THTIRTFXNTH CONGRESS OF Tltp% REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
Introduce by Senator Juan M. Flavier 
EXPLANATORY NOTE 
The proposal seeks to modernize the hospital care delivery system through an 
integrated approach and complemented by state-of-the art technology. The proposed 
"Health Care Delivery Modernization Program" has the following main components: 
e Delineation of the roles of the Department of Health (DOH) and the local 
government units @GUS) to strengthen their complementary roles. 
Strengthening the Capability of the Provincial Hospitals 
Establishment of Hospital Health Boar& 
The proposed hospital modernization plan is neither a grandiose nor a complex 
plan. It is just a simple plan to provide local hospitals what they need - modern 
equipment, upgrading of facilities and adequate number of physicians. 
Moreover, in 
areas where there are no hospitals and no doctors, the DOH is tasked to provide doctors 
and if necessary, build extensions of its regional hospitals. 
0 
e 
In short, the bill simply aims to make health care services more accessible, 
available, affordable and acceptable to our people. I therefore urge your support for its 
approval. 
R 


1 
CONGRESS OF THE PHILIPPTNES 
2 
THIRTEENTH CONGRESS 
3 
First Regular Session 
4 
5 
’I 
13 
9 
10 
11 
12 
13 
14 
15 
116 
‘I 7 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
S E N A T E  
7 
.- 
., . 
Introduced by Sen. Juan M. FIavier 
AN ACT PROVIDING FOR THE NODERNCZA’I’ION OF THE HEALTH CARE 
DELIVERY SYSTEM, APPROPRUTING FUNDS THEREFOR AM) FOR 
OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. 
Short Title. - This Act shall be known as the “Health Care Delivery 
Modernization Act.” 
SEC. 2. Declaration of Policy. - It is hereby declared a policy of the State to 
modernize the health care delivery system to a level where it can l l l y  and effectively perform 
its constitutiond mandate to protect and promote the right to health of the people and instill 
health consciousness among them. 
Towards this end, the thrusts of this modernization 
program under this Act shall be the following: 
(a) The development of an efficient and effective health care delivery system throughout 
the country; 
(b) The integration of the promotive, preventive, curative and rehabilitative aspects of 
health care delivery to be under the local chief executive (LCE) whenever appropriate; 
(c) The transformation of government hospitals into self-governing components, 
together with their respective rural health units; 
(d) The development of cooperation among the local and national government agencies, 
members of Congress and the private sector, including the civic, religious and nongovernment 
organizations; 
(e) The implementation of a residency training and accreditation program and 
accreditation of private specialist practitioners in provincial hospitals and medical centers; 


2 
1 
.2 
3 
4 
5 
'7 
8 
9 
1 0 
11 
12 
13 
1 4 
1 5 
16 
1 '7 
113 
I!? 
20 
21 
22 
23 
24 
25 
26 
2 7  
28 
211 
30 
3 'L 
(0 The establishment oE a dependable two-way referral system between the public and 
health worker up to the successive higher level of health care stations reaching up to the 
specialty hospitals and vice versa; 
(8) The delineation of specfic and specialized functions that will enable the Department 
of Health (DOH) to concentrate its efforts in establishing and maintaining adequately equipped 
state-of-the-art medical centers at the regional level, including those in Metro Manila, and 
specialty hospitals in the country, including those with original charter; 
(h) The development of partnership among local government units (LGUs) and between 
LGUs and the DOH in the establishment of health care delivery facilities; and 
(i) The adoption of a system and procedure by the LGUs and the DOH to attain a 
maximum level of transparency in the procurement of equipment and medicines. 
SEC. 3. Statement of Objectives. - The Health Care Delivery Modernization Program, 
hereinafter referred to as the Program, shall be implemented in accordance with the following 
objectives: 
(a) To modernize the health care delivery by adopting a comprehensive, consistent and 
systematic approach to health issues and concerns which will be complemented by state-of- 
the-art technology; 
(b) To fiu-ther enhance local autonomy by granting LGUs 111 powers in the formulation 
of policies and by mandating the DOH to perform its tasks under Section 5 of this Act relative 
to the operation and maintenance of hospitals and public health services under its supervision 
and control; 
(c) To implement a program of extending technological, financial and administrative 
assistance to LGUs to support and improve the provision, and operation and maintenance of 
health facilities and equipment; 
(d) To enhance inter-agency multi-sectoral cooperation; 
(e) To enhance the capability of hospitals by requiring the DOH to provide each LGU 
competent physicians to assist the local chief executive as may be appropriate, in the 
monitoring of health care delivery functions; and 
(0 To encourage the employment and retention of doctors in rural areas. 
SEC. 4. Definition of Terms. - The following terms used in this Act are defined as 
follows: 


