Prove you’re losing money, DOH tells private hospitals

THE Department of Health (DOH) is considering asking members of the Private Hospitals Association of the Philippines (PHAP) to open their account books and prove they are losing money due to the Cheaper Medicines law that imposed 50 percent price cuts on 21 essential medicines.

The PHAP members last week said they will increase their service fees by about 10 percent for six months or so in order to recover their losses due to the drug price discounts which became effective last Sept. 15.

Deputy presidential spokesman Lorelei Fajardo said contrary to their claims, private hospitals are not losing because Philhealth just reimbursed them up to P18 billion. She also said medicines are not the main source of profit of hospitals and that the losses could not have been that big because government lowered the prices of only 21 essential drugs.

"Imposibleng malulugi sila. They have other income-generating services inside their hospitals. They have to open their books for us to see if they are really losing," Health Secretary Francisco Duque said.

DOH undersecretary Alexander Padilla had already said on Monday that they are already looking at possible sanctions for what he described as PHAP members’ "indirect way of circumventing the law."

Fajardo said Congress should pass a law allowing government to regulate the private hospitals. She said officials of private hospitals have been rejecting attempts of the health department to hold dialogues with them.

"First, this can be an opportunity or an eye-opener na maaaring puwedeng maglatag ng batas to that effect... Second, siguro kung talagang may mga hardcore na private hospital owners or management, siguro doon puwedeng pag-usapan iyan when they are already renewing their licenses," she said.

"Probably one sanction would be, be strict on renewing their license or alisin ang accreditation sa Philhealth but hindi na sana tayo umabot sa ganoon. Maaari namang mapag-usapan iyan," she added.

Deputy presidential spokesman on economic affairs Gary Olivar said the effect of the Cheaper Medicines law on hospital revenues would just be a "one-time hit" and they could start earning again once their old stock or inventory has been consumed.

"I really think that there’s something going on at tama naman ang panawagan ni Secretary Duque na tingnan ang financials. The last thing we want to see is people taking advantage of policy changes for the good of the poor users of health care in order to improve their profits," Olivar said. "Siguro ipaalala na lang natin sa private hospitals na gagawa nito, we know who you are. Ganoon na lang."

PHAP said its members agreed during a meeting last Saturday on the service fee increase. PHAP legal counsel Dr. Bu Castro said it’s either that or the hospitals would have to retrench workers or close their pharmacies. He stressed that the fee increase will only be for "about six months."

But Akbayan party list Rep. Risa Hontiveros challenged Duque to sic the law on hospitals that resort to retaliatory actions to block the implementation of the Cheaper Medicines law. "His office has been granted broad administrative powers to implement the maximum retail price provisions of the law, and he can immediately enforce administrative sanctions against any individual, company, or institution that violates the cheaper medicines law," she said, adding that the DOH chief can legally fine erring hospitals from P50,000 to P5 million. –Regina Bengco and Gerard Naval