Sunday, September 8, 2013

Professional fees and the physician

A week after Napoles surrendered, BIR chief Kim Henares was back - blazing her guns at what she calls the professional tax evaders of the Philippines whom she fondly identifies as mostly coming from the sector of physicians, dentists, and lawyers.

It's such a shame to wash our dirty linen in public, but some people have to become popular at a job that is highly unpopular - tax collection. Some of my friends and colleagues abroad who have been practicing medicine since they graduated from medical school and decided to hie off to a country with lesser corruption were asking me - do we really not remit the taxes due to the government?

Good question! No answer?

For the sake of argument, let's stick to the basic rules and principles. As citizens of the Republic of the Philippines, we need to pay our taxes. We are considered by the government as a value added service. Never mind the fact that we get patients that we do not charge (like our colleagues and their families, the poor people whom we get to see but don't have the money to pay, compadres and comadres and some of the celebrity friends we cater to) - the point of it all is that services rendered and paid for should have an accompanying receipt. The receipt should incorporate the 12% VAT already.

With over 100,000 registered physicians, over 1,000,000 nurses, over 100,000 lawyers and over 100,000 dentists in the country, Kim asks a simple question - why is the collection from this bunch of professionals so paltry? Her argument, particularly for physicians, lawyers and dentists is that the majority of us in this profession can afford luxury houses, several cars, send our children to expensive schools, post pictures on Facebook on so many travels abroad - and yet many of us remit taxes less than P100,000.00 a year.

What does P100,000 a year in taxes paid mean? It means that in your profession you more or less should make around P65,000 a month or P2,166.66 a day presuming that you hold clinic every day. If you charge an average of P500.00 per consultation on an out-patient basis, that means you see around 4-5 paying patients a day. This is probably a very low end computation because this consultation fee does not include specialties that need procedures (like ophthalmologists, ENT, cardiologists, etc.).

I get the point. We're not all good people. Some of us don't walk the talk. But neither is the government. With all the money that is being siphoned off to Napoles and PDAF and government officials who literally, brazenly steal under our very noses, it wasn't really a good time to call tit for tat. But Kim was just doing her job. Obviously, you cannot please everyone. The doctors ask back - how about the patients that run away and don't pay us? Where do we charge this to? Or the patients that pay you with chicken or eggs, or JCo or coffee or cologne? How do we deal with that? And the answer of Kim is that if they don't pay, don't issue a receipt. The majority of our patients, however, contribute to the food on our tables, roof over our heads, schooling of our children, gasoline of our cars, travels we have abroad (not to include the drug companies share), and according to Kim, all taxes to these professional fees should be duly remitted to the government (to steal?).

But like other businesses in the country, what is paid for is duly taxed and a receipt is duly provided. The bureau describes the scenario as - when you go to a restaurant, you don't tell them that "okay don't issue the receipt and you can remove the 12% VAT on our food". And if the owner of the restaurant is your friend and he gives you the meal or dessert on the house, he doesn't include that meal on your tab. And we can do the same.

Which now goes to the stupid idea of putting a menu for services we render (akin to a restaurant). There was more hoopla when the doctors were fighting back (like me) at the idea of a menu for patient services.

CHECK-UP P500.00
Confinement in standard room P2500.00 per day
Confinement in suite room P5000.00 per day
Confinement in ICU P10,000 per day
Cesarean section without anesthesia P5000.00 (this is a sick joke)
Cesarean section with anesthesia P100,000.00

These were thoughts that were playing in my mind...and I was aghast because we don't actually charge patients on a standard fee for in-patients (well I don't for that matter). We charge patients according to the capacity they pay and gazillion patients end up bartering with you for your professional fees at the end of the stay. There's an ethical dilemma in advertising the professional fees - it's not fair to barter with healthcare levels because patients don't understand why there are disparate charges between doctors - the level of expertise, practice and achievement - comes with a price.

We have patients that are disappointed with how some doctors provide services. As one FB person would say, it is just correct that the BIR run after the doctors because we charge P500 "para sa laway na puhunan". A clear misunderstanding, but clearly also a disappointed patient who may have his own views on why in God's name they need to pay this much for a 60 seconds consult.

