Press Release
September 7, 2020

Transcript of Senator Pia S. Cayetano's Manifestations During the Period of Amendments on the CoW's Committee Report on PhilHealth

Part 1

Sen. Pia: Mr. President and Mr. Senate President and Sponsor, I have a very serious concern with that amendment because the very nature of the case rate is it averages the expense of an ailment across all types of health facilities. So whether you are a very high end hospital, let's say St. Luke's, Makati Med, or a very low end small public hospital in the province, they study that rate and create an average.

And that does a way with all the meticulous reporting of Q-tips, cotton buds, syringe, paper cloth, all the medicines. Kasi otherwise, every single ailment would have to be itemized by the medical professional and the hospital and submitted to Philhealth.

And that is why the case rate system is considered the gold standard all over the world because it allows an easier system to deliver the service immediately and payments should be done immediately. It is not flawless, and there have been criticisms on this, but it far outweighs the disadvantage of one-by-one itemizing these expenses, including professional fees na na-itemize din if we go back to the per-fee system, that is called the fee-for-service.

I can explain this longer to anyone who would like to understand it better, but the minute you introduce the concept that whichever is lower, then you are basically shifting to the fee-for-service. And that is exactly the opposite of the case rate system, which is institutionalized now in the Universal Health Care Act.

So that's the brief explanation, Mr. Sponsor. I feel very strongly about it because yun nga po, it is the gold standard of the world. The developmental partners of DOH and Philhealth, ito ho yung mga WHO, and even our local health experts from PGH and all across the medical associations support po the case rate system.

So, may I strongly urge that we not include that kind of language. But I have language, and when my time comes, my proposal really is to support the case rate and put in the other safeguards so that we minimize the abuses of the case rate, but we cannot go back towards fee-for-service, Mr. President, with all due respect.

SP Tito Sotto asks if Sen. Pia has any objection to the 2nd paragraph

Sen. Pia: Unfortunately, I don't even know what the MIDAS is, Mr. Chair. So as long as hindi ho siya... Yes opo.


Part 2

Sen. Pia: I had a series of meetings and more research to provide more technical data in our Committee Report. And since it's already very lengthy, it's already 12 pages long, I deemed it better to just submit a separate opinion, which I will do.

But what I would like to do with the permission of the sponsor is I will pull out as I have, a few short paragraphs to include as amendments, including the point on the case rate, as requested to clarify that issue, and then the rest, with the more lengthy explanation, I will just submit as a separate opinion, with the permission of the good sponsor.


Part 3

Sen. Pia: Mr. President, I concur with both the Senate President and the Minority Floor Leader. I have no desire to burden my colleagues with my separate opinion. I will just be submitting that separately, for those interested in the technical details on the case rate system, etc. It will all be there.

But because the item on the case rate system was brought up, I was not even going to propose it as an amendment but I think it's timely because I would like to explain my point on it. I have read it, it's a few paragraphs long. And then the other two points, Mr. President, are just additions to what I already amended, just an additional paragraph or two.

So I am ready to proceed, unless His Honor would like a copy, and I am checking with my staff if they have already provided your staff a copy.

SP Sotto said he is willing to listen to Sen. Pia's proposed amendments

Sen. Pia: I am ready, Mr. President...

Mr. President, with your indulgence, on Page 80... It's part of the recommendations, before the recommendation that starts with "increased involvement of COA," I will insert another paragraph... Add a new recommendation to read as follows:

"IMPROVE THE COOPERATION AND COORDINATION BETWEEN THE COMMISSION ON AUDIT (COA) AND PHILHEALTH TO ENSURE SOUND AND ETHICAL SPENDING OF GOVERNMENT FUNDS. In particular, with regard to the case-rate system, which is the gold standard in many parts of the world, COA auditors and management must have a clear understanding of how the case-rate system works.

PhilHealth, along with its developmental partners and health finance experts, should conduct training workshops with COA auditors and management. COA and PhilHealth should eventually prepare technical guidelines, and promulgate orders and issuances aligned with each other regarding the implementation and auditing of the case-rate system."

I submit.

A very brief explanation, Mr. Sponsor is simply that, I understand that the technical people in PhilHealth and DOH have encountered difficulties also with COA in terms of their understanding of how the case rate system works. And I can explain that even further later on on the part on case rate. But the only objective here is that from management down to the auditors, they must understand first how it works and conduct workshops so that they understand it when they start auditing, Mr. President.

Sen. Drilon asked if the amendment involves a pre-audit on part of COA

Sen. Pia: Not at all. The sole objective really is for them to conduct the workshop so that they understand what is this case rate. It's a different system that might defy basic logic. So that's all it is.

