Navigating the rising tide: Managing employee health benefits in the Philippines

Double-digit increases in medical costs are placing immense pressure on organisations globally, and the Philippines is feeling the pinch acutely. For HR professionals tasked with designing effective health benefits packages, this presents a significant challenge. How can organisations ensure their employees have access to quality healthcare while managing escalating costs?

Nel Badal, Head of Health and Benefits, the Philippines, WTW, shared more with HRM Asia on this pressing issue. “Medical inflation across Asia-Pacific, including the Philippines, has been consistent, although the trend remains elevated in the double digits,” she explained. This trend is not expected to abate anytime soon. WTW’s Global Medical Trends Survey projects an 18.3% increase in medical insurance costs in the Philippines for 2025, the second highest growth in the Asia-Pacific region.

This surge in costs presents a complex challenge for HR teams. Badal outlined several key actions employers can take to maximise the value of their employee benefits programmes:

• Prioritise Prevention: “Facilitate and encourage opportunities for disease screening, early detection measures, vaccination, and educational sessions or campaigns to help prevent and detect health conditions earlier, while they are easier and less expensive to treat,” advised Badal. Investing in preventive care not only improves employee health but also reduces long-term healthcare expenditures.
• Encourage Primary Care Use: Directing employees towards primary care facilities, such as company on-site clinics, teleconsultations, and outpatient clinic networks, can significantly reduce costs. “Most illnesses can be appropriately diagnosed and managed outside the hospital facility,” Badal noted.
• Expand Wellbeing Offerings: A holistic approach to wellbeing is crucial Badal suggested broadening benefits “to encompass a multidimensional approach beyond physical and emotional wellbeing, to also include social and financial wellbeing, to foster overall positive health outcomes for employees and their families.”
• Ensure Benefits are Fit for Purpose: Regularly reviewing benefits programmes is essential. Badal recommended verifying “that benefits offered fit your population’s needs, to be able to identify opportunities to eliminate unnecessary or underutilised coverage, assess the appropriateness of your network coverage and effectiveness of providers, and optimise benefit spend.”
• Focus on Employee Experience: Optimising employee access to healthcare programmes and promoting awareness of available benefits can prevent unnecessary services and claims.

The post-pandemic landscape has also seen a resurgence in claims frequency, now surpassing pre-pandemic levels. This suggests a heightened awareness of health among employees, fuelled by the rise of consumer-driven health monitoring tools like wearable technology.

However, Badal pointed out a critical gap, explaining, “WTW’s 2024 Global Benefits Attitudes Survey shows that only two in five employees surveyed globally report maintaining good lifestyle habits.” This disconnect between awareness and action contributes to increased medical costs.

Several factors are driving these rising costs. Badal explained that both internal and external pressures are at play. Internally, “medical practitioners recommending too many services (79%), including overprescription of both medications and diagnostics, which results in unnecessary and excessive costs,” is a significant concern. Externally, factors such as “higher cost of new medical technologies (73%); the continued pressure being placed on private healthcare providers as public healthcare systems are overwhelmed (40%); as well as the lack of cost sharing in plan design (39%),” all contribute to the problem.

The situation in the Philippines in particularly challenging, with the health maintenance organisation (HMO) industry experiencing substantial losses in recent years due to increased claims and benefits paid. “Although reports indicate that HMOs are recovering in H1 2024, ongoing negotiations between two HMO associations and various doctor groups regarding a potential 80% to 150% increase in professional fees are still driving the projected double-digit medical inflation projected for 2025,” warned Badal.

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Looking ahead, Badal emphasised the need for collaborative solutions. “Sustainable solutions and joint efforts from individuals, healthcare providers, and government are needed to build a more resilient and cost-effective healthcare system to ensure that quality care remains accessible to all at an affordable price. Cost-sharing aimed at apportioning medical costs between insurers and members can also help to manage costs. This will help to minimise overuse and overprescription of care,” she concluded.