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Hospitals and Economics

Hospitals and Economics

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Survival

Middle Ages hospitals served as almshouses for the poor, hostels for pilgrims, or hospital schools.

Latin hospes, signifying a stranger or foreigner, hence a guest.

Another noun derived from this, hospitium came to signify hospitality, that is the relation between guest and shelterer, hospitality, friendliness, hospitable reception.

Hospes is thus the root for the English words host(where the p was dropped for convenience of pronunciation) hospitality,hospice, hostel and hotel..

HISTORY

Ancient Egyptian Temples (Asclepius) 291 BC : it functiones as centers for medical advice, prognosis and healing: Tiber Rome

India: Fa Xian (chineseBuddhist Monk : The heads of the Vaisya families in them establish in the cities houses for dispensing charity and medicine

Lying In :Pandukabhaya of Sri Lanka (437BC to 367 BC

Mihintale Hospital

Anuradhapura

Medirigiriya

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Hospitals

With the rapid growth of the population during the 18th and 19th centuries it was obvious that local charities and the workhouse system could not provide sufficient medical care for the poor.

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PHYSICAL ASPECT OF HOSPITALS

Architecture:

a) space minimizing effort of medical personnel while maximizing of the whole system

b) Sturdy and strong to accommodate heavy departments

c) Provision of space for maintenance and waste disposal

d) New designs provides fresh air, better views and more pleasant colour schemes

Considerations: psychological needs of the patient, healing power of nature,, reduction of nurses fatigue and stress

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Hospital Departments

Emergency

Cardiology

Intensive Care Unit : Pediatric ICU, Neonatal ICU, Cardiovascular ICU

Neurology

Oncology

Obstetrics and Gynaecology

Outpatient

Behavioural Health

Dentistry

Dermatology

Psychiatric Ward

Rehabilitation Services

Physical Therapy

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Support Units of Hospitals

Pharmacy

Laboratory

Pathology

Radiology

Non-Medical :

Medical Records Department

Information Management

Clinical Engineering

Facilities Management

Plant Operation

Dining Services

Security Departments 9

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HOSPITALS

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Medical Tourism to the Philippines is currently on the rise

High-end private hospitals may charge an arm and a leg for medical procedures

but the prices are still affordable when you compare them to the rates charged

by top-notch facilities in first-world countries.

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DEMAND AND SUPPLY OF HOSPITALS

FACTORS AFFECTING DEMAND FOR HOSPITALS

NEED > Demand

Nature of Goods

Level of Income :Engel’s Law

Third Party

Resource Allocation of Government on Health

Lifestyle and Health Conditions

FACTORS AFFECTING SUPPLY OF HOSPITALS

Market : Demand

Production Inputs

Income

Profitability

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Pricing Mechanism

St. Luke’s Medical Center : Triple Cardiac Bypass Surgery normally cost an average of US $ 250,000 in the US would cost about P 900,000 (US$21, 428.60 at the exchange rate of US $ 1= Php 42)

Philippine Heart Center : Triple Cardiac Bypass Surgery The same medical procedure can be done for less than P 900,000 in the, a specialist hospital that is operated by the government.

St. Luke’s Medical Center or in the other top-notch private hospitals in the country: Asian Hospital and Medical Center, The Medical City, Cardinal Santos Medical Center, Manila Doctors Hospital, UST Hospital and the Medical Center Manila: Kidney Transplant costs upward of $200,000 in the US, costs about PhP 1,000,000 or $23, 809.50 in the Philippines.

National Kidney and Transplant Institute.

FACTORS AFFECTING THE PRICING MECHANISM OF HOSPITALS

1. Resource Allocation : Production Cost

2. Derived Demand

3. Supply

4. Nature of Goods

5. Level of Income

6. Government Laws

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High-end private

hospitals may charge

an arm and a leg for

medical procedures

but the prices are still

affordable when you

compare them to the

rates charged by top-

notch facilities in

first-world countries

HOSPITALS IN THE PHILIPPINES

PRIVATE GOVERNMENT

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GENERAL

SPECIFIC

PRIMARY LEVELSECONDARY LEVELTERTIARY LEVEL

Private Hospitals

A private hospital is a hospital owned by a for-profit company or a non-profit organisation and privately funded through payment for medical services by patients themselves, by insurers, or by foreign embassies.

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PRIVATE HOSPITAL

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PUBLIC HOSPITALS

A public hospital or government hospital is a hospital which is owned by a government and receives government funding. This type of hospital provides medical care free of charge, the cost of which is covered by the funding the hospital receives. Most hospitals worldwide are public.

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Types of Hospitals

General hospital : deal with many

kinds of disease and injury, and normallyhas an emergency department to deal withimmediate and urgent threats to health.

