rural National Cooperative Medical Scheme (NCMS) did not reduce out-of-pocket spending, was accompanied by increased out-of-pocket spending on inpatient stay and did not decrease expenditures associated with an outpatient visit (Wagstaff et al. 2009; Hou et al. 2014). By contrast, the expansion of coverage in Thailand (which offered a near-comprehensive benefit package) was associated with reduced OOP and catastrophic payments, both by one-third, and by even more among those who had been spending the most (Limwattananon et al. 2013). What one can take away from these experiences is that the expansion of health insurance needs to be complemented by other health system reforms and policies – some of which will be discussed in section 5.3 – if financial protection goals are to be achieved.

# **5.2 Data issues and limitations**

The FIES is the best available instrument with which to measure trends in financial protection in the Philippines, but it has significant limitations: First, the survey does not contain any variable(s)<sup>8</sup> that allow us to assess whether the out-of-pocket expenditure reported in the FIES is net of health insurance reimbursements. Nor does it contain an instruction to households to net out insurance reimbursements in formulating their answers to the health expenditure questions. This means that the FIES may overstate the amount of out-of-pocket spending and the degree of catastrophic and impoverishing expenditure, thus underestimating the extent of financial risk protection<sup>9</sup> . This should not, however, affect the observed _trend_ of increased out-of-pocket spending and catastrophic payments since the bias would be systematic over time.

Second, changes in the degree of financial protection over time may partly reflect changes in the way that health spending is measured in the FIES rather than actual changes in expenditure (see Annex 1). We have attempted to limit the bias by homogenizing the data categories across years to the extent possible. While this could be done quite effectively for survey waves 2000, 2003, 2006 and 2009, the change in the way that out-of-pocket health spending module was constructed in year 2012 means that some skepticism needs to be exercised about the extent to which the observed rapid increase in out-of-pocket spending between 2009 and 2012 reflects actual increases in expenditure. Specifically, there are more categories of expenditure included in the survey (which is likely to increase the overall estimate by improving recall), expenditure items are organized differently, and some of the items are ambiguous and/or repetitive.

Subsequent rounds of the FIES would do well to (i) include a brief question on health insurance coverage, including PhilHealth coverage, (ii) make the distinction between out-of-pocket spending that is reimbursed and out-of-pocket spending that is not reimbursed by insurance, and (iii) review the categories of health spending included in the survey with a view to improving both the precision of the estimates and their comparability over time.

# **5.3 Policy and implementation**

> 8 There is a receipts category on “back pay and proceeds from insurance”, but one cannot distinguish health insurance from other types of insurance payments (or from back pay for that matter).

> 9 Since PhilHealth almost always reimburses providers directly, rather than members, this is more likely to affect the measurement of health expenditure of those people which have complementary private health insurance in addition to PhilHealth.

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