THIRTEENTH CONGRESS OF THE REPUBLIC) 
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OF THE PHILIPPINES 
1 
FIRST REGULAR SESSION 
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Introduced by SENATOR LUISA “LOI” P. EJERCITO ESTRADA 
EXPLANATORY NOTE 
The Constitution, Art. XIII, Sec. 11, 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 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. 
LUISA G~LOI” 
P ~ J E R C I T O  
ESTRADA 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
FIRST REGULAR SESSION 
S.B. NO. 
Introduced by SENATOR LUISA “LOI” P. EJERCITO ESTRADA 
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. 
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 
(b) 
types of illness, disease, injury or deformity, or in need of 


obstetrical or other medical and nursing care. 
may be government or privately-owned. 
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. 
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. 
“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. 
A tertiary hospital 
(c) 
(d) 
(e) 
Sec. 4. TechnoloEy and services sharing demonstration proEram. - 
(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. 
On the second year after the establishment of the demonstration 
program under this section, the Administrators shall prepare the 
(b) 


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 - 
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; 
a description of the nature and scope of the 
activities contemplated under the cooperative 
agreement; 
a description of the financial arrangement between 
the entities that are parties to the agreement; 
a description of the geographical area generally to 
the served by the entities; 
a description of anticipated benefits and advantages 
to the providers and to individuals; and 


(vi) 
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 - 
the enhancement of the quality of care; 
the preservation of services in geographical 
proximity to the communities traditionally served 
by the applicant; 
improvements in the cost-effectiveness of high- 
technology services by the entities involved; 
improvements in the efficient utilization of the 
entities resources and capital equipment; 
the provision of services that would not otherwise 
be available; 
the elimination of unnecessary duplication of 
hospital resources; 
a reduction in costs to individuals; or 
no undue harm to the care provided individuals 
seeking services. 
Sec. 7. Allocation of grant funds. - 
(a) 
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. 
(b) 
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; and 
(ii) 
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 - 


(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 health-care 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. 1 1. 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,