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June 1995
A Study of Philippine HospitalManagement Administrative Systems
DISCUSSION PAPER SERIES NO. 95-16
Fred Avestruz
A STUDY OF PHILIPPINE HOSPITAL MANAGEMENTAND ADMINISTRATIVE SYSTEMS
PIDS Project No. DOH / 91-92 / 05
(Final Report)
October 30, 1994
Fred S. Avestruz, MBA, Ph.D.Asian Institute of Management
TABLE OF CONTENTS
Chapter Page
1 INTRODUCTION ...........................................................................1
1.1 Objectives of the Study .................................................. 11.2 Conceptual Framework of Hospital Management ................ 21.3 The Hospital in the Philippine Health Care System ................. 3
1.3.1 The Philippine Health Care System ..................... 5'_1.3.2 Role of Hospitals .............................................. 71.3.3 Hospitals Industry Structure ................................. 15
1.4 Operational Characteristics of Philippine Hospitals ................ 181.5 Hospitals in the Case Studies ...................... 2....................... 23
2 EXTERNAL INFLUENCES ON HOSPITAL MANAGEMENTAND PERFORMANCE ................................................ 1
2.1 Market Demand ............................................................... 1
2.2 Networking and Referral System ...................................... 232.3 Health Care Financing Programs ........................................ 292.4 Technology ................................................................... 312.5 Macroeconomic Conditions ................................................. 32
2.6 External Organizations .................................................. 332.7 Government Policies ....................................................... 33
2.7.1 General Interventions ..................................... 332.7.2 Local Government Code ....................................... 36
2.8 Summary ...................................................................... 37
3 MANAGERIAL DECISIONS AND CONTROL SYSTEMS INPHILIPPINE HOSPITALS .................................... :....... 1
3.1 Goals ............................................................................... 1
3.2 Decision MAking Processes to Establish a Hospital .............. 103.3 Key Hospital Actors ........................................................ 113.4 Planning Processes ..................................................................... 153.5 Interactions Among Key Hospital Actorss and Decisions
Making Processes in Philippine Hospitals ......................... 183.5.1 Capital Expenditure Decision ............................ 183.5.2 Budget Decisions .................................................. 223.5.3 Personnel Decisions ........................................... 23
3.5.4 Pricing Decisions ............................................ 463.6 Control System ................................................................ 63
3.6.1 Quality Control ................................................... 633.6.2 Financial Control ......................................... 68
3.7 Summary ................................................................... 71
4 TECHNICAL PERFORMANCE OF PHILIPPINEHOSPITAL ............................................................ 1
4.1 Conceptual Background of Hospital PerformanceEvaluation ............................................................. 1
4.2 Occupancy Rates of Philippine Hospital ...................... 34.3 Effectiveness of Treatment of Philippine Hospital .................... 124_4 Patient Length of Stay in Philippine Hospitals ..................... 194.5 Summary ...................................................................... 19
I
5 FINANCIAL CHARACTERISTICS AND PERFORMANCEOF PHILIPPINE HOSPITALS ......................................... 1
5.1 Financial Characteristics of Philippine Hospitals .......................... 15.1.1 Capital Structure ..................................................... 15,1.2 Allocation Of Assets ......................................... 2
5.1.3 Pattern of Expenditures ......................................... 95.1.4 Pattern of Revenues ............................................. 30
5.2 Financial Performance ...................................................... 33
5,2.1 Liquidity Ratios .................................................. 335.2.2 Efficiency Ratios ........................................... 405.2.3 Leverage Ratios .......... ..................................... 415.2.4 Profitability Ratios ............................................. 41
5.3 Summary ................................................................... 42
16 CONCLUSIONS AND RECOMMENDATIONS ..........................
6.1 Characteristics and Problems of HospitalManagement and Performance ..................................... 16.1.1 Govemement Hospitals ..................................... 16.1.2 Private Hospitals ............................................. 2
6.2 Recommendations ......................................................... 3
6.2.1 Private Hospitals .......................................... 36.2.2 Government Hospitals ..................................... 3
BIBLIOGRAPHY .............................................................................. B- 1
LIST OF TABLES
Table No. Title Page
1.1 Health Facilities to Population Ratio ......................1.2 Number of Health Facilities by Region ................1.3 Ratio of DOH Facilities to Population ................. 91.4 Number of Hospital Beds and Hospital Bed
to Population Ratio by Region ........................... ' 101.5 Bed to Population Ratio and Health Center to
Population Ratio by Region ............................... 111.6 Accessibillity of DOH Hospitals .............................. 121.7 Number and Percentage of Patients in Government
Hospitals by Region ............................................... 131.8 Classifictions of Hospitals ..................................... 181.9 Actual Bed Capacity of DOH Hospital, by
Category and by Region .................................... 171.10 Regional Distribution of Member Hospitals by
Category .......................................................... ] 91.11 Distribution of Licensed Hospitals by Level ................. 20
2.1 Ten Leading Causes of Hospitalization ....................... 52.2 Number of Cases per Classification ............................ 52.3 Nature of Leading Causes of Hospitalization ............ 62.4 Average Patient Days of DOH Hospitals by
Type of Service and by Type of Hospitals ................... 82.5 Number of Patients of DOH Hospital by Type of
Service and Type of Hospital .................................. 82.6 Ten leading Causes of Morbidity, G2 Hospital
Catchment Area ...................................................... 10
2.7 Ten Leading Causes of Mortality, G2 Hospitali Catchment Area ................................................... 11
2.8 Ten leading Causes of Discharges, G2 Hospital ............. 12i.9 Ten Leading Causes of Discharges, P3 Hospital ........ 13_:i'0 Ten Leading Causes of Morbidity, Bohol Province ...... 142.11 Ten Leading Causes of Mortality, Bohol Province ........ 1621i2 Ten Leading Causes of Discharges, P2 Hospital .......:.... 18._- .2:13 Ten Leading Causes of Discharges, G3 Hospital ......... 192:14 Volume and Direction of Inpatient Referrals .................. 22_!_, Reasons for Referring to other Hospitals ................... 24
': Reasons for Choice of Referred 24Hospitals
, ,, '-'_:,!,_1_1__%':"_-. .
2.17 Volume of In and Out Patient Referrals ...................... 262.18 Basic Difference: Insurance vs. HMO......................... 303.1 Objectives of G2 Hospital ................................................... 7
' 3.2 Internal Critical Success Factors of the Operational" Goals of G2 Hospitals ......................................................... 83.3 External Critical Success Factors of the Operational Goals
of G2 Hospitals ............................................. . ............ 93.4 Attributes, Responsibilities, Power and Other Characteristics
of Key Positions in Selected Private General Hospitals in GreaterManila Area .................................................................. 16
3.5 Personnel Complement of G3 Hospital ................................... 323.6 Personnel Complement of P3 Hospital ........................................ 403.7 Personnel Complement of G2 Hospital ................ ._................... 423.8 Personnel Complement of P2 Hospital .................................... 453.9 Average Rate of A Day's Stay in a Private Hospital Room ......... 473.10 Estimate
