit. The ceilings depended on the units of insurance enrolled in, subject to a maximum amount. For other non-life insurance firms, the ceilings were proportionate to the principal or total value of the insurance, but also with provision for a maximum amount. Still other non-life insurance firms had a set lump sum per accident regardless of the type of services availed of. All life insurance additional benefits that surgical; (il) nursing; likewise provided benefits restrictions with regard firm in Surlgao del Notre but nevertheless imposed

firms also provided hospitalization services but with may be any one or combination of the following: (i) and (iii) maternity services. Life insurance firms in the form of cash reimbursement, and did not impose to the service provider . However, one life insurance provided direct services through its company physicians no restrictions on the choice of service providers.

Benefit ceilings consisted of both outer and inner limits. The inner limits were usually applied to each type of surgery for which most life insurance firms have a pre-set schedule of fees. The outer limits, just like the non-life insurance firms, were set either as proportionate to the principal but not to exceed a maximum amount; per number of unit with maximum number of unit; or, a lump sum per type of illness. The last type of ceiling was usually applied to the so-called daily hospital income benefit which is unique to life insurance firms. Through this benefit scheme, a fixed allowance was provided to the member for each day of hospitalization depending on the type of illness, either ordinary or dreaded, with the latter having a higher equivalent daily allowance. Expectedly, the HMOs provided comprehensive services covering all outpatient consultation, diagnostic services and hospitalization. Though _amprehensive in benefit coverage, services could be availed only from accredited %f_/or company service providers, except when it involved an emergency situation, _8 which case, cash reimbursement was allowed. If a member availed of services _ non-accredited service providers for a non-emergency case, claims were __b_cted to a penalty either in the form of lower reimbursable amount or even |_O_Iowance. Even in emergency situation, procedural controls had been set _h_uBually entailed notification of the HMO coordinator within a sp ecified : _,_._,. . . _, ...... Zn non-emergency sltuatxons, procedural controls, such as issuance of _!_'@_al':slips or letters of authorization, were imposed. Just like those of L:_@=Insurance firms, HMO benefit ceilings had both outer and inner limits. |_ilImits are usually set on room and board daily costs, professional fees, __ber of allowable procedures. _a2a _!_":'I ___argely __itudles __cia!

pollcy, the commerclal indemnity firms and HMOs had a common set of which were excluded from benefit-coverage. These exclusions were because the required services were considered expensive and had shown that coveraae of such would raise remium costs or losses for the company. _ Some of the eĂ&#x2014;clusionsPwereimposed by


HEWSPECS-PIDS hseL_ne

Study on Private

virtue of provisions as follows:

in

Hearth

the

Insurance

a.

pre-existing illnesses their coverage after insurance;

b.

not work-related under personal

c.

conditions substance

Insurance

Code.

except in a certain

sanctioned and those

New PrOcedures not explicitly ceilings thus

like lithotripsy exclude this but were automatically

e.

mental

f.

maternity

g.

conditions

which

h.

congenital

deformities

i.

rest

j.

routine physical check up for were only for hospitalization

nervous and

due

to

k.

conditions

I.

catastrophic

to

be

more

like

by

conditions

of Some HMOs which allow of time from date of

for employees who their employers;

society from

are

war

such or

were

enrolled

as STDs, riots;

or ultrasound. their cost were excluded;

suicide,

Some firms/HMO did beyond set benefit

disorders;

abortion; require

the

use

of

ICU

and/or

requiring

isolation;

with

indemnities services for

whose benefits injuries owing

no

known

cure;

diseases and community-based or consultations with

diverse

HMOs

commercial or other

accidents;

Both employer-provided based on negotiations

operated

excluded

cures;

only

likely

usually

the case period

by arising

d.

decided

The

illnesses/injuries accident insurance

not abuse

or

Page 25

in

where

scope.

services

Most were

health benefits the beneficiaries,

employer-_rovided provided

by

health

accredited/

were hence

often were

benefits company

were service

providers. One sample company reinsured its employees in an HMO. Employers were , however, generally more lenient and tolerant about the use of non_¢¢redited service providers. Furthermore, ceilings, which were negotiated _ween the union and the management, were usually only of oute_ limit, allowing employee to make use of the benefit for any form of service. In two of the O_p_Q firms _O_ of cash g_ §@rvlce !i_n_Eibution, i_Eation

(one in Cebu loan. There availed of. the total period

and the other in Surigao del Notre), benefit was in the was no limit on the amount of loan as well as the type Although the employees did not make any prepaid loan was paid back at no interest with liberal

which

was

negotiable

depending

on

the

income

level

of

the

_m_=yee. .... '_,_ '_;c:_........ _he

community-based

!{__y-based _!<_idrUgS. _Eo." _ii_0,00 _A_?_!I?

insurance

organization, In

However, Cagayan,

for which Similarly,

__ii_aid __0.00

by

__gre

set

he

schemes

benefits

not all types each member of

came

were in

may be reimbursed in Misamis Oriental,

as

contribution

even form

of drugs were a cooperative of

to

more of

for In a

available in paid an annual

which Cebu,

health

varied.

up

from

on

one the

the community contribution to PI,000.O0 of P20.00 per

hospitalization 50% of the fund

For

a 50%-discount

any health expenses a fixed contribution

each member of a cooperative per year may be reimbursed. aside

the

which

IGP

expenses interest

the

member


q

HEWSPECS-PIDS Baseline

could Norte,

avail 10%

Stud_, on private

of cash percent

contribution availed of.

for In

loan up of the

Health

]nsurance

to PI,000.00 net income

which cash loans Misamis Oriental,

, Page Z6

per from

ranging members

illness. IGP was from of

diocesan organization paid a monthly contribution in exchange for which their children below supplemental food if they became malnourished. p_eventive health services such as out-patient

Similarly, set aside

P200 - P300 a mothers' 5

in Surigao as health

per illness association

of P5 and PI0.00, years of age They were also consultation.

del fund

may and

be a

respectively may be given provided with In another

community-based scheme, the employer agreed to pay P5.00 per month per factory worker while the employees paid P5.00 per month through salary deduction to cover their dependents. The premium is remitted monthly to the affiliated nongovernment organization which rendered preventive health services plus limited outpatient medical and dental care. Should any enrollee avail of outpatient medical/dental services, a corresponding cost is deducted from the employer's premium failure

dues for the month. The deductions were treated as penalties of the preventive health measures which was the main program of

for the the NGO.

Most organizations conditions mentioned

companies with employer-provided health plans and community-based with health insurance did not have explicit policiesregarding the that were excluded from benefit-coverage. Most of them, however, that conditions arising from substance abuse and suicide were

definitely

not

covered

excluded suicide help himself.

2.

by

since

Profile

All of the of their members firms/organizations enrollees by the or organizations

their

such

of

health

condition

Insured

plans.

One

implied

that

community-based the

By the end of 1991, enrollees, 70 per cent of _hould be pointed out,

nine commercial indemnity firms whom were enrollees of two foreign however, that not all of the

_91,

Nine Of

the the

covered only as

by an

enrollees individual

in

a health optional who opted policies.

sample HMOs had the said total,

@_ two.investor-based _ยง_ctive branch

willing

to

sample companies/organizations had no ready data on the profile and had to process them for this study. Thirty-four (34) sample were able to give data on the total number of their members/ end of 1991. The details are shown in Table 4. Fifteen firms could not give any data on the total number of their members. firm

d@termine _0vlewlng

not

Members/Enrollees

One commercial indemnity of them to date.

necessarily Qffered this

organization

personwas

HMOs offices,

Bohol

plan rider. for

offered

health

plans

but

a total of 133,900 about 43 per cent

rider

health

one

availed

altogether had 8,669 non-life firms. It said enrollees were

since most commercial It was difficult for the

no

plan

indemnity firms several firms to since

it

entailed

enrollees in the fourth quarter of were members of the three branches

in NCR, Cebu and the NCR branches

Misamis Oriental. Among of both investor-based

their HMOs

E_ยง_@red the most number of enrollees, followed by the Cebu branch office. _._While, the hospital-basedand employer-initiated HMOs had 26,000 and ii,000 QmJ, respectively, all over the country. The company did not have a ยง_Own of their enrollees by region or province. Being an area-based __ve, the community-based HMO had the least number of coverage with 865 _@@S in the fourth quarter of 1991


HEWSPECS-PIO$ 8asetine Study on Private

By

Table 4 Number of Enrollees and Type of Account:

Category

Type

Category

Corp. Group. C

A.

com.

C

E

Q,

1991

Enrollee

Voluntary Family C

E

4 -

127 -

Reinsured

C

Total

E

C

E

57

4 2 3

127 6300 2242

6 1 1 1

96035 ll000 26000 B65

7

3944

-

2

3523

Indem.

Dom. For. Life

Non-Life Non-Life

8.

HMO

Ins .-Based Hcsp.-Based Empl. -Initiated Com. -Based C.

E

Voluntary Individual

of

4th

HeaLth Insurance Page 27

.... 2 2020 3 2242

2 4223 ......

1

4 1 1 1

62741 ii000 26000 865

5 33294 ...... ....... ......

7

3944

2

919

-

-

1

2604

1

62

4

10267

3

10925

-

-

7

21254

ll

47784

8

13656

1

57

34

171290

....

Emp. -Prov.

CBA Voluntary ID.

Com. -Based Total

22

109793

.... :

C

company

-_

E

......

â&#x20AC;˘

_

.

.,

enr0[lee

Nine sample companies with employer-provided health benefits ¢@_al of 7,467 enrollees for the same period. The highest number _p_oyees per company was 2,710 while the least was 23 employees. i_i;_ : Lastly, seven (7) community-based i[_:E@llees in their health plans. These

organizations include 10,925

had a total dependents.

reported a of enrolled

of

21,254

The study also intended to analyze the trend in membership from the first I!_IE_@E to the fourth quarter of 1991. However, only 19 sample firms/ i_@_s&tlons were able to provide data for both periods under review. Of the ,i_:_i_S, 5 had the same number of enrollees from the first to the fourth _l_4%_, The other 14 firms showed changes over the said period with 8 firms __ii:_dditional members and 5 firms posting a deer ease in membership. The __persentage increase (575 % or from 37 members during the _irst quarter __@mbers in the fourth quarter) was achieved by a community-based _l_:Lon whose geographical outreach expanded from 3 pilot areas to 15 __0s. In terms of absolute value, however, an investor-based HMO in Cebu


HEWSPECS-PZDS BaseLine

Scudy on Private

had

growth

the

biggest

branch of membership

the at

same 2,273

Meanwhile, 0.3 percent, decreased were r_gistered

the

in

HeaLth

Insurance

membership

investor-based new enrollees.

the

highest

respectively. commercial highest

with HMO

and

6,697

posted

lowest

Three indemnity

depletion

Page 28

enrollees.

second

percentage

of the firms.

in

additional the

highest

decrease

was

sample companies Two community-based

membership

from

the

48 whose

start

to

The

NCR

increase

per

in

cent

and

membership organizations

the

end

of

the

year. The membership of these community organizations decreased by 2,000 and 280 members, respectively. In the case of the latter organization, 280 members were unable to continue payment of their contributions after their houses were gutted down by fire. Fortunately, the organization was able to generate donations to pay-off

the Out

contributions of

the

15

of

sample

the

fire

victims.

firms/organizations

who

could

not

give

any

data

on

their membership, 14 were branch offices of commercial indemnity firms and one was a community-based organization which had a total of 2,604 members in March 1993. Most of the branch offices of the commercial indemnity firms did not have a complete list of their members/enrollees because some of the accounts were contracted by agents or brokers who dealt directly with the head office. Data about the members were even more "difficult to retrieve in the case of the nonlife insurance firms which provided health plans as rider to personal accident or motor vehicle accident plans. In the case of personal members were usually students or employees such that the with the head of the school or company and the insurance number usually

of insured. stated in

As to general

those enrolled terms that

and/or the passenger of a have the names or even the

particular number of

where group accounts were acquired all employees of the client-company like this, the head office forwarded offices. But the branch office did the employees until reviewed. Sometimes, processing

of

claims

such the were

under the the insurance

time branch also

accidents_ the insured insurance was contracted firm get only the total

motor vehicle plan, the covered any licensed

vehicle making the beneficiaries.

it

policy driver

even more difficult to There were also cases

by

the head office but the insurance covered in various parts of the country. In cases a copy of the policy to the concerned branch not automatically get the names or number of

that claims offices done

at

the

were made and the need not even review head

policies were the policy as

office.

The head offices on the other hand, had only the nationwide total number of members and did not have sub-totals by branch office or area. Most, if not all, commercial indemnity firms did not keep a summary record of their members/ enrollees. Instead, they kept individual records of the members or only copies _ the policy. _@ Commercial _w@_all profile

_@_B

The HMOs indemnity of the

did have a complete firms, did not have enrollees.

_ Information on members of were easier to generate

_h_ly _i_panies _ss' _]_O_@B _Jt째/Only _m_?

__@w0_

processed even if one or organizations personal data, those of

employer-provided because they had did of

trend analysis. Of the six were able to give occupation, age and other

I_ITOSupplement the sample-members

__v_ews __i_iilc0vered

__i.=o_led

in.

were

but, just like could give an

and community-based fewer in number

and

insurance could be

to go through the individual records. not regularly or deliberately process past years' were difficult to retrieve 39 firms/ pertinent pertinent

company-level Althouqh

provided an by private

list of their members a summary record that

idea of insurance

the the and

organizations additional demographic

rof_le sample

of size

which had information data.

members was small

characteristics their perceptions

the the

of 'the of the

data such

Since the for on as

its the

stud also results of population health plan


HEWSPECS-PLD$ Baseline

Study

on Pr_va=e

Hea.[th

_nsurance

Page 29

Table Number By

Category

:om.

Category

Reg. 2 Cagayan

Indemnity

of

5

Sample-Members and

Sample

Reg. Cebu

NCR

Areas

7 Bohol

Reg. Or.

His

i0

Total Sur.

i0

ii

13

-

14

-

48

HMO

-

12

7

-

6

-

25

Emp.-Provided

4

15

6

-

6

3

34

community-Based

3

6

3

-

6

3

21

17

44

29

32

6

128

Total

As

designed,

3

principal

0

enrollees/members

in

each

sample

organization would have been interviewed; i.e., 150 sample-members sample companies. However, only 128 enrollees were covered. mentioned, one sample life insurance firm had only one enrollee

firm/

for all 50 As previously in its health

plan. A sample non-life insurance firm refused to give a list of its members in keeping with its policy of confidentiality. Three non-life insurance firms, which offered health plans as riders to their respective personal/motor vehicle insurance, could not give a list of its enrollees for reasons cited earlier. ThuS, the biggest shortfall in target number of sample-members were among the commercial indemnity firms. In of in

the

case

respondents the case of

sample-members since COmpanies be_!onged

of

the

HMOs

were the

more than beneficiaries

were

interviewed

almost

half

(48

were commercial to this insurance

%_gnificant

proportion

of

per

and

employer-provided

the

target of the in

the

cent

or

indemnity category. the

health

because they employer-provided work 24

out

place of

during the

50

firms, the biggest In terms of their

sample-members

were

from

benefits,

were

the

number

more accessible. health benefits, break

companies)

As the

time. of

the

sample

group of sample-members distribution by area, the

a

NCR.

Of the 73 sample-members of commercial indemnity firms and HMOs, there was _4_ _Imost equal number of enrollees under individual and company accounts. There ___ only 6 enrollees under family account. The members of employer_provided and i_nlty-based health services were all considered as company or group enrollees _!_n_@ %heir respective health plans were designed for all the members in general. ,.,_,.:._.!..¢_.,_ ........._

...

_._:_T_ble 6 presents i_ii;'_Ount, age, sex, _@i_IrQ cross'tabulated

the profile educational with the

of

sample principal members according attainment and monthly individual categories of health insurance covered

to type income. by the


HEWSPECS-P]OS BaseLine Study on Private HeatCh Insurance

Profile

of

Table 6 Sample Principal

Com. Indem. (n=48) A.

B.

C.

D.

E.

Type of Enrollee Individual company Family

25 21 2

Age 5-14 yrs. 15-45 yrs. 46-65 yrs. Not stated

1 35 Ii 1

old old old

Members

C a t e go r y HMO E mp.-Prov. (n=25) (n=34)

7 14 4

-

Page 30

Com. -Based (n=21)

34 -

21 -

19 4 2

28 2 4

16 4 1

Sex Female Male

26 22

7 18

14 20

17 4

Educ. Attainment Element ary High School Vocational College Post Grad. Not Stated

2 6 35 4 1

1 1 20 2 1

1 !2 2 16 3

9 5 7 -

Monthly Income < PS000 5000- 9999 10000-19999 20000-29999 > 29999 Not Stated

19 ii 5 3 3 7

24 3 2 5

14 1 _ 6

3 ii 6 1 4

There was a wide range between the ages of the youngest principal member W_ was 7 years old and the oldest principal member who was 63 years old. ___w@r, more than three-fourths (3/4) of the sample-members belonged to the 15_",=_. bracket. In terms of sex, equal number of male sample-members (64) and _i_male sample-members (64) were interviewed. More female sample-members i_%gOd to commercial indemnity firms and community-based organizations while )le-members were from HMOs and employer-provided groups. ,. reference to the educational attainment of the p_incipal members, _@_iWas noted across the four major categories of health insurance. Among ;le-members of the commercial indemnity firms, 40 or 83 per cent were o!lege graduate with 4 of them having reached post-graduate education. _rcentage (88%) of the HMO enrollees also reached, at least, college ng the 34 members of employer-provided health plans, 16 reached an almost equal number of 15 had educational attainment below college ng two members who finished vocational courses. As to the members health plans, three-fourths were not able to proceed to _!9 of them having reached only elementary level.


HEWSPECS-PID$ Baseline Study an Private

Health Insurance

Page 31

The monthly income of 106 members with income data ranged from P800.00 to p70,O00 with an outlier response of P200,000.O0. Excluding the outlier monthly income of P200,O00.00, the mean was at P7,115, the median at P4,000 and a mode at p6,000. Many of the members (60 Or 47 percent) had monthly income less than pb,000.00. Across insurance categories, almost all of the members of communitybased and employer-provided health plans had monthly incomes below Pb,000.O0. conversely, majority of the enrollees in commercial indemnity firms and HMOs had incomes above Pb,000.00 per month.

Range

of

Com. Indem. n=40 Minimum Maximum Mean Median Mode Std. Dev.

P

1,000 70,000 9,581 5,500 2,000 13,258 --, _

Table Principal's

HMOs n=21 2,406 40,000 9,534 7,000 i0,000 8,152

.,

,....

