VALUE IN HEALTH REGIONAL ISSUES 12C (2017) 115–122

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Economic Burden of Community-Acquired Pneumonia Among

Pediatric Patients (Aged 3 Months to o 19 Years) in the
Philippines
Bernadette A. Tumanan-Mendoza, MD, MScCE, MHE1,2,*, Victor L. Mendoza, MD3,4,
Melchor Victor G. Frias IV, MD, MScCE5,6, Dolores D. Bonzon, MD7,8
1
Department of Internal Medicine, Manila Doctors Hospital, Manila, Philippines; 2Department of Clinical Epidemiology, University of
the Philippines College of Medicine, Pedro Gil, Manila, Philippines; 3Department of Physiology, De La Salle Health Sciences Institute
College of Medicine, Governor D. Mangubat Avenue, Dasmarinas, Cavite, Philippines; 4Department of Internal Medicine, De La Salle
Health Sciences Institute College of Medicine, Governor D. Mangubat Avenue, Dasmarinas, Cavite, Philippines; 5Department of
Pediatrics, De La Salle Health Sciences Institute College of Medicine, Governor D. Mangubat Avenue, Dasmarinas, Cavite, Philippines;
6
Department of Clinical Epidemiology, De La Salle Health Sciences Institute College of Medicine, Governor D. Mangubat Avenue,
Dasmarinas, Cavite, Philippines; 7Department of Physiology, University of the Philippines College of Medicine, Pedro Gil, Manila,
Philippines; 8Department of Pediatrics, University of the Philippines College of Medicine and Philippine General Hospital, Manila,
Philippines

AB STR A CT

Objective: 1) To determine the hospitalization, follow-up and total
costs, and the economic burden of community-acquired pneumonia
among pediatric patients aged 3 months to o19 years of age; 2) To
compare the estimated cost of hospitalization to the pneumonia case
rate payments of the Philippine Health Insurance Corporation
(PhilHealth). Methods: Using the societal perspective, both healthcare
and non-healthcare costs were estimated. This was done through two
tertiary private hospitals in the Philippines. A base-case and sensi-
tivity analyses were performed using 2012 as the reference year. The
PhilHealth claims were the basis for the economic burden. Results:
The estimated healthcare-related hospitalization cost for PCAP-C
was PHP24,332 – 75,409 (US$576 – 1,786). For PCAP-D, it was
PHP77,460 – 121,301 (US$1,834 – 2,872) without mechanical ventilation
and PHP97,993 – 141,834 if mechanical ventilation was used. These
amounts are markedly higher than the PhilHealth case rates of
PHP15,000 for PCAP C and PHP32,000 for PCAP D. The post-discharge
cost was PHP1,175 – 1,531 for PCAP C and PHP1,275 for PCAP D. The
total hospitalization cost were PHP 31,332 – 93,609 for PCAP C and
PHP117,103 – 160,944 for PCAP D. The exact economic burden due to
pneumonia among the pediatric population was not definitely ascer-
tained due to lack of specific number of PhilHealth claims for this age
group. Conclusions: There is a huge disparity between the PhilHealth
case rates for PCAP C and PCAP D and the study results. Hence, the
estimated economic burden of hospitalization for pneumonia would
be markedly higher.
Keywords: community-acquired pneumonia, economic burden,
Philippines, PhilHealth.
& 2017 Published by Elsevier Inc. on behalf of International Society for
Pharmacoeconomics and Outcomes Research (ISPOR).

In the Philippines, pneumonia is one of the leading causes of
morbidity, especially among children o 5 years of age. In 2006,
there were 670,231 cases of acute lower respiratory infection (ARI)
and pneumonia (or 828.8 per 100,000 population) in the country,
with 393,812 cases (59%) occurring in the age group of o 5 years
[1]. In 2010, the total number of cases decreased to 381,123 (or
412.8 per 100,000), with 197,852 cases (52%) occurring in the age
group of 1 to 4 years [2]. However, despite this decrease, pneumo-
nia continued to be the leading cause of mortality among
children in this age group in 2001 to 2010. In addition, in 2010,
pneumonia was the leading cause of mortality among those in
the age group of 5 to 14 years [3].
Approximations of the cost of treatment underscore the
economic burden that pneumonia in the pediatric age group
places on society, especially in the health care community.
Among the developing countries of Asia, it was reported that in
2001 and 2002, the estimated average cost of in-patient treatment
for acute respiratory infection reached US$155.30 [4,5].
In 2006, the aggregate claims payment for pneumonia in the
Philippine Health Insurance Corporation (PhilHealth) for in-
patients below 19 years of age amounted to PHP324.688 million
(US$6.327 million using the 2006 average conversion rate of
Philippine peso [PHP] to US dollar [US$]) [6,7]. In 2011, it ranked
second in the top 20 conditions reimbursed by PhilHealth based
on the total number of claims (included both medical and
surgical cases for all ages) but ranked first in terms of the amount
reimbursed. The total PhilHealth claims for pneumonia in 2011
amounted to PHP2.5 billion [8].