.. 
I 
3 
1 
:2 
:3 
4 
5 
6 
‘7 
13 
I9 
10 
1 :I 
12 
13 
14 
15 
1 t j  
17 
18 
1 9 
20 
21 
2;! 
23 
24 
25 
26 
2 7’ 
251 
25) 
3 0 
31 
(a) “Xealth Care Delivery Modernization Program” refers to an integrated approach to 
health care which as detailed under Section 5 hereof shall have the following program 
components: a delineation of the role of the LGUs and the DOH, the strengthening of the 
capability of the provincial hospitals, and the establishment of hospital health boards. 
(b) ‘Wospital” refers to a place devoted primarily to the maintenance and operation of 
facilities for the diagnosis, treatment and care of individuals sflering fi-om illness, disease, 
injury or deformity, or in need of obstetrical or other medical and nursing care. 
(c) “Primary hospital” refers to a hospital with capabilities and facilities for providing 
fmt contact emergency care and hospitalization in simple cases. 
(d) “Secondary hospital‘, refers to a hospital which has capabilities and facilities for 
providing medical care to cases requiring hospitalization and the expertise of physicians with 
training oi‘not less than six (6) months on certain specialties. 
(e) Tertiary Level I hospital” refers to a hospital which has capabilities for providing 
medical care to cases requiring sophisticated diagnostic and therapeutic equipment and the 
expertise o€ trained specialists and sub-specialists. 
(f) “Tertiary Level I1 hospital” refers to a departmentalized hospital with teaching and 
research capabilities and which have accredited Residency Training Programs in the fields of 
surgery, pediatrics, medicine, OB-Gyne, EENT, orthopedics, anesthesia and other ancillary 
disciplines. It likewise offers dental services. 
(g) Tertiary Level I11 hospital” refers to a hospital which has been particularly selected 
to provide tertiary hospital services, with teaching, training and research functions. 
(h) ‘Tertiary Level IV hospital” refers to a tertiary hospital with expensive and 
sophisticated diagnostic and therapeutic facilities for a specific medical problem area 
(i) “‘District hospital” refers to the front-line hospital, which has its own catchment area, 
and with capabilities and facilities for providing secondary medical care to cases requiring 
hospitalization and the expertise of trained doctors. 
(i) “Provincial hospital” refers to a central district hospital with its own catchment area 
which provides at least a minimum of Tertiary Level I hospital care. 
(k) “Regional hospital” refers to a departmentahzed hospital which provides Tertiary 
Level I1 hospital care. 
(1) ‘Medical center” refers to a hospital whwh provides Tertiary Level 111 hospital care. 


