Ctk41 HealthLink Business Plan

Submitted By: Jose Marti Alunan

Miguel Aurelio Mariel Flores

Gabriel Garcia Pamela See

Charlene Tiu February 15, 20010

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I .Industry Overview

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A. General Description of the Industry

The health care industry, which includes the delivery of various health services ---

diagnosis, treatment of diseases, and maintenance of health, by health care providers or

professionals, is one of the stable services in the Philippines. In fact, the total health

expenditure has growth rates of at least 4.7%1 in 2003-2005 and at the same time the health

expenditure has a stable share of 3.1% in the gross national product (GNP) from 2003-20052

.

The health care service is deemed as a necessity by the government for the good of the people.

The health care industry has a wide scope of sub-industries from the production of over

the counter drugs and equipments to selling health insurances. The health care sub-industry

that HealthLink would enter would be the health care service of clinics and hospitals

specializing in the most prominent needs of the community where it is situated. A survey will be

conducted per area of expansion to prepare a focus to the services that unit of HealthLink

would provide, for example, San Jose, Rodriguez, Rizal branch would focus on pulmonary

conditions. Barangay San Jose has a 2009 expected population of 93,567 people with a national

rate of 0.5%3

of the total population having pulmonary diseases.

The common practice of providing health care in the Philippines is usually done through

physical or face-to-face consultations, wherein the health care provider or physician diagnoses

the patient’s symptoms and applies his/her medical knowledge to appropriately address the

condition. This system works well if the healthcare provider or physician is knowledgeable and 1 2008 Philippine Statistical Yearbook. Manila. National Statistical Coordination Board, page 9-31 2 ibid 3 Department of Health, 2007 Annual Report

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has sufficient experience with regards to the medical field. For urban dwellers who live in

Metro Manila, there would not be much of a problem as there are a handful of private (127)

and government (42) hospitals to choose from, totaling to a 1694 hospitals in the capital city.

But from a national perspective, with a total population of 97,976,6035

in 2009, the medical

service is spread thinly and social class starts to divide especially in provinces and less

industrialized places.

With a recorded 26,116 public health practitioners in 20066, the demand for this service

exceeds the capacity currently provided. 69% of public and private hospitals in the Philippines

only provide minor or routine check-ups and do not fully maximize their resources7

. Screening

is supposed to be done by Rural Health Units but the people are dissatisfied with their services

according to surveys and market researches. To address this particular need, health service

providers are looking for better ways and alternatives to serve more people efficiently; such

solutions involves the usage of telecommunications technologies like, emailing, text messaging

(SMS and MMS) and video conferencing. The trend of injecting technology into time-tested

practices has better chances to make the diagnosis process faster while reducing human error.

One of the emerging trends that corporations and other entrepreneurs are currently

looking into is telehealth, otherwise known as telemedicine. Telemedicine is defined as “the use

of medical information exchange from one site to another via electronic communications for 4 2008 Philippine Statistical Yearbook. Manila. National Statistical Coordination Board, page 9-27 5 "Philippines Demographics Profile 2009." Index Mundi - Country Facts. N.p., n.d. Web. 13 Dec. 2009. <http://www.indexmundi.com/philippines/demographics_profile.html>. 6 2008 Philippine Statistical Yearbook. Manila. National Statistical Coordination Board, page 9-21 7 "Overview of the Philippine Health System 2007 Veterans." COMSTE - Philippines' Congressional Commission on Science and Technology and

Engineering. N.p., n.d. Web. 13 Dec. 2009. <http://www.comste.gov.ph/content.asp?code=277&desc=downloads>.

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the health and education of the patient or health care provider and for the purpose of

improving patient care.”8 Telemedicine has three general types of devices: data storage and

retrieval systems, diagnostic imaging systems, and therapeutic systems.9

Telemedicine includes

services --- consultative, diagnostic, and treatment of illnesses, that are within reach all at the

same place. Access to health care services through telemedicine will enable patients to have

more access for their medical needs. It is specifically targeted to patients who live in the rural or

remote areas, where hospitals or local government clinics are situated in main towns or bayans

which are not fully accessible especially to those who live in the outskirts because of lack of

transportation.

Internationally, Telehealth is described as “the use of a digital network to monitor

and/or treat patients in a different physical location than the medical expert.”10Telemedicine in

the Philippines is already being practiced in some limited areas of the country through the

National Telehealth Centre since 2005 by a partnership between UP Manila and Philippine

Government Hospital (PGH). Its first operation were in the villages of Cagayan, Leyte, Capiz,

and Lanao Del Norte11

8 "Definition of Telemedicine." Med Terms. 26 06 2006. Web. 13 Dec 2009. <http://www.medterms.com/script/main/art.asp?articlekey=33620>.

. They have provided these remote villages an equipment (laptop) for

their health communications. The industry is projected to have a growth rate of 56% at a 5-year

annual compound targeting existing consumers such as patients with chronic pulmonary and

9 "COMSTE.gov.ph - Downloads." COMSTE - Philippines' Congressional Commission on Science and Technology and Engineering. N.p., n.d. Web. 13 Dec. 2009. <http://www.comste.gov.ph/content.asp?code=277&desc=downloads>. 10 MarketWatch: Global Round-up; Dec2008, Vol. 7 Issue 12, p227-228, 2p, Datamonitor, accessed through: Business Source Complete 11 "'Telemedicine' means doctor is always in - INQUIRER.net, Philippine News for Filipinos." News - INQUIRER.net. N.p., n.d. Web. 13 Dec. 2009. <http://newsinfo.inquirer.net/breakingnews/infotech/view/20081109-171195/Telemedicine-means-doctor-is-always-in>.

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heart diseases and to emerging markets such as long-distance patients seeking medical

attention through online.12

Datamonitor proclaims that despite the reluctance of most risk-averse professionals

who practice traditional medical diagnosis through physical conduction, telehealth seems

promising with the premise that that there is a more convenient information exhange between

doctor-to-doctor or to doctor-to-patients which allows for a rough assessment of the situation

before anything else. Telehealth covers a range of possible new services, products and sub-

industries to proliferate and eventually penetrate the market in the coming years, among which

is speech technology, thermal imaging, ultrasound and the like.

Another trend in the health services industry that Google and Microsoft are currently

experimenting on would be the Intel Health Guide Product. It is similar to telehealth in concept,

but uses specific technology and interface to its service such as health education content, video

conferencing, calendar and other reminder functions.13

HealthLink aims to provide medical screening for the most prominent illnesses in the

community by making use of technological advancements in detecting complications in the

human body. The concept revolves around speed, efficiency and the digitalization of records

which lesses the use of paper and easier way to transfer and store. By using the telehealth

concept, HealthLink clinic can reach more people too without them having to go through the

12 Ibid. 13 MarketWatch: Global Round-up; Dec2008, Vol. 7 Issue 12, p227-228, 2p, Datamonitor, accessed through: Business Source Complete

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hassles of commuting from one area to another. There would be treatment for the most

common illnesses in the community while all the other conditions that are not within the scope

of services provided by HealthLink would be referred to the most appropriate healthcare

institution, while all relevant data will be transferred electronically. HealthLink would be a

convenient first stop for anybody feeling discomfort and symptoms and are not sure of how to

go about treating it.

Because of the many prospects technology presents for health care, there is a need to

regulate it. There are multiple agencies given this task namely Bureau of Food and Drug, Bureau

of Health Facilities and Services, Bureau of Quarantine and especially for this project the Bureau

of Health Devices and Technology (BHTD). The BHTD is composed of physicists, engineers and

lawyers who regulate the use of thousands of devices for health care as they hold great risk to

human life if misused.14

They generally manage devices that fall into three categories which are

data storage and retrieval systems, diagnostic imaging systems and therapeutic systems.

For feasibility, this project is a modified version of the currently established UP Manila

National Telehealth Center (NTC). It was established in 1998 to improve health care delivery to

the general public through ideas and knowledge exchange utilizing information technology.15

14 "COMSTE.gov.ph - Downloads." COMSTE - Philippines' Congressional Commission on Science and Technology and Engineering. N.p., n.d. Web. 13 Dec. 2009. <http://www.comste.gov.ph/content.asp?code=277&desc=downloads>.

They have systems to handle electronic health records (CHITS), eLearning and eMedicine (also

known as telemedicine). They also make use of technological devices like the RxBOX for

15 "Welcome to the UP Manila - National Telehealth Center — UPM-NThC." Zope QuickStart. N.p., n.d. Web. 13 Dec. 2009. <http://plone.telehealth.ph:8081/NTHC

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medication, TRIAGE for coordination and EXPERT for poisons.16

HealthLink could address the

issues already faced by this organization and innovate on their efforts.

The concept of HealthLink is to be a more accessible alternative to hospital care and it

positions itself as the more convenient choice for initial diagnosis of symptoms and discomforts

for the lower income bracket through the incorporation of current technological innovations in

the field of medicine. . This position already implies that HealthLink would be competing against

hospitals, medical laboratories and other general clinics that offer basic services for their

number of patients. Conversely, HealthLink would also work with these said firms to improve

the flow of information among them thus improving the community further.

The health care industry has already been well established and it has existing

infrastructures that precede HealthLink. Some of the competitors faced by HealthLink,

specifically in San Jose, Rodriguez, Rizal are the following:

a) H Vill Hospital – a private-owned hospital that offers complete services for a high price

b) Kasiglahan Infirmary – public clinic that offers basic services and consultation for free,

consisting of 1 doctor and 13 nurses

c) Health Expert – a medical clinic that offers various laboratory tests such as clinical

microscopy, urinalysis, fecalysis, hepatitis, etc.

16 E-Health Initiatives, "COMSTE.gov.ph - Downloads." COMSTE - Philippines' Congressional Commission on Science and Technology and Engineering. N.p., n.d. Web. 13 Dec. 2009. <http://www.comste.gov.ph/content.asp?code=277&desc=downloads>.

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An indirect competitor of HealthLink would be self-medication of generic medicines,

where consumers can readily avail of in drugstores even without a doctor’s prescription.

Symptoms are sometimes seen as the sickness itself and the instantaneous response would be

to address these by taking medicines immediately in hopes of decreasing further complications

that would require expensive medical check-ups or operations later on. There is a possibility

that people would take advantage of these medicines, misusing them even they don’t need

them; which can further damage their health instead of getting better.17

There are also those

people who choose to ignore or deal with the symptoms until they can but this would just end

up complicating things more which would entail more expensive medical expenses later on.

HealthLink aims to establish itself in areas that are far from hospitals, up to the areas

where technology barely penetrates. HealthLink would be a prominent figure to the locals of a

community in feeling better and improve the technological awareness of the community. With

the use of databases, HealthLink will also be able to keep track of the status the community for

further initiatives to improve it.

In running the business, HealthLink will be using two desktop computers and one laptop

computer. The desktops will be used by the nurse and the medical technician. The laptop will

be used by the doctor. There will be computer-based hardware for x-ray imaging in order to do

in-depth diagnosis focusing in respiratory illnesses. The computers will have internet capability

via DSL or broadband, and be linked via modem/network. The software to be used will also be

17 "RxPinoy Medication Guide." RxPinoy: Find Doctors and Dentists in the Philippines. N.p., n.d. Web. 13 Dec. 2009. <http://www.rxpinoy.com/medguide/>.

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Dev C or Dev C ++, which is a program data analysis, and Java, for computer- user interface.

The effect of recent national calamities and inflation in prices would lead families to

have limited disposable income thus consumers would avoid luxurious goods and would rather

avail of goods and services that are only a necessity, including health.18

HealthLink would ride

on this trend where people with less financial resources can still afford medical service for a

fraction of the cost of a fully equipped hospital while keeping faster turnover for the

convenience of the patients who do not have time to have a checkup because of the need to

work and not miss a day's paycheck.

The Medical Act of 1959, section 10 “Acts constituting practice of medicine. A person

shall be considered as engaged in the practice of medicine (a) who shall, for compensation, fee,

salary or reward in any form, paid to him directly or through another, or even without the

same, physical examine any person, and diagnose, treat, operate or prescribe any remedy for

any human disease, injury, deformity, physical, mental or physical condition or any ailment, real

or imaginary, regardless of the nature of the remedy or treatment administered, prescribed or

recommended;…19

18 Euromonitor international, 2009

.”does not restrain the Telemedicine industry’s services in the Philippines

since our government supports the National Telehealth Center, allocating a budget amounting

to $2 billion for the development of this service. Although the government gives support, the

challenge that this industry faces is the conservative belief of the general public including

19 "REPUBLIC ACT No. 2382: THE MEDICAL ACT OF 1959." Law Phil. 06 20 1959. Web. 13 Dec 2009. <http://www.lawphil.net/statutes/repacts/ra1959/ra_2382_1959.html>

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doctors and other health practitioners that health advice should only be done in actuality or

physically.

The government passes bills like RA9502: Universally Accessible Cheaper and Quality

Medicines Act of 2008 which set the conditions for a more socially-oriented medical service.20

The government also supports retaining health specialists in the country so that they can serve

their own countrymen as well as provide more economical services and drugs for the masses,

as to avoid brain drain.21

B. The Business

Vision

We, at HealthLink, envision being the benchmark for social entrepreneurship and technological

appropriation in health care for poor communities nationwide.

Mission

We, at HealthLink, will enable patients to live life with ease, productivity and peace of mind

through our specialist clinics with laboratories in poor communities in the Philippines. Our use

of telemedicine technology will provide a more accurate, appropriate and affordable diagnosis.

We will generate profit while being driven by a customer-centric frame of mind. People will

come to us because we value the community, innovation and service excellence. We conduct

20"R.A. 9502." Philippine Laws and Jurisprudence Databank - The Lawphil Project. N.p., n.d. Web. 13 Dec. 2009. <http://www.lawphil.net/statutes/repacts/ra2008/ra_9502_2008.html> 21 Euromonitor international, 2009

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business with integrity for every patient we serve. We provide a working environment where

employees are passionate and continuously grow as professionals and persons.

HealthLink will be the first concrete eClinic in the Philippines. In a nutshell, an eClinic is a

regular clinic that has basic medical tools and services, but employs telemedicine equipment

which uses recent information technologies such as the internet or software technologies.

HealthLink will be a socially-oriented for-profit organization that provides health services to

people falling into the bottom part of the social pyramid through the use of integrated

telecommunications. Its first initiative is the E-Clinic which employs a more technological

approach compared to regular clinics.

HealthLink aims to promote a more active community participation In terms of

promoting and maintaining health and wellness of the members in the community. The clinic

will be centering its attention to the community and will make efforts to get closer to them.

Consequently, HealthLink will be able to gain more information and knowledge about the the

community and be able to addess their needs effectively and efficiently. It will also seek the

support of the government through tax exemptions and/or volunteer works. In exchange for

the local business tax exemption, HealthLink can offer the government, in return, its services

especially to indigent patients who do not have any capacity at all to pay for medical services.

Public health care establishments can refer these kinds of patinets to HealthLink who will be

able to provide them appropriate medical attention. In the case of government-owned

Kasiglahan Infirmary, which lacks the fund to improve on its facilities and medical equipments,

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patients are not able to be treated properly. Medical services should be one of the obligations

of the governemnt to its people but the government is currently doing an insufficient job with

it. The money which HealthLink can save up from the tax exemption can instead be

approportioned to servicing those who really can’t afford medical services. That way,

HealthLink is able to save money in order to save more lives.

HealthLink makes it financially possible for the D and E market in urban poor areas to

gain accessibility in consulting with specialist doctors and undergoing laboratory tests.

HealthLink will be using the latest telemedicine equipment for faster and more cost-efficient

acquisition of results, such as a low-cost plug-in X-ray device for laptops. It will also be using an

electronic patient database that can facilitate a more effective way of storing, reviewing and

sharing of relevant medical records.

The HealthLink e-clinic will obtain income from its end-users through nominal

consultation fees for walk-in patients or an insurance scheme for members. The insurance

scheme works by providing potential members the option of paying affordable fees through

monthly installments, or by paying 1 year worth of services in whole for the cardholder.

In return, members can get free and unlimited consultations, discounts and other

services that would generate customer loyalty and a steady influx of income every month.

Positioning will also be one of the company’s assets, as it taps areas that lack medical facilities.

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In essence, the business will target quantity and frequency of patient patronage, and will

steadily promote the insurance scheme to help sustain the affordability of its services.

More than medical technicalities, HealthLink sells quality life. It aims to bring families

closer to their aspirations by keeping them safe from life-threatening illnesses and maintaining

healthy bodies. By addressing the physical well-being of customers, the business is able to

provide productivity and peace of mind. Overall, HealthCheck’s E-Clinic service is an effort to

utilize telecommunications technology in the medical field such that it provides a solution to

one of the country’s main societal concerns – that is, health care for all.

C. The Product

The main product of HealthLink’s services will be the integrated software package for

telemedicine activation and shared access of database information via the internet. To illustrate

the feasibility of the product, the integrated package is similar to that of Adobe Suite. Adobe

Suite consists of many application programs such as PhotoShop, InDesign, Premiere and Flash,

which are integrated into a software package that the end-user can use in one installment. In

comparison to HealthLink, the company’s unique software package will include application

programs for the plug-in X-ray, as well as, an application for the web-based medical information

database. The strategic concept of having a software package allows expansion in terms of the

application programs that can be included into it. As an example, ultrasound, with its digital

imaging capabilities can be included in the package in the future. In the same way as Adobe

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Suite expanded with having DreamWeaver, Illustrator, Encore and Fireworks. This will allow

possible expansion of the business and tap new markets such as pregnant women.

HealthLink’s services will primarily consists of general consultations by a general

physician for basic illnesses, laboratory tests such as hematology, clinical microscopy, urinalysis,

fecalysis, hepatitis tests, blood chemistry [consist of white blood plate count and complete

blood chemistry], enzymes, electrolytes, thyroid tests, serology, tumor markers, hormones,

drug test, HIV, and limited bacteriology tests. However, HealthLink’s unique service separating

it from its competitors will be an X-ray device that can be plugged-in to any laptop. This will

allow for detection of respiratory problems, specifically, Tuberculosis, Pneumonia and

Bronchitis. It also has an integrated patient database to store in historical data and other

related information regarding check-ups.

Fig.1: Sample X-ray Image Fig.2: Sample Digital Imaging Fig.3: Mobile

To illustrate the requirements and feasibility of X-ray technology, the product can be

divided into three main components. First is the hardware, the output that scans the lungs of

the patient from the exterior. Second is the software that analyzes the data received from the

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hardware. The last is the monitor that displays the input of the software, allowing the end-users

to view the results. The product also uses digital imaging technology that eliminates radiation

present in regular X-rays, which is known to be harmful to humans22

, and instead uses

electrical impedance tomography which basically uses the flow of electric currents as a

measurement.

Science Daily, the resource of this product innovation, as well as, an interview with Ms.

Arsol Reyes of the Ateneo ECE department, proclaim that it is a feasible technological trend

that can replace regular, costly and bulky X-rays and can be marketed to depressed areas that

lack access to complicated health equipment and services and the space needed to house these

big machines.23

In addition, the patient database, which is included in the software suite that

the company will be developing, will mainly be used to record the pateient’s information such

as medical history, clinic transactions and lab results. The digital records will make it easier for

storing and sharing of files to authorized doctors. Overall, the product’s unique feature will be

its cost efficiency, because all the components are simplified and the output can be displayed

on the screen of the laptop. Below is detailed list of technological equipments needed to run

HealthLink’s services.

22 http://www.sciencedaily.com/releases/2008/04/080429204303.htm 23 Ibid.

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1. Hardware

1 computer This will hold the patients’ database and administrative files

and will be operated by the nurse in the receiving area. 2 laptops (Minimum specifications: Dual-Core 2.2 GHz processor, 120Gb Hard drive, 2 Gigabyte Ram and a good video card)

One laptop will be used by the doctor to input data from the patient in the consultation area. The other will be used by the medical technician for the actual X-ray and to input other medical data.

X-ray output The hardware that will scan the lungs of the patient. Modem This will allow Internet connectivity. Router This will allow a Local Area Network within the clinic. Broadband Connectivity (a minimum of 2 MB per second)

This is to ensure fast and smooth communication via Internet.

Printer This will be used to print any important documents. Telefax This will be used to fax important medical documents. Basic Laboratory Equipment Used for testing hematology, clinical microscopy, among

others. Table1: Hardware components

2. Software

Windows XP or Vista The basic computer operating system. Microsoft Office This will be used for administrative purposes. Dev C or Dev C++ Programming Software

This will create a program that will analyze the data from the X-ray output hardware.

Java Software Sun Microsystems The software program that will create the graphic user interface (GUI).

Web-based centralized database (WBCD)

This allows the nurse, the doctor and the medical technician to actively share medical information between each other. Such information will also be made available to the nearest hospital when a patient is referred. This will be somewhat like Google Docs.

Table 2: Software Components

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3. Product Design The product design of HealthLink is presented through the house of quality. It shows the relationship of the customer needs and the value that HealthLink offers. It also shows how competitors address the demands of the market. See appendix A for the house of quality diagram. 4. Service Blueprint

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Fig. 4: Service Blueprint

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D. Entry and Growth Strategy

HealthLink clinic initially intends to launch its services in Barangay San Jose in Rodriguez,

Rizal because there is a foreseen need for a better health facility and service in the area. The

first half of the year upon launch will be spent to actively market the clinic within the area.

Health services will primarily focus on pre-screening respiratory problems such as pneumonia,

bronchitis and tuberculosis since these are among the most prevalent diseases in the area. The

clinic will also be having a medical laboratory. HealthLink will also carry a portable x-ray imaging

device that will be connected to a laptop that will serve as the monitor and wherein the

necessary softwares will be installed. The problem is that no x-ray equipment is available in the

clinics because of lack of space so HealthLink will be acquiring a portable one. The other half of

the year will be spent concentrating on observing the current system and planning ways on

how to make the operation and logistic process more efficient if necessary.

For the second year, HealthLink will carryout the same operations as it did on the first

year with the primary goal of improving the delivery of its services and recovering its initial

investment. It will just continue improving its existing portfolio of services, build up on its brand

image through promotional means and gaining more number of clients.

In the third year of operation, HealthLink will be expanding its clinic in Barangay San

Juan, Taytay, Rizal, another heavily populated barangay with a rough estimation of 88,000 and

has the same health conditions as Barangay San Jose. Expansion to the said area is also seen to

be appropriate for it would be convenient for the company to have its first expansion also

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within Rizal in Region IVa. HealthLink will also start compiling information from the database as

a medical research for Rizal province because HealthLink will be having future plans of initiating

studies regarding the medical industry regionally in order to help contribute statistics and some

relevant health information that might be of great help for the Philippine’s medical industry.

HealthLink will also be putting up its headquarter office in Visayas Avenue, Tandang Sora in

Quezon City.