The authors have indicated that they have no conflicts of interest with regard to the content of this article.
* Address correspondence to: Bernadette A. Tumanan-Mendoza, MD, MScCE, MHE, Department of Internal Medicine, Manila Doctors
Hospital, 667 United Nations Avenue, Manila, Philippines.
E-mail: bernadette.tumanan@gmail.com
2212-1099$36.00 – see front matter & 2017 Published by Elsevier Inc. on behalf of International Society for Pharmacoeconomics and
Outcomes Research (ISPOR).
http://dx.doi.org/10.1016/j.vhri.2017.04.003
116 VALUE IN HEALTH REGIONAL ISSUES 12C (2017) 115–122
Because of the huge economic impact of pneumonia, partic-
ularly on the age group cited above, this study was undertaken
with general and specific objectives.
The general objective was to determine the economic burden of
community-acquired pneumonia (CAP) among pediatric patients
in the age group of 3 months to o 19 years, by using a societal
perspective. The specific objectives were 1) to determine the cost of
treating CAP, for a) hospitalization cost (health care cost and
non–health care cost) and b) total cost (hospitalization þ 1-week
postdischarge costs); 2) to compare the cost of hospitalization to
that of the PhilHealth case rate payments for pneumonia; and
3) to determine the economic burden of CAP (hospitalized cases)
in the country using the estimated cost as derived in specific
objective 1.
All of these specific objectives pertain to patients in the age
group of 3 months to o 19 years. Moreover, since PhilHealth only
reimburses claims for those hospitalized for pediatric
community-acquired pneumonia (PCAP): PCAP C and PCAP D,
corresponding to pneumonia moderate risk (CAP-MR) and pneu-
monia high risk (CAP-HR), respectively), this study was limited to
only these patients.
Methods
Setting
The above objectives were determined by using an urban setting
and a suburban area in the country. The study sites were two
tertiary private hospitals, the first one in Manila, an urban area
and the capital of the Philippines and the other in a suburban
area approximately 30 km south of Manila.
Inclusion Criteria
The study included patients in the age group of 3 months to o 19
years admitted from January 1, 2012, to December 31, 2012, to the
above-mentioned tertiary hospitals with a diagnosis of PCAP C or
D, which had been made on the basis of clinical signs and
symptoms and diagnostic tests. The medical records of the
patients who satisfied the inclusion criteria were reviewed, and
cases that met the criteria were entered in the study database.
Subsequently, these data were aggregated and analyzed.
Design: Cost Analysis
The steps for the cost analysis followed the methodology of a
study on the economic burden of CAP among the adult popula-
tion in the Philippines, using a societal perspective [9]. As an
overview, the process involved calculation of the hospitalization
and postdischarge or follow-up costs. Hospitalization costs
included 1) the out-of-pocket expenses incurred as a direct result
of the patient’s hospitalization, 2) production or productivity
losses, and 3) costs resulting from the consumption of other
resources. However, there was a need to stratify the pediatric
population into several groups to minimize variability in their
inherent characteristics. In addition, stratification was needed for
the calculation of the average cost of treatment for a particular
age group. Unlike in the adult population, where the doses of
antibiotics are relatively fixed (except in the presence of some
modifying factors or comorbidities, such as renal diseases), in the
pediatric population, the antibiotic dosage and the daily volume
of the intravenous fluids infused are dependent on the patient’s
weight. The study population were thus grouped as follows:
a) infants—4 3 months to o 2 years of age; b) children—4 2 years
but o 11 years of age; and c) adolescents 11 to 18 years of age.
The 2012 Philippine Academy of Pediatric Pulmonologists
Update for the evaluation and management of Pediatric
Community-Acquired Pneumonia [10] as well as standard prac-
tice patterns served as the bases for the costing of the diagnostic
procedures and treatment options. These practice patterns were
obtained through key informant interviews of experts, such as
pediatricians and pediatric pulmonologists.
As in the study on the economic burden of pneumonia in
adults [9], hospital charges for the diagnostic procedures, room
and board, oxygenation, and other charges of the study sites were
used in this study as well. Moreover, information about the cost
of medications and other related expenses (costs of intravenous
fluids, nasal prongs, and other related materials, such as cotton
balls, alcohol, etc.) was obtained from the country’s biggest
drugstore chain to reduce variability in the charges among the
study sites [9] and to increase the applicability of study results.
Sensitivity Analysis: Best-Case and Worst-Case Scenarios
Approaches to undertaking sensitivity analysis include the use of
