Philippine private hospitals told to avoid reckless spending

The country’s healthcare claims could increase by 21% this year.

Philippine private hospitals should cut costs by avoiding wasteful spending, including on medical supplies, to ease the burden on patients, as personal healthcare claims in the Southeast Asian nation could rise by 21% this year — the highest in Asia.

“We analyse each procedure’s actual cost to remove unnecessary expenses and implement a just-in-time inventory system to reduce waste in medical supplies,” Beaver Tamesis, CEO at Asian Hospital and Medical Center, told Healthcare Asia.

Private hospitals should also start offering affordable medical packages for procedures such as gallstone removal and pneumonia treatment, instead of catering only to the rich, he said via Zoom.

While the cost of medical claims across Asia is expected to stabilise this year, the Philippines is expected to experience a 21% increase in healthcare claims — the highest in Asia, where the average rate is placed at 13%, according to a Mercer Marsh Benefits report. The so-called medical trend rate in the Philippines was also estimated at 21% last year after rising 24% in 2023.

Rising costs associated with advanced treatments and an overall increase in healthcare service prices are driving the increase, said Vicky Ongchangco, Mercer Marsh Benefits’ Philippine advisory leader.

“For instance, 80% of Asia insurers reported an increase in the incidence of cancer treatment claims,” she said in an emailed reply to questions. “There is also an increased volume of utilisation and a shift towards higher-cost treatments and medications.”

A shortage of health workers is also driving the rise in claims as more Filipino professionals work overseas for better pay. “This situation is compounded by a significant increase in medical fees and salaries, which have risen by approximately 25% as set by professional healthcare organisations,” Ongchangco said.

“As private hospitals raise their prices to cope with rising medical claim costs, employers may face higher premiums for health insurance plans as insurers will likely pass on the increase,” she added.

Tamesis said hospital operational costs remain high due to sterilisation protocols, infection control, and equipment. “Medicine costs also increase due to importation and research and development expenses.”

“Medical inflation is always high — it’s even double compared with standard inflation,” he added. Mercer Marsh projects Philippine inflation this year at 3%.

“There is a growing need for more accessible outpatient services,” Tamesis said. “Specialised treatments like outpatient antibiotic therapy can help prevent unnecessary hospital admissions.”

Tamesis, who is an internist and cardiologist, said partnerships with health maintenance organisations (HMOs) to enhance insurance coverage could help address the problem.

Allocating Philippine Health Insurance Corp. beds ensures that even government-supported insurance could be used in private settings, he added.

The insurance industry is stepping up to address the financial burden, said Nandy Villar, AXA Philippines chief marketing officer. “We have a critical illness product that offers extensive protection, covering over 150 conditions across different stages,” he said in an emailed reply to questions.

Public-private partnerships, capacity-building programmes and telemedicine integration in medical education are also expected to ease the strain. “Efficient claims processing can also contribute to financial sustainability,” she added.

“Treatment advancements are good for care, but they tend to be expensive,” Villar said. “These are realities hospitals and insurers must continuously navigate.”