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 measured because of the limited availability of administrative health data. We used 37 million inpatient claims from PhilHealth (2018-2023) to estimate hospital efficiency and quality across the Philippines. We found stark variation in efficiency across different hospital ownership, service capacity, and regions. Descriptive cost-efficiency indicators showed 2 to 5-fold differences, even after adjusting for case complexity. Our stochastic frontier analysis revealed significant production inefficiencies, with public and private hospitals operating at efficiency levels ranging from 50% to 80%. This suggests possible underutilized capacity and room for improvement to increase the number of PhilHealth-covered admissions in private hospitals. We estimated the share of high-cost users (HCU), and approximately 5% of PhilHealth claimants account for about 25% of the total inpatient reimbursements of the Corporation. This pattern raises important concerns regarding equity and efficiency for PhilHealth, as it suggests that a small subset of patients, often those with complex or chronic conditions (i.e., non-communicable diseases), consume a disproportionate share of resources, potentially crowding out coverage for the broader population needs. On quality, we estimated a modest level of readmissions, avoidable admissions, and hospital-acquired complications (HACs), albeit patterns vary by hospital type and service capacity. Admissions for Ambulatory Care Sensitive Conditions (ACSCs) account for approximately 30% of all admissions, a relatively high share that suggests 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 in a regime shift toward value-based provider payment systems.