“SETTING UP AND SUSTAINING

HEALTH FACILITY NETWORKS”

Theme: UHC at the Crossroads of Change

PHAPI National Convention
Manila Hotel
Nov. 18, 2019

Rhais M. Gamboa
EVP & COO
Mount Grace Hospitals Inc.
OUTLINE
I. Why the Need for Service Delivery Networks (SDN) under the
II. Universal Health Care (UHC) Law?

III. What is an HDN?

IV. Essential Elements to Set-up SDN?

V. Benefits of Being SDN Member?

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VI. Mechanisms to Sustain and Integrate SDN?
1. WHY NEED FOR SDN UNDER UHC?
1.1. CONTEXT: KEY BENEFIT FEATURE OF UHC LAW
IRR
▪ mandates outpatient (OP) benefits coverage

• Current Philhealth (PH 1.0) essentially IP benefits

• UHC Law IRR (PH 2.0) essentially OP benefits

▪ PHI 1.0 & PH 2.0: underscores gov’t intent to provide full-

range of OP and IP benefits
▪ PH 2.0: mandates SDN to participate as a service provider
▪ PH 2.0 intends to pay providers on a capitation/family basis 4
1.2. WHY THE NEED JOIN SDN UNDER UHC?
▪ If service provider unable to provide on its own the full
range of PH covered services
▪ Typical benefit availment flow envisioned under UHC:

Beneficiary PCP
(Navigator) 5
1.3. IMPLICATIONS TO SDN OF CAPITATION
PAYMENT?
▪ UHC benefit availment flow with capitation payment
per family implies, among others:

▫ Need for referral system across participating

providers

▫ Need for formula for sharing capitation payment

▫ Rational care and efficiency essential to generate 6

margins from capitation
2. WHAT IS AN SDN?
2. WHAT IS A SERVICE DELIVERY
NETWORK (SDN)?
▪ Group of health professionals, retail outlets and/or health
facilities, whether rendering care on an inpatient or outpatient
setting, working together to:
• provide health benefits for PH members or other 3rd Party-Payors
• facilitate access to health services to PH beneficiaries
• optimize their managerial, operational and clinical capabilities

▪ Glue that binds the network can be:

• common investor/owner across facilities
• common interest to participate in PH 1.0 & PH 2.0

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3. ESSENTIAL ELEMENTS TO SET-UP AN
SDN?
3.1. ESSENTIAL ELEMENTS TO
SET-UP SDN (1/2)
 Need a Glue: shared common objective(s)

 Presence of Coordinator/Integrator/Administrator: to orchestrate the

interface (i) among SDN members (ii) with PH/3rd Party-Payors (iii) with
Beneficiaries

 Clarity of roles, responsibilities, processes

 Recognize the difference in capabilities of SDN members:

managerially, operationally, organizationally, range of medical services
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3.1. ESSENTIAL ELEMENTS TO
SET-UP SDN (2/2)
 Referral system

 Formula for provider compensation given capitation/family payment

under PH 2.0

 Openness to change

 Readiness of each facility to share information and experiences

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4. BENEFITS OF BEING SDN
MEMBER?

2.1 On Facility Level Operations

2.2 On Health Outcomes
2.3 On Financial Risk
2.4 On Customer Satisfaction
4.1. SDN MEMBERSHIP BENEFITS: AT
INDIVIDUAL PROVIDER-LEVEL
OPERATIONS
• Cost reduction via bulk procurement
• Improves productivity and efficiency via process and business standardization
• Shorter learning lead-time via sharing of information and best practices
• Access to various expertise at lower cost via organized network support services

• Revenue enhancement: opens door to

• participate in PH 2.0

• to service members of other 3rd Party-Payors by negotiating at SDN level

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4.2. SDN MEMBERSHIP BENEFITS: ON
HEALTH OUTCOMES

• Enhances quality of care via sharing of standards

• Better patient access to medical care through defined network level turnaround times
and referral system
• Improves access to quality products & equipment via coordinated, centralized
accreditation system and info sharing re supplier performance

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4.3. SDN MEMBERSHIP BENEFITS: ON RISK
MANAGEMENT

• Cheaper & easier maintenance of offsite common back-up IT system for business
continuity planning
• Better terms from financial institutions via network level negotiations
• improves financial management due to close oversight over capital expenditures,
supply chain, receivables, trade payables, among others
• Reduces regulatory risks by monitoring adherence to all regulatory requirements,
including updates of new and emerging regulations
• Minimizes bad debts by sharing experience on delinquent accounts

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4.4. SDN MEMBERSHIP BENEFITS: ON
CUSTOMER SATISFACTION

• Heightens customer satisfaction via network-defined minimum standards supported by

training programs and monitored internally and externally

• Strengthens MD loyalty thru shared experience on MD engagement programs

• Raises organizational cohesiveness via shared employee engagement programs

enriched by benchmarking

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5. ELEMENTS TO SUSTAIN AND
INTEGRATE THE SDN?

3.1. Shared Values

3.2. Operational Synergy
5.1. ELEMENTS TO SUSTAIN SDN:
SHARED VALUES
 Shared sense that common objective(s) being achieved

 Benefits of SDN membership appreciated by each member

 Sense of belonging to a network

 Openness to change

 Open communication 18
5.2. : ELEMENTS TO SUSTAIN SDN:
OPERATIONAL SYNERGY

• Availability of network support services

• Common technology platform
• Process standardization
• Cross-facility staff internship & observation visits
• Common training programs
• Regular reports for benchmarking
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IN SUMMARY (1/2),
▪ UHC creates opportunities for service providers whilst bringing with
it certain challenges
▪ Provider has to join SDN if, on its own, cannot render covered range o
PH benefits
▪ Setting an SDN requires a lot of work, including:
• Identifying service providers with the same objectives and values
• Negotiating share of SDN members in the capitation fee
• Creating an atmosphere of sharing and “kinship”
• Standardizing systems and processes to the extent possible
• Capturing synergies in working as a network

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IN SUMMARY (2/2),
• Ultimate success measures of network:

• Delighted customers: internal & external

• Measurable quality of care rendered

• Beneficiaries’ enhanced access to care

• Financial viability to SDN members

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THANK YOU

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