Currently, the Philippines health program is largely in need of further improvement. This

Currently, the Philippines health program is largely in need of further improvement. This

creates an opportunity for HealthLink to support and promote health consciousness and

implement basic health practices to communities that have only limited access to health

services. Moreover, what makes the clinic specifically different is that it will employ the use of

telemedicine equipments as a way to provide the necessary medical services that are

appropriate to the local setting. Space will not be a problem anymore because of the portability

of these equipments that are not only cheaper but also promises the same quality results.

These days, corporate social responsibility has also been gaining much recognition and

support from companies as they integrate it into their business practices. A lot of these

institutions are becoming active in participating in social services as they begin to become

aware in the importance of taking responsibility to help others and giving back to society. There

have been many foundations that aims to help the marginalized through the many projects

they offer, which are being carried out by a lot of sponsors and volunteers. In line with this, the

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HealthLink clinic will be implemented to serve its part in providing health services especially to

those who have limited access to it.

E-clinic’s strategic integration of telecommunications to its basic and specialized

medical services into a sustainable business model presents itself as a formidable option for

those that are financially challenged. This provides the marginalized a chance to access higher

quality health services that is equally affordable and convenient for them, reducing errors in

personal treatment or even malpractice of some questionable doctors. With the extensive

knowledge of the E-clinic’s medical specialists and nurses, the risk of putting health in jeopardy

is minimized and at the same time, it is able to provide more security and assurance to the

lower class who often resort to cheaper alternatives regardless of the quality of the service they

pay for.

E-clinic; therefore, seeks itself to be the frontier in delivering affordable and quality

health services to the marginalized in response to social inequality and malpractice. Armed with

reliable medical facilities, the possibilities of telemedicine, and strategic identification of the

need of the market, E-clinic is expected to reach new heights in the health care industry

employing opportunities for active community participation, corporate social responsibility,

utilization of the country’s surplus of nurses, medical and educational practice, and most

importantly, equal access of health services for everyone.

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II. Market Research

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A. Industry SWOT

STRENGHTS WEAKNESS

• Offering the service at a low price will make it easier for the community to accept the service.

• The technology that is applied gives HealthLink an image of superiority over other firms that rely less on technology.

• The small structure would make it easier to monitor the employees.

• The specialization will garner loyalty from people wiho are suffering from respiratory illnesses

• The technology used for one test could apply to confirm the existence or absence of a complication for an entirely different disease.

• Serving on a quantity basis might

slow down the operations if not managed well.

• Reliance on technology might make the firm useless if electricity is cut or if the server encounters a problem.

• The low revenue margin might backfire if volume is too low.

• HealthLink can only refer the patients that have a condition out of scope.

• Maintenance of the equipment becomes difficult if it is going to be used repeatedly for the quantity of patient.

OPPOTUNITIES THREATS

• Scientists, doctors and engineers are putting much effort into revolutionizing the medical industry not only through researches and experiments but also in the technological aspect.

• One of the trends that are changing the way of doctor and patient interaction is telemedicine and medical imaging. Also portability in using the technologies.

• The private sector, despite being seen as catering mostly to the upper market, is actually playing a major role than the public sector in financing and provisioning for health care.

• The poor are brand-conscious,

• Most patients prefer to visit

doctors or establishments that they have already tried and are satisfied with already.

• Poor transport and communication system limits the people's accessibility and utilization of resources. Most of the existing health services in provincial areas have outdated or insufficient basic medical equipments.

• People do not have enough money to pay the required medical fees so they resolve to medicate themselves with generic drugs or they wait to the best they can to tolerate whatever discomfort they are

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receptive of technology, and extremely value-conscious by necessity. Just like anyone else, these people have big dreams for a new and different quality life and they expect to get more value out of the prices that they could afford to pay.

feeling.

Table3: SWOT Analysis

B. Market Size and Trends

HealthLink would situate in the Rizal province of region IV-A (CALABARZON), specifically

in the municipality of Rodriguez (formerly Montalban). For the start-up of HealthLink, the

location of interest would have an estimate population of around 1,650,07524 according to the

DOH; specifically the barangay of San Jose which had a 93,567 recorded population as of Aug 1,

2007 according to the NSCB.25

Inflating the population by its 2007 recorded growth rate of

9.58%, the likely population of San Jose would now be around 112,353. This is prime location

for the services offered by HealthLink as it has the highest population of the 11 barangays of

Rizal taking 64.46% of the total population of Rizal which would work well with the business

model of HealthLink that would rely heavily on quantity of patients.

San Jose is also considered urbanized which would make it easier to penetrate the

community with technology-based products and equipment. From observation, there is a good

presence of the local government units in that area because of the multiple public facilities

available, some of which are public clinics/infirmaries. According to the survey conducted by

24 Department of Health, 2007 Annual Report 25 http://www.nscb.gov.ph/activestats/psgc/municipality.asp?muncode=045808000&regcode=04&provcode=58

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the group however, the services offered by the public clinics are lacking; an opportunity to

provide better services arises as the people voice discontentment. Despite being an urban

location, more than half of the total barangay population belongs to the poor, specifically

people relocated of this area who live in areas of the housing projects.

2007 Rizal population 1,650,075

2007 San Jose population 93,567

2007 growth rate 9.58%

2009 estimated population 112,353

Table 4: Summary of San Jose, Rodriguez Population Statistics

HealthLink would cater to the specific need of the community that it serves. For the

general area of CALABARZON, DOH has surveyed that the following are the most common

diseases:

Table 5: Region IV-A Top Diseases

Page | 27

This table helps generalize the region, but as HealthLink would focus more in the

general San Jose area with special attention to the needs of the more rural areas, a survey was

conducted to pin-point the most common local diseases. This survey revealed that even though

diarrhea was present, it was not considered as a significant enough threat in this particular

community. They mentioned that pulmonary diseases are the most prominent, with

Tuberculosis as the biggest problem. In addition to this, the “pain rating scale” portion of the

survey revealed that the people are very much wary of colds, clogged noses and dizziness; they

are more likely to consult early if they are experiencing these symptoms.

With this information, HealthLink will have a market segment for people who would be

bothered by these relevant symptoms and would find the need to consult for proper health

care. If in the event that a pulmonary disease is present in the patients, HealthLink would also

serve as a station for further care to help prevent complications that would come from late

treatment.

One major factor to be considered for the success of HealthLink in the community

would be the competition. Based on the surveys, many people are very enduring yes willing to

spend for health. Few of the respondents do see symptoms as disease and thus not worth

consulting for. In the event the treatment would not be free the people tend to endure up to

the point of tears in the pain rating scale; but surprisingly enough even with low margins, they

are willing to spend a significant amount for their health. The poorest people (decile 1) are still

willing to spend about 5% of their limited budget for their health while the richest (decile 10)

Page | 28

spend only about 2.4% of their income.26

With this burden of spending, people trying to save

find a reliable health care provider and stay loyal because it would be too financially

problematic to go to multiple places. HealthLink can make use of this through proper marketing

of reliability and being a more economic choice than the old system of one time spending when

the condition becomes unbearable already.

Another factor that will greatly affect the performance of HealthLink in the community

would be the quality of service. Many of the people there are conditioned to accept the public

clinic provided for them for it is free and accessible, but they are very much dissatisfied with the

quality of service provided to them. There are issues of unreasonable queuing, limited

resources and expertise and even relevance of the recommendation which often leads the

people to other firms, thus delaying the process. HealthLink could make use of these

weaknesses of the competitor and make it an opportunity to be realized. HealthLink would

serve the same purpose of being near the community as the people are willing to walk for even

30min if for medical reasons. HealthLink could reduce queuing by having faster turnovers

because of efficient equipment, a more complete set of diagnostic equipment at a cost that is

very much within reason.

With all the refinement of operations that caters to the needs of the community, it is

reasonable to expect very low following during HealthLink’s first year because it offers roughly

the same service that public clinics somewhat offer for free. The growth would rely on

26 Philippine Income and Expenditure

Page | 29

consumer trust in the brand, because it would surely benefit the people to spend small for a

diagnosis to avoid going to a large hospital that would charge much more. Starting from a

humble market entry in its first semester of at least 3% of the whole population, which is the

totality of the population known to have pulmonary complications for the first year; HealthLink

would care for the market that prioritizes pulmonary conditions. Rate of increase in market

share peaks at the second semester due to the maximization of promotional efforts, resulting

to a 5% market share at year end of entry. The rate of increase is then expected to slowly

flatten although growth in market share will still be consistent, reaffirming the need to expand

to another location by year three. The tables below reflect these trends.

Fig.5: Market Share Increase

Page | 30

Table6: Summary of market needs and trends

C. Target Market

1. Geographic

HealthLink would serve as a low-margin, high-turnover firm that would rely more on the

quantity of people served rather than the revenue generated from individual patients. A prime

location where this service would fit well would be a high density area with several urban poor;

the group sees the Rizal province of Region IV-A to fit this profile. The routes in this area make

it somewhat hard to reach which raises their requirements for services like health care. The

nearness to Payatas dumpsite also makes the environment ripe for diseases further increasing

the need for local health care services to be available and affordable.

Needs Segment HealthLink Trends -Pulmonary health care -Diagnosis of symptoms -Affordability -Fast queuing -Reliability of diagnosis -Close to community

-People looking to consult a medical expert for their symptoms and detect any serious diseases early, for an affordable price.

-Makes use of advanced technology to be more efficient in diagnosing and providing pulmonary health care while keeping prices affordable; helping prevent the development of serious complications.

-Use of technology -Cost reduction -Shorter waiting and processing times -Early detection -Digital transfer of data -Self-medication -Having multiple children

Page | 31

2. Demographic

There is no age requirement for acquiring medical services, but HealthLink would focus

its marketing efforts toward attracting adults who are of the right age to have a family and/or

have stable work. The main reason behind this is that they are expected to be the ones

handling the household’s budget and would be the one to allocate funds to be used for health

care.

The socioeconomic market segmentation that HealthLink would implement would be

prioritization of the D and E income bracket. The service that HealthLink would provide would

be costed with a low profit margin so as to accommodate the tight budget of the urban poor. It

is unlikely that the C and above market would see much value in the service because it is more

likely that they have their own family-trusted doctors to go to when complications arise.

3. Psychographics

The market segment of HealthLink appeals to the thrifty people that want to live a safe

lifestyle. Because the primary service of HealthLink is early detection, it is along the lines of

prevention. A person might think that going to HealthLink would be a better first stop because

it is well equipped and would not cost so much, as compared to waiting for a disease to subside

which could make it worsen and later cost more to cure.

As a technology-driven firm, HealthLink will appeal to people who greatly value the use

of technology (as the area is somewhat already urbanized). A person who is likely to avail of the

Page | 32

service of HealthLink would be someone open enough the experience of advanced technology

and willing to accept the functionality of technology in the community.

4. Behavioural

HealthLink would appeal to people who desire a cheaper alternative to having a doctor’s

consultation in a hospital or private clinic, which is heavy on the budget. They might also be

looking for the highest value that their scarce money would get them. Once we establish a good

connection with this aspect of the market segment we could gain brand loyalty which would

greatly benefit the future growth of HealthLink.

5. Sample Consumer Profile:

a. Aling Bebang

Aling Bebang is a fulltime housewife of 29 years old

with 4 children. Her husband is a full-time parking

attendant who brings home P7,000 a month. She is a

mother who loves spending time with her neighbor and

kids. She tries to save as much money as possible only

spending for the necessities.

She has experienced enough to know what over-the-counter drugs she would need

for basic symptoms and she tries to minimize her visits to the public infirmary because

Fig.6: Aling Bebang

Page | 33

the line queue would take up too much of her time.She usually either ignores symptoms

or self-medicates depending on the degree of intensity the symptom is. She would

usually avoid seeking help until the point of tears, and even when she reaches her limit,

she would only go to the free public clinic to save money.

Aling Bebang would like to go to good clinics to have consultations, treatment and

diagnosis for her family and herself but does not have money for it as its consultation

and treatment with good clinics are expensive.

She is wary for her children. With a fear of pneumonia for her children, she gets her

children checked out at the local pulmonary-specialized clinic that could also diagnose

her child for many other possible sicknesses. After the first experience of the efficient

service of HealthLink, she might decide to visit again every time symptoms present

themselves. She doesn’t even have to have pulmonary conditions in mind before

consulting because if her child is diagnosed with a different disease she can be referred

to a different firm with the proper skills to handle them.

b. Mang Edgar

Mang Edgar is a 35 year old man. He is a Jeep driver

and a part time steel wielder who repairs Jeeps during his

free time. He earns roughly around P12000 per month.

He has a wife, and 2 kids aged 5 and 7. Edgar likes to

drink with his neighborhood friends and taking his family

Fig.7: Mang Edgar

Page | 34

around town.

Mang Edgar’s first concern is the health of his family. As the head of the family, he

works hard in order to be able to provide food for his family and pay for the needs of

the family such as water and electricity and education for his children.He tries to keep

his family happy and safe by providing their needs. He tries to keep his family healthy as

to avoid unnecessary expensive expenditures. Whenever his family feels ill, he buys the

necessary generic medicines in order to help them get better. He avoids bringing his

family to the hospital as it would be expensive, and very inconvenient for them to go to.

He does not like the clinics in his town because more often than not the clinics are dirty

inefficient and rarely have doctors available.

c. Ate Jenifer

Ate Jenifer is a mother of one at a young age of 18. She

lives with her parents and sells fried chicken in order to help

earn money. She earns roughly around P3500 a month. Her

child is 1 year old. Ate Jenifer being so young was only able to

finish 2nd year of high school.

Living with her parents, she is able to ask them for financial aid whenever the need

arises, but she tries not to because she would like to be able to take care of herself as her

child on her own.

Fig.8: Ate Jenifer

Page | 35

She does not like going to the hospital and clinics as they are very inconvenient in terms

of location and expenses. Whenever ate Jenifer feels ill, she tries to sleep it all hoping that

the illness that she experiences will go away no matter. The only time she would go to a

clinic or a hospital is when the pain can be considered to be unbearable. Contrary to her

tolerance of illnesses, whenever her child feels ill, she instantly acts trying to find help. Ate

Jenifer does not mind spending for her child as long as he lives, and is healthy.

D. Competitors

With the given location of HealthLink in Barangay San Jose, Muntinlupa, the availability

of 3 health care centers posed as HealthLink’s immediate competitor--- a hospital, a barangay

clinic and a medical laboratory. Other competitors of HealthLink include self-medication and

household priority. Below is a detailed discussion of the competitors.

COMPETITOR PROFILE STRENGTHS WEAKNESSES H Vill Hospital (the quality and performance leader)

The H Ville hospital is conveniently located at the center of the barangay; it is a private hospital in barangay San Jose, where it is funded by “donation, principal investment, or other means by the individual, partner, or corporation”27. It is a general hospital wherein it is able to “provide all types of diseases, deformities, and illness.”28 The H Ville Hospital has a capacity of

-It offers a multitude of services that a regular hospital offers from internal medicine to pediatrics. -It is the biggest health center in the barangay thus most visible. -Most trusted by the people in the area. -They are open for

-The medical and consultation fees have an increase of 100%-300% depending on the pricing of the private doctor. -They usually have long waiting lines.

27 http://www.doh.gov.ph/files/ao2007-0041.pdf 28 http://www.doh.gov.ph/files/ao147-04.pdf

http://www.doh.gov.ph/files/ao2007-0041.pdf�


Page | 36

280 beds, of which 10% are for charity29 specifically allocated for indigent patients of social class C and D.

24 hours.

Kasiglahan Infirmary

The Kasiglahan Infirmary30 was established in 2003, located inside Kasiglahan Village, an urban poor community and a relocation site of former involuntary settlers in Metro Manila. It is a government infirmary where they offer diagnosis and primary care services---“complete blood count, white blood cell count, hemetocrit, differential count, qualitative platelet determination, urinalysis, fecalysis, and blood typing”31.

-It is an immediate cure health center. -They already have an immediate market to serve---the Kasiglahan village settlers, estimated to be about 230,00032 inhabitants.

-They have a bad image as they are perceived by the people as small and unsanitary place. -There is only one doctor33 and he is not always around so they usually refer patients to other nearby hospitals34; there are about 13 nurses35

-They usually have long lines.

as the front liners.

-Closed during weekends and is usually opened during Mondays only. -Based from further interviews in the area, the locals claim that the facilities and equipments are extremely lacking

29 http://www.doh.gov.ph/files/ao2007-0041.pdf 30 http://www.adb.org/Documents/Evaluation/Case-Studies/Involuntary-Resettlement-Safeguards-Policy/CS-PHI.pdf 31 http://www.doh.gov.ph/files/ao2007-0027.pdf 32 http://www.filipinowriter.com/kasiglahan-village-urban-poor-exposure 33 ibid 34 ibid 35 ibid


http://www.adb.org/Documents/Evaluation/Case-Studies/Involuntary-Resettlement-Safeguards-Policy/CS-PHI.pdf�

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http://www.filipinowriter.com/kasiglahan-village-urban-poor-exposure�

Page | 37

forcing them to go directly to the hospital. -One quote from the local, “Kahit na yung BP na madalas kailangan ay wala rin.”

Health Expert Medical Laboratory (the low cost quality leader)

Health Expert was established in 2008, it is located at the main street of Barangay San Jose, Montalban. It is a specialized medical lab clinic that is a privately owned establishment serving primary and secondary care---hematology, clinical microscopy, urinalysis, fecalysis, hepatitis tests, blood chemistry, enzymes, electrolytes, thyroid tests, serology, tumor markers, hormones, drug test, HIV, and limited bacteriology tests.

-The laboratory is perceived as reliable and clean by the people. -They are open during weekends.

-Patients ask for discount for the services they pay for (no fixed pricing).

Self Medication

The individual has the power to buy over the counter medicine at a generics pharmacy or drugstore. The individual is usually influenced by the following sources: television and radio commercials, referrals or advice from neighbors (word of mouth), and hearsays.

-Over the counter drugs are easily accessible. -Tried and tested technique. -It is cheaper because they do not need to pay any consultation fee to a doctor.

-Some drug commercials are misleading. -The medicines that they used may not always be appropriate. -Lack of knowledge in medicine may lead to misdiagnosis.

Page | 38

Household Priority

The individual has household expenses to allocate their household’s daily budget. The priorities of each household include food, payment for electricity and water bills, school expenses, health and medicine expenses, and other personal expenses.

-Households usually have cash on hand. -They are willing to pay for medical services when it is needed.

-Households have limited budget. -Based from area interviews, health expense is given the third priority from food and bills payment.

Table7: Competitors of HealthLink

E. Estimated Market Share and Sales

HealthLink will be offering both a diagnosing service and a medical laboratory for

general illnesses and will specialize in Pneumonia, Tuberculosis and other Bronchitis. The

medical laboratory will offer primary and secondary assistance which includes hematology,

clinical microscopy, urinalysis, fecalysis, hepatitis tests, blood chemistry [consist of white blood

plate count and complete blood chemistry), enzymes, electrolytes, thyroid tests, serology,

tumor markers, hormones, drug test, HIV, and limited bacteriology tests. Aside from these,

HealthLink will be focusing on low-cost medical plug-ins for laptops, specifically an X-ray plug-in

for the analysis of the specialized diseases.

HealthLink estimates that it will get a 5% market share in its first year of entry, 7% in the

second year, and a 7% market share in its third year for San Juan alone. The increasing market

shares of HealthLink is supported by the increasing trend of health expenditures in the country

Page | 39

in 2007. The expenditure shared of health is expected to boost as it is the fastest growing

category for consumer goods, with a “14.1% real growth per annum between 2002-2007”36

.

Fig. 937

: Real growth index showing performance of selected categories and the total 2001-2007

Also, HealthLink will capture the market that spends most of its household budget in

health goods and medical services as HealthLink is targeting the low income wage earners of

region 4a in the city of Rizal. The Table below show that “The lowest income earners (decile 1)

spends about 5% of their budgets on health goods and medical services, compared to 3.7%

spent by the middle income earners (decile 5), and 2.4% spent by the top income earners

(decile10)”38

36 www.euromonitor.com

. There is great potential with the low income earners because they are the ones

who lack basic health services and compose the majority of the population, hence penetrating a

need in the market.

37 ibid 38 ibid

Page | 40

Fig.1039

: Percentage of total consumer expenditure

HealthLink will be able to capture a big part of Brgy. San Jose’s market share in health

services because HealthLink offers a convenient, fast, and affordable pre-screening for the low

income wage earners who value affordability and fast pre-screening. This unique selling point

of HealthLink will answer the problem of long waiting lines in Kasiglahan infirmary and in H Ville

Hospital. Low income patients won’t need to go back and forth to clinic to hospital or medical

laboratory to hospitals for their medical examination results. HealthLink will be able to offer

them the convenience of just going to one place for their medical tests and pre-screening

diagnosis.

39 ibid

Page | 41

The revenue scheme that HealthLink will employ involves low margins but make up

for it with a high volume of patrons. HealthLink would do well with this kind setup because

ths would synchronize with its competitive advantage that creates fast turnovers. The

expected 5% budget alotted will be enough because according to interviews with cetain

empoverished families, that given the dire need that they would be willing to spend P50

exactly for the use of one medical equipment (usually sphygmomanometer or nebulizer);

though they seemed to be very incessant that the price would not go over P50.

Page | 42

III. Marketing Plan

Page | 43

A. Identified Marketing Opportunity Basic health care is a right each Filipino should have. Unfortunately, this right has turned

into a privilege that limited people have access to. Most urban poor areas in the Philippines do

not receive basic health care services. The minimum health infrastructure required of a

barangay, which is a health center, more often than not lacks equipment and skilled personnel.

In San Jose, Montalban, the ”Center” is said to opperate during weekdays. In reality however, it

is only open on Mondays because no doctor is present throughout the remaining days of the

week. In terms of facility, it does not even hold the basic apparatuses for vital statistics such as

bloodpressure. Other medical infrastructures would be the hospital where doctors are

overworked with the excessive number of patients.

On the part of the consumers, health issues are regularly present although these are

only addressed when pain is no longer tolerable. Such attitude is from the perception of health

care as limited to its currative aspect. They also associate it to cost. What the community fail to

value is the importance of early diagnosis to prevent further complications and, in turn, lesser

spending. If they are able to see clearer the direct correlation of health and productivity, with a

value-for-money service, perhaps they will be more willing to invest in the detection of life-

threatening diseases. The commonplace beliefs of the people is an issue that HealthLink

would also address by being a convenient source of medical information. The diagnostic

function of HealthLink is also augmented by educating the people through its bi-monthly

newsletter.

Page | 44

Establishing a clinic in such strategic areas will automatically provide monopoly for the

business. There is that unrealized volume and purchasing power of the D and E market in these

areas. According to C.K. Prahalad the dominant assumption that the poor is not a viable market

is faulty because they have the means to pay a premium for almost everything. Such premium

is coined as poverty penalty. He sites Dharavi, India as a shanty town that applies the said

penalty to everyday things such as rice and credit.40

This is undeniably a common practice in

the Philippines as well. For example, five-six is a familiar endeavor in poor communities. It has

become an informal financial institution that provides them instant gratification with the

consequence of high interest. If they are able to afford cellular phones and or television sets

through this, surely they can afford health-related services if they choose to avail of it. The

sheer volume of consumers will also help sustain the business as majority of the country’s

population face the same circumstances. Also, there is a consistent need for such services

because of the nature of their environment, where congestion and high population density

leads to the widespread of communicable diseases.