7 Monthly

Emp.-Prov. n=29 2,310 17,000 4,402 3,540 2,700 3,069

..,

,

---_..

Income

Com.-Based n=15

All Cases n = 105

800 5,201 2,347 i, 700 i, 600 1,419

800 70,000 7,115 4,000 6,000 9,502

._ ....

,..

Note: EXc[ucHngan outlier responseof P200,O00monthly income

Table 8 shows the profile of insured household members. an average household size of 5 persons with the maximum being 128 households had a total of 492 members. Notably, the belonged to bigger by sex, the female to the households males outnumbered

The survey showed 12 persons. All

members of community-based and employer-provided health plans households. In terms of the distribution of household members (255) slightly outnumbered the males (237). However, specific of the sample-members of community-based health plans, the the females.

As to the household members' age distribution, 45 per _5-45 age bracket. This trend holds true for all categories mxcept for the HMOs in which most of the household members

cent belonged to the of health insurance were below 15 years

Fixed salary was most frequently mentioned as the major source of household _¢¢_e followed by business. Specifically, twenty-five (25) members, most of w_ were enrollees of commercial indemnity firms, were engaged in business. %_%@L¢ businesses include printing press; airconditioning sales/service; hardware _¢@, _ Some enrollees of community-based health plans were engaged in small_il@_nterprise

such

as vending,

sari-sari

store.

!_!_:_!_i_<_i,!_ _i_:_:Th@ distribution of household income follows the same pattern as the _E_tlon of the principal members' income since the enrollees were usually __:_@@hold head and its principal earner. Almost one-fifth of households (18 _i@@nt) had an annual income within the range of P30,000.00 to Pb0.000.00; _@_onthly income ranging from P2,500.00 to p4,000.00. Across insurance __@m0 however, it was noted that the annual household income of almost __r_hs (3/4) of the enrollees in commercial indemnity firms, HMOs and __w_rovided health plans were above PbO,O00.O0. Conversely, the annual __/inoome of more than half (67 per cent)of the members of community-

i thpla

w re Pso,o00 or less.


HEWSPEC$-PID$ Basetine Study on Private

HeaLth'Insurance

Household

Table 8 Profile of Sample

C Com.

Indem.

a

t HMO

.....

A.

No

of

5 yrs old 5-14 yrs. old 15-45 yrs. old 46-65 yrs. old > 65 yrs. old Not stated

Educ.

r

y

Emp.-Prov.

Com.-Based

:..

6 20 17 5 -

i0 15 -

2 9 20 3 -

3 12 4 2

8 29 75 22 5 ii

15 40 47 4 3 -

ii 25 47 13 1 i0

15 35 52 i0 3 1

84 76

55 54

64 43

52 64

3 3 39 22 76 ii

1 8 29 14 34 1 2

3 7 27 31 42 2

7 4 44 25 19 4

1 1 5 16 6 12

1 1 6 4 Ii

2 4 9 11 8 3

Attainment

None yet Pre-elem. Elementary High School College Post Grad. Not Stated E.

o

Sex Female Male

D.

g

Age <

C.

e

Members

Members

Solo 2- 4 5- 7 8-I0 > i0 B.

Page 32

Annual

Income

Not fixed < P30000 3000050000 51000-100000 /i I01000-150000 _i _> 150000

2 4 8 5 2 -

Tho economic status of the enrollees' households was further measured by _J_E_ining their ownership of valuable properties such as their house and lot, _E_¢&I estate, car and other machineries. The pertinent data are shown in i_a _,: Twenty-two (22) respondents did not own any valuable property, not even _;hoUBe and lot. The biggest percentage of enrollees whose family did not _!_i:iOf the said properties were those of the community-based health plans.


HEWSPECS-PIDS Baset|ne Study on Private

By

Hearth Insurance

Page 33

Table 9 Ownership of Property Category of Health Insurance

Category Property Owned House and Lot Farm/Comm'l. Lot Other Real Estate Business Estab. Machinery Business vehicle Family vehicle None No Response

Com. 34 14 3 17 3 9 12 7 1

Indem.

HMO 19 8 4 3 3 ii 3 -

Emp. -Prov. 17 7 2 1 l 4 4 3 -

Com. -Based 16 6 1 5 1 9 -

Of the 105 sample-households who owned one or more valuable property, more than three-fourths (3/4) owned their house and lot. About 33 per cent owned a farm or a commercial lot; 26 per cent owned a family vehicle; and, 25 per cent had business establishments. Of the 86 enrollees who owned a house and lot, 77 were able to indicate the size of their lot. More than half of them owned a residential lot of less than 300 square meters. Most of those who owned more than 300 square meters of residential lot were enrollees of commercial indemnity firms. Table i0 shows the expenditure pattern which revealed that 40 per cent of the households spent less than P50,000.00 per year. Again, the community-based health plans registered the highest percentage of members whose annual expenditure were less than P50,O00.00. Among the members of the other categories, majority have an annual expenditure which exceeded P50,O00.00 The payment of amortization registered the highest average amount spent at P73,601.85 per year. This was followed by food for which an annual average of p54,381.00 was spent; entertainment for which the average expenditure amounted to P43,504.00; and, alcohol and cigarette with an annual expenditure of P32,050.00. Health and medical expenses ranked seventh highest expenditure _em. More than half (65 per cent) of the sample-households were able to incur _wings. It was noted, however, that among the members of the community-based _h plans the pattern was reversed with more than half (57 per Cent) not being _@ _O make any savings. 81xty per cent (60%) of those who had savings did so on a regular basis. i_,_&_l'i emergency expenses ranked first as the intended use of their savings, i:+_OWld by child's education and medical expenses as second and third priority, _M_G_ively. Among the members of the HMO and community-based enrollees, I:+_V@E, child's education ranked as first priority for use of savings. /.


HEWSPECS-P]DS Baseline

Study on Private

By "--o

Health insurance

Annual Category

Table 10 Gross Expenditure of Health Insurance

........

C .Income

<

Bracket

Page 34

Com.

Indem.

a

t HMO

g

o

r

y

Emp.-Prov.

-

10000-29999

7

-

6

6

30000-49999

7

4

8

i0

50000-69999

i0

3

4

1

70000-89999

6

2

2

1

16

14

13

2

1

1

-

-

& more

Can't

Estimate

2

Com.-Based

PI0,000

90999

-

e

1

Regarding the health status of the household members, about 73 per cent of respondents indicated that none of their family members suffers from a chronic, recurring or congenital ailments. The most common recurring ailments among the members of 44 respondents were as follows: (i) asthma; (ii) respiratory infection; and, (iii) hypertension, only one member per family was usually afflicted by any recurring/chronic ailment. About 43 respondents indicated that at least one of their family members suffered from an illness/injury in the preceding 3 months. The most common Lllness/ injury were: (i) respiratory infection; (ii) fever; (iii) viral/bacterial infection; (iv) renal problem; and (v) hypertension. These illnesses were a combination of infectious and degenerative diseases with infectious cases more dominant. Generally, the illness lasted between 2 to 7 days. This was particularly true with infectious diseases, e.g. respiratory _f_ctlon and other viral/bacterial infections, except TB which required much l_.Qngerperiod of treatment. Most of the respondents who required longer duration Q_ _reatment were enrollees of HMOs and commercial indemnity firms. A large percentage of those who got ill (42 per cent) were hospitalized; _Q p_r cent sought out-patient consultation; and 13 per cent resorted only to _@_[_-medicat ion. i_iii!_!:; _n table ii, it is interesting to note that 50 per cent of respondents had _R:@nrolled in their current health plan for 1 - 3 years and another 27.3 per t_8_:_or 4 - 6 years. The concentration of responses within these years somehow i_atad how recent various companies/organizations have been engaged in the _on of some form of health insurance. This pattern was true for all types i _Alth insurance covered in the study. _4_&_ority __ployers, __ily __hEough

of respondents or 55 per cent obtained their health lens throu h 23 per cent were convinced by friends/agents, anPd 21 per cengt enrolled. The large proportion of those who acquired their health their employer was consistent with the fact that most of the


HEWSPECS-PIOS Baseline Study on Private

respondents

are

under

the

Health %nsuranoe

group/corporate

Category Com.

Year < 1 4 7 >

B.

1 year 3 years 6 years 9 years 9 years

Manner

Form

Indem.

Members

of

Health

HMO

Insurance Emp-Prov.

Com.

Based

Enrolled 4 29 8 1 6

14 i0 1

2 9 ll 7 5

12 6 2 1

4 7 -

32 1 1 -

4 9 8 -

29

14

4

14

18 1

7 4

27 3

7

Obtained

By Employer Voluntary By Family Persuaded No response C.

account.

Table Ii of Principal

Insurance

A.

Page 35

of

20 13 1 13 1

14

Payment

Self-paid By Employer Fully Paid Subsidized

Health insurance premiums were either self-paid (48 per cent) or paid thr0ugh employers (52 per cent). The most common manner of paying premiums was %hrough salary deduction. Next to salary deduction was direct payment particularly among the enrollees who paid their own insurance. The third major meana of paying the premium was through the use of collector or agent.

_Id _0rn

As to the mode of payment, 39 per cent paid on a monthly basis, 29 per cent on an annual basis and 12 per cent on a quarterly basis. This was the for both the self-paid group and those paying through their employer.

Annual premium paid by respondents ranged from a minimum of Pe.00 to a i_um of P48,000.00, with a mean of P7,225.g7. About 28 per cent of the total ___ndents paid an annual premium of less than PS00, while 14 per cent paid _hln the range of P3,500.00 to P4,000.00. About 34 per cent did not know how _h p_emium was paid by their employer for their health plan. ............ Among the self-paid enrollees, annual premiums ranged from Pe.00 to _i000,00, with a mean of P3,855.67. The average and maximum were higher than _IOi!_&_d by employers for which the annual premium ranged from a minimum of _,001_O a maxÂŁmum of P16,500, with a mean of P2,141._4. I_0_Q than

half

of total

respondents

or 56 per

cent

indicated

that

none

of


HEWSPECS-PIDS BaseLine

their

family

members

3.

were

Service

Out s_rvice

Study on Private

of

HeaLth

also

Insurance

enrolled

Page 35

in

the

same

health

plan.

Utilization

the

50

sample

utilization.

Of

firms/organizations,

these

20

only

20

flrms/organizations,

had

eight

available (8)

were

data HMOS;

on five

(5) were companies with CBA-obtained health benefits; three (3) were domestic non-life insurance firms; 2 were community-based organizations; and one each of life insurance firm and company with voluntarily-provided health benefits. No trend analysis could be made about the membership since only single-year data were made available in the form required by the study. It were data

was

further

noted

that

NCR samples, understandably were available only in

NcR-based figures

sample since

the

commercial

they

had

nine

of

indemnity

not

By

Type

of

of

Members

Service

By

and

their

Availed

of

Category

Out-Patient Consultation C

A.

Com.

Domestic Life B,

Non-life

1 ....

were by

actually

sub-national

statistical data of the nationwide areas.

of

Benefits Health

of

Insurance

Service

Diagnostic Procedures E

C

i0

-

Hospitalization

E

C

E

-

1 1

4 1

2 1 1

4,991 393 79

HHO I I

_mployer-initiat

ed

2 1 1

140,485 8,304 1,219

2 1

151,305

1

33,556

1

1,566

-

-

700

3

49

154,086

Ii

515

Employer-Provided

_'

_.

mentioned, to this, th_

Indemnity

Insurance-based Hospital-based ¢_)¢_nunity-based

_.

HMOs data

Type Category

firms/organizations

previously Related

12

Who

and

aforementioned

firms

disaggregated

Table Number

the

so because, as head offices.

:iC°_unity-Based

3

214

1

2

243

....

12

ample _VQ __ers , " " :!_,,w _,, ' made _¢F_¢'resDectively,

HMOs use

in

185,976

5

5,567

NCR that reported a total of 183,564 and 151,305 of of out-patient consultation services and diagnostic in 1991. In addition, 5,494 of their members were


HEWSPECS-PIDS Basetine

Study

on Private

Health

Insurance

Page 37

hospitalized. With companies services that 700 sample

of

reference

to

the

sample-companies

in

the

other

reported that 2,412 members made use of in 1991. One company with employer-provided of its employees availed of various diagnostic firms

reported

Only eight hospitalization

pneumonia respectively causes of

sample of their

73

of

their

firms were members.

members

able to give an indication Four (4) of these sample

the leading cause of hospitalization. cited hypertension, accident, ulcer and hospitalization of their members.

The

lack

of

available

data

areas,

constrained

seven

of

The other infection as

further

analysis

the firms

problems of articulated

only monitor the the

survey

sample enrollees) enrolment. More than once.

kept records on amount Service utilization to

beneficiaries. economic benefits of

enrollees

had than

_ot of

showed

availed half or

of their 58 per

of claims and had get an indication

surprisingly, most health insurance. that

90

members

(or

causes cited

four firms the leading

on

which in itself could be a significant finding, since it insurance plans were mainly viewed in terms of their economic in terms of health welfare. Even the welfareLoriented

organizations necessary to

(7)

werehospitalized.

as

utilization, that health and hardly

The

(8)

that

sample

out-patient consultation health benefits recorded procedures and six (6)

service indicated benefit community

not found it of the health

members/enrollees

70

per

health benefits at least cent had even used their

cent once health

only

of

the

since plan

128

their more

The level of satisfaction expressed by respondents ranged from fairly satisfied (40 per cent) to very satisfied (30 per cent). About 9 per cent indicated dissatisfaction while 21 per Cent did not want to comment. There were more enrollees under the commercial indemnity and employer provided plans who were not satisfied with their current health insurance plans. Conversely, there were more enrollees of the HMOs and community-based plan who expressed satisfaction. Only 7 of the ii dissatisfied These reasons were as follows: schedule of service providers; dissatisfaction over services of claims â&#x20AC;˘

4.

Organizational

members respondents gave reasons for such. (i) limited coverage; (ii) poor/inconvenient (iii) claims not fully reimbursed; (iv) physician; and, (v) too long processing of

Set-Up

The study also investigated the organizational set up of the sample _g_n_es particularly with reference to three functional areas, to wit: i),;=_i.=m=rketing; b) provision of services or benefits; and, c) financial _Om_Nt

_

and The a_d

control.

study results indicated that HMOs were highly centralized.

O_-provided i_ii_ general _YQ_Pprovided __==ystems

the operations On the other

of the commercial indemnity hand, the operations of the

and community-based health insurance schemes were operations of the company or the organization. and community-based health insurance schemes and covered a limited number of members.

integrated Both the had simple


HEWSPECS'PIDS Baseline

Study

on Private

Health

Insurance

Page 38

Marketinq

Strictly speaking, only organized marketing strategies

the commercial for their insurance

indemnity plans,

firms including

and

HMOs have their health

planS, both as riders or as principal products. The commercial indemnity firms and HMOs adopted a free marketing scheme which involves various combinations of in-house sales staff, free agents and/or brokers. Twenty sample commercial indemnity firms and eight (8) HMOs had a sales force of 12,356 agents, brokers and in-house staff. Fifteen of these companies had a combination of two types of sales force; ten had only one type and three had all types of sales staff. It was also noted that ii of the companies do not have an in-house staff and relied solely on agents to market their various plans. There were much more agents/brokers (98 per cent) minimizing the administrative commission basis.

than

in-house expenditures

Table Composition By Category

A.

Comm. Dom. For. Life

B.

Category

Individual Agents C

sales as

might

be were

a way paid

of on

13 of

of

staff. This agents/brokers

Sales

Health

Force Insurance Brokers

SF

C

SF

In-house Staff C

i 2 7

169 180 4,447

3 2 2

i0 60 20

5 1 4

6 ....

7,361 -

1 1

18 15

5 1 1

9

123

12

SF

23 3 15

Indemnity Non-Life Non-Life

HMO Insurance-Based Hospital-Based Community-Based Total

C

16

Company

Free marketing _4_ a specific area __ branch offices W_rQ received _@•r approval _][4_..' insurance _¢i@s/brokers. _P_h o_f:Lce

SF

for done could

The latter not have

............ Th_ individual agents _@_ _anged from 15-30 per i_'•._mE_&In quota, the agents _•_ also a percentage _i!_i/|Ll%_e _._J'_l _=_;_, __u;_uoJ.ng __Ekoting

76

Sales Force

scheme also meant •that agents and brokers were of coverage since processing of application was assumed mainly marketing functions. Applications

and reviewed were usually company might

-

12,157

29 5 1

completeness at the head have both could deal a complets

at the branch office but processing office. In major cities like Cebu, a branch office and several

directly account

and brokers were cent of the total or brokers were of the premium.

not confined centralized. and claims

of

with the

compensated premium, also given

the head enrollees

office thus the in that area.

on a commission basis once their sales reached bonuses, the amount of

the sales force was composed in bulk by individual agents, most Indemnity. firms and HMOs marketed their insurance plans through direct sales presentation. This was supplemented by advertisements. A strategy done by a domestic non-life firm was the advertisement

_:


L

HEgSPECS-PIDS Baseline

Study

on Private

through major credit offered motor vehicle the Land Transportation said insurance. In firms

terms

and

of

HMOs

Hearth

Insurance

Page 39

cards. On the other hand, commercial indemnity insurance with health plan rider set-up sales Office since vehicle registration requires

procedures had

for

their

acceptance

respective

of

members,

standard

the

firms offices owners

commercial

application

forms

which near to get

indemnity which

the

p_ospective members had to fill-up. The application form usually asked the p_ospective member to declare his medical history particularly pre-existing illnessesThe other important aspect of the application form covered the economic status as basis for determining the capability of the applicant to pay the estimated premium. The

company

relied

basically

on

the

informationgiven

in

the

application

form to determine qualifications of a prospective member. In any case, the nondeclaration of certain information served as sufficient basis for non-approval of claims later on. Based on the initial review of data in the application form, the company may find it necessary for the applicant to undergo a medical examination. The review of the application is further guided by the layunderwriting and medical indemnity guidelines in the case of the commercial indemnity firms. Applicants who were determined to be high-risk were either rejected,

required

In

the

to

case

of

pay

higher

the

premium,

sample

or

companies

given

limited

with

benefits.

employer-provided

health

benefits, the health plans did not have to be marketed since these resulted from a negotiation between management and the employees' union whose members automatically qualify for coverage. However, all concerned sample companies conducted an in-house orientation about the health plans for their employees. After the initial company-wide orientation, new employees were individually briefed about their health plans until the next CBA negotiation. As to the community-based organizations, the target beneficiaries were _tivated to enroll in the health plans through a process of community organization. In all cases, the communities had already attained a certain level of organization before the health planswere conceived based on the needs of the communities. automatically dissemination assemblies _unlty-based

and

All members of the community organization or cooperative were eligible for membership. During the conceptual stage, of information about the health plan usually involved general house visits. Like the commercial indemnity firms and HMOs, the organizations also had application forms which need to be filled-

up by interested community members. applicants to attend an orientation .__ id be fully accepted for coverage.

