What appears below is a job ad. It’s formulaic and bland as many recruitment ads are. Feel free to read through it. The clutter-free version of this would read as follows:
“Entrepreneurial-minded finance professional needed. Willing to do whatever it takes to get the job done. Whiners and those who feel entitled need not apply. The work is hard and the hours are long but if you get what we’re doing it will be one of the most rewarding experiences of your life (and we’re not talking money, though that’s part of the package).
So? Do you have what it takes?
The Mercado General Hospital, Inc (MGHI) operating under the trade name Daniel Mercado Medical Center (DMMC), is one of the up and coming medical groups in the Philippines. MGHI owns and operates the University Physicians Medical Center (UPMC) through its subsidiary, Mercado Ambulatory Surgical Center (MASCI) as a joint undertaking with the University of the Philippines.
On November 11, 2011, MGHI entered into a Memorandum of Understanding with a group of doctors in Iloilo City under the banner of Panay Medical Ventures, Inc. (PMVI) to establish a specialty hospital in Iloilo City under the name UPMC-Iloilo. MGHI has also entered into a management contract with Southwestern University (SWU) to operate the Sacred Heart Hospital (SHH) in Cebu.
The DMMC Institute of Health Sciences (DMMC-IHS) is a tertiary-level institution offering degrees in allied healthcare professions. It was set up and its purpose remains to provide MGHI and its healthcare institutions with a steady supply of medical professionals.
With 55 years of experience in healthcare delivery management, MGHI continues to look for opportunities to bring its expertise in finding ways to reduce the cost of healthcare in the Philippines. MGHI prides itself as a doctor-driven and professionally managed company. These qualities are the qualities by which MGHI stands for in its quest to make quality healthcare accessible to more and more Filipinos.
National Capital Reg
Reporting to the President & Chief Executive Officer, the Corporate Accountant for MGHI shall provide strategic direction and oversee Strategic Business Units (SBUs) in the following Key Performance Areas:
POLICY MAKING. Creates and manages the implementation of Accounting policies and procedures to identify, resolve and document accounting issues towards efficiency and accuracy of processes.
PREPARATION AND CONSOLIDATION OF FINANCIAL STATEMENTS – Oversees all accounting functions; Ensures accurate and timely production of all financial information including consolidated financial statements; Determines the percentage of contribution to the revenue stream and percentage of liability taken on by each SBU; Conductsproper analytical review of the asset operations from a balance sheet, income statement and cash flow perspective as well as an overall business perspective.
PREPARATION AND REPORTING OF FINANCIAL CONDITION – Reviews monthly accounting close process including analytical review of the monthly operating results to ensure accurate accounting records are maintained; Prepares monthly reforecast incorporating historical results and future assumptions; Conduct advanced analysis of the accounts and company standing using Financial ratios, pro formas and forward looking analysis to determine if the company has enough resources to meet its requirements moving forward and makes appropriate recommendations.
ENSURING COMPLIANCE WITH REGULATORY REQUIREMENTS – Monitorsfull and timely compliance with all applicable laws, rules, and regulations imposed by government entities.
CORPORATE FINANCE INITIATIVES – Provides support in corporate efforts on Due Diligence, Financial Modeling, Financial Projections.
OTHERS – Supervises inter-subsidiary billing of asset management, incentive fees, acquisition, disposition, and other fees monthly, quarterly, annually in accordance with the respective agreements ; Prepares for its corporate-wide annual audit, taking charge of the preparatory process and overseeing the audit engagement; Overseas corporate-wide budget and disseminates necessary information down to the subsidiaries.
Candidate must possess at least a Bachelor’s/College Degree , Post Graduate Diploma / Master’s Degree, Professional License (Passed Board/Bar/Professional License Exam), Post Graduate Diploma / Master’s Degree, Finance/Accountancy/Banking, Business Studies/Administration/Management, Commerce or equivalent.
- At least 5 year(s) of working experience in the related field is required for this position.
- Preferably CEO/SVP/AVP/VP/Directors specializing in Finance – Corporate Finance/Investment/Merchant Banking or equivalent.
- 5+ years experience in the accounting and finance sector at key leadership role
- 4+ years experience managing accountants and the accounting and finance process.
- 3+ years in a position equivalent to a controller or higher responsibilities preferably in the healthcare industry
- Must be a CPA. Post graduate degree in business an advantage.
