Charity beds and Universal Health Care

  • August 22, 2012

‘Installing a fully functional universal health care model that benefits most Filipinos requires serious and rational debates.’

IN the run-up to the President’s third State of the Nation Address, the Aquino administration’s program of government came under a barrage of criticism from a broad range of sectors – from well-meaning allies sincerely trying to be helpful to impatient advocates demanding instant social change to implacable political ideologues who believe that they have sole possession of all social cures.

Some of the observations are valid and need to be addressed. Others are the result of misconceptions, wrong perceptions, or plain misunderstanding that need to be explained and corrected. Finally, there are also deliberate distortions of reality by those who, for one reason or another, simply do not wish present reforms to succeed – these should be exposed or their purveyors convinced that societal interests should override narrow political concerns.

One of the most strident notes of protest was the reaction to a statement from a ranking Department of Health official to the effect that charity beds in government would be “phased out”. The extent of misrepresentation of the impact of this “phase out” is encapsulated in the comment from a group calling itself the “Movement for Good Governance” which stated without any basis that “this would mean that the 42,997 charity beds in 703 government hospitals would no longer exist.”


The notion of charity beds for indigent patients is an old-fashioned concept of free health services given to the poor out of the goodness of the hearts of health providers. Charity wards were those in which the patients were to be admitted for free – meaning without having to pay out of their pockets for the services they consume.


However, the fact is that services for “charity” patients were never truly free. Private hospitals (generally affiliated with religious groups) initially funded these from charitable donations and from profits from hospital services for rich patients. In addition, most of these also collected “user fees” from the poor families themselves – purportedly to counter an imagined “dole-out mentality” that could develop in beneficiaries who were fully subsidized. This model was transferred to government hospitals.

Over time however, rising costs meant that financing such services could no longer be sustained and user charges were increasingly adopted as the norm by all institutions, government and private, who provided “charity care”. In time, in all “charity health operations”, the beneficiaries increasingly paid some amount out of pocket – whether for diagnostic tests, food and board, or incentives to providers.

The idea of supporting services to indigents from an insurance-like financing system simply means that payments for services are made out of a combination of general tax revenues and an effective health tax called premiums (paid through a payroll tax system or a form of individual subsidy contributions from government). It is for this reason that the hospital services, paid for by a third party or direct subsidy, may strictly speaking no longer be termed “charity” services or beds.

The other distortion commonly perceived by health advocates is the notion that “corporatization” of government hospitals is simply a way to disguise “privatization”. This notion, equating corporate governance structures with the conversion of institutions into for-profit or private institutions, is simply wrong. The fact is that hospitals that are run like corporations remain government-owned and retain their public functions and obligations even as they are managed as autonomous corporate bodies – the specialty centers in Quezon City have long been examples or models of this mode of hospital operations. (Even the venerable Philippine General Hospital can be cited as an example because it is essentially responsible to an autonomous governing body, the University of the Philippines Board of Regents.)

Another charge against the health program of the Aquino government is that the out of pocket component of health expenditures in the Philippines, at 54 per cent, is one of the highest in this part of the world. They overlook the fact that this figure is from the 2007 National Health Accounts (NHA). If there is something to criticize in this regard, it is probably the fact that the National Statistics Office has been slow to come out with more recent figures for total health expenditures. It should be pointed out that the first time NHA was used for health policy formulation in 1998-1999, the figures came from the 1997 survey, then just over a year old.

The fact that misconceptions, outdated notions, and false impressions concerning the universal health care initiatives of the present government persist two years after its assumption of office may in fact constitute one of its failures in the health sector. Whatever attempts have been made to inform, educate, and communicate with the public on these different health issues have apparently been ineffective to date. This is a serious flaw because installing a fully functional universal health care model that benefits most Filipinos requires serious and rational debates on the many approaches to health services. This can only be done if all stakeholders are sufficiently informed to participate meaningfully in such discussions.


Opponents of reproductive health and responsible parenthood should note that one of the most applauded proposals in President Aquino’s SONA was his mention of the need for passage of legislation to help reduce the burden of large family sizes on women, their families, and society at large.



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