Provision

of

services

or

Two community organizations seminar on primary health

required care before

their they

benefits

,..,[ â&#x20AC;˘

Benefits !i_,@w@n _i_i_@

were

in

the

form

zompanies involved _iled by the service

of

cash

in direct providers.

reimbursement, services

had

direct a

services

system

of

or

both.

reimbursing

the

.._.,

i!_!_D_r.Ct services

were

provided

by

in-house

or

accredited

service

providers

_i_ _%h._ Ten (i0) sample companies have both in-house and accredited service !:__ _rJ._,, One-half of these companies were HMOs while the other half were __m'iwho provided health benefits for their employees. In addition, 4 HMOs _z_@_any with employer-provlded health benefits had only in-house service

_.!_;In

all,

13

sample

companies

had

a

total

of

35

in-house/company


HEWSPECS-PIDS Baseline

hospitals on or

or

the other clinics

Study

clinics

on Private

and

hand, 15 and 3,397

Neatth

141

Insurance

Page 40

in-house/company

physicians

sample companies had accredited physicians

and

a total of and other

other

medical

1,004 accredited medical staff.

provider, or one insurance be less than

clinic, and hospital and physician, may be accredited firms, hence the total member of insurance-affiliated what the figures indicate. In Surigao there was an

for HMOs but could qualify

this for

Related

to

was not offered accreditation. this,

the

by

HMOs,

any

company

which

offer

procedures and requirements for accrediting clinics and physicians. All sample HMOs accrediting service providers which were as

a.

For

i.

ii. iii.

iv.

b.

For

i.

ii. iii.

iv.

_wld@_s i _Gians _i_ _@_

because

no

direct

services,

service had a follows:

by more than providers may alleged demand

hospital

in

had

providers, common set

the

area

standard

both hospital/ of criteria for

Hospitals/Clinics:

must be majority must

strategically of the target

accept

standard

located such beneficiaries; rates

set

complete and,

or

facilities range of

must be services;

has good attitude

reputation or towards HMOs.

Physicians

and

must be specialist must

is well and, must

a

hold

Other

known

in

and

standard

the members consultation member to

sufficient

rates usually (OPC). another

in

themselves firms and forms were

accessible

to

to

the

area

provide

and

a

has

broad

proper

In the diplomats;

or

case

of

hospital/clinic; amount

offered

of

influence

by

the

go first If found accredited

_TOr HMOs and those companies which did not _would have to go first to the Primary Medical _ii_nt would be give_ or, if necessary, a letter _'_,i_e:_ to Consult other accredited h sicians :_ _ii_,:_:: P Y _'.-;!i,_._,, .'...._._ ._,_ ..... â&#x20AC;˘ __h_Ce were also set procedures and requirements either by the members commercial indemnity ....... The duly accomplished

is

HMO;

practitioner. be a fellow

accredited right

the

it

Staff:

medical must

has

that

by

influence

Medical

licensed physicians, clinic

accept

Whenever available, for out-patient may refer the treatment.

_aoments __:i_i_,i._hs __O_

staff. hospitals A single

in

the

area;

HMO.

to the company service necessary, the company service provider for

have company physicians, a Services Unit (PMSU) where of authorization is issued â&#x20AC;˘ for

or the HMOs have submitted

filing

claims

for

cash

service providers. The to fill-up an official along with the required

whichinclude th, msdtca oertifi a e duly ,ig ,d by the


HEWSPECS-PID$ Baseline

In was

the

Study

case

of

additionally

required.

to

the

processing

Insurance

filed For

by

motor

work-related

regarding In

Health

claims

required.

As

employer

on Private

service

accident

claims

providers,

vehicle

circumstances

the

Page 41

the

a

accident

the

company

statement

police

insurance,

of

filed,

a

insurance,

of

reports

certification

had

to

be

usually

account

were

attached

first

also

from as

the well.

determined

the

completeness of the required documents. Once the required documents were found to. be complete, the company did a financial review to determine whether the amount being requested for reimbursement was within set ceilings and/or standard rates. Validity checks were also done to determine authenticity of the And, whenever the company had an in-house physician, a medical review done to determine appropriateness of treatment and of the corresponding For given having units

the

community-based

For

community-based

the members were medical service, once

employer-provided

the

loan

Eight services

organizations

also required usually the was

promissory note company/organization

for

and

health

through cash reimbursement, the procedures only to bring their official receipts to where their medical expenses were outrightly

(8) in

approved,

stating

the

the

sample 1991.

companies Sixty-five

total

amount

were

terms

cent

spent

for

for

to

was

have (65

outpatient

OPC,

48

loan

sign

per

cent

need for report.

an

agreement

agreed

upon

a total the said care

were

assistance,

a proof of diagnostic

mutually

spent %) of

which

with the members administrative

medical

asked

which

reported to per cent

34 per services.

provided

a form and present prescriptions or

members

the repayment and the member.

for in-patient services, cent for rehabilitation Of

which

to fill up physician's

benefits

were simpler the concerned reimbursed.

receipts. was also costs.

or by

the

of P13,056,177.00 amount was spent

(oPC)

and

only

1

was

for

diagnostic

per

procedures; 42 per cent was for professional fees; 4 per cent for drugs and medicines; and, 6 per cent for other services. The same pattern was observed with regard to the expenditure for in-patient services, with diagnostic procedures

also

The previously Since the

having

the

biggest

percentage

share.

study team also interviewed 31 accredited mentioned, only one commercial indemnity rest of the firms provided their health

reimbursement.

Twelve

(12)

of

the

sample

and company physicians. As firm had a company physician benefits in the form of cash

physicians

were

accredited

by

HMOs.

Majority of the sample physicians were aged below 41 years, female, _ied, have been in practice for at most, 20 years, and were already _¢lalists. More than half (20) had been accredited by an insurance company for _as__ than 5 years. Fifteen of them were accredited by more than one insurance _A_ny,

with

_J:_i_:_!/ When

two

(2)

queried

of

about

_es, only three of _?_O g@rvice availment. @_i_nlprior authorization _ w&g the most common _O_ _i_1'6

them their

__irate

of _e/insured _ ........

of

physicians company

professional patients

services

arrangements

to with

5

other

their

companies. respective

insurance

the physicians said that there was no form of control Sixteen of them mentioned that they were required to or referral before they provided services to members. form of control. The second most mentioned form of

was the imposition physicians.

........ _ _i_teen of the _.,_@ _ccrediting

providing

limits

But

on

procedures,

said that the a significant

fees comprised

were

f_xed

about

although

this

was

terms of payment were number (lO Dhvsicians_ by

25-50

the

accreditlng

p er

cent

of

mentioned

negotiated also said

company cllents

served

bY


HEWSPECS-PIOS Baseline

Study

on Private

20 accredited/affiliated insured patients comprised company doctors. When differently from those who case, the two physicians differently, only do so by

Health

Insurance

physicians. more than 50 asked whether were uninsured, who claimed way of referring

Page 42

Most of the sample-physicians whose per cent of their total clients were they treat their insured patients almost all physicians said no. In any they treated their insured patients them to other specialists for further

treatment. Having

a

of being an the second recognition

to

have

captive

market/client

given

accredited physician. most important benefit and prestige/honor as

Interestingly, negated the

first

rank

as

the

primary

Relatedly, the assurance of of an accredited doctor, third and fourth advantages,

the disadvantages aforementioned

of being advantages,

an accredited physician as the disadvantages

weighted scores. Low fees or rates were considered the primary This was aggravated by the delayed payment of claims which ranked serious disadvantage. The third and fourth disadvantages both clients who were either more demanding or more problematic. .Notwithstanding reported

no

physicians payment of clients •

these

negative

disadvantages,

experiences

with

who reported a negative claims or non-payment of

Consistently,

majority

respective arrangements stated dissatisfaction Despite recommendations

of the

with over

the general on how to

majority

the

insurance

experience, claims for

respondents

the insurance the arrangements.

satisfaction, improve their

advantage

payment ranked followed by respectively.

of

4 had services

expressed companies.

a lot of the relationship

the

company.

appeared got higher

disadvantage. as second most relate to the

sample As

to

physicians the

to do with rendered to

4

of

five

(5)

the delayed problematic

Satisfaction Only

as the

with them

their

directly

respondents presented some with the insurance company.

Expectedly, most of the recommendations were related to the rates of the professional fees. In general, it was recommended that professional fees be updated regularly, with one respondent specifying that this be done annually. COhere were more specific by recommending that fees should be increased commensurate to the specialty or may be determined on the basis of the severity of the illness and the extent of the care provided. The other physicians recommended some improvements in the operational _$pects to include: (i) ensuring prompt payment of claims, (ii) regular meetings _¢ween accredited physicians and company representatives to thresh out problems @, health care; (iii) continuous orientation of physicians and, (iv) regular r@@dback regarding the services.

(i)

The company the improvement

physicians of the

also . work

had specific conditions

recommendations (e.g., better

which included: ventilation); (ii)

_E_¢_

enforcement of the requirement for pre-employment physical examination; to use enrolment in private health insurance as basis for withdrawing !_aLnership; and (iv) giving physicians more opportunity to work/deal with the i_k_ O_ the company and not only with the personnel manager. _!._i ,' t_.!",_."._' "." •

_i!_i) not

,i".

j'--

:_N_!nanci.al

,_ThO __a_i_the __Pl. __MC_g

manaqement

and

control

'major sources of operating funds for commercial members' pre-payment and stockholders' /owners' commercial indemnity firms and HMOs also stated premiums as a way of generating more funds

indemnity firms and equity. The NCRthat they invested The usual form of


HEWSPECS-PID$ @asetine

investment

was

Study

the

on Private

HeaLth

purchase

of

Insurance

security

Pa@e &3

bonds

and

money

market

placements.

in the case of the branch offices, a financial budget proposal is submitted a_ the start of the year from which fund releases from the head offices were based. Other branch offices were provided with revolving funds, the amount of which were set by the head office, some excess expenditures were even drawn from the commission earnings of the staff. Some administrative requirements were also directly handled by the head office, e.g. p_ocurement of supplies which were then forwarded to the branch offices upon request. In some cases, even the payroll of the staff were prepared at the head office and disbursed through bank-to-bank tsansactions. Most

of

the

companies

with

employer-provided

health

benefits

had

annual appropriation for the operations of their health plans. community-based health benefits, the funds were drawn from contributions although this might not necessarily be out-of-pocket case where the funds were deducted from IGP interest or earnings. based organizations also solicited support from the government, Department An

of

Health,

important

and

aspect

even of

from

financial

common form of cost-containment was the commercial indemnity firms and well-defined, the major ones being well as the imposition of exclusions

external

a specific

AS to the the members' cash as in the The communitynotably the

donors.

managemen_

was

coat-containment.

The

most

the imposition of benefit ceilings. Among HMOs, other cost-containment measures were that of screening for adverse selection as and limits. The HMOs and some companies

with employer-provided health benefits also required their members to go first to the PMSU or in-house medical staff for screening before proceeding to any accredited service provider. Some of the commercial indemnity firms and HMOs also reinsured some of their members as a safety net. The selection of members to be reinsured was usually dependent on the contract/policy value. In

the

case

of

the

members had undergone also considered as organizations, critical input

5.

Key ._cdlng _@nce

the that

on

informants

in

the prospects operations. the

8¢_@

trends which the

Industry

the

to be in could

sample

for

respondents

_i requirement ._E_&_zation could i_l_%_@xperiences

i_q_L_iion8 _/_=_@ng

with

employer-provided

growth

were

drawn,

which, the

health services was of health benefits.

benefits,

the

in itself, community-based

was

considered

as

a

Prospects

companies and

were

asked

development

requested

to

of

give

run a health insurance drawn as responses varied operating their respective be

health

health examination measure. Among

provision of preventive would minimize availment

perceptions

_: ....... :_Y_rstly,

companies

a pre-employment cost-containment

however,

the respondents believed to commercial indemnity firms

an

give

regard

their

respective

estimate

plan. greatly health

with have and

to their

of

In this since they plans. to

affected the HMOs, economic

the

the

opinion health

minimum

regard, no were based

factors

growth of progress

or

a health ranked

important f ctor t ataffect theg o th anddevelopment ofhealth __nly __%!_j_i@nable __'_h&t __;_i_@amon _?_iii_'ek

because

it could redound to increased household income whiGh, in more Filipinos to afford insurance. Several respondents insurance, in general, is still a luxury. One respondent cited _or ranking economic progress as number 1 factor. He said it

morepollution which affects thehealth conditions ofthepeople financial

protection

in

the

fodm

of

health

insurance.


HEW$PECS-PID$ Baset_ne

Household income, respectively,

third,

i_surance insurance plan

Study on PrivaCe

industry. coverage,

becomes

that when more people on the importance of

for

positive

Page 44

and government incentives important conditions to

opined them

condition

important

Insurance.

education the most

It was educating

a major

Other

as

Hearth

ranked second, ensure growth of are able enrolling

to afford an in a health

success.

factors

cited

by

the

respondents

of

the

i_demnity firms and HMOs were: (i) the good relationship with brokers take charge of marketing; (ii) the effectiveness of the marketing themselves; (iii) regulation of premium such that they are affordable people; company.

(iv)

fast

specific

to

services; hospitals

settlement

HMOs,

(ii) adequacy and physicians.

The

respondents

of

other of

of

the

claims;

and,

factors

(v)

good

mentioned

facilities;

the

and the

sample

and

track

were:

(iii)

companies

the

with

commercial since they strategies to more

record

(i)

the

cooperation

of

the

quality

of

between

the

employer-provided

health

benefits cited a different set of factors that promote the development of their health plans. This includes: (i) the worker's pressure or demand for more health benefits; (ii) the owner's enlightened view of health benefits; (iii) the relationship between the employee and employer; (iv) good controls; (v) more information on the preventive aspects of health; and (vi) the vices of the employees plans.

without

some

of

venture an since this

which

the

they

companies

opinion was not

with their

will

not

with

employer-provided

regard the principal

get

sick

and

prospects product.

will

have

health for

growth

no

need

for

benefits of

their

health

refused health

to plans

Among the community-based organizations, a different set of factors were mentioned as affecting the development of their health plans. Though these factors were also ranked by order of importance, it was not possible to give an overall ranking due to the variety of responses. It was noted that most of the responses were related to the overall development and not just to the health ¢_nditlons of the community. These include the following responses: (i) _ecurity of land tenure w£th which the community members will be able to afford the required contribution for the health plan; (ii) availability of water since chis will mean better health conditions for the Community members hence there is po ,eed for health plans; (iii) peace and order situation; and (iv) adequacy of _¢ansportation which means accessibility to health services and facilities. Other

factors

cited

focused

on

the

characteristics

of

the

community

_nlzat£on itself such as: (i) level of organization of the community since _ work and community cohesiveness are important conditions to sustain i _nlty projects such as health cooperatives; (ii) quality of training or _nCation of community members on health plans; (iii) close follow-up by _¢Qrs or community health workers or skills of persons-in charge; and (iv) i_'_ development since they tend to be more effective and committed leaders. D_ i_i_i i_IV0ness

course,

there

_i_¥!_idemonstrated I _,i_a_ _!_t_:flrms __i_n¢lude:

of

also

factors

particular, measures;

effectiveness

which

were

attributable

such as: (i) (iii) coordination of

health

value among

to

the

health

on health; (ii) health agencies;

plans.

the identified needs and/or problems confronting the commercial and HMOs were conditions attributable to the industry. These (i) the cut-throat competition among the companies such that

90 _:_{_)

were

characteristics in of preventive

anymore comply withtheguid line ofthePhilippine insran e

stringen£

government

restrictions

on

health

plans;

(iii)

nsed

to


HEW$PECS'PIOS BaseLine

strengthen

the

standards

of

Study on Private

association

among

Other claims;

the

of

rest

of

plans;

(ii) From

cent)

problems, too low

or

the

and

side

(i)

income; of

some

period of, and payments; (iv) personnel/service

(iv)

need

for

unified

the

and

of

with

to

doctors go for

were

in terms of benefits.

and

and analysis personnel; and

of

fraudulent

majoriÂŁy their

of

health

the

other

these

problems,

more target members; In the case of the

the

to

of trends (vi) lack

the

importance

128

people's of

sample-enrollees

plan.

Of

those

(i> of

health

HMOs

cited

per some

were deemed services;

thus, and,

making (iii)

it long

claims/reimbursement of attitudes of insurance

plan

wider geographical commercial indemnity

(68

who

benefits medical

working hours consultation;

sample

payment fees of

claims.

were as follows: current high cost

coincide with non-emergency

(i) delayed (iii) high

attributed

appreciation

(iii)

members,

problems

of

data management (v) lack of Manila.

unclear procedures for, processing of inadequate facilit-ies; and (v) negative providers.

Notwithstanding

pricing

the company such as: marketing strategies;

problems

lack

the most frequently mentioned too little considering the hours members

Page 45

that hamper improvements; of Metro

identified as:

inadequate

(ii) clinic difficult for

plans health

the

such

encountered

HMOs;

were internal to for more vigorous

fixers; (iv) lack of computers that are basis for initiating of. qualified hospitals outside The

Insurance

HMOs.

problems (ii) need

characteristics,

HeaLth

to

expand

coverage health

expansion of the health plans is contingent on the expansion insurance plan. Several respondents also expressed reservations their health plans because they did not want to compete with considered health plans to be of greater risk than life and/or

their

health

and additional insurance, the

of

their about the HMOs non-life

principal expanding and they insurance

plans. Most of the commercial role of the government as licensing of firms, monitoring of the Insurance Code. the premiums, professional

They

indemnity firms and HMOs recognize a regulatory body particularly of financial status, and ensuring also believed that fees and capitalization

the

government of health

the important responsible for the enforcement should insurance

regulate firms.

