Protecting Phl healthcare sector

The Department of Health (DOH) looks forward to the signing into law soon of the proposed Universal Health Care (UHC) bill. Health Secretary Francisco Duque III is particularly optimistic after the Senate last week approved on third and final reading the landmark legislative bill, which among other things, seeks to guarantee equal access to quality and affordable health services for all Filipinos.

The approval of the UHC under Senate Bill 1896 came after President Rodrigo Duterte certified the measure as urgent administration bill. It is the counterpart version of the measure which the House of Representatives approved on third and final reading last year. The Senate and the House will now constitute a bicameral conference committee to reconcile the differing versions of this bill.

Once consolidated, the UHC bill will be submitted back to both chambers of the 17th Congress for ratification and transmittal to President Duterte for signing into law. “Once enacted into law, all Filipinos will be given access to quality and equitable health care coverage under the UHC,” Duque pointed out.

Duque, himself a medical doctor, cited the UHC complements the commitment of the DOH to institutionalize functional service delivery networks founded on the principles of primary health care. It would enable both public and private health providers to participate in a much improved system where every Filipino family is taken care of by a primary care provider team.

But there are other bright spots in our country’s healthcare sector.

This has to do with the silent but steady transformation of many of the country’s hospitals – both government and private – into world-class health facilities. The country’s medical tourism have been delighting both Filipino patients and international medical tourists. More and more, our hospitals are looking like five-star hotels, and displaying the customer relation-savvy of the leaders in the service sector.

Several factors have fueled this growth and transformation. One, there’s the steady climb in healthcare spending in the country. It has reportedly grown by an average of eight percent per annum since 2013. The spending is seen to reach some $20 billion by the end of this year.

The other reason is the growth of investments in the hospital sector. Among the beneficiaries of these rise in investments are hospitals which landed in the Top 5 list released by a global health insurance firm. These are the Asian Hospital and Medical Center, the Makati Medical Center, The Medical City, St. Luke’s Hospital and the Alabang Medical Center.

The sector must be perceived as so “lucrative” that certain foreign business interests are reportedly “over-enthusiastic” in the bid to benefit from the sector’s growth prospects. Many are wondering if these prospects may have in part fueled the ongoing row in one of the country’s hospitals in the Top 5 list – The Medical City.

It will be recalled that the 50-year old hospital has been in the news lately following reports of a major boardroom fight between two sets of shareholders. The fight features a block of investors led by Singapore-based Clermont Group. It is joined in that block by shareholders identified with Medical City executive Jose Xavier Gonzales and a handful of other local and foreign players.

On the other side are investors identified with Medical City president and chief executive officer, Dr. Alfredo Bengzon who himself was once Health Secretary during the term of the late president Corazon Aquino.

The series of events raised certain concerns within the business community and elicited growing attention. This has to do with the method reportedly adopted by the Clermont-backed block in a bid to gain control over the board and management of the hospital. There are also concerns regarding an apparent disregard of the authority which the Securities and Exchange Commission (SEC) has on the local corporate sector as its regulatory body.

Based on media reports, the Clermont-backed group has recently obtained two orders from a Pasig Regional Trial Court that may have disregarded an ongoing probe by the SEC of the validity of the shares held by the Clermont group. It appears that, at the behest of the Singaporean interest, the court issued a temporary restraining order and, more recently, a writ of preliminary injunction.

The question is: Wasn’t that move a diminution of the authority and territory of the SEC? Didn’t the court orders preempt the possible conclusion to the investigation being done by the SEC? What about the SEC’s instructions to the parties involved to maintain status quo until it had finished its investigation of the Clermont-acquired shares? What happens now to this order which the SEC issued to prevent what could be “irreversible damage” both to the company and to its shareholders?

The other worry among legal minds is this: What impact does the grant of the TRO and the injunction have on the SEC’s power to rule on the question of whether or not the group’s acquisition of a majority stake is valid? Did the court actually rule on that by issuing the orders? Isn’t the SEC the recognized authority on all matters corporate?

We can understand the interest and concern that the business and medical communities have on this row. True, they may have no direct interest in the shareholder squabble now rocking the Medical City. They may not even own shares in this hospital.

But everyone has an interest on how our public institutions – such as the courts and the regulatory bodies – exercise their functions. Their actions and decisions set precedents which affect all of the business sector.

They are an indication to investors on how rules are applied. Or, might be misapplied in this case.  At a time when the administration of President Duterte has been aggressively courting investments, the role of the SEC becomes even more vital.

The clarity and the fairness of the rules and processes to guide and protect the corporate sector are key to bringing those much-needed investments, including those in the country’s health care sector.