4 
:I 
‘) 
3 
4 
3 
t; 
‘7 
13 
!> 
10 
1 1 
12 
1 3  
14 
I!; 
16 
1 ’7 
18 
1!> 
20 
2:1 
22 
23 
24 
25 
26 
27 
213 
2!? 
30 
3 :L 
(m)“Specialty hospital” refers to a hospital which provides services for one particular 
illness or disease or health medical care need, with the hlghest medical care rendered by 
medical experts using highly specialized equipment for a specific medical problem area. It 
provides Tertiary Level IV hospital care. 
(n) “Competent physician” refers to a licensed medical doctor who possesses both 
technical and managerial knowledge or expertise in health care. 
(0) ‘Zocal government units (LGUs)” refer to provinces, cities, municipalities, barangays 
and other political subdivisions as may be created by law. 
SEC. 5. Health Cure Delivery Modernization Program. - In order to meet its 
objectives, there shall be created a Health Care Delivery Modernization Program which shall 
have the following components: 
(A)Delineation of the Role of the Local Government Units and the Department of 
Health (DOH). - The Leagues of Local Government Units (LGUs) and the Department of 
Health (DOH) shall support the implementation of the Health Care Delivery Modernization 
Program by performing the mandated tasks herein defined, to wit: 
(1) The province shall be responsible for the promotive, preventive, curative and 
rehabilitative aspects of health care delivery except in places where municipal and city 
hospitals exist, in which case these shall be under the responsibility of the LGU cowerned. 
They shall also undertake an annual review of health program in their areas of jurisdiction; 
The Integrated Provincial Health Office (IPHO), with the assistance of the DOH resident 
consultant, shall continue to coordinate with the municipal or city health oflticer in all activities 
pertaining to public health at the municipal or city level. 
(2) The DOH shall, in addition to the powers vested in it under existing laws, be 
responsible for the following: 
(a) Delivery of health care services higher than or more sophisticated than that provided 
by LGUs; 
(b) Provision of competent physicians €or each province or qualified cities or 
municipalities to assist the local chief executive, as may be appropriate, in the management and 
monitoring of devolved health care hctions; 
(c) Upper tertiary hospital care where the expertise in the different organ specific 
medical-surgical specialty is needed; 


5 
17 
1 EI 
15, 
20 
2 I. 
22! 
23 
24 
25 
26 
27 
28 
29 
30 
31 
3 Z! 
(d) Operation and maintenance of medical centers, including those in Metro Manila, and 
specialty hospitals whose functions are to provide tertiary expertise: Provided, however, That 
a specialty hospital with original charter shall continue to be governed by its own charter; 
(e) Supervision of the operation of the more sophisticated organ- specific medical 
centers; 
(f) Initiation and assistance in the establishment of a residency training program with 
the participation of the private practicing specialist, as much as practicable, as consultants in 
each provincial hospital; 
(g) Provision of doctors in rural communities under its program of doctors to 
doctorless areas, who shall be assigned by the regional field units in consultation with the local 
chief executive, as may be appropriate to qualified communities; and 
(h) Creation and funding of positions for doctors to doctorless areas including tkeir 
incentives and benefits, in addition to those granted under existing laws, to wit: 
(h.1) 
Free legal representation and consultation services shall .be immediately 
provided by the Public Attorney's Office in cases of coercion, interference, and in other civil, 
criminal and admrnistrative cases filed by or against such doctors arising out of or in 
connection with the performance of their duties as such; and 
(h.2) 
Scholarship benefits in the form of tuition fees in state colleges or universities 
to be granted to their legitimate children. 
(B) Strengthening the Capability of the Provincial Hospitals. - The provincial hospitals 
shall be developed into responsive, efficient and modem institutions with the capability to 
handle Tertiary Level I to I1 hospital care. In pursuance thereof, the following necessary steps 
shall be undertaken: 
(1) The establishment o€ a residency training program and acquisition of tertiary 
diagnostic facilities with, as much as practicable, the participation of the private sector or 
private specialist practitioner as consultants in each provincial hospital subject to the following 
conditions: 
(a) Consultants, who shall be accredited to practice in the hospital, may be entitled to 
honorarium to be determined by the district hospital health board; 
(b) Provincial hospital residents participating in the residency training program shall not 
be permanent employees but shall be considered employed for the whole duration of the 
residency training period; and 


