Needy patients get nothing while charity funds earn interest
Alekh Angre 31 January 2012

Poor box charity money failed to reimburse healthcare expenditure of poor, needy patients

The Poor Box Charity Fund (PBCF) in government hospitals, constituted to help poor patients access to healthcare which are not available for free, in reality, has remained unused with no real benefit to the needy.

According to the report, ‘Mapping the Flow of User Fees in a Public Hospital’ by Centre for Enquiry Into Health and Allied Themes (CEHAT), money collected from the patients as blood bank and morgue charges, goes into the PBCF. But the study found out that this is just around 2% of the total collections. The money is, in fact, is kept in bank accounts, to earn interests, which is used to run the PBCF.

CEHAT analyzed a Mumbai-based public hospital as a case study in the report. Moneylife had earlier reported that the user fee, paid by the patient at the time of using public healthcare facilities has kept the poor away from using the facilities.

PBCF is a fund which is used to reimburse a poor patient’s charges. Poor Box Charity Fund Committees were constituted in the hospitals run by the local government body in the year 1926 with the approval of the Standing Committee. The primary function of this committee was to provide medicines and surgical appliances unavailable for free in the hospital to the poor and needy patients.

However, statistics in report indicate that less percentage of money is actually spent to help the poor. “It is clear from that only a very low percentage of the money available—11.14%, 34.39%, 14.42%  for the years 2007, 2008, 2009, respectively, was used to reimburse the expenditure incurred by the poor and the needy. The sudden jump in 2008 from 11.14% to 34.39% was not because of an increased utilisation of funds, but because of a fall in interest income. The reasons for this fall remain unclear.”

It adds that, “It would be apt to look at the bank account that keeps the seed money from the local government body, the interest income which is to be used to run the PBCF. Over the five years between 2004 and 2009, the amount in the account—in which the local government body had invested seed money was Rs1.61 crore. The interest which was to be one of the main sources that finance PBCF has actually grown from Rs1.61 crore to Rs2.37 crore. This growth is solely because of accumulated interest earnings, primarily a result of money being unused to reimburse needy patients.”

Oommen Kurian of CEHAT, who worked on the report, explains that, “Only around 2% of the user fees collected is deposited in PBCF and the latter is seemingly assumed in the CRs (Corporation Resolutions) to be a is a part of the user fees mechanism when it is not. PBCF and user fees are completely different and separate mechanisms, and PBCF should offer needy patients relief over and above what they receive as exemptions or waivers. PBCF was constituted to enable the poor to access healthcare that was not free. It must not be used to reimburse the local government body for the minimal care it is bound to offer for free to poor people.”

In fact there have been cases of charity box money being misused mainly due to lack of transparency.  An enquiry commission last year revealed the ‘procedural irregularities’ in the way PBCF funds were used in KEM Hospital (Mumbai), which is run by the local government body. Another case of misuse of funds came up last year resulting in suspension of the medical superintendent from St George’s Hospital, Mumbai.

CEHAT says that barring a couple of instances, there is no clear mention of waivers in the existing policy documents/guidelines. “Whenever waivers are mentioned it is made clear that for each waiver/exemption, money equivalent to the fees that is foregone has to go from the PBCF to the local government body’s account.

This is not being followed as of now, but the researchers found out from interviews with the senior administrators that this constant fear of the local government body actually choosing to demand money from the PBCF account—following the guidelines—for each waiver granted has a devastating effect on the equity.”

 It adds, “On the one hand, there is pressure on the doctors to keep the number of waivers and exemptions to the minimum so that such claims are low, and also on the PBCF to keep reimbursements to a minimum so that there is ample money in the account just in case the local government body chooses to send a bill with retrospective effect.”

Nagesh Kini FCA
1 decade ago
The Govt. needs to bring in transparency in the entire Poor Box mechanism with a representation of the public in the committee to oversee opening of the box to banking of the collections and its end use. Leaving it only to the hospital makes it open to abuses.
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