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EFFICIENT HOSPITAL MANAGEMENT By Melchor R. Lucas, Jr., M.D., and Team Members

I. Introduction In recent years, it has become more difficult for the Philippine Government to provide hospital services to Filipinos. Deficiencies in annual budgetary releases coupled with system inefficiencies result into poorly run government hospital facilities. Problems such as shortages of supplies, unserviceable facilities and equipment, demoralization among staff, and decline in quality of services are widespread.

FIGURE 1. HOSPITAL SHARE OF DOH BUDGET (1994-2001).

D O H B udge t H o s p it a l B u d g e t

In B illio n P e s o s

H o s p it a l S h a r e o f D O H B u d g e t ( Y e a r 1 9 9 4 2 0 0 1 )

              
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Because of insufficient budget releases, the government might not be able to continue providing free care to its citizens. It can be seen from Figure 1 that the governments budgetary allocation has not substantially changed in recent years from P5,831,430,000 in 1999 to P5,883,126,000 in 2001. The budgetary increases from 1994 to 1998 were due to the increasing number of hospitals brought about by the re-nationalization of some devolved hospitals rather than a real increase in funding. In 2002, the hospital budget increased to P6,127,038,000. However, the Department of Budget and Management withheld releases by as much as 25% due to fund shortages. Comparing the money spent per admission in 1995 with the year 2000, the average cost of a DOH hospital admission in 1995 was P5,164.27. In year 2000, an admission cost P9,173.15. Adjusting for the real value of the peso, the government support per admission in year 2000 increased to P6,023.00. This increase is negligible considering the steep increase in the prices of medical commodities.

In the midst of dwindling financial resources, the burden is made worse by the rising costs of hospital care (see Table 1). The cost of three common illnesses in DOH hospitals almost doubled compared to the last four years.

TABLE 1. RISING COST OF HOSPITALIZATION.

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It is clear that sufficient funding is critical in delivering adequate government hospital services. Unfortunately financing of these facilities will no longer be sufficient if financing is solely dependent on government subsidy. In fact with limited funds, the government makes certain that only mandatory expenses (such as salaries) are covered first and the remaining money is allocated to maintenance and operating expenses. In DOH hospitals, the budget for maintenance and other operating expenses is only 36% to 40% of the total hospital budget. As a result, government hospitals are unable to run their operations effectively. The lack of funds is made worse by the bureaucratic system. The rules and regulations imposed on government line agencies oftentimes restrict efficient use of resources. The system is built to centralize decision-making and the present management systems were designed to support such a centralized system. Take for example the process of determining the type and number of personnel. This undergoes a centralized bureaucratic process. It takes years before a plantilla position is created. Even in a devolved set-up, controls are centralized at the provincial level. Unless the system is freed of these regulations, there is not much efficiency that can be squeezed out from government agencies. In addition, the centralized system does not empower heads of agencies; rather, they make them implementers of central office directives and issuances. It has been mentioned that production of services in government hospitals cost more than private hospitals. There may be truth to this since private hospitals need to conserve their funds and gain profit from the business undertaking. Their institutional survival depends on how much productivity they can derive out of limited resources. In government, incentives to promote efficiencies are lacking. The operating budget comes every year regardless of performance. Government hospitals consume their funds on unnecessary items in the last quarter of a fiscal year only to show the need for a higher budget in the succeeding year. Thus, it is never the practice of government hospitals to save money.

