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Formal Contract - Signing for the Faculty Medical
Arts Building (FMAB) Project, 18 June 2009
On June 18, 2009, another milestone has been notched in the history of the Daniel O. Mercado Medical Center (DMMC) with the formal contract-signing for the UP Faculty Medical Arts Building (FMAB) Project.
This marked the official commencement of the partnership between the DMMC and the University of the Philippines-Philippine General Hospital (UP-PGH) to enter into uncharted territories by forging an alliance to provide a different level of affordable, quality healthcare to many of our countrymen based in Metro Manila and in the surrounding areas.
This joint venture will substantially benefit a broad spectrum of the Filipino people already economically stressed out by recent international and local, natural and man-made circumstances that has already constrained this sector of society as to make access to advance medical care an elusive reality. But with this partnership, global Filipino expertise will have a venue for their talent to have a more far-reaching effect initially through the combined effort of at least 277 UP-PGH faculty who have already signified their intention to be of service through this avenue. This is also another way of giving back to an institution that has nurtured and empowered them to be the socially conscious professionals that they already are.
Much has been achieved, yet much more needs to be accomplished. With the DMMC-UP PGH – FMAB Project, we look forward to the new strides in medical practice that will promote the better good for Filipinos both here and overseas.
GROUND-BREAKING CEREMONIES, UP-PGH FMAB PROJECT
25 November 2009
We herald the official commencement of the construction activities for the UP-PGH FMAB Project with the holding of the groundbreaking ceremonies on November 25, 2009 at the Old Dispensary building, UP-PGH.
The auspicious event was attended by esteemed guests from University of the Philippines’ Board of Regents led by Hon. Nelia T. Gonzalez, Dr. Serafin C. Hilvano, President of the FMAB Association Inc., Dr. Ramon L. Arcadio, Chancellor of UP Manila, Dr. Carmelo A. Alfiler, Director of the Philippine General Hospital, and Dr. Alberto B. Roxas, Dean of the UP College of Medicine.  Also gracing the said event were top officials from the Daniel O. Mercado Medical Center led by its Chairman of the Board, Mr. Zosimo C. Malabanan, Vice Chairman of the Board Mr. Florencio C. Lat, President and CEO Dr. Edwin M. Mercado, Corporate Treasurer Ms. Susan M. Mercado-Lat, other members of the Board of Directors led by Dr. Teresita A. Hernandez, Dr. Dennis M. Mercado, Ms. Maria Soledad V. Mercado, Dr. Larry M. Montano and Dr. Reden Alfonso M. Silva. Also in attendance for DMMC were members of the Management Committee led by the Chief Operating Officer Mr. Germin G. Espino, DMMC Medical Director Dr. Jose Rene D. De Grano, and
DMMC-Institute of Health Sciences top officers led by Vice President Dr. Magdalena Sayas and Dean Emeritus Dr. Consuelo Suelto. Also in attendance were FMAB Medical and Ancillary Director Dr. Jose V. Tecson, III and Finance and Administration Director Atty. Nirmala S. Vanguardia.
To bless the occasion, a holy mass was celebrated by Rev. Fr. Vidal Gornes, S.J. The mass was followed by special remarks given by representatives from UP, UP-PGH and DMMC, followed by the blessing activities of the time capsule which contains a copy of the contract between UP-PGH and FMAB, copies of the messages given by key speakers, business cards and other special tokens were placed before the special receptacle was eventually lowered to its proper place.
Tugon sa Pangangailangan ng UP Manila Faculty ang FMAB
President's Speech at Ground-Breaking Ceremonies,
UP-PGH FMAB Project, 25 November 2009
Sa ngalan ng Daniel Mercado Medical Center, kami ay nagagalak sa pagdalo ninyo ngayong umagang ito sa simbolikong panimula ng pagkumpuni ng gusaling ito para maging Faculty Medical Arts Building o FMAB ng UP Manila. Bagamat matagal nang nakatayo ang gusaling ito at napagdaanan na ang maraming pagsubok, gaya ng ikalawang digmaang pandaigdig, mga paglindol at bagyo , masasabi pa ring panimula ang gagawin natin ngayong umaga. Panimula sa kadahilanang ito ang unang pagkakataon na magkaroon ng pakikipagpartnership ang UP Manila sa pribadomg sector upang pamahalaan ang isang gusali at ang nakapaloob na gawain dito.
