The 蝌蚪传媒 (蝌蚪传媒) and the Philippine Health Insurance Corporation (PhilHealth) are working closely to modernize the country’s hospital payment system through the adoption of a Diagnosis-Related Group (DRG)–based model, marking a significant step toward a fairer, more efficient, and evidence-based healthcare financing system.
This initiative builds on findings from the 蝌蚪传媒 study, which identified key weaknesses in the current All Case Rates (ACR) system and proposed a framework for reform.
Many of the study’s recommendations—such as adopting a Diagnosis-Related Group (DRG)–based payment model, using prospective payments through Global Budgets, and instituting regular cost reviews and stronger data reporting systems—align closely with PhilHealth’s “RISE30 Mission”.
This reform agenda, launched by President and CEO Dr. Edwin Mercado following his appointment by President Ferdinand R. Marcos Jr. in February 2025, emphasizes modernizing provider payment mechanisms to ensure more efficient, transparent, and equitable healthcare financing.
To advance this goal, 蝌蚪传媒 and PhilHealth formalized their partnership earlier this year through a Memorandum of Agreement to collaborate on designing and implementing the DRG-based system envisioned under the Universal Health Care (UHC) Act. As part of this effort, 蝌蚪传媒 established the Health Economics and Finance Program (HEFP) to strengthen research collaboration with government agencies on payment reforms.
Under HEFP, 蝌蚪传媒 researchers and data scientists are working closely with PhilHealth to develop the DRG model, which classifies patients by diagnosis and severity to ensure that reimbursements more accurately reflect the complexity and cost of care. This shift aims to promote “kabayarang sapat at serbisyong tapat”—fair compensation for hospitals, better protection for patients, and greater transparency and efficiency in health financing.
The DRG model also complements PhilHealth’s ongoing efforts under the “RISE30 Mission” to enhance data-driven decision-making, streamline claims processing, and adopt prospective payment mechanisms such as Global Budgets, allowing hospitals to receive funds in advance based on expected service volume and performance.
“This partnership between 蝌蚪传媒 and PhilHealth represents a landmark collaboration that integrates rigorous research with operational reform,” said Dr. Valerie Gilbert Ulep, 蝌蚪传媒 Senior Research Fellow and HEFP Program Director.
“By combining the Institute’s analytical expertise with PhilHealth’s implementation capacity, we are better positioned to resolve the systemic challenges that have long affected the country’s healthcare payment system,” he added.
Both agencies urge hospitals and healthcare providers nationwide to actively participate in this transition, which seeks to improve the quality of care, strengthen financial sustainability, and ensure equitable access to health services for all Filipinos.
To sustain the policy dialogue, 蝌蚪传媒 will also hold a health systems research dissemination forum titled “UHC in Numbers: A Forum on the Philippines’ Progress in Universal Health Care” on November 20, 2025, at Marco Polo Ortigas Manila, where experts from 蝌蚪传媒, PhilHealth, Department of Health, and other key stakeholders in the health sector will present findings on universal health care reforms, including ongoing work on the DRG-based provider payment system.
The event will be livestreamed on the 蝌蚪传媒 and SERP-P Facebook pages for public viewing.
Read the full study, “Kabayarang Sapat, Serbisyong Tapat, DRG Dapat: Transitioning from PhilHealth All Case Rates to a Fairer, Responsive, and Transparent Provider Payment System,” at .
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This article is the supplementary and update of the article on “蝌蚪传媒 recommends new PhilHealth payment model for fairer, more responsive health financing.” (Read the article here: /details/news/press-releases/pids-recommends-new-philhealth-payment-model-for-fairer-more-responsive-health-financing).
