Health care firms hike income by 463.8 percent in 2020 | Inquirer Business
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Health care firms hike income by 463.8 percent in 2020

By: - Reporter / @bendeveraINQ
/ 05:33 PM May 03, 2021

MANILA, Philippines—The total net income of health maintenance organizations (HMOs) jumped by 463.8 percent to P7.12 billion in 2020 as they narrowed operating expenses partly due to fewer clients due to quarantine restrictions, the Insurance Commission (IC) said on Monday (May 3).

In a statement, Insurance Commissioner Dennis Funa said preliminary end-2020 reports from 25 out of the 29 HMO players in the country showed their profit climbed from only P1.26 billion in 2019.

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“This may be explained by the 10.2-percent decrease in the industry’s total expenses against its increasing revenues,” said Funa.

“It should be pointed out, though, that the HMOs have shouldered a significant amount of the COVID-19 private medical expenses,” Funa said.

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“The figures we are seeing now reflects the temporary changes in the behavior of the general public,” said the IC chief.

“It appears that people are deferring or postponing, if they can, medical procedures. But definitely this is just temporary,” Funa said.

“When the opportunity affords it, people will have their medical checkups and procedures,” Funa added.

HMO firms’ revenues inched up 1.4 percent to P52.29 billion from P51.56 billion in 2019.

“The trends that we have seen from the unaudited reports submitted by the HMOs reveal that Filipinos are increasingly recognizing the value of availing (themselves of) HMO products as part of health protection,” Funa said.

“Perhaps now during this COVID-19 pandemic situation, more than ever, the importance of HMO products has been highlighted, especially that the increase in the HMO industry’s total revenues is mainly driven by its continuously growing total membership, or enrollees’ fees, which comprise 97.1 percent of the industry’s total revenues,” Funa noted.

Funa said the sector’s total liabilities increased 27.9 percent to P45.53 billion in 2020 from P35.57 billion in 2019 as “33.1 percent were under unearned membership fees, which refer to fees paid in advance to the HMO industry for services not yet provided.”

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In 2020, HMO companies’ total assets also rose 37.5 percent to P43.08 billion, while their combined equity grew 82.7 percent to P13.72 billion.

“The positive change in the industry’s equity may be attributed to the 59.5-percent increase in retained earnings, which comprises 77.1 percent of the total equity,” according to Funa.

“However, it should also be noted that the HMO industry’s capital stock decreased by 2.9 percent year-on-year, from P2.86 billion in 2019 to P2.78 billion in 2020,” he said.

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TAGS: #COVID19PH, Health, Health Insurance, hmo, pandemic
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