Tell it to SunStar: Improving private sector health workers’ wages

Tell it to SunStar: Improving private sector health workers’ wages

By Bagong Henerasyon Party-list Rep. Bernadette Herrera, Deputy Minority Leader

The wage concerns raised by nurses and other health professionals working in private hospitals and clinics are all valid and must be addressed.

Given the wide gap between their wages and the compensation of their counterparts in the public sector, coming up with solutions will be quite challenging.

Though the problems are difficult, they must be solved because the disparity in wages between the private and public health sectors is a glaring and continuing injustice.

I happen to have filed two bills: House Bill (HB) 4932, or the Medical Assistance to Indigent Patients (MAIP) Program Act, and HB 1232, or the Private Hospital Assistance Act. If these bills become laws, they will open up new sources of revenue to augment the private hospitals’ current streams while also giving indigents and other households access to hospital care.

I also present for further study by Congress, the Department of Budget and Management and the Department of Finance two sets of solutions.

The first set includes options for which there are existing legal precedents. The second set consists of innovations.

With precedents

First, looking at the current regime of wage laws, we can see that the minimum wage laws and regulations allow for classifications of workers. There are distinctions: agricultural workers, non-agricultural workers, administrative and clerical workers, industrial zone workers and household workers.

I, therefore, suggest a new wage category for healthcare workers, including health professionals. This category should have a national minimum wage rate that should be at least 50 percent higher than the highest rate in the National Capital Region (NCR). If it were entirely up to me, the daily minimum wage of an entry-level healthcare worker in the private sector should be at least P1,000 a day or P22,000 per month for at least 22 days of work in a month. Given current economic conditions and the essential and crucial role of healthcare workers, P1,000 a day is a just minimum wage at the entry level. The wage rates of those at higher than entry-level should of course be higher.

The twin issue is affordability. Many private hospitals would probably complain or protest that they cannot afford P1,000 daily minimum wage rate and higher rates for those with higher ranks.

The solution to this that I see is a direct wage subsidy from both the national government and the local government unit (LGU) — with P400 coming from the national government and P100 from local governments that are cities and first-class municipalities.

The budget for the P400 x 22 or P8,800 can be divided, with some lodged with the Department of Labor and Employment (following the Covid-19 Adjustment Measures Program model of wage subsidy given during the pandemic) while some can be a direct subsidy budget lodged with the Small Business Corporation of the DTI which already has a wage subsidy program in place.

A probable source of national funding would be a percentage tax or specific tax on products high in sodium and high in sugar. The sin taxes for health programs funding would be the relevant precedent for this approach. The local source of funding would be a percentage of the LGU Internal Revenue Allotment.

If the national government cannot afford a monthly wage subsidy, the fallback positions would be a quarterly or semi-annual subsidy. This would greatly reduce the budget requirement. But the goal should be a monthly wage subsidy.

There is another form of subsidy for which there are precedents being implemented at the Department of Transportation (DOTr) and the Department of Education (DepEd): service contracting. Service contracting is what made the Edsa bus carousel happen through DOTr. Service contracting has been done by the DepEd since the 1980s in the form of education service contracting by which students that cannot be accommodated in congested public schools are entrusted to private schools, with the ESC (educational service contracting) funds going to where the ESC students are transferred.

Innovations

A new approach that the House has thought of is to expand the coverage of lawmakers’ medical assistance referrals to include private hospitals. This way, private hospitals can augment their finances with the funds coming from the lawmakers’ referrals.

Another approach I suggest is for the Development Bank of the Philippines (DBP) to establish and sustain a concessional loan facility program for private hospital facilities and manpower development. This way, private hospitals, especially those in financial distress, can access affordable DBP funds to improve their services and afford higher wages for their staff.

A third approach is to ask the Asian Development Bank, the World Bank and the Japan International Cooperation Agency for a sectoral transformation loan facility of $500 million to improve private medical facilities, especially those in the provinces.

A fourth possible solution is the issuance of long-term bonds of at least 20 years maturity and amounting to at least P500 billion, with the proceeds to be used to improve the facilities and services with the ultimate goal of enabling the private hospitals to afford higher wages for their personnel.

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