First of two parts

THE explosive growth of the retail business and the long-lasting boom in the real-estate industry are among the conspicuous signs of the robust economy, as well as the increasing purchasing power of consumers, particularly the expanding middle class.

The rise of new and modern hospitals reflects not only the growing economy, but the improving quality of life of the people.

Furthermore, the entry of major investors indicates that hospitals are now being considered as viable business ventures.

In the past, doctors who became financially successful in their practice put up their own clinics, which they later expand into hospitals. For example, Manila Doctors Hospital in Ermita, Manila, was founded by a group of doctors in 1956. It was taken over by Metrobank Foundation in 1979.

Even now, groups of doctors are establishing their own business groups and are building their own
medical facilities.

Big investors, with their financial resources and expertise, have the advantage of being able to start big, and to run hospitals more efficiently. This, in turn, accelerates the modernization and expansion of the health-care
sector, which can only be good for the Philippines and its people.

Among the leading investors in hospitals is Manny Pangilinan, through his publicly listed Metro Pacific Investments Corp. (MPIC). The company recently signed an agreement with Metrobank Foundation to acquire a 20-percent interest in Manila Medical Services Inc., which owns the 300-bed Manila Doctors Hospital in Manila.

The acquisition will increase MPIC’s chain of hospitals to 10, with a total of 2,600 beds. Incidentally, Manila Doctors is also undertaking an expansion project, which involves the construction of an 18-story building that will house 200 additional patient rooms and more clinics.

MPIC, which is targeting a total of 4,000 beds, now has a nationwide chain of hospitals: the Makati Medical Center, De Los Santos Medical Center, Cardinal Santos Medical Center, Asian Hospital and Our Lady of Lourdes Hospital, all in Metro Manila; Central Luzon Doctors Hospital; Riverside Medical Center in Bacolod in the Visayas; and the Davao Doctor Hospitals Inc. and West Metro Medical Center (Zamboanga) in Mindanao.

Ayala Land’s strategy in the healthcare business is to put up new facilities rather than acquire existing hospitals. Ayala Land and its partner, White-knight Holdings, announced last year they would spend more than P5 billion to build a chain of hospitals and satellite clinics under the Qualimed brand in five years.

The group actually began opening satellite clinics in 2014, and plans to build one hospital each in Iloilo, Laguna, Bulacan and Bacolod in the next two years, plus another six in the next five years in Quezon City, Taguig, Cavite, Pampanga, Cebu and Davao.

The cost of a satellite clinic has been estimated at P20 million to P30 million, while that of a hospital with 100 beds to 150 beds has been placed at P500 million.

Vista Land & Lifescapes, the country’s biggest homebuilder, is also going into the hospital business, primarily to provide world-class and affordable health services to Vista Land Communicities and nearby areas.

Vitacare Health Group, in partnership with Unimed, a group of skilled and well-known doctors, is putting up its first hospital in Vista City. Vitacare Unimed Hospital and Medical Center, which will rise along Daang Hari at Vista City with 100 beds, will be accessible to communities in the Muntinlupa, Parañaque, Las Piñas, Cavite and Laguna areas. Construction of the hospital, estimated at P500 million, will start in May 2016. Target of completion for phase one will be two years.

The joint venture is targeting 10 more hospitals with a total of 3,000 beds within five years, which will require an investment of at least P8 billion. Possible areas for expansion are Parañaque (Lake Front), Bataan (Balanga), Bulacan (Malolos and San Jose del Monte), Cavite (General Trias and Tanza), Batangas (Santo Tomas), Pampanga (San Fernando), Naga (Camarines Sur), Cebu (Talisay), Iloilo (Boton), Davao and Cagayan de Oro.

I want to note that even the new projects being planned by these three major investors are not enough to satisfy demand for hospitals in the country of 100 million people.

The Private Hospitals Association of the Philippines (PHAP) said during a regional conference in August last year that the country would need 100 new hospitals with a total of 100,000 beds in the next three years to cope with the health-care needs of the growing population.

The country currently has 1,800 hospitals, both private and government-owned, with a total of 77,000 beds, according to PHAP. The public hospitals include the 72 institutions controlled by the Department of Health (the others are under local government units).

Pharmaceutical products distributor Zuellig Pharma, in an article titled “Expanding Healthcare Access in the Philippines,” written by Kirsten Clodfelter and published online in April, said the number of available hospital beds in the Philippines was 10 for every 10,000 people, one of the lowest in the world. The United States and United Kingdom each has 29 hospital beds for every 10,000 people.

While the entry of big investors will have a significant impact on expanding health infrastructure in the country, it is still the government that has the resources to build new hospitals.

First, it has vast tracts of public land that can be used as sites for the new hospitals. This is one major cost component that private investors have to cope with. Second, the government has been enjoying surpluses, and we have been seeing reports about big chunks of appropriated funds still to be spent.

I think that under the regular budget, which has breached the P3-trillion mark, the government is capable of building six new hospitals every year.

Lamentably, public lands are being given away to make way for malls and other commercial facilities, which only cause traffic. Tell me if there is one government hospital in the Bonifacio Global City, one of the largest public landholdings that are now mostly privately owned.

I believe building hospitals is only one side of the health-care issues that we face. My view is that the basic elements of health care are availability and affordability. The private sector may help in the availability side, but the government must lead in the affordability side.

The bottom line is that no Filipino patient should die without receiving medical attention.

To be continued

01 December 2015
By Manny B. Villar