Hospitals are expensive entities to operate. This creates a big financial burden for the government. The hospital system is not like a manufacturing enterprise. In manufacturing, when demand goes down, plant operations can be reduced to decrease production and thus save on cost. In hospitals, full operation continues 24 hours a day, 365 days a year, whether or not there are patients. A hospital cannot close its emergency room because there are no patients; it cannot close its operating room and lay off personnel because there are no surgical cases. All of these units must run in full complement at any given time. Government must realize that there are more efficient ways in operating a health care delivery system. It needs to explore other means to provide more health care to a greater number of people with the same amount of money. II. An Ailing Hospital Care Delivery System The government hospital system is not effective as it is hoped to be. Four As describe the effectiveness of the hospital system: Accessibility, Availability, Affordability, and Acceptability. From the perspective of the client, accessibility is the ability to get into a health facility at any time of need. To fulfill accessibility requirements there should be proximity of a primary health facility to the population and a system that would ensure a referral to an appropriate facility level. An indicator of accessibility is the bed to population ratio. In 1989, the bed to population ratio was 1:707, an increase of one bed for 607 people in 1985. Today the bed to population ratio is about 1:828. This means that there are more people competing for a hospital bed. In terms of proximity to government hospitals, 86.4% of the population is 17.5 Km from a DOH hospital (Solon, Gamboa et al). Thus, in terms of distance to a public hospital, there may not seem to be much difficulty. However if we consider terrain, road conditions, weather, availability of transportation, and peace and order situation, a different picture can be seen and it becomes extremely difficult in some places to reach a government hospital. Moreover, the poor referral system does not ensure that the patient can reach an appropriate facility. Availability means that the expected health service is obtainable all the time in a given facility. As such, primary level facilities are expected to have primary services and secondary and tertiary level facilities should have secondary and tertiary services respectively. This also means that medical supplies (such as drugs and medicines) are available in the hospitals. Availability of services is a big problem of the present public hospital system. In many government hospitals, physical plants are in disrepair and equipment are out of order or not available at all. Medical supplies and medicines are usually out of stock. The lack of physicians and nurses cause unavailability of surgical and intensive care services in the provinces. The patients care is therefore limited to what is available in the hospital. Affordability means that the health services are within the paying capacity of clients. Affordability is a relative concept and depends upon the paying capacity of the patient and the disease condition. A simple illness is a financial burden for a poor man, and for many, a catastrophic illness. If indeed government hospitals provide free care at the point of service to all its citizens then affordability will not be an issue. Unfortunately this is not the case since patients purchase items that are not available in these hospitals. In effect, care in government hospitals is becoming an out-of-pocket expense for its citizens and may no longer be affordable to them. Acceptability means that the quality of services is within the defined standards of care. There are many indicators to determine acceptability (quality) of services. One of them is to determine how government services compare with prevailing standards. Another way is to look at critical areas

in the hospital such as the emergency room, operating room and intensive care units. These areas can be indicators of the level of service quality in the hospital. Basing the assessment on the minimum standard of care, most government facilities will find it difficult to get a passing mark. The findings of O. Solon, Fajutrao, C. Tan, and C. Almario in their study on Quality, Cost and Competitiveness of Government Hospitals (2000) show the lack of efficiency and effectiveness of the present public hospital system. The more important findings are as follows: 1. The average length of stay for DOH and LGU facilities at all levels are longer than in similar private facilities. 2. DOH and LGU facilities tend to have more medical and non-medical personnel. Moreover, the ratio of medical to non-medical personnel is 1:5 in DOH tertiary facilities (1:3 in private tertiary facilities). 3. The average cost per patient day in DOH and LGU primary and secondary facilities are higher than in similar private facilities. The Department of Health has instituted many programs to address the lack of efficiency and effectiveness of the government hospital system. Unfortunately these programs did not create a sustainable impact. In an effort to improve the system, the national government devolved the health facilities to the local government but after 10 years in a devolved state, the strategy fell short of expectations in terms of bringing a more efficient and effective health care system. The past strategies may not have been effective. It is high time that the DOH looks into improving financial support through social insurance coverage and designing the systems around this scheme to bring more efficient and effective health facilities. III. Exploring Social Health Insurance as a Means for Financing Hospital Care In fiscal year 2000, the national government had a 6.6 billion-peso budget for 72 DOH hospitals with a total bed capacity of 24,685. If the DOH ran all its hospitals at a 100% occupancy rate with an average length of stay of 5 days for each admission, the DOH will only be able to cover 1.8 million patients, or 2.4% of the total Philippine population. If the DOH spent the same amount of money to pay 50% (P594) of social health insurance premiums (P1,188), this would provide coverage for 11.1 million households or about 55.6 million people (assuming an average of five members to a household), or 73% of the total population. This coverage is more than the informal and indigent sector combined, which comprises 55% of the total population. If DOH has to pay the full amount of premiums, with the same amount of money, they can still cover about 27.8 million people or 36% of the population. This can cover more than the indigent sector, which comprises only 25% of the total population. To increase social health insurance coverage, the government can shift its money from funding hospital operations to buying health insurance. If this is the case the next question would be, to what extent can government hospitals become financially viable from income derived from social insurance reimbursements? Consider the case of the Ilocos Training Regional and Medical Center (ITRMC). This hospital had a regular budget of P99, 950,749 to cover salaries and operating expenses for the year 2000.

