Providing affordable and quality care through HMOs

Healthcare is a fundamental aspect of human well-being, and having access to quality healthcare services is essential for maintaining a high standard of living. Proper healthcare also ensures that individuals can lead healthy and productive lives that will further contribute positively to society.

However, healthcare expenses can have far-reaching consequences beyond just the financial aspect. These costs can lead to significant strain on individuals and families, creating barriers to accessing necessary medical care and even exacerbating health disparities.

According to the World Health Organization, global health spending in 2021 reached a record high of US$9.8 trillion, accounting for 10.3% of the global gross domestic product (GDP).

In the Philippines, healthcare expenses continue to be a major financial burden for Filipinos. According to the Philippine Statistics Authority (PSA), the average Filipino spent an average of P10,059.49 for healthcare in 2022.

Meanwhile, out-of-pocket expenses for medical treatment, prescription drugs, and other healthcare-related services can also quickly add up, which will put a strain on household budgets.

Instead of foregoing necessary medical care or opt for cheaper, potentially less effective alternatives, individuals and families are getting healthcare insurance plan, such as those from health maintenance organizations (HMOs), to mitigate expenses.

HMO is a type of health insurance plan that offer comprehensive medical coverage through a network of contracted healthcare providers. According to a study published by StatPearls Publishing, HMOs have become increasingly popular in recent years because they can provide quality care at lower costs for members by combining financing and care delivery.

HMO members typically pay fixed monthly premiums, low or no deductibles, and modest co-pays for services. This makes healthcare more accessible and affordable, especially for those with limited budgets. In fact, studies have shown that HMO enrollees have 25%-30% lower healthcare expenditures compared to those with traditional fee-for-service insurance.

HMOs also have an ability to closely monitor and manage the care provided by their contracted network of doctors and hospitals.

For instance, Cocolife, a Filipino-owned stock life insurance company, is continuing to innovate its healthcare plans to help its clients and their loved ones achieve their dreams and aspirations.

In a statement, Atty. Jose Martin A. Loon, president and chief executive officer of Cocolife, said that their products and services are tailored to Filipino families to provide them with better financial protection and stability in the occurrence of unfortunate events.

“Our products cater to all segments and demographics — to all Filipinos. As the biggest Filipino stock-life insurance company, we value every peso invested in our products as we make it our mission to provide excellent and efficient service to all our countrymen. No matter how big or small your investment,” Atty. Loon added.

Ensuring comprehensive care post-pandemic

The COVID-19 pandemic has led to a significant increase in enrollment in HMOs across the Philippines, as individuals have recognized the value of comprehensive healthcare coverage and accessible care during these challenging times.

Many HMO plans have provisions for cost-sharing and out-of-pocket maximums, providing individuals with a greater sense of financial security during a time of economic uncertainty. In fact, HMOs saw a 17.3% surge in healthcare payouts in the first quarter of 2024, equivalent to $255.9 million in benefits. This was accompanied by a 20.09% year-over-year increase in total industry revenues, reaching $317.56 million. The Insurance Commission attributed this growth to a rise in membership fee collections, which totaled $303.26 million.

According to a report by Health-Scape Advisors, the economic impact of the pandemic has led employers to increasingly favor HMO products that can tightly control medical costs and administrative expenses, while limiting member cost-sharing. As employers look to defend against rising healthcare costs, they are shifting away from broad provider networks and high-deductible health plans towards more managed care options like HMOs.

Recent data also indicates that the percentage of covered workers enrolled in high-deductible health plans has leveled off in recent years, suggesting a potential resurgence in employer demand for HMO plans.

As a result, health insurers are responding by launching new and innovative HMO plans that leverage strategic partnerships with health systems, provider groups, and employers to enable accountable care at low premium price points.

HealthScape Advisors also mentioned that providers are increasingly open to joining capitated and delegated HMO models as they aim to protect themselves from potential revenue decreases and secure a larger portion of the premium. Therefore, there is growing cooperation between health plans and provider organizations to establish HMO networks.

Furthermore, the pandemic forced lockdowns and restricted in-person visits have driven the implementation of telehealth programs to continue providing care remotely. COVID-19 has also driven the expansion of telehealth capabilities, such as “virtual wards” that allow low-risk patients to receive hospital-level care at home.

In response, HMOs are leveraging telemedicine to enhance patient care, improve operational efficiency, and drive better health outcomes. HMOs have been able to connect their enrollees with virtual healthcare professionals that provide convenient and accessible medical services. This approach helps to overcome geographical barriers, improve patient engagement, and ultimately boost patient satisfaction and loyalty.

The proliferation of smartphones also allowed HMOs to enhance their engagement with members through mobile health applications. These apps enable patients to schedule appointments, access their health plans, receive medication reminders, and even obtain personalized health tips, according to a study published in the Journal of Medical Internet Research.

A research published in BMC Health Services Research also found that 23% of primary care physicians reported using telemedicine service apps, including HMO-provided applications, several times a day.

Meanwhile, electronic health records (EHRs) have enabled HMOs to streamline the management of patient data, further allowing healthcare providers to access comprehensive patient information in a centralized digital platform. This is particularly beneficial for patients with chronic conditions, ensuring they receive consistent and coordinated care across different healthcare facilities.

According to a study published in the Journal of the American Medical Informatics Association, psychiatric hospitals that were part of an HMO were 82.7% more likely to have a certified EHR system compared to those not affiliated with an HMO. The same study found that hospitals that were part of a preferred provider organization (PPO) were 87.8% more likely to have a certified EHR.

AI and data analytics are also being used to streamline administrative tasks within HMOs, such as automating data entry, processing claims, and managing medical records. These technology helps in reducing the administrative burden on healthcare providers, allowing them to focus more on patient care.

Some forward-thinking HMOs are also exploring the potential of artificial intelligence (AI) and data analytics to optimize their service delivery. For example, chatbots and virtual assistants powered by natural language processing is helping patients schedule appointments, refill prescriptions, and get answers to basic medical questions. — Mhicole A. Moral