Health Insurances are different and the charges are fixed rates depending on the room and the disease or what was performed on them during their hospital stay. A good many of doctors are not affiliated with health insurances and quite a number of us hold clinic only sparingly because some of us wear multiple hats and have a more fixed paying job. Which means that the clinic is there to accommodate some of our private patients but 60-90% of the time some of us are doing some other corporate activity or have their own small businesses while the remaining 10-30% see patients as a hobby and not a full time profession.

The health profession in the Philippines is significantly different from the US, Canada, Japan or even any other country. Here, the doctor has to make ends meet by multi-tasking and taking on different hospitals at different hours of the day at different days of the week. We have no 13th month pay. We pay for our own transportation and gasoline and car maintenance. We have no fringe benefits. If we don't make it as a doctor, many of us take a nursing course in the hopes of finding greener pastures in some other far away country because what we actually make is not enough to make ends meet. It's the way the healthcare is built in this country. Of course, Kim Henares is getting accolades from the US and other countries about her being one tough cookie trying to address the tax deficits in the country. But a tough cookie not in tangent with reality speaks poorly of the knowledge of the bureau on the practice of law, medicine or dentistry in this country.

What counts actually is to really run after the largesse that use taxpayers money in order to enrich themselves. And that's where the difficulty lies because most (if not all) of them are from the government. It is obvious that they have the manpower, the will and the innovativeness to hide what they steal and steal what is supposedly for the people. I guess at the end of the day, we just draw the line and say - let's follow the leader.

A perfect example are how some young people drive around in spankingly expensive Mercedes Benz owned by their parents who probably do not have legitimate resources for funding these. I have neighbors (sad to say) who really have no cash or are not even financially well off but they have a dozen cars or so in their garages. Why can't the BIR start from that? Look at all these fancy cars, find their owners and dig backwards and see if they even paid their taxes due compared to the properties they own or the businesses they run or even the cars they have? It's a simple way of running after tax evaders.

The meat of the problem lies not in government being inefficient but rather in who enriches himself while he/she is in power - are the ones running after the people who apparently do not pay taxes correctly. You can only expect the professionals to abide by what the government says if you dialogue with them and look for solutions by understanding what the real concerns are. Until government is able to take this step, there will always be an avenue for misunderstanding. With one side opposing the other side with various reasons. You can only expect people to pay taxes correctly if the taxpayers palpably see where their taxes are going to.

Several months after Kim has said that she would run after online businesses, where has that gone? Nowhere!

Several months after the government has run after former AFP Comptroller Garcia, where is the loot his family has stolen? What has happened to the Euro Generals in the term of GMA?

When you're running after the small fry, they only get angry because government has not resolved the bigger fries.

Start with them and then you can expect all professionals to follow your rules. In the meantime, it will be a long, tedious, painful debate on what Kim expects the professionals like doctors, dentists and lawyers to follow.

You can only make changes if you make the changes within the bureaucracy first. You cannot expect people to trust you just because you say so. Trust is a long relationship and the most pivotal one. It will wear itself thin because rules and regulations are made only for a select few.

Professionalize the Bureau of Internal Revenue. Then change will come. You cannot start with the taxpayers. Like every family, change begins from home.


Anonymous said...

This is great! I really hope Kim Henares and even PNOY will be able to read this one... is it even possible?? I actually even wanted to highlight several notable lines... my sentiments are strongly with you! Godspeed.

Anonymous said...

Well said! I hope The govt fixes the problem in her backyard befor pointing fingers at professionals who work hard for our money. Henares should stop generalizing that doctors/ lawyers don't pay proper taxes cause we do. She should have a dialogue with the PMA before she goes on making idiotic plans .

Kid at heart said...

I agree to the comment - hindi lahat ng doctor hindi nagbabayad ng buwis. Huwag mo kaming lahatin Madam Kim. The people trust us with their lives. Who trusts the government with the money that we remit? It's actually the taxpaying doctors that are angry over the BIR. Those that are not paying taxes are silent.