6 
I. 
I 
1. 
4 
fi 
6 
I’ 
$1 
B 
10 
11 
12, 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
(c) Participants in the residency training program shall be given preference in case of 
reemployment as residents of district hospitals. 
(2) The Improvement and Upgrading of Provincial and Highly Urbanized City 
Hospitals. - The DOH shd extend technical and financial assistance relating to the 
establishment of diagnostic centers and acquisition of modern and quahty equipment to 
improve the capabilities of the provincial hospitals pursuant to its modernization objectives: 
Provided, That the acquisition of new equipment shall be synchronized with the phasing out of 
obsolete major equipment and subjected to the laws on public biddmg. 
In provinces with a population of at least one million, and in island provinces as well as 
in hghly urbanized cities, the DOH may establish an extension of the regional medical center 
in the provincial or city hospital, as the w e  may be. The extension hospital to be established 
shall have the capability of Tertiary Level I1 hospital care: Provided, further, That the DOH 
shall also extend assistance equivalent to the cost of maintenance of equipment and personnel, 
and if necessary, the replacement or improvement of equipment in the abovementioned 
hospitals. 
(C) Establishment of Hospital Health Boards. - Th~s component of the Program is 
geared towards the realization of a genuine local autonomy. In Wherance thereof, there shall 
be established a district hospital health board, medical center health board, including those in 
Metro Manila, and specialty hospital health board: Provide4 however, That there shall also be 
established hospital health boards in municipalities or cities which have hospitals: Provided, 
further, That specialty hospitals with original charters, namely: 
National Kidney and 
Transplant Inslitute, Lung Center of the Philippines, Philippine Children’s Medical Center and 
Phihppine Heart Center, shall continue to be governed by their respective charters. 
(1) District Hospital Health Board 
(a) Composition - The composition of the district hospital health board shall be as 
follows: 
(a 1) Chairman: Chief of the District Hospital. 
(a2) Members: representative of the Congressional District for hospitals in his political 
district; a mayor of the catchment area of the district; member of the sanggUniang 
panlalawigan of the political district; representative of the Phihppine Hospital Association; 
representative of the Philippine Medical Association; representative of nongovernment 


7 
1 
I 
L 
:I 
4 
5 
ti 
7 
8 
5) 
10 
11 
12! 
1 :I 
1 4 
15 
16 
1 7 
1 El 
19 
20 
21 
2il 
23 
24 
25 
26 
2;' 
28 
25) 
30 
31 
organizations involved in health services; representative of the religious sector; and 
representative of the private sector. 
(a3) 
The members of the District Hospital Health Board, except the chairman and 
the representative of the congressional district, shall be appointed by the provincial governor. 
(b) Powers and Functions - The powers and functions of the district hospital health 
board shall be as follows: 
(b. I) To assist the provincial governor in the operation and management of the district 
hospital; 
(b.2) To review and endorse the budgetary requirements of the district health services; 
(b.3) To devise a mechanism for internal control; 
(b.4) To enhance the participation of LGUs and community involvement in hospital 
service and public health activities; 
(b.5) To screen and recommend to the Selection Board the appointment of qualified 
applicants to fdl vacant positions in the rural health units and district hospitals; 
(b.6) To be responsible for the recruitment of volunteer barangay health workers who 
shall be entitled to monthly honorarium and other benefits as provided for by the law; 
(b.7) 
To deposit, in trust, all the earnings ofthe district hospital and rural health units 
derived f?om whatever source with the Provincial Treasurer's Office or with any authorized 
depository banks; 
(b.8) 
To determine the utilization of the earnings of the hospital and rural health 
units for the betterment of hospital and rural health services; and 
(b.9) 
To perform such other functions as may be deemed necessary for the effective 
management of the rural health units and hospitals. 
(c) Meetings and Quorums - 
(c. 1) 
(c.2) 
The Board shall meet at least once a month or as often as may be necessary; 
A majority of the members of the Board shall constitute a quorum but the 
chairman must be present during meetings where budgetary proposals are prepared or 
considered. Members ihereof who are not government officials or employees shall be entitled 
to necessary traveling expenses and allowances chargeable against the fimds of the district 
hospital health board subject to the accounting and auditing d e s  and regulations. 
(2) Medical Centers and Specialty Hospitals Health Boards 


