9 private hospitals in Caraga sign ‘No Balance Billing’ pact
By Saghir Hussain ·
Nine private hospitals in the Philippines’ Caraga region have signed a “No Balance Billing” pact with the state insurer PhilHealth, effectively shielding patients from out-of-pocket costs for covered treatments. The deal, reported by the Philippine Daily Inquirer, means the hospitals absorb any difference between their charges and the government reimbursement rate — a move that puts the financial risk squarely on providers, not the sick.
A model that shifts risk away from patients
Under the memorandum of agreement, the nine hospitals — including major providers in Butuan City and Surigao del Norte — commit to accepting PhilHealth’s case rates as payment in full for eligible patients. No top-up fees. No “balance billing” the patient for the shortfall. For a region where poverty incidence sits above the national average, the practical effect is immediate: a family admitting a relative for pneumonia or a complicated birth walks out without a bill they cannot pay.
PhilHealth’s regional office described the pact as a “milestone” for financial protection. Hospital administrators, speaking to local media, framed it as a commitment to corporate social responsibility — though several acknowledged the arrangement squeezes margins already thinned by inflation and staffing costs.
The UK parallel: surprise bills and the private patient trap
The principle will feel familiar to anyone in the UK who has navigated private healthcare — or watched a relative hit with an unexpected invoice after an “insured” procedure. Despite the NHS covering the vast majority of acute care, the UK’s private sector — worth an estimated £8.5bn annually — operates on a fee-for-service model where “gap payments” between consultant fees and insurer reimbursements are routine.
A 2023 Competition and Markets Authority review found that 40% of privately insured patients faced out-of-pocket costs they hadn’t anticipated, with consultant fees the primary driver. The government’s subsequent “transparency” measures — requiring hospitals to publish price lists — have done little to close the gap. Patients still arrive for a hip replacement or cardiac catheterisation only to discover their policy covers £12,000 of a £16,000 episode.
Small businesses offering employee health schemes feel the pinch too. Premiums have risen 12–15% annually since 2021, according to the Association of British Insurers, forcing some SMEs to drop cover entirely. The Caraga model — where the provider, not the patient or employer, absorbs the variance — inverts that dynamic.
Can the NHS-private interface learn from Manila?
There is a deeper question for UK policymakers. As NHS waiting lists hover above 7.5 million, integrated care boards are increasingly contracting private capacity — often at tariff-plus rates. The money flows from the public purse to private providers, but the accountability chain is opaque. If a private hospital charges above the NHS tariff for a cataract operation, the ICB pays; the patient never sees the bill, but the opportunity cost is a missing district nurse or a delayed mental health referral.
Caraga’s pact is not perfect. It covers only PhilHealth members, only accredited hospitals, only defined case rates. Critics in Manila warn it could drive smaller clinics out of business or incentivise under-treatment. But it establishes a clear principle: the contract is between the state and the provider. The patient is not the financial shock absorber.
In the UK, we call that principle the NHS. Yet at the margins — private insurance, NHS-funded private care, co-payment schemes — we keep re-inventing the very balance billing Caraga just abolished. The question isn’t whether the model works. It’s why we tolerate the exception.