A general hospital typically is the majorhealth care facility in its region, with largenumbers of beds for intensive care andlong-term care; and specialized facilities forsurgery, plastic surgery, childbirth,bioassay laboratories, and so forth.

Larger cities may have several hospitals ofvarying sizes and facilities. Some hospitals,especially in the United States, have theirown ambulance service.

Specialized : deal with

specific needs

Specialized hospitals includetrauma centers, rehabilitationhospitals, children's hospitals,seniors' (geriatric) hospitals, andhospitals for dealing with specificmedical needs such as psychiatricproblems (see psychiatrichospital), certain diseasecategories, and so forth.

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PHILIPPINE HOSPITAL CATEGORY**ADMINISTRATIVE ORDER 147 S., 2004 (A.O. 70-A s., 2004 / A.O.68-A s.

1989)

PRIMARY CARE( FIRST LEVELREFERRAL HOSP./ SECONDARY)Non-departmentalized hospital that provides clinicalcare and management on the prevalent diseases inthe locality.

SECONDARY CARE (SECOND LEVELREFRL HOSP./ TERTIARY)Departmentalized hospital that providesclinical care and management on theprevalent diseases in the locality, as well asparticular forms of

treatment, surgical procedure and intensive

care.

TERTIARY CARE (THIRD LEVEL REFRL HOSP./ TERTIARY) Teaching and

training hospitals that provides clinical care and management on the prevalent diseases in the locality, as well as specialized and

sub-specialized forms of treatment, surgical procedure and intensive care.

INFIRMARY ( INFIRMARY / PRIMARY ) provides emergency treatment and care to the sick and injured, as well as clinical care and management to mothers and newborn babies.

BIRTHING HOME provides maternity service on pre-natal and post-natal care, normal spontaneous delivery, and care of newborn babies.

ACUTE CHRONIC PSYCHIATRIC CARE FACILITYprovides medical service, nursing care, pharmacological treatment, psychosocial intervention for mentally ill patients.

CUSTODIAL PSYCHIATRIC CARE FACILITY provides long term care , including basic human services such as food and shelter, to chronic mentally ill patients.

WESTERN VISAYAS REGION

AKLAN Kalibo

1. AKLAN COOPERATIVE MISSION HOSPITAL

2. ST. JUDE'S HOSPITAL

3. ST. GABRIEL HOSPITAL

4 .AKLAN BAPTIST HOSPITAL

ANTIQUE Semirara, Caluya

1. SEMIRARA COAL CORPORATION HOSPITAL

2. TUGON MEDICAL CLINIC AND HOSPITAL

ILOILO

1. BAROTAC VIEJO MEDICAL CENTER, INC.

2 .SEAMEN'S HOSPITAL -ILOILO (NEW)

ILOILO CITY

1. SAINT PAUL'S HOSPITAL

2. ILOILO MISSION HOSPITAL

3. ILOILO DOCTOR'S HOSPITAL, INC. 300

4. ST. THERESE-MTC COLLEGES HOSP.

CAPIZ-ROXAS CITY

1. CAPIZ DOCTOR'S HOSPITAL

2. WELL FAMILY MIDWIFE CLINIC (NEW)

3. CAPIZ EMMANUEL HOSPITAL, INC.

4. ST. ANTHONY COLLEGE HOSPITAL

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PRIVATE HOSPITALSRegion 6

PRIVATE HOSPITALSRegion 6

BACOLOD CITY

1. THE DOCTOR'S HOSPITAL, INC.

2. DR. PABLO O. TORRE SR. MEMORIAL HOSPITAL

3. WELL FAMILY MIDWIFE CLINIC (NEW)

4. WELL FAMILY MIDWIFE CLINIC (NEW)

5. WELL FAMILY MIDWIFE CLINIC-FORTUNE TOWN (NEW)

6. WELL FAMILY MIDWIFE CLINIC (NEW

7. BACOLOD OUR LADY OF MERCY SPECIALTY HOSP.

8.BACOLOD ADVENTIST MEDICAL CENTER (former BACOLOD

SANITARIUM AND HOSPITAL)

NEGROS OCCIDENTAL

1. HINIGARAN MEDICAL CLINIC

NEGROS OCCIDENTALKABANKALAN

CITY

1 SOUTHERN NEGROS DOCTORS HOSPITAL

SAN CARLOS

1. SAN CARLOS DOCTORS HOSPITAL, INC. (former SAN CARLOS

PLANTERS & LABORER'S HOSP)

SILAY CITY

1. WELL FAMILY MIDWIFE CLINIC (NEW)

VICTORIAS CITY 1 IMMACULATE CONCEPTION HEALTH CENTER

GOVERNMENT HOSPITAL Region 6

WESTERN VISAYAS REGION

AKLAN

1.BURUANGA MEDICAL COMMUNITY HOSPITAL (former BURUANGA MUNICIPAL HOSPITAL)