- Required skill(s): Policy Making, Preparation and Consolidation of Financial Statements, Preparation and Reporting of Financial Condition, Ensuring Compliance with Regulatory Requirements, Corporate Finance Initiatives.
- Required language(s): English
- Full time position available.
- Credibility, ethical, full disclosure and clean financial history
- Conscientious about timeliness of assignments and quality of work product
- Accountable for specific performance
- Possess exceptional written and verbal communication skills, including ability to articulate recommendations in a concise and timely manner
- Able to handle multiple tasks and maintain control and order over same
- Very good financial reporting technical skills
- Exceptional work ethic
This was originally written for Abraaj Capital and the Melinda and Bill Gates Foundation
This paper provides a glimpse of the Philippine Healthcare Sector and is not meant to be a comprehensive treatise on the subject. The first part looks at the relative standing of the Philippines from a global macroeconomic perspective. The second part looks at some characteristics of the Philippine healthcare space and the significant potential that it represents.
This discussion of the Philippine Health Care Sector begins with an oft-cited statistic – beds/10,000 population. The Henry J. Kaiser Family Foundation puts that number for the Philippines at 5 beds/ 10,000 population (Chart A). This puts it in the company of Benin and Uganda tied for 168th to 170th places among 182 countries surveyed which reported data.
This is very discouraging considering the fact that the Philippines is known as a significant exporter of healthcare workers globally. Among the 20 countries with the biggest populations, the Philippines only came out higher than Bangladesh as shown in the Chart B.
There are likely to be several outliers with the regard to the data which when stricken would make some difference to the data as presented above. The aggregate differences, however, are very difficult to ignore.
So – could it be possible that the ability or inability of Filipinos to pay for healthcare is the culprit for these seemingly unflattering comparisons? If we look at GDP per capita (Chart C), however, it would seem like the Philippines’ health industry situation based solely on our metric of beds/10,000 population should have more beds than it currently has which could be supported by its level of relative wealth.
Given this, some possible sources of this seemingly illogical state of things would be:
- Individual national priorities
- Unique regulatory obstacle
- Demographic and/or geographic factors
- Country-specific industry structures
For enlightenment we looked at comparative data from the World Health Organization (WHO). The following charts show the GDP per capita healthcare spending by our basket of countries adjusted for Purchasing Power Parity and Healthcare Expenditure as a percentage of GDP, respectively.
While any conclusion drawn from these statistics would, at best, be tentative, the Philippines falls within the bottom third in terms of healthcare spending on both a per capita and on a percentage of GDP basis. Now, having drawn this observation, it is also wise to be careful about making generalized conclusions from these two pieces of data.
To delve further into this, we looked at aggregate statistics from the ASEAN region. These statistics focus on healthcare-related comparative data.
The Philippines is the second largest country in terms of population in the ASEAN region. That alone shows its potential. In terms of healthcare expenditure, however, it ranks in the middle. While probably reflective of the size of the economy in terms of GDP, it could be argued that systemic problems in the Philippine healthcare system – some unique, some not – hold back the expansion of the industry.
The Provision of Healthcare in the Philippines
The Philippine healthcare industry is relatively underdeveloped with a significant potential for rapid growth contingent on the continued expansion of the economy, increased demand-side resources and the some regulatory reform.
While the number of hospital beds in the country is roughly equally divided between the public and private sector, government hospitals, whether run by the Department of Health or the Local Government Units (LGU) serve a disproportionate (70%) segment of the population. The public sector is in turn divided into facilities by the national-level Department of Health (DOH) and those facilities run by the LGUs.
Prior to the enactment of the Local Government Code (LGC) in 1991, the Department of Health (DOH) ran all the government hospitals. With the LGC, the management and governance of an overwhelming number of government hospitals was devolved to these LGUs consisting of provincial, city and municipal governments. This development has had mixed results but the most pressing problem has been to place an additional burden on these LGUs to fund these hospitals from their budgets. In many cases, this has resulted in under-investment in these hospitals to a point where some provincial hospitals had to be taken over by the DOH. There also is the question of the competency of these LGUs to manage the delivery of healthcare through the facilities that they manage.
The chronic funding pressure as well as the question of competency, by themselves, builds a case for the prospective outsourcing of the management of these facilities under the Public-Private Partnership (PPP) scheme. While a seemingly logical choice, issues with regard to the disposition of Civil Service employees as well as the question of facility ownership remain to be resolved and pose a deterrent to private-sector participation.
