Mercado vows reforms to cure PhilHealth 'ills'

(UPDATE) "AS a physician, I see PhilHealth is... marred with illnesses, and it's my job to treat it," the newly appointed president and chief executive officer of the Philippine Health Insurance Corp., Edwin Mercado, said Wednesday, as he vowed to expand member benefits and speed up the digitization of processes at the state health insurer. "The first thing I need to do [is to] study carefully what are the processes that need to be changed to implement the directive of our president, to continue and extend PhilHealth benefits," he said in a press briefing at the Palace. Mercado said his first priority was to review and refine PhilHealth's processes to ensure efficiency and eliminate financial leaks. "One of the key issues we need to fix is wastage. We will standardize financial reporting so that our records are consistent and transparent," he said. Mercado said that discrepancies in reports have made it difficult to track the agency's financial health. "First, we need to clean up and standardize financial reporting, which should be manageable since it mainly involves defining a chart of accounts," he said. "Once we have the data, we will use it as a reference point — we're moving forward apples to apples," he added. To improve claims processing and prevent fraud, Mercado stressed the need for a long-term solution through digitization. "We are pushing for digitization because it will help us adjudicate claims efficiently and determine the actual funds needed for benefit distribution," he said. Mercado said PhilHealth was also procuring tools to enhance membership tracking and claims adjudication. "Another priority is the computerization of our system. Once we can implement digitization, we can flag excessive or questionable claims," he added. On benefit management, Mercado said the agency would build on the reforms initiated by the former PhilHealth president, Emmanuel Ledesma Jr. — particularly the 50 percent increase in benefits implemented in January. "We can discuss with hospitals how the 50 percent increase can be deducted from existing PF (professional fees) and hospital [fees], which are usually subject to deductions," he said. Asked about criticisms that PhilHealth prioritizes investments over benefits, Mercado said the agency would comply with Supreme Court rulings on the matter but assured the public that funds would be allocated based on data-driven assessments. Being a doctor, Mercado said he understood the difficulties health care providers faced when dealing with PhilHealth. "I'm a doctor. So my approach comes from my experience on the other side of the fence dealing with PhilHealth. We have identified the pain points, and those are what we will address first," Mercado said. He also stressed the importance of reducing catastrophic health care expenses for PhilHealth members. "The number one concern is what we call support value. We will analyze which illnesses most commonly lead to catastrophic health care expenses," he said. The PhilHealth chief said the goal was to ensure an evidence-based standard of care in medical procedures, which would serve as a guideline for benefit adjustments. "The standard of care is based on evidence-based data that specifies the necessary lab tests and procedures for each disease," he said. Mercado said PhilHealth would also work with health care providers to align their services with these standards. "We will engage health care providers to follow the standard of care as part of a whole-of-nation approach. Since we are expediting the payment cycle, I also want to incentivize those who comply with these standards," he added. Asked whether he plans to reshuffle PhilHealth officials, Mercado said a staff review was ongoing but emphasized a unifying approach. "We are here to heal, to bridge, and to see what else we can contribute to the expansion of benefits and the improvement of processes," he said. Meanwhile, Mercado said PhilHealth would abide by the Supreme Court's ruling on the transfer of P89.9 billion excess funds to the National Treasury. "We respect the process that the Supreme Court is undergoing, and we will abide by whatever ruling the Supreme Court will have," Mercado said. The Court started oral arguments on the case against the transfer of PhilHealth funds to the National Treasury, which would be used for other government projects. So far, PhilHealth said P60 billion has been transferred to the National Treasury, with only P29.9 billion remaining with the agency. A total of P89.9 billion in excess funds of PhilHealth is expected to be transmitted to the state coffers on a staggered basis.