Assuming that the hospital needs this minimum amount to run its regular operations, its income should at least match this amount for it to be financially viable. Computing the income on an 85% occupancy rate, the hospital will have 170 beds occupied for the whole year or an equivalent of 62,050 patient days. If the average length of stay per admission is 5 days, the hospital will be able to take care of 12,410 admissions annually. If all of these admissions were covered by PhilHealth, and using the average value per claim of P5,424, ITRMC will be able to earn P67,311,840.00. If in addition, the hospital charged 10 pesos for each outpatient consultation, it will earn P567, 310.00 for an estimated yearly income of P67, 879, 150.00, a 68% cost recovery for the hospital. This means that the government needs to subsidize only 32% or P32,071,599 of the hospitals regular budget. Let us take another case, that of Pangasinan Provincial Hospital (a local government hospital), which had a year 2000 budget of P43,091,178. Assume a 100-bed capacity at 85% occupancy rate with an average length of stay of 4 days. On these assumptions, the hospital can admit 6,205 patients in a year. Multiply this by the average value per PhilHealth claim of P5,424, the hospital will be able to earn P33,655,920 for its inpatient services. If in addition it charged 10 pesos for each outpatient consultation, it will earn P246,960. This will give it a total earning of P33,902,880. This means that the provincial government only needs to subsidize about P9,188, 298 of the hospitals budget. Both examples show that government hospitals can earn as much as 2/3 of their present budgetary allocations. If the capacities of these institutions are built to cater to private patients, their earning capabilities will be maximized and could approach their budgetary requirements to sustain operations. Their subsidy requirements will be greatly reduced. IV. Financing Reforms Cannot Be Done Overnight. Money cannot be shifted from funding hospital operations to buying health insurance premiums right away. A transition period is needed. A workable model for creating the financing shift from funding operations of hospitals to buying insurance coverage needs to be designed. The convergence site model initiated under the DOH Health Sector Reform Agenda (HSRA) could serve as the framework to shift the governments role. The HSRA is composed of five primary technical areas that focus on health insurance, hospital reforms, drug management systems, local health systems, and public health. In a convergence site, all the reform programs are implemented, laying the groundwork for the financing change. A convergence site is either a city or a province where all the health sector reforms take place. The convergence site starts by holding a planning workshop where the different stakeholders formulate a plan reflecting the activities to achieve priority health objectives. The plan is refined through negotiations among the stakeholders. Subsequently a local health summit is conducted wherein the local chief executives in the convergence site pledge their commitment and support to the implementation of the convergence plan. Successful implementation of the convergence strategy in all the provinces will result into changing the health services delivery landscape into the following form:

TABLE 2. COMPARISON OF PRESENT AND NEW PERSONAL HEALTH SYSTEM Condition Present system New system Financing Out-of-pocket Insurance coverage Hospitals Government operated Autonomous institutions Local health systems Political territorial catchment Inter-local health zones

Drug management system

Individual procurement

institutional Pooled procurement

While the convergence strategy addresses the HSRA in the provincial level, changes in the DOH central and regional structure and functions also need to occur to support the paradigm shift. V. Hospital Reforms that Support the Financing Shift The hospital reforms actually started in 1994 when the DOH commissioned a study funded by the United States Agency for International Development (USAID) to determine the earning potential of public hospitals. The study was conducted in 1993-1995 in the Ilocos Training and Regional Medical Center (ITRMC) and Rizal Medical Center (RMC). The two hospitals served as a pilot test area. The study allowed the two hospitals to charge fees computed at-cost to patients who can afford to pay for services. The test implementation at RMC generated a total income of P724,613 from November 1994 to January 1995, or 78.6% more than its income the previous year (1993). In ITRMC, the test implementation generated a total income of P490,364 or 1,428% more than the revenues during the same period last year (HFDP Monograph #14, September 1995).

TABLE 3. FINANCIAL IMPACT OF THE REVENUE ENHANCEMENT PROGRAM 1993-1995 Name of Hospital Income before Income during % Difference Rizal Medical Center 405, 772.00 724,614.00 78.6 Ilocos Training Regnl Med. Center 34, 333.00 524, 697.00 1,428

More recently (1998-1999), a similar program was implemented in the Pangasinan Provincial Hospital. The hospital did not invest in new equipment or buildings but rather, improved their hospital systems, specifically its billing and collection procedures. In a short span of time, it was able to increase revenues significantly.

