Fortman Cline Capital Markets, a consulting firm regarded as one of the top merger and acquisition firms in the Philippines, projects greater consolidation, alliances formation and integration of ecosystems in the healthcare industry.
The process, the consulting company said, entrails spending estimated to be worth P1.5 trillion this year.
“The winners will be those that provide the most service-oriented patient experience that delivers optimal health outcomes at the most reasonable or affordable price,” Fortman Cline Management Services managing director Francis Del Val in a briefing.
FCMS is a new unit under Fortman Cline.
Del Val said the local healthcare industry remains highly-fragmented with multiple brand leaders across various sectors: medical supplies distributors, pharmaceutical firms, hospitals, diagnostic centers, retail pharmacies, retail medical device/equipment suppliers, and health maintenance organizations.
“Thus, consolidations and alliances are seen to emerge to allow the industry to become more efficient, respond faster to emerging trends in the healthcare industry as well as to the impact of the Universal Health Care, which was signed into law in 2019,” Del Val said.
As the consumer-driven Philippine economy grows, a bigger middle class with higher purchasing power and increasingly sophisticated preferences is being created nationwide, particularly in highly urbanized cities, the company said.
The affluent down to the growing upper middle class is seen to patronize private healthcare providers while the lower socio-economic class is given greater access to healthcare by the government because of the UHC.
“UHC implementation will increase competition between the private and public sector by providing options. As the government increases investments, private hospitals that do not invest, may not be able to keep up,” Del Val said.
“Competition will continue to increase between the private and public sectors over already scarce human resources. Rising administration costs and competition from the public sector will force smaller hospitals to consolidate with bigger megabrand hospitals to survive,” Del Val said.
“While the UHC will provide access to public healthcare facilities, these will be limited by capacity constraints and patient experience.”
He said there will be opportunities for the private sector to be seen as trusted partners of local government units who will implement the UHC as they may neither have the expertise nor the trained staff to succeed. Collaboration between private and public sector is key to move the UHC agenda forward, Del Val said.
According to the Department of Health, there are 1,071 private hospitals and 721 public hospitals at the moment. Among the public hospitals, 70 are operated by the Department Of Health.
Philippine hospital owners are led by Metro Pacific Health with 3,895 beds, United Laboratories’ Mount Grace Hospitals with 1,700 beds, St. Luke’s Medical Center with 1,250 beds, The Medical City with 1,040 beds, and AC Health with 531 beds and over 100 clinics.
“Medical tourism could be a game changer. The Philippines can position itself as the go-to surgical and recovery center for patients with overseas insurance and expensive local medical costs, not to mention long waiting lines in their home countries,” Del Val said.