Marami ang agam agam na pinagdaanan namin nuong isinasagawa ang pagbabalangkas ng kontrata at alituntunin ng FMAB. Nariyan na ang kung tatangkilikin kami ng mga doctor, dentista, nurses at iba pang Faculty ng UP Manila. Magkakasundo kaya ang ibat ibang departamento at kolehiyo lalo nat nakasaad sa Terms of Reference na PGH Clinical Departments ang magbibigay ng practice privelage sa bawat isang faculty, hindi man siya nagpapractice sa PGH. May proteksyon ba kami sa mga pagbabagong maaring mangyari sa pagpapalit ng liderato ng Unibersidad sa susunod na dalawamput limang taon. Sapat pa ba ang tibay ng gusaling ito para magampanan ang nilalayon na gamit para dito. Bilang namumuhanan, ang lahat ng ito ay dapat bigyan pansin sa kadahilanang hindi biro biro ang oras, salapi at pagiisip na gugugulin sa isang proyektong gaya nito.
Marami rin ang may alinlangan sa ganitong uri ng partnership. Bagamat itong modelo ng public private partnership ay napatunayan na sa maraming pagkakataon sa ibang bansa, mayaman man o mahirap, ngayon lang ito mararanasan sa UP Manila. Dalawamput dalawang taon nang hindi napapakinabangan ang gusaling ito at ilang ulit nang tinangkang patakbuhin ito pero lahat ay nabigo. Sana naman sa pagkakataong ito ay magkaroon na ng katuparan ang matagal ng mithiin ng Faculty na magkaroon ng sarili nilang lugar at opisina. Sapat ang mga probisyon sa kontrata na kapwa nagbibigay proteksyon sa DMMC at UP. Dapat lang tayong magtiwala sa isat isa, Natural lang na may pakakataon na hindi pareho ang pananaw natin pero sa katapusan dapat tayong sumangayon kung ang makikinabang naman ay higit na nakakarami. May kasabihan nga sa amin sa Batangas na ang nagsasabi ng totoo ay nagsasama ng tapat.
Sa harap ng mga agam agam at alinlangan na ito, nagpasya pa rin kami na harapin ang pagsubok. Naniniwala kami na makatutulong ang FMAB sa Unibersidad, sa PGH, sa Faculty at higit sa lahat sa ating mga kababayang pasyente. Naniniwala kaming may angking talino at kakayahan ang Faculty ng UP Manila at kinakailangan lang bigyan ng imprastruktura para mas yumabong. Nilalayon naming bigyan ng pagkakataon ang mas nakararami nating kababayan na makagamit ng makabagong kagamitang pagsusuri sa mas mababang halaga kumpara sa ibang pribadong hospital. Tumataya kami sa galling ng UP Manila at tuloy tuloy naming pamumuhunanan ito.. Hinahoman ko ang lahat na tumaya at mamuhunan.
Sa isang bandang personal, nais ko lang ipaabot ang taos puso kong pasasalamat sa Unibersidad ng Pilipinas. Habang ako ay nagfefellowship sa abroad, ilang beses na akong nagkaroon ng pagkakataon lumagi sa ibang bansa na pankaraniwang ginagawa ng ating mga graduates. Malaki ang pasasalamat ko sa Unibersidad dahil sa ang edukasyong aking nakuha ay kinikilala sa ibang bansa. Higit akong nagpapasalamat sa Unibersidad dahil nahubog ang aking pagmamahal sa Bayan kung kayat naririto ako ngayon, umuwi at mas ginustong tumulong sa Pilipinas. Maraming Salamat po at Mabuhay ang FMAB.
