DOF: HMOs to be placed under IC The Department of Finance (DOF) is currently working on a proposal for the Insurance Commission

(IC) to regulate health maintenance organizations (HMOs). The DOF is of the opinion that HMOs operate similar to a pre-need company. DOF Secretary, Cesar V. Purisima is supportive of the proposal, believing that HMOs would be better managed and regulated under the IC. While HMOs need to register with the Securities and Exchange Commission (SEC) as a corporation and secure clearances to operate from the Department of Health, no government agency is directly monitoring the financial operations of HMOs According to Purisima, HMOs are supposed to be regulated by the DOH. However, the DOH does not have the expertise so it is already a practice for the DOH to have talks with the IC when it comes to HMO matters. The only administrative implement that gives supervision over HMOs is DOH Administrative Order (AO) No. 34-1994 issued July 20, 1994, amended by DOH AO 36-1996 dated October 2, 1996, mandating that the Health department supervises HMOs, issuing their clearance to operate as health service providers. At the same time, the SEC regulates HMOs in matters related to Batas Pambansa Blg. 68 or the Corporation Code of the Philippines. HMOs make up a majority of private health expenditures. To attract more clients and to boost their income, most HMOs have introduced new features to their traditional products. However, the rising cost of medical services over the year has resulted in either shutdowns or consolidation in the industry. The emergence of fly-by-night HMOs which offer lower premiums but with a higher profitability of default is also an industry concern. A number of bills concerning HMOs are pending in Congress, but the industry seems to be keener on a measure that gives the IC the power to supervise and regulate HMOs