THIRTEE 
CONG 
F THE 
UBLl 
-04 JkIN 
:3 0 
OF 
PHIL1 
First Regular Session 
1 
Introduced by Senator S. R. Osmeiia 111 
EXPLANATORY NOTE 
In a time of mounting expenses and high medicine costs, it is imperative to 
institutionalize free hospitalization for all Filipino citizens through a working cost- 
sharing scheme that will ensure Filipinos get the medical attention they need 
without worrying about deposit payments before being treated or attended to by a 
physician. 
Health is a basic human rights and both a means and an end to 
development. It is influenced by factors within and outside of the health sector. 
Health for every Filipino can only be attained in partnership with the people. 
Access to health services is still a problem of many Filipinos. A survey 
conducted by the Department of Health showed that those, individuals who. 
belong to the low-income families manifested a high rate of mortality because of 
absence of necessary health care. Health statistics reveal that forty two percent 
proper medical care. The percentage of the population that was hospitalized is 
less than one percent (1%) of total population. 
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One major reason for the poor access of the population to proper medical 
care is the high cost of hospitalization. It is prevalent nowadays that a medical 
doctor will not attend to a poor patient if there is no substantial hospital deposit. 
The Local Government Code of 1991 devolved the function of providing 
health services, particularly hospital services, to the local governments. While the 
local government units (LGUs) welcomed the responsibility and authority to 
deliver health care services to their people, many LGUs faced problems in 
implementing this function. Financial and budgetary constraints and the lack of 
medical personnel and facilities to adequately service the needs of their 
constituents were encountered. 
This situation forced LGUs to find innovative ways to provide this basic 
service to their residents. The schemes adopted by local governments involved 
inter-LGU cooperation and cost sharing schemes. The Philippine Institute of 
Development Studies has documented successful LGU health systems that 
adopted these schemes, among them Bukidnon and Valencia, Negros Oriental. 


This bill therefor seeks’ to institutionalize a local health’ delivery system ~ 
among local governments to solve the problem of access to medical care. This 
will require local government units to establish a cost-sharing scheme for the 
hospitalization services to their constituents. The system will also include the 
blood typing of all residents for easy access to blood donors and establish a 
perfect system of identity of all citizens of the country. 
In line of this cost-sharing scheme, a national ID system shall also be 
established, which will show the individuals date of birth, residence address, 
blood type, thumb mark, civil status and picture. Said ID will be printed by the 
Department of Health to distributed to all LGUs through the barangay level. The 
ID will be signed by the barangay treasurer, countersigned by the municipal 
doctor and the municipal treasurer. 
The ID shall be accepted as proof of identity in all sectors of the 
government including the COMELEC. 
The Department of Health shall maintain operations of special hospitals 
such as the Philippine Heart Center, Kidney Institute, Philippine Children’s 
Medical Center, as well as the other hospitals under its jurisdiction. Said 
hospitals shall be covered by the cost-sharing scheme. 
The health system will require mandated contributions from all Filipino 
residents, LGUs and the national government. An example of annual 
contributions based on the per capita share on the internal revenue allotment 
(IRA) is as follows: 
City Dwellers 
(per person) 
Municipal Residents 
(per person ) 
Resident 
P30.00 
Resident 
P30.00 
Barangay 
15.00 
Barangay 
15.00 
City Government 
120.00 
Municipal Government 
70.00 
Dept. of Health 
75.00 
Provincial Government 
50.00 
Total 
P240.00 
Dept. of Health 
75.00 
Total 
P240.00 
This is highly feasible based on the experience of Negros Oriental. This 
province has a budget for health and hospitalization of P120,358,665 and. an 
income of P27,755,997. Its outlay is P92,600,669 or P 82.23 per capita 
(population of 1,126,061). For the Department of Health its budget for the year 
2001 is P10.74 billion and with a population of 76,498,735, this results to a per 
capita of P141.00. The budget for hospital assistance is around P4.123 billion 
translating to a per capita budget of P54.00. This includes the budgets for 
subsidy to indigent patients, support to local public health systems and health 
facilities direct service delivery. Therefore, the contributions are affordable. 
The expected contribution for a year will be P242.10 million and expected 
expenditures is P233.84 million resulting to a surplus of P8.26 million. Looking at 
the experience of hospital totalled P I  78.5 million. (Siliman University Medical 
Center-PI 01.7 million, Holy Child Hospital P49.0 million and Provincial hospital 
P27.7 million) These hospitals however, service mostly affluent families of the 
province and other nearby provinces. 
A Board of Trustees will manage the proposed system, and the funds shall 
be put into trust fund. The local treasurers shall assist in the collection of the 
contributions. 