PRIMER ON THE UPM-PGH FACULTY MEDICAL ARTS BUILDING (FMAB) PROJECT
1. What is the UPM-PGH FMAB Project?
The project is a joint undertaking of the University of the Philippines (UP or the University), the lessor, and the Mercado General Hospital, Inc./ Daniel Mercado Medical Center (DMMC), the lessee, to convert, rehabilitate, develop and operate the old Dispensary Building as the University of the Philippines Manila – Philippine General Hospital Faculty Medical Arts Building (UPM – PGH FMAB).
The Dispensary Building used to be the location of the charity out-patient department of PGH until 1989 when the department was transferred to the new out-patient facility along P. Faura Street. Since then, the Dispensary Building has not been utilized. The years of neglect and disuse has lead to the further deterioration of the building.
2. Who approved the concept for the Project?
The University exerted efforts to rehabilitate the FMAB. It considered several schemes to finance the Project, such as:
• Loan from University
• Loan from a lending institution
• Build-Operate-Transfer (BOT)
• Budgetary allotment from University or Government subsidy (General Appropriations)
• Corporation/Cooperative/Association
For one reason or another, the above mentioned schemes were found to be insufficient and non-responsive to the needs of the FMAB. When all options were exhausted and after a long and extensive process of strategizing and planning, the University decided to allow a private entity to lease, convert and develop the Dispensary Building.
The lease, conversion and development by a private developer/lessee of the Dispensary Building as the UPM-PGH FMAB was approved by the UP Board of Regents (BOR), the highest policy-making body of the University, during its 1093rd and 1201st meetings on December 15, 1995 and September 29, 2005, respectively.
Pursuant to the mandate of the BOR, a multi-sectoral technical working group was tasked to prepare the Terms of Reference (TOR) for the FMAB Project. The TOR was approved by the BOR during its 1214th meeting on October 26, 2006. The 2006 TOR stipulates the obligations to be fulfilled by interesting bidders. Under the TOR, other than the rehabilitation component of the project, the winning bidder must be able to operate the following concessionaire units: laboratory, pharmacy, radiology and food court, among others.
3. What are the objectives of the Project?
The Project is imbued with academic, professional, socio-economic and income-generating objectives, to wit:
a) Provide a centralized teaching, training, and research-related facility for the faculty, students, trainees, apprentices, medical residents and fellows, as well as faculty research and extension;
b) Strengthen the geographic practice of profession among faculty members of UPM;
c) Provide a faculty incentive package of affordable clinic spaces and income opportunities to UPM faculty in order to augment the faculty’s regular compensation package from the University;
d) Promote faculty retention and career development
e) Provide affordable, accessible, high quality, competent, comprehensive, integrated, and humane health care services to ambulatory pay patient clientele of PGH;
f) Generate additional financial resources to supplement PGH’s budget allocation for hospital operations from the national government;
g) Ensure higher occupancy rate for PGH’s pay patient services and utilization of specialized care units;
h) Provide health care incentives to employees of UPM and PGH
i) Strengthen the distinction of UPM and PGH as the National Health Sciences Center; and
j) Serve as an essential component of a strong National University Hospital
4. What procedure was followed in the awarding of the Project to DMMC?
In accordance with existing laws, government regulations, and University Rules, the bidding for the Project was initiated by the FMAB Special Bids and Awards Committee (SBAC) with the Publication of an invitation to bid. In response to the invitation, two (2) bidders submitted their letters of intent and eligibility documents on November 3, 2006, namely: Biopath Clinical Diagnostics, Inc. and DMMC. As a pre-qualification requirement to participate in the bidding of the UPM_PGH FMAB Project, an eligibility check was conducted and found DMMC as the only qualified bidder. The SBAC, after the conduct of post-qualification and upon the recommendation of the Technical Committee, determine that the bid submitted by DMMC was unresponsive and much less than the internal government estimate of Php 1,000,000.00 rent per month, and thus, declared a failure of bidding on July 16, 2007.
