Conglomerates vying for partnership deal with MediCard

A number of the country’s biggest conglomerates are betting big on the health maintenance business as the COVID-19 pandemic raised demand for health-related medical insurance and other products.

At least two local conglomerates with partner insurance companies, for instance, are vying for a partnership deal with MediCard Philippines Inc., which is among the top three health maintenance organizations (HMOs) in the country.

The deal, estimated at $350 million to $400 million, has moved a step closer to completion as prospective partners have submitted their bids which are soon to be evaluated.

The partnership is likely to be announced within the month, industry sources told

The STAR.

One source said the HMO business experienced record profits, especially in 2020, as a lot of members did not go for medical treatment.

“But now, they are coming back in droves to seek medical care; for chronic illnesses and check-ups. Margins should normalize at preCOVID-19 levels of two to three percent,” the source said.

“We are just hoping that the growing Filipino middle class will continue to seek quality health care.”

MediCard is the only HMO in the Philippines founded and managed by a group of physicians, according to its website.

It was incorporated in December 1986 and formally inaugurated in May 1987 to provide comprehensive health care coverage to individuals in Metro Manila and key provincial areas.

Its founders saw how healthcare can be elusive to ordinary people because of limited healthcare programs that could otherwise benefit as many Filipinos as possible.

Just recently, the Gokongwei Group and Maxicare Healthcare Corp., the largest player in the HMO industry in terms of assets, secured a license to operate a P2-billion life insurance firm, Maxicare Life Insurance Corp.

MaxiLife, which was incorporated by Gokongweiled JE Holdings Inc., Maxicare and its parent firm PinAn Holdings Corp. is the first domestic insurer established as a “new domestic life insurance company” under the Insurance Code of the Philippines.

This means MaxiLife was organized through the incorporation of a new entity and not by acquisition of an existing insurer.

The Gokongweis earlier acquired a 42.31 percent stake in Maxicare, making it a co-equal shareholder of Maxicare alongside Equicom Group.

The Equicom Group engages in a mix of business activities, including financial services, health care, and information technology.

Maxicare has an asset size of P15.21 billion, and renders its services through a network of 24,000 doctors and specialists, 1,400 hospitals and clinics, 1,000 dental facilities and 180 rehabilitation and dialysis centers.

Other conglomerates such as Ayala Corp. and Pangilinan-led Metro Pacific Investments Corp., for their part, have stepped up investments in healthcare as well, particularly through the establishment and expansion of health institutions, the launch of tech-related health apps, and investments in pharmacies.

Ayala, through AC Health for instance, has expanded its healthcare portfolio to include Generika Drugstore, a generic retail pharmacy operator; IE Medica and MedEthix, a major pharmaceutical importer and distributor; Healthway, a network of primary care, multi-specialty, and corporate clinics; and QualiMed, a network of full-service hospitals, multi-specialty clinics, and a stand-alone day surgery center.

MPIC has a portfolio of at least 19 hospitals in Luzon, Visayas and Mindanao with a bed capacity of 3,800 beds, according to its website. It also has investments in allied health colleges, a growing network of primary care centers, cancer care centers and a central clinical laboratory.