THE relationship between the ‘for-profit’ private sector and the ‘non-profit’ government has been a dilemma since the Industrial Revolution. That period marked a turning point because businesses were able to move beyond the grip of the government’s control on the economy. This was because prior to industrial manufacturing, economies were agriculturally dependant. Further, the governments, primarily monarchies, owned the land.
But then a private business owner with a factory and a few employees could create as much economic wealth as many hectares of agricultural production and usually with fewer workers.
However, government still had a vital role to play in opening up economic opportunities in various ways. The United States government as owners of huge tracts of land began selling this land to private people who then built cities. Further, for example when there was not any profit incentive to build a particular road, the government could do this which then supported private business.
Health care services delivery has been a great problem in the Philippines for decades. From the private sector viewpoint, there was not enough potential for business-sustaining profit except for the relatively small higher economic groups. Government was forced to fill the gap with publicly owned medical centers.
Now we see major companies moving rapidly with large amounts of investment into health care. The Businessmirror reported that “Metro Pacific Investments Corp. (MPIC) is stepping up its efforts to meet its health-care subsidiary’s 5,000-bed target through the acquisition of 12 more hospitals around the Philippines.” While many of the hospitals MPIC is buying are “private hospitals owned by families,” MPIC’s investment capability will substantially grow the industry.
Further, “Property developer Ayala Land Inc. said it plans to build at least 20 clinics and hospitals in the next five to six years, as setting up such health facilities will complement the company’s mixed-use developments by generating more foot traffic in its malls.”
Why the sudden push into health care?
The Philippine government has made excellent strides in expanding the Philippine Health Insurance Corp. (PhilHealth), created in 1995, to provide universal health coverage for Filipinos. This program actively complements the private sector being able to provide health care services with a sensible and sustainable business model.
The health insurance business has also expanded exponentially as the call-center and outsourcing business has grown through the years with perhaps several million more employees and their families now covered with health care programs than a decade ago.
The generous financial incentives given to the call-center companies had the unintended consequence of bring health insurance to its employees. That created more people now able to pay for higher quality health care which has led to the private sector moving into this business because they can make a profit to sustain and grow the health services industry.
The government-private sector relationship is vital for a strong economy.
1 comment
We keep on hearing all these success stories of state-run services and utilities in places like Singapore, etc., but these stories all have one thing in common: They always take place in other countries. Proponents of nationalization are hard-pressed to present a success story in the Philippine setting, at least within recent history. Perhaps one day, nationalization will work just as well here, when we learn to elect good leaders and purge our mindset of destructive influences like crab mentality and so on. But let’s not put the cart before the horse. For now we need the support of the private business sector whose record at efficiency and service is certainly enviable compared to that of government.