TABLE 4. PANGASINAN PROVINCIAL HOSPITAL, YEAR REVENUE BUDGET (MOOE), 1998 - 2000
1998 1999 2000 MOOE Budget 10.2 M 11.5 M 12.7 M Revenue 2.4 M 2.8 M 10.4 M % Cost Recovery vs. MOOE 24% 24% 82%

The revenue enhancement program had expected socio-political and operating impact as well as effects on personnel. Contrary to the common belief that charging patients will marginalize poor patients, it was found out from this experience that there was no significant change in the number and type of patients served in the two test sites (ITRMC and RMC). Another study conducted by HEWSPECS in 1994 show that: seventy five per cent (75%) of patients interviewed responded that hospitals should charge fees to be able to improve services When asked if they were

willing to pay for reasonably good hospital services, eighty-two percent (82%) replied in the affirmative Regarding the political impact, there were some initial opposition from the politicians and media practitioners. They expressed apprehension that the imposition of price increases and consultation fees may have a negative effect on the indigents access to hospital services. The hospital officials assured them that collections will not be compulsory for indigent patients. Rather, it would be based on the patients capacity to pay. On the other hand, the effects of the program among the hospital staff were positive. It made them appreciate the need for pricing principles, cost and operating efficiency, and opportunity cost awareness. How much estimated revenue can government hospitals generate at their present state and without widespread social health insurance coverage? In the earlier example we showed the earning capacity of hospitals from PhilHealth reimbursements, based on an assumption that majority of the population is insured. This mechanism shows that it is possible for a government hospital to earn 2/3 of its budgetary allocation. However, what if social health insurance does not become the major source of financing hospital care? Would the hospital be able to generate enough revenues to become financially viable? An analysis of hospital revenues was conducted in two hospitals. The results are is presented in Table 5 and Table 6. The figures in Table 5 are culled out from a costing study by MSH-PMTAT in 1998 at the Pangasinan Provincial Hospital.

TABLE 5. HOSPITAL COSTING MODEL/REVENUE, PANGASINAN PROVINCIAL HOSPITAL 1998 Volume & Proposed Expected Total cost/ Unit Charges/Fees revenue Annual Budget Inpatient P25,332,070 P29,073,080 Medical 14,856 days P445 P6,610,920 P5,470,653 Surgical 7,152 days P445 P3,182,640 P8,658,138 OB/Gyn/Maternity 5,560 P445 P2,474,200 P6,026,454 admissions Pediatric 28,365 days P445 P12,618,420 P5,104,898 ICU 1,002 days P445 P445,890 P2,2i8,230 All other P1,684,707 Outpatient Ancillary X-Ray Laboratory Operating Room Pharmacy 56,129 visits P46,491,470 P1,856,100 P12,520,170 P2,971,200 P29,144,000 P7,585,348 P7,183,381 P2,685,293 P2,184,910 P1,516,416 P796,763

18,561 exams 139,113 exams 2,971 operations 116,576 prescriptions 2,905 visit/contact

P100 P90 P1,000 P250

Outreach

P422,943

Training

P69,820

P534,900

TABLE 5. HOSPITAL COSTING MODEL/REVENUE, PANGASINAN PROVINCIAL HOSPITAL 1998 Volume & Proposed Expected Total cost/ Unit Charges/Fees revenue Annual Budget Nurse affiliates 717 students/yr P60 P43,020 Pharmacy/Pt 268 students/yr P100 P26,800 Total
Source: Dayl Donaldson, Health Reform and Financing Program, MSH-Boston.

P71,893,360

P44,799,652

With the proposed charges, the hospital is expected to earn P72 million, which is more than the budget given to them (P45 million) or a cost recovery rate of 160%. The volume of services is taken from the previous years experience. The charges and fees are very minimal compared with private hospital rates. Even if we reduce these rates to one half the hospital can still raise a substantial amount of earnings assuming that the volume of services remains constant. From this table we can see that there are no proposed charges/fees for outpatient services and outreach services. This means that the hospital can still increase its income from these sources. The same costing exercise was done in Amang Rodriguez Medical Center with the following results using 1999 figures:

TABLE 6. HOSPITAL COSTING MODEL/REVENUE, AMANG RODRIGUEZ MEDICAL CENTER, 1999 Volume & Proposed Expected Total cost Unit Charges/Fees revenue Inpatient P9,017,210 P36,344,208 Medical 12,877days P150 P1,931,550 P10,631,588 Surgical 9,463 days P150 P1,419,450 P6,690,599 OB/Gyn/Maternity 18,594 days P150 P2,789,100 P7,352,111 Pediatric 13,386 days P150 P2,007,900 P7,061,903 Pay 5,113 days P170 P869,210 P4,608,007 Outpatient Preventive Curative OP Clinic Dental ER Ancillary X-Ray Laboratory Operating Room Pharmacy 7,090,560 P19,105,991 P2,921,605 P16,184,386

