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Modernization of the
Philippine Orthopedic Center
Source: Department of Health (DOH)
Outline of Presentation
Development Objective
Project Description
Proposed Structure for PPP
Investment Opportunity
Way Forward
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Project Objectives
To drive the establishment of the New Hospital Facility as the
countrys Leading Tertiary Care Center for Bone and Joint
Diseases, Trauma, and Rehabilitation Medicine, capable of
providing international quality orthopedic and trauma care
To facilitate affordable, competitive and quality focused medical
care for all through cross subsidization framework, thus
achieving Universal Health Care agenda
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Why the need for a new hospital?
Constraints & Issues
Solutions facilitated by New Facility
LOW CAPACITY UTILIZATION
(only 70%-75% of Sanctioned capacity)
Private sector operational efficiencies
to improve capacity utilization to 90-
95% beds
STAFF-TO-BED RATIO &
DISCHARGE PERIODS
(lower than ideal)
Improved Staff-to-Bed ratio and
reduced discharge period
LIMITED MEDICAL SERVICES
(only primary and secondary services)
Super specialty tertiary care with
modern equipment and select qualified
medical staff
LIMITATIONS IN CATERING TO NON-
CITIZEN PATIENTS OR MEDICAL
TRAVELERS
Medical tourism patients identified as
part of envisaged overall patient
population served
ARCHAIC INFRASTRUCTURE &
FACILITIES REQUIRING ESSENTIAL
UPGRADATION
State of the art infrastructure and
modern equipment & facilities to be
installed and operated
Identified Site of the Project
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Located within the National Kidney and Transplant Institute (NKTI) Compound
along East Avenue, Quezon City, Philippines in an approximate area of 8,000
sq. meters
Private proponent shall design, build, finance, operate, manage
and transfer the super-specialty tertiary care Orthopedic Hospital
providing orthopedic clinical services and allied services
The project is a 700-bed capacity hospital with state of the art
infrastructure, modern medical diagnostics and clinical equipment,
and IT facilities, which shall be operated and maintained within a
period of 25 years, including:
clinical services (core) as well as facility maintenance (non-core);
specialty orthopedic care related to joint replacement, degenerative disorders,
orthopedics oncology, orthopedic trauma care, pediatric orthopedics, spine care,
arthroscopy and sports medicine and injury rehabilitation; and
provision of teaching and training facilities for basic and advanced clinical care and
management of specialized and sub-specialized treatments & surgical procedures.
Project Scope
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Features of the New Facility
In-house Diagnostic facility
Administrative and ancillary services of advanced level that is commensurate with the
specific clinical specialties practiced in tertiary care
Specific functional areas: general rooms, private suites & specialized areas (OT, ICU,
SICU, etc.)
Non core - Support amenities & services (Cafeteria, Pharmacy, Kitchen/Dietary
services, Laundry, CSSD, IT, Security)
Clinical Services
Joint Replacements-Hip/Knee
Degenerative Disorders
Orthopedics Oncology
Orthopedic Trauma Care
Pediatric Orthopedics
Spine Care
Arthroscopy
Sports Medicine & Injury Mgt.
Hospital Area Segregation
Day Care & Nursing Units
Ambulatory Patient Block
Administrative Block
Sports Medicine Block
Rehabilitation Block
Teaching, Training & Research Block
Seminar Hall, Auditorium, Gymnasium,
Cafeteria, etc.
Plan for the New Hospital Facility
700
Beds
60%
Sponsored Patients
Cost of treatment is
entirely covered by
PhilHealth/Insurance
No direct payment by
the patient to the
hospital
PhilHealth/Insurer
reimburses hospital
operator for service
Beds Reserved - 420
30%
Pay Patients
Partly sponsored
patients with co-
payment ( i.e. balance
exceeding insurance
coverage paid by
patient)
Private patients who
pay entire cost of
treatment, directly to
the hospital operator
Beds Available - 210
10%
Service Patients
Paid for by operator
Beds Reserved - 70
Additional revenue sources to include fees generated from use of support amenities,
affiliations, teaching & training, research, homecare, advertising, leasing, byproduct sales,
and use of allied infrastructure such as seminar hall, auditorium, gymnasium, etc.