The health care program will encourage the people, especially the 
marginalized sector, to seek medical assistance upon early manifestation of an 
illness. Prompt medical attention can arrest further complications minimizing 
work lags and reinforcing his productivity. 
Likewise, this scheme*assures private hospitals of a maximum fee per. 
patient amounting to P5,OOO.OO while there will be no limit to be imposed on 
government hospitals. The program will then encourage the establishment of 
health facilities since hospitals are assured of funding. The availability of prompt 
and efficient hospital service will also be greatly improved. 
Through this Act, no Filipino will then be denied access to medical and 
hospital services. 
In view of the foregoing, early passage of this bill is earnestly requested. 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLI 
1 
OF THE PHILIPPINES 
First Regular Session 
.. 
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I 
S.fN0. 3 
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Introduced by Senator S. R. Qsmeiia 111 
AN ACT 
ESTABLISHING A COST SHARING SCHEME TO PROVIDE FOR A 
HOSPITAL CARE PROGRAM IN LOCAL GOVERNMENT UNITS AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Declaration of Policy. - It is the policy of the State to 
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Constitution. As a basic service, this function is now a responsibility of local 
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government units. As such all local government units as mandated in the Local 
Government Code of I991 or Republic Act No. 7160 is required to render health 
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services to their constituents through the establishment and maintenance of 
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health facilities and to provide access to proper medical care possible. Local 
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government units shall utilize the powers and authority given to them to fulfill this 
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mandate including consolidating or coordinating their efforts, services and 
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resources for purposes commonly beneficial among them and the provision of 
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SEC. 2. Establishment of a Cost Sharing Scheme for Hospital Care 
budgetary allocations for health programs and services. 
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Program. - Every province or city, in cooperation with the,municipalitjes .
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barangays, shall establish a Cost Sharing Scheme for a Hospital Care Program. 
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This scheme shall ensure the access of their residents to affordable quality and 
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accessible medical care from health facilities and hospitals. The Hospital Care 


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program will cover all residents of the local government units under their 
respective j u ri sd i cti o n s . 
SEC. 
3. 
The 
. - Every province or city, 
municipality and barangay shall appropriate funds for the Hospital Care Program, 
which shall be placed in Trust Fund for this purpose. The contribution of each 
local government shall be as follows 
City Dwellers 
Municipal Residents 
(per person) 
(per person) 
Res id en t 
P3.0.00 
Res id en t 
P3Q.00 , 
Barangay 
15.00 
Barangay 
15.00 
City Government 
120.00 
Municipal Government 
70.00 
Dept. of Health 
75.00 
P rovi n cia I Govern men t 
50.00 
Total 
P240.00 
Dept. of Health 
75.00 
Total 
P240.00 
The contributions to the Cost Sharing Scheme may be adjusted by the 
Board of Trustees who will manage the program according to the needs of its 
beneficiaries and to improve the quality of health care services: Provided, 
however, That any adjustment in the National Government contribution shall be 
decided by the Department of Health according to the needs of the respective 
local government units and the availability of funds. 
The trust fund shall be used solely for the purposes of the Hospital Care 
Program and the improvement of the health facilities. The fund shall be deposited 
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SEC. 4. Identification Card System. - There is hereby established an 
into a bank account and managed by the Board of Trustees. Provided, however, 
That the fund shall not be invested in any financial instrument or undertaking that 
may jeopardize the feasibility and viability of the Hospital Care Program. 
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ID System which shall require the issuance of an identification card to every 
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citizen as proof of their qualification to the program, and which shall contain the 
following information: (a) residence address; (b) date of birth; (c) blood type; (d) 
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thumb mark; (e) civil status; and (9 picture. The identification card shall be signed 
by the barangay treasurer, municipal/ city treasurer and municipal/city health 
officer. Every citizen seeking medical attention shall present said ID upon 
admission to any hospital. Said ID shall be accepted as proof of identity in all 
government sectors including the COMELEC. 
SEC. 5 Creation of the Board of Trustees. - There shall be a Board of 
Trustees in every province to manage the Hospital Care Program and the Trust 
Fund. 
a) For provinces, the Board of Trustees shall be composed of the 
Provincial Governor as Chairman, Provincial Health Officer as President & Chief 
Executive Officer, and the following as members: 
President of the Provincial Mayor’s League 
Chairman of the Provincial Councilors’ League 
Chairman of the Provincial Barangays’ League 
Vice Governor of the Province 
Chairman of the Provincial Health Board 
Four (4) Representatives from four Non-Government Organizations 
b) For Highly Urbanized Cities, the Board of Trustees shall be composed 
of the City Mayor as Chairman, City Health Officer as President & Chief 
Executive Officer, and the following as members: 
President of Mayors’ League 
Chairman of the Councilors’ League 
Chairman of the Barangays’ League 
Vice Mayor of the City 
Chairman of the City Health Board 
Four (4) Representatives from four Non-Government Organizations 
The Non-Government Organization representatives shall be selected by 
the Provincial Governor or City Mayor, as the case may be, from NGOs involved 
in providing health and social services operating in the province or city. 


