FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No. 1403

EXPLANATORY NOTE
The Constitution, Art. Xill, Sec. Il, provides:

“Sec. Il. 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
precious 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.

RUFUS B. Lomiauez

e/a JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

1403

House Bill No.

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


(0) 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, heart-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-hours 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 (¢) 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 —


4) 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 be 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 —

4) 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. -


(a)

(b)

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

@ have high capital costs or extremely high annual
operating costs; and
0) 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 to services that may be shared under an

agreement entered into under this section, such services shall —

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

(i) 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 health-
care costs shall continue for the period agréed upon by the participating entities

SEC 10. Reports -

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

Approved.