Anonymous said...

The problem in the government ? BIR is another problem compared to this. That doesnt justify that medical professionals should not pay their due taxes. The right way is for the government to straighten its bureaus and also doctors pay their taxes.

Unknown said...

Question.. how about CPAs? They are professionals din naman who know more about how taxes are paid... or not... more than doctors.. or lawyers who do not practice corporate law...

Anonymous said...

@Kid at heart masakit rin sa mga emplyedo ng gobyerno na hindi mataas ang sahod at automatic ang bawas ng tax sa sweldo at kung magtrabaho ay "kahit anong oras"

Anonymous said...

Give to Caesar what belongs to Caesar, and give to God what belongs to God. Be honest, even if others are not. In short, no matter what your reasons are, pay the correct taxes. The rest of the Filipino employees are doing so even if the whole darn system appears to be corrupt. Actually, employees can't even do anything because the darn tax is automatically taken off their salaries. So why should you be an exemption?

Anonymous said...

Come on, Doc.

Dont smokescreen the issue with the host of other non related issues. Patients who run off and don't pay? That big fish neighbor with Benzes? That big PADF story? Even JCo gifts?

So are you going to play God and decide for yourselves when ALL of these problems you cited are solved. And only then you'll be ok to pay your fair share your taxes? If we go by your line of thought, only doctors in Utopia will pay their taxes.

Sorry for all the rest of us who have no choice but remit their taxes by our employers. The taxes we pay makes possible ALL services (it may not be much but you have to admit you cant live without them) that the government extends not only to us but TO DOCTORS AS WELL.

We pay our taxes.

If you're making a lot of noise that you shouldnt because of this or that, your being unfairly difficult. You are becoming part of the corruption of this society.

Kid at heart said...

I agree completely that we need to pay what needs to be paid. Question is, are the Filipinos willing to pay as charged with no exception to the rule?

Kid at heart said...

Don't get me wrong. Many of us pay our taxes. The point is the same for self-employed people here. Many don't pay their taxes correctly. Not just doctors. Online businesses like Kim's Store for gadgets, DVDs online etc.

By targeting only one group you become unfair to a profession that gives out more than what you people imagine. You eat in a restaurant but you can't barter and say "I don't have enough money, can I vomit the steak I just ate? But you get better after a heart attack and you tell your doctor, sorry we don't have money to pay your professional fee anymore. Is that right? What protects us now? We don't even have a law that allows such a rebate of debts on our taxes.

Lets be fair. We give to Caesar wheat is Caesar's.

So should the patients then. With no show of compassion or mercy or kindness. Is that tit for tat? It's sad that it will end up that way. There needs to be a compromise for unsettled debts

Again, I agree. We all need to pay our taxes. The question is - do all self employed professionals do?

Aveen said...

systemic change. sabay-sabay. professionals+tax collection+accountability

Anonymous said...

yes well said. but also think of this
if the PDAF is gone who will have access to all that money very scary! hoping PNOY will use it for good.

Anonymous said...

so nagkakaintindihan ba ang mga tao sa tunay na issue ng post na ito ? mukhang hindi eh

ang issue ba ay ...?

1) hindi nagbabayad ng buwis ang mga doctor ?

2) hindi nagbabayad ng tamang buwis ang mga doctor ?

3) hindi dapat magbayad ng buwis ang mga doctor ?

4) hindi dapat magbayad ng buwis ang mga doctor habang may corruption ?

5) dapat maglagay ng karatula ng serbisyo ng doctor na may kaakibat na presyo?

6) laway nga lang ba ang puhunan ng doctor? (walang utak ?)

7) walang utak ba ang nakakaisip na laway lang ang puhunan ng doctor?

8) laway lang ba ang puhunan ni kim henares?

cmon... aminin mo na hindi natin naiintindihan lahat

Kid at heart said...