Overall, the huge gap in health care services manifests its consequences through the

unsatisfied needs of the market. This is not being addressed because the consumers don’t

realize this need and existing institutions overlook their capacity to be customers of this

business.

40 Prahalad, C.K. The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Pennsylvania:

Wharton School Publishing, 2006. Print.

Page | 45

B. Overall Marketing Objectives

For the first year, HealthLink plans to provide basic health services -- general

consultation and diagnosis as well as a medical laboratory for general illnesses -- for walk-in

patients or HealthLink insurance members. HealthLink will also be specializing on pre-screening

of respiratory problems, particularly, the detection of the following diseases -- Pneumonia,

Tuberculosis and Bronchitis using the technology of digital imaging in X-ray as plug-in for any

laptop. For its infancy stage, HealthLink will be putting up a concrete clinic in Montalban, Rizal,

as it was identified as one of the municipalities in the Philippines lacking in health services. As

mentioned, there are only three primary health infrastructures in the area – H Ville Hospital,

Kasiglahan Infirmary and Health Expert. Henceforth, this will be a good market to penetrate for

its first year. The initial year will also be an experimental ground for smoothing out all the

procedures and equiment to be utilized in the clinic, from which easier copy strategy can be

employed for succeeding franchises, similar to Gawad Kalinga’s expansion strategy. In terms of

promoting the service, HealthLink plans to aggressively reach out to its customers through

extensive below-the-line advertising strategies of the clinic to allow instant brand recognition

that will eventually translate to patronage and loyalty of HealthLink’s services.

For the succeeding year, HealthLink plans to penetrate new markets by expanding in

terms of services and other geographic locations. In terms of geography, HealthLink will

penetrate communities within Rizal, the first expansion specifically would be San Juan, Taytay

by year three. In terms of service expansion, HealthLink will be exploring other technologies

that will diagnose other threatening diseases such as cancer and cardio-vascular illnesses. One

Page | 46

example would be to use the same digital imaging technology, but with a different plug-in

hardware that would detect cancer or ultrasound for pregnant mothers. Another would be the

ECG technology, a recommendation given by Ma’am Arsol Reyes of the ECE department

wherein the device tracks down the heartbeat wave form of the patient’s pulses. This aids

doctors in determining if the patient is experiencing any heart complications that may lead to

severe diseases However, due to financial constraints, the said evolution in technology would

not be concretely adapted within the company’s three years.

.

C. Specific Marketing Objectives

As previously stated, HealthLink plans to gain 8% market share in San Jose and 5%

market share in San Juan by its third year. This can be done through aggressive sales and

promotions of the company’s unique services. Consequent to the target market share,

HealthLink plans to gain 2,281,538 pesos for the first year, and 7,712,311 pesos (for Sand Jose

and San Juan) for the third year in sales revenues.

Sales volume for membership subscription is based on the expected market shares

multiplied by the total population of San Jose and San Juan, which are 93,567 and 88,321

respectively. The results are estimated in relation to the performance of HealthLink’s two

nearest competitors, Kasiglahan Infirmary and Health Expert (a medical laboratory).

Currently on its third year, Kasiglahan Infirmary has an average of 11,680 patient base.

Health Expert, on its first year, has an average of 3,840. Also, research on health surveys

shows a total number of 2,671 cases of tuberculosis and 1,314 cases of pneumonia in San

Page | 47

Jose, all of which are target clients. Given the competitive edge of HealthLink while taking

into consideration having competition, the company’s projections are set to be in between

that of the two medical centers. Sales and profit projections are then primarily outcomes of

pricing and estimated costs. In order to realize the target sales, Health Link plans to employ an

integrated marketing communications (IMC) plan that aims to foster customer loyalty. In terms

of quantification we’ll be focusing on 5 IMC components – direct marketing, events, sales

promotions, below the line advertising and public relations, following a specified media

schedule for the next three years. Below is a summarized table of objectives for the next three

years.

Year 1 Year 2 Year 3 Expected Market Shares

5% 7% 8% 5%

Sales (volume for membership subscription)

4,678 6,484 7,668 4,416

Sales (projected revenue from walk-ins in Pesos)

P540,000 P540,000 P540,000 P507,600

Sales (projected total revenue in Pesos)

P2,821,538 P4,313,093 P5,051,092 P2,661,219

Profit Levels (based on projected revenues and cost of service)

P2,489,494 P 3,734,838 P4,346,038 P2,410,745

Distribution Coverage San Jose, Rodriguez

San Jose, Rodriguez

San Jose, Rodriguez

San Juan, Taytay

Table 8: Market Forecast

Page | 48

D. Overall Marketing Strategy (4 P’s)

1. The Product

More than medical technicalities, HealthLink sells quality life. It aims to bring families

closer to their aspirations by keeping them safe from life-threatening illnesses and maintaining

healthy bodies. By addressing the physical well-being of customers, the business consequently

is able to provide productivity and peace of mind.

HealthLink is an eClinic that employs telemedicine technology. It includes the basic

services of a regular clinic, which is essentially diagnosis. It will be focusing on potentially fatal

prevalent diseases within a community. For example, in its entry phase, the first eClinic will be

established in Brangay San Jose, Montalban, Rizal, where respiratory illnesses are common.

Emphasis will be given to pneumonia, tuberculosis and bronchitis, all of which are at the top 5

causes of mortality in Rizal. Telemedicine equipment, such as X-Ray plug-in for laptops, will

then be used for faster and more accurate diagnosis. HealthLink provides the convenience of

eliminating unnecessary travel to Manila for the patients, reducing cost, and physical and

emotional stress from their experience of medical attention. Also, HealthLink will be using a

centralized electronic database for a more efficient transfer of medical records when referrals

are necessary. Moreover, the business is very patient-centered. It aims to create partnerships

rather than transactions. Service will be delivered in an unintimidating and accommodating

way. It will introduce and maintain itself as a member of the community as shown in the

succeeding promotional strategies.

Page | 49

Aside from being the only clinic with telemedicine functions in the area, HealthLink will

extend its services to patients even after sales. Loyal customers will get, among other things, a

bimonthly health digest that aims to promote preventive health care and serves as a

promotional and feedback avenue for the company.

a. The Brand

HealthLink. “Konektado ka sa kalusugan.” The brandname and tagline aims to

encapsulate connectivity in the two ways that it is relevant to the company: 1)

bringing health care to communities and 2) providing it through technology. In

addition to that, connectivity is also evident in the company’s community

partnership approach in conducting business. As a company, it aims to exhibit

trustworthiness. It is customer-centric. Services aim to provide the greatest amount

of convenience while demanding personal responsibility and financial accountability

from the patients. This mix is structured such that a balance relationship between

the company and patients foster empowerment for all.

HealthLink is visually translated into a plain-text logo. Colors are green for the

word “Health” and the letter “I,” and grey for the remaining letters. The logo’s

simplicity and the boldness of the text makes it easier to identify in print materials. A

clean look is balanced with a bright colors and informal font face to evoke credibility

and professionalism while exuding amiability.

Page | 50

Fig.11: HealthLink logo

b. Positioning Statement To families with low income living in highly congested urban poor areas who are

on a tight budget and want to keep themselves safe from life-threatening diseases,

HealthLink is the brand of eClinic (diagnosis center propelled by technological

advancements) that enables them to identify significant actions that address their

health concern such that they gain peace of mind and live a productive life with

ease. The reasons are 1) tailor-fit of technology to the specific health needs of the

community 2) integration of clinical and laboratory services and 3) community

centric philosophy. The brand character is affordable, approachable and

appropriate.

2. Price

Services range from general consultation and diagnosis, medical lab tests and X-

rays, depending on what package the patient-member availed of. To achieve a

competitive price range, coupled with a strategic business model, Healthway researched

on the various prices and services of its competitors to gain insight on what should be

Page | 51

the right pricing of Healthway’s services. Below is a table detailing the different price

range for a particular service of a competitor.

H Ville Hospital Health Expert* HealthLink Consultation Fee 100-300Php

depending on the collection of the physician

100-300Php depending on the collection of the physician

100

X-ray 1,000Php average

- 500

Hematology Complete Blood Count 280 80 75 Platelet Count 250 50 47 HGB & HCT 270 70 67 Bleeding Time 250 50 47 Clotting Time 250 50 47 Reticulocyte Count 350 150 140 ESR 320 120 115 ABO & RH typing 280 80 75 PBS/Peripheral Blood smear

360

160

150

LE Preparation 450 250 235 Protime/PT 450 250 235 APIT/PIT 500 300 285 Clinical Microscopy Urinalysis 250 50 47 Fecalysis 250 50 47 Urobilinogen 280 80 75 Ketone/Acetone 280 80 75 Biles/Nitrates/Bilrubin 280 80 75 Sugar 280 80 75 Micro-Alburnin Test 600 400 380 Pregnancy Test 300 100 95 Occult Blood 350 150 140 Concentration Technique

290

90

85

Urine Test 450 250 235 Creatinime Total 550 350 235 Creatinine Clearance 400 200 190 Protein 450 250 235

Page | 52

Na/K/Cl (each) 450 250 235 Calcium/Magnesium (each)

450

250

235

Uric Acid 450 250 235 Amylase 450 250 235 Glucose 450 250 235 VMA 1,500 1,100 1,045 Hepatitis HbsAg (screening) 400 200 190 HbsAg w/ titer (ELISA) 500 300 285 Anti-HBS w/ titer 500 300 285 HbeAg 550 350 330 Anti-Hbe 550 350 330 Anti-HBc IgM 550 350 330 Anti-HBc IgG 550 350 330 Anti-HAV IgM 550 350 330 Anti-HAV IgG 550 350 330 Anti-HCV 850 650 620 Hepatitis Profile 2,000 1,500 1,425 Hepatitis A Profile 1,100 900 855 Hepatitis B Profile 2,000 1,500 1,425 Hepatitis A, B, C Profile

2,700 2,200 2,090

Wee Bag 115 15 14 2Hr Post Prandial Blood

400 200 190

Blood Chemistry FBS/RBS 300 100 95 OGCT 500 300 285 OGTT 750 550 520 BUN/CREATININE (each)

300 100 95

BUA 300 100 95 Cholesterol 300 100 95 Triglycerides 350 150 140 HDL/LDL (each) 350 150 140 Bilirubin (TB,DB,ID) 550 350 330 Total Protein 350 150 140 Albumin 350 150 140 TPAG 500 300 285 HBA1C 700 500 475 Enzymes

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SGPT/ALT 310 110 105 SGOT/AST 310 110 105 GGTP 700 500 475 Alkaline Phophatase 380 180 170 Acid Phosphatase 380 180 170 Amylase 450 250 235 Lipase 500 300 285 Total CPK 800 600 570 CPK - MB 800 600 570 CPK - MM 800 600 570 Troponin I/T (each) 1,000 800 760 LDH 600 400 380 Electrolytes Sodium 330 130 120 Potassium 330 130 120 Chloride 330 130 120 Magnesium 450 250 235 Inorganic Phosphorus 450 250 235 Total Iron 600 400 380 TIBC + TOTAL Iron 850 650 620 Calcium 450 250 235 Ionized Calcium 550 350 330 Thyroid Test T3/T4 (each) 450 250 235 TSH 600 400 380 FT3 650 450 430 FT4 650 450 430 FT1 650 450 430 Serology VDRL/RPR 350 150 140 TPHA Screening 600 400 380 TPHA w/ Titer 800 600 570 Widal Test 550 350 330 Typhidot 900 700 665 ASO Titer 550 350 330 CRP w/ titer 250 400 200 195 RA/RF Latex 550 350 285 C3/C4 (each) 900 700 665 ANA Screening 1,100 900 855 ANA w/ Titer 1,300 1,100 1,045 Dengue IgM & IgG 900 700 665 Leptospiral Test 1,000 800 760

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H.Pylori 1,100 900 855 Rubella IgM 1,000 800 760 Rubella IgG 1,000 800 760 CMV IgM & IgG 1,300 1,100 1,045 Toxoplasma IgM 1,300 1,100 1,045 Toxoplasma IgG 1,300 1,100 1,045 Bacteriology Gram Stain 400 200 195 AFB 550 350 330 KOH 500 300 285 India Ink 550 350 330 Blood C/S 700 500 475 Culture Sensitivity 650 450 430 Hormones FSH/LH 900 700 665 Prolactin 900 700 665 Estrogen / Estradiol 1,000 800 760 Progesterone 1,000 800 760 Testosterone 1,100 900 855 Cortisol 1,100 900 855 Ferritin 1,000 800 760 Tumor Markers AFP 1,200 1000 950 CEA 1,100 900 855 PSA 1,300 1,100 1,045 B-HCG 1,000 800 760 CA-125 1,700 1,500 1,425 CA-15-3 1,900 1,700 1,615 CA-19-9 2,200 2,000 1,900 CA-72-3 2,700 2,500 2,375 Drug Test MET / THC 500 300 285 HIV Test HIV Screening Test 700 500 475 HIV w/ Titer (ELISA) 1,000 800 760 Others Stone Analysis 600 400 380 PAP Smear 280 80 75

*average prices, can be negotiable **HealthLink rates are those applicable to walk-in patients. Discounts will be granted to card holders.

Table9: Price list

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Apart from this data, HealthLink surveyed a sample of the target population to know

their price ceilings for specific health services. According to the data, the price ceiling or the

limit to which the customers will pay for the service is around 350 pesos for one consultation.

The ideal for them would be around 100 to 120 pesos. To ensure; however, that there will be

constant influx of income, we will be promoting HealthLink’s services in an insurance scheme

through a monthly or one-time payment that is affordable to them at a certain period of time.

The basic benefits would be either free consultations or discounts on services in case they need

to consult a doctor at a specific time.

Apart from that, HealthLink researched other clinics that also offer other insurance

services, one of which is Friendlycare. Friendlycare offers different package insurance cards

with a price range of 980pesos (minimal services), 1,600pesos (health plus, inclusive of more

discounts and service options), 1,400 pesos (baby) and 1,200 pesos (kids), all for one year

service. Given this marketing information, HealthLink will be strategically pricing its services in a

summarized table below.

Package Price (1 Year) Benefits

Walk-in Consultation 80Php / consultation See lab tests and X-Ray prices on the price-comparison list

- Depends on the service availed of

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Classic Membership 500Php (1 instalment for 1 year) 90Php (6-month instalment) 50Php (12-month instalment)

- 1 year’s worth of health services - Free unlimited consultations - 15% discount on all laboratory tests - 20% discount on all X-Ray tests

Premium Insurance 999Php ( 1 instalment for 1 year) 180Php (6-month instalment) 100Php (12-month instalment)

- 1 year’s worth of health services - Free unlimited consultations - Free health digest, bimpo and first aid kit - 25% discount on all laboratory tests - 40% discount on all X-Ray tests

Family Insurance 1999Php ( 1 instalment for 1 year) 350Php (6-month instalment) 180Php (12-month instalment)

- 1 year’s worth of health services for 5 members - Free unlimited consultations - Free health digest, 5 bimpos and first aid kit - 35% discount on all laboratory tests - 50% discount on all X-Ray tests

* Condition for membership- 2 months initial payment

Table10: HealthLink packages/List of services

Fig.12: Back View of membership card

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3. Place

The chosen location is Barangay San Jose in Rodriguez, Rizal. According to the

National Epidemiology Center of the Department of Health, Rizal is the largest and most

populous of the barangays with a total population of 1,650,075 people as of year 2007. It is

the first barangay of Montalban coming from Quezon City. The Montalban Public Market

and the Town Center is located within the area. It is also a location of several relocation

sites of informal settlers from Manila and other places.

With only very few health facilities in the area such as Hvill Hospital, Kasiglahan

Infirmary and Health Expert Medical Laboratory, people have to go all the way to Manila

such as Quezon City or Tondo to visit their own doctors. Although they have the local

infirmary, they opt to visit other health facilities even if they have to travel more distance

since they are completely unsatisfied with the services and treatments available in the local

infirmary. Diagnostic centers also exist but with limited medical equipments. Most do not

have x-ray and ultrasound machines which are being sought for by patients. The nearby

Hville hospital is often visited especially for major concerns but the people criticize it for

being expensive and having long patient lines. Because of these limitations within the area's

existing health facilities, the people end up ignoring symptoms of illnesses and do self-

medications instead.

For the expansion stage on the third year, HealthLink will locate its second branch in

San Juan, Taytay Rizal, as it is the second to San Jose in terms of population with 88,321

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residents as of year 2007. The same deseases are prevalent in the area, making the

replication of the HealthLink clinic more relevant and viable. Also, having the two clinics in

Rizal will make operations smoother.

4. Promotions

HealthLink will be using five marketing communication channels in promoting its

services. These are advertising, events, sales promotions and point of purchase

communications, direct marketing and public relations. The main objectives of the

formulated marketing mix are to spread product knowledge, encourage patronage, and

establish and maintain brand loyalty. Integrated into these objectives is promoting proper

health education to the community to promote the preventive rather than the curative

aspect of medicine. To achieve these, integration to the community is vital. The company

must create and sustain an open line of communication. HealthLink will be available and

open to receive feedback from the people so that its future services may be refined. This

will also allow it to maintain a good line of visibility such that consumers and potential

partners may be updated with its development.

a. Advertising

The main role of this channel is to provide HealthLink with the visibility it needs

for the public to know of its existence and eventually be aware of its services. The

medium to be used will be limited to print, with primary focus on tarpaulins, posters,

flyers and stickers – most of which are small enough to be distributed. Other media will

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not be used because the exposure needed by the company is only within the barangay.

Broadcasting advertisements is unecessary and will not be cost-efficient. To widen the

visibility reach of the materials, quantity will be favored over size.

Tarpaulins will be erected on the site of the clinic even before it operates to stir

interest from passersby. Posters will be placed in central areas such as hospitals, the

barangay hall etc., while flyers will be posted in public transportation such as tricycles

and jeepneys. Stickers will then be distributed to individuals or potential customers

instead of the fliers. This material guarantees greater longevity than the latter because

people, especially children, are less likely to throw them immediately. Instead, stickers

may be used as decorative accessories to personal belongings. In such cases, those

belongings serve as some sort of moving advertisement. The limitation of this material

would be the size. Hence, its function would primarily be brand name recognition and

retention. More detailed information may be seen in the fliers and posters. Distribution

will start even before the construction of the clinic. The timeline for each material is

indicated below.

Duration **

14 weeks before

12 weeks before

10 weeks before

8 weeks before

6 weeks before

4 weeks before

2 weeks before

Week of the opening

Other events

Foundation of the infrastructure

Construction of the infrastructure

Launch of the clinic

Material to be released

2 tarpaulines

300 stickers 50 posters

30 posters 100 fliers

70 fliers

700 stickers

300 stickers

**in relation to the opening Table11: Advertising TImeline

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Fig.13: Sticker Fig.14: Poster 1 Fig.15: Poster 2

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Fig.16: Flyer 1 Fig.17: Flyer 2

b. Events

Marketing through this channel will enable HealthLink to arouse interest in the

public. It will reach audiences in a more personal way compared to advertising. This will

also create hype about the product and serve as the business’ initial interaction with the

community – an opportunity to introduce the business to potential stakeholders. There

are two main events that will mark the establishment of HealthLink: the build and the

launch.

The build, Bayanihan Para sa Kalusugan, is an effort to make the remodeling of

the clinic a community activity. It is symbolic of bayanihan and will promote a sense of

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ownership on the part of the public. Participants will get a free membership insurance

valid for 3 months and the privilege to be the pioneer customers of the HealthLink.

Volunteers from partner organizations (Philippine Government Hospital, Philippine

Tuberculosis Society and Philippine Lung Center) will be there to provide manual labor

assistance and to facilitate the program. Because it is intended to be a family event, the

format of the program will be that of a game show. The production will be patterned

after those on television such as Pinoy Henyo. Only this time, the overall theme will be

health. Registration will start two weeks before the activity. It will be held in the

eClinic’s site.

The launch, Siklab: Kapit Kalusugan, aims to officially begin the business with

excitement from the community. The main objective of this event is to showcase the

different services of the clinic and promote a more health-oriented mindset to the

public. It is an opportunity for product demonstration to be conducted, which will be

lead by partner-organization volunteers and the builders in the previous event, the

documentation of which will be showcased. It will have free check-ups similar to those

of medical missions. The overall approach to the activity will be like a family fair with a

variety show-like program and mini sportsfest to advocate preventive health through

fitness. This will be done in the barangay basketball court about two hundred meters

from the HealthLink.

.

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c. Sales Promotions & Point of Purchase Communications

This channel contributes an instant boost in sales while exposing more people to

the product. It encourages the target market to patronize HealthLink. Point of purchase

communications includes the service menu and announcement board outside of the

clinic. This aims to attract walk-ins by displaying the wide array of medical attention

they can avail of. POP will be employed throughout the operation of HealthLink.

Sales promotions have components. The first is referrals. When a member refers

3 people, his/her membership will be upgraded to the more superior kind. Second is

group registrations. When a group or a family of 5 registers for the same package at the

same time, one of the memberships will no longer be charged. As such, the group will

pay for the amount of 4 insurance to avail of 5. The referals and group registration

incentives will be applied within the first month and during December of the first year.

There will also be freebies given to patients who will sign up for the membership card.

Fig.18: Free Mug Fig.19 : Free Towel

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Fig.20: Service Menu-change discounts

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d. Direct Marketing

It has been mentioned in the main objectives of the promotions strategy is to

establish and maintain brand loyalty. Simultaneous to other IMC efforts and even after

their proposed timelines, is important to have a constant reinforced communication

that will go beyond information and will call the target market into action. This channel,

working with specific targets, solicits immediate response from its recipients. And

because it is customized by nature, it is able to facilitate lasting relationships.

To concretize these into action, a database is necessary. To keep in touch with

walk-ins/non-members and to track the activity of members, every customer will be

required to register before availing of any service. This will be separate from the

members database that will hold clients’ personal medical records.

The direct marketing program will be in the form of the bi-monthly digest, which

will be given to premium and family cardholders. This will contain trivial health tips and

more importantly, it will serve as a tool for information dissemination. Service and sales

promotions update and will be included in the digest. It is also an avenue for customers’

feedback about the business to be heard. This will keep customers involved in the

business and HealthLink personnel alert in providing quality service all the time.

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Fig.20: Sample of HealthiLink bi-monthly publication

Sample paid advertisement

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e.

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HelathLink will also conduct direct marketing initiatives involving public health

centers, particularly Kasiglahan Infirmary. As indicated in “The Business” indigent

patients will be sponsored by HealthLink in exchange for a local business tax exemption.

