UST Hospital: Back in the pink of health

UST Hospital was in such financial ruins three years ago its cashflow was not even enough to sustain a full day’s operations.

Now, not only has the hospital recovered from a chronic cash deficiency – repaying loans and steadily turning in profits – it has also set its sights on an aggressive expansion plan aimed at making the campus-based medical facility the centerpiece of the country’s ambitious medical tourism program.

Anchored by the newly-inagurated P350-million Benavides Cancer Institute (BCI), the hospital’s P3-billion redevelopment is now in full swing, focused on the establishment of "centers of excellence" or specialized institutes covering five specific medical fields (cancer, cardiovascular diseases, organ transplantation, endocrine and metabolic systems and opthalmology). These will be integrated within the hospital complex inside the sprawling grounds of the 398-year old University of Sto. Tomas, the oldest in Asia.

"We’re now competing on a much higher level; something that transcends beyond the traditional clinical departments of general hospitals," says Dr. Cenon Alfonso, the hospital’s president and CEO, adding that such institutes would hopefully form the medical brands that will be known in the Philippines and the Asian region as centers of excellence in healthcare for specific diseases.

He notes that BCI, for instance, will evolve into a convergence zone for cancer experts, housing the most modern medical equipment backed by cutting edge hospital information technology, electronic medical records and clinical research.

Named after the university’s founder, Dominican priest Msgr. Miguel de Benavides, BCI will fill in the demand in the local market for world-class cancer treatment facilities and expertise, something which, up to now, remains heavily dependent on the US and other overseas medical facilities, Alfonso adds.

Cancer is now the fourth leading cause of death in the Philippines, after infectious diseases, trauma, and cardiovascular ailments. A Department of Health study shows lung cancer tops the list of cancer incidence, followed by breast, colon, and prostate.

A doctor re-engineers the business

The successful turnaround of UST Hospital from seven years of losses to two straight profit years and its ongoing transformation into a medical facility of international caliber was largely credited to the management team led by Alfonso, a pancreatic surgeon with a keen business sense.

"Way back in September 2003, we were asked by the UST board of trustees to propose a five-year strategic plan for the hospital which aims to bring it back to its premier state and convert it from simply being a national to an international institution, at least in the Asia Pacific region," says Alfonso.

Knowing fully well that it would take a Herculean job to put the hospital’s finances in order – with incurred losses of over P100 million and past due loans amounting to P80 million – Alfonso proposed a massive overhaul that shocked the entire Dominican order.

"There were a lot of issues raised; their objections even went up all the way to Rome," he recounts. "But I explained to the priests that the hospital was losing heavily the only other option was to close it down."

When the UST board eventually gave him the go-signal, Alfonso says his first order of business was a comprehensive audit – something that took them about nine months to finish as they had to change accounting firms three times. "What we saw really stunned us – there were as many as six to seven layers within a department, some not even related to hospital functions at all."

Working with a new management team – the sixth in eight years – Alfonso made sure UST Hospital immediately gets back on the right financial track. Addressing operational dysfunctions, cost inefficiencies, runaway overheads and irregular practices, the management succeeded in turning around the hospital’s financials with P35.8 million in net income within the first year. By the following year, bottom line earnings continue to improve, increasing to P36.9 million.

With the recovery seen on sustainable grounds, Alfonso says the hospital is now moving into the second phase of its five-year strategic plan. This, he points out, will involve the development of the organization, systems, processes and infrastructure to firm up the hospital’s stature as one of the country’s best.

In the final phase, UST Hospital has by then transformed not only into a world-class medical institution but a pillar of the country’s medical tourism and outreach program, with a number of satellite clinics servicing patients outside its Manila base.