R.

A 7875: The Philippine National Health Insurance act of 1995

AN ACT INSTITUTING A NATIONAL HEALTH INSURANCE PROGRAM FOR ALL FILIPINOS AND ESTABLISHING THE PHILIPPINE HEALTH INSURANCE CORPORATION FOR THE PURPOSE. This Act was approved on February 14,1995 by then President Fidel V. Ramos Health Situation in 1995 The Department of health reports that in 1995, "The infant mortality rate (IMR) was 48.9 per 1000 live births, (still within the WHO's global goal which is 50) while death of children below five years of age was at 67 per 1000. The maternal mortality rate was at 1.8 per 1000 or 18 maternal deaths per 1000 live births1." Whilst the average statistics given by the DOH report, the mortality rate in the Philippines was attributable not to accidents or natural causes but mostly to the inadequacy of medicine and other affordable health care facilities. Goals of the Act The Act seeks to create a committee that will oversee and ensure the efficient facility of a health care system that will not only assist its member beneficiaries in terms of monetary assistance, but will also ensure their proper diagnosis and treatment.2 More specifically, under Section 3 the act provides that it will: y y Help Filipinos gain financial access to health services Create a National Health Insurance Program that will provide the financial means for the member beneficiaries of the program Prioritize and accelerate the provisions of health care services to all Filipinos, especially those of the marginal demographic. Establish the Philippine Health Insurance Corporation that will serve to administer the implementation of the program.

World Health Statistics, 1995; World Health Organization, Available at http://www.who.int, Retrieved on 6/19/11 Article 1, Guiding Principles R.A 7875

Purpose of the Act The National health insurance program was created to provide health insurance coverage and ensure affordable, acceptable, available and accessible health care services for all citizens of the Philippines. The insurance program shall serve as the means for the healthy to help pay for the care of the sick and for those who can afford medical care to subsidize those who cannot. 3 The Program shall include a sustainable system of funds constitution, collection, management and disbursement for financing the availment of a basic minimum package and supplementary packages of health insurance benefits by a progressively expanding proportion of the population.4 The Program shall be limited to paying for the utilization of health services by covered beneficiaries or to purchasing health services in behalf of such beneficiaries. It shall be prohibited from providing health care directly, from buying and dispensing drugs and pharmaceuticals, from employing physicians and other professionals for the purpose of directly rendering care, and from owning or investing in health care facilities.5 Succinctly put, the program shall be limited to the financing of health care services in a general scope. It shall only deal with healthcare providers in a massive scale so as to pay for their services for the general public. Scope of health benefits provided by the Act The Act is limited to monetary assistance for expenses covering inpatient and outpatient hospital care like room and board, doctor fees, diagnostic, laboratory and other medical examinations, use of surgical and medical equipment facilities, emergency and transfer services as well as the purchase of limited prescription drugs and biologicals.6 Corollary however, services like the purchase of non-prescription drugs, out-patient psychotherapy and counseling for mental disorders, drug and alcohol abuse or dependency treatment, cosmetic surgery, home and rehabilitation services, optometric services and normal obstetrical delivery are generally not covered by the act but may be subject to exemptions dependent upon the discretion of the board. 7

Article 3, Section 5 R.A 7875 Ibid., Ibid., Article 3, Section 10 R.A 7875 Article 3, Section 11 R.A 7875

How the program works The Act provides for the creation of a tax exemptedPhilippine Health Insurance Corporation that will have not only administrative but also quasi-judicial powers to the extent needed to effectively carry out the purpose the law has mandated it to serve.8 Generally, the Corporation s administrative powers range from the formulation and promulgation of policies for the program, establishment of standards together with rules and regulations necessary to ensure quality of care, appropriate utilization of services, fund viability, member satisfaction, and overall accomplishment of Program objectives, the management and efficient disbursement of the corporation s funds, the acquisition of property necessary for the implementation of the program, authorization of local health care institutions and professionals, the establishment of Local Health Insurance Officers to serve as its agent, the power to sue and be sued in court, and all other powers necessary in the execution and efficient implementation of the act. 9 Its quasi-judicial powers on the other hand range from the conducting of investigations and rendering of decisions, orders and resolutions in determining questions, controversies, complaints, or unresolved grievances brought to it, the summoning of parties to controversies, issuing of subpoenas requiring the attendance and testimony of witnesses as well as the production of documents and other materials necessary to a just determination of a case under its investigation, and the temporary suspension, permanent revocation or the restoration of an accreditation of a health care provider or the right to benefits of its members, and the imposition of fines after due notice and hearing with its decisions immediately executory, even pending appeal if public interest so requires.10 How the Corporation works I. Administrative Composition

The Corporation is composed of a board of directors that serve as the primary officers in charge of carrying out the functions of the corporation. It is comprised ofthe secretaries of health, labor, interior and local government, social welfare or their representatives; representatives from the sectors of laborers, employers, self-employed and health care providers; the SSS administrator, the GSIS general manager and the corporation s president.11 The Secretary of Health is the ex-officio Chairperson while the President of the Corporation is the Vice-Chairperson of the Board.

