The net income of health maintenance organizations (HMOs) nearly doubled to 1.56 billion pesos in the first quarter of this year, as their spending on health care benefits and claims fell year on year. other, even in the midst of the Covid-19 pandemic.
Citing data from the latest unaudited interim financial statements submitted by HMOs, the Insurance Commission said HMO net income from January to March of this year jumped 95.57 percent from 797.6 million pesos. during the same period in 2020.
âThis substantial increase in the industry’s net income, however, is primarily due to a 9.24 percent decrease in total expenses, year over year. This in turn is explained by a 15.62% drop in health care benefits and claims, which fell from 9 billion pesos in the first quarter of 2020 to 7.6 billion pesos, âsaid Thursday the insurance commissioner Dennis Funa in a statement.
Pressed on why HMO’s spending on health care benefits and claims has dropped, even amid the pandemic, Funa told BusinessMirror it could be due to declining healthcare utilization. health.
âThere may have been a decrease in health care utilization – less surgeries due to restrictions on hospital admissions, fewer outpatient visits. Even the capacity of hospitals may have been restricted due to Covid protocols and Covid infections. In addition, the limited HMO workforce due to the quarantine measures could also have been a factor, âhe said in a post.
“I know some people have chosen to postpone major surgeries because the general attitude is to avoid going to the hospital for fear of getting infected with Covid,” Funa added.
Meanwhile, the HMO’s total equity nearly doubled to 15.14 billion pesos in the first quarter of this year, from 7.8 billion pesos in the same period in 2020.
âAccording to unaudited reports, this increase in total equity was due to an increase in retained earnings, which represents 77.90% of total HMO equity,â said Funa.
Assets in the HMO industry also increased to reach 66.56 billion pesos in the first three months of this year, up 31.77% from the 50.51 billion pesos in the comparable period of l ‘last year. The growth in assets was attributed to the increase in cash and cash equivalents which represent 53.92% of industry assets.
As for the industry’s total liabilities in the first quarter, it also rose to 51.42 billion pesos this year, 20.38% higher than the 42.72 billion pesos last year.
However, total industry revenues contracted slightly by 2.89% to 12.79 billion pesos at the end of March this year, from 13.17 billion pesos in the same period in 2020 due to ” a slight decrease in membership fees and registrants.
As a reminder, the regulation and supervision of the HMO sector was transferred to the Insurance Commission of the Ministry of Health following the publication of Executive Decree No. 192, 2015 series by President Benigno S. Aquino III.
The Insurance Commission reported earlier that since the start of the pandemic last year, HMOs have already paid 3.98 billion pesos in claims related to Covid-19, which is almost half of the 8.25 billion pesos aggregated of Covid-19 related claims paid. .
âClearly, HMOs have a unique place in our country’s fight against the pandemic as the frontline and have become a strong and reliable partner in ensuring that our country’s health needs in these uncertain times are addressed. account, âFuna said.