We don't understand what patients want. That's the bottom line. As long as ALL patients are willing to cough up their share there is no squabble here. Problem is that many are willing to part their money with a new gadget but when it comes to paying a professional fee, there's the rub. And yes - believe me when I say that there are patients who run off with the required payment. And that's the sad fact. So we all don't understand the issue. But I tell my colleagues that we need to pay correctly. And thanks for your point as well.

Anonymous said...

BIR plans to require doctors, lawyers, to post or display their fees in their place of practice...
1. What would this result into?
A. On the part of the government?
B. On the part of the professional?
C. On the part of the patient/client?
2. Is this feasible?

Anonymous said...

The mentioned professions are requred to pay correct taxes because they just dont't! This is to let the professionals mentioned to pay so to have an additional income coming from them and to cover up all the the stealing issues here.

Anonymous said...

I was born and raised here, but after finishing medical school I went to the US to practice medicine. Part of the reason why is it that med school opened my eyes to the reality of being a doctor here in the Philippines:
1. It is extremely hard to start your own practice. Not unless you have parents who have their own established practice.
2. The great majority of Filipinos do not have medical insurance and pay out of pocket. That is if they have money in their pockets. Most people "gift" doctors food, deserts, poultry, etc.
3. The Philippines is a very small world and everyone is related at some level. Somebody's uncle's cousin will be related to you and will expect you to waive your professional fee.

And the list goes on.

In the US we don't post rates. I treat all patients the same, whether they have medical insurance or not. But that's because most doctors are employed and are paid a fixed amount of money to see x amount of patients by a medical insurance company, medical group, or hospital. People are assigned a primary care doctor who is paid a specified amount each month which is a portion of their premium. Or the government would shoulder a portion of the cost of a visit. Meaning, you get paid. Period.

The reality is the practice of medicine is a business especially in the US. But here in the Philippines, doctors are not given their just compensation. If only lay people would understand what all doctors went through in medical school, in training...all those sleepless nights, all the lost time that should have been spent with family, all the meals we missed, all those times you kept going even if your body was saying you need to rest after being awake for more than 24 hours....and most of all, the swallowed pride of being 28 years old and still asking your parents for money... It would take one to experience it to understand.

I wish we were just auto mechanics and would just fix engines or the transmission of a car, like what another comment pointed out. I wish it was that simple. But doctors deal with LIFE, and the human body is a much more complicated machine than a diesel engine. If you can't fix an engine, you buy a new one. Not so easy with human life. You can't just buy a new heart, a new liver. Human life is much more delicate and each and everyone of us has an expiration date. Doctors try their darndest to try to extend that, so that you can live another day, another week, another year or more, so you can spend time with your family, fulfill your dreams. That I think is PRICELESS.

Anonymous said...

while what you say is mostly true, DO WE PAY OUR TAXES IN FULL? If we don't then we are part of the problem, whether it is a small part or a big one.

There are many problems, some bigger than others: big tax payers not paying, government stealing,.... and doctors not paying their taxes. What do you propose to fix the issue with the doctors?

Let us stop pointing at others. If everybody just waits for everybody else to fix things... nothing will get fixed.

Anonymous said...

I agree with anonymous doctor in the u.s.

When you think about it, statiscis will show that about half of the new doctors each year go to the united states to tak the MLE and try to practice there.... about another half of the half will try their luck in qatar, bahrain, doha, singapore, palau, micronesia and maybe even zimbabwe... only about 1/4 of the graduating class for the year choose to stick it out here in the philippines...

Why? mainly because of the reasons basically said by the anonymous pinoy doctor in the U.S.... Doctors are not justly compensated...
And do the doctors left in the philippines complain?
TO themselves maybe... but openly NO...

I think the doctors are being insulted by the posting of professional fees and i think only healthcare professionals and their loved ones easily understand why.... because being a doctor takes a lot of time, effort, sleepless nights from their lives... and i think the basic premise is you can never put a price tag on that.

