FILIPINO TYCOON TO FINANCE NEW HOSPITAL ON GUAM

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Proposed 300-bed hospital would cost up to $300 million

By Stella F. Arnaldo Philippines Correspondent

MAKATI CITY, Philippines (Marianas Business Journal, July 20, 2009) –Filipino businessman Cezar T. Quiambao is helping a private group from Guam to build a new hospital on the island, in anticipation of the massive military buildup on Guam beginning in 2010.

This was revealed by Jorge M. Yulo, president and chief executive officer of 1 Document Corp., a company co-owned by Quiambao, in an interview with the Journal. "We are spearheading and funding the project development efforts [of a new hospital], and eventually will be a party to the hospital corporation to be formed in Guam," Yulo said on the sidelines of the Guam Trade Mission Conference on June 30.

The proposal is to build a 200- to 300-bed private hospital on Guam, estimated to cost about $200 million to $300 million, to be constructed in two phases. "We are targeting to make sure the hospital construction commences by 2012," he said. With its Guam partners, 1 Document will likely "form a new corporation" in the U.S. territory to undertake the development and construction of the hospital.

Through his firm Stradcom Corp., Quiambao has been involved in information technology projects such as the automated elections in the Autonomous Region of Muslim Mindanao in August 2008 and computerization of the Philippines' Land Transportation Office and its processing systems. He was formerly the president and chief executive officer of Citra Metro Manila Tollways Corp. which constructed phase one of the Metro Manila Skyway and the Southern Tagalog Arterial Road Tollway.

The proposed privately-run Guam Medical Center is the brainchild of Peter R. Sgro Jr., president and board chairman of the International Group Inc. He also chairs the Guam Healthcare and Hospital Development Foundation Inc. and is currently in the U.S. meeting with potential hospital operators for the project.

Sgro was recently in Manila as one of the organizers of a 20-man Guam Trade Mission which held a two-day conference at the Renaissance Hotel on June 29 and 30 to encourage more Filipino businessmen to invest in the island.

Sgro told the Journal, "Quiambao has been working with us for quite some time and has taken the role of developer of the hospital project." He added that most of the investors in the new Guam hospital will likely come from the Philippines, as well as its nurses, therapists and other health care staff.

At present there is only one civilian hospital on Guam serving the population of 170,000 - the government-owned, 200-bed Guam Memorial Hospital. The only other hospital is the 55-bed Naval Hospital Guam which is solely for the use of American servicemen, qualified U.S. military veterans and their family members. Because of the lack of vital equipment and expertise at

GMH, many Guam residents travel to Manila for various medical treatments and surgery.

With the transfer of some 8,000 U.S. Marines and their 9,000 dependents from Okinawa, Japan to Guam by 2014, there is an anticipated increase in demand for health care facilities. "There is a need for 367 hospital beds on Guam based on industry standards to calculate community hospital bed needs using the population of people under 65 and those over 65," Sgro said. "We considered GMH in our planning and that is the reason that Phase 1 [of the hospital project] will be 100 beds, with Phase 2 being 200 beds. Considering the fact also that the Guam population is expected to grow by 20% from the military buildup, there will be a need for two hospitals."

With additional plans to beef up the air defense and army personnel on Guam, the U.S. military estimates a total of 40,000 American servicemen, their dependents and civilian workers will be stationed on the island.

Sgro said Yulo and Quiambao will soon be forming a Guam corporation called Guam Healthcare Investment Inc. to help them undertake the task of constructing the hospital. "Their attorney [on the island] already drafted the papers. They have retained a U.S. hospital development consultant that was sent to the States to study three hospitals in places about the size of Guam. He then worked with a contractor based in Pittsburgh with significant hospital construction experience to get construction cost projections."

The hospital consultant is Donald L. Weidemann, president and owner of Accent Healthcare Inc. based in Las Vegas. According to his biographical data, Weidemann "provided startup and management services" for the 107-bed hospital owned by the Adventist Health System/Asia in Silang, Cavite, south of Manila, from 2001 to 2007. Previously, Weidemann was administrator of the Seventh-Day Adventist Clinic in Guam from 1997 to 2001. He has been involved in other health care facilities including a stint at Johns Hopkins Hospital in Baltimore.

Sgro said the financial projections for the hospital project have been completed, as well as preliminary architectural renditions for the short list of sites, "although these are subject to change." A land-use consultant who had been retained by Quiambao will soon be going to Guam to pick the site.

"Once a reputable U.S.-based operator for the facility is chosen, then that will be the time to begin making more detailed presentations to potential equity investors of the opportunity which we believe will mostly come from the Philippines. We have already short-listed the nursing and therapist recruiting companies based in Manila to staff the project once complete. I, as well as another member of our Foundation, are traveling to the States and begin the process of face-to-face meetings with reputable hospital operators that have expressed serious interest to manage the hospital," Sgro explained.

Seven potential sites on Guam had been earlier identified, and the list has now been shortened to three sites. He declined to identify the three sites though it is fairly widely known that the foundation has at least considered the former Guam Greyhound Park site.

Sgro added that the planned private hospital will be seeking accreditation from the Joint Commission International, a division of the Joint Commission Resources tasked to ensure that international hospitals are on par with hospital standards in the U.S. Hospitals with JCI accreditation are deemed safe, trustworthy, and dedicated to patient care. In the Philippines only three hospitals have JCI accreditation - St. Luke's Hospital, Medical City and Asian Hospital.

"We have already been in touch with them (JCI).... It is imperative to have JCI accreditation to demonstrate confidence in the facility," he said, adding that the accreditation is required by U.S. federal law especially for hospitals which intend to treat U.S. military personnel and veterans. U.S. servicemen currently stationed on Guam also seek medical treatment elsewhere especially for cases that cannot be handled by the Naval Hospital.

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