Hospital expansion gains ground

A 17- STORY hospital tower with a helipad, 1000 doctors trained in multi-disciplinary healthcare and four new health institutes, the UST Hospital (USTH) seems not only to have recovered financially, but is eager to reach for the stars. But is its P3 billion expansion plan simply too starry-eyed for comfort? Is it too ambitious?

Yes, according to Dr. Cenon Alfonso, president and chief executive officer of USTH. He said that the P3 billion financing for the expansion came from a fixed-term, syndicated loan by the Development Bank of the Philippines.

“The P3 billion is a clean loan, it has no collateral. Actually, I asked the banks to take into account the name of UST and my name as a businessman. They could look at records of the Dominicans for the past 396 years and they would know that UST’s name is good enough collateral,” Alfonso told the Varsitarian.

The P3 billion loan is tax-free. Being fixed-term in nature, the loan is not subject to any change in interest rate, regardless of the vagaries of the Philippine economy. According to Alfonso, an international financial arranger was appointed by the hospital to syndicate the loan from five to seven financial institutions.

Alfonso said that the budget fits the extensive seven-year strategic plan for the hospital. The first year is for the “recovery” phase that aims to allow the hospital to recuperate from the debts it incurred in 1996 to 2003.

The following four years is for the “development” phase focusing on eight key areas to boost profit. The Benavides Cancer Institute, built in a record eight months and which went fully operational in 11 months, is under the first stage of the development phase.

The last two years is defined by the “transformation” phase that applies indirectly to medicine graduates of the University.

Out of the sickbed

After USTH separated from the Faculty of Medicine and Surgery in September 2004, which created the USTH, Inc., the hospital started to recover from its overwhelming financial losses. From a net loss of P57.4 million in 2004, the USTH spring-boarded to a net income of P35.9 million in 2005.

Increased income from parking lot rentals, food kiosks, and doctors’ clinics amounted to P39.7 million in 2005 from a lowly P5.4 million in 2004.

Moreover, expenses dropped from P62.05 million to P356,000, and liabilities collected from unsettled patient bills, medical equipment and supplies debt fell from P406.7 million to P393.2 million in 2005. Profit from the private division of the USTH accounted much for the recovery as it swelled to P100.8 million from P1.2 million. Furthermore, the foregone P9 million cost of living allowance of the members of the Samahang Manggagawa ng USTH helped alleviate the fiscal burden.

Now, with the reorganization of systems in the hospital, every office is subject to audit, even the office of the chairman/rector. Before the new management took over, no records were kept on the auditing of office expenses.

Building markets

The USTH also eyes eight stages of its development phase.

“We have 80 to 100 waiting patients everyday, and we have to provide a place for this market,” Alfonso said, referring to the second target of the development phase. He said that it was only in 2006 when the medical staff increased by more than 50 per cent, from 328 doctors in June 2004 to 700 in 2006. USTH still expects 1000 doctors for next year.

According to Alfonso, the addition of doctors in the hospital builds network and markets because doctors carry with them their patients and as such, the hospital should provide rooms for the additional patients.

The hospital is improving its charity ward’s fourth and fifth floors with the construction of 200 more rooms and the officials are looking forward to more rooms with the hospital’s expansion plans.

Meanwhile, the third development stage covers the ongoing construction of the 17-story hospital tower. Of these 17 floors, eight are planned to house doctor’s clinics that would initiate “manpower updating” in the hospital.

Stage four aims to position USTH in the Medical Tourism (MT) map of Asia. Alfonso said that the West looks at the East as the best site for healthcare system with its cheaper yet quality hospitalization. In Asia, Thailand is racing ahead with MT, followed by India, China, and Malaysia. The USTH towers will have four floors that would cater to international patients.

“It is all about providing quality healthcare to international patients without displacing local patients,” Alfonso said.

Global company

The fifth stage of the development phase focuses on world healthcare trends such as multi-disciplinary specialized care. Along this line, the hospital will establish an eye institute, an endocrine and metabolic institute, a cardiovascular institute, and an organ transplant institute.

The sixth stage will create a 1:1 ratio of charity and pay ward admissions so that at least one pay ward patient pays for a charity ward patient.

“We could not just shut down the charity ward because the healthcare being rendered by the hospital is for public service. Education is charity and charity is education,” Alfonso said, referring to the 460 charity rooms in contrast to the 300 rooms in the pay ward.

Stage seven will pave way for value-added benefits for the patients. “The better the service you offer, in the long run, the more patients you’ll have,” Alfonso said.

Finally, the last stage hopes to make USTH a global company, with formal links with Western hospitals like the Harvard Massachusetts General, Alfonso said. Already internationally accredited by the International Organization for Standardization, USTH also aims to be accredited by the Joint Commission on Accreditation of Healthcare Organizations.

Ultimately, the global thrust will make USTH a global hospital. “In terms of the doctors we graduate, and the duration of Medicine when it was first instituted in the University, Santo Tomas leads the game,” Alfonso said, “But where are all our doctors? They are out there scattered and what we need to do is put them together and make them practice.” Alfonso said USTH must establish itself not only in the country but in the Asia Pacific region. He added that the hospital should go the way India and China, putting up satellite hospitals and making Thomasian healthcare a global brand.

This transformation phase would require a bigger budget but the European Union is reportedly willing to loan USTH €1.5 billion.

The ambitious expansion plan and its rather prohibitive costs should reinforce the truism that health is wealth. But the P3 billion tag still has to prove hospitable to the nay sayers and deserving of a clean bill of health.