FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
S E N A T E  
Senate Bill No. 
INTRODUCED BY SEN. MANNY VILLAR 
EXPLANATORY NOTE 
This bill seeks to modernize the hospital care delivery system through an 
integrated approach and complemented by state-of-the-art technology. 
The 
proposed “Health Care Delivety Modernization Program” has the following main 
components: 
0 
Delineation of the roles of the Department of Health (DOH) and the 
local government units {LGUs) to strengthen their complementary 
roles. 
0 
Strengthening the Capability of the Provincial Hospitals 
Establishment of Hospital Health Boards 
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. 
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. 


FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
S E N A T E  
Senate Bill No. 
INTRODUCED BY SEN. MANNY VILLAR 
AN ACT 
PROVIDING FOR THE MODERNIZATION OF THE HEALTH CARE DELIVERY 
SYSTEM, APPROPRIATING FUNDS THEREFOR AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the 
Philippines in Congress assembled: 
SECTION I. Short Tile. - 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 fully and 
effectively perform its constitutional 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; 
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(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; 
(9 The establishment of 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; 
(9) The delineation of specific and specialized functions that will enable 
the Department of Health (DOH) to concentrate its efforts in establishing 
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 DOCH 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 further enhance local autonomy by granting LGUs full powers in 
the formulation of policies and by mandating the DOH to perform its tasks under 
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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: 
(a) “Health 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) “Hospital” refers to a place devoted primarily to the maintenance and 
operation of facilities for the diagnosis, treatment and care of individuals suffering 
from 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 first 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 of 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 
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therapeutic equipment and the expertise of trained specialists and sub- 
specialists. 
(9 "Tertiary Level II 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. 
(9) 
"Tertiary Level 111 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. 
(j) "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 departmentalized hospital which 
provides Tertiary Level II hospital care. 
(I) "Medical center" refers to a hospital which provides Tertiary Level 111 
hospital care. 
(m) "Specialty hospital" refers to a hospital which provides services for 
one particular illness or disease or health medical care need, with the highest 
medical care rendered by medical experts using highly specialized equipment for 
a specific medical problem are. It provides Tertiary Level IV hospital care. 
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(n) 
"Competent physician" refers to a licensed medical doctor who 
possesses both technical and managerial knowledge or expertise in health care. 
(0) "Local government units (LGUs)" refer to provinces, cities, 
municipalities, barangays and other political subdivisions as may be created by 
law. 
SEC. 5. Health Care Deliveiy 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 concerned. They shall also undertake an annual review 
of health program in their areas of jurisdiction; 
(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 for 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 functions; 
(c) Upper tertiary hospital care where the expertise in the different organ 
specific medical-surgical specialty is needed; 
(d) Operation and maintenance of medical centers, including those in 
Metro Manila, and specialty hospitals whose functions are to provide tertiary 
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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 sophisticate 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; 
(9) 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 their 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 administrative 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 modern 
institutions with the capability to handle Tertiary Level I to II hospital care. In 
pursuance thereof, the following necessary steps shall be undertaken: 
(1) The establishment of 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: 
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(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 residents participating in the residency training program 
shall not be permanent employees by shall be considered employed for the 
whole duration of the residency training period; and 
(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 shall extend technical and financial assistance 
relating to the establishment of diagnostic centers and acquisition of modern and 
quality 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 bidding. 
In provinces with a population of at least one million, and in island 
provinces as well as in highly urbanized cities, the DOH may establish an 
extension of the regional medical center in the provincial or city hospital, as the 
case may be. The extension hospital to be established shall have the capability 
of Tertiary Level II 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. - The component of the 
Program is geared towards the realization of a genuine local autonomy. 
In 
furtherance thereof, there shall be established a district hospital health board, 
medical center health board, including those in Metro Manila, and specialty 
hospital health board: Provided, 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 
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and Transplant Institute, Lung Center of the Philippines, Philippine Children’s 
Medical Center and Philippine Heart Center, shall continue to be governed by the 
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. 
(a.2) 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 
Philippine Hospital Association; representative of the Philippine Medical 
Association; representative of nongovernment organizations involved in health 
services; representative of the religious sector; and representative of the private 
sector. 
(a.3) 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.1) 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 service; 
(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 fill vacant positions in the rural health units and district 
hospitals; 
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(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 of the district hospital and rural 
health units derived from 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) The Board shall meet at least once a month or as often as may be 
necessary; 
(c.2) 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 district hospital health board subject to the 
accounting and auditing rules and regulations. 
(2) Medical Centers and Specialty Hospitals Health Boards 
(a) Composition - The composition of the Medical Center and Specialty 
Hospital Health Boards shall be as follows: 
(a.1) Chairman: Chief of Medical Centers or Specialty Hospitals, as the 
case may be; 
(a.2) 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 
10 


organizations involved in health services; a representative of the religious sector; 
and a representative of the private sector. 
(a.3) 
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. 
(a.4) The Chairman of the Senate Committee on Health shall choose 
from among the senators, who shall represent the Senate as member of each of 
the Medical Center or Specialty Hospital Health Boards. 
(a.5) 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, administrator 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) To devise a mechanism for internal control; 
(b.4) 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 may be; 
(b.5) To deposit, in trust, all the earnings derived from whatever source 
with any authorized depository banks as part of their General Fund; 
(b.6) To determine the utilization of funds of the specialty hospitals or 
medical centers, as the case may be, for the betterment of hospital health 
services; and 
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(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) The Board shall meet at least once a month or as often as may be 
necessary. 
(c.2) 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 entitied 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) Chairman: Chief of the municipality or city hospital 
(a.2) Members: Representative of the congressional district of 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 
Philippine Medical Association; a representative of nongovernment organizations 
involved in health services; a representative of the religious sector; and, a 
representative of the private sector. 
, 
(a.3) The members of the Municipal of 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; 
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(b.2) To review and endorse the budgetary requirements of the municipal 
or city health services; 
(b.3) To devise a mechanism for internal control; 
(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 qualified 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 utilization 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 Quorums - 
(c.1) The Board shall meet at least once a month or as often as may be 
necessary; 
(c.2) 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 funds of the Municipal or City Hospital Health Board 
subject to the accounting and auditing rules and regulations. 
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SEC. 6. Period of Interpellation. - The Program shall be implemented 
over a period of three (3) years from 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 from the Internet Revenue Allotment of the LGU 
concerned. 
Funds may be augmented by grants, donations, endowment from various 
sources, domestic or foreign. 
SEC. 8. lmplemenfing Rules and Regulations. - The DOH and the 
Department of the Interior and Local Government (DILG) shall, in coordination 
with the League of Provinces, promulgate the rules and regulations for the 
implementation of this Act within sixty (60) days from its publication in two (2) 
newspapers of general circulation. 
SEC. 9. Separability Clause. - If, for any reasons, any part or provision of 
this Act shall be declared to be unconstitutional or invalid, other parts or provision 
thereof which are not affected thereby shall continue to be in full force and effect. 
Repealing Clause. - All laws, orders, decrees, rules and 
regulations inconsistent with the provisions of this Act are hereby repealed or 
modified accordingly. 
SEC. I O .  
SEC. 11. Effectivity. -This Act shall take effect upon its approval. 
Approved, 
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