Measure, Monitor, Minimize: Re-envisioning a PhilHealth Hospital Readmission Policy for Value-Based Purchasing and Financial Risk Protection for Filipinos

Hospital readmissions are often used to measure quality and continuity of care within health systems. In 2024, the Philippine Health Insurance Corporation (PhilHealth) removed its Single Period Confinement (SPC) Rule, a longstanding policy that denied reimbursements for readmissions within 90 days for the same primary case rate or diagnosis. Originally intended to deter unnecessary admissions, the SPC Rule drew criticism for hampering access and reducing financial protection. This study presents the first empirical analysis of PhilHealth’s readmission policy using inpatient claims from 2018 to 2023 to assess the magnitude and cost of all-cause, planned, and avoidable hospital readmissions in the Philippines. Readmission trends were compared across hospital levels and ownership, as well as among patient groups. Findings indicate that readmission rates were significantly lower than those observed in other countries. The rates of avoidable and complication-related readmissions remained stagnant over the five years for all hospital levels, indicating a lack of significant changes in provider service delivery. Instead, the policy exposed the most vulnerable Filipinos to greater financial risk, as elderly and indigent Filipinos had the highest share of avoidable readmissions. The removal of the SPC Rule presents an opportunity to systematically redesign how readmissions in the Philippines are measured, monitored, and minimized, and to shift to a provider payment system that integrates quality assessments in payment determination. PhilHealth must distinguish planned or routine readmissions from unplanned and avoidable readmissions that may indicate hospital-acquired complications. A robust readmission monitoring system can inform value-based purchasing decisions that ensure quality and complete care for Filipinos without excessive financial risk. Finally, readmission policies must be supported by programs that bridge the continuum of care prior to and after patient discharge. Without these, PhilHealth will continue to reward avoidable readmissions that come at great cost to patients’ health and financial status. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph.