A Narrative Report on the Closure of OLPHI – to Finally Lay into Rest the Issue of the Closure So We May All Obtain the Peace of Mind, the Calmness and the Serenity of Soul Why the Healthcare Institution Has Shuttered
First and foremost, I would like to extend my deepest and most sincere apology for the long delay of this report as this has been long overdue for the many just reasons involved in which all of us I deemed to be of no fault at all. It is very easy to blame the global pandemic but also because I personally believe and in my own personal analysis is really the main culprit of the closure of the hospital which in a similar manner has also bankrupted millions of small businesses all over the globe and that includes also a good number of small businesses in the locality of Calbayog City where our hospital is located.
After the last day of operation in February 5, 2021, I, Salve, and Nestor still remained in OLPHI until all the necessary transition procedures are done. I stayed until the middle of May, facing every supplier who comes as I demand a clean slate of inventory from all of them. The remaining inventory of goods is returned and the cost is deducted to our dues to lessen our payment obligations. The ad hoc committee created by the Council now took over and I peacefully left for Kawayan in Biliran in the middle of May 2021.
HOW DID IT HAPPEN?
For the sake of brevity,
SALIENT POINTS FOR A TEMPORARY SHUTDOWN
(1st Main Cover Report for the Council – by Fr. Jun Jungco, OFM)
(cf. Document 1 – this document)
A. THE LOCAL SITUATION OF OUR HOSPITAL – WHAT ARE THE CONCRETE SIGNS?
1. THE SIGNS OF DANGER HAVE ARRIVED. Back in July 2020, I finalized a survey because I already found a very worrisome trend of the cash shortfalls increasing by the months that passed since the start of the lockdown in OLPHI on March 25, 2020, March 16 is the lockdown but around February of 2020 the 1st Covid case is already in Camillus Hospital. In the Management Team 5 members recommended retrenchment. During this time, PHIC has already started remitting payments to our Landbank account. It was very strange and unusual because PHIC does not often send payments by the millions, but the July payments are really astounding. As a backgrounder, OLPHI applied for the Interim Reimbursement Mechanism (IRM) in the amount of ₱ 9,703,767.50 and was not approved because OLPHI is not a Covid Hospital; the only designated Covid Hospital is the Calbayog District Hospital, and surprisingly instead, Philhealth made a remittance of their old dues more than the amount of the IRM. More than 11M
(cf. Document 2 OLPHI Management Crisis Interventions)
(cf. Document 3 COMPARATIVE MONTHLY COLLECTION SHORTFALLS 2019 vs. 2020 Mar to May 3 Months, Tables 1, 2, and 3)
(cf. Document 7 OLPHI Philhealth Claims and Payments Monitor – Year 2020)
(cf. Document 9 Philhealth Account Receivables by Book Reports)
2. THE OVERDRAWS. Last November 20, 2020 we issued our salaries for the 2nd half of November (OLPHI is on 5/20 basis as opposed to the common 15/30) to avoid the long bank lines. We made an OVERDRAW, our withdrawal is 750K+ against bank balance of 500K+. Luckily, there was a remittance received by Landbank earlier in the morning and so our withdrawal is still good. In more than 4 years that I am reassigned in OLPHI, it was the 1st time it happened. Last December 5 salary day, we made a 2nd OVERDRAW. OVERDRAWS ARE INDICATIVE THAT THE REMITTANCES OF PAYMENTS FROM PHIC IS GETTING LESSER AND LESSER BECAUSE OUR CLAIMS ARE ALSO LESSER AND LESSER IN AMOUNT BECAUSE THE ADMISSION OF PATIENTS IS ALSO GETTING FEWER AND FEWER. THE RELATIONSHIP IS DIRECTLY PROPORTIONAL BETWEEN THE FORMER AND THE LATTER.
(cf. Document 4 November-December Weekly Fund Balance)
(cf. Document 8 Overdraws)
3. THE COMPARATIVE REPORT REFERENCE. As elaborated in the report, the financial operations of the hospital ending November 30, 2020 for the last 9 months is now going back to the situation of May 2020. In my own analysis, based on the different reports, THE HOSPITAL’S FINANCIAL OPERATIONS CAN ONLY LAST UNTIL THE END OF THIS MONTH OF DECEMBER 2020, IF WE CONTINUE TO CRAWL INTO IT; BUT NOVEMBER IS ALREADY INDICATIVE THAT WE NEED TO SHUT DOWN. This comparative report tells all. (At the end of the report ON THE LAST PAGE, there is a simple analysis about the cash shortfall for the last 9 months).