In order to empower these patients and their families in the area of health and avoid

the notion that HealthLink is a charitable institution, they will be trained to become

health workers that will conduct focus group forums on current health issues, called

“Usapang Kalusugan.” There will be a different topic to be discussed per month. Health

workers will also be given the option of selling membership cards using a face-to-face

approach. As an incentive, they will get a comission of twenty percent of their sales. This

way, since most of the indigent patients come from Puray, a more rural barangay in

Rodriguez, having them as health workers may even expand the geographic market of

HealthLink.

e. Public Relations

This channel provides low-cost and long-term promotions in the mix. It intends

to support direct marketing in strengthening the community’s trust and customers’

loyalty. All actions will be directed to fostering good relationships with existing medical

institutions and local government unit, and activate positive word-of-mouth.

Concretely, the PR plan includes a testimonial segment in the bimonthly digest

and providing free first aid in barangay events. The testimonial segment is somewhat a

more lengthy version of the feedback. It features success stories of patients who have

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been treated of a potential fatal illness because of early detection. The first aid sustains

the HealthLink’s visibility and integration in the community. Similarly, the forums done

through the indigent group may also be considered as a public relations activity as it

fosters closer ties with the communy.

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III. Operations Plan

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A. Process Strategy

HealthLink is a clinic that will be focusing on respiratory problems such as pneumonia,

tuberculosis and bronchitis. Aside from that, it will also offer services of a diagnostic clinic such

as clinical microscopy, blood chemistry and X-Rays. The clinic will be employing a systematized

way of delegating procedures and an integrated networking of data exchange to ensure an

accurate, coordinated and exemplary service of the staff to the patients. The process flowchart

is showcased at the image below.

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Fig.22: Process Flow

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B. Capacity Planning

The demand forecasting is a linear regression (a=74.5 b=1.03846 y=74.5+1.04x) showing

the monthly demand of a similar establishment that offers lab services for the lower income

bracket in San Jose, Rodriguez.

Month Demand

Dec 2008 67 Jan 2009 71 Feb 2009 93 Mar 2009 88 Apr 2009 83 May 2009 81 Jun 2009 74 Jul 2009 75

Aug 2009 83 Sep 2009 69 Oct 2009 102 Nov 2009 89 Dec 2008 67

Total Yearly Demand 975 Monthly Average Demand 81.25

Table12: Demand Forecasting

Fig23: Linear regression graph (a=74.5 b=1.03846 y=74.5+1.04x)

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Below is a time-based capacity estimation of how many patients can HealthLink serve.

Under the best case scenario, HealthLink assumed that if everybody will only avail of the

laboratory service, the throughput time would be 18 minutes and 20 seconds. When the doctor

requires a patient to take a medical examination the throughput time would be 36 minutes and

20 seconds, but with two doctors working at the same time. When the patient goes to the

doctor only with the assumption that he has an appointment, the throughput time would be 27

minutes 30 seconds, but with two doctors working at the same time.

Throughput times Waiting times

Doctor (2) 10-30 min 2-15 min

Lab 10-20 min 2-16 min

Reception 10-20 min (noncardholder), 15-25sec cardhorlder)

0 min

Nurse 2-4 min 2-4 min

Tiolet *assumption, turnover time = 2 min

BEST CASE SCENARIOS TURNOVER

EXPECTED ACTUAL TROUBLED EXPECTED

ACTUAL LAB ONLY LAB ONLY LAB ONLY

Cardholder (15 secs) Cardholder (20secs) Cardholder (30 secs) Appt (2 mins) wait for medtech

Appt (2 mins) wait for medtech

Appt (3 mins 30 seconds ) wait for medtech

Lab 10 minutes Lab 15 minutes Lab 20 minutes

Pay 30 seconds Pay 1 minute Pay( 2 minutes)

TOTAL:12mins 45 secs Total 18 minutes 20 seconds

Total (25 minutes 30 seconds)

Doctor sent to lab Doctor sent to lab Doctor sent to lab Cardholder (15 secs) Cardholder (20 secs) Cardholder (30 secs)

Appt (2 mins) Appt (2 mins) Appt (3 minutes)

Nurse (2mins) Nurse (3 mins) Nurse (4 minutes)

wait for doctor 2mins Wait for doctor 2 minutes Wait for doctor (5 minutes)

doctor 10mins Doctor (13 minutes) Doctor (30 minutes)

sent to lab 1 min sent to lab (1 minute) Sent to lab (1 minute)

wait for medtech 2 mins Wait for medtech (2 mins) wait for medtech (3 minutes)

Lab 10 minutes Lab (12 mins) Lab (20 minutes)

Pay 30 seconds Pay 1minute pay (2 minutes)

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Total: 29 mins 45 secs Total: 36 mins 20 secs Total: 68minutes 30 secs

Doctor only (with appointment)



Cardholder (15 secs) Cardholder (20 secs) Card holder (30 secs)

Appt (2 mins) Appt (2 minute) Appt (3 minutes)

Nurse (2mins) Nurse (3 minutes) Nurse (4 minutes)

Wait for doctor 2 mins Wait for doctor (2 minutes) Wait for doctor (5 minutes)

Doctor 10 mins Doctor (13 Minutes) Doctor (30 minutes)

Advice 5 mins Advice (5 minutes) Advice (7 minutes)

Pay 1min Pay (2 minutes) Pay (2 minutes)

Total :22 mins 15 sec Total :27 minutes 20 secs Total :51 minutes and 30

seconds BEST CASE SCENARIO (8AM-5PM, +LUNCH BREAK)

all patrons cardholders, have appointments and arrive on time Most likely (8AM-5PM, +LUNCH BREAK)

Lab Test only with appointments

Estimate 37 patrons (8*60/14.5)

Estimate 26 patrons Estimate 18 patrons

Doctor check-up which requires a lab test be taken

Estimate 32 patrons for two doctors sending to lab

Estimate 26 patrons Estimate 14 patrons

Doctor check-ups only with appointments

Estimate 42 patrons (2 doctors cuts doctor time)

Estimate 34 Patrons Estimate 18 patrons

*Formula Used: (Hours a day X Minutes in an Hour)/(Total time per category)

(8X60)/Total time 480/total time

Table13: Capacity Planning Computations

Because purely doctor visits, purely lab tests and purely doctor visits that are directed to

the in-house lab is infeasible, the three values must be further refined. Going by the formula

given below, we can expect the following capacities based on how fast HealthLink can serve its

patrons.

Estimated Patrons = (doctor only) + (lab only) – (combination of doctor and lab) Expected Case 34 expected patrons Best Case 47 expected patrons

Troubled Case 22 expected patrons Table14: capacity Planning results

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Reception Phase

Personnel Involved: Receptionist

Equipment: Card Scanner, Computer

In the reception phase, the patients are separated into cardholders and non-

cardholders. For card holders, they can immediately swipe their card into the car reader to

retrieve their personal records. This will take around 15-25 seconds. After which, they wait for

the nurse to assess them. For non-cardholders, they will be presented with various HealthLink

plans available via a computer. This will take around 5-10 minutes. If the patient does avail of

the plans, the receptionist will create a personal patient record for him or her. Creating a

patient record will take around 5-10 minutes.

Patient waits for nurse

The patients wait for the nurse. The waiting times varies. For those with appointments,

the waiting time is 2 minutes, while it will take 2-10 minutes for those without appointments.

Nurse Station

Personnel Involved: Nurse

Required equipment: Sphygmomanometer, Thermometer, Stethoscope, Computer

When the nurse sees the patients, the nurse takes and records the patient’s vital stats

such as the temperature, blood pressure, and the heart rate. This will take around 3-4 minutes.

The personnel and equipment needed is the nurse, a thermometer, sphygmomanometer (used

for measuring blood pressure), a weighing scale to check the patient’s weight, and a

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stethoscope to check the patient’s blood pressure and heart rate. All of these will be recorded

on the computer in the patient’s records.

Patient waits for doctor

After seeing the nurse, the patient then sits down waiting for the doctor. This usually

takes 2-10 minutes for those with appointments and 2-20 minutes for those without

appointments.

Consultation with Doctor

Personnel involved: Doctor

Equipment Needed: Stethoscope, Tongue Presser, Otoscope, Computer

Upon seeing the patient, the doctor performs a general check up on the patient. In

doing so, the doctor will be using a Stethoscope to check the patient’s lungs, a tongue presser

to check the patient’s throat, and an Otoscope to check the eyes, ears, and nose of the

patients. After which the doctor will ask some questions in order to better diagnose the

patients. All findings will be placed in the computer. This will take around 13- 30 minutes

depending on the situation. After the diagnosis, the doctor will perform one of the 3 options

below:

o Refer non-related illnesses to hospitals. This will usually take 10 to 20 minutes and

will be done via the computer or use of telephone.

o Gives medical advice prescription to the patient for general illnesses such as colds

and coughs. This usually takes 5 minutes.

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o Refer the patient to the laboratory for respiratory and other illnesses covered. This

usually takes around 1 minute.

Lab testing

Personnel Involved: Medical Technician

Equipment Needed: Medical equipments such as the compound light microscope and

electrolyte analyzer

For the patients partaking in the lab testing services of the clinic, the patients will be

classified into three categories, upon which the waiting time varies. For those who made an

appointment with the lab, the waiting time would be 2 minutes. For those who were sent to

the lab by the doctors, since they have priority, they will wait around 2-5 minutes. Lastly, for

those without appointments and wish to undergo lab testing, the waiting time will be

approximately 5-10 minutes. Depending on the tests, the average time for performing

examinations will be 10-15 minutes. The equipment the medical technician will be using will

vary on the different tests. The medical technician after analyzing the tests will then make a

report, print it, and input it in the patient database using the computer. This will take around 1-

2 minutes.

As for the utilization of the equipment, all of them will be working under capacity at

around 80% at maximum capacity utilization for the human labor. Many of the equipment have

a relatively short useful life compared to how long the asset can remain usable; this is because

HealthLink will advocate an early turnover of equipment to maintain its competitive advantage

of cutting edge innovation.

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Payment process

Personnel Involved: Receptionist

Equipment Needed: Computer

In paying, the patients will be categorized into cardholders and non cardholders. Cardholders

simply go to the receptionist to inform the receptionist that she is finished, and she will swipe her card

and be on her way. On the other hand, non-cardholders will have to go to the receptionist and pay cash.

This will take around 2-5 minutes.

C. Quality Management

1. Definition & Dimensions of Quality

At the end of each visit, the company wishes customers to feel that HealthLink is the

reliable choice. In HealthLink, they can expect quality service. That is, low-cost and highly

efficient need-specific clinical consultation and laboratory services. Specialized services differ

per community as these depend on life-threatening diseases most prevalent in the area. The

efficiency, cost and appropriateness of the services are brought about by the added technology

unique to HealthLink clinics. These are further explained through the various dimensions of

quality of the company.

The House of Quality (see appendix 1) that shows the relationship of customer needs

and the value that HealthLink offers. It also shows how competitors address the demands of

the market. This is discussed in detail in each section below.

Affordability – In the medical field, there is not much product differentiation. Also, the

target market in Rodriguez, Rizal, is composed of very price conscious consumers. As

such, price competitiveness is one of the qualities patients can expect from patronizing

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HealthLink. This will be addressed by assigning relatively lower prices on each service

and bundling multiple products into packages that consumers can pay within a certain

period of time. It is evident in the House of Quality how most aspects of the business

answer to the need of patients of a low-priced service.

Service Appropriateness – Each HealthLink branch ensures services that cater to the

specific needs of a community. The first branch for example, will specialize on

pulmonary diseases namely, pneumonia, bronchitis and tuberculosis. This will be the

basis for the technologies to be used that are unique to the clinic to increase cost

efficiency and aid in providing faster services. By using telemedicine technology, the

clinic will be able to employ supposedly huge equipment. In the first branch, instead of

using a bulky x-ray machine, HealthLink will use a laptop plug-in. The House of Quality

shows how the use of advanced technology is relevant to the needs of the customers.

Four out of five needs have a medium to high relationship with this factor.

Wide Range of Services – A unique selling point of a HealthLink clinic that it will strive to

keep is it’s wide range of services. Patients of nearby hospitals and infirmary usually

have to go elsewhere for laboratory services due to the low capacity of the said

businesses. On the other hand, even those external laboratories do not provide enough

services. For example, Health Expert, a laboratory in Rodriguez, turns down many

patients because they do not have an x-ray machine. HealthLink is a one-stop-shop

where consultation and laboratory tests are available. Like in the low price customer

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requirement, the need for having multiple services is addressed by four out of five

solutions from the company.

Accessibility – HealthLink ensures that each clinic is strategically located in areas

frequented by traffic. It serves as an added value for customers to be offered a set of

services that is available within the vicinity of places they go to each day. The first clinic

will be situated near 3 schools, a church, informal market vendors, and a pharmacy

among others. Although it garnered low ratings in the House of Quality, in the bigger

picture, it contributes to HealthLink’s competitive advantage over other Manila-based

medical businesses, as it taps underserved markets where demands are high.

Short Waiting Time – In order to constantly serve more patients, special attention will

be cast on reducing waiting time. This has been discussed in the Process Strategy. The

efficiency of such process will be persistently monitored by the Clinic Manager. If

needed, it will be reevaluated and changed to cater to the demand of a community.

Clean and Efficient Facilities – Healthcare facilities available to HealthLink’s target

market are often lacking in facilities and unhygienic. Even though potential customers

did not explicitly mention the need for this factor, HealthLink sees it as a crucial aspect

of its service being in the medical field. And although investing in cleanliness and

facilities would incur greater costs, it adds great value to the product. Aside from

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ensuring the safety of the patients, it also exudes a more trustworthy image. This will

also lengthen the lifetime of HealthLink’s properties.

Good Customer Service – The business will be highly customer-centric. Hence, it is not

enough to simply diagnose and examine the patients. What will make them want to come

back is the attention and manner by which they were received by each personnel in the

clinic. Also, service will follow the customers even after they leave the infrastructure.

Certain cardholders will receive a bimonthly digest that provides health tips and updates

on services. For those diagnosed with serious illnesses who need to be referred to a

hospital, special arrangements can be made through HealthLink so that they can secure a

specialist and their records can be shared smoothly. As shown on the figure, this is the

most crucial design requirement as it exhibits the highest relationship to the customer

requirements.

2. Quality Assurance Systems

R&D Department – The Research and Development Department plays a key role in

ensuring HealthLink keeps its price and technological competitiveness. The department is

in charge of keeping the company up to date in the technological applications relevant to

the medical field. Researchers are tasked to continuously look for alternatives that would

decrease cost and increase efficiency through innovative solutions.

Customer Feedback – HealthLink will live up to its customer-centric philosophy by making

the customer an active participant of quality assurance. There will be comment drop

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boxes in the reception area, so patients can leave their comments or suggestions at any

time. Also, there will be an evaluation sheet attached to each bimonthly digest, so that

cardholders who are entitled to it can regularly provide their assessment. This effort aims

to increase the management’s awareness of its performance as well as increase customer

involvement in the business.

Human Resources – HealthLink puts primacy on its human resources because it believes

that its personnel are the backbone of the business. It is critical to have both discipline

and passion in the work place. Hence the two quarterly employee surveys: performance

evaluation and Job Satisfaction Rating.

For the Performance Evaluation, each personnel will have a self-evaluation and

an evaluation from those at a higher position. After the two written assessments have

been accomplished, the Clinic Manager will have an Individual Consultation with every

staff, relaying the results. This will provide an open line of communication between the

management and the clinic staff. It will also keep each personnel consistently aware of

the things they have to improve on and keep up.

The Job Satisfaction Rating is helpful in sustaining the staff’s passion for serving.

It will also show them that the management does not only care about the output they

produce but also in their own professional development. Since monetary compensation is

minimal, it is important for the management to identify other means by which employees

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can be motivated. This survey gives them a regular access to employees’ perception of

the working environment and their job fit. This will be included in the Individual

consultation with the Clinic Manager.

D. Location Planning

1. Clinic Location Planning

HealthLink will be establishing its first branch in the region 4a of Calabarzon, specifically

in Mayon Street, San Jose, Rodriguez, Rizal. The factors that HealthLink will consider in choosing

its first location will be the basic health statistics of the area. This includes the estimated

population and its number of households, mortality rate, natality (live births) rate, and the

number of available local government unit’s health workers in the area. The second factor

would be the rate of pneumonia of the area because this is the disease that will benefit most

from the starting technology of HealthLink which is the portable x-ray. The third factor that

HealthLink will consider will be the human flow or the accessibility of the chosen location.

For the first factor considerations, Calabarzon (region 4a) has a total population of

11,743,11041 vis-à-vis Rizal’s population of 1,650,075 (14.05%)42 and a 348,12543

41National Epidemiology Center, Field Health Report Service Information System, page10, accessed: November 20, 2009. <

households of

region4a’s total population, which are both the second largest provincial population in the

region. A large population means a big market to offer HealthLink’s services. The mortality rate

of the chosen region has a relatively high to moderate death rate with 46,926 number of deaths

http://www.doh.gov.ph/chd12/images/downloads/thsis/Annual_Report07.pdf> 42Ibid 3National Epidemiology Center, Field Health Report Service Information System, page137, accessed: November 20, 2009. <http://www.doh.gov.ph/chd12/images/downloads/thsis/Annual_Report07.pdf>

http://www.doh.gov.ph/chd12/images/downloads/thsis/Annual_Report07.pdf�


Page | 86

or a death rate of 444 (5.6 is the highest in region 6 and 1.0 is the lowest in ARMM). On the

other hand, a promising crude birth rate of 21.4%45 (23.6 is the highest in region6) of the

Philippines’ total births of 1,860,87146 signal room for expansion, especially since HealthLink

will be incorporating improvements in technologies on its succeeding operations, as well as, a

continuous market to serve. In region 4a a total of 247,365 births happen annually and in Rizal

alone, there are a total of 32,38547

births, the third largest in the region. Below is a death and

birth rate statistics.

Fig.24: Crude death rate in the philippines

44National Epidemiology Center, Field Health Report Service Information System, page16, accessed: November 20, 2009. <http://www.doh.gov.ph/chd12/images/downloads/thsis/Annual_Report07.pdf> 45National Epidemiology Center, Field Health Report Service Information System, page25, accessed: November 20, 2009. <http://www.doh.gov.ph/chd12/images/downloads/thsis/Annual_Report07.pdf> 46National Epidemiology Center, Field Health Report Service Information System, page29, accessed: November 20, 2009. <http://www.doh.gov.ph/chd12/images/downloads/thsis/Annual_Report07.pdf>




Page | 87

Fig.25: Crude birth rate in the Philippines

In the first factor considerations, one of the most important to consider is the question,

“Is there a need for the product in the market?” HealthLink is a quick service, affordable clinic

specializing on its x-ray technology on its entry in the industry, thus HealthLink will address

respiratory diseases like pneumonia and tuberculosis. In the Philippines, pneumonia is the most

leading cause, bronchitis as the third, and TB respiratory as the sixth leading cause of sickness

as for the reported cases. In the chosen region, pneumonia is the second leading cause,

bronchitis as the fifth, and TB respiratory as the sixth leading cause48. The follow-up question

that one needs to consider concerns about the available health centers in the area. Region 4a

has a total number of 253 local government unit workers which 47 of it is in Rizal49

48National Epidemiology Center, Field Health Report Service Information System, page 150, accessed: November 20,2009

<http://www.doh.gov.ph/chd12/images/downloads/fhsis/Annual_Rep07.pdf>

. It also has

437 total local government unit nurses in the region with 50 in Rizal; a total of 1,787 local

government unit midwives in the region with 195 in Rizal; and a total of 128 local government

49 National Epidemiology Center, Field Health Report Service Information System, page 142, accessed: November 20,2009

<http://www.doh.gov.ph/chd12/images/downloads/fhsis/Annual_Rep07.pdf>

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unit medical technicians with only 15 of them in Rizal50. It is to be noted that Rizal province in

region 4a has the lowest number of nurses, midwives, and medical technicians, thus a need to

be addressed.

Fig.26: Region IV-A leading causes of disease

HealthLink will be establishing its quick service clinic in urban areas outside of Metro

Manila because from observation alone, the number of hospitals and health care centers or

clinics of Metro Manila are for the urban dwellers. With the chosen region and province,

HealthLink has selected three major possible options where the clinic will be placed for its first

year of operations – 1) Amity Ville Subdivision, Tagumpay St., Barangay San Jose, 2) 3/F BML

Building 423, del Pilar St., San Rafael, and 3) #51 P. Rodriguez St., San Rafael. All of which in are

in Rodriguez, which is formerly known as Montalban. Using the factor rating method, below is a

detailed comparative table that discusses which among the options is the best to choose for the

HealthLink’s location in quantitative terms:

50Ibid

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Scores (out of 100) Weighted Scores Crtitical Success

Factors (CSF) Weight Location

1 Location

2 Location

3 L1 L2 L3

Near malls and other establishments such as church, covered courts (urban setting), busy landscape with many people passing

0.15 90 70 60 13.5 10.5 9

Price 0.15 50 70 90 7.5 10.5 13.5 Accessible to target market either by walking or transportation

0.20 90 70 50 18 14 10

Available utilities (water, electricity, etc.)

0.15 90 90 90 13.5 13.5 13.5

Availability of Internet Service Providers within the area and telephone lines

0.10 90 70 50 9 7 5

Specifications (land area)

0.10 50 70 90 5 7 9

Support of local government units and the community

0.15 90 70 70 13.5 10.5 10.5

Totals 1 80 73 70.5 Table15: Factor rating for HealthLink Clinic

Legend: Location 1 – Amity Ville Subdivision Location 2 – BML Building 423 Location 3 – P. Rodriguez Rating – out of 100%

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Based from the factor rating analysis, the location to best place HealthLink will be

location1 or in Amity Ville Subdivision. Firstly, because it is located in a busy street where most

people flock; also, it has a close proximity to Tagumpay National Elementary Grade School and

High School, Ynares multipurpose covered courts, and the Iglesia ni Christo church. Further, the

street is not located in alleys, but on the main road, thus passengers of public transportation

and private vehicles will be able to see HealthLink.

Fig.27: Rent space in Amity Ville subdivision Fig.28 Iglesia ni Cristo

Fig.29: Covered Court Fig.30: Busy street

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Fig.31: Other establishments

Fig.32: P. Rodriguez Street location option

Despite having bigger locations and lower prices – 15,000pesos/month for 400sqm lot

area and 20,000pesos/month for 200sqm lot area – for the P. Rodriguez and BML, respectively,

the location in Amity Ville Subdivision is far better, even though it costs 20,000/month for only

123sqm, for its accessibility to HealthLink’s target market, since location1 and location2 are

approximately near the rural areas already. Further, the support of the local government unit in

the Barangay is stronger, as compared to the other two locations, based on current programs

employed. As an example, Barangay San Jose holds Silid Aralan, which is a socially-oriented

institution that provides financially-challenged children an opportunity and access to education,

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where the local government unit involves community building through constant

communication with the parents of the children, as well as, partnerships for various activities.

They also employ laws that would require the community to either give donations, in cash or in

kind, or community involvement itself to help sustain the operations of Silid Aralan.

