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Chapter 1

THE PROBLEM

Rationale

Hospital is a health effort facility that organizes health service activities

and can be used for education of health workers and research. The main

task of the hospital is to provide health services in the form of healing

patients and recovering patients which are carried out in an integrated

manner with promotion and prevention efforts. According to Zaid et al.

(2020). Hospitals, one of the institutions for nursing services, are currently

innovating to increase the degree of patient satisfaction with various

efforts made by hospitals, various methods have been applied in

hospitals, methods applied by hospitals to increase patient satisfaction

include applying several methods, namely service excellent method and

service quality.

Many providers think of the patients as just that — patients. They

have symptoms that need diagnosis; diagnoses that need treatment

plans and/or management; and conditions that may require more tests,

surgery, and follow-on care. However, patients first and foremost are

consumers, and their voices are growing ever louder.

Quality Management System refers to the objectives, policies,

procedures, plans, resources, and processes of the organization, and

delineation of responsibility and authority, with the purpose of achieving

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product or service quality levels with customer satisfaction as the focus.

(Venus et. al, 2011).

Patients often find medical bills confusing and difficult to understand.

Lack of transparency in billing practices, including unclear itemized

charges, codes, and terminology, can make it challenging for patients to

comprehend the services they are being billed for. According to a

Revenue Cycle Intelligence article citing a 2020 survey, less than half of

healthcare consumers have a clear understanding of their medical bills.

About 50% of consumers also reported that they pay their medical bills

late, with many citing confusions as a reason why (Clements, 2024).

Patients may receive unexpected medical bills for services they

thought were covered by their insurance plans. This can occur when they

receive out-of-network care without realizing it or when services are

deemed medically unnecessary by insurance providers and not covered.

Insurance companies may deny claims for various reasons, such as

missing or incorrect information, lack of pre-authorization, or the

insurance company deems the service as not medically necessary. When

claims are denied, patients are left responsible for the bill, resulting in an

unexpected financial burden.

Patients may face limitations in their insurance coverage, such as

high deductibles, co-pays, or co-insurance. These out-of-pocket costs

can be significant, especially for expensive procedures or long-term

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treatments, making it challenging for patients to afford necessary

healthcare. Patients may receive bills with incorrect charges, duplicate

charges, or charges for services they never received. These billing errors

can lead to confusion and frustration for patients, requiring patients to

spend time and effort in rectifying these discrepancies.

Prior to receiving medical services, patients often lack access to

accurate cost estimates. This makes it difficult for them to plan and

budget for their healthcare expenses, leading to financial surprises when

the bills arrive. Surveys show that patients want more price transparency,

and know their specific out-of-pocket costs, not just what the healthcare

facility’s gross charges are. The 2021 Annual Consumer Sentiment

Benchmark revealed that up to 83% prioritize the availability of precise

out-of-pocket cost details prior to receiving healthcare services.

Furthermore, an alarming 25% of patients have refrained from seeking

necessary care due to insufficient information regarding costs.

In cases where patients are unable to pay their medical bills,

healthcare providers may involve collection agencies to recover the

outstanding balance. However, relying on collection companies may not

always be the wisest course of action, as it can negatively impact a

patient’s credit score and financial well-being. The practice risks losing

patient loyalty as these companies employ aggressive tactics and their

services come at exorbitant fees. Collection agencies typically have a

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relatively low success rate in debt recovery. Healthcare practices should

carefully evaluate alternative strategies for debt recovery that prioritize

maintaining patient relationships. They can consider collaborating with

financial counselors to find mutually beneficial, result-oriented solutions

that retain the patient’s loyalty.

Furthermore, patients may face challenges when dealing with

insurance companies, such as long wait times, unhelpful customer

service representatives, or difficulty navigating complex insurance

policies and procedures. This can add to the frustration and stress of

managing medical billing issues.

The Ilocos Training and Regional Medical Center, the peoples’

hospital, the people’s home for health in Region 1, serving the Ilocanos

and its adjacent areas for 74 years (itrmc.doh.gov.ph/)

The hospital started in 1945 as a 40-bed first aid medical facility

under the auspices of the US 6th Infantry Division. It became the La

Union Provincial Hospital in 1946, then later in 1992, named as Ilocos

Regional Hospital authorized to operate as a 200-bed healthcare

institution through Republic Act 7364 (itrmc.doh.gov.ph/)

Ilocos Training and Regional Medical Center as it is now; became a

300-bed facility through the enactment of RA 8411 in November 1997, a

manifestation of its continued growth in health services. It is situated in a

4.7-hectare lot in Parian, City of San Fernando, La Union, the seat of

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regional government offices – the springboard of economic development

in Northern Luzon. (itrmc.doh.gov.ph/).

