FOURTEENTH CONGRESS OF THE REPUSLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
SEN4 
%No. 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The Constitution, Article XIII, Section 11, provides: 
Section 2. The State shall adopt an integrated and comprehensive 
approach to health development which shall endeavor to make health and other 
social services available to all the people at affordable cost. 
Despite the Constitutional mandate, health services have become a precious commodity 
available only to the moneyed few. Health care costs have skyrocketed to such levels that people 
are forced to resort to alternative medicine rather than seek expensive professional medical 
intervention. 
This bill seeks to reduce health care costs by requiring tertiary and specialized hospitals 
to share certain services and equipment.* 
* This bill was re-filed during the Thirteenth Congress, First Regular Session. 


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FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
1 
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t 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
TO REDUCE HEALTH CARE COSTS BY REQUIRING TERTIARY AND SPECIALIZED 
HOSPITALS TO SHARE CERTAIN SERVICES AND EQUIPMENT 
Be it enacted by Senate and the House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. - This Act shall be known as the “Health Services Cost Control 
Act of 2007.” 
SECTION 2. Declaration of Policy. - It is the purpose of this Act to reduce health care 
costs by encouraging cooperation between tertiary and specialized hospitals in order to contain 
costs and achieve a more efficient and effective health care delivery system through the 
elimination of unnecessary duplication of expensive medical or high technology services or 
equipment while preserving services in geographical proximity to the communities traditionally 
served by the facilities. 
SECTION 3. Definition of Terms. -As used in this Act, the term: 
(A) “Administrators” refers to the Secretary of Health and the presidents and owners of 
tertiary and specialized hospitals which are covered by this Act. 
(B) “Tertiary hospitals” means hospital that have complete, advanced, and 
departmentalized facilities and services for the diagnosis, treatment and care of 
individuals suffering from all types of illness, disease, injury or deformity, or in need 
of obstetrical or other medical and nursing care. A tertiary hospital may be 
government and privately-owned. 
(C) “Special” or “specialized hospitals” means hospitals that devote their services hll- 
time for the diagnosis and treatment of specific types of illness such as, but not 
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limited to, heart-related ailment, lung disease, kidney problem, and abnormal mental 
state. The term hospital shall also be construed any institution, building or place 
where there are installed beds, or cribs, or bassinets for twenty-four hour use or 
longer by special classes of patients like children and patients suffering from 
tuberculosis. A special hospital may likewise be government or privately owned. 
(D) “Government hospital” means a hospital operated and maintained either partially or 
wholly by the national, provincial, municipal, or city government or other political 
subdivisions, or any other department, division, board, or agency thereof. 
(E) “Private hospital” means one which is privately owned, established and operated 
with funds raised or contributed through donations, or by private capital or other 
means, by private individuals, associations, corporations, religious organizations, 
firm, or joint stock association. 
SECTION 4. Technology and Services Sharing Demonstration Program. - 
(A)Not later than one year from approval of this Act, the secretary of Health and the 
presidents and owners of the country’s tertiary and specialized hospitals shall jointly 
design a demonstration program to determine the extent to which health care services 
and equipment can be shared to reduce health care cost. 
(B)On the second year of the establishment of the demonstration program under this 
Section, the Administrators shall prepare the guidelines for the kind of cooperative 
agreements that may be entered into in accordance with the results of the 
demonstration program. 
SECTION 5. Service Area. - The Administrators shall determine the area to be served 
by a demonstration program under Section 3(A). 
SECTION 6. Grant Funds and Tax Breaks. - 
(A) Tertiary and specialized hospitals that enter into cooperative agreements under 
Section 3(B) of this Act shall receive grant funds and tax breaks to be determined by the 
Administrators and the Commissioner of Internal Revenue. To be eligible to receive a grant or 
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tax break, a tertiary or specialized hospital shall prepare and submit to the Administrators an 
application at such time, in such manner, and containing such information as the Administrators 
may require, including - 
(1) A statement that such entity desires to negotiate and enter into a voluntary 
agreement with another tertiary or specialized hospital for the sharing of medical 
technology or services; 
(2) A description of the nature and scope of the activities contemplated under the 
cooperative agreement; 
(3) A description of the financial agreements between the entities that are parties 
tot he agreement; 
(4) A description of the geographical area generally to he served by the 
individuals; and (e) a description of anticipated benefits and advantages to the providers 
and to individuals; and 
(5) Other information determined appropriate by the Administrators. 