Article 3, Section 14 R.A 7875 Article 3, Section 16 R.A 7875 Article 3, Section 17 R.A 7875 Article 3, Section 18 R.A 7875

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II.

Financial Composition

The Corporation has its own funding system that include in its sources contributions from program members, current balances of the Health Insurance Fund of the SSS and GSIS collected under the PhilippineMedical Care Act of 1969, as amended, including arrearages of the Government of the Philippines with the GSIS for the said Fund and other appropriations earmarked by the national and local governments for the program, subsequent appropriations provided for by the act, donations and grants-in-aid, and all other accruals of the corporation.12 The funds obtained by the corporation shall be segregated into: 1. The Basic Benefit Fund13-this portion of the program s fund shall be used to pay for the basic minimum health requirements of indigent and non-indigent beneficiary members as well as the premium for the basic minimum requirements of members of the SSS and GSIS Medicare programs. 2. The Supplementary fund14- this serves as the source for the additional benefits not included in the basic minimum benefit package but subject to the Board s approval. These supplementary benefits shall be financed by whatever amounts are available after deducting the costs of providing the basic minimum benefit package, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves for member beneficiaries of the SSS and GSIS-Medicare. 3. Reserved funds15- this shall comprise a portion of the corporation s accumulated revenues not needed to meet the cost of the current year s expenditures with the condition that if the amount exceeds the estimated budget for the year, the Program s benefits would be increased or the member-contributions decreased accordingly depending on the amount obtained from this reserved fund. All other funds in excess from this reserve are to be invested to short-term investments to earn an income. Such investments are those provided for under Section 27. III. Research and Development composition

Under Section 20 of the act, the Corporation shall create a financial research department that shall hold the function of broadening the academic resources of the Corporation with regards to equitable health policies and development, including anything in connection to the said field.

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Article 6, Sections 24 R.A 7875 Ibid., Article 6, Sections 24 R.A 7875 Article 6, Section 27 R.A 7875

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IV.

Logistical Framework

In the interests of public convenience and the efficient implementation of the program, the Corporation shall act through its local health insurance offices that will be designated in the different provinces.16 These local offices shall serve as the Corporation s means to reach its beneficiary members who reside in far flung areas and provinces.17 V. Jurisdiction

Each local health insurance office serves as an extension of the Corporation, subject to the rules provided by the latter. The scope of each local health insurance office may comprise not only a single locality but may also include numerous territories within its scope if it would serve efficiency and cost- effectiveness for the office.18 The scope of the program is not limited to the financial assistance of health care services but also entails the monitoring of quality assurance of services by health care providers. As provided in Sec. 37, the local health insurance offices also have the following functions: 1. To ensure that the quality of personal health services delivered, measured in terms of inputs, process, and outcomes, are of reasonable quality in the context of the Philippines over time. 2. To ensure that the health care standards are uniform within the Office s jurisdiction and eventually throughout the nation. 3. To see to it that the acquisition and use of scarce and expensive medical technologies and equipment are consistent with actual needs and standards of medical practice, and that: a. The performance of medical procedures and the administration of drugs are appropriate, necessary and unquestionably consistent with accepted standards of medical practice and ethics. Drugs for which payments will be made shall be those included in the Philippine National Drug Formulary, unless explicit exception is granted by the Corporation. b. The performance of medical procedures and the administration of drugs are appropriate, consistent with accepted standards of medical practice and ethics, and respectful of the local culture. In addition to this enumeration, it is also incumbent on the Corporation to set-up safeguards that will
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Article 5, Section 22 R.A 7875 Article 5, Section 23 R.A 7875 Article 5, Section 22 R.A 7875

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prevent the over or under utilization of services. These safeguards should be able to provide for the over-utilization of services, unnecessary diagnostic and therapeutic procedures and intervention, irrational medication and prescriptions, under-utilization of services and inappropriate referral practices.