cash transfers program (called family development sessions), an outreach campaign at the local _barangay_ (community) level (through the “ _Alaga ka_ campaign”), and hospital-based interventions including signboards and patient outreach officers. An additional measure to consider would be to issue health insurance cards to all indigent members. This would help to overcome the problem that a number of people who are listed as beneficiaries in the PhilHealth database, and for whom the national government is providing subsidies, are not aware of their entitlements. If coupled with information pamphlets on benefits and/or an information hotline, knowledge of the full range of benefits could also be improved.

# _5.3.2 Continue to reform provider payments and enforce no balance billing_

Second, how providers are paid matters. In 2013, PhilHealth moved from a fee-for-service (FFS)-based reimbursement method for inpatient care to case-based payments which pay a fixed amount for the treatment of a particular disease or condition, regardless of the actual cost of treating the patient. In contrast to FFS which creates an incentive to encourage more patient visits, charge higher fees and prescribe more diagnostic tests and procedures than is medically necessary, the move to case payments encourages providers to treat patients more cost-effectively. On the flipside, it also carries the risk of under-provision of services and medicines, and of compromises on quality, and overall cost-savings will depend critically on the level at which the reimbursement is set. Primary care is reimbursed through a capitation payment. The implementation of an expanded primary care benefit package for the poor (called “ _Tsekap_ ”) which also includes certain non-communicable diseases and a medicines benefit in 2015 is another step in the right direction.

Also, the fact that, beyond primary care, most outpatient care is still largely excluded from the PhilHealth benefit package means that many patients may delay treatment until the condition worsens sufficiently for hospital admittance, or alternatively be treated on an inpatient basis for care that could be more cheaply provided on an outpatient basis. Including an outpatient package may help to improve the timeliness and cost-effectiveness of care. Any policy move in this direction would need to be carefully examined, though.

Authorities will also need to ensure compliance with the “no balance billing” policy of PhilHealth. While indigent/poor members are not supposed to be charged any fees (for conditions in the PhilHealth package) when seeking care at PhilHealth-accredited facilities, in practice this is quite common, even in government facilities. Recent studies based on exit interviews from hospitals found compliance with no balance billing of only 13 percent in 2012 (PHIC 2012, World Bank 2012) and 7 percent in 2013 (PHIC 2014b)<sup>12</sup> , but with a marked improvement to 41 percent by late 2014 (PHIC 2015).

Failure to effectively implement the no balance billing policy can be attributed to a combination of factors: supply-side failures (such as when hospitals run out of medicines), unscrupulous providers (who may 12 A 2012 study by PhilHealth, consisting of exit interviews of a sample of 400 patients from 20 hospitals, found no balance billing compliance of only 13 percent among the 222 sponsored program members (PHIC 2012). 37 percent of patients had to pay part of the hospital bill and 82 percent of patients had to make medical purchases outside the hospital for use during the stay<sup>12</sup> , despite their medical conditions being covered by the PhilHealth package. A World Bank study six months earlier, employing a convenience sample of 8 hospitals, obtained the same number and a similar pattern of expenditure (World Bank 2012). A follow-up PhilHealth study in 2013, utilizing a similar methodology but with a much larger sample size of 6.657 respondents from 315 government hospitals (of a total of 690 government hospitals in the country), found that no balance billing compliance was only 7 percent, with medicines again topping the source of out-of-pocket spending (PHIC 2014b). The latest set of exit interviews conducted by PhilHealth (July-October 2014) show no balance billing compliance of 41 percent.

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