INTERVIEW

	Mr. Mario Silos President and CEO Intellicare

Mr. Mario Silos
President and CEO Intellicare

There is greater international awareness about Asia as an attractive destination for business, investment and travel. The Philippines has great potential with GDP last year of 7.3%. What do you think are the key elements of President Aquino's administration that will help induce further economic growth in the years to come?

The Philippines in terms of its economy has always just required a degree of stability for it to move forward. Firstly, this can only be provided by consistent regulations and perseverance over time; policies that are not reversed. We need a government that can provide this sense of stability in policies, in direction in mission. I think the Aquino administration is coming in with a clean slate. Secondly, we want to ensure a level playing field in terms of corruption and influences. We want to be sure that if you are going to play the game you have the necessary risks assessed. Thirdly, the private sector must be truly allowed to compete, to innovate and to grow without the continuous interference of the government in terms of taxation and regulation. I will limit it to these three criteria. I believe the Aquino administration has therefore opened the window of opportunity. First and foremost he says that he will ensure stable policies, secondly there is the issue of honesty and integrity and how we will look at dealing with the private sector and move forward, considering the entire population rather than just a minority. Thirdly, this will allow for the movement of resources in key areas rather than just wasting it in so many projects that do not bring significant improvement to the population as a whole. I would like to believe that these three areas are critical and these are being assessed; so far, so good. The overall interest in the Philippines is the change of paradigm about how business is going to be dealt with in the new administration.

Do you agree that the elimination of corruption and transparency will allow foreign investors to come in with a clear way of doing business?

There was always the question in the past that certain groups would be favored so the field will be quite even and they can look at the tax and the market and assess the risks as a businessman. They do not want to discover that the regulations change overnight and new taxation rules apply. They do not want to be priced beyond what they already assessed. I think this has been eliminated with the new President.

The Millennium Development Goals regarding Social welfare, Education and Healthcare stand at the forefront of the agenda. How do you see the Healthcare sector in the Philippines contributing to achieving these goals?

The critical factor in any of these goals is the resources that you are going to put into the projects. It is like saying, 'put your money where your mouth is'. In terms of budget, in the Philippines we have one of the lowest allocations for healthcare. For many countries it accounts 10% to 15% of their budget. I think we are currently at around 4% but the numbers are changing with the new budget so I am not entirely sure but I know from a historical basis it was 2% to 3%. It has to move far beyond this, closer to 7% to 8% to really move these healthcare projects along.

Not only do we have budgetary constraints but we also have to realize that 60% of our population really lives on the poverty line and the efforts so far have only really concentrated on those who cannot afford it at all. For those who could only just afford it was a second priority. The priority program needs to concentrate on those who have zero and then move along accordingly. What we have tried to do as a Health Maintenance Organization (HMO) is provide coverage for those who can already pay a portion for themselves. We provide programs and innovate products and services to improve the delivery for healthcare services for those who can already pay a portion. We cannot focus on those on the poverty line; this is the government's function. They are moving in terms of micro insurance; especially down in the poorer, rural areas to the extent that we can support the government in this micro insurance area, this could perhaps create more opportunities that will simultaneously allow these people to receive not only aid but also a way by which they can provide for themselves. This is why to a large extent we are not waiting for the government to come here.

What a lot of governments have done is become strong in their CSR. These CSR projects in many top companies are really focused on communities, not just families and individuals. We choose certain communities and provide livelihood projects so they can have an ongoing sense of sustenance and economic freedom rather than a one off aid provision. This is where I think the private sector is coming on strong even without the government. We really need to focus on this as in the long run it not only expands our market anyway but it temporarily allows us to focus our expertise on areas that could help. We are a member of the Philippines Business for Social Progress (PBSP) and a lot of corporations are very happy to support different projects depending on their specialty.

HMO's are due to be the second phase of the project. What are the challenges that you face and what are some of the opportunities?

The major challenges are the availability of healthcare providers in rural, provincial areas. You will find the best clinics are available in the metropolis areas throughout Asia. However in provincial areas this is very different. We really need the government's support to upgrade providers in the rural areas. These community hospitals in provincial areas require refurbishments and the provision of new equipment. The second challenge for them is to ensure that we do not suffer the brain drain of our doctors and nurses who move to Europe or the U.S. as a result of a lack of opportunity here. This is the basic framework by which the government really needs to work around. We are going to come in to provide innovation, the products and the services and by getting a population base that allows them to be channeled to these providers. The channeling of this membership allows them sustainability, economic performance that in turn allows them to maintain hospitals and doctors. What we have done therefore is from the old system where people were too afraid to go to their providers, as they could not afford it. The law of large numbers allows us to maintain a structure that allows them access to these facilities. We provide support to the providers and allow sustainability but we also allow the population to access this and provide them with better health. Otherwise they are forced to go to practioners that may not be fully qualified or resort to traditional medicines like fruits. We need a very close-knit relationship between the public and the private sector to work this out. The government needs to initially provide for those who have no way of supporting themselves. What I am talking about here is just the next step and ensuring our doctors and nurses stay with us.

Do you see PPP's as the main source of income for the future development of HMO's?