“scenario analysis,” a form of multiway analysis, whereby the
best-case and worst-case scenarios, that is, the most optimistic
and the most pessimistic scenarios, respectively, are determined
[11]. This type of sensitivity analysis was performed in this study.
The best-case scenario pertained to the use of the lowest costs
of the range of the values of the included cost centers. This
meant the use of the cost of the available generic counterpart of a
particular antibiotic and the lowest charges for the diagnostic
option, accommodation (ward), professional fees, and all other
charges related to the hospitalization and follow-up costs. How-
ever, the policy of one of the study sites with regard to not
placing patients with pneumonia in the general ward or allowing
sharing of the room with other patients was taken into account.
Hence, the lowest cost for a private room, rather than the charge
for being confined in the wards, was the one included as the
lowest cost for the room or accommodation. Moreover, for
consistency purposes in costing, this policy was also applied to
the other study site.
However, the PhilHealth case rate fees were designated as the
lowest of the range of the professional fees. These corresponded
to PHP15,000 for PCAP C (CAP-MR) and PHP32,000 for PCAP D
(CAP-HR), which are equivalent to US$356 and US$758 for PCAP C
and PCAP D, respectively, based on the average PHP to USD
exchange rate for 2012 [12].
The worst-case scenario depicted the expensive scenario—
that is, it entailed the use of the higher or highest cost possible in
the study settings. In contrast to the best-case scenario, this
scenario used the cost of innovator brands and the highest
hospital charges for diagnostic or therapeutic interventions
(e.g., oxygenation), accommodations (big private room instead
of small private room), and other related expenses. In addition,
instead of just using the average or mean, the SD (if applicable)
was added to the average of the parameter measured (e.g.,
average weight plus SD or mean duration of hospitalization).
For example, instead of using the PhilHealth case rate payment
for professional fees, the room rates multiplied by the average
number of hospitalization days plus its SD served as the basis for
determining professional fees (this represents the highest in the
range for the professional fees).
In view of the high variability in the use of antibiotics, data
regarding antibiotic regimens obtained from practice guidelines
and practice patterns were utilized. The antibiotics included
intravenous penicillin G, ampicillin, cefuroxime, and ceftriaxone.
After a certain number of days (3 days), a shift was made from
intravenous antibiotics to oral preparations, usually amoxicillin
or cefixime. Azithromycin or clarithromycin were also considered
as add-on antibiotics. The costs of the antibiotic regimens were
computed on the basis of the average weight (plus SD, if
applicable) of a particular age group (infants, children, or
 VALUE IN HEALTH REGIONAL ISSUES 12C (2017) 115–122
adolescents). For the adolescent age group, the adult dose was
utilized, since the average weight of the patients in this group
was 50 kg.
In summary, the scenarios in the analyses included variations
in 1) antibiotics used; 2) type of accommodations; 3) length
of hospitalization; 4) study site (Hospital A or Hospital B);
5) professional fees; and 6) type of ventilation (for PCAP D) used.
These scenarios were influenced by the different pediatric age
groups and corresponding weights of patients.
Economic Burden of PCAP C and PCAP
The economic burden was estimated by multiplying the hospital-
ization cost with the number of PhilHealth claims for CAP-MR
and CAP-HR for 2012.
In terms of the method employed by patients’ families for
paying hospitalization bills, patient charts were reviewed to
determine whether payments were made through out-of-pocket
payments (personal funds) or a health maintenance organization
(HMO) or whether the patients were classified as “service”
patients. Allotment of a certain number of hospital beds to
“service” patients (referred to in some hospitals as “charity”
patients) is considered part of a private hospital’s corporate
social responsibility program. This program allows lower hospi-
talization costs for patients in the lower social economic strata in
comparison with those for “private” patients, since it is expected
that the lowest charges will be applied to a “service” patient. A
senior resident physician is assigned as the primary attending
physician to the “service” patient by the department and he or
she provides care under the supervision of a consultant. In this
program, the “service” patients are not charged professional fees
for the services rendered by one or more physicians. Moreover, in
one of the study sites, “service” patients are given a certain
“donation” by the hospital. This amount is given in the form of a
deduction in the patient’s total hospital bills.