We go backwards a little, June 20, 2019 the balance sheet of the hospital for the 1st half of 2019 tells us a ratio of 1.67:1.00. That means, if you pay 1peso for expenses, we still have 67 centavos remaining as capital. And for me it’s rosy. And so I write to the Custos Fr. Renee, to request for an additional capital infusion for the hospital for the reason that we are about to finish the payment of all the loans from Custody incurred since 2007. Because of the clean slate of loans, we now a leverage to acquire for new loans.
(cf. Document 3 COMPARATIVE MONTHLY COLLECTION SHORTFALLS 2019 vs. 2020 Mar to May 3 Months, Tables 1 – 9)
4. OUR ACCOUNT PAYABLES. For the record as of December 2, 2020 our payables to suppliers have already amounted to ₱ 15,789,934.68. We are already experiencing great difficulties in the payment to our suppliers. They are now holding deliveries even with the most needed medicines attached to conditions that we make partial payments or settlement of old dues. In a business relationship, it will still be okay with a huge payables for as long as income is steady, you can always make partial payments, as long as there is movement in your account. Now, we are hindered due to shrinking income.
(cf. Document 3 Accounts Payable to Supplier as of December 2, 2020 – MEDICINES, SUPPLIES AND MACHINES)
5. THE WEEKLY FUND BALANCE. As of November 27, 2020, our liquid assets is ₱ 1,629,658.88. Please compare it with the balances of July and August 2020 which is ₱ 6M+
(cf. Document 4 Weekly Fund Balance November 27)
(cf. Document 5 Weekly Fund Balance August 28)
6. OUR CENSUS. Census of admission has already dropped very low sometimes to the point of zero admission in a single day. During the pre-Covid days in 2019, the highest admission is 401 and the lowest is 246. During the pandemic, the highest admission is 204 and the lowest is 82 for a certain month.
(Admin Report)
7. THE SKELELETAL SYSTEM. OLPHI’s skeletal system has been in place since the early days of operation. The mitigating approach of the skeletal system cutting the work force into half (OLPHI policy is no work, no pay) can only partially offset the regular salary expenses per month at 15.22% because it only applies mostly to the administrative department staff. Only in rare times that it applies to other departments because of the fact that we are already in perpetual shortage of medical workers like nurses and med-techs. For a period of 8 months, from April to November 2020, the skeletal system gained an average monthly savings in the amount of ₱ 170, 564.00 per month. The skeletal system is 15.22% less from the regular monthly salaries.
(cf. Document 10 Savings Gained on the Application of the Skeletal System)
8. ENDLESS RESIGNATIONS, VERY FEW RECRUITS. As of December 1, 2020 during our management meeting, the Nursing Service reported 5 resignations from our staff nurses. This is already a perennial problem since we came here in 2016 and even earlier when the problem started because of DOH oversight. It gets worse when the NDP started as a government program. The medical staff has already received more privileges than before (hazard pay, honoraria, free meals, and free dormitories) yet, the tide of resignations has never ebbed. We cannot give them anymore much more than we can. In fact in this pandemic, it has worsened. And the worst thing that happened to the hospital is that it is even VERY DIFFICULT TO RECRUIT GRADUATES FROM OUR VERY OWN CKC-BSN. SOMETHING IS SO WRONG IN THIS ONE AREA OF COLLABORATION. I have seen the efforts of the HR Department for the last 4 years when Fr. Salve has to go to different nursing schools as far as Tacloban in RTRH and Catarman in UEP patiently waiting just to woe fresh graduates offering them pre-board assistance and apply later in the hospital. It did not work, Covid-related jobs offered by the government gives a higher salary than the hospital. It was a tragic problem for the hospital’s medical workers even before the pandemic. The Wuhan virus aggravated the situation.
(HR Management Report)
9. ENDLESS QUARANTINES. As of December 1, 2020 the management reported that OLPHI now has only 1 staff on home quarantine. On December 3, 2020, the hospital has another 7 employees and doctors for quarantine. The entire 2nd floor of the Main Bldg. has been converted to a quarantine facility for our staff. The quarantines of employees has become routinary for those in the frontliners. They are rationed with free food and 50% of their salary is provided as a form of assistance for their basic needs inspite of their unproductive status; not to mention of course that the existing space is no longer used for in-patients.
