Medical and health services are so expensive that many Filipinos cannot afford to get sick. But in La Union, poor residents can worry less about getting sick because there is a hospital that wouldn’t turn them away—the La Union Medical Center.

       The hospital has a system to discourage “dole out mentality” and enable indigent patients to pay in kind.
“We allow the patient’s relatives or friends to clean the hospital premises and water the plants, or to donate blood, fruits and vegetables,” explains La Union Governor Victor F. Ortega. “It depends on the patient’s capacity to pay. If the cost of patient’s hospitalization is P50,000 and he or she donates only a basket of vegetables, then that’s it.”

       Patients are categorized from class A to D. Class A and B patients pay their bills. Class C patients get discounts of 25-75%. Class D patients get charity and pay in kind. The amount not paid is considered “quantified free service.” Since 2002, the quantified free service had amounted to P36 million.

       From April 2002 to December 2003, the hospital rendered services to 77,308 patients (including those from Pangasinan and Benguet), 66% of such were charity patients, 26% were Philhealth-covered patients, and 8% were private pay patients. As of September 2004, it had served 122,100 patients, consisting of 98,268 out-patient consultations and 23,832 hospital admissions.

       Paradigm shift in the hospital’s services came after a P650-million donation from the European Union. The hospital was transformed in April 2002 into a world class 100-bed medical center with 16 air-conditioned rooms and several state-of-the-art equipments, including a CT Scan unit worth P14 million, a hemodialysis unit worth P5 million, and a reagent/solution machine worth P3 million. These equipments are operated in joint venture with the private sector.

       To operate, manage, and sustain the hospital as a medical center, the provincial government turned it into an “Economic Enterprise for Sustainability and Development” through Executive Order No. 4 series of 2002. It formulated a private-public mix type of cost recovery and revenue enhancement program involving joint ventures with the private sector, which invested on the CT scan and home dialysis units.

       The investors pay for the rent, electricity, and employees. Of the gross revenue, 15% goes to the hospital. The income is placed in a trust fund to subsidize indigent patients who use the said machines.

       The Department of Health-Region I also granted P1.5 million to the trust fund for retail pharmacy operation. Of the net income, 60% goes to the charity fund, 20% to capital build-up, and 20% to miscellaneous expenses. In 29 months of operation, the pharmacy earned a net income of P2.17 million.

       The medical center implements an Integrated Hospital Operation-Management Information System (HOMIS). Through a network of 33 computers, the system links the cost resource areas, the billing and cash sections for easy access to the hospital’s cash flow.

       The hospital had increased its employees from 139 to 238, including part-time or contractual specialists in the fields of neurosurgery, thoracic surgery, orthopedic surgery, urology, gastroenterology, ophthalmology, radiology, ENT, internal medicine, cardiology, diabetology, nephrology, and anesthesia.

       The hospital’s growing economic viability had made it less and less dependent on subsidy from the provincial government. Its actual cash collection from April 2002 to September 2004 representing regular hospital services is P64.66 million. There are also accounts receivables from Philhealth amounting to P5.5 million.

       The medical center’s sustainability is ensured by the continuing partnership with stakeholders and the signing of Republic Act No. 9259 by President Macapagal-Arroyo last March, transforming it into a non-stock, non-profit local government owned and controlled corporation.