SP Sotto accepted the amendment.

Sen. Pia: Thank you for that, Mr. President, may I proceed with the next?

The next item is on Page 82. This is just before the recommendation that starts with the line, "For the PhilHealth to look into strengthening..."

To add a new recommendation that reads as follows:

"RESTRUCTURE PHILHEALTH TO ENSURE THAT POSITIONS ARE IN LINE WITH THE MANDATE OF PHILHEALTH, AND THE EMPLOYEES HIRED ARE QUALIFIED FOR THEIR POSITIONS. It should be pointed out that prior to the implementation of Republic Act No. 10351 or the Sin Tax Law of 2012, PhilHealth was focused on membership and collection. This is the reason the majority of the personnel in PhilHealth were dedicated to such functions. However, after the Sin Tax Law of 2012, the focus of PhilHealth changed as the national government expanded health insurance coverage by providing the PhilHealth premium subsidy for indigent families and senior citizens from the incremental revenue from the excise tax on all tobacco and alcohol products, thus decreasing the need for PhilHealth to focus on membership and collection. But the bulk of Philhealth personnel were hired for that purpose and are still holding those positions.

Due to the changes in the focus of PhilHealth, the organization must have a set of personnel trained in accreditation and provider payment or reimbursement, also known as "strategic purchasing". In addition, PhilHealth should monitor HCIs to ensure quality care is provided and there are no fraudulent transactions submitted. PhilHealth needs the support of these technical personnel to perform critical functions exclusively mandated in PhilHealth."

I submit, Mr. President.

SP Sotto accepted the amendment.

Sen. Drilon asked if Sen. Pia is suggesting that there should be a redundancy program in PhilHealth to streamline their personnel force

Sen. Pia: Thank you so much. I'd like to express my gratitude for pointing that out because he correctly observed that that is the direction that I am recommending. I did not go so far as directly saying it because to be honest, I was cramming my studies over the weekend on this issue. But it does appear that we should consider a redundancy program. So would the Minority Floor Leader like to suggest an amendment to my amendment, directly saying for PhilHealth to consider, to study the possibility of a redundancy program? I am very happy to accept that.

Sen. Drilon confirmed that he is willing to propose an amendment, subject to style.

Sen. Pia: Actually, Mr. President, and now is the last one on the case rate. Mr. President, still on Page 82, after the recommendation that reads, "For the PhilHealth to look into strengthening its manpower..." An insertion of another recommendation there, Mr. President. I will proceed with your permission.

"PROPERLY IMPLEMENT THE CASE-RATE SYSTEM AS INTENDED UNDER THE UHC ACT AND CONTINUOUSLY UPDATE CASE-RATE DATA TO IMPROVE ACCURACY. The case-rate system is one of the global best practices introduced in the Philippines even before the passage of the UHC Act. It is a fundamental feature of the UHC Act.

The objective of the case-rate system is to simplify and make it efficient to bill treatments. It is a payment scheme where a fixed amount is paid to health care institutions (HCIs) per instance of treatment of a specific illness or "case". The amount to be paid per case is computed from the average cost of treatment in public and private HCIs, which includes professional fees, medical tools, bed fees, and medicines. Being an average, there will be instances when the payment is insufficient to cover treatments as it is when a case is more complex - more tests or procedures are done and if it is in a private hospital. But there will also be times when the payment exceeds the cost of treatment, more likely to be the case in public hospitals. Given the foregoing, the payments to the HCIs are expected to balance out.

The case rate system far outweighs the disadvantages of using a Fee-for-Service system which is not only a tedious process requiring the submission of every expense that forms part of the procedure, but has also been shown to be more prone to abuse by way of over-charging what was actually used and over-prescribing procedures or medications.

However, we must take note that the case-rate system currently utilized by PhilHealth is merely in its initial stages.The next step for PhilHealth is to introduce the Diagnosis Related Groupings (DRGs) in the current case-rate system, as provided for under the UHC Act. DRG classify cases according to the following variables: principal and secondary diagnoses, patient age and sex, the presence of co-morbidities and complications and the procedures performed. DRGs will ensure that benefits given to patients are tailor-fit, as the benefit rates will be modified based on a database of reimbursement rates that will provide average differential cost per treatment."

I submit.

Mr. President, brief explanation. The case rate system is a complex case and we also have to graduate into, not just always updating the case rate, but graduating into this DRG. Yung DRG will provide different kinds of classification within the same kind of ailments. So kung bata ka, mas maliit yung cost kasi the chances of you having complications will be much less, and so on and so forth. Ito po yung sinasabi ko na medyo mahaba yung explanation ko, that's why it's in my own separate opinion. However, because of the questions raised, I shortened it and I am submitting it to the main Committee Report, with the permission of course of the good sponsor. Thank you.

