Me Republic of the Philippines
ca HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

6127

House Bill No.

Introduced by Representatives
DIOSDADO MAGAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
PROVIDING FOR THE MODERNIZATION OF THE HEALTH CARE DELIVERY
SYSTEM, APPROPRIATING FUNDS THEREFORE AND FOR OTHER

PURPOSES %

EXPLANATORY NOTE

The Constitution explicitly provides that "the State shall protect and
promote the right to health of the people and insti! health consciousness among
them.” The enactment of the Local Government Code in 1991 sought to give
meaning to such mandate. Under the Code, local government units (LGUs) were
granted more powers, authorities, responsibilities and resources. A year after its
enactment, the Implementing Rules and Regulations on the devolution of health
services was created.

Among those devolved to the LGUs were hospitals and field health
services of the Department of Health (DOH). The full implementation of the
Local Government Code in 1993 transferred the operation of provincial and
district hospitals to the provincial govemors and rural health units (RHUs) to the
city and municipal mayors. This translates to 580 hospitals being operated by
the governors and 2,000 RHUs under the mayors, and a total of 45,082 health
personnel devolved to the focal government. Meanwhile, DOH's residual powers,
functions and responsibilities remain. These include the oversight (general
supervision) monitoring and evaluation functions, formulation of standards and
guidelines, and technical and other forms of assistance to the LGUs.


Notwithstanding the devolution of health services in 1993, the
deterioration of health facilities and equipment remains deplorable, something
which has been admitted by the department. As early as 1995, the DOH
reported in its Hospitat Devolution Study that LGU funds to finance operations of
devolved health services were inadequate.

The problems brought about by devolution led to the deterioration of
health services particularly in far-flung areas where services are needed most.
Only 1/3 of the total number of hospitals and about ¥% of hospital beds are public.
Out of the country’s 41,000 barangays, only % have a barangay health station.
These goverment health facilities have been notoriously described as “death
stations” for their lack of equipment, medicines and able staff.

This bill humbly attempts to respond to such an urgent need to effectively
address pressing health issues in order to rationalize the health care delivery
system in our country.

In view of the foregoing, the expeditious passage into law of this proposed
measure is earnestly requested.

DIOSDADO -APAGAL ARROYO GLORIM MACAPAGAL ARROYO
Second District, Camarines Sur Second District, Pampanga

wu


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
‘Quezon City

FIFTEENTH CONGRESS
Secand Regular Session

109
House Bil No, 9427

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
PROVIDING FOR THE MODERNIZATION OF THE HEALTH CARE DELIVERY
SYSTEM, APPROPRIATING FUNDS THEREFORE AND 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 of 2011.”

SECTION 2. Dectaration of Policy. — \t 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. Toward
this end, the principal thrust of this modernization program under this Act shall be
as follows:

(a) The development of an efficient and effective health care delivery
system throughout the country,

(b) The integration of the promotive, preventive, curative and rehabilative
aspects of health care delivery to be under the local chief executive
whenever appropriate;


(c) The transformation of government hospitals into self-governing
components, together with their respective rural health units;

(d) The deveiopment of cooperation among the loca! and national
govemment agencies, members of Congress and the private sector,
including the civic, religious and non-govemment organizations;

{e) The implementation of a residency training and accreditation program
and accreditation of private specialist practitioners in provincial hospitals
and medica! centers;

(f) 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;

(g) The delineation of specific and specialized functions that wilt 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 charters;

(h) The development of partnership among local government units and
between local government units and the Department of Health (DOH) in
the establishment of health care delivery facilities; and

{i) Local government units shall adopt a system and procedure to attain
maximum level of transparency in the procurement of equipment and
medicines.