2. Corporate office Location Planning

Aside from the main location of the clinic, HealthLink will also be renting an office space

to accommodate the board of directors, so they can have a place for their regular meetings.

Further, the office space will be holding different rooms or cubicles for the varied functions of

the management – marketing, finance, medical, and information technology, among others.

HealthLink plans to place the office in Quezon City, as it would be more attractive, convenient

and appropriate to entertain potential business partners and matters here, given the city’s

commerce nature in relation to the office’s main purpose. Further, this will house a technical

innovation room for our technician employees to assist in their maintenance responsibilities

and for the technology and information department to aid in their innovation of HealthLink’s

unique package software. With this, HealthLink has identified three major office locations –

Visayas Ave., Del Monte and West Ave. Below is another comparative chart.

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Scores (out of 100) Weighted Scores

Crtitical Success Factors (CSF)

Weight Location1

Location2

Location3 L1 L2 L3

Accessible to the HealthClinic site at Bgy. San Jose, Rodriguez

0.20 90 70 50 18 14 10

Price 0.20 90 60 60 14 12 12 Available utilities (water, electricity, etc.)

0.20 90 90 90 18 18 18

Availability of Internet Service Providers within the area and telephone lines

0.20 90 90 90 18 18 18

Specifications (land area)

0.20 70 80 90 14 16 18

Totals 1 82 78 76 Table16: Factor rating for HealthLink corporate office

Legend: Location 1 – Visayas Ave., T.Sora, Quezon City (53sqm) Location 2 – 209-211 Del Monte, near corner Matutum Street (110sqm) Location 3 – 1140 West Ave. (100sqm)Rating – out of 100% Based from the table, the Visayas Ave. location is the best option to choose for the

office, despite it having smaller space (53sqm), as compared to Del Monte with 110sqm and

West Ave. with 100sqm. Firstly, because of its accessibility to Rodriguez via Quezon Circle and

Commonwealth direction through car or taxi, as compared to the other locations that takes

longer routes. Also, it is more affordable given the price of 20,000/month, negotiable up to

15,000/month, as compared to Del Monte with 23,540/month and West Ave. with

25,000/month.

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Fig.33: Chosen office location in Visayas Ave. Fig.34: Internal façade1

Fig.35: External façade1 Fig.36: Internal facade2

Fig.37: External façade2 Fig.38: Internal façade in Del Monte

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Fig.39: External façade in Del Monte Fig.40: Externals of West Ave. location

Fig.41: Side-view of externals in West Ave

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E. Facility Layout

1. Clinic Facility Layout

Fig.42: Blueprint of HealhLink San Jose,Rodriguez branch

The first branch of HealthLink has an area of 123sq meters. It will have a reception and

payment area, a nurse station, two consultation rooms, a basic medical laboratory, and a

lounge for the staff. The blueprints of the clinic are as follows:

HealthLink will be employing a process-oriented lay-out, simply because the business is

service-oriented. There are two possibilities of patient flows in HealthLink’s quick service clinic.

The red arrow describes a patient that is either already a member (someone who availed of

HealthLink’s package service) or a new walk-in patient. The reception area will be the holding

section of walk-ins or new patients while patients with appointments can immediately proceed

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to the holding area outside the doctor’s consultation office. The patient will then proceed to

the nurse station where his measurements (blood pressure, weight, height, etc.) will be taken.

The patient can now go to the doctor’s office for consultation. If the patient is advised to have a

laboratory exam, he goes there then a print-out copy of his exam will be given to him. The

patient can go back to the doctor’s consultation room and payment would be back at the

reception area.

The blue arrows on the other hand describe a member patient who already has an

appointment with the doctor or the laboratory. The patient will swipe his membership card to

the membership card sensor. He will then proceed to the holding area outside the doctor’s

consultation office. The patient will do this scheduled appointment then payment will be done

at the reception area.

Fig.43: Process Oriented Layout

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2. Corporate Facility Layout

Fig.44: Blueprint of corporate office

Aside from the facility layout, below is the corporate office lay-out, which is 53sqm in

area. Here, the lay-out is divided into main component rooms that will be used regularly to

maximize the limited office space. Upon entering, the guest or employee will see the reception

room, where he or she can wait or relax in the couches. Further, there are also two executive

rooms, one for the chief executive officer and the other for the board of directors, who would

like to meet a client or business partner personally. Only two rooms were provided, since the

other directors are not expected to be in the office the whole day, given their flexi-time

schedule.

Aside from that, there is also a conference room for the regular management team

meetings, toilets and a management cubicle area, which are furnished with computers and

desks for any of the directors to use. In addition, there is the technical innovation room for the

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technology and information department, where they can explore their creative abilities to

formulate new innovations to help sustain the operations of the business. Given HealthLink’s

unique software package for medical utilities – similar to Adobe Suite which has Photoshop,

InDesign, etc. – the technology and information team can innovate in terms of adding new

programs for the software such as an application program for a plug-in ultrasound, or for a vital

signs and heart-rate monitoring system through a mobile patch device.

HealthLink envisions its employees to be creative as possible, to provide a better line-up

of services in the most convenient and cost-efficient way as much as possible. However,

innovation will be limited to the improvement of the software, or other related digital forms

that can be included into the integrated package suite such as website applications. This room

will also be used as a reference for technical maintenance of the clinic’s equipments to observe

any malfunction or deterioration that may happen in the future.

F. Design of Work Systems

1. Key Positions

The management team comprises owners/ directors and other key management positions

a. Board of Directors

-Chief Executive Officer (CEO) The Chief Executive Officer will be the one overseeing

the overall operations of the company. He will be the directions, planning and

developing the strategies and implementing these accordingly towards the company’s

objectives and goals while making sure that each endeavor HealthLink takes is in line

with its Vision-Mission. He will also be the one dealing with mergers and sealing

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partnerships, approving documents, and setting up regular meetings with the other

board members for updates and brainstorming. He is responsible for setting a good

working environment and establishing a strong, honest and cooperative relationship

with all the personnel, partners and customers of the company. He should be a

management graduate with at least 4 years of experience in managing any reputable

company, have a charismatic personality and excellent leadership skills.

-Chief Medical Officer (CMO) The Chief Medical Officer will be the principal medical

adviser and head of the medical staff of the company. He has the responsibility of

recruiting and screening the medical staff as well as training health workers. He will be

the one developing and coordinating health programs and handle medical

documentations. In addition, he will be keeping the company updated with the latest

development and trends in the medical industry. He will be directing and supporting

medical management decisions that will help maximize the benefits for customers and

support the company’s objectives. He will also be available for consultations in the clinic

for specific days. He should be a licensed doctor with a medical degree specializing on

respiratory and pulmonary illnesses. He should also have at least 3 years of physician

leadership in a health organization.

-Chief Financial Officer (CFO) The Chief Financial Officer will be the one managing the

cash inflows and outflows of the company and monitor its use of resources within the

company’s budget. He is responsible for the financial planning, analysis and forecasting

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of the figures, managing associated risks and supervising the investment of funds. He

will also help in finding ways to increase capital in order to support the company’s plans

for expansion. He should be a certified accountant and have at least 3 years of work

experience as an accountant in at least a medium-scale company.

-Chief Operating Officer (COO) The Chief Operating Officer will be the one to handle

the daily operations of the business. He will be the one managing the logistics and

maintaining the quality of the products and services and ensure that these are being

met with high quality standards. In addition, he will also be the one responsible for

hiring, training and managing all the personnel of the company in accordance with

human resource policies and procedures to current laws and regulations. He should be a

business graduate and have knowledge in the field of operations and management,

basic human resource management and project management. He should be a multi-

tasker with good leadership skills.

-Chief Marketing and Sales Officer (CMSO) The Chief Marketing and Sales Officer will

be responsible for the promotions and communications of the company. He will be

ensuring that that business will have a strong and positive image to the public and to its

stakeholders. He is also responsible for doing updated observation and research on the

target market and market trends. He will also be the one setting competitive prices for

the services and handling public relations/public affairs with the media, related partner

companies and other people relevant to the company’s operations. He should be a

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business or marketing graduate with sufficient knowledge on at least Adobe Photoshop

and Indesign. He should be creative, original, and have good oral and written

communication skills and a pleasing personality.

-Chief Technology and Information Officer (CTIO) The Chief Technological and

Information Officer will be handling the technological, scientific and research and

development aspect of the company. He will be managing the technology infrastructure,

information flow and technical decisions of the company. He is also responsible for

updating the company with the latest software developments, information technology

solutions and training the staff with technical expertise. He should be a graduate of

engineering, computer science or any courses related to information systems. He should

have at least 3 years work experience in a similar field.

b. Management

-Clinical Manager The Clinical Manager will be the one handling the operations of the

clinic from the accounting, operations and staff supervision. He will be reporting directly

to the Chief Operating Officeron a weekly basis for updates. He acts as a liaison between

the staff and to the board of directors. He should be a business graduate who has at

least 2 years of work experience as a manager. He should be responsible, flexible,

possess good leadership qualities, and have good time management skills.

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-Information Technology Assistant The information technology assistant will be

assisting the Chief Technology and Information Officer with handling technical issues. He

will also be involved in developing softwares, updating them, as well as maintaining the

hardwares that are being used for each of the clinic branch. He should be a graduate of

computer engineering, computer science or of the same field. He should have at least 2

years experience in desktop support and facilities management.

-Information Analyst The information analyst will be the one maintaining and

evaluating the data that are being gathered in the electronic patient database. He will

analyze them and submit the reports to the board of directors. He should be a

management information system graduate and have knowledge and experience

handling data management. He should have good logic and comprehension skills.

-Accountant The accountant will be managing the sales and financials of the clinic.

He will be monitoring closely the administrative expenses of the clinic as well as the

revenues. He will also be the one responsible for giving out the compensations to the

staff. He will report directly to the Chief Financial officer. He should be an accounting

graduate with at least 2 years of work experience as an accountant or treasury officer.

He should have at least basic knowledge on risk management and inventory

management.

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c. Clinic Personnel/Staff

The Staff are the employees who work in HealthLink clinics. They are the frontliners of

HealthLink.

-Internal Medicine Doctors specializing in Respiratory Diseases The physicians are

specialist in dealing with Respiratory Diseases. They provide diagnosis and consultations

with regards to the related illnesses. They have the permission to give out prescriptions

and refer the patients to other doctors if necessary.

-Nurse The nurse will be responsible for administering physical examinations to the

patients and handling their health records. She will be assisting the doctor if ever there

is a need. She should be able to pass the nursing board exam and have at least half a

year related experience or training in basic occupational health course.

-Medical Technologist The medical technologist is responsible for operating

laboratory tests and processing them for results. He will also operate the x-ray machines

and do the readings and final reports. He should be able to have a bachelor degree in

medical technology and have at least 2 years of work experience.

-Receptionist The receptionist will be the one greeting the patients and handling the

payments. She will be the one receiving and making calls, noting down appointments

and updating patients on new promotions/services of the clinic. She should be a

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business management or marketing graduate with a very pleasing personality. She

should be detail-oriented and have good mathematics skills.

d. Health Workers

Health Workers are those who conduct “Usapang Kalusugan,” focus group forums on health

and have the option of selling membership cards for a certain commission. They are not part of

the organizational chart as they are not officially employed by HealthLink. They are from the

indigent pool of patients referred to HealthLink by public health centers such as Kasiglahan

Infirmary in accordance to the agreement HealthLink has with the government regarding free

services to those in need in exchange for local business tax exemption. A certificate of approval

from the CMO is required for them to officially represent HealthLink.

Fig.45: Management Organizational Chart

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2. Compensation of Key Management a. Board of Directors

Position Monthly Salary Non-Monetary Benefits

Bonus Scheme

Chief Executive Officer

P15,000

Premium Card membership

Maximum of 4

Classic Card membership cards

for direct family relatives

Performance-based management compensation: when company-wide target is achieved percent increase bonus will apply

Chief Financial Officer Chief Operating Officer Chief Marketing & Sales Officer Chief Technology & Information Officer Chief Medical Officer

Table17: Compensation plan for the Board of Directors b. Management

Position Monthly

Salary Non-Monetary

Benefits Bonus Scheme

Clinic Manager P10,000


Maximum of 2

Classic Card membership for

direct family relatives

Performance-based management compensation: when branch target is achieved percent increase bonus will apply or additional membership cards will be issued

Information Technology Assistant

P8,000

Information Analyst

Accountant

Table18: Compensation plan for the management

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c. Clinic Personnel/Staff

Position Monthly

Salary Non-Monetary


Physician P10,000


Performance-based management compensation: when branch target is achieved percent increase bonus will apply or additional membership cards will be issued

Nurse P7,000

Medical Technologist

Receptionist P6,000 Classic Card

Table19: Compensation plan for the clinic personnel/staff The Figures were based on the minimum average salary indicated at Salary Report, a

segment on JobStreet.com. The site features average salary ranges for various jobs taken from

samples of real positions.

d. Health Workers

Position Monthly

Salary Non-Monetary


Health Worker NA

Free medical services upon

referral of public health centers or

social services

20% sales commission upon selling membership cards

Table20: Compensation plan for the health workers

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3. Staffing and Recruitment Plans

To minimize costs, not all positions will be filled at once. In the first two years when

there will only one clinic, the Board of Directors will function as the management body as well.

These positions will be primarily occupied by the founders of HealthLink. Only on the third year

will the positions for Clinical Manager, Information Technology Assistant and Information

Analyst be open to replace the managerial functions of the Board of Directors in San Jose,

Rodriguez, while the Board focuses their attention in the second clinic in San Juan, Taytay . The

distribution of roles for starting clinics is indicated in the table below.

Positions Management Roles Chief Executive Officer Clinical Manager Chief Medical Officer Chief Financial Officer Accountant Chief Operating Officer Chief Marketing & Sales Officer Chief Technology & Information Officer Information Technology Assistant

Information Analyst Table21: Year 1 Executive board management roles

HealthLink clinics with an average size of 120 square meters will have two doctors, a

nurse, a medical technician, a receptionist, and a maintenance employee. The group of medical

professionals will be drawn from partner medical institutions and former government

healthcare employees.

Many students in Rodriguez go to Manila to pursue medical courses in schools such as

the Far Eastern University and University of Sto. Tomas. After getting their degree, they come

back to Rodriguez for practice. These schools may be tapped to secure a large pool of

applicants. Also, the Chief Medical Officer may coordinate with the schools’ administration to

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create a program wherein training for undergraduate medical and premedical students may be

done in HealthLink clinics. They may take on roles such as assistant nurses and assistant

physicians. Having assistants for the clinic staff may increase productivity in terms of the

number of patients served. UPPGH may also be partnered with, as they are known for excellent

service in Public Health.

Former government employees are also a good pool to consider. According to an

interview conducted at Kasiglahan Infirmary. Both administrative and medical staff (except for

the medical technologist) are replaced whenever the local government administration is

changed. This is due to the politics in Rodriguez. These individuals are great candidates for

HealthLink because they are used to serving the target market. In turn, the potential patients

have also invested a certain amount of trust in them. Having them as staff will provide ease in

the entry of HealthLink in the community. Another advantage is that they are used to providing

good service with minimum compensation. It is then safe to conclude that their motivation is

greatly non-monetary. Hence, securing them for long-term employment is more probable than

doing the same for individuals with a background in the private sector.

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Call for applications will be announced through government centers (ex. Barangay Hall,

government-owned infirmary) and partner institutions (ex. PGH, FEU). After this, several

procedures follow before formally hiring applicants. The complete process is illustrated in the

diagram below.

Fig46: Recruitment procedures

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4. Training Policies

All clinic staff are required to undergo various training before officially taking on a

position at HealthLink and while serving within the timeframe of their contract. Several courses

are available per training. Courses to be taken are dependent on the requirements of each

position as indicated in the grey tables below. Failure to comply with the required output of the

training will prohibit an individual from proceeding with his/her application or put his/her

employment on hold. All Clinic Managers are to ensure that each personnel fulfill the required

training for his/her position. The Chief Operating Officer in turn, makes sure all Clinic Managers

have undergone the necessary training. The table below indicates the training applicable to the

different positions.

Position Equipment

Usage Information

Systems Service Operations

Clinic Manager X X X X Information Technology Assistant

X X X

Information Analyst X X Accountant X Doctor X X X Nurse X X X Medical Technologist X X X X Receptionist X X X Maintenance X X

Table22: Training policies 1

a. Equipment Usage Training

This gives primary focus on the unique equipment of HealthLink. It is necessary to

ensure accuracy and efficiency in handling the instruments for the safety of the patients and

the work force. The Clinic Manager is also required to take this training, although at a more

basic level, so that he/she can make better decisions regarding staffing that is related to the

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use of such equipment. This training will also give the manager a better grasp and

appreciation of the operations. Training will be held whenever there is a new applicant to

the specified positions and whenever a new technology is availed of by HealthLink.

Position Functions Safety Operation Internal

Mechanics Clinic Manager X X Information Technology Assistant

X X X X

Medical Technologist X X X X Table23: Training Policies 2

b. Information Systems Training

An information system is an integral part of the business. Without it, HealthLink

will not function smoothly. Hence, every personnel is required to undergo this training.

The intensity of the training is dependent on the degree to which an employee’s job is

involved with electronic information. This is incorporated in the on-the-job training of

each applicant. Mastery of the systems is a requisite to being hired.

Position Software

Operation Database

Management Data

Analysis Software

Maintenance Clinic Manager X X X Information Technology Assistant

X X X X

Information Analyst X X X X Accountant X X X Doctor X X X Nurse X X Medical Technologist

X X

Receptionist X X X Maintenance X X


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c. Service Training

The Service Training ensures the customers receive consistent high-quality

service. It also familiarizes the staff with the various services the company offers that

they may easily recommend to the patients. For a better transition in staffing and a

more hands-on way of learning, a mentorship system will be employed for job

applicants. Training with their peer will allow them to see how each task should be

properly done. It also promotes a sense of pride for the trainers because it puts greater

value in their skill and knowledge. And lastly, it eases in the applicant in the working

environment, creating a more harmonious interaction among all personnel.

Position Job-Specific Tasks Customer Relations

HealthLink Services

Clinic Manager X X X Doctor X X X Nurse X X X Medical Technologist X X X Receptionist X X X


d. Operations Training

Training on operations is necessary to have a good working relationship among

various personnel in the clinic. It will provide ease for transactions that require

interaction. It also aims to manage the speed by which individual tasks are accomplished

in relation to the speed by which the entire clinic efficiently operates in. This training

involves a mock operation that simulates various scenarios that may be encountered by

the clinic. A new branch will not be permitted to operate without having an operations

training first. Succeeding trainings during regular operation will be in the form of timed

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observations. The Clinic Manager will visit the clinic and time the various transactions.

He/she may or may not announce such observations. Feedback will then be given to the

staff either individually or as a group. Additional training will be conducted if the Chief

Operations Officer puts new operation systems in place. In addition to training

employees, HealthLink will also train indigent individuals as part of its direct marketing

strategy and partnership agreement with the government concerning tax exemption.

These individuals who have availed of HealthLink services for free with a clearance from

social services or a referral from public medical facilities will be trained as health

workers under the CMO. This kind of training will take place once a month.

5. Human Resources Management Policies

Some examples of human resources management policies in the Philippines are the following:

a. Philippine Labor Code of 1976

It is a comprehensive law which consolidates labor and social laws that gives protection

to labor, promote employment and human resources development and insuring industrial

peace based on social justice.51

51"LABOR CODE OF THE PHILIPPINES [FULL TEXT] - PHILIPPINE LABOR CIRCULAR ON-LINE." THE LAW FIRM OF CHAN ROBLES & ASSOCIATES. N.p., n.d. Web. 10 Jan. 2010. <http://www.chanrobles.com/legal4labor6.htm>.

The law covers everything from making a leave, handling

terminations, minimum wage down to unionization. For example, it states that for regular

employment, the employer cannot end the services of an employee without just cause. For

someone who was unjustly dismissed, he shall be entitled to reinstatement without loss of

Page | 115

seniority rights and other privileges from the time his compensation was withheld from him

up to the time of his actual reinstatement.52

b. 13th Month Pay Law

All employers, except government owned corporations, employers of household helpers

and those paid on commission, should pay their rank and file employees a 13th month pay

on or before December 24 each year, provided that they have worked for a minimum of

one month during the year.53

The 13th month pay is in essence a form of monetary

assistance which makes up 1/12 of the employee’s basic salary earned for the year and the

employees can ask for it if they are entitled to it.

c. Minimum Wage Rate

Minimum wages should consider factors affecting the region such as socio-economic

conditions which affects the cost of living of the people in the area, business environment

for the creation and preservation of jobs, capacity to pay by the majority of employers and

the comparability of wages that will permit sustainable viability and competitiveness on the

business and industry.54

52 Ibid.

In the private sector of Region IV-A, minimum wage workers and

employees shall be receiving a basic wage increase in the following amount:

53"Job Questions | 13th Month Pay Law & Labor Code in the Philippines." Jobs & Job in the Philippines : Philippine Job & Manila Jobs | JobsDB. N.p., n.d. Web. 10 Jan. 2010. <http://www.jobsdb.com.ph/PH/EN/V6HTML/Home/inside-pages/CC_JobQuestions/JobQuestions.htm>. 54 "REGION IV-A - CALABARZON - WAGE ORDER NO. IVA-12 - PHILIPPINE LABOR CIRCULAR ON-LINE - CHAN ROBLES VIRTUAL LAW LIBRARY." THE LAW FIRM OF CHAN ROBLES & ASSOCIATES. N.p., n.d. Web. 10 Jan. 2010. <http://www.chanrobles.com/region4a.wageorderno-iva-12.html>.

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1) Growth Corridor Area P 10.00 - 13.00

2) Emerging Growth Area P 8.00 - 9.00

3) Resource Based Area P 6.00

The area of Rodriguez, Rizal is classified under growth corridor area and the workforce

there shall receive the following amount of minimum wage:

Non-Agriculture

Plantation Non-Plantation Cottage Employing not more than 10

workers P 277.00 P 252.00 232.00 P 240.00 P 172.00

Table26: Various wage rate in different industries

This should apply for normal working hours which do not exceed more than 8 hours a

day. However, for the cases of contractors such as security, janitorial and construction, the

prescribed increases in the wage rates shall depend on the principals or clients of the

service contractor. For failure to comply with the regulation, the contractors shall be jointly

and severally liable with the principals or clients.55

In cases where in the business has other

establishments in different parts of the region or where the headquarters in situated

outside the region, the applicable rate depends on the particular city/municipality where

the employee is based. For transferrals from a high rate area to a lower rate area, the

higher rate shall be applied.

