Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS
First Regular Session

House! Bill No. 1271

Introduced by REP. AUGUSTO BOBOY SYJUCO, Ph. D.

EXPLANATORY NOTE

The health of the nation determines its own level of energy and vigor and therefore,
ultimately, its performance in social and economic development. Implicit in the development
process is the existence of reasonable citizenry capable of carrying out development goals. It
thus, clear that the promotion of health is always an urgent business of society not only because
it is the very foundation of an active and useful life but also the right of every Filipino.

Cognizant to this reality, the Constitution explicitly provides that the State shall promote
and protect the right to health of the people and instill consciousness among them, In. pursuance
to this mandate, Republic Act No. 7160 otherwise known as the Local Government Code of
1991 was enacted devolving among others the functions of managing public health and district
hospitals to local government units.

However, inspite of the time that has elapsed since the effectivity of the Code, there is
still confusion and duplication of functions among health care deliverers ~ the Department of
Health still involves itself with the day to day public health work and hospital care (primary,
secondary and level I tertiary) when these functions have long been devolved to local
government units.

This situation clearly defeats the noble objectives of the Local Government Code.
Besides, it drains the Department of Health of essential funds to provide for higher tertiary
capability for its hospitals in different regions which should be their primary concern. Moreover,
local government units are still denied the funds for the cost of devolved functions. Numerous
district hospital had been re ~ nationalized in contravention of the policy on the local government
autonomy embodied in the Local Government Code.

‘There is an urgent need therefore, to pass a curative and comprehensive legislation that
will effectively address these health issues and concern in order to rationalize the health care
delivery system in our country.

This piece of legislation seeks to institute the modernization of the health care delivery
system in the Philippines. This modernization program consists of several components that will
ultimately phase out the antiquated system of health care delivery to complement state-of-the-art
equipment and technology. It includes strong advocacy that leans towards the realization of a
genuine local autonomy by transforming devolved hospitals, together with their respective
catchment rural health units into self ~ governing components with the establishment of district
health boards in regional medical centers, and in specialty hospitals.


‘These district health boards shall be separate and distinct from the local health boards
embodied in the Local Government Code. It is also the intention of this bill to introduce among
others, the active participation of the members of Congress in different district and hospital
boards; the private sector participation in the management of their own health care program; the
delineation of specialized fumctions to enable the Department of Health to concentrate in
establishing and maintaining fully equipped medical centers; the institutionalization of a
dependable two ~ way referral system from the public health units at the grassroots level up to
specialty hospitals and vice ~ versa; and encourage partnership among local government units
and between local government units and the DOH in establishing modern health care delivery
facilities. All these things are geared toward the promotion and protection of the general health
of the Filipino people, which shall ultimately enhance the socio — economic conditions of the
country.

The foregoing reasons warrant the immediate passage of this important piece of
legislation,

ar

AUGUSTO BOBOY SYJUCO, Ph. D.
2™ District, Province of Iloilo


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS:

First Regular Session

House Bill No__ 1272

Introduced by REP. AUGUSTO BOBOY SYJUCO, Ph. D.

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 1. Short Title, ~ This Act shall be known as the “Health Care Delivery
Modernization Act of 2010.”

SEC. 2. Declaration of Policy. ~ It 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 {o protect and promote the right to health of the people and instill health consciousness
among them. Towards 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 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;

(@ ‘The development of cooperstion'among the local and national government
agencies, members of Congress and the private sector, including the civic, religious and
non-government organizations;

(©) The implementation of a residency training and accreditation program and
accreditation of private specialist practitioners in provincial hospitals and medical ;
centers;

(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 will 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
charter; and

(fh) The development of partnership among local government units and between

‘
focal government units and the Department of Health (DOH) in the establishment of

hhealth care delivery facilities.

(Local government units shall adopt a system and procedure to attain maximum
jlevel 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:

€


“(@)_ To modemize the health care delivery by adopting a comprehensive, consistent
and systematic approach to health issues and concern to complement the state-of-the-art
technology;

(®) To further enhance locsl autonomy by granting local government units full
powers in the formutation of policies and by mandating the Department of Health (DOH)
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;

© To implement a program of extending technological, financial and
administrative assistance to local government units to support and impzave the provision,
and operation and maintenance of health facilities and equipment;

(4) To enhance inter-agency multi-sectoral cooperation;

(©) To enhance the capability of hospitals by 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

{8 To encourage the employment and retention of doctors in rural areas.