Aside from assuming regulatory functions, the respondents see the _,owernment's role as that of arbiter in the settlement of complaints filed by the '_amber s against the companies. Furthermore, it was recognized that the g_w@rnment plays a major role in providing incentives to boost the development _ _he industry through such measures as: (i) allowing duty-free importation of @_._@,Kial medical equipment; (ii) exempting the service providers from payment @( @@ntra¢tors' fee and VAT; (ill) issuance of a legislation that will allow _.._. n_ of health plans/insurance as tax deductible; (iv) requiring the g_w@_@nt and private employees to enroll in HMOs; and (v) conducting _%Lonal campaign on the importance of health insurance. Z_ the case of the community-based organizations, they cited the lack of !'_i_ ¢_%._ _acilities as their most serious problem. One community_based i:_la%ion which provides low-cost drugs and medicines faced problems owing to _:_@@n_Icting program orientation where other non-government organizations _h_ In the area give health services on dole-out basis thereby making it _{_%_to convince the members to make a financial contribution. The same __based __@@

for

_@_@_were __r:gVided

organization drugs with

experienced brand names

problems rather than

no concrete plans for health benefits since

the these

related generic

expansion of are subject

to the names.

some

community-based to negotiation

members'

and with


HEWSPECS-P]D$ Baseline

Study

on Private

the oommunity members until the plans have

and been

Nevertheless,

the

Health

Insurance

employees. evaluated

following

Page 46

In for were

some cases, financial

the

by the government: (i) establishment of low-income groups can avail of low-cost co,unity-based drug cooperative; (ii) h_alth; (iii) grants; to sustain the health measures. From the

the

following:

point (i)

of

view

of

another About

the

with

plan; (iii) changing insurance Majority (73 %) of respondents health plan. A major reason affordability. They believed get

recommended

members,

the

present

deferring

support

hospital-based medicines technical

(iv) increased assistance plans; and (v) continuing

continuing

NGOs are viability.

that

drug that are assistance

decision

may

be

given

cooperative where not available in or training on

for income-generating support for preventive

future

plans

meant

health

plan;

(ii)

one

projects health

or

more

upgrading

of

health

company; or (iv) discontinuing their health plan. expressed desire to continue with their current given for keeping with the current health plan was that it may be financially difficult for them to

plan. 2 per

cent

indicated

insurance institution. their health plan but

a desire

Meanwhile with other

3 per cent indicated a desire but did not state whether it

to

upgrade

their

coverage

in

10 per cent also expressed a desire health insurance organization/company.

to get would be

another plan with other with the same level of

the

to

insurance coverage

same

upgrade Another

or

company higher

package-

VIII.

CONCLUSIONS

AND

RECOMMENDATIONS

â&#x20AC;˘ Notwithstanding _nfermation, preliminary private health broader

insurance insurance potentials

the

inadequacy conclusions

or unavailability can be drawn

on

of some critical the potentials

as a source of health care financing. has unique features and characteristics as sources of health care financing,

Since which they

of

data/ the

each category of determine their will be assessed

_eparately.

A.

Market

i.

The

Potentials

of

Commercial

results

of

the

Various

Indemnity

study

Types

of

Insurance

confirmed

an

Health

and

earlier

Insurance

HMOs

hypothesis

that

commercial

_Ity firms and HMOs tend to cater to the urban employed as indicated by the _@' preference for group accounts. This is understandable since these types _ _@urance require â&#x20AC;˘regularity of income. Also, because of their fairly high i_gm, they tend to cover the high-income population. In addition, they also _ tO be preferred by those with higher education. _;On the JR_PEL&t@ _Eing _!i_60,000.00 _Dn)_then

premise for that

those

that

commercial

regularly

indemnity

employed

in

insurance the

formal

and sector,

HMOs and

are

more

further

they nay be affordable and marketable mainly among those earning and above per annum and those _ith fairly high levels of it is reasonable to conclude that these types of health insurance

'an


HEWSPEC$'PID$ Basetfne

HMOs-

This

Study

means

potentially

that

enroll

in

2.

those

Although who are

on Private

a

Hearth

Insurance

maximum

commercial

of

Page 47

little

indemnity

Employer-Provided

the employer-provided regularly employed,

Health

their

over

6

million

insurance

and

Filipinos

could

HMOs.

Benefits

health benefits are likewise potential market includes

restricted to the low-income

employees and, in most cases, the dependents of these employees. Using 1991 employment data, about 22.9 million employed Filipinos could potentially benefit from employer-provided health benefits. Assuming further that, on average, one dependent per employee may be covered by the health plan, about 45.8 million Filipinos could be potentially reached through employer-based financing schemes. within the employed population, the over 864,000 members of labor unions have better chances of obtaining employer-provided health plans through collective bargaining agreements.

3.

Community-Based

community-based

health

insurance available most co,unity-based

Health

care

for organized health care

Care

Financing

the

Schemes

financing

are

low-income financing

families. plans were

most

likely

form

As shown initiated

of

health

by the study, by community

organizations side by side with income generating projects (IGP). The IGP component is essential as a means of ensuring an income source for community members so that they can afford to pay modest premium costs. It is, however, difficult to estimate the probable size of the population representing organized co,unities as there are no data on the number of existing con_nunity organizations. records show are available

As that on

regards cooperatives, the Cooperatives there were 24,193 cooperatives as of June the number of members.

Development 30, 1993,

Authority but no data

The present administration promotes the organization of low-income groups in line with its thrust of people empowerment. Using the 1988 data on income and expenditure as an indicative figure, there are 5.3 million families whose income _ell below the poverty threshold. Assuming that these families could be orqanized, community-based health care financing scheme in accordance with their _qcal conditions could be anchored on such organization. The intensive community _tgAnization _unÂŁty-based

inputs for financing

B.

Potentials

i.

_,_ _bly _:_IQ

such an schemes

for

endeavor, a slow and

Generatinq

Commercial

Indemnity

Fund

however, painstaking

for

Insurance

makes the process.

Health

and

opt

__i:funds __&lth __l'resources,

to enroll in is at least for plans

health care offered as even if

a health Pl,000,

plan then

HMOs

offered as these health

ranging from P2 4 billion riders to other'forms of they charge only at least

of

Care

Commercial indemnity firms and HMOs generate funds ipolicy holders. Given their current expenditure assumed that only 40% - 50% of the premiums for health services. If the maximum potential

_-¢_L_o8 _i_!_emium

expansion

from the premiums paid patterns, it can be collected are actually clients of 6 million principal insurance

product firms

whose could

to P3 billion per annum. insurance could generate P6.00 per annum per unit


HEWSPECS-PIDS Basetine

S¢udy on Pr_vaCe

2.

Hearth'

Insurance

Employer-Provided

Financing

for

PBge _8

Health

employer-provided

Benefits

health

benefits

are

usually

sourced

from

company appropriations and, in some companies, employees' counterpart contribution. Of the 9 sample companies providing health benefits to their employees, the lowest-cost allocation per year per member amounted to P240.00. If the same amount is applied to each of the 22.9 million employed Filipinos, the total health care funds that could be generated would amount to P5.496 billion.

3.

Community-Based

Financing

for

Health

community-based

Care

health

Financing

insurance

schemes

the members' contribution or from a fixed percentage income generating projects set aside as health funds. community health funds covered by the study ranged year per family. Assuming that all families could be organized and would amounts, an estimated P106 million community-based health care funds. If outreach covered

each

category

subsidy,

either

C.

through

Potentials

I.

Lhat

of

health

potential, an estimated by any health insurance

for

Commercial

Commercial define not

indemnity only the

insurance

health

Providinq.

care

from from for per

could

reach

its

projected

maximum

the population will still not be could be targeted for government

premium

or

Insurance

and HMOs often and types of

usually

5.3 million low-income or set aside the same could be generated as

through

AdequateLAppro_riat

Indemnity

firms amount

comes

share of the profit Members _ contributions from P20.00 to PI00.00

of the estimated agree to contribute to P530 million

20 percent of scheme. These

direct

Schemes

and

e

premium

Health

subsidy.

Care

HMOs

have a services

uniform offered

set

of but

policies also the

Specific conditions covered for health benefits. The findings of the study supported another earlier hypothesis that the policies set by commercial i_emnity firms excludes from coverage a sizeable segment of the population, _BAma!y: (i) the disabled; (ii) the senior citizens; (iii) those who are _;_gularly employed and/or employed in high-risk occupations; and, (iv) those W_ have pre-existing illnesses. Health plans offered by the commercial _em_Ity firms and HMOs often put more emphasis on high-cost, technologically.._ced care which, ironically, also makes the health plan more attractive to _%_ _w_tential clients. Benefits offered tend to be anchored on the use of modern _¢&l _..,.:,;_.:• ..

technology,

with

physicians

as

the

main

provider

on the other hand, the study also showed that _h care by offering coverage for annual check-up, _t@d_health information.

2.

...... i_§_

__i_84rvlces

of

Employer-Provided

the

employer-provided and cash reimbursement

Health

health for

of

care.

HMOs do promote preventive while some already go into

Benefits

plans are offered medical expenses.

in the form of The employees

both are

required to availof se viceo lyf omao redit providers. d


HEWSPECS-PIDS Baseline

Study on Private

Health

insurance

Page 49

Moreover, the employer-provided health benefits are more flexible coverage with most of the sample companies offering a comprehensive medical services that include in-patient and out-patient services, :ehabilitation and maternity services. They are also often less

in

particularly in providing normally excluded by HMOs

conditions

The through care,

its the

coverage for pre-existing and commercial indemnity

employer-provided in-house medical companies are

paraprofessionals

such

3.

as

health staff more

illnesses health

or other insurance.

benefits emphasizes primary and clinic. In providing likely to maximize the

midwives

and

Community-Based

nurses

Health

as

Care

primary

Financing

care

service set of dental , stringent,

clinical in-house use of

care health health

providers.

Schemes

With lower-cost premium contributions, the community-based health plans alsO offer lower-cost benefits. As a supplementary measure, the community-based health schemes often promote the use of alternative health procedures and traditional medicines. Moreover, the community organizations often maximize the use of health paraprofessionals-such as midwives and trained barangay health workers as primary care provider. All these are consistent with the operationalization

of

the

preventive and promotive based health insurance expensive

D.

primary

health schemes

care are,

health

c_re

through however,

approach

organized unable

which

emphasizes

effort. Many communityto provide coverage for

hospitalization.

Potentials

i.

for

Commercial

Containinq

Indemnity

Costs

and

of

Medical

Carp

HMOs

By all indications, the commercial indemnity firms have very well-defined system of cost-containment which consist of benefit ceilings and guidelines on who and what are excluded from coverage. As previously mentioned, the same exclusions and limits often inhibit a significant segment of the population particularly the high-risk groups from enrolling since most of them suffer from zhe illnesses or conditions that are not covered. Again, these findings, support the earlier hypothesis that the commercial indemnity firms have to strike a balance between ensuring cost-containment and providing quality health care %at vices. The HMOs have similarly prescribed ceilings and exclusions as their primary _O_m of cost containment. Moreover, the HMOs have standard requirements and p_@0dures for accrediting service providers from whom the members are, in turn, ___Ired to avail of services. Availment of services is itself subject to the _@¥_@W of the primary medical service unit such that unnecessary health care is _d@d or minimized. The HMOs have also effectively imposed standard rates of £_=_¥LCes including the professional fees, though this is a major cause of _i¢lan [_=_@0m i_._ hOW

dissatisfaction. may suffer. Some they were treated

Should members by HMO

such dissatisfaction have, in fact, already Dhvsicians.

pervade, related

the quality bad experiences

of


HEWSPECS-PIDS BaseLine

Study

2.

As

on Private

Health

Insurance

Employer-Provided

previously

Health,

mentioned,

to be generally less exclusions, theemployees

Page 50

the

Benefits

employer-provided

restrictive. seemed

health

Notwithstanding likely to abuse

less

the or

benefits

were

minimal misuse

limits or the health

found

benefits. This may be partly attributed to the fact that the health plans were based on mutual agreement between management and the employees. Moreover, the more intimate relationship between company management or personnel administration and their employees serve as a check against abuses thus, mitigating the need to be very strict about coverage or rigid health screening procedures likelihood for adverse selection.

3.

Community-Based

Expectedly, imbibes a sense of benefits. self-imposed

E.

the of The

process

of

expansion

employees hence,

went there

through is less

Schemes

community-based

its members and trust

which among

health

prevent abuse the members

schemes or misuse serve as a

measure.

Factors

Commercial

of

Financing

organizing

cooperation among mutual coopeDation

Constraininq

Besides, most to employment,

Health

cost-containment

i.

The

benefits. prior

to

Expansion

Indemnity

commercial

and

indemnity

of

Services

HMOs

firm

and

HMO

coverage

is

restricted

Dy the cost of the premiums, which is often prohibitive for the low-income groups. Furthermore, the highly centralized system of operations often results in prolonged processing of applications and claims which could discourage enrollment in the outlying areas. The required minimum capitalization of P1 million to start-up a similar health insurance appear Xn terms of geographical coverage, the expansion of and HMOs are restricted by the absence of suitable rural areas.

2.

Employer-Provided

Health

to be prohibitive as commercial indemnity hospitals in suburban

Benefits

The expansion of employer-provided health benefits _ employer's magnanimity, on one hand, and the employees' _@f_ts_ on the other. Corollary to this, the expansion health _n_Ons. _It&bility

,_i_Ive _in

well. firms and

is

greatly dependent insistent demand or sustainability

on for of

benefits may be constrained by management-union conflicts and The expansion of health benefits is also dependent on the overall of the business. Increased company profits would create a more environment for expansion of health benefits while low revenues may reduction or stoppage of such health benefits.

3.

Community-Based

Health

Financing

Schemes

Tha_development of community-based health care financing __organizing inputs. Among others, the organizing __gQry flexible organizational/management operating

requires intensive process would set in systems that are


HEWSPECS-PIDS Baseline

Study

on Private

Health

Insurance

Page 51

responsive to the local conditions. In other formula for the organization of community-based •facilitate initiatives, achieving

expansion of coverage community-based health economies of scale.

F.

Reguired

1.

Support

to

Commercial

Admittedly,

the

to other areas. care financing

Expand

Market

Indemnity

expansion

of

words, health

there care As

have

can be financing

no single that may

in other area-based limited potentials for

Coveraqe

and

HMOs

coverage

of

commercial

indemnity

piMOs is dependent on the improvements in the national economy translate into higher family income thereby increasing the potential health insurance. Improvements in the management infrastructure for

firms

and

that would demand for collection,

especially the transportation and communication systems could enhance • the development of HMOs and commercial indemnity health insurance. Electronic data management would greatly facilitate the processing of applications and of claims. A more critical support to enhance the expansion• of coverage of commercial indemnity and HMOs is the setting-up of quality hospitals in outlying areas.

2.

Support through

for

clear

employers time, the

Employer-Provided

expansion

policy

to initiate employers

On

their

in the a need revenues

as

well

as

the

health information

benefits on

may

various

Health

low-income

Financing

groups

need

Recommendations/Options

for

Government

provided for

the same could be

incentives. More environment that health insurance.

Schemes

organizational

support and, eventually, technical assistance to start up a _ith care financing. Since community-based health schemes are wlth income-generating projects, the community organizations _d_ng and technical support for this purpose.

G.

be

options

health insurance schemes. At insurance to their employees

form of direct assistance or tax to create a supportive business that would go into provision of

Community-Based

part,

Benefits

employer-provided

their respective who provide health

given incentives either importantly, there is will ensure increased

3.

of

directions

Health

development community-based closely tied-up may also need

Interventions

The government could assume a significant role in maximizing the potentials private health insurance as a source of health care financing either by ¢_&_Lng a supportive environment for business development or by directly _Ldlng incentives/support for health insurance development. _••_h@

_h@ incentives for business development include instituting improvements i!_nfrastructure for telecommunications. This will minimize delays in •Ing of documents/papers and facilitate field-level decision-makin without _._[_o forego with essential control measures from the head offices of

__i&l __@|

indemnity firms would enhance

and HMOs. the retrieval

At

the and

same time, management

improved of data

communication that serve

as

••


HEWSPECS-PIDS BaseL]neStudy

critical

basis

for

on Private

planning

Hearth

or

Insurance

policy

Page 52

formulation,

promote low-cost technologies that would more workers qualify for health insurance. enable a larger segment of the population Incentives intensification dissemination could play an comznunity-based organized In

or

support

for

the

secondly,

there

minimize occupational Ultimately, economic to enroll in health

health

insurance

is

a need

hazards progress insurance.

development

could

so

to

that would

include

of the government's public education, advocacy, or information on the importance of health insurance. Similarly, the government important role in disseminating information on various innovative schemes particularly in areas where there are already well-

groups. addition,

the

government

could

exempt

health

insurance

from

premium

taxes or offer tax credits for family expenditure in buying or enrolling in health insurance. The government may also provide technical assistance in training managerial and technical support staff to promote efficient/ effective health insurance management. This will ensure a balance between the efforts for cost-containment and ensuring adequate/appropriate health care particularly among

the In

government hospitals The public

insurance areas

firms

where

may explore and private hospital

employers.

Government

p_ojects along with of community health healt h schemes affordable to

in the

with

there

no

-lack

staff. hospitals,

the

the possibility of a tie-up between the public insurance firm for some form of health maintenance would gain added revenues from the pre-payment

tertiary plan. of the

support

is

medical

may

of

also

community-health insurance. Public

be

qualified

needed

The government may also encourage insurance programs for their employees Medicare I or II. Employers offering Medicare may be asked to manage their or

to

promote

schemes to improve hospitals can also

their respective areas by providing community insurance organizations.

benefits to employees' dependents ?fan with its own premium-benefits

private

income-generating

the financial viability support community-based

referral

services

that

are

private employers to administer health and their dependents as alternatives to better health care program benefits than own Medicare programs and asked to extend

other relatives structure.

through

a

companion

health

Lastly, the government may develop a suitable regulatory scheme to protect public from undesirable practices of profit-oriented companies and promote image of the health insurance industry as a legitimate business offering _sential public services. The preferred government regulatory body by most _surance firms is the Department of Health. Quite a number of firms, howevez, _¢j_essed preference for self-regulation by a professional association of health _ance-related insititutions.


HEWSPECS-PIDS Basetine

on Privace

Stay

Health

Insurance

Page 53

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___ing

Company,

_ej_K. __Dg:Center

Health

held

is

the

Care.

in

Summary

of

Manila,

July

Primary

In

World

Health

Proceedings

of

27-August

Care

Health

Participation and Effectiveness: An Rural Health Delivery Mechanisms. 1985.

and Effects of Five Inc.,

Financing:

Financing

_91Ftlons

__bliu

Care

3,

Strategy.

Forum,

1988,

Analysis of Manila:

Poli Directions y .ealth inthe198o,s. April 1981, 25(2).

Philippine

Administration, ; et.al. for

Primary Health Care: A Continuing Primary Health Care Development,

Challenge. 1987.

Thailand:


HEWSPECS-PIDS Baseline

chiang, Republic systems cost De

Study on Private.Hearth

Tung-Liang. A of China. Paper held in Taipei,

and

Cure.

Ferranti,

Department _ndustry,

In D.