Since the patients included in the study were those hospi-
talized in 2012, the reference time for the cost analysis was
also 2012.
Results
Hospitalization and Post-Discharge Costs for PCAP C and
PCAP D
The hospitalization and postdischarge costs (incurred a week
after discharge from the hospital) were computed for both PCAP C
and PCAP D (CAP-MR and CAP-HR) by using a societal perspective.
The hospitalization cost for PCAP C (CAP-MR) for the study
sites are listed in Tables 1 and 2. It ranged from PHP24,332 to
PHP75,409 (US$576–US$1786). The tables are separated into those
using a) the lower cost centers (generic equivalent of the anti-
biotics and other related cost centers); b) innovator brands and
other related higher cost centers; and c) patients’ age groups and
corresponding body weights.
Among patients included in the study, only one patient
(infant) was hospitalized for PCAP D (CAP-HR). The estimated
health care cost for this patient’s hospitalization was PHP77,460
to PHP121,301 (US$1834–US$2872) and the total economic burden
for hospitalization (healthcare plus non-healthcare costs) was
PHP96,570 to PHP140,411 (US$2287–US$3325). However, it should
be noted that this patient did not require mechanical ventilation
but only a facemask for the delivery of oxygen. Assuming that
this patient required mechanical ventilation, it was estimated
that approximately PHP20,533, would be added to the hospital-
ization cost. This would bring the hospitalization cost to
PHP97,993 to PHP141,834 (US$2320–US$3359) and the total
117
economic burden caused by hospitalization for pneumonia (PCAP
D) to PHP117,103 to PHP160,944 (US$2773–US$3811).
Results of the best-case and worst-case scenario analysis,
representing the lowest and highest costs (minimum to max-
imum) as listed in Tables 1 and 2, are summarized and depicted
in Figures 1–3. These figures illustrate the range of health care
and total costs or the total economic burden for CAP-MR for the
three age groups, namely, infants, children and adolescents. The
PhilHealth case rate payment is also illustrated in the figures;
however, it should be noted that the PhilHealth case rate pay-
ment only represents health care cost from the payer or Phil-
Health’s perspective.
Postdischarge or follow-up costs were estimated to be
PHP1175 to PHP1531 for PCAP C (CAP-MR) and PHP1275 for PCAP
D (CAP-HR). For PCAP C, this included the cost of completion
of antibiotic coverage, but not in the case PCAP D, as
antibiotic coverage had already been completed during the
hospitalization phase.
With the PhilHealth case rate payment for CAP-MR set at
PHP15,000, the estimated increment in hospitalization cost for
the following groups were as follows:
1. Infants: PHP9332 to PHP46,121 (US$221–US$1092)
2. Children: PHP12,674 to PHP46,297 (US$300–US$1096)
3. Adolescents: PHP16,873 to PHP55,872 (US$400–US$1323)
For CAP-HR, with the PhilHealth case rate payment set at
PHP32,000, the estimated additional hospitalization cost for the
infant patient was PHP65,993 to PHP109,834 (US$1563–US$2601).
Economic Burden of Pneumonia
In 2012, PhilHealth listed 347,653 claims for CAP-MR and 7153
claims for CAP-HR. Using their case rate payments, these
amounted to PHP5.21 billion and PHP228.9 million for CAP-MR
and CAP-HR, respectively [13]. Since they did not mention the
specific age groups of these claimants, it can be assumed that
they represented both the pediatric and adult groups. In view of
this, the approximate total burden of pneumonia specific for the
pediatric age group cannot be fully ascertained. However,
because of the huge disparity between the PhilHealth case rate
payments and the hospitalization costs estimated in the study, it
is expected that the total economic burden will be significantly
higher.
Table 3 shows the mode of payment that was availed of by
patients’ families to settle hospitalization bills. Payments were
made a) out of pocket and paid wholly, as in the case of “private”
patients, or partially (subsidized) as in the case of “service”
patients; or b) through a health maintenance organization (HMO).
Discussion
Hospitalization Cost of Pneumonia Among Pediatric Patients
The study results estimated the “real” health care–related hospi-
talization costs for treatment of pneumonia among the pediatric
age groups, both for PCAP C and PCAP D. For PCAP C, the
hospitalization cost ranged from PHP24,332 to PHP58,294 and
PHP24,799 to PHP61,121 among infants with weights of 10 kg and
13.5 kg, respectively. Among children weighing 19.5 kg, the range
was PHP27,674 to PHP61,297, whereas for adolescents weighing 50
kg, the costs were PHP31,220 to PHP75,409. For PCAP D, the cost
was derived from the patient (infant) in the study. The estimates
ranged from PHP77,460 to PHP141,834. It is expected that a
higher amount would be obtained for children and adolescents,
in consideration of their higher weights, as an increase in
weight would increase the dosage and, thus, the cost of
118 VALUE IN HEALTH REGIONAL ISSUES 12C (2017) 115–122