Health care service providers are expected to provide the highest

quality health care to all its stakeholders. Quality health care corresponds

to patient-focused care, which means: giving top priority to patient safety

while addressing vulnerability; providing compassionate patient care;

providing timely and effective treatment; complying with applicable

treatment protocols; ensuring effective, efficient and secured patient and

hospital/medical center records management; providing effective and

readily accessible communication channels; and, ensuring reliable

hospital/medical center support services (Development Academy of the

Philippines, 2020).

The Ilocos Training Regional and Medical Center (ITRMC) is a

leading healthcare institution in the Ilocos region, providing

comprehensive medical services to the local community. The billing and

claims section plays a crucial role in the financial operations of the

hospital, ensuring accurate and timely processing of patient invoices and

insurance claims. However, the rapid changes in the healthcare industry,

coupled with the increasing complexity of billing and claims management,

have posed significant challenges to the ITRMC's ability to maintain

efficient and uninterrupted service delivery. (itrmc.doh.gov.ph/).

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Unfortunately, ITRMC encountered various problems specifically in

the billing and claims section. These problems encountered are

Intermittent internet connection causing delays in processing of claims,

hospital management system (database system failure, data backup

system), lack of trained staff to perform different duties in the billing and

claims sections (multi-tasking), staff shortage, shortage of up-to-date

equipment such as computer, printer, scanner.

To address these challenges, the ITRMC has identified the need for a

comprehensive continuity plan that will ensure the resilience and

reliability of its billing and claims section. This research study aims to

develop a model for a quality management system (QMS) that will serve

as a blueprint for the ITRMC to enhance its billing and claims processes

and ensure business continuity in the face of potential disruptions.

Conceptual Framework

A universal care system would reduce administrative costs by

expanding economies of scale, streamlining processes, and cutting

insurance companies’ marketing costs and profits from our national

health care bill. At the same time, costs for drugs and procedures would

be kept in check by increased transparency, as well as increased

governmental bargaining power and rate- setting authority.

Universal health coverage (UHC) is about ensuring that people have

access to the health care they need without suffering financial hardship. It
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is key to achieving the World Bank Group’s (WBG) twin goals of ending

extreme poverty and increasing equity and shared prosperity, and as

such it is the driving force behind all of the WBG’s health and nutrition

investments. UHC allows countries to make the most of their strongest

asset: human capital. Supporting health represents a foundational

investment in human capital and economic growth—without good health,

children are unable to go to school and adults are unable to go to work. It

is one of the global economy’s largest sectors and provides 50 million

jobs, with the majority held by women.

The United States is the only industrialized country in the world that

does not have Universal Health Coverage for all citizens. Some countries

– Canada and Taiwan – have developed single-payer models to care for

their citizens. Other countries such as Germany, Switzerland, and

Singapore have shown that it is possible to have universal coverage

through a combination of public funding, employer participation, and

personal responsibility while maintaining a robust competitive market of

insurance payers and medical providers.

The 1987 Philippine Constitution declares that it is the policy of the

State to protect and promote the right to health of the people and instill

health consciousness among them. In February 2019, the President of

the Philippines signed the Universal Health Care Bill into law, ushering in

massive reforms in the Philippine health sector. Among the salient factors
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of the UHC Law is the expansion of population, service, and financial

coverage through an array of health system amendments. Along with this

is a planned paradigm shift to primary care, which is the core and center

of all health reforms under the UHC.

Republic Act No. 11223, otherwise known as the Universal Health

Care Act, states that the State shall adopt (a) An integrated and

comprehensive approach to ensure that all Filipinos are health literate,

provided with healthy living conditions, and protected from hazards and

risks that could affect their health; (b) A health care model that provides

all Filipinos access to a comprehensive set of quality and cost-effective,

promotive, preventive, curative, rehabilitative and palliative health

services without causing financial hardship, and prioritizes the needs of

the population who cannot afford such services; (c) A framework that

fosters a whole-of-system, whole-of-government, and whole- of-society

approach in the development, implementation, monitoring, and evaluation

of health policies, programs and plans; and (d) A people-oriented

approach for the delivery of health services that is centered on people’s

needs and well-being, and cognizant of the differences in culture, values,

and beliefs.

