THE net income of health maintenance organizations (HMO) nearly doubled to P1.56 billion in the first quarter of this year as their expenses on healthcare benefits and claims dropped year-on-year even amid the Covid-19 pandemic.
Citing data from the latest unaudited interim financial statements submitted by the HMOs, the Insurance Commission said the net income of HMOs from January to March this year surged by 95.57 percent from P797.6 million in the same period in 2020.
“This substantial increase in the industry’s net income, however, is primarily driven by a 9.24 percent decrease in total expenses, year-on-year. That was, in turn, driven by a 15.62-percent decrease in Healthcare Benefits and Claims from P9 billion in Q1 2020 to P7.6 billion,” Insurance Commissioner Dennis Funa said in a statement on Thursday.
Pressed on the reason behind the drop in HMO’s expenses of Healthcare Benefits and Claims even amid the pandemic, Funa told the BusinessMirror this may be due to the decline in healthcare utilization.
“It is possible that there was a decrease in utilization of healthcare – less surgeries because of restrictions in hospital admissions, less outpatient consults. Even capacity of hospitals may have been restricted because of Covid protocols and Covid infections. Also, the HMOs’ limited workforce due to quarantine measures might have also been a factor,” he said in a message.
“I do know that some people have chosen to defer major surgeries as the general attitude is to avoid going to hospitals for fear of getting infected by Covid,” Funa added.
Meanwhile, the HMO’s total equity almost doubled to P15.14 billion in the first quarter of this year from P7.8 billion in the same period in 2020.
“According to the unaudited reports, this increase in total equity was due to an increase in Retained Earnings, which comprise 77.90 percent of HMOs’ total equity,” Funa said.
The HMO industry’s assets also grew to P66.56 billion in the first three months of this year, up by 31.77 percent from P50.51 billion in the comparable period last year. The growth in assets was attributed to the increase in Cash and Cash Equivalents that make up 53.92 percent of the industry’s assets.
As for the industry’s total liabilities during the first quarter, these also went up to P51.42 billion this year, higher by 20.38 percent than last year’s P42.72 billion.
However, the industry’s total revenues slightly contracted by 2.89 percent to P12.79 billion as of end-March this year, from P13.17 billion in the same period in 2020 due to a slight decrease in Membership and Enrollees’ Fees.
To recall, the regulation and supervision of the HMO industry was transferred to the Insurance Commission from the Department of Health following the issuance of Executive Order No. 192, Series of 2015 by then President Benigno S. Aquino III.
The Insurance Commission earlier reported that since the start of the pandemic last year, HMOs have already paid P3.98 billion in Covid-19-related claims, which constitutes almost half of the P8.25-billion aggregate Covid-19-related claims paid.
“Clearly, HMOs have a unique place in our country’s fight against the pandemic as frontliners and have become a strong and dependable partner in ensuring that our country’s healthcare needs during these uncertain times are addressed,” Funa said.
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