8 
1 
2 
3 
4 
5 
6 
7 
8, 
9 
1 0 
11 
1 2 
1 :I 
1 4 
1 fi 
16 
1 '7 
1 I3 
113 
20 
21 
22 
23 
24 
25 
26 
2.7 
2.8 
;!9 
3 0 
3 I 
(a) Composition - The composition oE the Medical Center and Specialty Hospital 
Health Boards shall be as follows: 
(al) 
Chairman: Chief of Medical Centers or Specialty Hospitals, as the case may 
be; 
(a2) 
Members: a senator of the Republic; a representative of the Congressional 
District where the medical center or specialty hospital is located; a representative of the 
Philippine Hospital Association; a representative of the Philippine Medical Association; a 
representative of the nongovernment organizations involved in health services; a representative 
of the religious sector; and a representative of the private sector. 
(a3) 
The chairman of the Medical Center Hospital Health Board, including those in 
Metro Manila., and Specialty Hospital Health Boards shall serve by operation of this Act 
without the need of any appointment. 
(a4) 
The chairman of the Senate Committee on Health shall choose fiom among the 
senators, who shall represent the Senate as a member of each of the Medical Center or 
Specialty Hospital Health Boards. 
(as) 
The representative from the nongovernment organizations, religious and the 
private sector in the Medical Center and Specialty Hospital Health Boards shall be appointed 
by the chairman of the respective health boards. 
(b) Powers and Functions - The powers and functions of the Medical Center and 
Specialty Hospital Health Boards shall, as they are applicable be the following: 
(b. 1) 
To assist the Secretary of health, h s t r a t o r  or chairman of the boards of 
trustees, as the case may be, in the operation and management of medical centers and specialty 
hospitals; 
(b.2) 
To review and endorse the budgetary requirements of the medical centers and 
specialty hospitals; 
(b.3) 
(b.4) 
To devise a mechanism for internal control; 
To screen and recommend to the Selection Board the appointment of qualified 
applicants to fill vacant positions in the medical centers and specialty hospitals, as the case m y  
be; 
(b.5) 
To deposit, in trust, all the earnings derived fi-om whatever source with any 
authorized depository banks as part of their General Fund; 


9 
li 
:! 
3 
4 
5 
6 
7 
8 
!> 
10 
11 
1:; 
13 
14 
15 
1 ti 
1 :I 
18 
19 
20 
21 
2: 
2 3 
24 
25 
26 
27 
28 
2!> 
30 
3 :I 
32 
(b.6) 
To determine the utilization of h d s  of the specialty hospitals or medical 
centers, as the case may be, for the betterment of hospital health services; and 
(b.7) 
To perform such other functions as may be deemed necessary for the effective 
management of the medical centers and specialty hospitals. 
(c) Meetings and Quorums - 
(c. 1) 
(c.2) 
The Board shd meet at least once a mnth or as often as m y  be necessary. 
A majority of the members of the Board shall constitute a quorum but the 
chairman must be present during meetings where budgetary proposals are prepared or 
considered. Members thereof who are not government officials or employees shall be entitled 
to necessary traveling expenses and allowances chargeable against the funds of the health 
boards of the medical center and specialty hospitals subject to the accounting and auditing 
rules and regulations. 
(3) Municipality or City Hospital Health Board 
(a) Composition - the composition of the Municipal or City Hospital Health Board 
shall be as follows: 
(a 1) 
(a2) 
Chairman: Chief of the municipality or city hospital. 
Members: Representative of the congressional district for hospitals in his 
political district; the municipal or city mayor of the area where the hospital is located; member 
of the sangguniang bayan or sangguniang panlungsod; a representative of the Philippine 
Hospital Association a representative of the Phdippine Medical Association; a representative 
of nongovernment organizations involved in health services; a representative of the religious 
sector; and, a representative of the private sector. 
(a3) 
The members of the Municipal or City Hospital Health Board except the 
chairman and the representative of the congressional district, shall be appointed by the 
municipal or city mayor, as the case'may be; 
(b) Power and Functions - The powers and functions of the Municipal or City Hospital 
Health Board shall be as follows: 
(b. 1) 
To assist the mayor in the operation and management of the municipal or city 
hospital; 
(b.2) 
health services; 
(b.3) 
To review and endorse the budgetary requirements of the municipal or city 
To devise a mechanism for internal control; 


