Issue after issue hounded the Philippine Health Insurance Corp. throughout 2024, among them the diversion of P89.9 billion in unused funds from the health insurer to the national treasury in a bid to augment unprogrammed appropriations in the 2024 budget.

The issue has sparked debate among lawmakers, healthcare professionals, and the public, raising concerns about the legality and ethical implications of diverting funds earmarked for healthcare to other budgetary needs.

However, last October, the Supreme Court issued a temporary restraining order against the transfer of PhilHealth funds to state coffers.

PhilHealth has so far remitted to the national treasury the first tranche of P20 billion in May 2024 and another P10 billion in August 2024, then remitted the third tranche of the diversion amounting to P30 billion in October 2024.

The remaining P29.9 billion was supposed to be transferred in November.

Further, when PhilHealth initially proposed P74.43 billion in its budget for the 2025 National Expenditure Program, this amount was later reduced in the Congress-approved budget.

The health insurer received zero subsidy from the national budget. This came after Senate Finance Committee chairperson Grace Poe argued that PhilHealth had P600 billion in reserve funds during the bicameral committee on the 2025 General Appropriations Bill.

Starting 1 January, PhilHealth has been implementing its P284 billion Corporate Operating Budget, according to the Department of Health (DOH).

Last year, Health Chief Ted Herbosa said the state-run insurer had a P150-billion surplus budget from its 2024 budget to cover the indirect members' subsidy.

New era

On 4 February, President Ferdinand R. Marcos Jr. appointed United States (US)-trained orthopedic surgeon Dr. Edwin Mercado to head PhilHealth.

Mercado has 35 years of experience in hospital management and has been the vice chair of the Mercado General Hospital/Qualimed Health Network since March 2021.

According to Marcos himself, Mercado "has demonstrated proven leadership and executive and strategic planning expertise."

Under his leadership, Mercado General Hospital Inc. has expanded into a national chain of healthcare facilities that includes four general hospitals, six multi-specialty clinics, two surgery centers, 150 primary care corporate clinics, a college for paramedical professionals, and a physician practice group of 400 doctors.

A Doctor of Medicine graduate of the University of the Philippines in 1987, Mercado completed his Master of Medical Sciences in Global Health Delivery from Harvard Medical School in 2023.

He also has an Executive Master’s in Healthcare Administration from the University of North Carolina in the US.

Mercado has dedicated his work to ensuring equitable access to quality medical care and leveraging technology to strengthen health systems, particularly in financial management and primary care programs.

He did advocacy work with the Zuellig Family Foundation and several DOH Centers for Health Development, providing technical assistance to Provincial Health Boards on operationalizing their Healthcare Provider Network.

Mercado also serves as a faculty lecturer at the Ateneo School of Medicine and Public Health on Global Supply Chain, Research Methods, and Implementation Science, and a guest lecturer at the University of the Philippines College of Public Health on Medical Processes and Programs.

Further, he is involved in an ongoing study on using Artificial Intelligence (AI) as an assistive tool for community health workers to deliver primary care.

'Additional benefits'

Among the things to look forward to during his leadership is his promise to create additional benefits for PhilHealth members using the P29.9 billion worth of excess funds.

"The first thing that we outlined is the additional benefits and how much funds need to be allocated so we have a study to intensify our actuary, the first is the contributions, premium contributions of our direct members," Mercado said during the Senate Committee on Health and Demography’s hearing on 12 February.

"If needed, the reserved funds are currently in the savings account or placement of PhilHealth," he added.

Mercado said their objective is to raise the share of PhilHealth in the total healthcare expenditure from 10.6 percent to 18.5 percent or 18.7 percent.

He explained that currently, PhilHealth members’ out-of-pocket expenses range from 44 percent to 45 percent of their total medical bills.

"The 50 percent increase [in health packages] by itself is a big addition, because we aim, eventually and hopefully, to reduce the out-of-pocket expenses to 25 percent to 30 percent," he added.

Mercado noted that PhilHealth will gradually make the adjustments over three years.

PhilHealth has implemented a 50 percent increase in around 9,000 health packages despite a zero government subsidy for this year.