The private sector while serving only an estimated 30% of the population garners about 60% of aggregate healthcare expenditures. The services provided by the private sector are patterned after the American fee for service model. These are composed of free-standing hospitals, clinics run by sole practitioner physicians and a growing, albeit still infinitesimal, number of multi-specialty healthcare facilities.
The chart below shows the source of funding for healthcare expenditures (HCEs).
This chart tells many stories. One is that the national health insurance system under the banner of PhilHealth remains in its infancy. The data presented above is actually dated and anecdotal evidence suggests that the share of PhilHealth in funding HCE has risen to close to 20%. The story is similar in the private pooled insurance space (e.g. HMOs). Again, anecdotal evidence supports the hypothesis that it share of funding HCE has risen to about 15%.
The out-sized share (40% to 50%) of out of pocket cash payments again supports the story posited above that pooled risk payment structures are still not as pervasive as they could or should be. Until this equation changes, demand for healthcare services will remain relatively expensive and stunted.
The supply-side of the system also has significant room for improvement. Competition, to a certain degree, remains muted particularly in areas outside Metro Manila. In a noble but misguided attempt to improve physical accessibility of healthcare services, the DOH adopted a stricture which basically does not allow new hospitals to be built within a one-hour radius of an existing hospital. This has instead had the impact of dis-incentivising investment in new construction given the limited number of areas where the construction and operation of a new hospital would be economically viable – a veritable illustration of the law of unintended consequences.
It has also created monopolistic or oligopolistic markets. Competitive pricing is largely absent. This has removed the incentive for existing facilities to reduce costs by increasing efficiencies. With pricing, to a large degree capped by the limited ability of the Filipino consumer to absorb price increases, many hospitals run very thin profit margins. This, in turn, reduces the ability and the inclination of hospitals to spend on upgrades and new equipment. In the end, the consumer loses out by having relatively high prices which due to the under-investment does not directly translate to quality care.
The archipelagic nature of the Philippines has also been historically been resistant to the establishment of national health care players. Instead, what the Philippines’ overwhelmingly has today are entities owning single facilities. This is not efficient from the perspective that economies of scale are not being built by the providers of healthcare. This limits their ability to negotiate with suppliers particularly on big-ticket hospital equipment and pharmaceutical supplies.
The opportunity that the Philippine healthcare industry space provides is multi-faceted. From a demand standpoint, the size of the population, the still significant population growth rate and the gradual increase in relative wealth will spur growth for healthcare services.
On the supply-side, the providers of healthcare remain very inefficient causing the cost of healthcare delivery to be unnecessarily higher than it could and should be. A national player or players with the right mentality could target the roll-up acquisition of the many single-facility entities, introduce efficiencies and eventually build scale to put pressure on equipment and pharmaceutical suppliers.
The key will be increasing affordability. There will come a “tipping point” where the equilibrium price of healthcare services will be forced down to a degree which will spur a dramatic and substantial spike in demand. The timing for this to happen could be significantly truncated with a properly motivated push to increase efficiencies and reduce prices on the supply-side. Demand will move towards that state of equilibrium without any exceptional healthcare-directed stimulus.
While the experience that underlies the data, whether anecdotal or scientific, is contextually a Philippine experience, the formula of building scale, operating efficiently and thus delivering healthcare at a reasonable cost can be used in other countries in the region to drive demand and increase the quality of healthcare delivery.
Philippine Daily Inquirer, June 26, 2012. [Note: It is actually Mercado General Hospital, Inc. (parent company of UPMC) which will manage Sacred Heart Hospital].
THE University Physicians Medical Center (UPMC) will now manage the operations of the 65-year old Sacred Heart Hospital of Southwestern University.
A management contract was signed last June 21 between the hospital and UPMC.
The deal was aimed at improving the health care services of Sacred Heart Hospital, streamlining its internal processes and systems operations.
Human resource management, effective marketing strategies and acquisition of modern technology are their priorities. Both institutions will ensure will result quality yet reasonable healthcare to all.
“This collaboration will hopefully encourage more clients to avail of the services of Sacred Heart Hospital,” SWU president Dr. Elsa Suralta said.
SHH Medical Director Dr. Mirela M. Mijares added, “We strive for excellence in all our undertakings. This is one of the management’s thrusts, to forge partnership with like-minded entities. This is also our way of responding to the needs of the Cebuanos.”