MANILA, Philippines — The Gokongwei Group has entered the health maintenance organization (HMO) business by investing in Maxicare Healthcare Corp., the largest player in the industry in terms of assets.
The Insurance Commission (IC) has given the green light to the Gokongwei-led JE Holdings Inc. to acquire a 42.31 percent stake in Maxicare.
JE Holdings, through chairman and president Lance Gokongwei, sought the regulator’s approval to proceed with its investment in Maxicare last April.
With the approval, JE Holdings is now a co-equal shareholder of Maxicare alongside Equicom Group under the leadership of chairman Antonio Go. The Equicom Group engages in a mix of business activities, including financial services, health care and information technology.
IC Commissioner Dennis Funa said the agency welcomes the Gokongwei Group’s foray into the HMO industry. With the entry of a new player, he trusts that the industry will sustain its recovery from the pandemic and become one of the sustainable pillars of the economy.
“With this investment transaction, the Insurance Commission warmly welcomes the Gokongwei Group into the HMO business,” Funa said.
Established in 1987 by a group of doctors, Maxicare serves as one of the pioneer HMOs in the Philippines that later on became the leading player in the industry.
With an asset chest of P15.21 billion, Maxicare services its corporate and individual customers nationwide through its network of more than 24,000 doctors and specialists, 1,400 hospitals and clinics, 1,000 dental facilities and 180 rehabilitation and dialysis centers.
Based on records, Maxicare’s revenue went up by three percent to P19.26 billion last year from P18.79 billion in 2020. However, its profit sank by 32 percent to P1.39 billion from P2.04 billion, reflecting the industry trend where net incomes fell on additional spending for coverages.
According to the IC, Maxicare issued an industry-leading P12.68 billion in health benefits during the second year of the pandemic.
In general, medical claims paid by HMOs grew by a fourth to P32.72 billion from P26.17 billion, as policyholders asked for the release of their benefits mostly for COVID-19 hospitalization and treatment.
The industry recorded a 28 percent drop in profit to P5.14 billion in 2021 from P7.11 billion in 2020.
HMOs like Maxicare used to be monitored by the Department of Health (DOH), until the late President Benigno Aquino III transferred regulation to the IC in 2015.