The declaration of a failure of bidding required the SBAC to publish a second invitation to Apply for Eligibility and to Bid through a newspaper of general circulation and through Philippine Star on August 4, 2007 and August 11, 2007. To allow more prospective bidders to participate in the bidding, the SBAC announces the extension of the period for the submission of Letters of Intent and eligibility requirements until August 27, 2007. Since no letters of intent and eligibility requirements were received from the bidders on August 27, 2007, the SBAC declared a second failure of bidding on September 5, 2007 and thus, recommended that the contract for the UP-PGH FMAB Project be awarded to a qualified entity after negotiations.
Acting on both recommendations of the SBAC and the PGH Director, the Chancellor of the UPM approved the active search for the qualified individuals and entities who can bid for the UPM-PGH FMAB Project while conducting the initial negotiations with DMMC as the sole prequalified bidder thereof as well as the conduct of a review of the TOR. The active search yielded to the identification of, invitation to, and initial talks with four (4) prospective bidders for the UPM-PGH FMAB Project other than DMMC, namely: Biopath Clinical Diagnostics, Inc. the United Diagnostic Laboratory, Inc., from April 30, 2008 to July 11, 2008. These bidders, however, subsequent withrew from the negotiation talks and did not submit bid proposals.
During its 1234th and 1239th meetings held on July 21, 2008 and December 17, 2008, respectively, the BOR of the University of the Philippines approved the amendments to the TOR for the UPM-PGH FMAB Project, as follows: extending the term of the lease from 15 to 25 years; defining the one-year construction period as being counted from the date of the signing of the Contract of Lease; and granting the Lessee an additional period of 6 months from date of signing of Contract of Lease as mobilization period.
Following a favorable evaluation and recommendation on the technical and financial proposals of DMMC, the SBAC, through the Chancellor of UP Manila (UMP), recommended to the President of the University the award of the contract to DMMC, and which recommendation was duly approved by the President and thereafter duly noted by the Board of Regents of the University of the Philippines during its 1240th meeting on January 28, 2009.
The contract for the FMAB Project was signed on June 18, 2009, the 101st foundation of the University, by UP President Emerlinda Roman and DMMC President Dr. Edwin Mercado.
One of the sectoral regents filed a motion for reconsideration with the BOR to invalidate the award to DMMC. The BOR conducted extensive consultations with the different stakeholders and decided to confirm the award to the project to DMMC. On October 22, 2009, the contract was confirmed with finality by the BOR. The College Council of the UP College of Medicine and the Faculty Medical Building Association issued similar resolutions in support of the ratified FMAB contract. A notice to proceed was subsequently issued by the University of UPM-PGH FMAB Project.
The FMAB Contract, as confirmed by the BOR, may not be revised or amended without the mutual consent or agreement of the University, through the BOR, and DMMC.
5. What is the duration of the lease contract?
The lease of the FMAB shall be for a period o twenty five (25) years, exclusive of the rent-free period of eighteen (18) months from date of signing of this Contract within which DMMC must perform, comply with, and complete all the works for the conversion, rehabilitation and development of the Leased Premises as FMAB. For this purpose, the counting of the 25-year lease period shall be reckoned from date of the completion of all works for the conversion, rehabilitation and development of the FMAB and the acceptance by the University.
The contract may be renewed for a maximum period of five (5) years by the contracting parties at the option of the University, subject only to such applicable laws, and policies, rules and regulations of the University and upon mutual agreement of both parties.
6. What are the obligations of DMMC?
DMMC shall exclusively and solely shoulder any and all costs of, and shall be responsible for the design, conversion, rehabilitation, construction and development of the Leased Premises as FMAB, including the facilities and utilities thereof. Except for the practice of medical and health-related professions in all the faculty clinics and rooms, the operation and management of the Leased Premises as FMAB shall be the sole responsibility of and shall be for the exclusive account of DMMC.