(Nursing Service Report)
10. LEAN DECEMBER. The leanest month for hospitals is the month of December. People as much as possible would not want confined because of the joyfulness of the season.
(Management Report)
11. UNCERTAINTIES IN THE COMING MONTHS. I have always been on the news on the developments and updates and everyone knows that the pandemic, to this day, has no end yet in sight. The release of vaccines is still a media hype until today even in the most medically advanced countries like the United States.
(Current Events)
12. TIGHT OPTIONS FOR FINANCIAL ASSISTANCE. OLPHI as of this time has little to no options left for financial assistance. Except for PHIC. I have called the local in-charge Cleofe Andoy and reminded her of the past dues that they need to pay. She replied that she will coordinate with the regional office. Back in July of this year, PHIC paid us of their old dues amounting to 9M PhP. (see the tables.) After 4 months from the receipt of the assistance we are almost back to the May 2020 situation. We are now in a hand to mouth existence to speak of it harshly.
(Financial Operations Report)
13. WE FACE THE REAL-TIME SITUATION. Let us face the situation in real time. I HAVE PROVIDED THE FACTS AND FIGURES AS THE BASIS FOR OUR DECISION WHATEVER IT MAY BE. The concrete signs are hard to ignore. IT IS HIGH TIME TO MAKE GOOD OR EVEN DRASTIC DECISIONS.
B. THE NATIONAL SITUATION
14. Way back in May 2020 the Private Hospitals Association of the Philippines Inc. (PHAPi) revealed through Rustico Jimenez, president of the 744-member PHAPi, that some members have already partially stopped operations, with only the emergency rooms still open. “Among our members, about 50 percent are about to close,” Jimenez said in an interview with “The Chiefs” aired on One News/TV 5 on Wednesday night. (Lifted from internet clipping) Here:
https://www.msn.com/en-ph/news/national/over-300-hospitals-on-verge-of-closure/ar-BB14IIBe I have no update how many small private hospitals have already closed.
15. In House Bill 7569, Deputy Speaker Paolo Duterte, House Committee on Appropriations Chairman Eric Yap and Dumper-PTDA Rep. Claudine Diana Bautista said despite nurses’ gallant efforts in facing Covid-19, they are still paid considerably less than their counterparts in the public sector, adding “they must not be allowed to endure outrageously low salaries and wages.” The lawmakers, citing the Bureau of Local Employment of the Department of Labor and Employment, said registered nurses receive an average salary of P9, 757 a month. The lawmakers said this “paltry” amount is even less than what a minimum-wage earner gets each month. Recently, the lawmakers said, the government has declared that nurses in the public service are entitled to a minimum monthly salary equivalent to Salary Grade (SG) 15, depending on the class of the city or municipality. Depending on the step increment, they said a government employee with SG 15 may receive anywhere from P19, 845 to P30, 531 each month. (Lifted from internet clipping) Here:
https://businessmirror.com.ph/2020/09/14/house-bill-proposes-minimum-pay-package-for-private-sector-nurses/ As of date, this is not yet a law, but the most that will be affected by it are the small, private hospitals.
C. SOME FACTS ABOUT THE OLPHI SITUATION
16. Fact 1 – OLPHI is built primarily to serve as the BASE HOSPITAL FOR CKC-BSN.
17. Fact 2 – CKC has already SUSPENDED OLPHI TEMPORARILY as its base hospital without any time frame when, will it end.
18. Fact 3 – that OLPHI serves as a HEALTH CARE MINISTRY IS REALLY JUST A GLOSS OVER; it is just an improvement of what the Philippine province once has because of the fact that we already have a hospital. There are 4 existing hospitals in Calbayog; the reduction of health care services to the people due to our shutdown will always be covered by the 3 remaining hospitals.
19. Fact 4 – The 9M+ from PHIC leads us back to the same situation in only 4 months. WE NEED AT LEAST 3M PESOS A MONTH to keep OLPHI afloat within the pandemic situation. That would be more or less, 1M for salaries, and 2M to finance supplies.
20. Fact 5 – We can no longer operate because sooner our coffers will be empty. If we continue, WE WILL JUST SHUT DOWN BY DEFAULT. The future is so uncertain, there is no end to the consequences of the pandemic in sight until now, and 9 months have already passed.
