Gearing up for medical tourism

If there’s big spending, potential revenue sources should not be far behind. And the growing medical tourism is prize in sight. This should sum up why Metro Pacific Investment Corp. led by Manuel V. Pangilinan continues to buy (or acquire shares in) hospitals in the Philippines.

It all started in 2007 when Metro Pacific took a more aggressive interest in Makati Medical Center and acquired a 33.4-percent stake in it. The bill was worth P750 million in convertible notes, making MVP’s group its largest single investor.

At that time, Makati Medical Center was in the middle of management problems, partly attributable to difficulties among its original doctor-owners because of personality differences. The hospital, once the premier health care delivery institution in the center of the country’s business district, was slipping in terms of health care delivery.

Competition from nearby Asian Hospital and Medical Center, which opened in 2002, was challenging its Makati Medical Center’s reputation for having the latest medical equipment, rooms and suite of services, and the enrolment of the best doctors of the country.

Building up capability

In 2008, the MVP group took over the management of Cardinal Santos Medical Center (CSMC) on Wilson Street in San Juan. This helped strengthen the management capability and scope of Medical Doctors Inc., an MVP company formed to initially manage Makati Medical Center.

Then MPIC bought 34 percent of Davao Doctors Hospital for P500 million, giving the Pangilinan company presence in Davao Doctors Oncology Center Inc., Allied Professional and Development Corp. and Davao Doctors College.

MVP has added to this list Riverside Medical Center in Bacolod City and the management contract with Our Lady of Lourdes Hospital in Manila which includes a commitment to spend at least P350 million on facilities and equipment for the hospital over the next five years.

Hospital King

Not surprisingly, this has earned the business tycoon the monicker of “Hospital King.” With billions committed to upgrading and refurbishing of the hospitals acquired and the resulting upgrading of hospital operating standards, no wonder there are also similar moves to invest in the hospital industry by other groups.

Worthwhile mentioning is St. Luke’s Medical Centre, which recently added the state-of-the-art 14 story in Global City, Taguig. The new hospital offers a wide range of medical services covering cardiovascular medicine, ophthalmology, cancer, neurology and neurosurgery, and treatments for liver and digestive diseases.

Moreover, the Global City hospital receives international patients from the United States, Europe, Asia and the Middle East. It has an international patient care center providing extra services for the medical tourist such as travel planning and airport pickup.

Even hospital groups in other strategically located provinces, notably Cebu, have been busy upgrading their facilities and expanding their services. And of course, their market horizons.

Growing health care spending

The underlying push comes from trillions of dollars being spent by the US alone on health care, which over the last years had still been growing by double digits notwithstanding the financial crisis and the impending threat of a recession to the world’s biggest economy.

The trend in health care spending is also echoed, though at a much more conservative pace, in European countries and even leading Asian economies. The sick, especially those who can afford – either by their own pockets or through government support – are paying more to get treated.

Such indicators are juxtaposed against the high cost of getting medical attention in the US or even in medical centers in Singapore and Japan. Simple medical procedures for non-life threatening conditions have become too expensive for many people.

Health and leisure

It’s no secret that the Philippine government is eyeing a share of the now lucrative medical tourism market. As early as 2004, our ports of entry had seen about 200,000 foreign visitors willing to undergo medical and dental treatment in the country, and incidentally, happily visit our famed beaches.

The Philippines is starting to show an edge over rival Asian medical tourism providers such as India, Thailand and Singapore, thanks to the private sector’s response in terms of continuing investments in new and existing health care delivery infrastructure and manpower resources.

Added to this, returning Filipino doctors and nurses who have trained and worked abroad in countries such as the US and the United Kingdom bring with them a lot of valuable insights that help increase our medical tourism-biased hospitals’ growing reputation for excellence but at very affordable prices.

Increasing competitive pressures

But we cannot be complacent. Malaysia and Korea, two countries that have better basic infrastructure, and also resources to quickly build a competitive medical tourism industry, are particularly focused on the very same market that we are trying to attract.

There is a growing trend among governments to reduce subsidies in the health care of its citizens. This is creating a niche market for those in the medical sector to offer specialized service to those seeking cost effective medical attention outside their country of residence.

We are not alone in looking at medical tourism as a growth area. The private sector and the government must get together to maintain our competitiveness by upgrading basic infrastructure such as airports, roads, transportation and telecommunication facilities, etc., and by continuing to upgrade health care delivery thru investments in hardware and training and development of expert medical staff. Otherwise, our neighbors in the region will easily overtake us. –Rey Gamboa (The Philippine Star)