Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2548

Authored by HON. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

The Constitution, Art. XIII, Sec. II, provides:

"Sec. 11. The State shall adopt an integrated and
comprehensive approach to health development, which shall

endeavor to make ... services available to all the people at
affordable

cost..

Despite the constitutional mandate, health services have become
a expensive 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.

Hence, the immediate passage of this bill is highly
recommended.

=>"

JOSEPH VICTOR G. EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2548
Authored by HON. JOSEPH VICTOR G. EJERCITO

AN ACT
TO REDUCE HEALTH CARE COSTS BY REQUIRING TERTIARY
AND SPECIALIZED HOSPITALS TO SHARE CERTAIN SERVICES
AND EQUIPMENT

Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Short Title. - This Act may be cited as the
“Health Services
Cost Control Act.”

SEC. 2. Declaration of Policy. - It is the purpose of this Act to
reduce health care cost 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.

SEC. 3. Definition of Terms. -As used in this Act:

(a) The term “administrators” refers to the Secretary of Health
and the presidents and owners of tertiary and specialized hospitals,
which are covered by this Act. :

(b) The term “tertiary hospitals” means hospitals 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 or privately-owned.

(c) The term “special” or “specialized hospitals” means hospitals
that devote their services full-time for the diagnosis and treatment of
specific types of illness such as, but not limited to, hear-related
ailment, lung disease, kidney problem and abnormal mental state. The
term hospital shall also be construed as any institution, building or
place where there are installed beds, or cribs, or bassinets for twenty-


four-house 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 subdivision, or by any
department, division, board or other 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,
association, corporation, religious organization, firm, company or joint
stock association.

SEC. 4. Technology and Services Sharing Demonstration
Program. -

(a) Not later than one year from the 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 after 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.

SEC. 5. Service Area. - The Administrators shall determine the
area to be served by a demonstration program under Section 3 (a).

‘SEC. 6. Grant Funds and Tax Breaks. -

a) Tertiary and specialized hospitals that enter into cooperative
agreements under Sec. 3 (b) and (c) 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
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 arrangement between the
entities that are parties to the agreement;

4) a description of the geographical area generally to the served
by the entities;

5) a description of anticipated benefits and advantages to the
providers
and to individuals; and

6) any other information determined appropriate by the
Administrators.

b) Development of evaluation guidelines. The Administrators
shall develop regulations, including criteria and evaluations guidelines,
with respect to applications submitted under paragraph (a) in
determining which applications to approve for purposes of awarding
grants and tax breaks under subsection (a), the Administrators shall
consider whether the agreement described in 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) improvements in the efficient utilization of the entities
resources and
capital equipment;

5) the provision of services that would not otherwise be
available;

6) the elimination of unnecessary duplication of hospital
resources;

7) a reduction in costs to individuals; or

8) no undue harm to the care provided individuals seeking
services.

SEC. 7. Allocation of Grant Funds. -

In general. Amounts provided under a grant awarded under
Section 6 shall be used to facilitate collaboration among entities. Such
permissible uses may include reimbursements 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 highly resource-intensive services not previously owned or
provided by the facility. .

Grant award amount. Entities applying for grants under Section
6 shall specify the desired grant award amount. The Administrators
shall determine the appropriate amount in granting such award.

SEC. 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 the drugs, devices, equipment, medical
and surgical procedures utilized in medical care and the organizational
and support systems within which such care is provided, that -

(i) have high capital costs or extremely high annual
operating costs;

(ji) are technologies with respect to which there is a
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 Services. With respect for services that may be
shared under an agreement entered into under this section, such
services shall -

(i) either have high capital costs or extremely high
annual operating costs; and

(ii) be services with respect to which there is a
reasonable ‘expectation that shared ownership will
avoid a significant degree of the potential excess
capacity of such services in the community or
region to be served under such agreement. Such
services may include mobile services.

SEC. 9. Term - Cooperative agreements under this Act to
reduce healthcare costs shall continue for the period agreed upon by
the participating entities.

SEC. 10. Reports -

(a) 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.


SEC. 11. Appropriations - To carry out the demonstration
program in Section 5, such sum as may be 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.

SEC. 12. Separability Clause - If any provision or part hereof
is held invalid or unconstitutional, the remainder of the law or the
provision not otherwise
affected shall remain valid and subsisting.

SEC. 13. Repealing Clause - Any law, presidential decree or
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.

SEC. 14. Effectivitv Clause - This Act shall take effect fifteen

(15) days after its publication in at least two (2) newspapers of
general circulation.

Approved,