10 
I. 
;! 
:I 
4 
5 
6 
' I  
8 
5) 
10 
11 
12 
13 
1 4. 
15; 
16 
1 7' 
1 e; 
1 SI 
20 
21 
22. 
23 
24. 
25; 
26 
27 
28 
(b.4) 
To enhance the participation of local government units and community 
involvement in hospital service and public health activities; 
(b.5) 
To screen and recommend to the Selection Board the appointment of quahfied 
applicants to fill vacant positions in the rural health units and municipal or city hospitals; 
(b.6) 
To be responsible for the recruitment of volunteer barangay health workers 
who shall be entitled to monthly honorarium and other benefits provided for by the law; 
(b.7) 
To deposit, in trust, all the earnings of the municipal or city hospitals and rural 
health units derived from whatever source with the municipal or city treasurer's office, as the 
case may be, or with any authorized depository banks; 
(b.8) 
To determine the &ation 
of funds of the hospitals for the betterment of 
hospitals and rural health services; and 
(b.9) 
To perform such other functions as may be deemed necessary for the effective 
management of the rural health units and hospitals. 
(c) Meetings and Quonuns - 
(c. 1) 
(c.2) 
The Board shall meet at least once a month or as often as may be necessary; 
A majority of the members of the Board shall constitute quorum but the 
chairman must be present during meetings where budgetary proposals are prepared or 
considered. Members therefore who are not government officials or employees shall be 
entitled to necessary traveling expenses and allowances chargeable against the h d s  of the 
Municipal or City Hospital Health Board subject to the accounting and auditing rules and 
regulations. 
SEC. 6. Period of Implementation. - The Program shall be implemented over a period 
of three (3) years fiom the approval of this Act. 
SEC. 7. Appropriations. - The Secretary of Health shall immediately include in the 
Department's program the implementation of this Act, the funding of which shall be included 
in the annual General Appropriations Act. 
For the implementation of the devolved health services, the amount necessary shall be 
taken fiom the Internal Revenue Allotment of the LGU concerned. 
29 
301 
domestic or foreign. 
31 
32. 
Funds may be augmented by grants, donations, endowment fi-om various sources, 
SEC. 8. Implementing Rules and Regulations. - The DOH and the Department of the 
Interior and Local Government (DILG) shall, in coordination with the League of Provinces, 


11 
promulgate the rules and regulations €or the implementation of this 
fiom its publication in two (2) newspapers of general circulation. 
Act within sixty (60) days 
SEC. 9. Separability CZause. - If, for any reason or reasons, any part or provision of 
this Act shall be declared to be unconstitutional or invalid, other parts or provision hereof 
which are not af€ected thereby shall continue to be in 111 force and effect. 
SEC. 10.RepeaZing Clause. ,- 
All laws, orders, decrees, rules and regulations 
inconsistent with the provisions of this Act are hereby repealed or modified accordmgly. 
SEC. 11. Effectivity. - This Act shall take effect upon its approval.