2 .IBAJAY DISTRICT HOSPITAL

3. DR. RAFAEL S. TUMBOKON MEMO. PROV. HOSP.

4 .LIBACAO MUNICIPAL HOSPITAL 10

5 .DON LEOVIGILDO DIAPO SR. MUNICIPAL HOSPITAL 10 6. BORACAY ISLAND MUNICIPAL HOSPITAL 7 MALAY MUNICIPAL HOSPITAL

ANTIQUE

1 PEDRO L. GINDAP MUNICIPAL HOSPITAL

2 BUGASONG MEDICARE COMMUNITY HOSPITAL

3 CULASI DISTRICT HOSPITAL

4 GOV. LEANDRO FULLON DISTRICT HOSPITAL

5 ANGEL SALAZAR MEMORIAL GENERAL HOSPITAL

6 SEBASTE COMMUNITY HOSPITAL

7 RAMON MAZA SR. MEMORIAL DISTRICT HOSPITAL

8 PRES. DIOSDADO MACAPAGAL HOSPITAL

9 VALDERRAMA MUNICIPAL HOSPITAL

CAPIZ

1 SEN. GERARDO ROXAS MEMORIAL DISTRICT HOSP. 2 CAMP PERALTA STATION HOSPITAL

3 MAMBUSAO DISTRICT HOSPITAL

4 BAILAN DISTRICT HOSPITAL

5 TAPAZ DISTRICT HOSPITAL

ROXAS CITY

1 ROXAS MEMORIAL PROVINCIAL HOSPITAL

GUIMARAS

1 GUIMARAS PROVINCIAL HOSPITAL

2 NUEVA VALENCIA DISTRICT HOSPITAL

ILOILO

1 ALEOSAN DISTRICT HOSPITAL

2 JESUS COLMENARES DISTRICT HOSPITAL

3 DON JOSE S. MONFORT MEDICAL CENTER

4 RAMON TABIANA MEMORIAL DISTRICT HOSPITAL

5 RICARDO S. PROVIDO SR. MEMORIAL HOSPITAL

6 DUMANGAS DISTRICT HOSPITAL

7 REP. PEDRO TRONO MEMORIAL DISTRICT HOSP.

8 FEDERICO ROMAN TIRADOR SR. MEMORIAL DIST. HOSP.

9 DR. RICARDO Y. LADRIDO MEMORIAL HOSPITAL

10 NEW LUCENA POLYTECHNIC COLLEGE MEDICAL CLINIC

AND HOSP 10 Dr. Layla Catedral-Solinap General Infirmary

11 ILOILO PROVINCIAL HOSPITAL

12 WESTERN VISAYAS SANITARIUM

GOVERNMENT HOSPITAL Region 6

ILOILO CITY

1 WESTERN VISAYAS MEDICAL CENTER

2 WEST VISAYAS STATE UNIVERSITY MEDICAL CTR.

PASSI CITY

1 DON VALERIO PALMARES SR. MEMO. DISTRICT HOSP.

NEGROS OCC.

1 CALATRAVA MUNICIPAL HOSPITAL

2 CAUAYAN MUNICIPAL HOSPITAL

3 VICENTE GUSTILO MEMORIAL DISTRICT HOSPITAL

4 GOV. VALERIANO GATUSLAO MEMO. DIST. HOSP

5 ISABELA DISTRICT

6 VALLADOLID DISTRICT

NEGROS OCC.-

1CORAZON LOCSIN MONTELIBANO MEMORIAL REGIONAL HOSP. 400 Dr.

BAGO CITY

1 BAGO CITY HOSPITAL 10

CADIZ CITY 1 CADIZ DISTRICT HOSPITAL

KABANKALAN CITY

1 KABANKALAN DISTRICT HOSPITAL

2 GUMERSINDO GARCIA SR. MEMORIAL HOSPITAL

LA CARLOTA CITY

1 DON SALVADOR BENEDICTO MEMORIAL DIST. HOSP.

SAGAY CITY

1 ALFREDO MARAÑON SR. MEMORIAL DISTRICT HOSP.

SAN CARLOS CITY

1 SAN CARLOS CITY HOSPITAL

SILAY CITY

1 DR. JOSE C. LOCSIN MEMORIAL PROVINCIAL HOSP.

GOVERNMENT HOSPITAL Region 6

Resource Allocation

Includes the distribution of resources to the hospitals within the health sector, as well as allocation among hospitals, geographic region, and population group served (urban versus rural, vulnerable vs non vulnerable, rich versus poor).

Resource Generation

The use of the resources of hospitals comparing the output to input, which are assessed according to efficiency.

Resource Management

• Generating additional resources for additional funds.

