Briefer on the Privatization of Philippine Orthopedic Center

The Philippine Orthopedic Center (POC) is the only specialized orthopedic tertiary care government hospital in the country. The 700-bed capacity hospital has 927 employed staff and provided services to 196,436 patients in 2010.

The Department of Health (DOH) admitted that no “major renovation or improvement has taken place” in the POC since the construction of the hospital’s main building along Banawe Avenue, Quezon City in 1963 “primarily due to budgetary constraints”.

The budget allotment for POC since 2009 increased a mere 2-3% annually from 2009 to 2011, and even decreased by almost 3% in 2012.3 For 2013, POC was allotted P413.65M from the General Appropriation’s Act. Instead of providing adequate budget to POC, the government is embarking on Public-Private Partnership (PPP) to upgrade, modernize and improve the operational efficiency of the hospital.

Philippine Orthopedic Center under PPP Project
The government dubbed the modernization of the POC as “the country’s first health project under the PPP program”. The new hospital facility will be built and maintained under the Build Operate Transfer (BOT) arrangement. The proposed hospital will be called the “Center for Bone and Joint Diseases, Trauma and Rehabilitation Medicine” capable of providing international quality orthopedic and trauma care according to DOH.

The project is part of the Aquino government’s Kalusugan Pangkalahatan (Aquino Universal Health Care) that promises increased affordability and accessibility of health care. The government targets the improvement of hospital facilities by involving private investors through PPP. PPP is a central policy and solution announced during President Benigno Aquino III’s 1st State of the Nation Address in 2010. Other hospitals up for PPP include the Research Institute for Tropical Medicine (RITM), San Lazaro Hospital, Dr, Jose Fabella Memorial Medical Center, and Jose R. Reyes Memorial Medical Center.

The P5.7 billion-project was approved by President Aquino on September 8, 2012 and involved a 25-year contract for the construction, operation, and maintenance of a 700-bed hospital inside the National Kidney and Transplant Institute compound in Quezon City. The modernization of POC was showcased in October 2012 Forum for Excellence for PPPs in Health organized by the DOH and the Public-Private Partnership Center. In November 18, 2012 the DOH issued the invitation to qualify to bid. In January 25, 2013, a pre-bidding conference was held with 9 prospective bidders, namely Siemens, Inc. – Health Sector, GE Electric Philippines, Inc., Sta. Clara International Corp., Mount Grace Hospital Ventures, Philips Electronics and Lighting Inc., Metro Pacific Investments, Megawide Engineering Excellence, Strategic Alliance Holding, Inc., Nikkon Sekkei, Inc./Data Trail Corp.

In June 4, 2013, a lone bidder, the Megawide Construction Corporation-World Citi Corp consortium(Partly Owned by Henry Sy), submitted bid documents. Target construction starts by 2014, with completion by May 2016.

Turning Health into Profitable Business – where will poor patients go?
Some 450-500 indigent patients avail of free service daily in the POC Out-Patient Department. Approximately 80-90% of hospitalized patients is poor and depends on free medicines, supplies and procedures available in the hospital. Many poor patients with fracture who stay at the hospital for more than 2 months have to solicit money to buy metal screws costing P60,000-P250,000. Patients from all over the country seek services in POC since it is only the public tertiary hospital for trauma and bone disease. 

The POC management, citing decreasing national allotment, implemented rates hike in 2011 which resulted to 100% rates increase in radiology procedures and 30-60% in laboratory procedures. Regular chest x-ray cost increased from P100.00 to P250.00. This was protested by both health workers and patients.

In the “modernized” POC under the private investor’s management, 420 beds will be allotted for PhilHealth-sponsored patients, 70 beds for indigent patients whose expenses will be shouldered by the private operator, and 210 beds or more are allotted for paying patients. Therapy and metal prosthesis will be borne by the patients, whether pay or sponsored. If the 70 beds are already filled-up, the private operator will stabilize incoming indigent patients and transfer them to other DOH facility.

Under PPP, the private investor will recover its investment by running the hospital as an enterprise for profit. Every health service will have a cost equivalent. It means that there will be token or no free or affordable service for the poor.

PhilHeath as the panacea for health care inaccessibility is pure fallacy and outright lie. “No balance billing” (NBB) is only limited to 23 medical cases which do not include any orthopedic or trauma case, limited to selected catastrophic illnesses, and applicable only to public hospitals. With the higher cost of health services in privatized hospitals, patients who are not qualified for NBB are actually paying more from out of their pockets.

Further, studies by UP Manila National Institutes of Health and data from PhilHealth itself, showed that the for more than a decade the top 10 hospitals for PhilHealth reimbursements (hospital and professional fees) was dominated by big private hospitals such as St. Luke’s Hospital and Makati Medical Center. This means that it is still the rich families that actually avail of the services of PhilHealth.

Job Insecurity for the Health Workers

The fate of almost 1,000 POC health workers is uncertain. DOH Secretary Enrique Ona repeatedly assured health workers that “nobody loses a job as a result of the modernization of the POC”.Yet, bid documents provide that the DOH shall offer the existing POC staff, an option – by allowing early retirement, severance and termination of employment with DOH and seeking appointment with the Project Proponent, but the project proponent “have the freedom to select employees who wish to transfer”.
The project proponent/investor is “not under obligation to recognize the existing union.”

Debunking the myth that “PPP is not Privatization”
Provision of public health services is an essential government function and responsibility. Public hospitals should be modernized and improved -- this should be done by the government itself and not be passed on to private investors. Once private investors are allowed into health service provision – whether through PPP, corporatization, or outright sale – the primary purpose of huge profit generation replaces service orientation, as health workers’ and patients’ experiences have shown. When PPP was implemented in selected health services in public hospitals, health services became costlier beyond the reach of poor patients.

People's health, safety and lives should not be left to the profiteering whims of the private investors. If the government is indeed sincere in improving people's health, it should allot adequate fund and invest in public health services.#