Table 1 – Cost of hospitalization for PCAP-C (CAP-MR) in Hospital A.

Table 1.1A - Hospitalization cost among infants using generic equivalent drugs and lower-cost centers (weight ¼ 10 kg).

Antibiotic used Penicillin G Ampicillin Cefuroxime Ceftriaxone

Health care cost 24,332–29,432 26,767–31,867 28,534–33,634 26,794–31,894

Production losses 4,750–7,600 4,750–7,600 4,750–7,600 4,750–7,600
Cost of other resources 2,250–3,600 2,250–3,600 2,250–3,600 2,250–3,600
Total economic burden 31,332–40,632 33,767–43,067 35,534–44,834 33,794–43,094

Table 1.1B - Hospitalization cost among infants using innovator brand drugs and higher-cost centers (weight ¼ 10 kg).

Antibiotic used Penicillin G Ampicillin Cefuroxime Ceftriaxone

Health care cost 29,295–41,295 31,785–43,785 33,559–45,559 34,418–46,418

Production losses 4,750–7,600 4,750–7,600 4,750–7,600 4,750–7,600
Cost of other resources 2,250–3,600 2,250–3,600 2,250–3,600 2,250–3,600
Total economic burden 36,295–52,495 38,785–54,985 40,559–56,759 41,418–57,618

Table 1.2A - Hospitalization cost among infants using generic equivalent drugs and lower-cost centers (weight ¼ 13.5 kg).

Antibiotic used Penicillin G Ampicillin Cefuroxime Ceftriaxone

Health care cost 24,799–29,899 27,175–32,275 30,236–35,336 28,322–33,422

Production losses 4,750–7,600 4,750–7,600 4,750–7,600 4,750–7,600
Cost of other resources 2,250–3,600 2,250–3,600 2,250–3,600 2,250–3,600
Total economic burden 31,799–41,099 34,175–43,475 37,235–46,536 35,322–44,622

Table 1.2B - Hospitalization cost among infants using innovator brand drugs and higher-cost centers (weight ¼ 13.5 kg).

Antibiotic used Penicillin G Ampicillin Cefuroxime Ceftriaxone

Health care cost 29,762–41,762 32,193–44,193 35,261–47,261 37,246–49,246

Production losses 4,750–7,600 4,750–7,600 4,750–7,600 4,750–7,600
Cost of other resources 2,250–3,600 2,250–3,600 2,250–3,600 2,250–3,600
Total economic burden 36,762–52,962 39,193–55,393 42,261–58,461 44,246–60,446

Table 1.3A - Hospitalization cost among children using generic equivalent drugs and lower-cost centers (weight ¼ 19.5 kg).

Antibiotic used Ampicillin Cefuroxime Ceftriaxone

Health care cost 27,674–29,374 27,510–29,210 29,941–31,641

Production losses 3,800–5,700 3,800–5,700 3,800–5,700
Cost of other resources 1,800–2,700 1,800–2,700 1,800–2,700
Total economic burden 33,274–37,774 33,110–37,610 35,541–40,041

Table 1.3B - Hospitalization cost among children using innovator brand drugs and higher-cost centers (weight ¼ 19.5 kg).

Antibiotic used Ampicillin Cefuroxime Ceftriaxone

Health care cost 32,692–38,692 36,000–42,000 40,165–46,165

Production losses 3,800–5,700 3,800–5,700 3,800–5,700
Cost of other resources 1,800–2,700 1,800–2,700 1,800–2,700
Total economic burden 38,292–47,092 41,600–50,400 45,765–54,565

Table 1.4A - Hospitalization cost among adolescents using generic equivalent drugs and lower-cost centers (weight ¼ 50 kg).

Antibiotic used Ampicillin Cefuroxime Ceftriaxone

Health care cost 31,873–40,373 34,032–42,532 33.733–42,233

Production losses 7,600–12,350 7,600–12,350 7,600–12,350
Cost of other resources 3,600–5,850 3,600–5,850 3,600–5,850
Total economic burden 43,073–58,573 45,232–60,732 44,933–60,433

Table 1.4B - Hospitalization cost among adolescents using innovator brand drugs and higher-cost centers (weight ¼ 50 kg).

Antibiotic used Ampicillin Cefuroxime Ceftriaxone

Health care cost 44,907–64,907 55,409–75,409 51,993–71,993

Production losses 7,600–12,350 7,600–12,350 7,600–12,350
Cost of other resources 3,600–5,850 3,600–5,850 3,600–5,850
Total economic burden 56,107–83,107 66,609–93,609 63,193–90,193

All figures are in Philippine peso (PHP); lower cost, using mean hospitalization days; higher cost, using average plus SD.
 VALUE IN HEALTH REGIONAL ISSUES 12C (2017) 115–122 119

Table 2 – Cost of hospitalization for PCAP-C (CAP-MR) in Hospital B.

Table 2.1A - Hospitalization cost among infants using generic equivalent drugs and lower-cost centers (weight ¼ 10 kg).