41,592 visit 6,737 visit 40,303 visit

P80 P80 P80

P3,327,360 P538,960 3,224,240 P16,105,519 P2,221,300 P9,978,480 P956,939 P2,948,800 P38,769,869 P7,253,076 P12,818,917 P13,354,839 P1,710,414

22,213 exams 166,308 exams 1,570 Maj. Operations 58,976 prescriptions

P100 P60 P609 P50

TABLE 6. HOSPITAL COSTING MODEL/REVENUE, AMANG RODRIGUEZ MEDICAL CENTER, 1999 Volume & Proposed Expected Total cost Unit Charges/Fees revenue NICU/ICU --day P160 P3,632,632 Outreach Child health other Training Residents P1,394,847 8,039 visit/contact 500 visit/contact Total
Source: Liz Lewis, Health Reform and Financing Program, MSH-Boston.

P4,348,383

34 students/yr

P32,213,289

P99,963,298

Compared with the Pangasinan study, the rates were reduced and the hospital would be able to recover only P32 million out of the P100 million spent to operate the hospital. This represents a 32% cost recovery rate. The results proved that given the proper tools and political will, public hospitals could improve their revenue-generating capacity. The revenue enhancement experience in the two government hospitals also serve as concrete evidence that something can be done to overcome the longstanding perception that public hospitals are free care institutions. Moreover, it disproved the widely held notion that financial sustainability of public hospitals cannot be attained. (HFDP Monograph #14, September 1995) Generated income then becomes an option for the government to source funds for its hospitals. However in their present organizational form, these hospitals cannot completely reap the benefits of their efforts. At present, to access the earned funds, the hospitals have to submit a special budget proposal for the approval of the Department of Budget and Management (DBM). This budget proposal is limited by the ceiling set for allowable use of income. In most cases the hospitals can only partially regain earned income and in a delayed fashion. In order to create incentives for revenue generation and to make it sustainable, the hospitals must become autonomous to be relieved from government restrictions. Among the organizational forms that the DOH has decided to pursue is converting its hospitals into non-stock, non-profit corporations or foundations. VI. The Concept of Hospital Autonomy: Some General Propositions The dictionary defines autonomy as the quality or state of being self-governing, existing or capable of existing independently. The characteristics of autonomy are as follows: Hospital autonomy is a relative not an absolute concept. Even private hospitals are not truly autonomous- they are also subject to government regulation.

The issue is one of degree of autonomy rather than an absolute autonomous state. Implicit in the definition of autonomous hospitals is that of being at least partially, selfgoverning, self-directing, and self-financing. What is relevant and important is the effect of the degree of autonomy on the performance of the hospital to the extent that it promotes positive outcomes and reduces negative outcomes. Autonomy does not automatically enhance performance. Autonomy is not synonymous with privatization- an autonomous hospital can exist just as easily under government ownership, as under private ownership. Equity, quality, and patient satisfaction are indicators to measure the outcomes of hospital autonomy.

A key factor in the design of this concept is that hospitals will be granted a different organizational status (semi-autonomous) rather than just one of the units under a government system. A decentralized autonomous system results in the government delegating operational responsibility to the hospital governing board. The new status is to feature enhanced management authority with respect to personnel administration and budget administration such that there will be incentives for more efficient performance and more discretion by management to achieve it. This is a key concept because corporate restructuring will be relying in good part on these enhanced incentives and authorities to drive improved organizational efficiency and quality of outputs if hospitals are to succeed with substantial cost recovery. (Decentralizing Health Care Delivery in Kenya: Transforming Public Hospitals into Autonomous Institutions, MSH-AFS Project) An autonomous hospital might take any of the four legal organizational forms: single proprietorship, partnership, cooperative, or corporation. In choosing the single proprietorship option, it will become necessary for the government to completely divest its hospital assets. Since this will not favor the intention of the government to serve indigent patients, this organizational form was not pursued. This goes likewise for partnership since the governments interest to take care of the indigent patients might not completely align with the interests of the participating partner. The cooperative and corporate forms are then the most feasible organizational forms that can be used to provide hospital autonomy. Since the DOH has extensive experience in operating corporate hospitals from its four specialty hospitals (Lung Center, Heart Center, Childrens Hospital and Kidney Institute), it chose corporatization as the organizational form for hospital autonomy.