Sen. Lacson said the case rate system has been the source of corruption

Sen. Pia: Mr. President, I am happy to respond. May I? As I mentioned, Mr. President in the other recommendation that was already approved, that is precisely why we are suggesting that there would be these workshops and training programs with COA auditors and management. Because without a clear understanding of how case rates work, madali hong sabihin na it's a source of abuse, because it can be abused, like any system.

Again, with the example I gave you, if you look at pneumonia, obviously, St. Luke's, Makati Med, or whatever private hospital will always charge for pneumonia much more expensive than a public hospital, right? And yet, the case rate is the same, regardless kung private or public. So may savings talaga si public hospital diyan. Now if we will now go with the way of COA and simply say, "Ay, mag fee-for-service kayo kasi mas mura kayo 'pag fee-for-service diyan," then we will now open that pandora's box wherein the disadvantage we are told far outweigh the disadvantages of the case rate, because dito naman, they can put in any expense that they want and the tendency in the fee-for-service, Mr. President is that, they overprescribe. Because they can charge it.

Yan ho yung parang sa US... If I may ask you to visualize whatever you know of the US system, wherein angtaas-taas ng healthcare cost, it's because they keep charging it to the insurance provider. Ganyan ho ang mangyayari sa fee-for-service. The doctors will feel the need to keep ordering all these kinds of tests dahil may magbabayad. And that is PhilHealth. Even the abuses will happen that way, kahit hindi kailangan yung procedure na yun o test na yun, papagawa nila. So doon ho yung disadvantage ng fee-for-service. And that is why all the health experts have weighed in on this and they recommend the case rate.

In any case, all we are saying is let's allow COA to be trained properly and then we can hear from them kung ano pa ang ibang recommendations nila, Mr. President.

I submit.

Sen. Drilon said he would endorse Sen. Pia's proposal to stick with the case rate system.


Part 4

Sen. Pia: Yes, Mr. President. I understand where the presiding officer, the good gentleman from Cavite is coming from. This is also why I go back to the recommendation in the case of COA because it makes total sense what his honor is saying, whichever is lower. However, that goes against the very nature of how the case rate system works. Because the way the case rate system works, it does away with the tedious process of itemizing every expense. It will just be submitted that "Item No. 1" which is "Case Rate 0001" as happened, therefore approved.

Pagka hong meron tayong "or whichever is lower," then you will now require that PhilHealth, who is already so inefficient and undermanned with people who are qualified to do this job, will now be comparing the case rate and every single itemized item that is being presented to them. That is the fee-for-service. So technically, the simple amendment of the good gentleman, which I said in principle, makes sense, actually opens the door for the fee-for-service. Nagiging fee-for-service na po siya by giving that "or," by providing for that "or," you are then saying pwede ka namang mag fee-for-service. Yes, nandun ho yung, captured po ang concern ng ating colleague from Cavite na lower, but yung efficiency ngayon ng Philhealth to itemize every single one will really wreak havoc, I believe, on the system of Philhealth. That is my understanding, Mr. President.

Sen. Lacson said Sen. Marcos brought up the problem of upcasing during the hearing.

Sen. Pia: Mr. President, I'd like to thank the gentleman for his concerns. Kasi they are very valid concerns. But again, I will also repeat that that's why part of my recommendations are that no. 1, the case rates are regularly updated so it captures what are the ailments and concerns of the time, and no. 2 din, ang malaking culprit din kasi dun sa situation na sinasabing upcasing is because currently, we do not have outpatient treatment. And that is also part of my recommendations, which is already in the separate opinion, because I did not want to burden the Chair and the Committee with them. But that is such an important component, because imagine, kung mabibigyan ang outpatient ng tablets or ng medicine, then hindi na siya tatanggapin sa ospital.

Ang nangyayari, and I mentioned this during the debates in the Committee of the Whole, some doctors, without malice, without intention to defraud, would agree to upcasing kasi walang pambayad ng gamot yung bata o matanda. So kesa wala silang gamot or whatever, D"Sige upcase na lang natin yan. Pneumonia na lang yan." Pero sa totoo lang, with an outpatient treatment, it will be solved. Now the Universal Health Care provides for outpatient treatment, and I will present you, my dear colleagues, with a challenge. We have to ensure that the budget for 2021 will now include a budget for outpatient because that will address the upcasing, or one of the instances of upcasing.

SP Sotto accepted Sen. Pia's final amendment.

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