Antibiotic used Penicillin G Ampicillin Cefuroxime Ceftriaxone

Health care cost 27,787–31,387 30,277–33,877 32,044–35,644 30,305–33,905

Production losses 4,750–6,650 4,750–6,650 4,750–6,650 4,750–6,650
Cost of other resources 2,600–3,640 2,600–3,640 2,600–3,640 2,600–3,640
Total economic burden 35,137–41,677 37,627– 44,167 39,394–45,934 37,655–44,195

Table 2.1B - Hospitalization cost among infants using innovator brand drugs and higher-cost centers (weight ¼ 10 kg).

Antibiotic used Penicillin G Ampicillin Cefuroxime Ceftriaxone

Health care cost 41,971–53,171 44,461–55,661 46,235–57,435 47,094–58,294

Production losses 4,750–6,650 4,750–6,650 4,750–6,650 4,750–6,650
Cost of other resources 2,600–3,640 2,600–3,640 2,600–3,640 2,600–3,640
Total economic burden 49,321–63,461 51,811–65,951 53,585–67,725 54,444–68,584

Table 2.2A - Hospitalization cost among infants using generic equivalent drugs and lower-cost centers (weight ¼ 13.5 kg).

Antibiotic used Penicillin G Ampicillin Cefuroxime Ceftriaxone

Health care cost 28,258–31,858 30,689–34,289 33,750–37,350 31,837–35,437

Production losses 4,750–6,650 4,750–6,650 4,750–6,650 4,750–6,650
Cost of other resources 2,600–3,640 2,600–3,640 2,600–3,640 2,600–3,640
Total economic burden 35,608–42,148 38,039–44,579 41,100–47,640 39,187–45,727

Table 2.2B - Hospitalization cost among infants using innovator brand drugs and higher-cost centers (weight ¼ 13.5 kg).

Antibiotic used Penicillin G Ampicillin Cefuroxime Ceftriaxone

Health care cost 42,540–53,740 44,869–56,069 47,936–59,136 49,921–61,121

Production losses 4,750–6,650 4,750–6,650 4,750–6,650 4,750–6,650
Cost of other resources 2,600–3,640 2,600–3,640 2,600–3,640 2,600–3,640
Total economic burden 49,890–64,030 52,219–66,359 55,286–69,427 57,271–71,411

Table 2.3A - Hospitalization cost among children using generic equivalent drugs and lower-cost centers (weight ¼ 19.5 kg).

Antibiotic used Ampicillin Cefuroxime Ceftriaxone

Health care cost 31,241–33,941 31,077–33,777 33,509–36,209

Production losses 4,750–6,650 4,750–6,650 4,750–6,650
Cost of other resources 2,600–3,380 2,600–3,380 2,600–3,380
Total economic burden 38,591–43,971 38,427–43,807 40,859–46,239

Table 2.3B - Hospitalization cost among children using innovator brand drugs and higher-cost centers (weight ¼ 19.5 kg).

Antibiotic used Ampicillin Cefuroxime Ceftriaxone

Health care cost 45,425–53,825 48,732–57,132 52,897–61,297

Production losses 4,750–6,650 4,750–6,650 4,750–6,650
Cost of other resources 2,600–3,380 2,600–3,380 2,600–3,380
Total economic burden 52,775–63,855 56,082–67,162 60,247–7 1,327

Table 2.4A - Hospitalization cost among adolescents using generic equivalent drugs and lower-cost centers (weight ¼ 50 kg)

Antibiotic used Ampicillin Cefuroxime Ceftriaxone

Health care cost 31,220–34,820 33,379–36,979 33,081–36,681

Production losses 5,700–7,600 5,700–7,600 5,700–7,600
Cost of other resources 3,120–4,160 3,120–4,160 3,120–4,160
Total economic burden 40,040–46,580 42,199–48,739 41,901–48,441

Table 2.4B - Hospitalization cost among adolescents using innovator brand drugs and higher-cost centers (adolescents;
weight ¼ 50 kg).

Antibiotic used Ampicillin Cefuroxime Ceftriaxone

Health care cost 49,169–60,369 59,672–70,872 56,255–67,455

Production losses 5,700–7,600 5,700–7,600 5,700–7,600
Cost of other resources 3,120–4,160 3,120–4,160 3,120–4,160
Total economic burden 57,989–72,129 68,492–82,632 65,075–79,215

All figures are in Philippine peso (PHP); lower cost, using mean hospitalization days; higher cost, using average plus SD.
120 VALUE IN HEALTH REGIONAL ISSUES 12C (2017) 115–122

