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Health care industry

HMO Sector Sees Profits Surge by 85 Times in Q1, Attributed to Government's Medical Allowance Program

Strategic Insights

— 1 min read

The Philippine health maintenance organization (HMO) sector experienced a remarkable surge in profits during the first quarter, with a staggering 85-fold increase. This exponential growth can be attributed to the government's program that provided a P7,000 medical allowance to public sector workers, allowing them to avail of HMO coverage. As a result, HMO membership fees skyrocketed, accounting for 97.52 percent of the industry's total revenues during the quarter.

Key Takeaways:

  • The HMO sector saw a 85-fold increase in profits during the first quarter, reaching P579.39 million, compared to the P6.78 million recorded in the same period last year.
  • The significant growth was attributed to the government's program granting P7,000 medical allowance to each qualified government employee, resulting in a 26.15-percent increase in membership fees collected by HMOs.
  • The 78.73-percent surge in membership fee reserves to P17.89 billion has increased the resources that HMOs can use to meet their financial obligations and ensure the sustainability of their operations.
  • Total liabilities increased by 22.82 percent to P75.52 billion, while total expenses, including income taxes, went up by 20 percent to P22.41 billion, on the back of a 17-percent increase in benefits and claims paid to sick members.
  • The Insurance Commission attributed the higher profits to the ongoing recovery from the COVID-19 crisis, with Commissioner Reynaldo Regalado stating that the industry's sustained recovery is a strong and reliable indicator of the HMO sector's resilience.

Statistics:

  • 85: The number of times the HMO sector's profits surged in the first quarter compared to the same period last year.
  • 579.39 million: Net profits of the HMO sector during the first quarter.
  • 97.52 percent: The percentage of total revenues accounted for by membership fees during the first quarter.
  • 26.15 percent: The increase in membership fees collected by HMOs due to the government's medical allowance program.
  • 78.73 percent: The surge in membership fee reserves to P17.89 billion.
  • 75.52 billion: Total liabilities of the HMO sector after a 22.82 percent increase.
  • 22.41 billion: Total expenses of the HMO sector, including income taxes, after a 20 percent increase.
  • 17 percent: The increase in benefits and claims paid to sick members.

Sources:

  • "HMOs post P579.39-M in Q1 profits", BusinessWorld, March 25, 2023.
  • "Insurance Commission: HMO industry's growth 'reassuring indicators'", Philippine Daily Inquirer, March 26, 2023.

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