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Earlier violation
of tender procedures and other malpractices contributed to a loss
of hundreds of millions of rupees What ails this
1001 bed hospital, a gift from Japan and once a show piece in South
Asia? According to a hospital Board member Shirley Perera, its ailments
have been many. Among them were purchase of excessive drug stocks,
medical equipment, and unrealistic charges for services. Mr. Perera
warns that "unless immediate action" is taken to remedy
the "sorry state of affairs," the SJH, run as a public
company with a Government grant, would come to a grinding halt. Mr. Perera,
a one time Co-ordinating Operations Manager in one of the largest
hospital chains in the United States, the Service Master Hospital
Corporation, is Health Minister P. Dayaratne's appointee on the
SJH Board. In a bid to
resuscitate the ailing hospital, its Chief Accountant Rohan Abeygunawardena
said "we have decided to reduce stock levels and manage the
cash flow to break even." He said the Government grant for
the current year is Rs. 307 million. However, in the coming year,
it has been pruned down to Rs. 267 million. Contributing to losses
last year, he said, were rise in cost of drugs and salaries. Even
in the conduct of by pass surgery, he told The Sunday Times, the
hospital was losing Rs. 25,000 to Rs, 30,000 on every case. Mr. Perera
made some surprising disclosures to confirm the sorry state of affairs
at SJH. After 1999
where the hospital recorded a surplus of Rs. 1.3 million, the preceding
years have only shown a loss of several millions. Mr. Perera said
the hospital recorded a loss of 4.5 million in 2000 and Rs. 43.7
million in 2001. Though the
initial loss projected for this year was Rs. 21.4 million, it now
stood at Rs. 166.8 million, Mr. Perera said. This loss would almost
double over the next year with officials projecting a loss of Rs.
278.8 million or 31% of the recurrent expenditure for 2003, he warned. The Auditor
General in his report for 2001 had observed 'significant variances'
between the budget and the actual income and expenditure of the
Board and concluded that the budget had not been made use of as
an effective instrument of management control. Among some
equipment remaining idle was the Scoliosis, a special equipment
for spinal surgery and Invetro Fertilisation (IVF). "Hospital
funds are paid into projects which have neither been approved or
gone through proper tender procedures," Mr. Perera alleged.
When the issue was raised at the board meeting in February this
year, it had been revealed that hospital funds were used for several
projects that had not gone through the proper channels. The cumulative
cost of such bad tender procedure was put at ten million rupees.
"But there is no record to show that the work had been accomplished
or any verifications made before payment," Mr. Perera said. The hospital's
expenditure per year exceeds Rs. 800 million. Although the hospital's
requirement for a month was about Rs. 21 million, the hospital purchased
stocks for over Rs. 25 million per month. According to
Mr. Perera the biggest losses have been earlier reportedly detected
in the purchasing practices and dispensing or issuing of medical
supplies, surgical items and drugs. The tender board has issued
tenders for drugs, medical and surgical supplies worth Rs. 124 million
for 2002. But this has been in contrary to normal tender procedures.
Irrespective of the hospital's actual consumption and requirement,
tenders were issued for large-scale purchasing, resulting in over-stocking. "Drugs,
surgical and dressing items had been purchased without evaluating
the possibility of utilizing the stock and their period of expiry
and they had been unnecessarily stocked. As a result, at the end
of the year under review (2001), there was a lapsed stock valued
at Rs. 2,427,507," the audit report stated. At present,
the hospital has Rs. 16 million worth of heart valves in stock,
of which 75% have expired. "Doctors have requested for an additional
Rs. 15 million worth of valves. Purchase of only those which are
unavailable have been now approved. Mr. Perera
who is also a member of the budget committee said that during its
meeting last month it was revealed that Rs. 386 million worth of
supplies were in stock. Moreover, there were drugs worth Rs. 16.8
million in the nurses' station. "Bad tender procedure has resulted
in the accumulation of stocks. Orders are not made by item, but
by quantity," he said. Mr. Perera
also alleged that the budget committee had never met in the previous
years while even board meetings never lasted for over an hour and
not a question about the malpractices was raised. However, now,
the budget committee has been expanded to include a representative
of all the departments in the hospital and changed its name to Budget
Implementation and Planning Committee. Though much
of the deficiencies were slowly beginning to surface, there still
remained much mystery. For next year,
the accountant had three budgets with three different figures -
Rs. 278.8 million deficit, Rs. 258.5 million deficit and Rs. 269.5
million deficit. "This is allegedly prepared by two people
who may not be qualified to do this task," Mr. Perera said. The hospital
also made a huge loss over the years in all the services provided.
All hospital services had been substantially below cost. Another area
where the hospital loses millions is the open heart surgery. In
some of the open heart operations, the hospital loses as much as
Rs. 95,000 per case, Mr. Perera said. Private practice by some consultants
at the expense of the hospital has only added a burden on the patient
who has to pay a 'professional fees' which is added to the bill. Acting Director
Keerthi Kumarage said the increase in hospital service charges was
in order to make up for the shortfall in the Government grant. He said that
in most instances in the past, there had been an underestimation
in charging for the services while in some cases the hospital never
charged. However, it seems that it will be some time before the hospital can put together itself and be a viable institution. |
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