Rationalizing Health Personnel Financing Schemes for Evidence-informed Policy Reforms: Policy Analysis

  • Hilton Y. Lam
  • Katrina Loren R. Rey
  • Ma-Ann M. Zarsuelo
  • Ma. Esmeralda C. Silva
  • Michael Antonio F. Mendoza
  • Carmencita D. Padilla
Keywords: physicians, reimbursement mechanism, healthcare financing, universal health insurance


Background. The Universal Health Care Law seeks to optimize financing of personnel costs without compromising quality and equitable health care among the health care facilities. This position statement aimed to identify strategies and policy recommendations for the cost-effective financing of health personnel in public healthcare facilities.

Methods. A systematic review of literature was done to generate policy brief and key points for roundtable discussion in collaboration with the Department of Health (DOH). The discussion was guided by the three health financing options of DOH: (a) retain Personnel Services (PS) as DOH budget but shift Maintenance and Other Operating Expenses (MOOE) to PhilHealth; (b) shift PS and MOOE to PhilHealth, and (c) rationalize part-time status in government hospitals.

Results. The pros and cons of financing options were cross-examined. In Option 1, physicians in government hospitals would receive fixed salaries from DOH / Local Government Units. In Option 2, there would be a monopsony between PhilHealth and provincial power. Payment will be performance-driven, and balance billing will be eliminated. Option 3 would be a set up of retaining part-time positions for physicians.

Conclusion and Recommendation. Participants deduced that for Option 1, provision of salary augmentation sources and ensuring adequate plantilla items and level of remuneration in government hospitals should be considered, in order to sufficiently compete with physicians’ income from private practice. For Option 2, the PhilHealth reimbursement system should ensure timely reimbursement so as not to subject care providers to financial instabilities. For Option 3, rationalizing part-time status should be flexible and can be applied regardless of how physicians are paid, as this would incentivize caregivers to work harder and smarter.


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