55 Ibid.

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G. Supply Chain Management

HealthLink has two kinds of medical suppliers, one for the basic lab equipment and

another for the telemedicine equipment. Basic lab equipment will be purchased from

Bambang, Manila, a hub of medical supplies and equipment well known for low prices with

convenient payment schemes. Health Expert, one of Brgy. San Juan’s noted laboratories,

purchase their equipment from the area. HealthLink will be transacting with CJ Medical

Supply, situated in 1554B Bambang St., Sta. Cruz, Manila. Among three potential suppliers

in the area, CJ Medical Supplies provide a wider range of product selection that is specific to

laboratory requirements. The other two companies, Floren Hospital Equipment and Medical

Supplies, and Medical Center Trading Corporation offer general hospital equipment.56

It is

best to conduct business with one supplier at a time so that greater discount can be availed

of.

The telemedicine equipment demands a different setup. Since these kinds of

apparatuses are not available in the commercial market, it has to be custom-made.

HealthLink will outsource the manufacturing of such equipment as the plug-in x-ray from

Himex Corporation. Himex started business in 1990, lead by engineering graduate Mr.

Teruhiro Ohno. Its clients include the Philippine General Hospital, Philippine Children’s

Medical Center, and the Department of Health.57 The head office is based in Unit 603-604,

Prestige Tower Condo, Emerald Avenue, Ortigas Center, Pasig City.58

56 “Medical Equipment.” EYP.ph. Directories Philippines Corporation. Web. 11 Jan. 2010

57 “Company Overview.” eHimex.com. Himex Corporation. Web. 11 Jan. 2010 58 “Head Office.” eHimex.com. Himex Corporation. Web. 11 Jan. 2010

Page | 118

Another important component of HealthLink’s services is the Membership Card Sensor.

Since it uses the common magnetic stripe card technology, units will simply be bought by

each clinic online. HP USB Magnetic Card Stripe Reader can be purchased at keezo.com for

$60.82, approximately P2,700, inclusive of shipping. The site was rated 4 out of 5 by 257

sellers.59

The manufacturing of the actual membership cards will be outsourced from

Zhuhai Dari Giftware Company Limited, a China-based manufacturing company located in

the province of Guangdong. It has a productivity rate of 30 million cards per month.

Shipping is included in every business transaction.

Fig.47: Magnetic stripe card reader

H. Inventory Management

In running HealthLink, the clinic will not only offer quality services but quality equipment

and a clean environment thus ensuring the customers that HealthLink is a safe and clean

avenue for health care. With this in mind, HealthLink has asked for the services of an

information technology assistant which will be outsourced and an overall maintenance person

to handle the various maintenance tasks.

59 “HP USB Magnetic Stripe Card Reader with Brackets.” Google.com. Google Products. Web. 11 Jan. 2010

Page | 119

The IT assistant is there to ensure that the computers and diagnosis machines are in

perfect working condition. The maintenance person will be in charge of keeping the clinic clean

and spotless as well as act as a runner for the clinic.

The maintenance person will be required to sweep and mop the floor every night after

clinic hours. This will ensure that the clinic will be always clean. The clinic will have a general

cleaning day every week. The IT assistant will handle the maintenance of the computers as well

as the diagnostic machines. The IT assistant will be asked to come to the clinic twice a month in

order to do a bi-monthly maintenance check up by the It assistant.

A more traditional view of "Inventory" would involve the materials that flow through

the firm into different stages of completeness ranging from raw goods inventory, to work-in-

progress inventory, and to finished goods inventory. This definition would be more applicable

to a firm producing goods; and because Health Link is a service oriented firm it deals more with

the state of the people as they avail of the services offered by Health Link.

1. Raw Materials Inventory: Patrons demanding service from Health Link

They are the people who enter the Health Link reception area looking for medical

solutions for their needs. This visit might arise from several causes, some of the reasons that

Health Link expect would be because of current sickness, need for lab testing for whatever

reason, fear of letting symptoms to develop into serious sickness and regular checkups.

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2. Work-In-Progress Inventory: Patrons in the process of either diagnosis or lab testing

Depending on the specific needs of the patrons, they will be taken to either the doctor or the

lab. In both cases, the patron will be subject to multiple computer-aided testing and their data

will be recorded on the Health Link database where it could be easily retrieved (more so if the

patron avails of the membership card). Through this process, the patrons will be able to get an

assessment of their physical condition and know whether or not to take any corrective actions.

3. Finished-Goods-Inventory -> Patrons done with the tests and is going to retrieve data

- The data will all be stored in the database ready to be printed before exiting the Health Link

venue and for further information the patrons can contact Health Link for any additional help.

The information will also be available online accessible through the membership card, but

because of the target market it would be unlikely that this feature will be used extensively.

60 “Auto Hematology Analyzer.” Yunfan Medical Equipment Co. Ltd. Web. 14 January 2010 ,<http://cqyunfan.en.alibaba.com/product/268409049-209319760/auto_hematology_analyzer.html> 62 Ibid

Lab Category Medical Equipment Description Qty. Hematology

Automated hematology

analyzer60

This machine has a throughput of 60 samples per hour. It is fully automated with an LCD screen with a thermal printer.

1

Clinical Microscopy

This section processes urine samples, stool samples and other body fluids. Equipped with automated analyzers and Laminar flow cabinets. This enables fast processing of results as well as a safe and sanitary work area.62

1

Page | 121

61“Lab Departments.”Hi-Precision Diagnostics. Web. January 14, 2010, < http://www.hi-precision.com.ph/services4803.html?item_id=1769> 63 “Urine Reagent Strips.” Lab Essentials. Web. January 10, 2010 <http://www.labessentials.com/Urine_Reagent_Strips.htm> 64 Ibid. 65 “Hepatitis A lgm Elisa test kit”. Beijing Keiwei Clinical Diagnostics Co. Ltd. Web. January 14, 2010 <http://bjkewei.en.alibaba.com/product/263435362-200457188/Hepatitis_A_IgM_elisa_test_kit.html> 66 “Hepatitis (HBsAg) rapid serum test strip." Sulit.com.ph. Web. January 10, 2010. <http://www.sulit.com.ph/index.php/view+classifieds/id/1470723/HEPATITIS+(HBsAg)+rapid+serum+test+strip> 67“Products and Services.” Paratron Services. Web. January 12, 2010 <http://paratronindustries.com/products_services.php> 68“What is a blood Chemistry Test” e.How.com. Web. January 20, 2010 <http://www.ehow.com/about_5386952_blood-chemistry-test.html>

Compound light microscope61

24-Hour Urine Test

10 Parameter urine

reagent strips63

Urine reagent strips are used to detect levels of specific parameters like pH, glucose, protein, ketone, bilirubin, blood, nitrite, urobilinogen, specific gravity, and leukocytes.64

100

Hepatitis

Hepatitis A test kit (ELISA) chemicals65

This test kit is a rapid, direct binding test for the visual detection of hepatitis B surface antigen (HBsAg) in serum. It is used as an aid in the diagnosis of hepatitis B infection.66

50

Blood Chemistry

Vital Selectra blood chemistry analyzer67

This used to measure the chemical components of your blood plasma. The plasma contains water, glucose, proteins, lipids and minerals such as calcium.68

1

Page | 122

69 “Urine Reagent Strips.” Lab Essentials. Web. January 10, 2010 <http://www.labessentials.com/Urine_Reagent_Strips.htm> 70 “Digestives Enzymes test kit." Life Work Estiantial.com. Web. <Http://www.lifeworkpotential.com/acatalog/Digestive_Enzymes_Test_Kit.html> 71 “Electrolyte Analyzer.” Yunfan Medical Equipment Co. Ltd. Web. 14 January 2010 ,<http://cqyunfan.en.alibaba.com/product/268409049-209319760/electrolyte_analyzer.html> 72 http://www.lifeworkpotential.com/acatalog/Digestive_Enzymes_Test_Kit.html 73 http://www.cholesterol-doctor.com/advice/test/what-is-lipid-profile-test.html 74 http://www.amazon.co.uk/Home-Liver-Function-Test/dp/B002KLF6AG 75 http://www.answers.com/topic/liver-function-tests

Enzymes

IgG/IgM ELISA Test (Enzyme-Linked Immuno-sorbent Assay)69

This test analyzes the energy patterns of carboxypeptidase, enterokinase, lactase, lipase, lysozyme, maltase, pepsinogen, pepsin, peptidase, amylase, sucrase, trypsin, etc.70

50

Electrolytes

Electrolyte analyzer71

Analyzes sodium, potassium, chloride, magnesium, inorganic phosphorus, total iron, TIBC + TOTAL iron, calcium, ionized calcium

1

Chem Packages

CHOL-10-991

Lipid Profile Cassettes72

A lipid profile test is a collection of tests carried out in order to assess the levels of different types of cholesterols (like triglycerides, LDL-Cholesterol and HDL-Cholesterol) in the blood stream.73

1 case

Home Liver Function

Test74

Used to measured in LFTs include gamma-glutamyl transferase (GGT); alanine aminotransferase (ALT or SGPT); aspartate aminotransferase (AST or SGOT); and alkaline phosphatase (ALP), and prothrombin time (PT).75

20

http://www.answers.com/topic/prothrombin-time�

Page | 123

76 ttp://www.lifeworkpotential.com/acatalog/Digestive_Enzymes_Test_Kit.html 77 Lab Departments.”Hi-Precision Diagnostics. Web. January 14, 2010, < http://www.hi-precision.com.ph/services4803.html?item_id=1769> 78 http://www.mossmanassociates.com/immunodiagnostics.htm 79 “Products and Services.” Paratron Services. Web. January 12, 2010 <http://paratronindustries.com/products_services.php> 80 Ibid. 81 Ibid 82 “Multi Drug test kits.” Drug Test Kit Shop. Web. February 10, 2010

<http://www.drugtestkitshop.com/>

Thyroid Test

Thyroid Test – ZRT

Labs76

A machine used to test for Hepatitis and Thyroid testing (20/box).

20

Serology

Serological Test

Centrifuge77

This test is for the diagnosis of tuberculosis and employs liparabinomannan (LAM) antigen bound to plastic combs.78

1

Bacteriology

Autoclave/High Pressure

Sterilizer79

Equipped with Blood Culture Analyzers and Bio Safety Cabinets, this section performs all bacteriologic and fungal tests in a controlled environment.

1

Spectrophotometer,

Analyzer80

This machine is used to measure properties of light over a specific portion of the electromagnetic spectrum that identifies any bacteria in the test sample.81

1

Hormones

Hormone Profile II + PM

Cortisol (6 Tests)82

This test does a comprehensive evaluation of overall hormone balance or imbalance, and indicates thyroid and adrenal function and breast cancer profile.

20

http://en.wikipedia.org/wiki/Light�

http://en.wikipedia.org/wiki/Electromagnetic_spectrum�

Page | 124

83 Ibid. 84 “Tumor Marker Test”. Beijing Keiwei Clinical Diagnostics Co. Ltd. Web. January 14, 2010 <http://bjkewei.en.alibaba.com/product/263435362-200457188/Tumor_market_test.html> 85 “Multi Drug test kits.” Drug Test Kit Shop. Web. February 10, 2010

<http://www.drugtestkitshop.com/> 86 Ibid 87 “Hiv Test Kitt”. Beijing Keiwei Clinical Diagnostics Co. Ltd. Web. January 14, 2010 <http://bjkewei.en.alibaba.com/product/263435362-200457188/Hiv_test_kit.html> 88 Ibid.

Hormone Profile III +

AFT (8 Tests)83

This test does evaluation of hormone balance, imbalance and interrelationship of specific hormone levels as related to symptoms of menopause, andropause and adrenal function.

20

Tumor Markers

Tumor Marker test kit84

This test is a double antibody sandwich EIA for quantitative detection of Pro-GRP- a new tumor marker of small cell lung cancer (SCLC). Used for diagnosis of SCLC.(96 tests)

5

Drug Test

Drug Test Kit85

Used for detecting any drug intake in the bloodstream by taking samples of the blood.86

50

HIV Test

HIV test kit with titer (ELISA)87

To test whether the sample blood is HIV positive (+) or negative (-).

20

Others

Opti-cide Disinfectant

spray88

A 24 ounce bottle disinfectant spray will be used for the laboratory equipments to make sure that the instruments used are clean.

10

Page | 125

89 “Disposable Laboratory Gloves”. Cole Parmer. Web. January 14, 2010. <http://www.coleparmer.com/products/safetyproducts/disposable-gloves.asp> 90 “Product Catalog.” Cole Parmer. Web. January 12, 2010. <http://www.coleparmer.com/catalog/product_index.asp?cls=54792> 91 Ibid. 92Ibid. 93 Ibid.

Disposable gloves89

This will be used by the medical technician and the interns when performing lab tests.

500

Disposable Syringe90

The syringe will be used to hold the needles when taking blood samples from the patient.

500

Disposable syringe

needles91

The needle that will be injected in the person’s skin to take blood samples.

500

Forcep92

Used to get small samples and objects that are hard to get such as hair strands.

5

Precision scissors93

Used to cut objects specifically for medical purposes.

5

Page | 126

94 Ibid. 95 “Beaker” Nexusgamers. Web. January 10, 2010. <http://nexusgamers.co.uk/catalog/images/Glass%20Beaker.jpg> 96 “Product Catalog.” Cole Parmer. Web. January 12, 2010. <http://www.coleparmer.com/catalog/product_index.asp?cls=54792> 97 Ibid. 98 “Home.” Lab Essential. Web. January 12, 2010. < http://www.labessentials.com/home.htm> 99 Ibid.

Erlenmeyer Flask94

Used for titration purposes such pH and to heat liquids.

20

Beaker95

Also used to hold liquids to be measured. 15

Air cleaner and

humidifier96

Used for the maintenance of the clinic to eliminate airborne particles such as dust, pollen, bacteria, and smoke and relieve dry skin, itchy eyes, and harmful static electricity.97

2

Sphygmomanometer98

This is used to measure the patient’s blood pressure.

2

Thermometers99

Used to measure the temperature of the patient.

3

Page | 127

100 Ibid. 101 Ibid. 102 Ibid. 103 Ibid. 104 Ibid. 105“C-3 Select Centrifuge.” Lab Essential. Web. January 12, 2010. < http://www.labessentials.com/centrifuge.htm>

Weighing Scale100

Used to measure the height and weight of the patient.

1

Microscope101

Used to study samples of cells and other micro-organisms.

1

Glass slides102

This used as a placeholder of samples to be tested in the microscope.

30

Test Tubes103

These tubes serve as containers for blood and other samples.

30

Small plastic bottles104

These bottles serve as containers for stool, and urine samples

50

LV Scientific Ultra

Centrifuge105

This centrifuge has a capacity of 8 test tubes that is 8-15 ml in size; it can be used for blood, fecal, urine, and semen tests.

3

http://www.microscope.com/student-c-50.html�

Page | 128

Table 27: Summary of major equipments I. Maintenance

In running HealthLink, the clinic will not only offer quality services but also quality

equipment and a clean environment thus ensuring the customers that HealthLink is a safe and

reliable avenue for health care. With this in mind, HealthLink has asked for the services of both

an overall maintenance person to handle the various maintenance (housekeeping) tasks and an

information technology assistant who will be based at the headquarters who visits for regular

equipment maintenance and for breakdowns.

The in-house maintenance person will handle the housekeeping of the whole clinic with

standard tools used for cleaning. The maintenance person will be required to sweep, mop the

106 “Product Catalog.” Cole Parmer. Web. January 12, 2010. <http://www.coleparmer.com/catalog/product_index.asp?cls=54792> 107 Ibid. 108“First Aid Kit.” David Report. Web. February 10, 2010 < http://davidreport.com/blog/wp-content/uploads/2008/02/first_aid_kit.jpg>

Mini blood bank refrigerator106

This is used to preserve the blood samples for testing or donation and keep it well-ventilated.

1

15ml Conical Centrifugal

Test tube with cap107

This test tube is specifically used for the LV Scientific ultra centrifuge.

20

First aid kit108

Used for basic medication consisting of basic medicine, gauze and cotton among others.

15

Page | 129

floor and wipe the furniture every night after clinic hours. This will ensure that the clinic will be

always clean and ready to use for the following day. The clinic will also have a general cleaning

day every week for a more thorough. This maintenance person will have no hand in equipment

maintenance, only the venue.

The IT assistant will ensure that the computers and diagnosis machines are in perfect

working condition. He or she will be expected to report to the head office rather than to the

individual Health Link locations, and is tasked to simply travel to the Health Link areas during

the regular maintenance schedule or other technical needs. The IT assistant will be responsible

for going to the clinic twice a month in order to do a bi-monthly maintenance check up on the

equipment, both hardware and software. Because it is very inefficient for the IT assistant to

continuously travel to areas, whenever the problems are minor then he or she acts as a

troubleshooting guide contacted either through the phone or internet. HealthLink would

employ a preventive strategy for maintaining their equipment because it would be more cost

efficient for them to do so.

Breakdowns in a year Estimated frequency of breakdowns 0 0.1 1 0.5 2 0.3

3 (or more) 0.1 Table26: Estimated frequency of breakdowns

Key Assumptions:

- Maintained equipment are expected to breakdown only once per year.

- The breakdowns are serious enough to merit a personal visit to the Health Link area.

- The IT assistant would be given P250 to go to the specified area.

Page | 130

- Whether the equipment is maintained or not, the breakdowns are of the same

severity.

- The expected average fixing time of the breakdown would be 1 day, Health Link closed.

- The number of people who would visit that day would be 10 (50:50 mix, 50% capacity).

- Each of those 10 people have classic memberships which is P500/month; P6,000/year.

- Of those 10 people who will not be serviced, 5 will take their business elsewhere and

not go back to Health Link, thus being revenue lost.

Fig48: Expected Maintenance Cost

With regular breakdown repair, Health Link would expect to lose 42,350 of revenue

because of closing down while only losing P36,000 if they maintained their equipment; thus

preventive maintenance would be the better choice. There is also great value in keeping the

image of having very few breakdowns.

Page | 131

V. Financial Plan

Page | 132

A. Company’s Financial Assumptions 1. Accounting Cycle HealthLink’s financial period will be on a semi-annual basis from January 1, 2011 to June

30, 2011 for the first semester and July 1, 2011 to December 31, 2011 for the next semester.

The accounting cycle will show the process of how the company manages its debit and credit

flow of transactions and preparation of its financial statements at the end of the accounting

period. Please refer to Appendix 1 for a more detailed explanation of each step in the

accounting cycle.

Fig.49: Accounting cycle steps

Page | 133

2. Type of Business Organization

HealthLink chooses to be a limited liability company (LLC) as a form of business

organization. It is a type of business ownership that has no restriction on the type and number

of owners, except that it must be formed or managed by at least two members. It has a mixture

of the characteristics of a corporation and partnership structures. Owners are called members

and they get the same tax benefits as partners in partnership and enjoy the limited liability

benefits of a corporation. Business profits, losses and expenses are “passed through” to the

members where they pay income taxes at their individual tax rates only and not at the business

level. This gives the company the advantage of having less complicated taxation and avoiding

double taxation but circumstances can favor a corporate tax structure.109 Since an LCC exist as a

separate entity, members cannot be held personally accountable by creditors for any debts and

obligation liabilities the company has incurred. However, this rule does not apply to instances

where there is a personal guarantee agreed upon to the repayment of debts, cases of fraud or

misrepresentations and negligence in actions, which may cause harm and damages to a third

party.110

Please refer to Appendix 2 for a further description about LLC.

3. Initial Capital

HealthLink will be initially investing a total of P2,541,413.50 for the business for the first

year of operations. The breakdown of the capital is shown below:

109 “Limited Liability Company 101.” About.com: Small Business Information. Web. January 8, 2010. <http://sbinformation.about.com/cs/ownership1/a/LLC.htm> 110“Limited Liability Company.” Lawyers.com. Web. January 8, 2010. < http://business-law.lawyers.com/business-enterprises/Limited-Liability-Company.html>

Page | 134

HEALTHLINK Cash 1,000,000 Other Current Assets 332,939 Fixed Assets 936,309.50 License Fee 7,000

Patent 16,010 Insurance 100,000 Rent 20,000 Promotions 20,203

TOTAL INVESTMENT 2,541,413.50

Fig.50: Summary of initial capital

HealthLink will be putting up its clinic in Barangay San Jose in Rodriguez, Rizal in the year

2011. Owners will put in a cash capital of P1,181,891 as initial investment as well as P40,000

worth of current assets, which includes medical supplies such as gauzes, cottons and liquids,

as well as office supplies. In addition, the company will also be investing on fixed assets that

are necessary for the operation of the clinic. Medical machines like the plugged-in X-ray,

analyzers, etc. and equipments like microscopes, test tubes, etc. costs a total of

P936,309.50. This includes the development of the integrated software that will be used

which costs P500,000.

Meanwhile, other things to consider for the initial investment includes spending on the

licensing fee of the business which costs P7,000, insurance fee of P100,000, preliminary

promotions worth P20,203, and the rent of the company for the year which costs a total of

P240,000 (P20,000/month). All in all, the total sum of the company’s initial investments

costs P2, 541,413.50

Page | 135

4. Balance Sheet Assumptions

Apart from the Income Statements, the following are the balance sheets of HealthLink to

indicate the financial position of the company in terms of “resources it owns, the debt it owes,

and the amount of the owner’s equity (investment in the business),” to put it simply.111

Cash This is basically the current cash on hand for each year, which are received from

revenues earned. At the start of the year, initial capital and loans are included in the

account.

Accounts Receivables Accounts receivables are expected to be 1/12 or 8.33% of the total

cash of HealthLink by the end of the year, this rate taken from the months of the year

wherein conservatively if all membership accounts for the previous year owe HealthLink for

the month of January of the coming year. This amounts to P45,271.46 by the end of the

first year, 151,564.83 end of the second year and 199,286.00 for the third year most likely

amount of accounts receivable. This phenomenon is assumed, because there is no tangible

basis for assuming bad debt given that the people are given packages that are very much

affordable even at minimum wage and HealthLink even offers service to the destitute with

help from incentives from the government.

111 Accounting 15: Fundamentals of Accounting Workbook, Venus Ibarra, JGSOM

Page | 136

Membership Cards (Inventory) This is the number of inventory cards produced and

stocked, which is based on the demand forecast or number of people availing of the

packages.

Health Digest (Inventory) Same as the membership cards, this is also the number of

produced magazines, which is part of the promotional strategies of HealthLink.

Medical Supplies (Inventory) These are stocks of supplies for basic medication purposes

such as gauze, cotton, Betadine, which are commonly found in first aid kits.

Retired Long Term Debt This is the portion set aside in an account to pay for the long

term debt of HealthLink to ensure that there are funds to cover the specific liability.

License This is an intangible asset of the company required to setup the business.

Patent Also an intangible asset to protect intellectual property rights of HealthLink’s

service line-up, especially since product innovation will be employed.

Software Development and Modification Since the core of the HealthLink’s service is

software-based, half a million will be spent and set aside to innovate and develop new

programs for the software. This will include research and electronic costs.

Page | 137

Computers Computers will be an essential equipment to run HealthLink’s services, which

will be used by the doctors, receptionist, etc. Most importantly, it will serve as the display

screen for the X-Ray. There will be five computers for the clinic and six in the office.

Office Supplies and Equipment These include the desks, chairs, air conditioners, printer

and other new office assets. These are expected to be depreciated overtime using straight-

line depreciation.