Department of A/I Information Documentation.

Chronicle, Paying

of Finance 1985-1989.

and

Health, System

Page 54

Critical Assessment of Health prepared for the International 18-19 December 1989.

Manila

1985.

Insurance

11-17

for

Health

Insurance

January

E.P. Mach. Countries.

Evans,

Robert

The

America Health

is Rather Different. Care Systems held in

Executive Asia

Summaries

and

the

Fry, J and Livingstone, Gamboa, Report

G°

Rhais

of

Pacific

M.

prepared

Life

1991. the

let.

United

_[OiProsram. _lth _hnlcal

An

unpublished

at

care

the Barangay In Philippine

System:

In

1990,

7(1).

Heaith

Care

2000.

Paper

on

_i!iprepared

llMl.united _=on_;Gail _j_A_'_View '_"_'i982, _._aleJandro __pines, a_Ss _a_k

and Welfare (INTERCARE). for

the

Health

Agency

Basic 1975.

Other

Part

thesis.

York:

the

International

University

Specialists, 1990.

Inc. Final

Council

for

Health

North on

for

Churchill

Philippines.

Development.

of

the

Forum in May 1987.

(HEWSPECS) Report on

of

Institute

New

in

Health

Symposium

Insurance

Insurance

for

1991. and

Case Study of Public

Health Care Financing and Delivery Other Nations. Paper prepared Care systems held in Taipei, 18-19

masteral

Philippine

Insurance

Level: A Journal

The

Care - Who Pays. Reprinted from World Health Discussions, Fortieth World Health Assembly,

_h Education _i_&tion, Inc.

Data:

to Meeting Organization,

Researches.

States

Graf, J. Matthias. The West German _ts Experiences and Lessons for :;_ternational Symposium on Health

Key

for Technical Cooperation. Care Management: Introduction

Quarter

Primary

Background

Countries.

prepared for the International 18-19 December 1989.

Insurance

Journal,

for

Health

Paper Taipei,

Developing

R.P.

Alternative Approaches Geneva: World Health

Canadian

J. Hasler. 1986.

in

Commission,

Dorros, S. Initiating Popular Participation of the Community Health Project at Carigara. Administration, January 1980, 24(1). Djukanovic, V. and Needs in Developing

1992.

Services

R.P. and German Agency on Innovations in Health

care Financing in the Symposium on Health Care

System: for the December

Philippines.

support

and the

Intercare Pilot HMO

Research

and

of

the

Research Project.

Development

states Agency for InternationalDevelopment E. and M.S. Cohen. from Inside the System 72(11).

Health â&#x20AC;˘

Care American

Medicaid Quarterly,

the People's Republic of Journal of Public Health,

In

N. Assessment of Population, 1986-1988. PIDS Working Paper and E. Sussman. Memorial Fund

in

Health Series

Prepayment: Health and

and #

concept society,

Education 90-10.

Policies

and Implementation. Fall 1974, 52(4).

in


HEWSPECS-P]DS Basetine

Huebner, S.S. prentice-Hall, ikegami, Experiences

on

on Private

The Lessons

Health

L. and L. Needs in

Kark,

Sidney.

Jr.

Care

held

Health for the

care Asian

Practice

Appleton-Century-crofts,

of

H. Felix. Current 4th. Quarter, 1987.

Laaser, verlag,

U., et.al.. 1985.

Che. and

prepared November Research

Taipei,

18-19

Financing Development

in

of

comment. 4(4).

In

Health

in 4th.

of Health, 1980.

of

R.P.

:_reville,

J.

i_.e_Qtlations _e pacific

on Trade Journal,

_@aZO;Oscar

Insurance

Care

and

Care of

the Bank.

Jersey:

System: Its International 1989.

Philippines:

Mechanisms

Health

A

Country

for

Meeting

Care.

in

on

Insurance

in Insurance 3rd. Quarter D.R.

Klock.

Issues

and

Institute

the

In 6(4).

New

Terminal Health

Financing Schemes the Philippine

Primary

York:

Development, Services In 1990, 7(3).

Initiatives

Care.

Economic Insurance

Perspectives

Springer-

Report Programs.

held in Council

D.

the

Institute

Irwin,

on the Paper

Manila, 23 for Health

Insurance.

Health

Care.

In

Flnanc/ng

and

PIDS

Health

1978.

Ministry

Development Institute

for

Inc.,

Manila:

on

in

and

the Delivery of of the Philippines.

Richard

Health

Asia

Germany:

Insurance

1990_ People's

Illinois:

1974.

for

Making.

Participation and thesis. University

Insurance.

Primer

Francois.

F.

Delivery for the

Existing

Health Insurance. Quarter, 1989,

Citizen masteral

Principles

Irving

New

December

Primary

Sa Kalusugan ng Sambayanan (LIKAS}. Rice Mill Stores for Community-Based

Mehr , Bobert.

edition.

Financing and Paper prepared

Compendium

for the Seminar on Health 1990, under the sponsor6hip and Development.

_L_._er'

in

8th.

Community-Oriented

Trends Journal,

>; Maayo, Geraldine. 1983. Services. An unpublished

Ministry _@alth,

A

Primary

International the Pacific

Lingap Pare Cooperative

Insurance,

1981.

Kloman, pacific,

Lin, Asia

Page 55

Life

Systems

Cari_o. 1980. the Philippines.

The

]nsurance

Japanese Health Care for Other Nations.

INTERCARE, Inc. 1987. studyReport prepared joves, _ealth

Hearth

and K. Black, Inc., 1976.

Naoki. and

symposium

Study

for

of

and

the

Asia

and

Development

_O_._=gh_e_,,_arch-April 1990,8(2). _dt, __'ce

__m

Uwe and

__%!_Report

The

U.S. for

Health

Other

Care

Nations.

Paper

prepared

Dellvery for

the

System:

Its

International

on HealthCare Systemsheld in T_ipel,lS-19DÂŽoembe_1989 lie.

_ar°911is.

E. Lessons

Bangkok: United Nations and N. Mehta. Community

1985.

Documentation

prepared

for

the

Asian and and Health;

of

Pacific Development Institute, An Inquiry into Primary Health

Specific

Population

Area Center

Experiences Foundation.

in

Primary


HEWSPECS-PIDs Baseline

Study

on Private

States Agency Project. A

for International project agreement

wilson, Ronald. International _alth Care Technologies at Foundation, 1986. world

Bank.

world

Health

WHO and conferenc

Korea:

Health

the

Workshop Family

Insurance

Organization.

1978.

UNICEF. 1978. Primary e on Primary Health Care.

WHO and UNICEF. _ealth Care.

Insurance

Page 56

Rates of Insured Lives in the Pacific Journal, 4th.

[The] Trend of Mortality institute for Asia and united Financing

Hearth

1978. Final Geneva and New

Report York:

and

Development. document.

the

Health Geneva the and

Health of

In 6(4).

Primary

Towards More and Community

Financing

of WHO

the Philippines. Quarter, 1989,

Effective Levels.

Sector.

Health

Insurance

Health

Care

Use of Primary Geneva: Aga Khan

Report

No.

7412-KO.

Services.

Care: Report and New York:

of WHO

the and

International UNICEF.

Conference

International UNICEF. on

Primary


PART

CASE

II

REPORTS


HEWSPECS-P]DS Baseline

Study

case Report No. Reference Company Area(s) Studied:

i:

A-

company

adopted

HEALTH The

Both

Non-life

Page 57

Insurance

AND

The

1965,

name

Firm

assumed

in

3 decades, nationality,

1985.

a new

corporate

Though

its principal its operations

it

name

assumed

product are

in

1975,

3 different

remains limited

to

to be nonthe NCR.

BENEFITS

currently

offer

in

corporate

in less than Of Filipino

company

plans

offers

similar

general

two

basic

benefits,

features

but

of

health

plans,

differ

both

plans

in are

namely

premium

briefly

ID-A

cost

and

and

described

ID-B.

benefit

below:

Death,. Dismemberment or Loss of Siqht. Pays full amount of principal for accidental death or los_ of both hands, both feet, sight of both or any two members, hearing or speech. Pays one-half of the principal for accidental loss of one hand, one foot or sight of one eye. Pays per one

b.

Insurance

established

present

PLANS

ceilingsa.

Domestic No. 1 NCR

was

its

corporate names life insurance.

B.

Hearth

IDENTIFICATION The

aid

on Private

cent hand.

(10%) of (losses

Permanent Total within 180 days

the must

principal sum occur within

Disability from the

date

for loss 180 days

Indemnity. of the

of thumb and index from the date of

If, because accident, the

of injury insured is

sum, eyes sum ten

finger of accident). commencing totally and

permanently disabled and prevented from engaging in any occupation for wage or profit for which he is reasonably qualified, the company will pay the principal sum less any amount already paid or payable under the principal sum as a result of the same accident at a rate of 1% per month for i00 months, provided the disability has continued for 12 consecutive months and is total, continuous and permanent at the end of the period. c.

_,

Weekly Indemnity (oDtional). the event of total disability accident.

Pays the amount selected commencing within 90

Medical Reimbursement (optional). selected for medical or surgical hospitalization incurred within resulting from injuries sustained.

_L< _ For both plans, the required _i_St losses resulting directly, I_dQntal bodily injuries including ts. insured

policy

holders

Pays the treatment 52 weeks

up days

to 52 from

categorized

in of

actual cost up to the amount including trained nurses and from the date of accident

age limit is 16-60 years old. and independently of all other drowning, dog bites, snake bites

are

weeks date

as

They cover causes, from and traffic

follows:

;,,: ;', ,,

ass

A:

Non-hazardous only to office

.ass

B:

Occupation

C:

involving

Industrial , using

office and executive work and travelling;

workers

machinery;

: Industrial

limited

workers

most

manual of

whom

personnel

labor are

and using

heavy

machinery.

not skilled

whose

using or

duties

machinery; semi-skilled

are


_EWSPEC$-PID$ Base_tne

Study

on Private

The annual premium p15.30 for B; P25.80 for ID-B are slightly lower p30.20 for D. As

a

general

the

Page 58

_, the

stipulated

amount

of

benefits

applicable

maximum

-

to

both

plans

are

a.

Principal income.

b.

Weekly sum or exceed

C,

Medical Reimbursement - The reimbursable amount for medical treatment vary according to th_ premium with the minimum being PSO0.O0 and the â&#x20AC;˘maximum being 10% of the principal sum but not to exceed PI00,000.00. The

by

Insurance

per person for medical Plan ID-A is Pll.80 for class A; C; P32.80 for D. The annual premium per person for Plan at P9.20 for Class A; P12.70 for B; P23.70 for C; and

policy

guided

Health

sum

following:

benefit:

Minimum

indemnity - limited 75% of the proposers P1,000 for a maximum

amount

on actuarial followS:

of

premium

to

per

Conditions

prior

P10,O00;

a maximum of P5.00 for weekly income whichever period of 52 weeks.

payment

computations.

-

and

benefits

are

were

excluded

existing

b.

Conditions

which

c.

conditions including war/riots,

d.

Mental

e.

Pregnancy,

childbirth,

miscarriage,

abortion

and

their

f.

Congenital

deformities

and

cosmetic

and

plastic

_.

Routine

)%.

Conditions

_. _

Conditions/diseases cholera, et_. ;

_.

Conditions

arising from AIDS, suicide, etc. ; or

nervous

physical which

without

annual

principal but not to

determined

from

Conditions

not

times

each PI,O00 is lesser

a.

are

to

plan which

10

based

coverage

are

as

membership/enrollment;

work-related; acts which substance

are not abuse,

sanctioned conditions

by society like STDs arising from acts of

disorders;

check~up are

defects, and

recurrent requiring

known

rest in

complications; surgery;

cures; nature

isolation

or as

quire per

prolonged DOH

policy

treatment; like

leprosy,

cure;

_i_.._i.. , [_i_i

â&#x20AC;˘.Conditions resulting from hunting, mountaineering, landslide or cave_in of mines, operating/learning a crew member of aircraft or vessel, operating two-wheeled vehicle with or without side-car, volcanic eruptions , and mosquito bites.

any form of racing, to operate or serving as or riding in a motorized earthquake, tidal waves,

['

_he _j_rB:_._

company can

_OFILE i _n _O_i_ifor

the

go

to

OF

does any

not

require

licensed

accreditation

hospital,

clinic,

of or

health doctor

providers. of

their

Policy choice.

MEMBERS/ENROLLEES

first quarter of 1991, a total personal accident benefits.

of 36 policy Of these,

holders 23 were

were listed classified

as as


HEWSPECS-PIDS

Baseline Study on Private Heatth Insurance

corporate/group characteristics

D-

and 13 as individuals. of beneficiaries, hence

SERVICE

UTILIZATION

Neither

were

PATTERN,

there

data

BY

Page 59

No data were, however, available no profile could be made.

on

the

MEMBERS

available

on

the

benefit

utilization

patterns

by

members-

_.

MANAGEMENT i.

AND

OPERATING

Marketinq

and

SYSTEMS

Recruitment

The company's main marketing is composed of 6 individual agents force are compensated by commission Aside status of accepting range, he

from

the

previously

employment applicants is accepted

of

Members

strategy is through direct and 2 insurance brokers. amounting to 30% of total

mentioned

age

limit

and

sales. Sales force Both types of sales premium per policy.

conditions

of the insured is also considered for insurance. If the insured comes as policy holder. If not, then

of

exclusions,

as a criteria for within the standard his application is

rejected. 2.

also

Premium

Premiums are paid act as collectors. 3.

Payment

Benefits requirements notice of

The

of

are

have claims,

drugs/medicines m_atsment of _,

Collection regularly

Medical amount

extended

_,

Financial standard

to

the

prescribed, accounts.

review cost.

E,_

•Accounting

review

_i_

•Validity checks ,false receipts

company

insured

been completed accident report,

review to of benefits

the

or

CONTAINMENT

individual

or

.h°spitalizati°n

of

the

claims

determine availed.

the

to

determine

to

determine

to safeguard or statement

MEASURES

and

agents

who

on

application

of

after

all

claims

requirements include official receipts of

the

appropriateness

veracity

AND

holder

laboratory

focuses

the

Of

policy

satisfied. Claims doctors certificate,

diagnosis,

and

following: of

of

service

provided

or

benefit

ceilings

or

like

submission

of

receipts.

against possible accounts.

All the above documents are forwarded !_%_I payment of claims to the claimant. [_ W_thin 21 days. The shortest claims _@i_t is more than 30 days.

_'_ ....... _.°ST

through

Claims

review/assessment

_.

to

abuses

to the company for processing On average, claims are processed processing time is 14 days while

and and the

MECHANISMS +

..... _Ami_ With most health _i'_{i)_: pro-membership

insurance screening

operations, to weed out

cost-containment high risk clisnts;

measures and (ii)


HEWSPECS-PID$ BaseLine

controls of high

G.

study

on utilization risk/high cost

PERFOR/_ANCE

No Likewise, collections, difficult

HeaLth

through Services

INDICATOR

Policy holders fQr reinsurance. At having Seen reinsured.

H.

on Private

information

careful from

AND

with the

given

VIEWS

Respondents

ON

estimated

review/assessment benefit coverage.

on

of

claims

and

exclusion

STATUS

amounting this study

there were no data on total claims filed to assess the performance

RESPONDENT'S

Page 60

FINANCIAL

premium time of

was

Insurance

the

to P500,O00 and above only I policyholder

nature

and

proceeds

are qualified is recorded as

from

reinsurance.

marketing and administration costs, and paid. In the absence of data, and financial status of the company.

INDUSTRY

PROSPECTS

that

start-up

the

capital

needed

to'set

up

premium it is

a health

insurance business is around P2,000,000. As a minimum, an insurance firm should hire at least 3 office personnel, including i Manager, 1 Cashier and I typist. Tables and chairs, and at least 1 typewriter, I telephone and I calculator are 51so seeded as initial equipment. Economic

progress,

government incentives growth anddevelopment Economic

household

were of

progress

identified as health insurance

was

considered

brings about industrialization increased environmental health p¢otection obtaining illness.

for themselves. health services

Having

!_,

Standardization As

_u_ate _lums

plans

a means the for

cover of of

employment,

factors and operations. the

most

all

controls facing unmanageable

leads often

types

benefits,

low

of

on the health and

diseases

coverage

equity,

the

ratio income

so as group.

_actor

most from

premium

allow

affect

the

because

appropriate the adverse

plans offered were insurance Operations. possibly could be

respondents to

that

and

this

to improved income compel people to

including and

education

conditions

important

HMOs are considered the and financial protection

promoting

premium-benefit members from

and

which generally hazards which

Competition and government tO be the most serious problems _roblems were considered most _hrough the following: _,

income

and seek

means cost

of of

considered These addressed

AIDS; 'contribution. suggested

higher

that benefits

government but

lower


r_ L

HEWSPECS-PIDS Baseline

Study on Private

Hearth

Insurance

case Report No. 2: (Domestic Non-Life Reference Companies No. 2, 18, 24, 36 Area(s) Studied: NCR, Cagayan, Cebu,

A.

Page 61

Insurance) & 46 Misamis Oriental,

Surigao

del

Norte

IDENTIFICATION

The Reference Company, which was established in 1930 with a start_up capital of P147,000, is now at the forefront of non-life insurance business in the Philippines. Filipino in nationality, it serves almost all key provinces, cities and municipalities in the country. The study covered the National Capital Region covers Visayas

head office, and the branch offices at (i) Tuguegarao, Cagayan which Cagayan Valley and Kalinga Apayao; (ii) Cebu City which covers the whole and Some provinces in Mindanao; (iii) Cagayan de Oro City which covers

Hindanao;

B.

and

HEALTH The

resulting

(if)

Surigao

PLANS

AND

Reference in

City

of

covers

Surigao

del

Norte.

BENEFITS

Company,

loss

which

life/

offers death_

6 principalplans permanent

covering

disablement

or

personal

accidents

dismemberment.

The first four plans which give full medical and surgical benefits to the insured are Master Plan, Exeplan, Econoplan and Budget Plan. Premiums are based on: (i) the age of the insured, which ranges from 20 to 64 years old; (ii) amount of daily cash benefits selected among those offered by plans; and (iii) the type of enrollee, which daily cash benefit options

with a.

The term benefits

of coverage as follows:

When, as hospitalized physician

is

one

year,

individual, of Pl00.00

starting

at

noon

spouse or family. The to a maximum of Pl000. of

the

inception

a

result of accidental injury or sickness, the and put under the continuous care of a currently or surgeon, the Reference Company will pay the

benefit as insured and are entitled b,

is categorized as range from a minimum

stated in their schedule up to a maximum of spouse are entitled to 100% of above benefits, to 50%.

