SC OKs privatization of state hospitals

The Supreme Court has given its nod to the privatization of state-owned hospitals and health facilities under the Health Sector Reform Agenda, saying reforms in the health sector is a valid exercise of the President’s constitutional power.

In a 23-page decision penned by Associate Justice Minita Chico-Nazario, the SC affirmed the constitutionality of the Health Sector Reform Agenda (HSRA) for 1999-2001 of the Department of Health and Executive Order No. 102 issued by former President Joseph Estrada on May 24, 1999, which paved the way for the privatization of various government hospitals.

In issuing its decision, the High Court upheld the November 2004 decision of the Court of Appeals which denied the petition filed by the workers of the Tondo Medical Center, Research Institute for Tropical Medicine, National Orthopedic Hospital, Dr. Jose R. Reyes Memorial Hospital, San Lazaro Hospital, and by non-government organizations Alliance of Health Workers Inc., Health Alliance for Democracy, Council for Health Development, Network Opposed to Privatization, Community Medicine Development Foundation Inc., Philippine Society of Sanitary Engineers Inc., Kilusang Mayo Uno, Gabriela, Kilusang Magbubukid ng Pilipinas, and Kalipunan ng Damayan ng mga Maralita.

The private petitioners in the case were Elsa Guevarra, Arcadio Gonzales, Jose Galang, Domingo Manay, Tito Esteves, Eduardo Galope, Remedios Ysmael, Alfredo Bacunata, Edgardo Damicog, Remedios Maltu and Remegio Mercado, all DOH employees.

Citing Section 17, Article VII of the Constitution, the SC said the Constitution sanctioned the President’s authority, by executive or administrative order, to direct the reorganization of government entities under the executive department, including the DOH.

“To remain effective and efficient, it must be capable of being shaped and reshaped by the President in the manner the Chief Executive deems fit to carry out presidential directives and policies,” the SC ruled.

The High Court said the issuance of EO 102 is well within the constitutional power of the President and there was no usurpation of any legislative prerogative in issuing EO 102, and that the actions of the DOH secretary, being an  alter-ego of the President, are also presumed to be acts of the President.

The SC further said petitioners had failed to prove that the HSRA supposedly violated the equal protection and due process clauses that are embodied in Section 1 of Article III. None of the private petitioners were removed from public service, the Court added, nor could they cite actions that would show the reorganization was pursued in bad faith or resulted in actual injury to petitioners.