• Insurance, user charges,

community financing hospital

HOSPITAL RESOURCE ISSUES

RESOURCE ALLOCATION

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Production Function

ΩΩ allocation of the department of inputs to achieve

the greatest output (< reduction in morbidity and

mortality)

ALLOCATIVE EFFICIENCY

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Budget Allocation

The average budget allocation for health since 2001 under the Arroyo administration is just 1.8% of the total budget-- the lowest share for health among the last three administrations (Aquino at 3.1%, Ramos at 2.6%, and Estrada at 2.4%).

Under the 2010 national government budget proposal, the health sector is allocated P37.9 billion or only 2.46% of the total proposed budget. Based on an estimated population of 94.01 million for 2010, this means that real per capita spending is just P403 per Filipino for health services.

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DEPARTMENT OF HEALTHCY 1991-2009 BUDGET APPROPRIATION

YEAR PS MOOE CO TOTAL

1991 2,970,670,000 3,882,689,000 319,392,000 7,172,751,000

1992 5,089,652,000 4,710,415,000 427,677,000 10,227,744,000

1993 2,227,344,000 3,862,613,000 824,775,000 6,914,732,000

1994 2,274,670,000 3,679,651,000 1,377,870,000 7,332,191,000

1995 2,872,405,000 3,595,884,000 2,065,787,000 8,534,076,000

1996 3,370,752,000 4,089,307,000 1,777,494,000 9,237,553,000

1997 3,965,000,000 4,537,828,000 2,435,029,000 10,937,857,000

1998 4,967,983,000 5,435,953,000 2,539,281,000 12,943,217,000

1999 5,042,874,000 5,300,903,000 922,061,000 11,265,838,000

2000 5,028,963,000 5,313,600,000 396,342,000 10,738,905,000

2001 5,020,223,000 4,392,428,000 43,612,000 9,456,263,000

2002 5,404,739,000 5,115,498,000 899,000,000 11,419,237,000

2003 5,368,302,000 3,807,988,000 730,000,000 9,906,290,000

2004 5,368,302,000 3,789,927,000 405,575,000 9,563,804,000

2005 5,397,944,000 3,942,388,000 384,986,000 9,725,318,000

2006 5,397,944,000 3,760,310,000 299,031,000 9,457,285,000

2007 5,789,064,000 4,639,809,000 969,898,000 11,398,771,000

2008 5,832,513,000 10,643,479,000 2,436,018,000 18,912,010,000

2009 6,727,340,000 10,584,705,000 6,354,610,000 23,666,655,000

SOURCE: General Appropriations Act 1991-2009

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EVALUATION OF RESOURCE

ALLOCATION

St. Luke's has taken and applied the bestpractices in the field of hospitality in itspremises, providing services and amenitiessuch as a selective menu, private butlerservice, and cable television. St. Luke'sbelieves that comfort and a positiveexperience are vital in the quest for healthand recovery.

St. Luke's has a total of 650 beds, whichinclude 342 private suites, one presidentialsuite, one ambassador suite and a newly-inaugurated Birthing Room.

A range of accommodations to suitdifferent needs and budgets is available atSt. Luke's. More affordably-priced semi-private rooms and wards are also wisechoices. To St. Luke's, what is essential isan uncompromising standard of excellentservice at any level.

Patient Rooms

Ambassador Suite

Birthing Room

Presidential Suite

Private Room

Semi-Private Room

Suites

Ward37

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RESOURCE ALLOCATION

Cost Function

The relationship between hospital cost and output

levels; Minimization of operating unit costs,

ECONOMIES OF SCALE : constant, increasing,

decreasing

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Health Expenditure Per Capita

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OUT OF THE POCKET HEALTH EXPENDITURE

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RESOURCE MANAGEMENT

MANAGEMENT FUNCTION

1. Technical Efficiency: inputs : personnel, equipment, supplies

2. Economic Efficiency : least combination at the desired level of output

3. Scale Efficiency

4. Efficiency Interrelationships

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Poor management

results to wastage of

resources, including

money, staff, building

and equipment

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Hospital Beds

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Nurses and Midwives in the Philippines

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Health Professionals

Professionals for Healthcare Consumers

St. Luke’s Medical Center has over 1,500 medical consultants, 230 medical residents and 123 fellows on its roster, apart from interns from its College of Medicine. There are 644 nurses and 2,000 other paramedical, administrative and support staff.

Over 4,000 professionals in medicine and its allied fields, as well as business management and hospital support staff, are the crown jewels of St. Luke’s. Their collective expertise and dynamic synergy provide a roster of local and international patients with health care skills and optimum technology.

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RESOURCE GENERATION

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Equity in health

fair, just, and equal access to health care by all Filipinos.

Constitutional guarantee: Article II Section 15 – “The State shall protect and promote the right to health of the people and instil health consciousness among them.”

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