21. Fact 6 – NOW, IT IS A FACT, THAT IT IS WISER THAT OLPHI WILL HAVE TO SHUTDOWN ITS OPERATIONS TEMPORARILY BECAUSE ALL THE CONCRETE INDICATORS PERVADING AND EXPERIENCED BY THE HOSPITAL ARE ALREADY POINTING TO SUCH DECISION. THE FACTS ARE NOW VERY HARD TO IGNORE.
22. Fact 7 – And to say the least, albeit momentarily, OLPHI HAS ALREADY OUTLIVED ITS PURPOSE AS A BASE HOSPITAL AS DECIDED BY CKC-BSN.
23. Finally, an exhortation based on my personal reflection reading the signs happening in the hospital during this pandemic:
Now a final look at the cash flow of the hospital.
“We wear PPE’s, masks, shields; dab our hands and arms with alcohol, gels, and sanitizers to protect ourselves while we serve the patients? True; but, at the same time, obviously, WE ALSO SERVE TO PERPETUATE THE FEAR OF THE VIRUS IN SO DOING. No cost of life in the hospital has ever occurred for 9 months among all the 113 listed employees and administrators; because the virus has 99% recovery rate. And yet, THE ATMOSPHERE OF FEAR IS HORRENDOUS, IT DEVASTATED OUR LIVES AND BANKRUPTED THE HOSPITAL ECONOMY. The global extreme caution for protection has become overly outlandish when in this locality there are no people dropping dead by the hundreds. “AS A FRANCISCAN, RELIGIOUS INSTITUTION; WE CAN NO LONGER SERVE BOTH THE PATIENTS AND THE VIRUS AT THE SAME TIME; AND CERTAINLY, WE CANNOT EXIST JUST TO SERVE AND PERPETUATE THE OVERWHELMING FEAR OF THE VIRUS.” (Fr. Jun, OFM)
Prepared by:
Fr. Jun, OFM
CEFO/Bursar
July 8, 2023 after the 2023 Annual retreat
Based on the report of
December 6, 2020
OLPHI IS NOW ON TEMPORARY CESSATION OF OPERATIONS
(A notice to the brothers as required by the Council Meeting of December 19, 2020. For a full understanding of the presentation, please download the attachment entitled: Document 22.) OLPHI-BOT for Council Meeting Cover Report.)
Here: https://drive.google.com/file/d/1vPMQzM4eaKkZAFpkngMKakLXVD5u3dVh/view?usp=sharing
The above title is a legal term, and it actually means the temporary closure of hospital services. It means further that some hospital services like Intensive Care Unit (ICU), Operating Room (OR) are no longer available but other services like Emergency Room (ER) Outpatient Department (OPD) Dialysis Clinic and others are still open. When this month of December closes, the hospital will be 10 months into the Covid 19 pandemic and the hospital is so hard hit by it.
In order to mitigate the impact of the crisis, the management resorted to the REDUCTION OF SERVICES or the closure of some of the services of the hospital effective the date of the Emergency Management Meeting of December 7, 2020. On December 9, the Board of Trustees Meeting followed but due to the ENORMITY OF THE PROBLEM the BOT did not make any decision. With the situation hanging, the BOT resolved that the management will make a special presentation to the Custodial Council as the president of the BOT, the Custos, has so recommended. The successive meetings beginning December 1, the Regular Management Meeting; December 7 the Emergency Management Meeting; December 9 the Board of Trustees Meeting; and finally December 19 Custodial Council Meeting brought us to a partial decision; that “WE ARE MOVING TOWARDS A TEMPORARY CESSATION OF OPERATIONS” in the hospital. Throughout the process, in the meetings, consultations, analysis, argumentations and reflections, we have finally identified at least 6 problems. The problems all came out and they evolved and the crisis itself was triggered by this pandemic.
THE PROBLEMS ARE NOW IDENTIFIED
1. THE PROBLEM OF THE SHORTAGE OF MEDICAL WORKERS
2. THE SAME PROBLEM IS EXACERBATED BY THE COVID 19 PANDEMIC
3. THE END OF THE PANDEMIC WILL NOT RESOLVE THE SHORTAGE OF NURSES
4. THE ADVENT OF THE PANDEMIC HAS TRIGGERED A CLOSER AND CRITICAL ANALYSIS AT THE REAL MAIN PROBLEM – THE SHORTAGE OF MEDICAL WORKERS
5. PHIC or Philhealth – THIS INSURANCE AGENCY HAS SIPHONED THE PROFITS OF OLPHI FOR MANY YEARS IN THE FORM OF THE NON-COMPLETION OF PAYMENTS
6. THE EXTREME NECESSITY OF MAKING A RADICAL DECISION WHETHER WE LIKE IT OR NOT – TOTAL SHUTDOWN, TEMPORARY SHUTDOWN, OR REDUCTION OF SERVICES OR WHAT IS THE BEST OPTION NOT PRESENTED. (No. 6 is not actually a problem but a part of the solution, but it will add to the problem if we do not make any decision.)