Fee Sources & Patient Mix
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Deliver the site & right of way (ROW)
Assist in securing government approvals
Select & appoint Independent Consultant
(IC)
Enforce the project proponents right to
develop, operate & collect fees from the
services as authorized under the BOT
Agreement;
Provide funding support in form of O&M
cash support (if required)
Ensure adherence to DOH stipulated
policies, standards, norms as well as the
MPSS requirements monitored by IC
Special Purpose Company
(Concessionaire/Project Proponent)
Department of Health
(Awarding Agency)
Undertake the project scope &
conditions i.e. design, build, finance,
operate & maintain the new hospital in
adherence with the MPSS for
construction & operations and patient
mix to be prescribed in BOT agreement
Collect the fees for services as
authorized under the BOT Agreement
Set up the SPC, appoint IC & achieve
financial close
Bear commercial risks from project as a
going business concern; and
Turn-over and transfer the new hospital
in good working condition to DOH at
the end of the cooperation period
Roles/Obligations under BOT Agreement
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Project Proponent/SPC
(Concessionaire)
Independent
Consultant for
Construction
constructs new hospital facility
in conformity with MPSS
ensures compliance
with MPSS & other
construction related
standards
DOH
(Concessioning Authority)
appoints SPC under concession
based contract
monitors compliance based on
Independent Consultants
recommendations
Structure during Construction Phase
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undertakes O&M in accordance
with MPSS and O&M Manual
DOH representatives
monitors compliance with
MPSS and O&M Manual
provides independent
third party monitoring
on all operational
aspects
Hospital Operator/
Project Proponent
Project Management &
Monitoring Team
Governance Committee
Project Proponent SPC
DOH
Independent
Consultant for
O&M
constituted with representation
from members of Project
Proponent & DOH
resolves disputes
Structure during Operation Phase
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Likely Bid Parameter
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HIGHEST UPFRONT LUMP SUM AMOUNT
PAYABLE BY THE BIDDER TO THE DOH
(Premium)
LOWEST LUMP SUM AMOUNT
PAYABLE BY DOH TO THE BIDDER
FOR FIRST 5 CONSECUTIVE YEARS OF OPERATIONS
(O&M Subsidy)
OR
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Nearly 237,000 patients projected at the facility at the time of operations
commencement, over 268,000 by the end of cooperation period, after
accounting for competing medical facilities
On average, more than 230,000 patients served each year, incremental
patients may be expected from medical tourism & availing of allied services
at the facility
Projected Case
2016
2020 2024 2028 2032 2036
2038
Total Patients
237,500
246,750 253,500 260,250 265,500 267,000
268,000
In Patient 33,000 34,750 36,500 38,250 40,000 40,500 40,500
Out Patient 204,500 211,750 217,000 222,000 225,500 226,750 227,500
Start of
Commercial
Operations
End of
Cooperation
Period
Projected No. of Patients Served
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First of its kind PPP project
DOH to adopt PPPs for developing other upcoming
medical facilities as well in the Philippines
NEDA* Board-approved project
with a project cost of PhP 5.7 Billion
Optimal PPP structuring
balanced risk sharing and competitive returns to
private sector proponents
PPP Agreement for 25 years
scope for long term investment & returns
Award through competitive bidding
transparency and equality for all prospective private
sector bidders/investors
Possibility for financing support
(if required) tax benefits & ancillary support from
domestic implementation support agencies
Funds Allocation in the Cabinet Budget
allocation of funds for project to be made part of forthcoming
Cabinet Budget in 2013
*NEDA - National Economic & Development Authority
Why Invest?
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Strong project fundamentals
Government backed hospital facility for specialized
orthopedic care & allied treatments at a centralized level
READY FOR
BUSINESS.
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Activity Timeline
Invitation for Request for Bid proposal 18 November 2012
Release of Bid Documents 26 November 2012
Bid preparation 26 November 2012 to
25 March 2013
Pre-bid conference 25 January 2013
Bid Submission Due Date 26 March 2013
Bid Evaluation Period April 2013
Notice of Award May 2013
Signing of BOT Agreement May 2013
Independent Consultant Selection December 2013
Start of Commercial Operation April 2016
End of Cooperation Period & Turnover to DOH October 2038
Note that these timelines are tentative and may be subject to change. The final timelines shall be communicated at the
appropriate time, as necessary. The bidding process, once commenced, shall follow the timelines as prescribed under the
BOT Law of Philippines and its 2012 Revised Implementing Rules and Regulations.
Way Forward: Estimated Project Timelines
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MPOC Bid Documents
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Bid documents shall be available at:
Center of Excellence for Public Private Partnerships in Health (CEP3H)
3rd Floor of the Diagnostic Center of the National Kidney and
Transplantation Institute
East Avenue, Quezon City, Philippines
Will be available from 26 November 2012 to 25 February 2013
Payment of non-refundable fee of Two hundred Fifty Thousand Pesos (PhP
250,000) shall be made in cash or managers check payable to the Department
of Health, or by wire transfer to the following account:
Department of Health COBAC Account # 1432104610
Landbank of the Philippines,
Tayuman Branch, Sta. Cruz, Manila
* Only entities that have been issued the Bidding Documents shall be allowed to participate in the Bidding Process
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Bidding Activities
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Pre-bid Conference:
25 January 2013, 10:00 a.m.
Auditorium, 3rd Floor, Diagnostics Center, National Kidney and
Transplant Institute Compound, East Avenue, Quezon City,
Philippines
Bid submission deadline:
26 March 2013, 2:00 p.m.
COBAC, Ground Floor, Building V, Department of Health, San
Lazaro Compound, Rizal Avenue, Manila City, Philippines
* Only entities that have been issued the Bidding Documents shall be allowed to participate in the Bidding Process
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Modernization of the
Philippine Orthopedic Center
THANK YOU!