For purposes of management and operation of the FMAB, DMMC shall sub-lease the clinic spaces/rooms to pre-identified clinical departments/specialties at Php 400.00/square meter and subject to escalation rates.
The commercial/concessionaire areas (Radiology, Laboratory, Pharmacy and Food Court, among others) in the FMAB may be directly managed and operated by DMMC and/or may be sub-leased to third parties.
Upon expiration or termination of the lease, any and all permanent improvements made on the Leased Premises resulting from and/or arising from the performance and/or completion of all construction and development works, including the permanent fixtures shall be considered as forming part of the Leased Premises in favor of the University.
7. How much is the monthly rental rate?
The monthly rental due on the Leased Property during the first five (5) years of the leased shall be ONE MILLION PESOS (Php 1,000,000.00) subject to a yearly increase or escalation at the rate of ten percent (10%) per annum commencing on the sixth (6th) year of the term of the lease until termination or expiration. The escalation of ten percent (10%) per annum shall be based on the last year rental.
The FMAB, at its present state, is unfit for tenancy due to years of neglect and disuse. To compare the rental rate with existing facilities within the area is grossly inappropriate and misleading. The building needs an extensive amount of renovation and rehabilitation works for it to be habitable.
8. How many clinic rooms are available at FMAB?
The clinic rooms are allocated to the following pre-identified clinical departments: Dentistry, Family Medicine, Medicine, Neurosciences, Obstetrics, and Gynecology, Ophthalmology, Orthopedics and Rehabilitation Medicine, Otorhinolaryngology, Pediatrics, Psychiatry and Surgery. Each clinic room is further subdivided to cubicles. There are 71 clinic cubicles distributed among the 11 departments.
The faculty members of the Departments of Anesthesiology, Laboratory/Pathology and Radiology shall render medical service as a department practice group.
9. What can the FMAB do for PGH?
The FMAB will complement the existing services and facilities offered by PGH. The institutionalization of the private out-patient practice of PGH doctors at FMAB will provide the client base that will be the source of additional patronage for PGH’s pay wards and specialized units. The FMAB, with its capabilities in CT angiography and stress-echocardiography testing, will serve as a catchment area for the PGH Cardiac Catheterization Laboratory. Also, DMMC will pay a rental rate with graduated annual increase as described in No. 7.
10. What can FMAB offer UPM faculty members?
The FMAB forms part of a faculty incentive package where affordable clinic spaces are provided to UPM faculty members I order to augment the faculty’s regular compensation package from the University. A great majority of the faculty members of the UP College of Medicine are without compensation.
Besides the subsided rate Php 400.00/square meters offered for the rental of the clinic spaces, doctors who will participate at FMAB need not buy any stocks to practice. The monthly rate is for the bare finish of the clinic spaces as defined by the TOR and covers the actual realty departments. With this arrangement, there is always a specialist available for consultation.
The distribution of the clinic rooms provides the framework for the framework for the group practice of the different departments. With this arrangement, there is always a specialist available for consultation.
11. What other benefits will UPM-PGH and other units of UPM derive from FMAB?
From a broader perspective, it will strengthen the role of UP Manila as the leading Health and Sciences Center and enhance the role of PGH as the National University Hospital.
The FMAB will pave the way for the geographic private practice of profession of PGH doctors and other health professionals. In a geographic set-up, the proximity of the doctor’s clinic to the University makes the doctor readily available for student-related learning activities. This arrangement will enhance the learning experience of the students of the UP College of Medicine and other health degree granting units.
12. How will the FMAB benefit the public?
To the general public, the FMAB will provide a one-stop, multi-specialty out-patient facility with expert physicians supported by the latest in medical technology.
13. Who will manage the UPM-PGH FMAB?
The FMAB will be managed jointly by UPM-PGH and DMMC through a FMAB Management Team (MT). The FMAB-MT shall be composed of seven (7) members, as follows: one (1) representative from UPM, one (1) representative from UP College of Medicine, two (2) representatives from PGH, and three (3) representatives from DMMC. The chairperson shall be appointed by the Chancellor of UPM from the representatives of PGH or the representatives of DMMC.