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TABLE 7. DOH HOSPITALS - DISTRIBUTION OF AUTHORITIES BEFORE AND AFTER HOSPITAL AUTONOMY/CORPORATIZATION AS DOH HOSPITAL AFTER AUTONOMY AREA (BEFORE (CORPORATIZATION) AUTONOMY)
GOVERNANCE & OWNERSHIP

Ownership Policy and organizational oversight Management

Government DOH

Medical Center Chief/ Chief of Hospital None

Community input

Allocation of resources within the hospital

DOH through line item budget Treasury & DOH through line item budget

ALLOCATION OF RESOURCES

Allocation of Government resources to hospital

HUMAN RESOURCES

Allocation of financial surplus/funds not used Use of earned revenues (user fees, cost recovery, etc.) Direct donations/direct community support Employment Hiring, firing, and transferring hospital staff Salary and benefit levels and incentives Pensions

Returned to DOH and/or Treasury

Gradual transition of assets to foundation Board of Trustees comprised of community members, local business persons, and government representatives Chief Executive Officer initially from DOH, eventually hired and fired and supervised by Board of trustees Active participation through membership on Board of Trustees (minimum __%) Management, through internal budget process, with approval of Board of Trustees Treasury & DOH through negotiated block grant based on hospital budget projections of Government-supported services being provided (charity care, etc.) Earned revenues retained by hospital; funds from budget moved to next years budget Earned revenues retained by hospital; funds from budget moved to next years budget Retained by hospital for improvement activities All employed by Hospital foundation. Civil Service rules and regulations and Management. Management with annual approval of Board of Trustees Government for a minimum five year transition period

Treasury (excess over budgeted amounts) Directed to Treasury & DOH DOH Civil Service and DOH

Government Government

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TABLE 7. DOH HOSPITALS - DISTRIBUTION OF AUTHORITIES BEFORE AND AFTER HOSPITAL AUTONOMY/CORPORATIZATION AS DOH HOSPITAL AFTER AUTONOMY AREA (BEFORE (CORPORATIZATION) AUTONOMY) Access to capital/Ability to borrow
FINANCIAL MANANGEMENT

Limited to DOH capital budget

Hospital can seek other sources for capital funds, especially local and/or development banks

Setting user fee levels Accounting procedures

DOH regulations Government, especially DBM and COA

Management with approval of Board of Trustees Developed/adjusted by Management (with approval of Board of Trustees) but consistent with DBM and COA requirements COA with transition toward private sector Board of Trustees oversees physician and employee appropriateness/ discipline. Prosecution, if required, is done in courts. Procedures set by Management with approval of Board of Trustees Management responsible for maintenance activities/program. May contract out some or all of the functions.

External audit Prosecution for fraud

COA Government

OPERATIONS

Materials Management and Procurement Maintenance

DOH

Department of Public Works/ DOH

Source: Jeff Sanderson, Health Reform and Financing Program, MSH-Boston,2000.

The advantages of a hospital corporation are as follows: (1) For the government/DOH a. Decrease cost to operate hospitals the income derived from operations will decrease the hospitals reliance on government subsidy. b. Freedom from operating problems the hospital management team with guidance from the hospital board becomes responsible for the day-to-day operations of the hospital c. Can concentrate on core roles i.e. regulation, public health (2) For the hospital management

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a. More management latitude through the exercise of the hospitals corporate powers b. Can avail of more management expertise through hospital board membership (3) For the patients and clients a. Access to improved hospital services b. Availability of drugs, medicines, and equipment c. Better quality services (4) For the employees a. May avail more benefits derived from hospital earnings b. Better working environment (5) For the community a. Able to participate in the policy making of the hospital (6) For public health a. Availability of more funding derived from savings due to lesser subsidy requirements of hospitals VII. Components of Hospital Autonomy Below are the institutional components that need to be built up to transform a government hospital into a functional autonomous institution. The brief discussion under each component gives the highlights of the MSH-HSRTAP experience in developing these components for hospitals within the eight convergence sites. (Note: Jun Lucas has not yet submitted the text for below.) Hospital Governing Board Hospital Management Accounting and Financial Management Human Resources Management Nursing Services Organization The Medical Staff Organization Pharmacy Services Purchasing, Stores and Distribution (Materials Management) Quality Assessment and Improvement ###

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