According to the Department of Health (DOH), with UHC, all Filipinos

are guaranteed equitable access to quality and affordable healthcare

goods and services and protected against financial risk. The UHC helps
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ensure every Filipino is healthy, protected from health hazards and risks,

and has access to affordable, quality, and readily available health service

that is suitable to their needs.

Under the said law, there will be more members who will avail

themselves of PhilHealth benefits because of its population coverage.

Philippine Health Insurance Corporation or PhilHealth was established to

provide health insurance coverage for all Filipinos and ensure affordable,

acceptable, available, and accessible health care services for all citizens

of the Philippines. The benefits of a PhilHealth member are inpatient,

outpatient, primary care, Z, MDG benefits, and other Special Benefit

Packages

Framework of the Study

The research will use the Input-Process-Output (IPO). The input

variables include the profile of ITRMC in terms of bed capacity,

accreditation status, services offered, number of patients admitted and

discharged, problems encountered by the billing and claims section,

strategies implemented to overcome problems encountered.

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Framework of the Study

INPUT PROCESS

OUTPUT

1. Profile of
ITRMC in terms
of; 1. Gathering of
a. bed capacity data
b. accreditation CONTINUITY
status 2. Tallying of data PLAN FOR
c. services QUALITY
offered. 3. Analysis of data MANAGEMENT
d. number of SYSTEM FOR
patients admitted 4. Interpretation of BILLING AND
and discharged. data CLAIMS
SECTIONS IN
2. Level of 5. Development of ILOCOS
Implementation continuity plan TRAINING
of Quality REGIONAL AND
Management MEDICAL
System for billing CENTER
and Claims
section

3. Problems
encountered in
the
Implementation
of Quality
Management
System for Billing
and Claims

Figure 1. Research Paradigm

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Statement of the Problem

The general objective of this study is to determine the Implementation

status on Quality Management System for billing and claims section in

Ilocos Training Regional and Medical Center. Specifically, this study aims

to answer the following questions:

1. What is the profile of ITRMC in terms of:

a. Bed capacity

b. Accreditation status

c. Services offered

d. Number of patients admitted and discharged

2. What is the level of Implementation of Quality Management System

3. What are the problems encountered in the Implementation of Quality

Management System on billing and claims sections?

4. What are the strategies to overcome problems encountered in the

Implementation of Quality Management System in Billing and Claims

Section?

5. What Quality Management System Continuity Plan can be proposed

for the billing and claims sections in ITRMC?

Significance of the Study

The reason for conducting this study is to determine the level of

Implementation of Quality Management System status on Billing and Claim

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Sections of ITRMC. The data that will be gathered in this research can help

identify quality issues, eliminate unnecessary activities, and close gaps in

performance. Hospital administration is pivotal in the healthcare ecosystem,

serving as the cornerstone of healthcare institutions worldwide. The

management and organization of hospitals are critical components in ensuring

the effective delivery of healthcare services. Hospital administrators oversee

various aspects of hospital operations, from financial management and

resource allocation to quality improvement and patient safety.

The overarching goal of any healthcare system is to provide high-quality

care that results in positive patient outcomes. Patient outcomes measure the

effectiveness and success of healthcare interventions and services like billing

and claims services. These outcomes encompass a wide range of factors,

including the patient's overall health, satisfaction with care, recovery, and,

notably, the prevention of adverse events specific to their treatment or

condition. Improving patient outcomes is a moral imperative and a critical

component of healthcare quality and performance evaluation. Hospitals and

healthcare institutions are continually working to enhance patient outcomes,

recognizing that they are intrinsically connected to the reputation and success

of the institution, as well as the well-being of the community it serves.

Scope and Delimitations

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This study will involve Ilocos Training Regional and Medical Center

(ITRMC). The data will be taken from billing clerks, billing officers, PhilHealth

clerk, PHIC Portal Clerk, Claims Officer, Billing and PHIC Claims Head,

administrators and other medical professionals in the hospital. The study is

delineated in the year 2024-2025.