Hosp
pitalizatio
on Cost forr CAP-MR
R Among pitalizatio
Hosp on Cost fo
or CAP-MR
R Among
In
nfants Adolescents
100,000
90,000 100,000
80,000 90,000
70,000 80,000
60,000 70,000
50,000
40,000 60,000
30,000 50,000
20,000 Maxximum 40,000
10,000 30,000
0 Min
nimum
20,000 M
Maximum
10,000 M
Minimum
0

Total Cost = Healthcare cost

c plus No
on-healthcarre cost

Fig. 1 – Hospitalization cost for medium-risk community-

acquired pneumonia (CAP-MR) among infants. To
otal Cost = Healthcare
H co
ost plus Non
n-healthcare
e cost

Fig. 3 – Hospitalization cost for medium-risk community-

weight-dependent factors, such as dosage of antibiotics and acquired pneumonia (CAP-MR) among adolescents.
intravenous fluids.
In comparison, a study conducted in the same year [9] showed payments in the Philippines. The cost incurred in government
that the hospitalization costs among adults ranged from hospitals, definitely are lower; however, these hospitals are
PHP25,000 to PHP90,000 for CAP-MR, whereas for CAP-HR, the provided with funds/budgets from their respective local govern-
range was PHP93,000 to almost PHP214,000. With both the ment units, and these resources are used to cover some of the
pediatric and adult populations having the same PhilHealth case hospitalization costs for patients. Thus, the lowest costs obtained
rate payments of PHP15,000 for CAP-MR and PHP32,000 for CAP- in the study setting might be better approximations of “true”
HR, findings from that study and ours demonstrated the huge hospitalization costs.
disparity between “actual” hospitalization costs and the amounts However, there is a possibility of much higher costs compared
of PhilHealth case rate payments [9]. with those of the worst-case scenario in the study. This is in view
The huge cost of hospitalization cannot be simply attributed of the possibility of patients using more expensive accommoda-
to the private nature of the hospitals in the study. The cost of tions, such as private suites, or more expensive private hospitals.
antibiotic therapy played a large role in the hospitalization cost, However, this was not included since this is more of the
and this was not affected by the hospital setting. In fact, in a exception rather than the usual practice. In addition, patient
previous study on the cost of hospitalization for acute coronary utilization of very expensive items (accommodation cost of
syndrome, the difference in the hospital charges between a private suites) cannot be used to illustrate the disparity between
private hospital (suburban hospital located south of Manila) and the health care–related hospitalization costs to the amounts of
those of a tertiary government hospital in Manila was merely PhilHealth case rate payments.
5.4% to 7.8% [9]. Finally, using a spectrum of the lowest to the highest range of
costs in the sensitivity analysis may encompass all relevant
possible scenarios. This means that the analysis would cover
Sensitivity Analysis
changes in cost parameters that occur simultaneously (multi-
It is to be expected that not all possible scenarios can be included variate analysis), for example, combinations of lowest and high-
in any sensitivity analysis. However, it is important to recognize est cost ranges.
that relevant or useful scenarios be included in the analysis.
Admittedly, the resulting best-case scenario in this study does
not represent the lowest possible health care–related hospital- Economic Burden of Hospitalization for Pneumonia Among
ization costs, which are usually borne through out-of-pocket Pediatric Patients
It was earlier mentioned that the PhilHealth payments of PHP5.21
billion and PHP228.9 million for CAP-MR and CAP-HR in 2012 [13]
Hospitaliz
H zation Cost for CAP
P-MR might be for the aggregate claims of the pediatric and adult
Amon ng Childreen population. In a previous paper on the economic burden of
100,000 pneumonia among adults in the Philippines, this burden was
90,000
80,000
calculated using the lowest estimated cost for the adult popula-
70,000 tion. It showed that the estimate for CAP-MR was PHP8.48 billion
60,000
50,000 and PHP643.76 million for CAP-HR [9]. Assuming that the lowest
40,000
30,000 possible estimated cost of hospitalization for any of the pediatric
20,000 age groups is used for the computation, the total economic
M
Maximum
10,000
0 M
Minimum burden will be similar or higher than this amount. This is in
view of the study results, which showed that the lowest possible
hospitalization cost for the infant population with a mean weight
of 10 kilograms approximated the lowest cost for the adult
population. For the other sub-groups of the pediatric population,
however, the lowest estimated costs of hospitalization were
higher than the lowest estimated cost for the adult population.
To
otal Cost = Healthcare
H cost
c plus Non
n-healthcare
e cost
Although the estimate for the adult population was higher than
Fig. 2 – Hospitalization cost for medium-risk community- the pediatric population when the highest value in the cost
acquired pneumonia (CAP-MR) among children. centers were used, the most sensitive of the analyses is deemed
 VALUE IN HEALTH REGIONAL ISSUES 12C (2017) 115–122
Table 3 – Type of payment.
Private; N (%) HMO; N (%)
Hospital A 97 (50.0) 87 (44.8)
