Hemodialysis Center PPPs:

Project Structures and Terms

25 October 2019
Collaboration of the Department of
Health and the Public-Private
Partnership Center
Developing PPPs in the Health Sector
Collaboration between the public and private sectors is paramount in the
SOCIOECONOMIC AGENDA

delivery of quality health service

Accelerated
Infrastructure
Development

infrastructure
spending of 7%
of GDP by 2022

“The UHC provides opportunity for private providers to

0-10 POINT

expand their market reach and challenge the creativity in

making value enhancing solutions. Through forum like this,
Invest in human
we benefit from PPP experts, we learn to quantify the gaps
capital development,
including health and and map where private sector can bring most value,”
education systems - Health Secretary Francisco Duque III
Hemodialysis Center PPP Project

The Public-Private Partnership (PPP) Center and the Department

of Health (DOH) are developing Hemodialysis Facility PPP Projects
in various hospitals across the regions, through business case
development. Pilot projects include:
➢ Baguio General Hospital and Medical Center
➢ Cagayan Valley Medical Center
➢ Quezon City General Hospital
Market Sounding Activity

The government intends to sound off the initial project scope and potential
private sector role for the proposed hemodialysis facility projects.

The government intends to foster a broadly competitive procurement

Gather private sector insights on the proposed scope and potential

participation/role in the project.
✓ Interest as a contract, supplier, operator, financing institution
✓ Experience on similar projects
✓ Possible points for improvement in the structuring of these projects (i.e., technical and
financial aspects)
✓ Other points/components that should be considered in the study
✓ Identify potential challenges and risks

4
What we would like to know…

Project Private sector

viability capability

Maturity of
Capacity
the concept

5
Key Reminders

• This is an information/feedback-gathering activity only. Participation

in this activity does not translate to a company’s formal expression of
interest to participate in the project.

• Attendees of this activity are not given due advantage on the

projects. Information disclosed here are also open to all interested
parties to ensure a level-playing field come the bidding process.

• Insights gathered will be solely used for the development of the

studies for these hemodialysis projects.

6
Ground Rules / Reminders

Please put your phones in silent mode. Should you need to take a call,
kindly take the call outside the room.

There will be audio recording of the whole session. The recording will be
solely used for documentation purposes.

Photos of the session will be taken and will be used for the documentation
report.
Ground Rules / Reminders

All participants are enjoined to speak out their thoughts and

opinions. Participants have the right to abstain from answering
topics they are not comfortable of.

All responses are valid. There are no right or wrong answers.

The activity will start at 10:45AM end by 11:15AM. Should you

have forgotten to raise any comment during the activity, forms
will be given afterwards where you can write these down.

Let’s try to stay on topic to maximize allotted time.

Market Sounding Activity Outline

Background and Objectives

Overview of Public-Private Partnerships

Proposed Scope and Structure of the Hemodialysis PPP

Projects

Market Sounding Activity Feedback-Gathering Session

PPP Program for Infrastructure Development
0-10 POINT SOCIOECONOMIC AGENDA

Government Financing
General appropriations,
Accelerated corporate funds
Infrastructure
Development Financing and
infrastructure Implementation Government Borrowings
spending of 7% Domestic & foreign debt,
of GDP by 2022 official development
Delivery assistance (ODA)
Mechanisms
Private Sector Financing
Public-Private Partnership
(PPP)
PPP Concept
✓ A contractual arrangement between
the government (Implementing
Agency or Local Government Unit)
and private sector to accelerate
provision and/or implementation of
infrastructure and/or development GOVERNMENT PRIVATE SECTOR
projects or services.

✓ The contractual agreement provides

clearly-defined roles and
responsibilities of the
parties/partners.

