PH healthcare costs seen to rise in 2025 — WTW survey

Medical costs in the Philippines are seen to climb by double digits, according to a survey by global advisory company Willis Towers Watson (WTW).

The WTW Global Medical Trends Survey showed that medical insurance costs are expected to increase by 18.3% in the Philippines.

The Philippines ranked the second highest growth among markets in Asia Pacific. Indonesia topped the list with 19.4% while Malaysia ranked third with 16.4%.

The survey was conducted from June to August 2024 with 348 leading health insurers as correspondents, representing 75 countries.

WTW local brokers representing 55 countries also participated in the survey.

According to the survey, the health maintenance organization (HMO) industry in the Philippines experienced significant losses of P1.433 billion in 2022 and further jumped to P4.269 billion in 2023 due to a substantial increase in claims and benefits paid.

Since then, the HMO industry has adjusted its pricing assumptions annually to deal with the continuous increase in utilization trends.

The survey also noted that medical inflation in the Philippines has been around 15% to 18% over the last three years, increasing to 19.3% in 2024

“Although reports indicate that HMOs are recovering in the first half of 2024, ongoing negotiations between two HMO associations and various doctor groups regarding a potential 80% to 150% increase in professional fees are still driving the projected double-digit medical inflation projected for 2025,” said Nel Badal, WTW head of Health and Benefits in the Philippines.

The survey said the increase in the cost per claim is attributed to the higher cost of medical services and procedures.

“Insurers are facing heightened increases in both utilization and unit prices as primary cost drivers,” the survey said.

The top internal driver influencing medical trend rates is “medical practitioners recommending too many services” with 79%. This includes overprescription of both medications and diagnostics, which results in unnecessary and excessive costs.

Meanwhile, insurers cite “higher cost of new medical technologies” as the top external driver influencing medical trend rates with 73%.

The other external factors are the continued pressure being placed on private healthcare providers as public healthcare systems are overwhelmed, and the lack of cost-sharing in plan design

“Continued pressure is being placed on private healthcare providers in the Philippines. Although the rise in availability of telehealth and other virtual care offerings is expanding access to healthcare in the Philippines, it also contributes to increasing costs,” Badal said.

“Coupled with the shortage of manpower in the healthcare sector in the country, the double digits trend of medical cost increases remains and is expected to rise in the near future,” she added.

To help manage healthcare costs and inclusive service, the WTW survey said there is a need for sustainable solutions and joint efforts from individuals, healthcare providers and the government.

“Cost sharing aimed at apportioning medical costs between insurers and members can also help to manage costs. This will help to minimize overuse and overprescription of care,”  the survey said.

In Maki Pulido’s "24 Oras" report on Tuesday, the hospitalization bill of Leonora Santiago’s husband reached P400,000 when he was amputated due to complications brought on by diabetes and stroke.

But even using his PWD discount and PhilHealth, the family was still short of P65,000, which led Leonora to be in debt.  She said she takes out a portion of her monthly salary to settle their balance.

Aside from the hospital bills, Leonora said she has to raise money for her husband's maintenance medicines.

To make do with their limited budget, she said she sometimes gives him less medication than what was prescribed.  

Meanwhile, 80-year-old Magno Galana said check-ups, laboratory fees, and medicine still take a big chunk of his budget despite the discounts.

Private Hospitals Association of the Philippines Inc. president Dr. Jose Rene de Grano said the cost of hospitalization, medical supplies, and salary of nurses also increased.

PhilHealth earlier implemented a 50% increase in around 9,000 health packages despite a zero government subsidy for 2025. 

The state health insurer said no law regulates hospitalization costs. While there are increases in benefit packages, hospital charges are also rising.

Because of this, PhilhHealth said it would study implementing a ceiling price on charges of private hospitals.

“We need to negotiate with the facilities and the doctors. And also, we need to get their actual cost para alam po natin gaano kataas o gaano kababa isset ang fixed co-payment (to know the amount that will be set as fixed co-payment),” Pargas said.

The Department of Health (DOH) said PhilHealth needs to step up since more than 40% of hospitalization bills are shouldered by the patient while it only pays for 10%.

“Ang trabaho ng PhilHealth ay bayaran ang benepisyo ng mga miyembro nito at para mangyari yun, dapat mabilis yung bayad. Ikalawa, yung pag estima ng amount ng bayad, tama,” DOH spokesperson Albert Domingo said.

(PhilHealth’s job is to pay for the benefits of their members and to make it possible, they should pay it swiftly and the estimated amount should be accurate.)—LDF, GMA Integrated News