SECTION 3. Statement of Objectives. — The Health Care Delivery
Modernization Program, hereinafter referred to as the Program, shail be
implemented in accordance with the following objectives:

(a) To modernize the health care delivery system by adopting a
comprehensive, consistent and systematic approach to heaith issues and
concern to complement the state-of-the-are technology;

(b) To further enhance local autonomy by granting local government units
full powers in the formulation of policies and by mandating the Department
of Health to perform 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 local govemment units to support and


improve the provision, operation and maintenance of health facilities and
equipment;

{d) To enhance inter-agency multi-sectoral cooperation;

(e) To enhance the capability of hospitals requiring the DOH to provide
each local government unit, competent physicians to assist the local chief
executive as may be appropriate in the monitoring of health care delivery
functions: and

(f} To encourage the employment and retention of doctors in rural areas

SECTION 4. Definition of Terms. — The following terms shall be
understood in this Act to mean:

(1 } "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.

(2) "Primary Hospitals" refer to those with capabilities and facilities for
Providing first contact emergency care and hospitalization in simple cases.

{3) "Secondary Hospitals“ refer to those which have capabilities and
facilities for providing medicai care to cases requiring hospitalization and
the expertise of physicians with training of not jess than six (6) months on
certain specialties,

(4) “Tertiary Level | Hospitals" refer to those which have capabilities for
providing medical care to cases requiring sophisticated diagnostic and
therapeutic equipment and the expertise of trained specialist and in the
sub-speciaities.

(5) “Tertiary Level il Hospitais" refer to a departmentalized hospital with
teaching and research capabilities and accredited Residency Training
Programs in the fields of Surgery, Pediatrics, Medicine, OB-Gyne, EENT,
Orthopedics, Anesthesia and other ancillary disciplines. Dental services is
part of the professional services.

(6) “Tertiary Level Ill Hospitais" refer to hospitals which have been
Particularty selected to provide tertiary hospital services, with teaching,
training functions and research.

(7) "Tertiary Level IV Hospitals” refer to a tertiary hospita! with expensive
and sophisticated diagnostic and therapeutic facilities for a specific
medical problem area.

we


istrict Hospital” refers to the front-line hospital with capabilities and
facilities for providing secondary medical care to cases requiring
hospitalization and the expertise of trained doctors.

(9) “Provincial Hospital" refers to a central district hospital with its own
catchments area which provides at least a minimum of Tertiary Level |
hospital care.

(40) “Regional Hospital” refers to departmentalized hospital which
provides Tertiary Level II hospital care.

(11) "Medical Center” refers to a hospital which provides Tertiary Level III
hospital care

(12) “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 and using highly
specialized equipment for a specific medical problem area. It provides
Tertiary Level lV hospital care

(13) "Competent physician” refers to a doctor who possesses both
technical and managerial knowledge or expertise in health care

(14) “Local Government Units” refer to provinces, cities, municipalities,
barangays and other political subdivisions as may be created by law.

SECTION 5. Components of the Program. — The Program shall consist of
the foliowing components:

a) Delineation of the role of the local govemment units and the
Department of Health. - The leagues of local government units and the
Department of Heaith 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
municipal and city hospitals shall be under the responsibility of the
local goverment unit concemed. They shall also undertake an
annual review of health program in their areas of jurisdiction

2) The District Health Board shall be responsible for the recruitment
of volunteer barangay health workers, who shall be entitled to
monthly honorarium and other benefits as provided for by law.


3) The Department of Health shall, in addition to the powers vested
in it under existing taws, be responsible for the following

(3.1) Health care delivery higher than or more sophisticated
than that provided by local government units;

(3.2) Provide each province or qualified cities or
municipalities competent physicians to assist the locai chief
executive as may be appropriate in the management and
monitoring of devolved health care functions;

(3.3) Upper tertiary hospital care where the expertise in the
different organ specific medical-surgical specialty is needed;

(3.4) Operation and maintenance of medical centers,
including those in Metro Manila, and specialty hospitals
whose functions are to provide tertiary expertise: Provided,
however, That specialty hospital with original charter shall
continue to be governed by its own charter.