When, as a result of confined in an Intensive of a currently licensed pay double maximum of

the 30

daily days.

cash

accidental Care Unit physician benefit

date,

insured is licensed daily cash

365 days. The while children

injury or sickness, the insured (ICU) and put under the continuous or surgeon, the Reference Company amount

stated

in

their

schedule

up

is care will to

a

If the total number of days confined in ICU exceeds thirty (30) days, the insured will be paid the Daily Cash Benefit for the additional days of confinement. For instance, if Gerry was confined in ICU for 12 days in iJanuary, 14 days in April and 5 days in July, he will be paid the ICU _benefit for 30 days of the 33 days he was confined, and the Daily Cash [Benefit for the remaining 3 days. The insured and his spouse are :while the children are entitled

benefit -

entitled to 50%.

to

100%

of

the

above

benefit,

a r sultof thedisease, the insured needsto be

)_rated on by a duly licensed surgeon, the Reference Company will pay for [_:_i:_!expenses incurred. However, the amount paid shall not exceed the _iXimum surgical benefit as stated in the schedule. In the schedule, _:_erent part, or organs of the body affected by sickness or accident are


HEWSPEC$-PIDB

Baseline Study on Private Health Insurance

Page 62

assigned different percentage of maximum benefits. For amputation of thigh, breast, removal of kidney and other vital 100% surgical benefit; cutting of thoracic cavity, amputation entire foot, arm, etc. get 25% and puncture of antrum, cutting of eye on eyelid, etc. gets only 5%. The plan

fifth

which

a.

Class

I-

office Class

II-

c.

Class

IIl-

d.

Class

IV

Annual of

is

called

employees

of

non-hazardous

&nd

b.

term

plan

covers

is

or

a

personal

accident

classifications

executive

limited

semi-skilled workers

vary one

Rajah",

and

involving

industrial

premiums

occupational

insurance

as

personnel

follows:

whose

duties

are

only.

skilled

coverage

"The

office

travelling occupation

-

the four

instance, parts get of leg, operation

worker

using

according

year

to

with

manual

the

using

heavy the

labor

light

machinery

class

the

using

machinery).

machinery.

or

where

following

unskilled

insured

workers.

belongs.

The

benefits:

a.

Accidental death months after the

b.

Permanent disablement or dismemberment - pays the principal sum in the case of permanent or total disability defined as being prevented permanently and totally from engaging in a reasonable occupation based on education, training or experience (monthly payment commences with the 13th month); percentages thereof for loss of feet, hands, fingers, thumbs, arms, leg(s), sight, hearing, and other injuries.

c.

Weekly indemnity - pays the weekly indemnity as stated in the schedule not to exceed 52 consecutive weeks when, by reason of injury, the insured is continuously disabled and'prevented from performing each and every duty pertaining to his occupation and one third of the weekly indemnity if he can't perform at least one important duty.

d.

Medical exceed

i_@_

reimbursement the amount stated

qualified physician or of a licensed or private

The

sixth primarily

plan to

of

all

anyone, Most

l_@rage

unnamed

is the Motor insure against

passengers

regardless vehicles

except

of used

public

of age

for

for

pays the actual in the schedule

by licensed employment

_ended i_i_ht

- pays the whole sum date of the accident.

(not

private

utility

of

surgeon, nurse.

insured

vehicle

is and

occurring

within

incurred, results

confinement

Personal death,

sex

life

expenses when injury

Vehicle accidental the

and

loss

in

but not to in treatment a hospital

Accident Plan dismemberment including

12

- This and loss

the

driver,

or

is of such

covered. commercial

vehicles.

The

purposes benefits

of

are

eligible

the

plan

for are

as

[

_

Death. i_10,000.00

_il '

Pays to

the

capital

a maximum

sum of

insured,

which

ranges

from

a

minimum

of

PSO,000.00.

;_rmanent disablement or dismemberment. Pays a pre-determined percentage ,0_ the capital sum insured. For instance, the loss of two limbs, both ihand@, or all fingers, and both thumbs, etc. are paid up to 100% of sum _sured, while loss qf other body parts oÂŁ organs are paid from i0% to 70% _@_::i@um insured.


'HEWSPEC$-PID5 Basetine Study on Private Hearth Insurance

Page 63

The first 4 plans do not cover those conditions normally excluded in other health plans and insurance. For "The Rajah" plan, exclusions include suicide, bacterial infection, certain murder and assault, war or organized hostilities, mountaineering, scuba diving, aerial sports, racing, mini cave-ins, etc. For plan six, vehicles,

excluded are vehicles other law enforcement

race-making, vehicles used the Philippines. This also It does not cover vehicles and Luzon.

strictly

Exclusions because

anymore. including businesscontainment

are some

classified vehicles,

in pursuance of felonious acts includes some of the exclusions being operated in some areas of

defined very clearly and, conditions, even if efforts

Other acts or situations them for coverage will In essence, exclusions measure applied in the

The

as public utility vehicles, those utilized for testing,

Reference

Company

punishable by laws of of the other 5 plans. Mindanao, the Visayas

in most are done,

cases, could

are considered as too be extremely prejudicial of whatever form is the insurance industry.

has

no

facilities

for

followed very not be altered

high-risk hence, to the insurance most common cost-

direct

health

Neither does it accredit health providers like hospitals, clinics Basically, the company requires a_propriate licensing and credible of medical institutions, facilities and practitioners. The insured own free-will, 2o to any of these providers in case of sickness There are specific standard rates and ceilings for each plan mentioned in the stipulated benefits. However, Medicare benefits, insurance, are deducted first from t_e total reimbursement hospitalization, including drugs and medicines, due the insured. addition to the daily cash benefits corresponding to the number insured was treated and confined at the hospital.

c.

PROFILE In

numbers

OF

all the areas/regions of insured, except in

SERVICE Only

gave

covered NCR which

were no status.

UTILIZATION NCR

by this study, had 157 policy

breakdown The NCR

of data by respondent

no data holders age, said

MANAGEMENT

....

i_

_..

_00king

_:._oved _1_.Today L_._6_[0ther

marital were no

some

AND

data

OPERATING

Marketinq back the

to

status, data at

PATTERN on

hospital

admissions

in

1991.

It

recorded

31

and

i was confined at were: pneumonÂŁa, and gastro-enteritis. cases. The average

stay (LOS) was about 7 days. The shortest LOS was 13 days. The total amount spent for hospitalization The Company also paid a total of P56,400.00 for daily

i_i

or accident. as previously like in other cost of This is in of days the

was given on total during the fourth

sex, there

_Ses, 21 of which were medical in nature_ 9 were surgical i_tensive care unit. The 5 leading causes of hospitalization _ver (typhoid/dengue), urinary tract infection, amoebiasis _%la comprised about 55% of the total hospital admitted !_@n_thof 'i%@n_stwas _U}390;00.

services. and doctors. track record can, on his

MEMBERS/ENROLLEES

_arter of 1991. There residence and educational the time of the survey.

â&#x20AC;˘D,

military racing,

l

day and the services was cash benefits.

SYSTEMS

and

Recruitment

its

history,

the

/ompanv

Reference Company into marketing is done primarily marketing efforts are being

started

the-competitive through 112 done by 16

with

onlv

world individual inhous_

8

aqents

who

of

insurance agents in staff and

5 8


HEWSPECS-PIDS Baseline

insurance

brokers.

The or through the sales company.

sales fixed quota

Members application

Study

on Private

Health

Insurance

force is compensated salaries and other of PIO0,000.OO or

either through incentives. In above, are given

or insured clients are forms. The applicant,

undergo

a

physical

passed screening

these is

examination

basic intended

pre-existing

which

before

collection

of

could

commission some cases, a share of

approval

of

be

a basis

his

for

the

Claims

the be

policy.

application and determine

If is

rejection

accomplished required the

accepted. whether there of

the

to

applicant The are

applicant.

Premium

• Premiums are usually paid on an annual basis. through salary deduction, or are collected by agents opt to voluntarily pay their dues at the office. 3.

of 20% per policy those who reached the profit of the

screened basically through if deemed necessary, may

requirements, then his to detect adverse selection

illnesses

2.

Page 64

Payments are generally and collectors. Others

done may

Processinq

Benefits are extended to the insured after the claims requirements have been fully satisfied. This involves filling up a claims reimbursement form and submitting all official receipts and hospital statements of accounts. In some cases,

certifications

from

attending

physicians

and

police

All claims are routinely reviewed and assessed thorough medical review to determine appropriateness amount of benefits availed. Validity checks are also abuses like submission of false receipts or statement of time _hortest

to

process processing

claims time

F.

COST

_nclude

Cost-containment the following:

_, _ _,

CONTAINMENT

and effect is 2 days

measures

and abuses fraud are:

are

iConnivance between _on-declaration of

_

_Alteration

.....Aw

r_

m

p_

of

to members longest is

usually

Undertaken

by

a safeguard

and

review physical medical

._ pe¢ifying _V_ifying

amount claims

_,_,,_._..,

and

an

industry

falsification

suspicious

against

_onducting _Q_ewing

considered

is usually 3-4 about 7 days.

the

days.

The

company

and

the

death above

assessment examination certification

and type through

of

with

other

The

for

forms

and

fictitious

claim

ways

claims;

documents;

and

claims.

abuses,

of

application form; in each plan; and

hazard.

the insured and hospital/doctor preexisting illness;

receipts

accidents

iB_ingent

required.

MEASURES

_i_"_ _i

...... ]Fake

are

by a process which involves of service provided and the done to determine possible of accounts. The amount

Screening for adverse selection through the use of Application of exclusions and limits as stipulated Referral controls through agents and brokers.

Frauds ii_ ¢0mmitting

_

payment and the

reports

the

following

measures

have

been

claims; necessary laboratory of doctors, their

of medicines used); proper interview of

witnesses

diagnosis; rescri

p

in

Ptions

case

of


HEWSPEC$-PIDS BaseLine Study on Private Health Insurance

Page 65

accidents; ef.

Disallowing a portion Making surprise visits The

respondents

practitioners

G.

feel

would

PERFORMANCE

The least p8,899.24

that

uphold

which

may

considered

completely

and

FINANCIAL

re-insure there are beginning

is

be

integrity

AND

not as the

eliminated

and

if

medical

honesty.

STATUS

its policy holders. no time-series data and end of 1991. In

Membership available, 1992, 138

In NCR, premium Collected for !990 was P279,196 with 6 claims filed, of which were paid; in 1991, total collection was P490,433 with 37 claims and 31 claims fully paid representing a claims payment rate of 80.11%. June 1992, total collection was P204,166 with Ii c_aims filed, 100% of which

100% filed As of were

data

Excess invested

H.

as

were

given

premiums time

are

deposits

RESPONDENT'S Based

on

the

amount

either for

VIEWS

on

the

ON

to

of

added

claimspaid to

INDUSTRY

for

profits,

securities/bonds,

respondents

capitalization required to cover expenses needed

per annum. The highest ranged from P2,000 to

and premium There were were insured. was

No

was P498.96 popular premium

anomalous;

cost premium P3,000.

paid.

cost premium and the most

fraud

their

INDICATOR

The company does trends are not defined 157 insured members in

of the claim to hospitals.

money

or

the

said

added

market

three to

and

years.

reserve

or

stock.

PROSPECTS own

initiate to recruit

experiences,

the

estimated

health insurance operations and hire _ complement of

minimum

is about PIO M 60 personnel to

perform marketing and management functions as well as meet the administrative and operating expenses of the company. Five sets each of computers, adding machines and typewriters are identified as necessary for the operation. Considered following factors: _. _, _, _

Household Economic Education; Government

to

affect

income and progress; and incentives.

the

growth

and

development

of

the

industry

are

the

employment;

â&#x20AC;˘ Household income and employment were ranked as the leading factors _cting the growth of the insurance industry. To most of the country's _lation who comprise the lowe_ income group, insurance is deemed a luxury K_b@r than a necessity. Paying for an insurance means less money for food, _hlng and other basic needs. Hence, if the income is improved, there will be _@@ponding increase in funds which might go to availment of insurance. The $;_i_re _U_tsd

most serious problems facing the industry solvable through educational campaign or implemented by both government and

_dditional _i,hlng the _i_&rties to _i_ion among

today are fraudulent and value orientations industry itself_

claims. to be

government intervention is not considered necessary in industry. Instead, government should be more liberal and allow offer health benefits tO the public to encourage healthy industry peers.


HEWSPEC$-PIDS Baseline Study on Private Health Insurance

case Report No. Reference Company Area(s)

No.

Studied:

A.

(Domestic 17

Non-Life

Insurance)

Cagayan

IDENTIFICATION

The established top ten biggest million.

Reference on March

Company 23, 1960.

started Today,

insurance groups in the Filipino-owned insurance

The insurance view

3:

Page 66

of

original Commission

this,

In

original

the

Reference

1987,

At engaged

present, in

The established The branch

was

and with

in

Reference

of

Company

AND

branch

HEALTH

include

The company offers 4 types medical benefit provisions.

its

license by business.

composite

of

three

firms. Reference

composed

of

5

and P300

the In

nature. life

and

non-

The acquisition Company.

groups

of

companies

operation.

principal all areas

B.

reflect

insurance of the

is

company among the

of the fastest growing combined resources of

a conglomerate

non-life operation

insurance

Company's

in 1974. Its office covered

to

became

two the

is one a total

granted a composite and non-life insurance

changed

company

Reference

types

PLANS

name

it bought strengthened the

various

country groups

company was the first to engage in both life

its

life insurance when of these companies

as a small non-life insurance it is a conglomerate which ranks

office

in

Tuguegarao,

p_oduct was non-life in Cagayan Valley.

Cagayan

insurance

was

and

bonds.

insurance plans briefly described

which below:

BENEFITS of

personal accident These 4 plans are

i. The GrouD Student Personal Accident Insurance Plan (GSPA) is a comprehensive student plan that provides protection to students while travelling from home to school and back; while in regular attendance on school premises; while taking part in school sponsored activity or travelling to and from such activity as member of a group which is under school supervision. The following benefits are provided: _,

Cash indemnity sight.

_,: ,,.'..

Accidental medical expense incurred for treatment of in-patient, provided such date

!__ "_"!_

of

the

for

accidental

accident.

Burial assistance .accident, provided ,policy is 500 or

loss

benefit. accident expenses

of

dismemberment

and

less

of

The company will pay actual expenses related injuries, whether outpatient or were incurred within 52 weeks from the

Reimbursement

of PI,000 that the more.

life,

is

if the group's

up

to

insured number

a maximum

of

P2,000.

dies as enrollees

a

resulting of war or thereof.

from bacterial rebellion, murder

of

result in the

of the master

iE_clusions _:i_Th@ plan does not cover death or injuries _@_'ohs, disease, suicide or self destruction, act _i..[.'_oveked or unprovoked _ault or any attemyt _%,-,,,,.-,., .. ._:_,_ii_: The

Keyman

Personal

Accident

Insu_-ance

Pla_

is

a

personal

accident


HEWSPECS-PID$ BaseL_n6

protection for land

and

plan sea

Keyman and

Study

or

dismemberment, _so offers

Health

two

plans.

Plan

unprovoked

(wife

medical

B

murder, spouse

ranges

any in

kind any

accidental

Plan

on amount P20,O00

indemnity

riding in a passenger

A covers

provoked.or unprovoked optional coverage for the

only),

Page 67

murder.

Medical indemnity depends medical indemnity ranges from

of

Insurance

that covers a person while travel or while riding as

offers

provoked

on Private

from

death

covers

coverage. P501000.

PI0,000

and

dismemberment

accidental

and medical and children.

of to

of conveyance used commercial airline.

For

to

death

indemnity.

and

The

For Plan B, the optional

plan

the amount coverage

P20,O00.

3. The Motor Vehicle PassenQer Accident Insurance Policy provides coverage for accidental death and dismemberment and medical expense benefit to all vehicle occupants (including the driver) of insured vehicles. Insurance coverage is extended on an unnamed driver/passenger seat basis, only vehicles used for private or commercial purposes are qualified to insure under this policy.

Benefits

include

Accidental

b.

Accidental medical expense benefits. The company the maximum benefit amount, for medical/hospital expenses are incurred within 52 weeks f_-om the

or

of

seat;

and

following:

a.

Amount benefits

death

the

dismemberment

benefits;

medical benefit up to PI,000 per

depends occupant

Plan

per

IIl,

P5,000

upon or

and pays actual cost-, up to treatment provided such date of the accident.

coverage per plan. Plan seat; Plan II, P2,000 per

occupant

or

I extends occupant

seat.

Exclusions

The i

Infections rebellion. 4. this plan. _ccupation, Death b. _, _.

policy

does

not

cover

and other diseases, Only accident related

medical

expenses

suicide, injuries

incurred

_and injuries are covered.

Unlimited Personal Accident. Only The amount of medical benefits and include the following:

males depends

arising arising

from ' out

bacterial of

war

are eligible to enroll on the clessification

or

under of

benefits;

Permanent disability benefits; Temporarypartial disability

benefit;

and

Medical expense benefit. Medical expenses with death and permanent disability reimbursement ranges from PI00 to PI,000.

can only benefits

be covered jointly.

if sold Medical

Exclusions 0nly

accident

..... '_iReference !_[_@d members i!_;i_:any ....

related

Company who need

licensed

injuries

are

does not require medical attention

hospltal/doctor

for

covered. accreditation due to accident

of service providers. related injuries could

treatment.

:,...

_!,_;!:_ :;_.;_::;0FILE O F MEMSERS _'_i_'_[ii"ii_Ji_Liks other

insurance

companies

under

this

category,

Reference

Company

did


HEWSPECS-PIDS Basetine

D.

SERVICE

i-

AND

company

provides

total

&

and of

in

advertising to

related

agents

(3

in

agents

injuries were those

broadcast

for

and

direct

individual

were employed to carry out marketing the study. These agents receive 30% for the 10% annual contingent profit per

MEMBERS in

all its resulting

plans; from

SYSTEMS

brochures

five

BY

Page 68

Recruitment

engages

posters

Insurance

covers only accident consultationconfinement

OPERATING

Marketinq

The

Health

PATTERNS,

the company cause of

MANAGEMENT

A

on Privpte

UTILIZATION

Since, the leading accidents.