✓ There is allocation of
rewards/revenues and costs/risks
between public and private partners.
PPP Legal Framework by Implementing Agency

RA 7718 NEDA Joint

Implementing PPP/ JV/ P4
(Amended Venture (JV)
Agency Code
BOT Law) Guidelines
NGA ✓  
At the option
LGU ✓ of the LGU ✓
GOCC, GCE,
GICP, GFI, SUC ✓ ✓ 
(including WDs)
Visit the PPP Center website for the
Modes of Procurement: Guidelines on Managing Unsolicited
▪ Solicited Proposals including checklist of
documentary requirements. Access
▪ Unsolicited link: https://bit.ly/2VTqN2j
Harnessing Advantages under PPP Approach
• Proper alignment of incentives (among contractor,
Integrated operator and maintenance provider) in a whole-of-
approach life approach
• Single procurement process

• Allocation of risks to party who can best manage that

Optimized
risk (e.g. risk of cost and time overruns allocated to
risk allocation
private partner)

• Specifications are defined via desired project outputs

Output • Government can tap private partner’s innovation and
specifications expertise in coming up with most efficient design that
adheres to specifications

Revenue • Revenue sharing with private partner

potential • Revenues from commercial activities

• Can address implementing agencies’ limited

Private sector
absorptive capacity and government’s limited fiscal
capacity
space
PPP: Integrated Approach in Procurement
Traditional Public Works Contract
Design Build (Construction) O&M

Bidding Outsource Bidding Outsource Bidding Outsource Bidding Outsource Bidding Outsource

Company A Company B Company C Company D Company E

PPP Contract
Design Build (Construction) O&M

Output-based Specifications
Bidding Outsource

PPP contract

Company X (Special Purpose

Vehicle in many cases)
PPP Payment Mechanisms
1. Concession-based PPPs – private partner is allowed to
collect charges, tolls and fees from users

2. Availability-based PPPs – implementing agency (IA)

will allocate budget or funds as payment to private
partner

3. Non-monetary payments – private partner may be

repaid through non-monetary payments (e.g. grant of
commercial development rights, grant of a portion of
reclaimed land, subject to constitutional
requirements, etc.)

4. Others – private partner may be repaid through a

combination of different schemes or any other
schemes approved by ICC/NEDA Board or appropriate
approving body
Market Sounding Activity Outline

Background and Objectives

Overview of Public-Private Partnerships

Proposed Scope and Structure of the Hemodialysis PPP

Projects

Market Sounding Activity Feedback-Gathering Session

Hemodialysis (HD) Treatment and the HD Industry
End-Stage Renal Disease (ESRD)
End-stage renal failure, also known as end-stage renal disease (ESRD), is the final,
permanent stage of chronic kidney disease, where the kidney function has declined to
the point that the kidneys can no longer function on their own.

The Philippine Context

2.3 Million 15% Increase

Filipinos have chronic P8.8 Billion
In the number of
kidney disease Total PhilHealth Payout
patients in one year
(2% of Total (7% of Total Payout)
(2015 – 2016)
Population)

Source: DOH-PhilHealth Health Policy Note entitled, “Should PhilHealth cover more hemodialysis
sessions?” by Health Technology Assessment (HTA) Study Group
Hemodialysis (HD) Treatment and the HD Industry
Renal Replacement Therapy (RRT) in the Philippines
As a form of management for patients with end-stage renal failure, the two most common
modern modalities as renal replacement therapy (RRT) include kidney transplantation
with drug suppression therapy and dialysis.

Peritoneal
Kidney Transplant Hemodialysis
Dialysis

Considered to be the More common

best of the options for treatment option
people with ESRD Appears to be simpler
and easier compared to Shorter treatment time
Overview
Replacement of failed HD as no expensive and less infection risks
kidneys can improve machines are needed as it is administered by
patient’s quality of life professionals in a
and survival health facility
Finding a right match for Dialysis demands longer PhilHealth coverage for
Concerns a kidney donor is a time HD is only 90
challenge Infection Risk sessions/year

Source: Preliminary Stakeholder (Patients and Practitioners) Consultations, Health Study Team
Hemodialysis (HD) Treatment and the HD Industry
Renal Replacement Therapy (RRT) in the Philippines
As a form of management for patients with end-stage renal failure, the two most common
modern modalities as renal replacement therapy (RRT) include kidney transplantation
with drug suppression therapy and dialysis.