(3.5) Supervise the operation of the more sophisticated
organ specific medical centers:

(3.6) Initiate and assist 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; and

(3.7) Provide doctors in rural communities under its program
of doctors to doctor-less areas, who shall be assigned by the
local chief executive as may be appropriate to qualified
communities.

The Department of Health is hereby authorized to create positions
of, and provide the necessary funding, as a national aid to local
govemment units, for doctors to doctorless areas including their
incentives and benefits, in addition to those granted under existing laws, to
wit:

(1) Hazard allowance in an amount to be determined by the district
hospital health board of the focal government unit concerned;

(2) Subsistence allowance equivalent to the meals they take in the
course of their duty which shall be computed in accordance with the


prevailing circumstances as determined by the local government
unit concemed; and

(3) Automatic promotion to the position of Medical Specialist | or to
the next-higher rank, as the case may be, under the Revised
Compensation Classification System

‘The doctors to the doctor-less areas shall be entitled to incentives
and benefits to be provided under this Act by other government agencies,
to wit:

(1) Free legal representation and consultation services shall be
immediately provided by the Public Defenders Office in cases of
coercion, interference, and other civil, criminal and administrative
cases filed by or against such doctors arising out of of in
connection with the performance of their duties as such; and

(2) Scholarship benefits in the form of tuition fees in state colleges
of universities to be granted to their legitimate children.

(b) Strengthening the Capability of the Provincial Hospitals. — The
Program shall develop the provincial hospitals into a responsive, efficient
and modem hospital with the capability to handle tertiary level | to II
hospital care. In pursuance thereto, the following necessary steps must be
undertaken, to wit:

4) The establishment of a residency training program and 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 empioyees but shall
be considered employed for the whole duration of the
Residency training period; and

¢) Participants in the Residency training program shall be
given preference in case of reemployment as residents of
district hospitals and shail occupy the position of Medical
Officer IV.

2) The abolition of regional hospitals and offices. All equipment,

records, and other assets of both the regional offices and hospitals


shall be transferred to the Regional Medical Center. Personnel
shall be absorbed by the Medical Centers or assigned to the
provincial govemment to assist the governors in managing the
devolved functions; Provided, That the rights accorded to such
personnel pursuant to the civil service law, rules and regulations,
shall not be impaired.

3) The improvement of each provincial hospital. The provincial
government shall strive to establish diagnostic centers and to
provide 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 obsclete major equipment.
Provided, further, That, the acquisition of new equipment shall be
‘subject to the laws on public bidding.

¢) Establishment of the District Hospital, Medical Center and Specialty
Hospitais Health Boards. - This component of the Program is geared
towards the realization of a genuine local autonomy. In furtherance,
thereof, there shall be established a district hospital, medical center,
including those in Metro Manila, and specialty hospital heaith boards.

The composition of the district, medical center and speciality hospital
health boards shall, as they are applicable, be as follows:

Chairman: (1) For district hospital, A Sangguniang Panlalawigan member
representing the district where the district hospital is located;

(2) For medical center, the Chairman of the Regional Development
Council. In Metro Manila, the Mayor where the medical center is located

{3) For specialty hospital, the Chairman of the Board of Trustees for
specialty hospital with original charter; the Secretary of Health for specialty
hospitals under its control and supervision.

Vice Chairman: Chief of the District Hospitals, Medical Centers and
Specialty Hospitals

Member: (1) Representative of the Congressional District for hospitais in
his political district;

(2) Senator of the Republic for ali medical centers and specialty hospitals;

(3) A mayor of the catchments area of the district;


Members common to the district hospitals, medical centers and specialty
hospitals health boards;

(1) Representative of the Philippine Hospital Association;
(2) Representative of the Philippine Medical Association:

(3) Representative from the non-government organizations involved in
health services;

{4) Representative of the religious sector;
(5) Representative of the private sector

The Chairman, Vice Chairman and the members of the District Hospital
Heatth Board, except the Representative of the Congressional District, shall be
appointed by the provincial governor.

