The ‘Corporatization’ of the Public Health System

Official statistics show that seven out of every 10 Filipinos die without ever seeing a doctor and that the nearly 75 percent of the population living below poverty line are mainly in rural areas where there is no access to basic services such as health and medical care. Yet the government has allotted a mere 30 centavos per Filipino per day for health care. And now, its thrust is the “corporatization” of the health system translating into higher fees and eventually the privatization of public health care services.

By Karl G. Ombion & Ranie Azue

The reality in private hospitals where an in-patient must first give a down payment of P2,000 upon admission is now also true in public hospitals today. A public hospital patient now has to pay a deposit of P500 to P1,000 first.

This is why, according to health activists, the health situation of Filipinos has become deplorable. Official statistics show that seven out of every 10 Filipinos die without even seeing a doctor. Nearly 75 percent of Filipinos live below the poverty line, most of them from the rural areas. These are the people who have no access to the most basic services including health care and medical treatment.

Health activists conclude that the inaccessibility of health services and the worsening health situation are due to the government’s thrust of pursuing the policy of privatization, where ownership and control of public services and utilities, like power, water, schools, and hospitals, are being turned over to private corporations whose main objective is to profit. This trend is called the “corporatization” of public services.

In 1998, the government formed a “Task Force on Corporatization” led by the Department of Health (DOH). It evaluated public hospitals regarding their viability for fiscal autonomy and restructuring, in line with the thrust towards “corporatization” of 38 state-run hospitals nationwide.

The evaluation showed most public hospitals are inefficient, unprofitable and unsustainable. Hence, the government implemented the Health Sector Reform Agenda (HSRA) aiming for: hospital revitalization or modernization, financing system expansion, conversion into public corporation, improvement of hospital networking and patient referral system, and organizational changes.

Higher tariff for medical services

In line with the national government’s thrust, the Negros Occidental provincial government raised the tariff for medical services in government hospitals.

Data obtained by Bulatlat revealed that the provincial government passed Provincial Tax Ordinance No. 92-002, amending Provincial Tax Ordinance 97-001, raising the fees being charged by government hospitals at an unprecedented rate of 250% compared to the year 2000.

In Article C of the said Provincial Tax Ordinance, the following standard rates are set:

Rates for the use of laboratory facilitates vary from a minimum of P45 to a high of P400. Oftentimes laboratory needs of patients are referred to private laboratories since most of the procedures needed are not available. Worse is the reported blatant collaboration between hospital personnel particularly laboratory technicians and physicians and private laboratories.

The charge for ultrasound service ranges from P350 to P900.Use of x-ray machines is pegged at P150; incubator fee at P240 a day or P10 per hour; respirator machine excluding oxygen at P250; cardio monitor at P500; and respirator tubing, P950 per piece.

Negros Occidental Governor Joseph Maranon said the imposition of standard rates is intended to generate revenues for better services. The funds generated are used for the replenishment of hospital supplies and upgrading of facilities, the governor said.

A long time resident nursing aide however belied the Governor’s statement saying that the provincial hospital looks modern outside but is dilapidated inside. Requesting not to be identified, she took Bulatlat around the buildings and showed how some of the rooms and ceilings have remained unfinished while some have been severely damaged or poorly maintained. Worse, she added, patients are charged for the use of medical equipment donated by politicians and benevolent groups for the use of the public.

Privatization cum “corporatization”

Corporatization, as defined the Center for Investigative Research and Media Services (CIRMS), is the process of take over by private corporate interest of a public utility entity, which eventually leads to full privatization.

In its study of selected cases of privatized government utilities, CIRMS said corporatization has two types. One is the direct sale of a government or public utility to a private company. The most common reasons given for this are government inefficiency, slow modernization, and indebtedness of the utility. CIRMS cited the case of national government companies as examples.

The second is the indirect takeover by a private corporate interest of a public utility firm for the same reasons as above. CIRMS cited the case of local water units, financial institutions, and the Corazon Locsin Montelibano Memorial Regional Hospital (CLMMRH), which have heavy private investments.

The CLMMRH, a case study

The Corazon Locsin Montelibano Memorial Regional Hospital (CLMMRH) started as a district hospital. It became a regional hospital in the late ‘80s. But according to sources, its status was elevated without the standards of a regional hospital being fully satisfied. These include having separate buildings for each medical function, standard medical equipments, a 300-bed capacity, a certain number of doctors, nurses & health staff, including resident doctors, among others.

In mid ‘90s, the CLMMRH was listed as one of the pilot hospitals out of 38 priority state-run hospitals nationwide by the Department of Health (DOH) for its privatization cum corporatization thrust. Since 1998, it has carried out sweeping changes in hospital management and systems in accordance with the government’s health reform agenda.

But after several years of experimentation, CLMMRH has only turned for the worse.

The envisioned hospital modernization and delivery of affordable and quality services did not materialize. Inside sources who requested anonymity said the new buildings were erected from 1997 to 2000 but their construction was reportedly full of irregularity. The medical isolation building for one remains unfinished despite the P10 million spent on its construction. Three other buildings remain under-utilized and one, which is supposed to be a modern laboratory building, remains empty of modern equipment.

Today, patients, including children and infants, are cramped in small, old and dilapidated wards. Many lie in the corridors, vulnerable to passing people who may be carriers of communicable diseases.

Higher cost of services

Out-patients are now required to pay a minimum of P30 per consultation. A nursing aide tells the patient to first pay before being taken to the doctor. This was not the case before, a nursing staff said.

Meanwhile, the hospital pharmacy often does not have basic medicines like paracetamol and aspirin, and supplies like syringes and dextrose. Indigents and PhilHealth cardholders interviewed by Bulatlat said even hospital patients are often told to go outside and buy their prescribed medicines and supplies.

A midwife interviewed by Bulatlat confirmed this, saying some nurses and doctors at the emergency room would often give purchase orders to their new patients with specific instructions to buy them at private drugstores outside of the hospital.

The midwife scored the lack of the most basic medicines and supplies which could be crucial in the immediate treatment of some deadly illnesses.

Health system in crisis

The Philippine health sector is in a state of calamity. For decades, the health system reflects the ill state of the people and the wrong priorities of the national government & leadership.

Data obtained by Bulatlat revealed that from 1986 to 2004, government spending for health has dropped significantly. In 1997, health appropriation was 2.9% of the national budget. It was reduced to a mere 1.5% in 2004. This year, national budget for health has dropped further to 1.3%.

The bigger chunk of the national budget goes to paying off foreign debts (up to 40 percent of the budget in the past, and more than 60% this year) and funding military spending (15-20 percent).

The much-hyped efficiency, better and affordable health services under the HSRA never came. The opposite happened.

Profit has dictated the supply and distribution of vital medicines and vaccines, and the accessibility of medical facilities. Increasingly, it will determine the thrust of the country’s health care system and services. (

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