D.

study

media.

marketing

agents

activities commission. (AcP) if

print

and

2

It

also

purposes.

in-house

sales

staff)

in the branch office covered by Individual agents could qualify they reach the P30,000 sal_s quota

year. All

medical

insurance

check-up

plans as

a

fill up the application of the applicant. The medical

history

Being ._olicy. directly

for

claims

2.

a

insurance,

term

payments office. of

for

process

how

of

clients

applicants

requirement

to is

data and applicant

who

premiums

much

of

are

total

of

undergo

for

them

medical declares

to

history in the

have

p_=eviously

committed

paid

upon

signing

collector, to how many members

collections

were

of

the

the agent availed

paid

from

or of

which

signed

drugs

to

submission

reimbursement_

by

the

purchased

to

the

attending

outside

the

office

requirements

physician;

the

of

all

are:

and

hospital.

sees to it that all the requirements are complied with to the head office for processing. Claims are subjected accounting, and other validity checks. The usual time

claims

the

subject

medical

bills; duly

ranges

CONTAINMENT contain

policy

are

For

receipts

The branch office _@re claims are sent _'medlcal, financial,

To

require only

be remitted to company company could not say

reimbursement

official

COST

or

requirements.

i:_

_

not The

Processinq

police report; medical/hospltal medical certificate

to

do

outright.

annual

may The

payment

@. _, ¢.

._n_,

of

rejected

Collection

Claims

claims _peclfied

renewal

Premium

modes

3.

company

procedure.

form that contains the personal company accepts whatever the

are

Premium to the

particular mode.

the=

form.

Application fraudulent

of

screening

from

one

to

four

months.

MEASURES cost

of

member

services,

each

plan

has

specified

benefit

exclusions. R imbu seme t subject to theseoo dit on . ij bmi.sion oÂŁ f aud lent receipts ls a common ormof fraude peri noed by _@_pany.

Cost

of

services

and

medicinss

are

sometimes

overpriced

by


HEWSPECS-PiDS Basetine

tampering

with

Study

the

on Private

amount

on

Hea_th

the

receipts

sales clerks. To avoid or minimize _nvestigation with establishments if proven, will not be paid.

G.

PERFORMANCE

INDICATOR

Information

on

this

Insurance

section

Page 69

or

through

connivance

was

provided

Reinsurance of members is done on a case policies over P200,000 are automatically exce_tional cases when policies below P200,000

by

the

RESPONDENT'S

branch

The Company office in

to put up following policy provided

a

has a given

a PS0,000 as minimum

issue by

personnel

VIEWS

from

Respondent the growth and employment and will then have

INDUSTRY

standard area.

bond. The personnel

clerk, the head

come

ON

and 1 office. the

Head

policy office

branch office requirements:

Office.

to reserve investment

governing is required

is i

All office the salaries

funds. income

rule, are

No data levels.

expected branch

the by

settiag the Head

to operate manager, 1

equipment and and allowances

up of a Office

with cashier,

the 1

supplies are of the branch

Office.

gave economic progress as the most important factor affecting development of the insurance industry. Economic progress means income opportunities to a greater number of people. The people the money to spend for an insurance coverage.

Respondent cited stiff competition insurance industry. In the 1990 annual were i01 non-life insurance authorized There were @suzlly caused by %he following: _,

Failure of processing. requirements

_

Delays

in

Head

checks/ claims,

PROSPECTS

operating A branch

janitor. Even

unscrupulous

to case basis. As a general reinsured_ However, there are also reinsured.

Excess premiums are generally invested or added were, however, provided on the type of investment and investment incomes were usually added to profits.

H.

with

this, the company conducts routine that issue the receipts. Fraudulent

as the most serious report of the Insurance to do business in the

also problems on insurance delays in claims payment.

the

claimants to submit The branch office to the Head Office processing

of

company This is

and often

problem facing the Commission, there Philippines.

client relationship the result of any

all the necessary papers does not forward claims with for processing; and

claims

by

the

Head

Office.

of

needed for incomplete


HEWSPECS-PIDS

Baseline Study on Private Health Insurance

case Report No. Reference Company Area(s) Studied:

A.

4:

(Domestic No. 23 Cebu

Non-Life

Insurance

Firm)

IDENTIFICATION

The Reference Company is Dranch office in Cebu City was main business is fire insurance. and

Page 70

Bohol

B.

as

HEALTH The

policy

well

as

PLAN

AND

company's

targeted

for

the

cities

Class

1

7

pre-paid

health

persons

between

persons

accountant, b.

of

Zamboanga

and

Dipolog.

BENEFITS

p_ior to age 60 for males are which are actuarially computed subscribed and the occupation a.

a domestic non-life insurance corporation whose established in 1978. Its principal product or Its market area covers the provinces of Cebu

service the

is

a rider

ages

16

and

to 60

whose

work

advertising

Class

III

managers, contractor, d.

Class barber;

IV

-

persons chemist, master

Personal

are

strictly

manager,

architect,

for

office

auditor,

involved dentist, tradesmen;

- persons with private driver,

in

supervisory engineer,

Accident

Policy

renewable up to 65 years old. The ranges from P200 to P2,500 depending of the insured which are classified

Class II - persons with no manual work but whose land, sea and air on commercial scheduled flight, automobile dealer , commercial travele_, lawyer, professions and occupations;_

c.

the years.

issued

annual premium on the policy as follows:

duties

only,

clergyman

e.g.

etc.;

duties include travel by e.g. agent, appraisers, physician, and similar

manual grocery

work,

e.g.

manager,

bakery painting

and

duties gardener,

involving messenger,

light manual veterinary

work e.g. surgeon,

baker, etc_

Considered as prohibited risks and not insurable in the plan are acrobats, _rmy personnel, asylum attendant, auto racing driver, boils,men, carpenters, _ivsrs of public hire vehicles, electricians, explosives handlers and people with chronic diseases, totally blind, deaf, etc.

:_h

The Plan covers expenses resulted

i_bJsct

to

ceilings

reimbursement from injuries ranging

The company does not i_q_dent, a policyholder can i!{_!@ a claim for reimbursement

ii_:i

:PROFILE

OF

from

of expenses caused by PI,000

to

_or drugs accident.'

P5,000

and medicines Reimbursable

depending

accredit medical service go to any hospital/phzsician for drugs used.

on

the

provided amount is policy.

previders. In for treatment

case of and then

MEHBERS

Host data needed by the study were said to be available only from the head _G_in Manila. A high-ranking official in Manila was approached regarding _ii_nd information but _as not available during several visits to his office. _r_Unately, only said official can authorize any personnel te release the data _@_ii_@r_ considered classified information. In any case, extra time and effort _.iihave _ii!_The _,,,,,,,_o,,,_'_

been needed to sort and retrieve stud Y was , therefo . r e , unable to

the required data obtain the needed

from data

voluminous on members.


HEWSPECS-PIDS Baseline

D.

SERVICE

Study

on Private

UTILIZATION

Health

Insurance

PATTERNS,

BY

Page 71

MEMBERS

In 1991 the office received drug/medicine whom were involved in work related accidents. company does not keep records on the specifics of services, services used

hence could

the patterns and causes not be determined.

of

claims from i0 Unfortunately, of the availment accidents,

much

clients, all of the Reference or utilization

less,

the

type

of

[

E.

MANAGEMENT 1.

AND

OPERATING

Market_nq

The

Cebu

add

branch

SYSTEMS

Recruitm_Dt

office

employed

25

staffAgents are paid by commission are salaried employees and get added The persons

acceptance

doing 2.

or

high

rejection

risk

Premiums

jobs

of

are

individual

and have commission application

not

agents

and

7 in-house

no quota. In-house upon recruitment of is

based

on

sales

sales staff new members.

risk

assessment.

insurable.

9o!lect_on

r

Tot

Premiums 1991, the 3.

are paid or branch office Claims

Filing together purchased involves: costs; and submission

for

reimbursement

adjuster's

and a)

on regular basis by collectors an estimated P300,O00 from

report,

requires

medical

validity checks, false receipts.

e.g.

COST

CONTAINMENT

Aside

from

MEASURES

exclusions

_@n adopted. No abuses ._n made. Respondent i___@ugh close screening

AND

and

submission

or agents. members.

of

possible

claims

application

receipts assessment ceilings

against

payment month.

of

official

review and of benefit

safeguards

The usual time to process and effect ahortest at 1 day and the longest at one

F,

the

certificate,

certification from employer. The financial review, e.g. application

b) of

200

Processinq

claims

with

collected collected

is

for

drugs

of claims o_ standard abuses

2 days,

with

like

the

MECHANISM

limits,

no

other

or fraud relative to claims that fraud and of documents submitted

cost

containment

measureshave

filing of claims hav_ reportedly abuse can be totally eliminated to substantiate claims.

.,.,_ ,, [

,@_

_.., ..,...

PERFORMANCE i:Data

-_i_.

on

INDICATORS financial

:IRESPONDENT'!..;S VIEW

,,,, .... iliThe Respondent

AND

status

ON

FINANCIAL

were

reportedly

INDUSTRY

estimated

should tables and

that

Kconomic progress _i':%_[_d..._ ....: development

include chairs.

was ranked of a health

available

only

at

home

office.

PROSPECT

operatiois 200,000

_nt/furniture _/_'_O_ns lines,

STATUS

the

minimum

capitalization

required

for

officestaffof 3. Theb siooffice

typewriter,

adding

machines/calculators,

as the number 1 factor/condltion insurance operation. Government

affectÂąng the _ncentives


HEWSPECS-PID$ Baset_ne Study on Private

'Health Insurance

and education were ranked second and ranked first place because it provides people to pay insurance premium.

third, respectively. employment and higher

Page 72

Economic growth was wages thus enabling

The most serious problem facing health insurance operation is the people's lack of appreciation of the importance of health insurance. Also, slow payment of claims by some companies gives a negative mark on the whole industry. " This reference company does health plans since their principal

m

not have firm plans for expansion concern is fire insurance.

of

their


HEWSPECS-PIDS Baseline

Study

case Report No. Reference Company _rea (s) Studied:

A.

5:

on Private

Hearth

(Domestic No. 33 Bohol

Insurance

Non-Life

Page 7"5

Insurance)

IDENTIFICATION The

offices

in

Reference Company the other sample

information

on

their

Established indemnity firm

I.

HEALTH The

PLANS

AND

Third

June 24, business

are

per

Liability

Cash of Like from

reimbursement

merely

per

and

plans,

riders

per accident premium cost

insurance

P500.00 drugs

insurance

as

covers

premium rates big trucks.

of

hospitalization, other

Bohol branch office vehicle insurance,

motor vehicle driver and

person Annual

(TPL)

)f insured vehicles. Annual ind Pi,171.05 for buses and

_osts

1991, the is motor

offered

{TPL) for to authorized

up to PS00.00 and medicines. Party

because refused

branch to give

is a commercial fire and bonds.

BENEFITS

plans

Liabi!itv apply only

_eÂŁmbursement :ost of drugs

in Bohol is highlighted, either non-existent or

operations.

only in whose main

health

_P_rtv _ensfits

branchoffice areas were

are

person

on

Accident

and

accident Cash

covers hospitalization, is P108.00.

and

unnamed

P70.75

per

Personal

insurance. Personal motor vehicle helper.

for

accident

riders light

are

or motor

provided

passengers vehicles

to

cover

medicines.

the

company

excludes

the

following

conditions

coverage:

a. h. c.

Conditions Conditions Conditions including war/riots,

existing prior to membership/ which are not work-related; arising from acts which are not AIDS, suicide, substance abuse, etc.;

d, _. _. 9. _, _, [,

New procedures like lithotripsy, ultrasound; Mental or nervous disorders; Pregnancy, childbirth, miscarriage, abortion and their complications; Conditions requiring use of ICU; Congenital deformities and defects, cosmetic and plastic surgery; Routine physical check-up and rest cures; Conditions which are recurrent in nature or require prolonged treatment; Conditions/Diseases requiring isolation as per DOH policy like leprosy,

_. ;_%r

cholera, Conditions conditions

etc.; without known which are not

.._These exclusions limit i_@_dentified and specified !_0ugh cash reimbursements. j_ICes

nor

does

it

sanctioned conditions

cure; and accident-related.

payment of benefits to those types of accident which in the policy. Payments to the claimants are made The Company has no facilities for direct health

accredit

different

health

providers.

i_Except for owners and operators who directly insured _i0iaries of the insurance like drivers, helpers and _i_ied and virtually not known to the insurance until _y_;_records showed that the number of insured vehicle _:0f;1991

was

65,

ten

by society like STDs arising from acts of

of

which

were

females

and

the vehicles, other passengers are not claims are filed. owners in the last

fifty-five

were

males.


HEWSPECS-PID$ Baseline

C.

D.

OF

No

available.

data

Data

INSURED

were

1.

Acceptance assessment.

were

Claims

for to

paid As or

vehicle

not

applicable

insurance

considered

is

high-risk

or collected on of 1991, P6,900.00

paid

the

for

particular

item.

in

primarily nature

based

are

not

on

risk

insurable.

that

a regular basis was said to

by have

direct been

remittance collected.

to No

year.

normally

company's report, or death

of

need

office.

submission Claims

driver's license, certificate, in

procedure,

the

Company

of

claims

documents

documents

consist

pictures, official case of death.

reviews

and

assesses

from

of

claims

receipts,

claims

based

on

considerations:

medical review to determine appropriateness of service provided; accounting review to evaluate veracity of receipts; and validity checks, e.g. to put safeguards against possible abuses like submission of false receipts or statement of accounts and validate adjuster's The

_B

of

are

reimbursement

a matter

following

a. b. ¢.

were

C laims.Processinq

claimant

As

or

Recruitment

that

_pplication, police medical certificate,

the

MEMBERS

Collection

filed

3.

Page 74

SYSTEMS

rejection

Premium

Premiums are branch office.

the

and

or

BY

available

OPERATING

Vehicles

2.

claims

not

Marketing

Insurance

PATTERN,

either

AND

Health

MEMBERS

UTILIZATION

MANAGEMENT

the

on Private

PROFILE

SERVICE

_.

Study

report.

usual

about

two

or

average

months.

_. i_

Even though health required in statement

i_

official

_

COST No

"_d

receipt

of

_%ed

to

_01icy

on

_yjilfamiliar

Bohol

AND on

office

the

one not

started

claimant penalized and

FINANCIAL

Company'_

effect the

driver's

cost-containment was

h ado fice in anila.

and and

payment

longest

to is

claimant

six

months.

are not accredited, provider's bills are processed. Included in these are and

reimbursable

AND

claims month,

license.

MECHANISMS

when

Claimant are

INDICATOR

with

one

expenses

given

items

branch

process is

experienced

accident. what

_ERFORMANCE _e

was

was

the

medical

MEASURES

information abuse

to

shortest

service providers of accounts and

CONTAINMENT

and

time

The

what

measures

but

filed

medical

but items

was are

one

instance expenses

merely

of not

reminded

of

not.

STATUS in

1991

and

serves

mainly

as

a

Thebranch managerinterviewed was region-wide

operations.

marketing

Consequently,

not data


HEWSPECS-PIDS Basetine

on

performance

H.

and

RESPONDENT'S

The Company capital is needed onlY) with a staff The insurance

Study on Private

financial

VIEWS

Hearth

status

ON

main factor perceived is the availability

solvable

th_nks

not

available

or

that

for that

most

closer

and

more

non-existent.

the growth funds at

of

PS00,000.00 (Tagbilaran and chairs.

of claims couldbe serious

document. avoided

problem

that

by

will also reimbursed Processing decentralizing

affect

the

including the one she runs now, by fixers and some LTO personnel. honest

supervisor

start-up operation

and development the local level.

the new office. This their claims could be

presentation reimbursement the

virtually

PROSPECTS

to affect of company

of the industry, rates being charged through

Page 75

branch manager thinks that a minimum to operate a health insurance business of 4, 2 computers and sets of tables

immediately upon proper which unnecessarydelays She

were

INDUSTRY

needed to build credibility assurance to policy holders

development c0r_nission

Insurance

and

Supervision.

of

health This is

serve as or paid in

growth is

Manila funds. and

the high This is


HEWSPECS*P|D$ Baseline

Case Report No. Reference Company Area(s) Studied:

Study on Private

6:

Health

Insurance

(Domestic Non-Life No. 35 Misamis oriental

Page 76

Insurance)

A.

IDENTIFICATIONâ&#x20AC;˘

bonds,

Reference Company is a non-life insurance fire, marine, motor vehicle, and personal The

company

operation nationwide

B.

HEALTH

The insurance

b.

Permanent disability benefits

d.

Medical expenses

s.

Murder

de

Filipino types of

Pays

Disablement. following

and up and

schedule unprovoked

the

the

Provides schedule

Total. Partial.

March

the branches.

1991

while

in

NCR

company

operates

to

the

compensation of percentage

their

personal

accident

principal

sum

assured;

depending reflected

on the extent in the table

of of

Surgical Expenses. to the limits stated Assault.

Pays

the

should assault or for

occupational -

persons managers,

work etc.

in

insured the any the

25%

of

bodily attempt health

actual

medical/surgical

benefits

A

injury/death thereat. plans

are

c.l

and

B

be

(as

per

caused

classified

by

according

whose duties do teachers, students

superintending

do not surveying

workmen,

not and

entail other

manual similar

work, e.g. occupation;

entail manual work, agent, automobile

e.g.

Bakery

but include dealers and

Manager,

Chemist,

; and

persons DC - - persons janitor,

Reimburses the in the policy;

in

class:

Class B - persons whose duties travelling, e.g. inspecting or other similar occupation;

_occasional

;

Pays the insured the sum agreed upon; Pays the insured 1/3 of the benefits

members/beneficiaries

Class A accountants,

ibarber,

in

as riders coverage:

beneficiaries

(Optional)

of percentage) murder and

following

â&#x20AC;˘Class _-Class

operation

engaged

;

Temporary Temporary

_Engineer,

Oro

in nationality, product in its

health benefits the following

Disablement

Target

Cagayan

primarily business.

BENEFITS

Death.

Temporary c.l c.2

a,

AND

company offers plan which have

Accidental

._)â&#x20AC;˘ the

its

in 1959. the same

PLANS

a.

c.

started

started offering

company accident

involved whose duties

messenger,

ininvolve supervising light

generally

who

do

manual manual light

work, work,

manual

e.g.including baker,

work.


HEWSPECS-PIDS 8aseiine

Premium

Study

rates

on Private

vary

HeaLth

Insurance

depending

on

Page 77

thetype

of

occupation

and

are

summarized

below: QccuDational

Class

Class Class Class Class The computation. in addition

A B C D

benefit

sum

but

Services

ceiling

not

and

to

conditions

Bacterial Medical Hernia; Suicide; War or

f.

Earthquake,

g.