SOME FACTS AND REALITIES ABOUT OLPHI SO THE BROTHERS MAY UNDERSTAND THE SITUATION
1. OLPHI is a 56-bed healthcare facility. During the pre-pandemic years, the highest average daily bed occupancy is 53.53% or 29.98 beds out of 56 beds are actually occupied.
2. During the 9 months of the pandemic the average daily bed occupancy shrunk to 21.69% only, or 12.15 beds out of 56 beds are occupied. If bed occupancy is the gauge, OLPHI is running less than ¼ of our total bed capacity.
3. For the month of November, OLPHI already has an average cash collection shortfall per month in the amount of ₱ 2,635,535.19. A cash collection shortfall is understood in this given example: in 2019 considered a good year, we collected 5M but in 2020 in the pandemic, we only collected 2M so we have a cash collection shortfall of 3M.
4. We need at least 3M PER MONTH to keep OLPHI afloat without any mitigation if we remain on a status or we do not do any intervention at all about the crisis. There are no means for us to subsidize the financial operations with such a monthly amount.
5. Note the exact figures reported for the last 6 months in the Mid-Year Financial Report ending June 30, 2020. The report includes the 2 non-covid months of January and February and the 4 covid months from March to June 2020. OLPHI posted a revenue of ₱31,904,895.54. Subtract the posted expenses at ₱28,748,986.8 and the posted income is ₱3,155,908.74. Divide the income into 6 months and you have an average monthly income of ₱525,984.79 for the 1st half of the year. But this figure is problematic because in an accrual accounting system not all revenues is in cash; it includes collectibles or all the money that we still have to collect so the ₱525,984.79 is not realistic.
6. OLPHI now has very few promissory notes since I arrived in 2016. So the non-cash posted as revenues in the mid-year report can only come and the bulk of it is from Philhealth because this insurance agency only pays about 85% more or less of our claims more or less. It never pays in full at 100% and they always have reasons why. This problem persists even with the interventions of the Philippine Hospital Association (PHA) and the Private Hospitals Association of the Philippines Inc. (PHAPi) year after year.
7. OLPHI is plagued with a PERENNIAL SHORTAGE OF MEDICAL WORKERS FOR MANY YEARS AND WE CANNOT RECRUIT ANYMORE. We have already reached saturation point. This is a problem not only in OLPHI but also common in all the hospitals all over the Philippines. As a Level 2 Hospital we need more medical staff compared to that of a Level 1 hospital. We also cannot downgrade from Level 2 to Level 1 because we are also a Base Hospital of CKC-BSN. THE MANAGEMENT HAS ALREADY EXPRESSED TO THE COUNCIL THAT THIS PROBLEM IS ALREADY NON-NEGOTIABLE BECAUSE IT IS BEYOND OUR CONTROL.
8. I have made my statement in the Council that we can only last the hospital operations until December 31, 2020, but we can crawl until January. THE REDUCTION OF SERVICES ONLY ARRESTS THE HUGE LOSSES OF THE HOSPITAL AS QUICKLY AS POSSIBLE.
THIS IS NOW FOR EMPHASIS. WE DO NOT SEE A RECOVERY WITHIN 6 MONTHS OR EARLIER BECAUSE THERE IS NO END YET IN SIGHT FOR THIS PANDEMIC. THE END OF THE PANDEMIC WILL NOT END THE SHORTAGE OF MEDICAL WORKERS. PHILHEALTH WILL REMAIN AS IT IS WHILE BESET WITH LAWSUITS AND SCANDALS. THE MOST THAT WE CAN RESUME TO FULL OPERATIONS WILL BE THE EARLY MONTHS OF 2022 WHEN CKC-BSN WILL PRODUCE THE 1ST NURSING GRADUATES AFTER K12. THE DECISION OF REOPENING WILL ALSO DEPEND GREATLY ON THE DECISION OF THE ENTIRE FRATERNITY AND THE COUNCIL.
(Sgd.)
Felix A. Jungco Jr., OFM
Chief Executive Friar Officer
December 23, 2020