Bed As in any clinic, this will be used to lie or rest the patient down, when the doctor is

doing the examination.

Scanners This will be used to scan the membership cards of the patients to identify their

personal information and the package that they acquired.

Medical Equipment These include the lab equipment such as Abbot AxSYM system,

Pharma Unicap, Microscope, Coulter JT Heme Analyzer, ASNR Gamma Counter, Plastic

Containers, Weighing Scales, Spygmomamonitor, Test Tubes and Glass Slides. Similar to the

office equipment, these are expected to be depreciated overtime.

Page | 138

5. Income Statement Assumptions

Below are four income statements table of HealthLink, the first table is the summary of

a 3 year forecasting while the next three tables are detailed income statements of years 2011,

2012, and 2013.

Revenue Recognition Revenue is recognized when there is a purchase of HealthLink

prepaid packages (classic at P50 monthly, premium at P100 monthly, and family at P180

monthly), patient walk-ins, and laboratory examinations services are rendered.

At the first semester of the first year of the HealthLink, an assumption of 3% of

the target market will avail the packages of HealthLink. That would be 2,807 patients

out of the total 93,567112

For the second semester and succeeding semesters of HealthLink, there would

be a rough average increase of 2.5% of the total captured market of the total population

of San Jose, Rodriguez. This is due from the marketing efforts and brand awareness of

the company. A decreasing demand of market share increase just shows that the first

two semesters of the operations of HealthLink will aim for building its consumer base.

San Jose population. Of the 2,807 patients, an estimated 60%

will procure the classic, 30%, will buy purchase the family package, and 10% will be that

of premium plans. This 60-30-10 package breakdown assumption will be used for all

semesters of the HealthLink. An estimate total of P1,500.00 is rendered from the walk-in

and medical tests. Such assumption is made from a safe estimation of the 50% of Health

Expert’s, a competitor, total earnings per day of P3000.00.

112 National Epidemiology Center, Field Health Report Service Information System, page10, accessed: November 20, 2009. <http://www.doh.gov.ph/chd12/images/downloads/thsis/Annual_Report07.pdf>


Page | 139

At the third year of Healthlink, a second branch will be established at the same

region in Calabarzon (region4a) but it would be situated at baranggay San Juan,

Binangonan, Rizal. Just like San Jose, San Juan has a rough population of 88,000 with the

same health conditions with San Jose. The basis for revenue for the third year is still the

same with the table below but year 1 of the table below is added because of the newly

established second site.

year 1 year 2 year 3 1ST sem 2nd sem 1ST sem 2nd sem 1ST sem 2nd sem

% captured market of the total population 3.00% 4.50% 6.30% 6.93% 7.62% 8.19%

% increase of the market share demand 50% 40% 20% 10% 7.50% *total population = 93,567

Table29: Summary of revenue assumptions

Cost of Services The cost of services of the clinic would entail the materials, medical

supplies, and magnetic stripe cards (membership card) that would be used for

consultations and laboratory examinations. For those 10% premium members and 30%

of the family cardholders of the total captured market of the total population of San

Jose, Rodriguez, a bi-monthly magazine would be given to the member. As the captured

market of HealthLink increases, the cost of services of the clinic would increase too. The

increasing cost is paralleled to the percent increase of the market share demand of the

semester.

Salaries and Wages The total amount of salaries and wages is based from the total

number of employees with their respective salaries and compensation. At the first four

semester (equivalent to two years), there would be no key management positions (clinic

Page | 140

manager, I.T analyst, and accountant) as they would only be employed at the first year

of the third semester when the second branch has been opened.

Employees Benefits The employee benefits are based on the monetary equivalent of

the benefits of the employees of HealthLink’s membership package.

Office Supply The office supply will includes the purchase, handling costs, and other

costs incurred when the office supply is delivered to the clinic. The amount in office

supplies would increase in the third year when a second branch and a Manila based

office is in operations.

Laundry and Cleaning Laundry and cleaning expenses would include the janitorial

expenses of the clinic. This amount would also increase at the third year when a second

branch and a Manila based office is in operations.

Repairs and Maintenance Repairs and Maintenance would entail the sustenance of

the clinic’s equipments, specifically the electronic swipe card reader or the membership

card sensor, portable x-ray, and its software. This repairs and maintenance of these

equipments be done twice a month.

Promotions and advertisements The promotions and advertisement expense are

mainly the costs of the direct marketing activities (roving service, sticker give-away), PR (

Page | 141

give-away mug and towel, will be given to those who will avail of specific membership

packages), and events costs to build the brand awareness of HealthLink (sportsfest and

the Bayanihan para sa Kalusugan).

Rent and Utilities The rent expense includes the San Jose clinic branch rent for the

first two years. On the third year, a Manila based office rent and San Juan clinic branch

would be consolidated with the expenses. The renovation time is included in the

computation of the cost. As for the utilities, these include the water, electricity, and

telecommunication (telephone and internet) consumption of the clinics. The utilities

expense would increase upon the establishment of a corporate office and second clinic

branch.

Training and seminars The staff of Healthlink will undergo training before his actual

position in the clinic or office and while being a regular employee, several training would

be offered to ensure quality service depending on the requirements of his job

description. Trainings would be done twice a year. The cost for the first semester of the

first year is higher than the succeeding training costs because it is assumed that the

company would be developing the skills of the hired employees and a refresher course

would be done at the succeeding semesters.

Insurance HealthLink would apply for a yearly business insurance to have a back-up

system in case an emergency would happen. the insurance cost is estimated from 10%

Page | 142

of the total fixed assets of year one. The total insurance cost would increase during the

operation of a Manila based office and additional branches.

Licensing Fee The license fees would include the business permits and the

Department of Health clinic license.

*Taxes The total taxes that HealthLink would pay is 35% , this includes capital gains

tax of 10%, e-vat tax of 3%, and the imposed Rizal local business tax rate of 22%.

"Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the

seller from the sale, exchange, or other disposition of capital assets located in the

Philippines.113" This is enforced on the revenues earned by HealthLink from the sales of

the membership cards and the revenue from walk-ins. E-vat is the expected increase in

the tax rate, according to the Philippines Securities and Exchange Commission allotment

for VAT114. Business tax is the local business tax imposed by the municipality on to the

firms that operate under their jurisdiction. The 22% tax rate is an estimate value taken

from municipal income of Binangonan, Rizal in 2005115

. However, there is an alternative

strategy that if the government would accept the invitation to support and recognize

the HealthLink clinic as a community effort, then HealthLink will be exempted from the

22% tax rate of Rizal. An example would be the Silid Aralan, which is located in the local

114 “Minucipal Physical Framework Plan’. Municipality of Binangonan. Web. January 10, 2010. <http://www.binangonan.gov.ph/binangonan_socio_eco_profile.pdf> 12” “Capital Gains Tax.” Bureau of Internal Revenues. Web. January 11, 2010. <http://www.bir.gov.ph/taxinfo/tax_capgin.htm> 115 “Cost of Getting Started.” Securities and Exchange Commission. Web. Januaray 10, 2010. <http://www.coa.gov.ph/tsolmp/TSOIntra/Cost%20of%20Getting%20Started.htm>

http://www.binangonan.gov.ph/binangonan_socio_eco_profile.pdf�

Page | 143

community hall of San Jose, Rizal. It is a privately-owned school that provides

supplementary education for public schools. It is being supported by the government

and the benefits it receives are being exempted from the local business tax rate and free

rental space.

B. Presentation of 3 Years Financial Statements (Balance Sheet, Income Statement) 1. Financial Schedules a. Before the beginning of the business (Year 2011)

HealthLink Balance Sheet

For the Year Start January 1, 2011

Assets Cash Php 1,000,000.00

Inventory (a) 332,939.00 Office Equipment (b) 242,930.00 Machinery (c) 193,379.50

Intangible Assets (d) 500,000.00 Prepaid Expenses (e) 23,010.00 Total Assets Php 2,292,258.50 Liabilities

Bank Loan Php1,000,000.00 Notes Payable 292,258.50 Equity

G. Garcia, Capital 1,000,000.00

Total liabilities and equity Php 2,292,258.50 b. i. Optimistic: Start of business operations (End of Fiscal Year Jan 2012)

HealthLink Balance Sheets

For Year Ended December 31, 2012

Assets Cash Php988,503.50

Inventory 377,555.00

Office Equipment 242,930.00 Machinery 193,379.50 Depreciation (f) (77,526.95)

Page | 144

Intangible Assets 500,000.00

Prepaid Expenses 23,010.00 Amortization (f) (104,602.00) Total Assets Php2,325,378.00 Liabilities

Bank Loan Php1,000,000.00 Equity

G. Garcia, Capital 1,000,000.00 Net income 325,378.00

Total Liability and Equity Php2,325,378.00 ii. Optimistic: (End of Fiscal Year Jan 2013)



Assets Cash Php3,216,074.00

Inventory 678,607 Office Equipment (g) 985,860.00 Machinery 386,759.00 Depreciation (g) (155,053.90)

Intangible Assets 500,000.00 Prepaid Expenses 46,020.00 Amortization (g) (209,204.00) Total Assets Php5,813,320.00

Liabilities New Bank Loan Php2,000,000.00

Notes Payable 500,000.00 Equity

G. Garcia, Capital Php1,325,378.00 Net income 1,987,942 Total Liability and Equity Php5,813,320.00

iii. Optimistic: (End of Fiscal year 2014)




Inventory (i) 1,086,672

Page | 145

Office Equipment 985,860.00

Machinery 386,759.00 Depreciation (h) (155,053.90) Intangible Assets 500,000.00 Prepaid Expenses 46,020.00

Amortization (318,408.00) Total Assets 8,444,137.00 Liabilities

New Bank Loan Php2,000,000.00

Equity G. Garcia, Capital Php3,313,320.00

Net income 3,130,817 Total Liability and Equity Php8,444,137.00

iv. Optimistic 3 year Income Statement for 3 years

HealthLink HealthLink HealthLink Income Statement Income Statement Income Statement

For The Year Ended

2011 For The Year Ended


2013

Revenues Php3,391,922 Php5,570,791 Php9,754,413 Cost of Services 377,555 678,607 1,086,672 Gross Income 3,014,367 4,892,184 8,667,742 Operating Expenses:

Salaries & Wages Php1,729,920 Php1,729,920 Php2,829,360 Employees' Benefits 20,485 20,485 30,978 Rent 240,000 240,000 624,000 Utilities 150,000 150,000 360,000 Office Supplies 24,000 24,000 72,000 Laundry & Cleaning 39,456 39,456 150,912 Repairs & Maintenance 6,000 6,000 12,000 Promotions/Advertising 22,203 4,000 26,203 Training & Seminars 14,000 8,000 22,000 Insurance 100,000 100,000 200,000 Licensing Fees 7,000 0 7,000

Total Operating Expenses 2,353,064 2,321,861 4,334,453 EBITDA 661,303 2,570,323 4,333,289 Depreciation 182,130 182,130 394,101 Amortization 3,202 3,202 6,404 Depreciation & Amortization 185,332 185,332 400,505 EBIT/Operating Income 475,971 2,384,991 3,932,784 Less Interest 100,000 100,000 250,000 EBT 375,971 2,284,991 3,682,784 Taxes (13%)* 50,593 297,049 551,966 Net Income Php325,378 Php1,987,942 Php3,130,817

*Refer to income statement assumptions

Page | 146

b. i. Pessimistic: Start of business operations (End of Fiscal Year 2012)

HealthLink

Balance Sheets For Year Ended December 31, 2012


Inventory 332,044.00

Office Equipment 242,930.00

Machinery 193,379.50

Depreciation (f) (77,526.95)


Prepaid Expenses 23,010.00

Amortization (f) (104,602.00) Total Assets Php1,806,738.00 Liabilities

Bank Loan Php1,000,000.00

Equity G. Garcia, Capital 1,000,000.00

Net loss (193,262.00) Total Liability and Equity Php1,806,738.00

ii. Pessimistic: (End of Fiscal year 2013)

HealthLink



Inventory 578,255

Office Equipment (g) 985,860.00

Machinery 386,759.00

Depreciation (g) (155,053.90)


Prepaid Expenses 46,020.00

Amortization (g) (209,204.00) Total Assets 1,806,738.00 Liabilities

Bank Loan Php1,000,000.00

Notes Payable 500,000.00

Equity G. Garcia, Capital 806,738.00

Page | 147

Net income 732,969 Total Liability and Equity Php4,039,707.00

iii. Pessimistic: (End of Fiscal year 2014)

HealthLink

Balance Sheets



Inventory (i) 947,897 Office Equipment 985,860.00

Machinery 386,759.00 Depreciation (h) (210,107.80) Intangible Assets 500,000.00 Prepaid Expenses 46,020.00

Amortization (318,408.00) Total Assets Php4,411,424.00 Liabilities

New Bank Loan Php2,000,000.00


Net income 871,717

Total Liability and Equity Php4,411,424.00 iv. Pessimistic 3 year Income Statement for 3 years

HealthLink HealthLink HealthLink Income Statement Income Statement Income Statement

For The Year Ended



2013

Revenues Php2,821,538 Php4,313,093 Php7,712,311 Cost of Services 332,044 578,255 947,897 Gross Income 2,489,494 3,734,838 6,764,414 Operating Expenses:

Salaries & Wages Php1,729,920 Php1,729,920 Php2,829,360 Employees' Benefits 20,485 20,485 30,978 Rent 240,000 240,000 624,000 Utilities 150,000 150,000 360,000 Office Supplies 24,000 24,000 72,000 Laundry & Cleaning 39,456 39,456 150,912 Repairs & Maintenance 6,000 6,000 12,000 Promotions/Advertising 22,203 4,000 26,203 Training & Seminars 14,000 8,000 22,000 Insurance 100,000 100,000 200,000

Page | 148

Licensing Fees 7,000 0 7,000 Total Operating Expenses 2,353,064 2,321,861 4,334,453 EBITDA 136,430 1,412,977 2,429,961 Depreciation 182,130 182,130 394,101 Amortization 3,202 3,202 6,404 Depreciation & Amortization 185,332 185,332 400,505 EBIT/Operating Income (48,902) (1,227,645) 2,029,456 Less Interest 100,000 100,000 250,000 EBT (148,902) 1,127,645 1,779,456 Taxes (35%) 0 394,676 907,739 Net Income (Php165,379) Php732,969 Php871,717

d. i. Most Likely Scenario: Start of business operations (End of Fiscal year 2012)

HealthLink

Balance Sheets



Inventory 332,044.00 Office Equipment 242,930.00 Machinery 193,379.50 Depreciation (f) (77,526.95)

Intangible Assets 500,000.00 Prepaid Expenses 23,010.00

Amortization (f) (104,602.00)

Total Assets Php1,834,621.00 Liabilities

Bank Loan Php1,000,000.00 Equity

G. Garcia, Capital 1,000,000.00 Net loss (165,379.00) Total Liability and Equity Php1,834,621.00

Page | 149

ii. Most Likely Scenario: (End of Fiscal year 2013)

HealthLink



Inventory 578,255 Office Equipment (g) 985,860.00 Machinery 386,759.00

Depreciation (g) -155,053.90 Intangible Assets 500,000.00 Prepaid Expenses 46,020.00 Amortization (g) -209,204.00

Total Assets Php4,315,672.00 Liabilities

NewBank Loan Php2,000,000.00 Notes Payable 500,000.00

Equity G. Garcia, Capital 834,621.00

Net income 981,051 Total Liability and Equity Php4,315,672.00

iii. Most Likely Scenario: (End of Fiscal year 2014)




Inventory (i) 947,897 Office Equipment 985,860.00 Machinery 386,759.00 Depreciation (h) (210107.80)

Intangible Assets 500,000.00 Prepaid Expenses 46,020.00 Amortization (318408.00) Total Assets Php5,257,968.00

Liabilities New Bank Loan Php2,000,000.00


Net income 1,442,296

Page | 150

Total Liability and Equity Php5,257,968.00 iv. Pessimistic 3 year Income Statement for 3 years

HealthLink HealthLink HealthLink

Income Statement Income

Statement Income Statement

For The Year Ended 2011



Revenues Php2,821,538 Php4,313,093 Php7,712,311 Cost of Services 332,044 578,255 947,897 Gross Income 2,489,494 3,734,838 6,764,414 Operating Expenses:

Salaries & Wages 1,729,920 1,729,920 2,829,360 Employees' Benefits 20,485 20,485 30,978 Rent 240,000 240,000 624,000 Utilities 150,000 150,000 360,000 Office Supplies 24,000 24,000 72,000 Laundry & Cleaning 39,456 39,456 150,912 Repairs & Maintenance 6,000 6,000 12,000 Promotions/Advertising 22,203 4,000 26,203 Training & Seminars 14,000 8,000 22,000 Insurance 100,000 100,000 200,000 Licensing Fees 7,000 0 7,000

Total Operating Expenses 2,353,064 2,321,861 4,334,453 EBITDA 136,430 1,412,977 2,429,961 Depreciation 182,130 182,130 394,101 Amortization 3,202 3,202 6,404 Depreciation & Amortization 185,332 185,332 400,505 EBIT/Operating Income (48,902) 1,227,645 2,029,456 Less Interest 100,000 100,000 250,000 EBT (148,902) 1,127,645 1,779,456 Taxes (13%)* 0 146,594 337,160 Net Income Php165,379 Php981,051 Php1,442,296

*Refer to income statement assumptions C. Projected Financial Statement Analysis 1. Break-Even Point

Formula: SP-VC = TA

Package Options Sales OPEX Patrons VC SP-VC FA Break-Even in Units

Premium (999/year) 449122 374552.04 749 500.07 498.93 959319.5 1922.75 Family (1999/yr) 485051 404515.57 449 900.93 1098.07 959319.5 873.64 Classic (500/year) 1347365 1123655.28 4491 250.20 249.80 959319.5 3840.36 Walk-in 540000 450341.11 1800 250.19 49.81 959319.5 19259.39

Page | 151

(100/visit*3visits)

Total 2821538 Table 30: Break-even point analysis

Looking at the different package options offered by HealthLink, the business will be able to

break-even if 1923 people avail of the Premium package, 874 for Family, 3841 for classic, and

19259 for the walk-in instance.

2. Payback Period

Formula: Payback period = fixed assets – Net Income (Remaining months=Remaining balance/ Net Income of next year)

Year Fixed Assets Net Income

Remaining Balance

1 (2011) 959319.5 -165379 1124699 2 (2012) 981051 143647.5 3 (2013) 1442296

*2 years + 143647.5/1442296 = 2.1 years Table 31: Paybackt analysis

In using the payback period formula, which is basically Assets minus Net Income, HealthLink

will be able to earn back its investments in 2.1 years. This will be the month of February in the

year 2013.

3. Return on Investment

Formula: Return on Equity = Net Income / Total Equity

ROE Year 1 Year 2 Year 3 Net Income -165379 981051 1442296

Total Equity

806,738.00 3313312 6444137 ROE -0.204997161 0.296093758 0.223815229

Table 32: Return on investment analysis

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Since a lower ROE for each year means it is better, HealthLink will be able to retrieve the

equity by Year 2, and will have a faster return on equity by Year 3.

4. Return on Assets Formula: Return on Assets = Net Income / Total Assets

ROA Year 1 Year 2 Year 3

Net Income -165379 981051 1442296 Total Assets 2325378 5813320 5257968 ROA -0.07111919 0.16875916 0.275561966

Table 33: Return on assets analysis

Same as ROE, HealthLink will be able to retrieve the cost of assets by Year 2, and will have a

faster return on assets by Year 3.

5. Profit Margin Ratio Formula: Profit Margin = Net Income / Sales

Profit Margin Ratio Year 1 Year 2 Year 3 Net Income -165379 981051 1442296 Sales 2,821,538 4,313,093 7,712,311 Profit Margin Ratio -0.058613068 0.22745881 0.187012168

Table 34: Profit margin analysis

Health Link will have an increasing profit by the second year but the profit margin will

decrease due to the establishment of a second branch which will affect its total sales.

6. Liquidity and Solvency Formula: Current Ratio = Current Assets / Current Liabilities

current ratio Year 1 Year 2 Year 3 current assets 847418.5 3894681 6634702 current liability 1000000 500000 - Current ratio 0.8474185 7.789362 -

Table 35: liquidity and solvency analysis

Page | 153

HealthLink will only be able to cover its current liabilities by the company’s current

assets in year 2 with a 7.79 ratio, since the first year is below the average of 1. The third year

has no liabilities, so that means the company doesn’t need current assets to cover it, hence, no

ratio.