Any injury consequent hunting, racing of all

surgical

service

in

the

services Health for

accident

in

As of the 4th quarter individual enrollees. of members were not

SERVICE

is

per the

P500

actuarial product

or

10%

.of

year.

plan

coverage

are:

had

ido not accredit _i;0n these events,

_MANAGEMENT

from

accident;

waves;

and

insured playing,

engaging etc.

are excluded extended to

cases

purely

for

from the plan because members in the form

sports,

of of

the cash

only. funds

for

health

plans

are

members'

pre-

MEMBERS/ENROLLEES

UTILIZATION

company

the polo

and operating equity.

_nd i0 _atus

resulting

tidal

upon kinds,

related

PROFILE

i!_

accident

based on as principal

forces;

and conditions benefits are

of capital stockholders

OF

armed

not

eruption,

C,

_i

reimbursement

per

excluded

treatment

volcanic

The above involved.

The

is plan

infections/diseases; or ,

reimbursement

_,. :<i

medical

PS,000 usually

b. c. d. e.

Sources payments and

for

exceed

a.

risks

Premium

P12.30 14.55 16.80 22.00

amount of prepaid contribution per class The company offers the personal accident to other products offered by the company

Minimum principal

Annual

AND

of

1991, the Statistics available.

PATTERN,

no

information

any service although

OPERATING

Marketing

and

BY

company on the

had 58 corporate/ occupation, age,

group accounts sex and marital

MEMBERS

on

the

providers. records may

services

extended

Neither do be available

to

members

they compile and filed.

because

statistical

SYSTEMS

Recruitment

_he branch office employs 3 individual aqents and 1 insurance broker _#_heir product. Marketing of health Dlans-is done throu h direct sellin ........ '째_=i ' _ g __ s&t and group product presentation. Individual agents are compensated _A_Slon basis while in-house sales staff are paid on ,slaty basis. _dar

d

procedures

adopted

by

the

company

in

screening

applicants

are:

to g'


HEWSPECS-PIDS BaseLine Study on Private Health Insurance

a.

Applicants

b.

Accomplished pre-existing

forms are forwarded illness; and

c.

If accepted, forwarded to

applicants and the main office

criteria iS

are

required

Application for for accepting

found

to

have

2.

Premium

to

The

of

to

agents

does

Insured

is

usually

claims

F.

CONTAINMENT

and

contain measureS:

a.

screening

b.

Exclusions

go

filed

a

its

the

for

cost

adverse

and

of

form

meet done

to

be

the company if applicant

agents

or

direct

are and

insurance

_!_o_ehold

15

AND

ON

paid

and

and service

reimbursement upon medical Certificate

within

lO

days,

or

a

days.

MECHANISMS

member

services,

the

company

has

adopted

the

and

INDUSTRY

telephone,

conditions

PROSPECT insurance business, the perceived up operation is P10 M. The office cashier. 'Office equipment needed

typewriter,

calculator,

will

the

that

affect

airconditioner.

growth

and

development

of

are:

and

employment;

c0,o progres ic ;

_7_i_@_ation; _n_0rmation

and

facilities

hospital

can file claims for account, police report,

selection;

operations income

service

licensed

limits.

VIEWS

operation

'i/Factors

and drive

....... _,Househ01d _Onough

is

through

health any

processed

of

of

to

Based on company experiences on the _,Imum capitalization required for a start _ have 1 manager, I clerk, and 1 accountant/

i

examination

application

either

own

directly

are

maximum

MEASURES

RESPONDENT'S

_h

the

form;

for

if applicants of applicants

done

accredit can

Upon discharge, members of hospital statement of receipts.

average,

COST

not

members

5 days

the

concerned

agents sign for processing. is accepted Rejection

application

Processinq

minimumof

_

company's

conditions.

premium

company

providers. presentation and official

_Q,

the

Collection

Claims

providers.

To following

up

office.

3.

On

fill

membership applicants.

pre-existing

Collection payment

to

Page 78

income for

their

was

priority _!_,competition at

present.

considered

basic

was This

as

needs,

cited

number

then

as

problem

the is

getting

most being

1 factor an

because

insurance

serious addressed

if

family

coverage

problem by

faced the

income will

by

be

health

industry

by plan, andbenefits o fered byother companies pgrading their


HEWSPECS-PID$ BaseLine

Study

incorporating

on Private

HeaLth

benefits

Insurance

plans

by

offered

include: settling

Suggested regulatory measures (i) a uniform application of claims to members.

Looking at the industry regulatory body for the industry The 5 years

company projects and 30% expansion

a of

Page 79

by that of

other should tariff

companies. be enforced taxes; and

by (ii)

government immediate

as a whole, the company suggested should be the industry peers.

70% increase in benefit packages.

coverage

of

population

in

that

the

the

next


HEWSPECS-PIOB BaseLine

Case

Report

Reference Area(s)

A.

No.

Study on Private

7:

Company Studied:

Health

(Domestic No. 45 Surigao

Insurance

Non-Life

del

Page 80

Insurance)

Norte

IDENTIFICATION

surigao Norte.

S.

Reference in 1972.

HEALTH

The insurance, coverage. person

at the maximum owners

other

Company Markmt

PLANS

AND

company's enrollees As part

could

get

is a non-life insurance area covers Surigao City,

reimbursement

Target beneficiaries time of accident. number of persons who

insure

The plan related

Reimbursement The

company

providers. hospital/physician reimbursement.

In

C.

OF

PROFILE The

company

only

the

driver. medical provided

subject

to

does

medical

Premium costs to

a maximum

not

case foz

is motorcar to include a personal

for

insurance. In this type of personal accident in their accident coverage, an insured

expenses

have

INSURED

per

seat

is

any

of

P750.00

standards

in

an

accident.

Pl08.50/year. outpatient caused by per

for

an insured injuries and

care accident.

and

person/accident.

accreditation person file

of

could claim

a

go for

service to any medical

MEMHERS

issued

a

total

of

21

rider) In the

policies in 4th

of

motorcar

the first quarter of

No statistical data regarding occupation, age, Q_ insured persons could be derived because there insured persons spelled 0ut in the policies issued.

insurance

quarter of 1991, there

1991. were

with This a total

sex, marital status, etc. are no specific names of Policies call for unnamed

SERVICE UTILIZATION PATTE BYMEMBERS As

expected,

availment

of

Oii_accidental injuries. But _er.?of availments per type _RaOunt-â&#x20AC;˘spent for such services.

_i_

incurred

of hospitalization, treat injuries limit

Of accident, treatment of

personal accident (with health comprises the voluntary clients. )f 24 policies issued.

_,,

established in and Dapa Surigao

are any persons or passengers of an insured vehicle The seating capacity of a vehicle determines the that could be insured. However, there are Vehicle

reimburses services is

office Leyte,

BENEFITS

principal product have the option of the benefits of

cash

branch Maasin

":MANAGEMENT ;_:

AND

i.llMarketinq

_The_company

need

OPERATING

hospital/medical the of

company service.

and

other

had no available Neither could

services

were

data on they give

the the

all

due

total total

SYSTEMS

and

Recruitment

not

engage

in

intensive

marketing

strategies

because

motor


HEWSPECS-P]DS

car

Baseline Study on Private Health Insurance

insurance

is

compulsory

upon

composed of 20 individual given 20% for TPL policies The

plan

insures

Premium

registration

agents who are and 30% for PA unnamed

related injuries. Therefore, have standard procedures/criteria 2.

Page 81

of

paid on policies.

vehicles.

persons/passengers screening for

is not accepting

Sales

commission

and

force

basis.

covers

applicable. or rejecting

The

They

only

is are

accident

company enrollees.

does

not

Collection

Premium payments are on a yearly basis and paid on a one-time payment scheme. Some, however, opt for a longer period of coverage e.g. 3 years. Fremiums are paid directly to the agents. The total amount collected by agents in 1991 (or any other year) could not be determined, or were deliberately concealed from the researchers. 3.

Claims

Like centralized.

other insurance Processing

branch office requirements. review/assessment provided validity receipts.

but

merely saw Review and include:

COST

amount of were paid

CONTAINMENT

'_

PERFOB/MANCE

the

companies, claims

Responses to head office

_i_nfidential _/processed

data data

not asked

availed. against

to process a month.

AND

on

operations the head

Were highly office. The

submitted the complete claims were done at the head office. The - e.g. appropriateness of service

(2) accounting possible abuses

claims

and

review, receipts like submission of

effect

payment

was

cost-containment measure to their operations.

FINANCIAL

(3) false

3 months,

and

did

not

STATUS

performance However, the

needed the available.

at

MECHANISMS

employ any as relevant

AND

questions in Manila.

premiums income is _6fits and some

RESPONDENT'S

time in

INDICATOR

which were

Reference Company payments were done

to it _hat claimants assessment of claims (i) medical review

MEASURES

The company does consider the questions

!/9_,

and

_

on amount of benefits checks, e.g. safeguards

The usual some claims

F.

ProGessin

approval

and head of

financial office top

status were was unwilling

management.

In

some

referred to share cases,

are invested in securities/bonds and stocks. No range of given. Investment income are said to be added to reserve are reinvested to other ventures like real estate.

VIEWS

ON

INDUSTRY

PROSPECTS

ieepondent in the branch office refused to speculate on the industry |@iS and referr@d us to th_ h_ad office for responses %Q th_ _et of on this subject. The estimated minimum administrative requirements for health insurance busln@sm in the =ountry are _ _ollQw_ tion - PI0,000,000; _onnel Category; _i President ._VP


HEWSPECS-PID$

c.

of

iii) iv) v) Type i) ii) The health

Baseline Study on Private Health Insurance

VP Comptroller VP Administration Staff - 20 persons of Equipment; Typewriters - 3 units Validating Machine factors insurance

a. b. c. d.

Economic Household Education; Government

e.

Competitions;

and

conditions a_e:

1

Page 82

unit

perceived

to

affect

the

growth

and

development

progress; income; incentives;

The respondent views function and responsibility the following:

regulation of of the industry

a.

Improvement

of

services;

b째

Improvement

of

facilities;

health itself

insurance operations and one that should

as a focus on


HEWSPE_S-PIDS Baseline

Case Report No. Reference Company Area(s) Studied:

A.

Study

8:

on Private

â&#x20AC;˘(Foreign No. 3 NCR

Hearth

Insurance

Non-Life

Page 83

Insurance)

IDENTIFICATION

The Reference insurance companies. started its operation, fire, marine, motor

B.

HEALTH As

PLANS

part

of

Company was created through a merger of In December ii, 1991, when the Reference it was basically an American business vehicle and personal accident insurance.

AND a wider

several Company concern

subsidiary formally engaged in

BENEFITS insurance

plan

the

company

offers

the

following

health

plans: a.

PavrollD@duction Plan - This employees and their family. and P540.00 for employee and i,

Accidental unit of

Death coverage)

Principal Spouse Each child ii.

iil.

b' i

and

accident insurance is designed for per annum is P300.U0 for individual The benefits are as follows:

Dismemberment/Permanent

insured

Accident Medical Principal insured Spouse Each child

personal Premium family.

Expenies

Accident Burial Expense Principal insured Spouse Each child

Total

Disability:

(Per

PI00,000.00 50,000.00 i0,000.00 (Per

-

P

-

P

accident) 2,500.00 1,250.00 250.00

5,000.00 2,500.00 500.00

Group Accident Plan - This is an accident insurance designed for private or government employees who wish to enroll as a group. There is no standard annual premium rate for group because these are individually computed based on the number of employees per group, nature of occupation of employees and type of premium the group may .desire. Employees are classified by size into 7 groups, the smallest group of which is composed of 2-4 employees and the biggest is a group of more than 200 employees. Employees are further classified into 4 occupational classes such as Class .I: z office duties only; Class II limited manual work; Class III i!skilled 'unskilled _!:,

or semiworker.

skilled

worker;

and,

iHealth benefits are in the form of medical _indemnity (for principal insured only), .surgical professional fees. Coverage varies The schedule of coverage _eCted. for each Accident

Medical

_'Principal insured Spouse Each child Eachbrother/sister

Class

heavy

machinery

or

expense reimbursement, weekly weekly hospital income and according to annual premiums type

Reimbursement: -

IV-

Pl0,000.00 5,000.00 1,000.00 1,000 O0

of

benefit

is

as

follows:


HEWSPECS-P]DS Baseline

ii.

Study

Weekly

Weekly Hospital Income: Principal insured Spouse Each child/sibling

-

PS00.OO/unit 250.O0/unit 50.O0/unit

Surgical Principal Spouse

of

and

Covered

room

than

The

PS00.OO/unit 250.O0/unit

-

premium

payment

50.00/unit

as

comparisons.

medical

reimbursement

well

conditions

per

covered

benefits

(i)

cost

below under

are the

generally

Conditions For

C.

pre-existing

OF

recurrent

illnesses,

in

nature

coverage

per

or

takes

actuarial

medicines

and

and P250.00 examinations

per of

coverage

by

most

DOH

require effect

policy,

e.g.,

prolonged after

leprosy, treatment.

six

months

not restricted laboratories

of to and

MEMBERS/ENROLLEES

During the last quarter of 1991, there were ],984 individual policy holders and 50 policies on _cheme, Data on the characteristics of these policy _% the time of the survey.

SERVICE

and

from

as per insurance policy. Members or enrollees are set of accredited health providers such as hospitals, because the company accepts all licensed providers.

PROFILE

ii_,

drugs

on

policy:

d.

membership a limited doctors,

based

for spouse laboratory

excluded

company's

Conditions which are not work-related; New procedures like lithotripsy, ultrasound; Conditions/diseases requiring isolation as cholera, etc.; are

of

PI,2SO.O0 and (iLl)

a. b_ c.

which

are

accident.

listed

are

as

are:

up to P2,500 for principal, and board at P700.O0/day;

Pl,400.00

but

Fees: -

industry

for

hospitalization child; (ii)

Professional insured

child/sibling

amount

computations

insurance

Page 84

PS00.OO/unit

Each

more

Insurance

-

iv.

The

Health

Indemnity

iii.

not

on Private

UTILIZATION

PATTERN,

BY

2,000 group policy voluntary payroll holders were not

holders, deduction available

MEMBERS

7

The

_i

company

I..]_N_GEMENT !i_._ _Ths

_'_fj_4_i_

AND

not

company

_ ,,_....

__@_;insured, _/_|ii'per _?_9@_should

have

OPERATING

Marketinq

_0_i%nsurance _@,ntives _

does

sells

and

processed

data

on

medical

benefits

utilization

SYSTEMS

Recruitment insurance

brokers. A_ents and proflt-sharzng

through

its

and brokers schemes on

network

of

150

are compensated a case to case

individual

agents

by commissions, basis.

....

group

in case of group e.g. 2-4. In terms not be more than 65

insurance, must meet minimum of age requirement, the principal years old while the child/sibling

number of insured should


HEWSPECS-PIDS Baseline Study on Private HeaLth Insurance

be

aged

i9-23 The

policy

years

old.

following

limits

are

observed

by

the

company

in

accepting

or

rejecting

holders:

a.

High benefit salary;

limit.

b.

Politicians. therefore

They are usually readily accepted;

c.

PBge 85

not

Those

with

2.

Premium

Benefits

existing

policies

should

not

high and with

exceed

risks

many

due

claims

ten

to

are

times

ambush

the

cases

usually

not

annual

and

are

accepted.

Collection

.i

salary

The Reference deduction, 3.

As following a,

Claims

collects regular (agent/broker),

discussed,

benefits

Presentation of reimbursement hospital statement of account, For

c.

For death necessary

accident

claim

a. b. ¢,

submit Forward Return

for

police

processing

extended

report

must

for

of

be

autopsy

claims

with

to

members

Medical amount

through

reviews/assesses

and

reimbursement

review to of benefits

these

determine availed;

the

claims

and

marriage

filed

based

appropriateness

the

attached official receipt, attending physician;.

accomplished;

report

through

by

the

reimbursement claims to the Claims Department; documents to Underwriting Department for verification; documents after verification to Claims Department for

The company .considerations: _,

-

are

claims forms certification

claim - accomplished are required documents.

Procedures fellows:

premiums from policy holders bank and credit card.

Processinq

previously procedures:

b.

as

Company collector

on

the

contract

if

insured

are

and payment. following

.of

service

provided

or

of

benefit

ceilings

or

[,

_, .....

Financial standard

!_i_.

Accounting

.The usual, !_!_._ant is 3-4

ii_,_:_[

'COST

review to cost; and review

to

amount days.

of The

CONTAINMENT

'.Screening __i6_tion of

i

determine

proper

determine time to shortest

MEASURES

AND

application

veracity

of

process claims is 2 days and

receipts. and effect the longest

payment to is 14 days,

the

MECHANISMS

for adverse selection exclusions and limits

through are the

use main

of application cost-containment

form and measures


HEWSPECS'PIDS Baseline Study on Private Health Insurance

Page 86

Fraud and abuses were occasionally experienced by the company in the form of ghost confinement and connivance between the claimant and hospital and/or doctor. There are, however, safeguards adopted to minimize or avoid said fraud and abuses. Concerned brokers/agents are called to discuss the problem whichr if verified to be true and correct, could result in the suspension of the employees

'G."

However,

and

non-renewal

PERFOR]4ANCE Company data

of

INDICATOR

coverage.

AND

has provisions on the number

FINANCIAL

STATUS

for reinsurance with of reinsured members

American was not

International available.

Group.

Salaries of personnel, supplies and con_unication expenses are the main items of administrative expenditures. Most of these come from Reference company's accounts, the excess of which is added to reserve fund. Again, the amount spent for administrative purposes was not available.

Ho

RESPONDENT'S

VIEW

ON

The company respondent requirement for operating that affect the growth and as follows: a.

Household

b. C. â&#x20AC;˘ d.

Education; Economic Government

Household affecting the buy insurance The knowledge insurance

incomes

INDUSTRY

PROSPECTS

did not cite any administrative a health insurance. However, development of health insurance

and

and capitalization factors and conditions operation were cited

employment;

progress; and incentives. incomes and employment growth and development only after he has met

were considered the most important factors of health insurance because a person will his other basic needs.

most serious problem perceived as about the business. In this regard, and scope of its coverage.

affecting agents

insurance must explain

is the lack of very well the


HEWSPECS-PIDS Baseline

Study

Case Report No. Reference Company Area(s) Studied:

A.

Qn Private

9: No. NCR

HeaLth

(Foreign 4

Insurance

Non-Life

Page 87

Insurance)

IDENTIFICATION The

agent issued

Reference

in 1839. at that

Company

The time

started

doing

Reference Company which is displayed

business

still at

has the

in

the

in its branch

Philippines

through

possession a marine office lobby.

The Philippine branch of the Reference Company was opened for business 1904 and has become a distinguished member of the local insurance community. Reference Company is directly linked by modern technology to its head office Hongkong. In 1960, it become leading .insurance companies.

offers