It is often portrayed in old movies and i think it would be disgusting in real life if you go into the emergency room and see the consultation fee and fee for procedures are posted in the triage area and the nurse will say to a man with a stab wound to the chest.... eto ho ang professional fee ni doc.. dahil sa nasasak ho kayo, 1000 ang consulta,para patigilin ang pagdugo ng sugat 500 na dagdag... kung kailanganin ng tubo ( chest tube) 2000 pesos po and dagdag ... ngayon kung kailangan po kayong operahan, dagdag na 5000. Pero kaialangan nyo nga po palang sweruha.. so magdadagdag kayo ng 500 ... so lahat lahat po ang pinakamababang babayaran nyo ay 550 pesos para sa konsulta at swero...

Pero hwag ho kayong mag-aalala... may 50% discount naman po kayo kapag hindi ho kayo nabuhay ni doc.

I think the issue that the BIR wants to Resolve is to go after the doctors who do not pay the proper taxes.. which is correct and just... its just that the way they thought of is plainly stupid... what will posting the professional fees do? counting the people who go into the clinc and multiplying by the posted professional fee? how about if the patients are not charged? then you have just to declare them as non paying patients? so if i am a serious tax evader ? i would just declare that 8 out of 10 patients i saw for the day were non paying ... did the posting of the professional fee help in anyway?

common sense is not all that common after all

Korvac said...

I'm sorry. I'm a doctor too but come on! We doctors do not have the monopoly on sleepless nights, time lost from family, sacrifices with blood, sweat & tears, unjust compensation, etc. I'm so sick of hearing about "the hardships of med school, 24 - 36 hour duties, the service we provide, the compassion for our poor patients", blah, blah, blah. I'm sure a lot of other people, mostly employees, perform their job with as much hard work and compassion. Nobility of profession can come from small actions too. These may not necessarily be life-saving actions, but that doesn't preclude them from being regarded as noble.

Just because we're saving lives, just because of the 'nobility' society has ascribed on our profession, we are somehow excused from paying the correct taxes? Or until the government can assure us that our taxes will be utilized properly (you'll have better odds with hell freezing over), you can't expect the professionals to diligently pay the right taxes? Since we don't get just compensation from all our hard work & sacrifices, the BIR should just leave us alone? And since online businesses are getting away with it, we doctors should get away with it too? Unahin niyo muna ang mga corrupt officials, online businesses, CPA's, at mga artista bago ang mga doktor kasi mga mabubuti kaming tao? I don’t think so.

While I also do not agree that posting professional fees will somehow miraculously solve the tax evasion problem that is quite rampant among professionals (not just doctors), I’ve been quite disappointed with the way some of my colleagues have been reacting to it (e.g. making mock menus). Parang sobrang nakakababa sa pagkatao nila maikumpara sa mga parlor at carinderia? Dear colleagues, while it is true that the doctor-patient relationship must ever be valued and respected, whether we like it or not, whether we admit it to ourselves or not, we enter into a business transaction with our patients. In exchange for our services, we charge fees. No matter how altruistic, no matter how noble our intent, it is still a form of business.

Some argue that posting professional fees will adversely affect our relationship with our patients. If we take real good care of our patients, I don’t think posting professional fees will desecrate the doctor-patient relationship. Why will a ‘menu’ restrict us from extending our charity and our compassion to our patients? We can still choose not to charge or give discounts to our indigent patients. A signage won’t change this.

Kid at heart said...

"The practice of medicine is an art, not a trade; a calling, not a business; a calling in which your heart will be exercised equally with your head. Often the best part of your work will have nothing to do with potions and powders, but with the exercise of an influence of the strong upon the weak, of the righteous upon the wicked, of the wise upon the foolish." - Sir William Osler

I guess Osler's paradigm has changed throughout the centuries. And while many of his teachings may still hold true today, we have made the practice of medicine a business. And we give to Caesar what is due him.

akoto said...

There are already taxation laws geared toward proper collection of taxes and id3ntifying tax evaders. proper implementation is the key. Posting of professional fees does not in any way help in this endeavor.

akoto said...

There are already laws for proper tax collection and finding tax evaders. Proper implementation is the key. Posting rates of professional fees will not in any way help.