By Roderick T. dela Cruz

The Philippines will establish a $100-million fund that will be lent to healthcare providers contracted by Philippine Health Insurance Corp. for their services.

A technical assistance consultant?s report prepared by the Asian Development Bank said the health fund would be established by the Development Bank of the Philippines and be supported by the German Bank for Development, or KFW, and the ADB via its Credits for Better Health Project.

?ADB had agreed with DBP that its support will be mostly used for lending money to different categories of providers to support the attainment of health-related millennium development goals, to support access to healthcare for underserved areas and to prevent patients from impoverishment when in need of health services,? the 142-page report said.

The fund will be fully effective and operating at the beginning of 2010, the ADB said.

Contracting is a vehicle being considered to ensure the financial viability of the $100-million health fund.

Contracting of healthcare providers by healthcare insurers is a common practice in such developed countries as the United States and the Netherlands. Under the contracting system, the healthcare insurers negotiate the contracts with healthcare providers.

Borrowers of DBP?s health loans, who would serve the PhilHealth members, should be contracted also by PhilHealth for offering their services, the report said.

PhilHealth plans to start an effective and efficient contracting system to improve its services this year. In the second half of 2008, policy development work on contracting has been done, financed by ADB and German Technical Cooperation or GTZ.