Peritoneal
Kidney Transplant Hemodialysis
Dialysis

Proportion of Patients
2% 4% 94%
in Modality
Transplant surgery and 00
Current PhilHealth 3 PD solutions per day,
immunosuppression up 90 sessions per year*
Coverage for a year
to Php 600,000
Number of visits 16 (for the first year 156 (adequate
24
required per year after surgery) treatment)
Estimated total annual
Php 1.2 million Php 235,000 Php 562,000
medical cost

Source: DOH-PhilHealth Health Policy Note entitled, “Should PhilHealth cover more hemodialysis
sessions?” by Health Technology Assessment (HTA) Study Group
Hemodialysis (HD) Treatment and the HD Industry
Issues & Challenges Faced by Public Hemodialysis Centers

The inadequate facilities and insufficient HD machines in public hospitals like BGHMC,
CVMC, and QCGH pose the following recurring issues in their respective HD units:

Inability to Accommodate the Subsequent Regular

Schedule Disruptions
Hemodialysis Treatments of the Inpatients

Source: BGHMC and CVMC Project Study Committee Inception Report Findings
About Baguio General Hospital and Medical Center

BGHMC is the largest government-funded

tertiary hospital in the Cordillera
Autonomous Region and was selected as
an expansion area for the construction of
the state-of-the-art health facilities

➢ On September 23, 2018, President Duterte signed Republic Act No. 11084 increasing the bed
capacity of BGHMC from 500 to 800 beds and upgrading its existing service facilities and
professional health care services

➢ BGHMC’s existing 30-machine Dialysis Center has become the Dialysis Center of Northern
Luzon serving patients from the Cordillera, Regions I, II, III and IV, with increasing number
of clients served in recent years.

➢ With a vision “BGHMC is the premier referral center of Northern Luzon offering leading
edge specialty services,” the hospital is keen to undertake more health infrastructure
projects in the future. People from Kalinga and Apayao, and even neighboring lowland
provinces like Pangasinan have their medical consultations and procedures done in the
hospital because it enjoys high trust ratings for affordable healthcare.
21
About Baguio General Hospital and Medical Center

BGHMC AS A
MULTI-SPECIALTY
CENTER

✓ In January 2017, BGHMC is one of ✓ In 1958, BGHMC was one of the identified 11
the first agencies to be awarded training hospitals all over the Philippines.
the ISO 9001:2015 certification in
✓ Through the years, it gained recognition as a
Baguio. teaching institution in 13 Accredited Medical
Services, as well as a training establishment for
✓ Having only received the ISO allied medical affiliated schools. To date, these
9001:2008 certification last 2014, accredited medical services are Internal Medicine,
the hospital went further by having Anesthesiology, Family Medicine, Dental, OB,
the latest certification Ophthalmology, ENT, Orthopedics, Pediatrics,
Psychiatry, Surgery, Radiology and Pathology.
✓ BGHMC commits to attain ✓ In response to the growing client base, it expanded
international standards of quality its services to include Out-Patient Department
and be globally competitive (OPD), Emergency Room (ER), Operating Room
(OR), Pay Ward, Cancer, Out-patient Drug
Treatment Rehabilitation Unit (ODTRU) and Women
and Child’s Protection Unit (WCPU)
22
Local PPP-Projects
Location BGHMC

The proposed project is located within the

16.7-ha property of the BGHMC in Barangay
BGH Compound, Baguio City. The BGHMC
Complex is connected to national road
networks including Kennon Road and
Marcos Highway
About Cagayan Valley Medical Center
Cagayan Valley Medical Center (CVMC)

Location: Dalan na Pagayaya, Regional Government Center, Carig Sur, Tuguegarao City, Cagayan, Philippines

CVMC is the largest medical facility in Cagayan

Valley region and the only government-owned
tertiary hospital in Cagayan province. It is a center of
excellence on patient care, training & research.
About Cagayan Valley Medical Center
Cagayan Valley Medical Center (CVMC)

CVMC is a regional 3rd level Hospital, is a

center of excellence on patient care,
training & research.

On April 22, 1980, CVMC was classified as Tertiary Regional Hospital by virtue of
Ministry Order No. 83, series 1980.