(B) Development of Evaluation Guidelines. - The Administrators shall develop 
regulations, including criteria and evaluation guidelines, with respect to applications submitted 
under paragraph (A). In determining which applications to approve for purposes of awarding 
grant funds and tax breaks under paragraph (A), the Administrators shall consider whether the 
agreement described ion each such application meets the criteria and guidelines developed under 
this paragraph and is likely to result in - 
(1) The enhancement of the quality of care; 
(2) The preservation of services in geographical proximity to the communities 
traditionally served by the applicant; 
(3) Improvements in the cost-effectiveness of high-technology services by the 
entities involved; 
(4) Improvement s in the efficient utilization of he entities’ resources and capital 
equipment; 
(5) The provision of services that would not otherwise be available; 
(6) The elimi.nation of unnecessary duplication of hospital resources; 
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(7) A reduction in costs to individuals; or 
(8) No undue harm to the care provided individuals seeking services. 
SECTION 7. Application of Grant Funds. - Amounts provided under a grant awarded 
under Section 5 shall be used to facilitate collaboration among entities. Such permissible uses 
may include reimbursing for the expenses associated with specialized personnel, administrative 
services, support services, transportation, and instructional programs. Funds may not be used to 
purchase expensive, capital- intensive medical technology or other resource-intensive services 
not previously owned or provided by the facility. 
Entities applying for grants under Section 5 shall specify the desired grant award amount. 
The Administrators shall determine the appropriate amount granting such awards. 
SECTION 8. Medical Technology and Services. - 
(A) In General. - Cooperative agreements carried out under this Act shall provide for the 
sharing of medical technology or eligible services among the entities which are parties to such 
agreements. 
(B) Medical Technology. - For purposes of this section, the term “medical technology” 
includes drugs, devices, equipment and medical and surgical procedures utilized in medical care, 
and the organizational and support systems within which such care is provided, that - 
(1) Have high capital costs or extremely high annual operating costs; and 
(2) Are technologies with respect or which there is reasonable expectation that 
shared ownership will avoid a significant degree of the potential excess capacity of such 
service in the community or region to be served under such agreement. 
(C) Eligible Sewices. - With respect to services which may he shared under an 
agreement entered into under this section, such services shall - 
(1) Either have capital costs or extremely high annual operation costs; and 
(2) Be services with respect to which there is reasonable expectation that shared 
ownership will avoid a significant degree of the potential excess capacity of such services 
in the community or region to he served under such agreement. Such services may 
include mobile services. 
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SECTION 9. Term Cooperative Agreements. - Term cooperative agreements under this 
Ac,t to reduce healthcare costs shall continue for the period agreed upon by the participating 
parties. 
SECTION 10. Reports. - In general, the participants to health-cost reduction programs 
entered into under this Act shall submit annual reports to the Administrators containing 
information on the programs funded under this section, as required by the administrators. 
SECTION 11. Appropriations. - To carry out the demonstration program in Section 5 
such sum as hereby necessary is hereby authorized to be appropriated from the National 
Treasury. Thereafter, such sums necessary for the grant funds shall be included in the annual 
appropriations of the Department of Health. 
SECTION 12. Separability Clause. - If any provision or part hereof, is held invalid or 
unconstitutional, the remainder of the law or the provision shall remain valid and subsisting. 
SECTION 13. Repealing Clause. - Any law, presidential decree, issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to or inconsistent 
with, the provisions of this Act is hereby repealed, modified or amended accordingly. 
SECTION 14. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
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Approved, 
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