New PhilHealth chief named

US-trained surgeon takes over embattled state insurer

MANILA, Philippines — President Marcos has named a US-trained orthopedic surgeon and hospital executive as president and chief executive officer of the Philippine Health Insurance Corp. (PhilHealth), which made headlines recently after it was given zero subsidy in the 2025 national budget.

Edwin Mercado, who has 35 years of experience in hospital management, took his oath as the new PhilHealth chief before Marcos yesterday at Malacañang, according to the Presidential Communications Office.

He replaced Emmanuel Ledesma Jr., who was appointed to the state-run health insurer in July 2023.

Malacañang has yet to respond to media queries on whether Ledesma resigned or was removed from his post.

Mercado’s appointment was announced more than a month after the Nagkaisa Labor Coalition demanded the resignation of PhilHealth officials over their supposed failure to perform their mandate.

The labor group also decried the allocation of zero subsidy for PhilHealth in the 2025 national budget, saying it would lead to the deterioration of the country’s health situation.

With the removal of the subsidy, many Filipinos struggling to afford health care would find themselves “practically in hospital detention” because of their inability to pay hospital bills, the coalition warned.

PhilHealth was initially allocated a P74-billion subsidy in the 2025 national expenditure program, but the bicameral conference committee removed the item because of an unspent P600-billion reserve fund.

Marcos backed the subsidy removal, saying PhilHealth has enough budget for its operations even without subsidies.

He also instructed the Department of Health (DOH) to ensure the continuous delivery of PhilHealth’s services even if the state-run health insurer was not given a subsidy in the 2025 budget.

The newly-appointed PhilHealth chief has been the vice chairman of the Mercado General Hospital/Qualimed Health Network since March 2021.

Mercado finished his doctor of medicine degree at the University of the Philippines in 1987 and earned his master of medical sciences in global health delivery at the Harvard Medical School in 2023. He also holds an executive master’s degree in health care administration from the University of North Carolina.

Mercado did advocacy work with the Zuellig Family Foundation and various DOH Centers for Health Development and provided technical assistance to provincial health boards on operationalizing their health care provider network.

The new PhilHealth chief also worked as a faculty lecturer at the Ateneo School of Medicine and Public Health and a guest lecturer at the University of the Philippines College of Public Health.

He is a fellow under Dr. Chunling Lu, associate professor of global health and social medicine at the Harvard Medical School and associate professor of medicine at the Brigham and Women’s Hospital.

Mercado is involved in studies on the use of artificial intelligence as an assistive tool for community health workers to deliver primary care and the cost of per-member payment for global coverage of in-patient services.

PhilHealth, in a statement, said it welcomes the appointment of Mercado, citing his “solid experience in the medical field” and “proven leadership and management expertise.”

“The entire PhilHealth family extends its full support to Dr. Mercado as he steers the agency to new heights,” PhilHealth said in a statement.

“We are confident that, through his leadership, PhilHealth will continue to successfully carry out the mandate of the National Health Insurance Program and fulfill the aspirations of Universal Health Care,” it added.

PhilHealth also thanked Ledesma for the reforms he initiated in the past two years. “He (Ledesma) spearheaded very important reforms in the last two years, especially in the area of claims payments and benefit enhancements,” the state health insurer noted.

The Department of Health also welcomed Mercado’s appointment. “We look forward to working with new P/CEO Dr. Edwin Mercado very soon,” said the DOH.

Deficit, liabilities

Former PhilHealth executive and health advocate Dr. Minguita Padilla said medical practitioners like herself are hoping that Mercado would not be “eaten by the syndicate in PhilHealth.”

In an interview with “Storycon” on One News, Padilla said Mercado would be facing a daunting task of rebuilding the state insurer which has a deficit of more than P600 billion and P1.13 trillion in insurance contract liabilities.

“Those debts, in 2023, it is shown there that the deficit of PhilHealth is P600 billion plus and they have a P1.13-trillion insurance contract liabilities. It is in the audited financial statement of liabilities of PhilHealth,” Padilla said.

She said reports in the media about PhilHealth’s financial condition are “almost actually not true.”

“In other words, there are articles coming out in other respective newspapers, broadsheet, that what they have been saying all along are almost actually not true. They are using as basis financial which does not take into account all of these liabilities,” Padilla said.

“There are many (issues) that are unclear that need to be cleared because as a clinician, as a surgeon, I am sure that Dr. Mercado will agree. He cannot solve the problem unless he diagnoses it and admits that there is a problem,” Padilla said.

She expressed belief that Mercado is highly qualified for his new position.

“We have all the same comment, thank you and we will help him and we wish him well. But this is what we are saying, we hope that he will not be eaten by the syndicate. That is always what people say. Let’s wish him well. He is a contemporary. He is my fraternity brod in the UP College of Medicine,” Padilla said.

She also said there should be an overhaul of PhilHealth’s executive committee. “It is not enough to just replace the president/CEO. You have to clean up the execom,” Padilla said.

She recalled that former president Rodrigo Duterte had four PhilHealth presidents during his administration.

Government defends fund impounding

At the Supreme Court, meanwhile, Solicitor General Menardo Guevarra said the transfer of unused excess funds of PhilHealth is the government’s “temporary measure” to address concerns on fund availability for projects and programs.

In his opening statement during the oral arguments on the petitions challenging the PhilHealth fund transfer, Guevarra said the move was government’s “common-sense approach” to provide the money for the government’s essential services, assuring that this was “within the legal bounds.”

“As luck would have it, the money needed to provide these essential services does not come easy in our side of the world. Oftentimes, creative and innovative solutions are born out of something as common as ‘common sense’,” he said.

He said the provision of the 2024 budget law and the Department of Finance’s circular allowing the transfer of unused excess funds from government-owned and -controlled corporations such as PhilHealth to the national treasury is intended to “temporarily eke out the cash needed for the national government’s numerous priority programs.”

“Indeed, our government will not be acting with common sense if it shelved other much-needed projects because one pocket is short on funds, while knowing fully that there is abundance in the other,” he added.

Lower contribution

On Wednesday, the House of Representatives approved last night on third and final reading House Bill 11357 reducing from five percent to 3.5 percent the premium contribution for members of PhilHealth.

The measure was among the listed priority bills of President Marcos in the Legislative Executive Development Advisory Council.

Three members of the Makabayan bloc registered their vehement opposition to the bill’s approval.

“This bill will strengthen the Philippine health care system to improve efficiency and equity, and to build resilience moving forward, learning from experiences during the pandemic,” read a portion of the committee report.

HB 11357 stipulates that the 3.5 percent premium PhilHealth contribution would only be adjusted based on actuarial studies that would be evaluated by a non-government, impartial and credible independent body.

Also at the House of Representatives, Cagayan de Oro Rep. Rufus Rodriguez filed on Monday a bill that aims to compel PhilHealth to pay billions in reimbursement claims filed by hospitals and other health facilities.

“In the interest of fairness and equity regarding the services rendered by health facilities to PhilHealth members, PhilHealth shall implement a total amnesty and pay all claims that were filed late, whether the claims are at the level of refiling, administrative protest, appeal or denied with finality,” Rodriguez said in House Bill (HB) No. 11398.

HB 11398 mandates the PhilHealth to issue the necessary implementing rules and regulations.

In his explanatory note, Rodriguez invoked a provision of the Constitution, which directs the state to “adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost.”

“There shall be priority for the needs of the underprivileged, sick, elderly, disabled, women and children. The State shall endeavor to provide free medical care to paupers,” according to HB 11398. — Jose Rodel Clapano, Delon Porcalla, Rhodina Villanueva, Daphne Galvez