The Chairman and Vice-Chairman of the Medical Center, including those
in Metro Manila, and specialty hospital heatth boards shall serve by the operation
of this Act without the need of any appointment

The representative from the non-government organizations, religious and
the private sector in the medical center and specialty hospital heaith boards shail
be appointed by the Chairman of the respective health boards.

The powers and functions of the district hospital, medical center and
specialty hospital health boards shall, as they are applicable, be as follows:

(1) To assist the provincial govemor, the Secretary of Health,
Administrator or Chairman of the Boards of Trustees, as the case may be,
in the operation and management of devolved functions, medical centers
and specialty hospitals;

(2) To review and endorse the budgetary requirements of the district
health services, medical centers and specialty hospitals;

(3) To devise a mechanism for intemal control:

(4) To enhance the participation of local government units and community
involvement in hospital service and public health activities;

(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, medical centers and speciaity hospitals, as the case may
be;


(6) To deposit, in trust, all the earnings of the district hospitals and rural
health units derived from whatever source with the Provincial Treasurer's
Office or with any authorized depository banks; for medical centers and
specialty hospitals, with any authorized depository bank as part of their
General Fund;

(7) To determine the utilization of funds of the hospitals and medical
centers for the betterment of hospital health services; and

(8) To perform such other functions as may be deemed necessary for the
effective management of the rural health units, hospitals, medical centers
and specialty hospitals: Provided, however, That the Board of Trustees of
specialty hospitals with orginal charter, shall exercise the powers and
functions of the hospital heath board under this section, in addition to the
powers vested in it under existing laws

The Board shal! 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 and the vice-chairman must be present during meetings where
budgetary proposals are prepared or considered. Members thereof who are not
goverment officials or empioyees shall be entitled to necessary traveling
expenses and allowance chargeable against the funds of the health boards of the
district hospital, medical center and specialty hospitals subject to accounting and
auditing rules and regulations.

SECTION 6. Period of Implementation. - The Program shal! be
implemented over a period of three (3) years from the approval of this Act

SECTION 7. Appropriations. - a) Initial Appropriations. ~— For the first year
of the implementation of this Act, the amount of One Billion Pesos
{P1,000,000,000.00), is hereby appropriated out of any funds of the National
Treasury not otherwise appropriated

b) Continuing Appropriations. - The Department of Budget and
Management (DBM) is hereby mandated to include in the annual General
Appropriations Act the amount necessary for the implementation of this Act

Other sources of funds shall from the following:

(1) The totat cost of devolved functions to be deducted from the Internal
Revenue collections subject to the following principies:


(2) Internal revenue allotment shares be based on the total amount
collectible for internal revenue, including value-added tax collected by the
Bureau cf Customs, proceeds from the sin taxes and the like:

(3) The cost of devolved functions shall be taken from the sixty percent
(60%) share of the national government;

(4) Twenty percent (20%) net earings from the Philippine Amusement
and Gaming Corporation (PAGCOR);

(8) Twenty percent (20%) net eamings of the Public Estate Authority: and

(6) Loans, grants, bequest, or donations, whether from local or foreign
sources.

SECTION 8. Implementing Rules and Regulations. — The Department of
Health (DOH) and the Department of the Interior and Local Goverment (DILG)
shall, in coordination with the League of Provinces, promulgate the rules and
fegulations for the implementation of this Act within sixty (60) days from its
effectivity.

SECTION 9. Repealing Clause. - All laws, orders, decrees, rules and
regulations inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SECTION 10 . Separability Clause. - If any part or provision of this Act
shall be declared to be unconstitutional or invalid, other parts or provision hereof
which are not affected thereby shall continue to be in full force and effect.

SECTION 11. Effectivity. - This Act shall take effect fifteen (15) days
following its publication in at least two (2) newspapers of general circulation

Approved,