On March 20, 1998, R.A. No. 8599 converted from Cagayan Valley Regional Hospital
(CVRH) to Cagayan Valley Medical Center (CVMC) with an authorized Bed Capacity of
500.
Mission Vision ISO 9001:2015

Cagayan Valley Medical Center Cagayan Valley Medical

is a government tertiary, Center is a Center of
teaching, training and research Excellence of patient
hospital of Region II providing care, training &
quality patient care. research.
About Cagayan Valley Medical Center
Cagayan Valley Medical Center (CVMC)

“The Cagayan Valley Medical Center

(CVMC) is envisioned to become a
‘mega’ hospital in Luzon by 2022.
Among the features of a mega hospital
include the establishment of special
The newly built Department of Behavioral Medicine at
centers for the lung, heart, kidney, the Cagayan Valley Medical Center.
burn, acute stroke, cancer, trauma
Newly-constructed centers (2019):
and other special services.” • Cancer Center
• Department of Behavioral Medicine
• Human Immunodeficiency Virus/Acquired
Immunodeficiency Syndrome (HIV/AIDS)
Source: PIA (2018) Center
https://pia.gov.ph/news/articles/1009301 • Malasakit Center
Local PPP-Projects
Location CVMC
ProjectQC
About Scope
General Hospital
▪ QCGH is under the direct
supervision and control of the QCGH
Mayor, as stated in Quezon City’s
Charter, RA 6548. SM North
▪ Hospital Category: Tertiary (250
bed capacity)
▪ Hospital Director – Dr. Josephine
B. Sabando
▪ Services offered:
✓ Clinical Services
✓ Physical Medicine and Rehabilitation 2018 PROFILE AND PERFORMANCE
✓ Internal Medicine Personnel 937
✓ Otorhinolaryngology Appropriation Php 765 million
✓ Surgery Bed Occupancy Rate 82.19%
✓ Ophthalmology
PHIC Accredited Yes
✓ Pediatrics
✓ OB-GYN
✓ Dental
✓ Radiology
Local PPP-Projects
Location QCGH
Local PPPScope
General Projects
of Work

✓ Procurement, Delivery, and Installation of Renal Facilities

✓ Undertaking of other required services
✓ Engineering, Procurement, and Construction of
Hemodialysis Center Building

Procurement, Delivery, and Installation of Renal Facilities

Baseline No. of HD Units 50 - 60

Increase in capacity Yearly depending on
volume
General Function, Operational ✓
Features, Safety Features, etc.
Machine Life @ 3 shifts 5 – 8 years
Back up requirements ✓
Other Medical Equipment ✓
Local PPPScope
General Projects
of Work
Undertaking of other required services

▪ Water and Chemical analysis ▪ Supplies, Consumables and

▪ Back up Facilities for Power Supply Materials
▪ Integration of Energy Conservation ▪ Housekeeping and Maintenance
and Efficiency Measures Works
▪ Hazardous Waste Management ▪ Security

Required Manpower

Required per Required Medical Staff based on

Medical Staff Responsibility
DOH AO 2012-0001 100 HD machines
Physician on 1 per 15 HD
7 Mainly Government
Duty stations
Nurse 1 per 4 HD stations 25 Private
Dialysis
Not specified At least 1 per shift* Private
Technician
* Preliminary allotment, figure under study
Local PPPScope
General Projects
of Work
Engineering, Procurement, and Construction of
Hemodialysis Center Building
✓ HD Center Building shall refer to the building to be designed, financed,
developed, constructed, and maintained by the Private Partner at the
Project Site and in which the principal functions of the Required Services
shall be performed
✓ If the building is already existing, this component may involve retrofitting,
refurbishing and finishing works

Proposed 2-storey
building and floor plan
Local PPPScope
General Projects
of Work
Indicative Floor Plan for BGHMC
Local PPPScope
General Projects
of Work
Indicative Floor Plan for BGHMC
Local PPPScope
General Projects
of Work
Indicative Floor Plan for BGHMC
Local PPPScope
General Projects
of Work
Functional Areas
General Scope of Work
Minimum Performance Standards and Specifications (MPSS)
A. MPSS During Engineering Procurement and Construction (EPC) Phase of
the HD Center
1. Spatial Planning Parameters
2. HD Center Materials and Quality of Works
3. Plumbing and Sanitary Works
4. Electrical Works & Installations
5. Fire Protection System
6. Mechanical Works
7. Mechanical, electrical and internal plumbing & drainage systems
8. Doors, windows, and ventilators
9. Interiors
10. Fit Out Works
11. Lighting / Illumination
12. Gender
13. Design Standards
B. MPSS Related to the Procurement and Service of the Renal Facilities
I. Major Medical Component / Equipment
1. Dialysis Service Complex / Treatment Area
2. HD Machines
3. Water Treatment System (WTS), etc.
II. Other Medical Equipment
General Scope of Work
Key Performance Indicators (KPIs)
A. General Building, Facilities and Service Availability KPIs
1. Service Availability
2. Availability of Back-up Supply of Utilities
3. Availability of Service Capacity
4. Maintenance Incidents Resolution Time
5. Availability of Supplies & Consumables
6. Water Quality
7. Availability of Personnel
8. Waste Management
B. Medical-related KPIs
1. Dialysis Adequacy and Quality
2. Vascular Access
3. Measurement of Mineral Concentration
4. Mortality Rate
5. Hospitalization Rate
6. Anemia Management
7. Patient Safety
8. Infection Control
Local PPP Considerations
Financial Projects
Projected Demand for HD Care in Select Area*

