Measuring Hospital Performance in the Philippines: Evidence on Quality, Efficiency, and Equity from Social Health Insurance Claims

In the Philippines, hospital efficiency and quality are rarely assessed due to the limited availability of administrative health data. An analysis of 37 million inpatient claims from PhilHealth (2018–2023) estimated hospital efficiency and quality nationwide. Findings revealed significant variations in efficiency based on hospital ownership, service capacity, and regional differences. Descriptive cost-efficiency indicators showed differences of 2 to 5 times, even after adjusting for case complexity. The stochastic frontier analysis revealed notable production inefficiencies, with public and private hospitals operating at efficiency levels ranging from 50 percent to 80 percent. This indicates potential underutilized capacity and opportunities for improvement, particularly in increasing the number of PhilHealth-covered admissions in private hospitals. Approximately 5 percent of PhilHealth claimants account for about 25 percent of total inpatient reimbursements by the Corporation, highlighting significant concerns regarding equity and efficiency. This pattern suggests that a small subset of patients, often those with complex or chronic conditions (i.e., noncommunicable diseases), disproportionately consume resources, potentially limiting coverage for the broader population's needs. In terms of quality, a modest level of readmissions, avoidable admissions, and hospital-acquired complications was observed, with variations depending on hospital type and service capacity. Admissions for Ambulatory Care Sensitive Conditions constitute roughly 30 percent of all admissions, a relatively high share that points to policy and programmatic gaps in hospital efficiency, primary healthcare, and the effectiveness of ambulatory care in hospitals. This report demonstrates the feasibility of using health insurance claims data to measure variations in hospital performance, particularly as the sector shifts toward value-based provider payment systems. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph.