HMOs hike income by 63% to P1.65 B

MANILA, Philippines — The health maintenance organization (HMO) industry posted a 63 percent growth in net income last year due to the increased collection of fees from members, according to the Insurance Commission (IC).

Citing the data from the interim financial statements submitted by 29 companies, Insurance Commissioner Dennis Funa said the net income of the HMO industry surged by 63.4 percent to P1.65 billion in 2018 from P1.01 billion in the previous year.

Funa said Medicard Philippines Inc. reported the highest net income amounting to P706.31 million, accounting for 42.8 percent of the industry total.

HMOs provide products that are pre-agreed with designated health care services available to enrolled members for a fixed prepaid fee. These products can be used for a specific period of time – maximum of 12 months – through a selected network of health care providers.

According to IC data, the increase in net income happened amid higher revenues last year, which grew by 15.2 percent to P45.3 billion from P39.32 billion in 2017.

Funa said 96 percent or P43.57 billion of the revenue generated last year came from fees paid by members to HMO firms for assuming the risk for the cost of their health care services and other related administrative costs.

He said Maxicare Healthcare Corp. took the lead in the industry in terms of revenues, with a reported amount of P14.18 billion.

The IC said collection from membership fees likewise rose by 14 percent year-on-year to around P44 billion, with Maxicare Healthcare accounting for P13.84 billion.

Reported assets of the HMO industry, meanwhile, reached P38.96 billion, up by 18.4 percent from the P32.91 billion recorded in 2017.

Maxicare HealthCare Corp. likewise took the top spot in this regard with  reported assets amounting to P9.89 billion.

The IC is finalizing the Standard Chart of Account for HMOs, which will serve as the financial reporting framework for the industry.

Funa said this would ensure transparency in the industry’s financial conditions and the consistent compliance of existing regulations.

The IC chief said the SCA would also provide a framework to determine the allocation and use of funds of HMOs, in compliance with the rules and regulations promulgated by the IC.

Funa also announced that the IC will be implementing additional reporting requirements for HMO companies.

“In order for the commission to have a complete picture of the HMO industry, HMO companies are now required to submit comparable data relating to enrollment of members. Specifically, HMOs are now required to provide data on the number of clients, policies, members, principals, and dependents,” he said.

He said these data are valuable in understanding the role of HMOs and their effect on the market for health services.