Increasing demand for

HD care within the
planning horizon

Expectation is for need

of HD machine to
increase by 10 - 12
every year to reach at
least 100 within 5
years

*Based on current
prevalence rates
Local PPP Considerations
Financial Projects
Projected Demand for HD Care in Select Area*
For the Baguio area:
HD Machines Demand Projection
2020 2021 2022 2023 2024 2025
Number of
Patients 480 537 598 665 736 813

Number of
60 67 75 83 92 102
HD units

For the Tuguegarao area:

2018 2019 2020 2021 2022 2023 2024
(Year 1) (Year 2) (Year 3) (Year 4) (Year 5)
Total Number of
CVMC’s Hemodialysis 218 265 317 369 428 493 562
Patients

Number of HD
36 44 53 62 71 82 94
Machines Required
Local PPP Considerations
Financial Projects
Cost Recovery Mechanisms

Revenue Sources Preliminary Estimation Positive financial

Hemodialysis Treatment Est. Php 150 - 270 million* annually indicators based on
projections
OOP Charges On the account of proponent
Commercial Revenues Leasing of available spaces
Rental Payments from Hospital Depending on project structure
*Based on Php 2,600 per HD session
Local PPP Projects
Procurement Strategy

Legal Framework ▪ BOT Law (RA 7718, as amended)

▪ Local PPP Code
Mode Solicited
Type 2-stage (Qualification and Bid Proper)
1-stage
Eligibility Financial – Equity equal to % of Project Cost +
bank testimonial letter
Legal Eligibility
Technical - Experience in construction +
Experience in HD operation + key personnel
Procuring Entity ▪ DOH
▪ Regional Hospital
▪ LGU
Target Publication 2nd Quarter of 2020
Local
UniquePPP Projects
Proposition

Why partner with the Government for

the delivery of HD Care facilities?

✓ Longer contract period than the

average lease of equipment
contract (e.g. 10 , 15, 20 years) GOVERNMENT PRIVATE SECTOR

✓ Situated within the hospital

premises catering to all types of
patients (in patient, out patient,
emergency)

✓ Volume-triggered increases in
capacity

✓ Optimal sharing of risks and

responsibilities
Local
UniquePPP Projects
Proposition

Partnering with renowned public

hospitals for the provision of
hemodialysis care:
✓ Quality of service
✓ Less waiting time
✓ Higher life expectancy and
quality of life, longer work
productive life
✓ Reasonable charges
Who are we looking for…

Asset to be Delivered / Asset Ownership after

Responsibility PPP Contract Period

• HD Center Building
Public Sector
Construction Firm / • Ancillary Facilities
(immovable assets)
Contractor • Parking Facility (if applicable)
Public Sector OR
• Furniture, Fixtures and Non-
Private Proponent
Medical Equipment
(movable assets)

• Delivery of Medical Equipment Private Proponent

Private HD Operator
• Operate and Maintain the entire
-
Renal Facility
Market Sounding Activity Outline

Background and Objectives

Overview on Public-Private Partnerships

Proposed Scope and Structure of the Hemodialysis PPP

Projects

Market Sounding Activity Feedback-Gathering Session

 Thank You!
For further information, please contact:
Imari Kate S. Galvez
ISGalvez@ppp.gov.ph

Janella B. Santiago
JBSantiago@ppp.gov.ph

47