Hospital B 77 (45.3) 88 (51.8)
Total (%) 174 (47.8) 175 (48.1)
HMO, health maintenance organization.
to be nearest the lowest possible estimate. This is in view of the
preponderance of the population in the lower socio-economic
strata, with 64 -70% belonging to Class D and 22 – 28% in class E [9].
The estimated hospitalization cost for CAP-HR for the pedia-
tric and adult population ranged from PHP77,460 – 141,834 and
PHP93,000 – 214,000, respectively. The age group was not men-
tioned in the total PhilHealth claims (7,153) in 2012. Multiplying
the total PhilHealth claims with the above amounts, the eco-
nomic burden for CAP-HR will be nearer the PHP643.76 million
cited in the adult pneumonia study [9]. On the other hand, If the
total claims will be multiplied by the PhilHealth case rate pay-
ment of PHP32,000 for CAP-HR, the resulting amount of PHP228.9
million is markedly underestimated.
According to PhilHealth, CAP-MR was ranked first among the
top 10 medical conditions with claims for the year 2014 [14].
There were a total of 533,594 claims for CAP-MR amounting to
PHP7.6 billion (PHP7,619,776,074) [14]. Again, if the study esti-
mates will be used, this amount is an underestimation of the
huge economic burden of pneumonia in the Philippines.
Implications on equity and policy issues were discussed in the
paper on the economic burden of pneumonia in the adult
population [9]. Since the present study also demonstrated a
significant disparity between the estimated hospitalization cost
for the pediatric population and PhilHealth case rate payments,
the same implications will apply to the pediatric age group,
especially with regard equity issues as members and dependents
of the sponsored program as well as indigent members occupy a
large chunk of PhilHealth membership. The sponsored program
category of PhilHealth “includes members whose contributions
are being paid for by another individual, government agencies, or
private entities” [15]. Indigents include “persons who have no
visible means of income, or whose income is insufficient for
family subsistence, as identified by the Department of Social
Welfare and Development (DSWD), based on specific criteria” [15].
In 2014, the indigent category was considered a distinct category,
separate from the sponsored program. By the end of 2014, the
indigent and sponsored program categories comprised 40% and
2% of PhilHealth’s membership, respectively [14].
An important question that should be raised is: who pays the
difference between the actual cost of hospitalization and the case
rate payment? For the sponsored members and their dependents
who are admitted in service beds (wards) of government hospi-
tals, the government policy of “no balance billing” applies [16].
This means that these patients will not incur out-of-pocket
expenses, instead the government hospitals will shoulder the
difference in the hospitalization cost. These amounts will either
be written off as losses or obtained from the hospital’s budget or
elsewhere [9].
In terms of the type of payments availed by the patients, the
study showed that 48.1% had health insurance through health
management organization (HMO) on top of their PhilHealth
membership. This meant that they did not have to pay their
hospitalization cost, unless the total cost was beyond their
private insurance coverage, which would have necessitated out-
of-pocket payments. Payments done through “private” and “serv-
ice” categories are considered out-of-pocket payments. These
121
Service; N (%) Total number of patients (%)
10 (5.2) 194 (53.3)
5 (2.9) 170 (46.7)
15 (4.1) 364 (100.0)
patients do not have private insurance and even if some of them
may be PhilHealth members, they have to pay the remaining
balance between the PhilHealth coverage and their real
hospitalization cost.
Conclusions
This study illustrates the huge disparity between the PhilHealth
case rate payments and the healthcare costs for hospitalization
for pneumonia in the pediatric age group, which is similar to the
adult population as reported in the previous study. It thus
validated the estimated huge economic burden of hospitalization
for pneumonia in the country.
Limitations
The study is limited by the problem regarding the “true” preva-
lence of pneumonia (CAP-MR and CAP-HR) among the pediatric
age group. This limitation is due to the following: 1) the online
PhilHealth statistics on pneumonia [13] did not specify the age
group; neither did it separate the cases attributable to the adults
nor to the pediatric age group, 2) the PhilHealth coverage for 2012
was about 84% of the total population of the country [13], and 3)
unavailability of recent data on prevalence of pneumonia from
the Department of Health.
Acknowledgments
We acknowledge Jocelyn Herrera-Gaymaytan, Carol Mendoza,
Bibiano Reyes, Jr., Susan De Guzman, and Maricel Ruz for their
help during the study.
Source of financial support: This study received financial
support from the Pfizer Global Funds for Investigator-Initiated
Research (grant WS2337375). The sponsor did not participate in
any way in the conduct of the study, from protocol development,
analysis and interpretation of results, writing of the reports, to
publication of this article.
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