No, I think this will really be in terms of the major industries that will require that. In our case it would simply be an upgrading of government facilities and the private sector being given the right incentives to take risks in the provincial areas beyond the metropolis. We have to move beyond that to the smaller cities.

Intellicare is one of the leading HMO's in the country. Can you tell us about your progress?

We began operations in January 1995 and today we have more than 600,000 members nationwide. This is one of the most extensive networks nationwide. The question of providing our membership nationwide is not easy with over 7100 islands. Wherever the companies are they have to have access to providers and we have made sure we blanket them with providers of an extensive network that allows them to use their card wherever and whenever they need it. We do have the major accounts from Metro Bank, Banco de Oro, SM Bank and huge nationwide corporations. Therefore when clients come in they force you to expand your network to areas you didn't expect to be operating in. The greater the number of accounts in the countryside the more the network has to grow because you have to provide for them. The essence of our success is not because we responded critically at the required moment but the fact that we maintained these accounts over the duration. You have to not only be the best in terms of network providers but also provide the best service so that people stay with you. Therefore there is always a net addition in terms of new sales every year and overall growth. This is where we came in very strong for 15 years we had something like 30% compound growth annually. This cannot happen without the retention of business, which was the key to our success. We had around 90% retention of business.

In order to retain business it is important to provide quality of services, a professional service and international standards for the services. What is your future plan in terms of internationalizing the company?

We have no plans for this right now because what we have in the Philippines alone is the challenge of doubling our existing membership base. If we can get this up to 8 to 9 million this would already be an incredible growth internally. The only international component would be marketing such that we have millions of OFW's worldwide to make sure that families are covered. We are still Philippines based but expanding to the OFW's.

What are you doing in order to reach out to the OFW's?

We are working with different institutions. These are marketing outlets, but they can get to us through the Internet. What we would like is for them to be able to access all our information with no small print. This is why we have kept retention very high, as we would rather give 110%. We can have in effect a 'menu' and they can choose the type of cover they like. It used to be a lot of letters back and forth for head office, but now we have regional centers so they can issue cards and reimburse on the spot as if they were the head office. We are all connected so we can get real time utilization reports for everybody, wherever they are. This is the important thing about transparency because in our business people can say why are you increasing the rate and we can provide qualitative reasons. They can audit the company at any time to see how the money has been spent and allocated.

You have a dynamic workforce of around 1000 employees. Please can you tell us about the education and training of your workforce?

Around 600 of our employees are permanent and 400 temporary and soon to become permanent. Most of our workforce consists of graduates from either Medical Schools or Nursing Colleges; most of them are from Medical backgrounds. It is clearly ideal that they understand medical terms. A few years back there was huge demand for Nurses abroad that there were graduates from all over the country. Any time there is a company that needs nurses we have access to them with our nationwide network. The only training that they get is training to improve their service capabilities; they often have to deal with panicking clients and this is high-pressured work. They must handle cases with patience.

As the President of Intellicare what are your top priorities at the moment?

The number one priority of the association is to get an HMO bill passed. We are now working with congressman and senators to try and get some form of bill. This is critical for me because the number of members will increase dramatically and I want to make sure that all the companies operating in this field are of integrity, there for the long run and have a capital base that can withstand loss. I also want to make sure they get the incentives that they deserve because right now there is a huge debate as to whether premium payments are completely taxable or whether it will be net of all the medical expenses that are taxable. I want to ensure we can protect the membership base so we can increase the number of people getting healthcare rather than reducing it. We also want to expand the capability of working with Phil Heath in terms of the Medicare components and what is the private sector component when we provide healthcare to our members. Our members are mostly workers and they get reductions from Phil Health. Phil Health for example will be able to cover 20% of an operation; the rest will have to be covered by the HMO. They package all of it together with low premiums. So we are working with the government and if they can increase their component share we can lower the cost to our members. Right now it is very little even for those who could afford it.

Would you like to see more cooperation between the Philippines and the United States?

I would always love to see some cooperation with the U.S. because even if we could get some second hand equipment from them it would be great for the provincial areas; a tremendous help.

Where do you see Intellicare in the next five years?

We think Intellicare already has about 20% of the market share and we are of the opinion that any growth and long term sustainability has to be the basis of true competition. If you have a larger share of the market it is easy to become inefficient and complacent, less innovative. I would rather say that we will grow our market share a bit maybe up to 30% and we are happy to make our competition strong. The challenge is how to expand the market. Most HMO's that exist today have been operating and competing in the metropolis areas. What we have done is open regional centers nationwide and regardless of how small accounts are we are increasing our population base. It is about coming up with innovative products to make them affordable as opposed to trying to get rid of competition.

What is your final message to the readers?

Filipinos abroad love to talk about home and the true sense of care they have for their families. Sometimes they spend their money on sending their family back home new cell phones or appliances when at the end of the day they need to focus on the basics that their family needs here. To me this is healthcare and providing your family with a sense of security and wherever there may be somebody looking after their family. This is a question of affordability, one month's premium in the U.S. costs around the same as an annual premium here. This is how much it is to cover their families here. Sometimes it is a lack of perspective and awareness for what is important in life.

Thank you very much.