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The members of the Board shall have a term of three (3) years and shall 
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receive reasonable allowances as determined by the Board 
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SEC. 6. Powers and Functions of the 
oard of Trustee 
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of Trustees shall have the following powers and functions: 
a) To administer the Hospital Care Program and manage the Trust Fund; 
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b) To formulate and promulgate policies for the sound administration of 
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the program; 
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c) To set standards necessary to ensure the quality of hospital service, the 
proper utilization of services, viability of the Trust fund and other rules that may 
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be needed for the successful implementation of the Hospital Care Program; 
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d) To formulate the rules and guidelines for the proper availment of the 
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services of the hospital Care Program including limits to the amount of service 
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and medicine that can be availed, amendments to the coverage and other 
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relevant aspects of the program; 
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e) To amend the contributions to the cost sharing scheme to make it more’ 
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responsive to the needs of the Hospital Care Program and other external factors; 
9 To set the guidelines for the accreditation of the health facilities; 
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g) To negotiate and enter into contracts with health care institutions, health 
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professionals and other juridical or natural persons regarding the financing, 
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payments, pricing design and administrative systems and procedures necessary 
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h)To collect, deposit, administer and disburse the Trust fund in 
for the delivery of the services of the Hospital Care Program; 
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accordance with the provisions of this Act; 
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i) To monitor and inspect the delivery of services to ensure the 
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of the beneficiaries; 
appropriate delivery of quality hospital service and make certain the satisfaction 
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j) To solicit, receive and manage grants, donations and other forms of 
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assistance; 


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Care Program; and 
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k) To organize its office, fix the compensation of and appoint personnel as 
may be deemed necessary for the successful implementation of the Hospital 
I) To submit a report on the financial condition and status of operations for 
the Hospital Care Program to the Sangguniang Panlalalwigan or Sangguniang 
Bayan of all municipalities. The reports shall likewise be posted in every 
municipality and made available to the beneficiaries. 
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SEC. 7. The hcospifal Care Program. - There shall be created a Hospital 
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Care Program in every province or city which shall provide the following services 
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to their residents: 
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a. Impatient Hospital Care 
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1. room and board 
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2. services of health care professionals; 
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3. diagnostic, laboratory and other medical examinations; 
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4. use of surgical or medical equipment and facilities; and 
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5. prescription drugs and biologicals, subject to limitations set forth. 
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b. Outpatient Care: 
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services of health care professionals; 
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2. diagnostic, laboratory , and other medical examination services; 
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3. personal preventive services; and 
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4. prescription drugs and biologicals, subject to limitations set forth. 
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The following treatments shall be excluded from the coverage of the 
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Hospital Care Program: 
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a. eyeglasses and optometric services; 
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b. dental examinations and dentures 
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c. expensive and sophisticated procedures such as CT scans and the like; 
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d. cosmetic procedures and surgery; 
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e. non-prescription drug and devices; 
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f. drug and alcohol abuse and dependency; 


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g. other ailments as may be declared by the Board of Trustees 
SEC. 8. Accredifation of Health Facilities. - The Board of Trustees 
shall ensure that health facilities shall be available for the Hospital Care Program. 
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All government health facilities shall participate in the program and in addition, 
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private health facilities shall be accredited to provide services for the program. 
SEC. 9. &nro//menf Beneficiaries. - Every barangay shall enroll their 
residents in the Hospital Care Program. The barangay captain shall certify that 
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the person to be enrolled is a resident of the barangay based on official records 
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such as the municipal civil registry, community tax certificates and others. 
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The municipal local treasurers in coordination with the barangay 
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treasurers shall collect the contributions of the residents and remit them to the 
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provincial or city treasurer. 
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SEC. I O .  The Department of Health. - The DOH shall maintain its 
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subsidy for indigent patients who are for confinement in specialty hospitals as 
well as the other hospitals under its jurisdiciton. Said hospitals shall be convered 
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by the cost-sharing scheme. 
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SEC. 11. Separability Clause. - If any section or provision of this Act is 
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declared unconstitutional, the rest of the provisions not affected thereby shall 
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continue to be valid. 
SEC. 12. Repealing Clause. - All laws, as well as pertinent rules and 
regulations thereof, which are inconsistent with the provisions of this Code, are 
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hereby repealed or amended accordingly. 
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SEC. 6. Effectivity. - This Act shall take effect fifteen (15) days after its 
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complete publication in two (2) newspapers of general circulation. 
Approved,