The University shall solely and exclusively provide the physicians who will be allowed to practice and hold clinic I the FMAB with exclusive and sole supervision over the credentialing, peer review, health quality management, and any and all other clinical and medical operations thereof.
DMMC will supervise and manage the fiscal and non-clinical operations of the FMAB, including but not limited to administrative, secretarial, accounting, communications, messengerial, collection, management of waste disposal and occupational health safety, repairs and maintenance, housekeeping, security functions, and the like.
14. Will UPM-PGH FMAB compete with the existing facilities of PGH?
PGH does not have an institutionalized outpatient private practice for its doctors. UPM_PGH FMAB will cater to the market not adequately served by the PGH, but served by the numerous clinics and diagnostic facilities along Taft Avenue. These are the broad B and C segment of the market that are budget-conscious paying out-patients who are outside the client profile of the more upscale medical centers. An analysis of the patient profile of PGH patients will show that only 0.51% belongs to this category.
Of the 2.5 million patients who availed of PGH laboratory services in 2008, only 3.17% are private outpatient. Radiological service was used by only 9.4% private outpatient from a total of 130,000. The Central ECG Station served only 1.28% private outpatient. One can safely assume that the pharmacy also catered to the same number of private outpatient. Despite the numerous diagnostic facilities and pharmacies along Taft Avenue, these PGH units still posted an increase in their patient census.
The contract for the FMAB Project has enough safeguards that will protect the interest of PGH to ensure its continued viability and sustainability. One of these safeguards is the price protection clause where the rates of services offered at FMAB should not be lower than PGH rates.
The ancillary service units at PGH will continue to operate and will not be replaced by the ancillary service units at FMAB.
15. Is it to the best interest of the UPM-PGH FMAB that the services and facilities of PGH continue to function?
Definitely. The mutually beneficial relationship between PGH and the FMAB will only be realized if both units are efficiently functioning serving their respective clientele. The FMAB was never intended to replace the services or facilities offered at PGH but rather to complement the same.
16. What will be the effect of UPM-PGH FMAB on the employment status of PGH employees?
The monthly lease rental generated by UPM-PGH FMAB will augment the income of PGH and, thereof, will be beneficial to all stakeholders on the employee-employer relationship between PGH and its employees.
17. Will the public character of UPM-PGH be affected by UPM-PGH FMAB?
Not at all. Even for the whole duration of the partnership between UPM-PGH and the Mercado General Hospital Inc., ownership of the UPM-PGH FMAB is retained by the government.
18. What can DMMC bring o FMAB?
DMMC, a recognized PhilHealth Center of Excellence, will bring to FMAB its 53 years of established best practices in the healthcare businesses. The Management Team of DMMC has 78 cumulative years experience in hospital administration and 75 cumulative years experience in finance and banking. DMMC’s experience in operating an integrated management information system (accounting, billing, cashier, pharmacy and all ancillary units) and management of its own Medical Arts Building will provide the framework for an efficient and effective FMAB operation. Strategically located within he industrial parks of Southern Luzon, DMMC is affiliated with 19 HMO’s, 80 companies and 11 insurance companies. Some of these companies include: Epson Precision Phil., Inc., Little Fuse Phils., Yamaha, Motor Phils., Inc., Chowking, Greenwhich, Jollibee, KFC, RCBC, Mariwasa Siam Ceramics, Phillip Morris, Ibiden, Chevron and San Miguel Corp. The relationship of DMMC with these companies can be replicated at FMAB.
Sources:
a. Concept Paper, UPM-PGH FMAB Project
b. Terms of Reference, UPM-PGH FMAB Project
c. Contract of Lease, UPM-PGH FMAB Project
d. PGH Annual report 2008
e. Company Profile, DMMC
f. Excerpts, from the minutes of the meetings of the UP-BOR instruct
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