PLDT acquires medical outsourcing firm

The Philippine Long Distance Telephone Co. has expanded its business process outsourcing business with the acquisition of Laguna Medical Systems Inc. (LMS) for $8.25 million (about P400 million).

In a disclosure to the Philippine Stock Exchange on Wednesday, PLDT said the acquisition was made by SPi Global Solutions, a leading BPO company which is a unit of its wholly owned information and communications technology company ePLDT Inc.

LMS has over 50 consultants across the region who assist more than 200 hospitals attain coding and billing compliance as well as optimize entitled reimbursements for patient services.

This 22-year-old company also offers recovery audit contractor (RAC) defense and recovery services to help healthcare providers manage and defend RAC audits.

"As a result of the significant focus on healthcare reform in the US, we have been actively tracking companies in the coding compliance space with the goal of finding one to acquire whose corporate culture and values match our own," SPi president Peter Maquera said.

"LMS fits the bill. Their capabilities nicely complement our existing medical transcription, billing and revenue cycle management services and provide an excellent new entry point for us into this rapidly growing $25 billion industry," he added.

The inclusion of LMS' product offering, he noted, would strengthen SPi's relationship with more than 400 hospitals, multi-specialty clinics and physician practices.

"And it increases our healthcare-specific employee base to more than 2,000 worldwide," he said.

The US healthcare industry accounts for 16 percent of US gross domestic product and is the largest segment in the US economy.

With the US government now requiring healthcare workers to achieve a 95 percent or greater accuracy rate on medical coding, inexperienced healthcare providers with limited resources are seen struggling to meet this requirement.

This in turn is seen to provide growth opportunities for well-funded and -managed service providers in the coding compliance consulting market.

"SPi's acquisition of LMS is an excellent example of how we are executing on our strategic plan to accelerate growth and strengthen our position in the BPO arena," said ePLDT president Ray Espinosa.

Medical hub strategies drawn up

Good news for this sunrise industry! The government targets two million foreign patients and annual medical receipts of $2.3 billion from abroad by 2010.

To achieve the target the government has drawn up six strategies to promote the country as a medical-service hub to the international community.

The policy was introduced already in 2004 to promote modern health care services through private hospitals and traditional services such as spas. The number of foreign patients increased from 630,000 in 2004 to 1.5 million in 2007. Revenue from this segment also grew, from $0.5 billion in 2004 to $1.2 billion in 2007.

To reach the goal of two million international patients by 2010, six strategies have been drawn up to further drive the medical-hub policy:

First, quality and diversity of health care services will be further improved to meet global standards. Certificates from international accreditation institutions are required, while technology must be developed to address chronic diseases.

Second, infrastructure has to be improved to support the service speed as well as access to health care services. One-stop service centers will be introduced to provide a fast track to issue the visa and reserve the accommodation for foreign patients and their relatives to enter the country and develop the reimbursement systems with the health insurance agencies of their original countries. This will help them reduce their financial burden while they are staying in the country.

The third strategy will focus on a proactive public relations and marketing plan to promote the country as a brand in the healthcare industry to make the country recognized in the international community. As part of this strategy, international medical conferences will be organized, which will open up the opportunity for local researchers to show medical research to international scientists.

The fourth strategy is a plan to share staff among public and private hospitals, particularly highly skilled physicians and service and hospitality experts. This strategy is aimed at strengthening the range of healthcare services between the public and private sectors.

As the fifth strategy, health staff will be increased and the capacity of medical workers be improved by supporting them with training through international programs, including undergraduate and postgraduate degrees.

The final strategy will seek collaboration with agencies to manage all strategies to improve the country’s capacity for health tourism.

The Philippines?

No — Thailand.

Let’s see this as a wake-up call to get united and move this sunrise industry forward. The Thailand strategy makes sense; more government support needs to be provided so that the Philippines can become a recognized player in this game, also played by India, Singapore and Malaysia. But the private sector has to get its act together too.

The European Chamber of Commerce of the Philippines (ECCP) has been working on retirement and health care as a sub-sector of tourism for a number of years.

While some progress has been made, the Philippines still does not have an integrated retirement village that can be presented to potential retirees. There are plans, from Tagaytay to Cebu, but so far they remain plans.

The Philippine Retirement Authority should provide seed capital for a retirement village jointly with the private sector.

This seems to be a better idea than sending its profits into government coffers.

As retirement has two main components: lifestyle and health care, we have now added medical services and medical travel to our program.

Promoting the Philippines as medical hub is almost impossible: the Philippine hospitals have hundreds of doctors with different fees for the same procedure. How can we compare the Philippines with the competitors?

Quality standards also have to be reviewed: some target markets are more familiar with ISO than with JCI. We feel that more partnerships between leading hospitals in the Philippines with leading hospitals in target markets need to be developed.

This will help in answering the recurring question: Why the Philippines?

ECCP has started discussions with some hospitals in Manila and Cebu to prepare for the promotion of this industry abroad, to provide better services for our long-stay visitors and for the retirees that we are attracting.

The partnerships between leading hospitals, universities and insurance companies will also have a positive effect on the Philippines’ information technology industry.

The convergence of biology and engineering is turning health care into an IT industry, which in medicine means the digitization of medical records and the establishment of digital networks for sharing those records.

I find it careless that we travel internationally (and locally) without carrying a chip with our health records. If we have an accident, how will doctors find the right lifesaving solution if they don’t have access to our records?

Back to Thailand: in the absence of suitable software offerings from software vendors, Bumrungrad, the benchmark hospital for medical travel in Bangkok, has built its hospital-management system from scratch. When Microsoft decided to enter this industry, it was so impressed that it bought Bumrungrad’s software division outright.

If health providers were to switch to electronic health records, integrated into a "smart grid" of information technology, the future of medicine could look a lot brighter.

The RAND Corporation, an American think tank, examined the potential benefits of digitizing health systems in a 2005 report. It estimated that, if 90% of hospitals and doctors in America were to adopt health information technology over 15 years, the health system could save some $77 billion a year from efficiency gains.

Plenty opportunities; plenty to do. Let’s move.