HEALTH MAINTENANCE organization (HMO) profits declined in the third quarter after a surge in claims outweighed revenue growth, according to the Insurance Commission.
The HMO industry posted a 40.87% decline in overall net profit to P4 billion in the third quarter.
“This substantial decrease in the total net income is driven by the 11.95% increase in total expenses notwithstanding the 2.61% increase in total revenues, year on year,” Insurance Commission Dennis B. Funa said in a statement on Tuesday.
Revenue grew to P39.27 billion in the third quarter due to the growth in membership and enrollees’ fees and a surge in administrative services only network access and processing fees.
Healthcare benefit claims hit P23.8 billion in the third quarter, up 23.67%.
Unaudited financial statements of 28 HMOs indicate asset growth of 27.59% year on year to P63.21 billion, “driven by a corresponding growth in the value of the industry’s investment portfolio despite the decrease in cash and cash equivalents,” Mr. Funa said.
Investments in subsidiaries, associates, and joint ventures rose more than 38 times, while investments in property increased more than 15 times.
Equity industry-wide rose 17.24% to P15.22 billion in the third quarter.
Liabilities rose 31.27% to P47.98 billion.
“This was due to the increase in health plan liabilities, administrative services only (ASO) fund, and deferred tax liability,” Mr. Funa said.
The industry’s capital stock increased by 17.21% to P3.22 billion in the third quarter. — Jenina P. Ibañez