Press Release
August 4, 2020

PhilHealth may collapse in 2022 if COVID-19 persists, its official admits

Senate Minority Leader Franklin M. Drilon raised serious alarm over the possible collapse of Philippine Health Insurance Corp (PhilHealth) by 2022.

"This is really a cause of concern for the entire country. I am dumbfounded," Drilon said when PhilHealth Acting Senior Vice President Nerissa Santiago said the agency may no longer be able to sustain operations by 2022 due to the high payouts and decreased collections amid the COVID-19 pandemic.

During the Committee of the Whole inquiry, in aid of legislation, into the alleged rampant corruption, incompetence and inefficiency in the PhilHealth, Drilon asked about the state-insurance actuarial life given the increased utilization during the COVID-19 pandemic.

PhilHealth acting SVP Santiago responded: "Because of the decreased contribution and increased COVID-19 payout, we are expecting by 2021, we will be on the 'red' (alert)...We can only survive with additional subsidy coming from the government."

Santiago further said that from 10 years, its actuarial life has been reduced to a year due to the pandemic, saying that there will be no more reserve funds by 2021.

Visibly shocked and concerned, Drilon clarified: "Are you saying in 2022, there will be no PhilHealth?"

Santiago answered in the affirmative, saying that the agency projects net operating losses at P90 billion for 2020 and if the pandemic persists by 2021, operating losses will total P147 billion. She said the PhilHealth system will "collapse" by then.

The minority leader then asked the PhilHealth to implement measures to prevent the collapse of PhilHealth.

Drilon said controversies continue to haunt PhilHealth because it does not follow simple auditing rules.

"We are in this mess because of Philhealht's non-compliance with rules, including a simple COA rule. That is why we have all these problems because you disregard all the rules designed to protect public funds," Drilon told PhilHealth President and Chief Operating Officer Ricardo Morales.

The Senate chief fiscalizer was referring to the Commission on Audit rule that no additional cash advances shall be allowed to any official or employee unless the previous cash advance given to him is first settled or a proper accounting thereof is made.

"Per COA rules, you must first liquidate before further advances be made.", Drilon reminded PhilHealth upon learning that the agency released about P15 billion to the hospitals from its controversial Interim Reimbursement Mechanisms even if only P1 billion was liquidated.

"Even the name Interim Reimbursement Mechanism is a misnomer because this is not a system of reimbursement but an advance - one with very weak liquidation procedure, " Drilon said in disbelief.

At the start of the hearing, Drilon lamented how nothing has changed in PhilHealth since the Senate conducted a thorough investigation on the allegations of fraudulent claims, overpayments, and ghost dialysis last year.

"We are at war, yet it seems that the plague of PhilHealth corruption could be more fatal than any other virus," said Drilon.

Drilon asked: "How can you sleep well at night?"

"It is absolutely outrageous and offensive that in the midst of our fight against a dreaded disease that has so far infected over 100,000 of our people, killed over 2,000 people, claimed over five million jobs, and brought hunger to over 5 million families, the agency mandated to provide health insurance coverage and ensure accessible health care services for Filipinos continues to be haunted by controversies," Drilon stressed.

In May this year the minority leader bared the overpricing of PhilHealth COVID-19 testing kits, which forced the health insurance agency to bring down the cost from P8,150 to P3,409. This saved the government over P9 billion, on the basis of a projected two million tests.

"Nakakalungkot dahil nasa gitna po tayo ng pandemya. Ang apela po ng taumbayan: makonsensya naman po kayo," Drilon said.

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