Page | 154

VI. Appendix

Page | 155

A. House of Quality

B. Health Link Prices Depending on the Packages

Walk-in Classic Premium Family

10% off walk-in

price

15% off walk-in

price

20% off walk-in

price

Consultation Fee 100 90 85 80 X-ray 500 450 425 400 Hematology

Complete Blood Count 75 68 64 60

Platelet Count 47 42 40 38 HGB & HCT 67 60 57 54

Bleeding Time 47 42 40 38 Clotting Time 47 42 40 38

Reticulocyte Count 140 126 119 112

Page | 156

ESR 115 104 98 92

ABO & RH typing 75 68 64 60

PBS/Peripheral Blood smear 150 135 128 120

LE Preparation 235 212 200 188 Protime/PT 235 212 200 188 APIT/PIT 285 257 242 228

Clinical Microscopy Urinalysis 47 42 40 38 Fecalysis 47 42 40 38 Urobilinogen 75 68 64 60

Ketone/Acetone 75 68 64 60

Biles/Nitrates/Bilrubin 75 68 64 60 Sugar 75 68 64 60

Micro-Alburnin Test 380 342 323 304

Pregnancy Test 95 86 81 76 Occult Blood 140 126 119 112

Concentration Technique

85 77 72 68

Urine Test 235 212 200 188

Creatinime Total 235 212 200 188

Creatinine Clearance 190 171 162 152 Protein 235 212 200 188

Na/K/Cl (each) 235 212 200 188

Calcium/Magnesium (each) 235 212 200 188 Uric Acid 235 212 200 188 Amylase 235 212 200 188 Glucose 235 212 200 188 VMA 1,045 941 888 836 Hepatitis

HbsAg (screening) 190 171 162 152

Page | 157

HbsAg w/ titer (ELISA) 285 257 242 228

Anti-HBS w/ titer 285 257 242 228 HbeAg 330 297 281 264 Anti-Hbe 330 297 281 264

Anti-HBc IgM 330 297 281 264 Anti-HBc IgG 330 297 281 264

Anti-HAV IgM 330 297 281 264

Anti-HAV IgG 330 297 281 264 Anti-HCV 620 558 527 496

Hepatitis Profile 1,425 1283 1211 1140

Hepatitis A Profile 855 770 727 684

Hepatitis B Profile 1,425 1283 1211 1140

Hepatitis A, B, C Profile 2,090 1881 1777 1672 Wee Bag 14 13 12 11

2Hr Post Prandial Blood 190 171 162 152

Blood Chemistry FBS/RBS 95 86 81 76 OGCT 285 257 242 228 OGTT 520 468 442 416

BUN/CREATININE (each) 95 86 81 76 BUA 95 86 81 76 Cholesterol 95 86 81 76 Triglycerides 140 126 119 112

HDL/LDL (each) 140 126 119 112

Bilirubin (TB,DB,ID) 330 297 281 264 Total Protein 140 126 119 112 Albumin 140 126 119 112 TPAG 285 257 242 228 HBA1C 475 428 404 380 Enzymes

Page | 158

SGPT/ALT 105 95 89 84 SGOT/AST 105 95 89 84 GGTP 475 428 404 380

Alkaline Phophatase 170 153 145 136

Acid Phosphatase 170 153 145 136 Amylase 235 212 200 188 Lipase 285 257 242 228 Total CPK 570 513 485 456 CPK - MB 570 513 485 456 CPK - MM 570 513 485 456

Troponin I/T (each) 760 684 646 608 LDH 380 342 323 304 Electrolytes Sodium 120 108 102 96 Potassium 120 108 102 96 Chloride 120 108 102 96 Magnesium 235 212 200 188

Inorganic Phosphorus 235 212 200 188 Total Iron 380 342 323 304

TIBC + TOTAL Iron 620 558 527 496 Calcium 235 212 200 188

Ionized Calcium 330 297 281 264 Thyroid Test T3/T4 (each) 235 212 200 188 TSH 380 342 323 304 FT3 430 387 366 344 FT4 430 387 366 344 FT1 430 387 366 344 Serology VDRL/RPR 140 126 119 112

TPHA Screening 380 342 323 304

TPHA w/ Titer 570 513 485 456 Widal Test 330 297 281 264 Typhidot 665 599 565 532 ASO Titer 330 297 281 264

Page | 159

CRP w/ titer 250 195 176 166 156 RA/RF Latex 285 257 242 228 C3/C4 (each) 665 599 565 532

ANA Screening 855 770 727 684 ANA w/ Titer 1,045 941 888 836

Dengue IgM & IgG 665 599 565 532

Leptospiral Test 760 684 646 608 H.Pylori 855 770 727 684 Rubella IgM 760 684 646 608 Rubella IgG 760 684 646 608

CMV IgM & IgG 1,045 941 888 836

Toxoplasma IgM 1,045 941 888 836

Toxoplasma IgG 1,045 941 888 836 Bacteriology Gram Stain 195 176 166 156 AFB 330 297 281 264 KOH 285 257 242 228 India Ink 330 297 281 264 Blood C/S 475 428 404 380

Culture Sensitivity 430 387 366 344 Hormones FSH/LH 665 599 565 532 Prolactin 665 599 565 532

Estrogen / Estradiol 760 684 646 608 Progesterone 760 684 646 608 Testosterone 855 770 727 684 Cortisol 855 770 727 684 Ferritin 760 684 646 608

Tumor Markers AFP 950 855 808 760 CEA 855 770 727 684 PSA 1,045 941 888 836 B-HCG 760 684 646 608 CA-125 1,425 1283 1211 1140

Page | 160

CA-15-3 1,615 1454 1373 1292 CA-19-9 1,900 1710 1615 1520 CA-72-3 2,375 2138 2019 1900 Drug Test MET / THC 285 257 242 228 HIV Test

HIV Screening Test 475 428 404 380

HIV w/ Titer (ELISA) 760 684 646 608 Others

Stone Analysis 380 342 323 304 PAP Smear 75 68 64 60

C. Accounting Cycle116

The first step is collecting and analyzing transactions and events for journalizing. The accountant or financial executive will gather and prepare receipts related to financial events and will be analyzed in line with their effects on the company’s financial position as which accounts are affected, how (increase or decrease) and how much. An example would be collecting the sales receipt of the clinic for the day and inputting these into the company’s chart of accounts as Cash and Sales category.

The second step is entering or journalizing the collected information as an entry into the journal diary. Recorded financial events are done in a chronological order and may be done continually. It can also be done per batch when similar transactions are being sorted and collected. For example, if the clinic purchased some disposable syringes for P50, it will be recorded as Medical Supplies P50 and Cash P50. Entries recorded show the amount that was transacted and the effect of the transaction to the account titles in terms of debits and credits. The medical supplies will be debited while the cash will be credited since the company gained supplies while decreased in cash. The third step is posting the debit and credit entries from the journal to the general ledger accounts. Transactions made under the same account are collected and summarized into that particular account and then posted as the final entry for the process. Usually an account number is assigned to each ledger and these ledger accounts may be in T-account form or may include balances. These also show the effects and references of the transaction made.

116 Larson, Wild, Chiapetta. Principles of Financial Accounting. Accounting cycle. McGrawHill 7th edition

GENERAL JOURNAL page 10

Date Description Debit Credit 2011, Jan 5 Medical Supplies 50 Cash 50

Page | 161

General Ledger account Cash Account no. 101 Date Description PR Debit Credit Balance 2011, Jan 5 10 50 50

General Ledger account Supplies Account no. 126

Date Description PR Debit Credit Balance

2011, Jan 5 10 50 50

The fourth step is preparing an unadjusted trial balance which summarizes the unadjusted ledger accounts and amount in a table form. Double entry accounting requires the sum of debit account (right side) equals to the sum of the credit account (left side). Accounts such as assets and expenses have debit balances while other accounts such as liabilities, owner’s equity and revenues have credit balances. Total amounts of these should be equal to each other that is why preparing an unadjusted trial balance tests the quality of these as recorded in the general ledger. It is also useful to investigate if inequality occurs. It is not a financial statement but a working table used to prepare the financial statements. The fifth step is preparing and recording adjustments of journal entries to bring the account balances up-to date and to check for discrepancies. This includes setting up post accrued and deferred items to journals and ledger T-accounts. Under accrual accounting, an entry may be required at the end of the period to record revenues that have been earned but not yet recorded on the books. Similar adjustments also have to be made to record expenses that may have been incurred but not yet recorded. The sixth step is preparing an adjusted trial balance. This step reviews the equality of the debits and credits of the aforementioned entries. Unequal amounts or inaccurate accounts are rechecked and corrected. It is important to ensure that all the information is accurate and ready for the making of the end-of-period financial statements. The seventh step is preparing the financial statements using the corrected entries from the adjusted trial balance. The financial statements includes the a.) Balance sheet which shows the summary of the amount of assets, liabilities and owner’s equity for the financial period, b.) Statement of cash flow which displays the inflow and outflow of all the money and c.) Income statement which shows the company’s amount of revenues earned and the amount of expenses and losses for the accounting period. This step also includes compiling the statements, tax returns and other accounting reports in order to close out the accounting period. The eight step is closing the accounts or zeroing out the balances from temporary accounts such as revenues and expenses from the income statement to the owner’s equity in the balance sheet. The only accounts that have balances are the asset, liability and owner’s equity accounts and these balances will be carried on towards the next accounting period.

Page | 162

The last step is preparing a post-closing trial balance which is done to determine if all revenue and expense accounts have been properly closed and if the debit and credit balances of all accounts are equal to each other. D. Limited Liability Company Fundamental changes within the business such as admission of new members in the LLC require the unanimous approval of the existing members first. Members can assume an active management role wherein an operating agreement helps define and distribute the rights of the members and managers, if any, regarding membership, management, operations and income distribution issues. This private operating agreement, unless provided otherwise, grants members the responsibility for managing the LLC but they can also opt to delegate their management authority to a particular member as the manager, to a group of members or in some cases, to a non-member manager.117 As a separate legal entity, it also has advantages that include having less administrative paperwork since there is no need to formally keep track of minutes and meetings as required in corporations and no distribution of stocks so there are fewer formalities involved. An LLC also has a more flexible and varying forms of profit distribution unlike for partnerships where the division is 50-50.118

Members of an LLC can contribute capital in exchange for a membership interest, which usually includes economic interest. There is no minimum amount of capital contribution and members can usually contribute in cash, property or services.119 A member’s contribution to the company determines the member’s voting and financial rights in the LLC, unless the operating agreement states otherwise. If a member fails to deliver a promise of a future contribution to the LLC in exchange for membership interest, the LLC can impose the promise as a contract or sell the member’s existing interest to make up for the failure.120

An LLC, however, has a limited life and is usually dissolved upon death, expulsion, retirement or resignation of a member or if the company goes under bankruptcy or dissolution. Nevertheless, remaining members may voluntarily choose to continue or close the LLC at any time and for any reason but may involve a complex process depending on the laws of the state where the LLC is located.121 The accounting system of an LLC is designed to help management comply with the regulations adopted by its members and with the dictates of the articles of organizations, which is a document that must be first filed by the LLC with the secretary of state in which the LLC will be located. The accounting system must also provide information that would support the company’s compliance with state and federal laws, as well as taxation.122

117 Ibid. 118 http://sbinformation.about.com/cs/ownership1/a/LLC.htm 119 http://legal-dictionary.thefreedictionary.com/Limited+Liability+Company 120 Ibid. 121 http://business-law.lawyers.com/business-enterprises/Limited-Liability-Company.html 122 Principle of Financial Accounting book, p470

Page | 163

E. Financial Schedules 1. Balance Sheet Before the beginning of the business (Year 2011) (a) Inventory:

(c) Machinery: Membership Cards (Inventory)

140,360.00 Abbot AxSYM system

24,500.00

Medical Supplies (Inventory)

150,000.00 Xray(USB)

100,000.00

Health Digest (Inventory)

42,579.00 Pharma Unicap

20,000.00

Microscope

16,660.00

(b) Office Equipment: Coulter JT Heme Analyzer

15,000.00

Computers

110,000.00 ASNR Gamma Counter

10,000.00

Desks

53,900.00 Plastic Containers

2,695.00

Air conditioners

33,600.00 Weighing Scales

1,911.00

Chairs

27,930.00 Spyghmomamonitor

1,500.00

Bed

9,800.00 Test Tubes

900.00

Printer

5,000.00 Glass Slides

213.50

Scanners

2,700.00

(e) Prepaid Expenses:

(d) Intangible Asstes: License

7,000.00

software development

500,000.00 PATENT

16,010.00

Optimistic, Pessimistic, and Most Likely Scenario Start of business operations (End of Fiscal Year 2012)

(f) Depreciation per year: Value Life Dep'n / Amort.

License 7,000.00

5

1,400.00

PATENT 16,010.00

5

3,202.00

software development and modification 500,000.00

5

100,000.00

Page | 164

Computers 110,000.00

5

22,000.00

Desks 53,900.00

10

5,390.00

Air conditioners 33,600.00

5

6,720.00

Chairs 27,930.00

10

2,793.00

Bed 9,800.00

10

980.00

Printer 5,000.00

5

1,000.00

Scanners 2,700.00

5

540.00

Abbot AxSYM system 24,500.00

5

4,900.00

Xray(USB) 100,000.00

5

20,000.00

Pharma Unicap 20,000.00

5

4,000.00

Microscope 16,660.00

5

3,332.00

Coulter JT Heme Analyzer 15,000.00

5

3,000.00

ASNR Gamma Counter 10,000.00

5

2,000.00

Plastic Containers 2,695.00

10

269.50

Weighing Scales 1,911.00

10

191.10

Spyghmomamonitor 1,500.00

5

300.00

Test Tubes 900.00

10

90.00

Glass Slides 213.50

10

21.35

Page | 165

Optimistic, Pessimistic, and Most Likely Scenario: Start of business operations (End of Fiscal year 2013)

(g) acquisition of new assets: Value Life Dep'n / Amort.

License

7,000.00 5

1,400.00

PATENT

16,010.00 5

3,202.00

software development and modification

500,000.00 5

100,000.00

Computers

110,000.00 5

22,000.00

Desks

53,900.00 10

5,390.00

Air conditioners

33,600.00 5

6,720.00

Chairs

27,930.00 10

2,793.00

Bed

9,800.00 10

980.00

Printer

5,000.00 5

1,000.00

Scanners

2,700.00 5

540.00

Abbot AxSYM system

24,500.00 5

4,900.00

Xray(USB)

100,000.00 5

20,000.00

Pharma Unicap

20,000.00 5

4,000.00

Microscope

16,660.00 5

3,332.00

Coulter JT Heme Analyzer

15,000.00 5

3,000.00

ASNR Gamma Counter

10,000.00 5

2,000.00

Plastic Containers

2,695.00 10

269.50

Weighing Scales

1,911.00 10

191.10

Spyghmomamonitor

1,500.00 5

300.00

Test Tubes

900.00 10

90.00

Glass Slides

213.50 10

21.35

New Office Equipment 5

Page | 166

500,000.00 100,000.00

Optimistic, Pessimistic, and Most Likely Scenario: Start of business operations End of Fiscal year 2014

(h) Depreciation of New Office Assets Value Life Dep'n / Amort.

New Office Assets

500,000.00 5

100,000.00

(i) New Inventory

inventory of both Health Link centers 947,897

2. Income Statement i. Revenue

Market Share (MS) x Barangay Population = No. of Card Holders (CH)

Premium - (10% x CH)* x Php100 = Monthly Sales from Premium Card Holders

Family - [(30% x CH)/5]123

Classic - (10% x CH)* x Php50 = Monthly Sales from Classic Card Holders *No. of Members

* x Php180 = Monthly Sales from Family Card Holders

Total Revenues = Total Sales from CH + Walk-In Sales124

YEAR 1

1st SEM MK = 0.03 CH = 2,807 Package # of Members Sales/mo Sales/6mo Premium 281 28,070 168,421 Family 168 30,316 181,894 Classic 1,684 84,210 505,262 Walk-in NA 45,000 270,000 Total 1,125,577 2nd SEM MK = 0.05 CH = 4,678 Package # of Members Sales/mo Sales/6mo Premium 468 46,784 280,701 Family 281 50,526 303,157 Classic 2,807 140,351 842,103

Total Revenue Walk-in NA 45,000 270,000 2,821,538 Total 1,695,961

123 1 Family Card is good for 5 family members 124 Estimations made are based on Health Expert’s daily revenues, Php3,000

Page | 167

YEAR 2

1st SEM MK = 0.06 CH = 5,895 Package # of Members Sales/mo Sales/6mo Premium 589 58,947 353,683 Family 354 63,663 381,978 Classic 3,537 176,842 1,061,050 Walk-in NA 45,000 270,000 Total 2,066,711 2nd SEM MK = 0.07 CH = 6,484 Package # of Members Sales/mo Sales/6mo Premium 648 64,842 389,052 Family 389 70,029 420,176 Classic 3,891 194,526 1,167,155


YEAR 3

1st SEM MK = 0.08 CH = 7,133 Package # of Members Sales/mo Sales/6mo Premium 713 71,326 427,957 Family 428 77,032 462,193 Classic 4,280 213,978 1,283,870 Walk-in NA 45,000 270,000 Total 2,444,020 2nd SEM MK = 0.08 CH = 7,668 Package # of Members Sales/mo Sales/6mo Premium 767 76,676 460,054 Family 460 82,810 496,858 Classic 4,601 230,027 1,380,161


ii. Cost of Service

Medical Supplies125

Membership Cards = CH x Php20

= Previous semester’s expense increased by the same percentage increase of the demand

Publications126 = (P + F) x Php9127 x 3128

Total Cost of Service = Medical Supplies + Membership Cards + Publications

125 Php10,000 was used as a base estimate for the first semester’s monthly expenses 126 Bi-monthly Digest 127 Price per digest (based on quotation in UP Shopping Center) 128 Number of issues every semester

Page | 168

Note: Periods – Y1S1 = 1st Year, 1st Semester etc.

Period Med. Supplies Cards Publication Cost of Service Y1S1 60,000 56,140 12,126 128,266 Y1S2 90,000 93,567 20,210 203,777 Y2S1 126,000 117,894 25,465 269,360 Y2S2 151,200 129,684 28,012 308,896 Y3S1 Clinic1 166,320 142,652 30,813 339,785 Y3S2 Clinic1 178,794 153,351 33,124 365,269 Y3S1 Clinic2 60,000 52,993 4,557 117,550 Y3S2 Clinic2 90,000 35,328 7,596 132,924

iii. Depreciation and Amortization Note: The depreciation and Amortization rates differ per item

: New office assets are assumed to be worth with depreciation over n years

: New assets are acquired by year 3 for the expansion, but will only add assets identical to the ones bought during the start up

Fixed Assets Asset value Useful

life

Depreciation/ Amortization per

year Intangible Assets

License

7,000.00 5 1,400.00

Patent

16,010.00 5 3,202.00 Tangible Assets software development and modification

500,000.00 5 100,000.00

Computers

110,000.00 5 22,000.00

Desks

53,900.00 10 5,390.00

Air conditioners

33,600.00 5 6,720.00

Chairs

27,930.00 10 2,793.00

Bed

9,800.00 10 980.00

Printer

5,000.00 5 1,000.00

Page | 169

Scanners

2,700.00 5 540.00

Abbot AxSYM system

24,500.00 5 4,900.00

X-ray(USB)

100,000.00 5 20,000.00

Pharma Unicap

20,000.00 5 4,000.00

Microscope

16,660.00 5 3,332.00

Coulter JT Heme Analyzer

15,000.00 5 3,000.00

ASNR Gamma Counter

10,000.00 5 2,000.00

Plastic Containers

2,695.00 10 269.50

Weighing Scales

1,911.00 10 191.10

Spyghmomamonitor

1,500.00 5 300.00

Test Tubes

900.00 10 90.00

Glass Slides

213.50 10 21.35 Total Depreciation Per Year 182,128.95

iv. Detailed Income Statements for Most Likely Scenario Year 1 (2011)

1ST SEM 2nd SEM YEAR-END Revenues 1,125,577 1,695,961 2,821,538 Cost of Services (128,266) (203,777) (332,044) Gross Income 997,310 1,492,184 2,489,494 Operating Expenses:

Salaries & Wages 864,960 864,960 1,729,920 Employees' Benefits 0 20,485 20,485 Rent 120,000 120,000 240,000 Utilities 75,000 75,000 150,000 Office Supplies 12,000 12,000 24,000 Laundry & Cleaning 19,728 19,728 39,456 Repairs & Maintenance 3,000 3,000 6,000 Promotions/Advertising 20,203 2,000 22,203 Training & Seminars 10,000 4,000 14,000 Insurance 50,000 50,000 100,000 Licensing Fees 7,000 0 7,000

Total Operating Expenses 1,181,891 1,171,173 2,353,064 EBITDA (184,581) (321,011) (136,430) Depreciation (91,065) (91,065) (182,130)

Page | 170

Amortization 0 (3,202) (3,202) Depreciation & Amortization (91,065) (94,267) (185,332) EBIT/Operating Income (275,646) (226,744) (48,902) Less Interest 0 100,000 100,000 EBT (275,646) 126,744 (148,902) Taxes (13%) 0 16,477 16,477 Net Income (275,646) 110,267 (165,379)

Year 2 (2012)

1ST SEM 2nd SEM YEAR-END Revenues 2,066,711 2,246,382 4,313,093 Cost of Services (269,360) (308,896) (578,255) Gross Income 1,797,351 1,937,486 3,734,838 Operating Expenses:

Salaries & Wages 864,960 864,960 1,729,920 Employees' Benefits 0 20,485 20,485 Rent 120,000 120,000 240,000 Utilities 75,000 75,000 150,000 Office Supplies 12,000 12,000 24,000 Laundry & Cleaning 19,728 19,728 39,456 Repairs & Maintenance 3,000 3,000 6,000 Promotions/Advertising 2,000 2,000 4,000 Training & Seminars 4,000 4,000 8,000 Insurance 50,000 50,000 100,000

Total Operating Expenses 1,150,688 1,171,173 2,321,861 EBITDA 646,663 766,313 1,412,977 Depreciation (91,065) (91,065) (182,130) Amortization 0 (3,202) (3,202) Depreciation & Amortization (91,065) (94,267) (185,332) EBIT/Operating Income 555,598 672,046 1,227,645 Less Interest 0 100,000 100,000 EBT 555,598 572,046 1,127,645 Taxes (13%) 72,228 74,366 146,594 Net Income 483,371 497,680 981,051

Year 3 (2013)

Clinic 1 Clinic 2 HealthLink Revenues 5,051,092 2,661,219 7,712,311 Cost of Services (705,054) (242,843) (947,897) Gross Income 4,346,038 2,418,376 6,764,414 Operating Expenses: Salaries & Wages 961,920 1,729,920 2,829,360 Employees' Benefits 10,493 20,485 30,978 Rent 240,000 240,000 624,000 Utilities 150,000 150,000 360,000 Office Supplies 24,000 24,000 72,000 Laundry & Cleaning 39,456 39,456 150,912 Repairs & Maintenance 6,000 6,000 12,000

Page | 171

Promotions/Advertising 4,000 22,203 26,203 Training & Seminars 8,000 14,000 22,000 Insurance 100,000 100,000 200,000 Licensing Fee 0 7,000 7,000 Total Operating Expenses 1,543,869 2,353,064 4,334,453 EBITDA 2,802,169 65,312 2,429,961 Depreciation (182,130) (182,130) (394,101) Amortization (3,202) (3,202) (6,404) Depreciation & Amortization (185,332) (185,332) (400,505) EBIT/Operating Income 2,616,837 (120,020) 2,029,456 Less Interest 100,000 150,000 250,000 EBT 2,516,837 (270,020) 1,779,456 Taxes (13%) 327,189 0 337,160 Net Income 2,189,648 (279,991) 1,442,296

CLINIC 1 CLINIC 2 1ST SEM 2nd SEM 1ST SEM 2nd SEM

Revenues 2,444,020 2,607,072 1,061,407 1,599,812 Cost of Services (339,785) (365,269) (114,688) (128,155) Gross Income 2,104,235 2,241,803 946,719 1,471,657 Operating Expenses:

Salaries & Wages 480,960 480,960 864,960 864,960 Employees' Benefits 10,493 0 20,485 0 Rent 120,000 120,000 120,000 120,000 Utilities 75,000 75,000 75,000 75,000 Office Supplies 12,000 12,000 12,000 12,000 Laundry & Cleaning 19,728 19,728 19,728 19,728 Repairs & Maintenance 3,000 3,000 3,000 3,000 Promotions/Advertising 2,000 2,000 20,203 2,000 Training & Seminars 4,000 4,000 10,000 4,000 Insurance 50,000 50,000 50,000 50,000 Licensing Fee 0 0 7,000 0

Total Operating Expenses 777,181 766,688 1,202,376 1,150,688 EBITDA 1,327,054 1,475,115 (255,657) 320,969 Depreciation (91,065) (91,065) (91,065) (91,065) Amortization 0 3,202 0 3,202 Depreciation & Amortization 91,065 94,267 91,065 94,267 EBIT/Operating Income 1,235,989 1,380,848 (346,722) 226,702 Interest 0 100,000 0 150,000 EBT 1,235,989 1,280,848 (346,722) 76,702 Taxes (13%) 160,679 166,510 0 9,971 Net Income 1,075,311 1,114,338 (346,722) 66,731

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