SEC. 4, Definition of Terms. - ‘The following terms shall be understood in this Act
fo mean: . i ;

(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.


oe

G) “Secondary Hospitals” refer to those which have 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,

(4) “Tertiary Level I 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-specialties,

(5) “Tertiary Level I Hospitals” refers 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.

(©) “Tertiary Level Lil Hospitals” refers to hospitals which have been particularly
selected to provide tertiary hospital services, with teaching, training functions and
research,

(7) “Tertiary Level 1V Hospitals” refers to a tertiary hospital with expensive and
sophisticated diagnostic and therapeutic facilities for a specific medical problem area,

(®) “Disttict Hospital” refers to the front-line hospital with capabilities and
facilities for providing secondary medical care to edses requiring hospitalization and the
expertise of trained doctors. * .

(9) “Provincial Hospital” refers to a central distvict hospital with its own catchment

+ area which provides at least a minimum of Tertiary Level I hospital care.
‘ GO) | “Regional Hospital” refers to departmentalized hospital which provider
‘Tertiary Levelt hospital care.
(11) “Medical Center” refers to hospital which provides Tertiary Level III hospital

care,


(12) “Specialty Hospital” refers to 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 IV 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.

SEC. 5. Components of the Program. - The Program shall consist of the following
components:

() Delineation of the Role of the Local Government Units and the Department of
Health (DOH). - The leagues of local government units and the Department of Health
(DON) shall support the implementation of the Health Care Delivery Modemization
Program by performing the mandated tasks herein defined, to wit:

(@) 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 exe, in which ease these municialand city hospital shall be undo the
responsibility of the local government unit (LGU) concerned. They shall also undertake
an annual review of health programa in their areas of jurisdiction;

(b) ‘The District Health Board shall be responsible for the recruitment of
volunteer barangay heaith workers, who shall be entitled to monthly honorarium and
other bencits as provided for by the law.

, (©) The Department of Health (DOH) shall, in addition to the powers vested

in it under existing laws, be responsible for the following:


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

(c2) Provide each province or qualified cities or imunicipalities
competent physicians to assist the local chief executive as may be appropriate in the
management and monitoring of devolved health care functions;

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

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

(c.5) Supervise the operation of the more sophisticated organ specific
medical centers;

{c.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

(.7) Provide doctors in rural communities under its program of doctors
to doctorless areas, who shall be assigned by the ‘local chief executive ‘i may be
appropriate to qualified communities,

‘The Department of Health (DOH) is hereby authorized to create positions of, and
provide the necessary finding, as a national aid to local government units, for doctors to
doctoriess areas including their incentives and benefits, in addition to those granted under

excisting laws, to wit:


(6) Hazard allowance in an amount to be determined by the district hospital health
bourd of tie local government unit concerned;

(®) 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 concerned; and

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

The doctors to doctorless areas. shall also be entitled to incentives and benefits to
be provided under this Act by other government agencies, to wit:

(a) Free legal representation and consultation services shall be immediately
provided by the Public Defenders 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

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

(2) Strengthening the Capability of the Provincial Hospitals, - The Program shall
develop the provincial hospitals into a responsive, efficient and modern hospital with the
capability to handle tertiary level I to"Tl hospital care. In pursuance thereto, necessary
steps must be undertaken, to Wit:

(e) 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;


(@1) Consultants, who shall be accredited to practice in the hospital, may be
entitled to honorarium to be determined by the district hospital health board;

(2.2) Provincial hospital residents participating in the residency training program
shall not be permanent employees but shall be considered employed for the whole
duration of the Residency training period; and

(a3) Participants-in the Residency training program shall be given preference in
case of reemployment as residents of district hospitals and shall occupy the position of
Medical Officer IV.

(®) 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 government to assist the govemors 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.

G

strive to establish diagnostic centers and to provide modern and quality equipment to

“The improvement of cach provincial hospital. The provincial government shall

improve the capabilities of the provincial hospitals pursuant to its modorsization
objectives: Provided, ‘That, the acquisition of new eqlipment shall be synchronized with
the phasing out of obsoleie major equipment. Provided, further, That, the acquisition of
new equipment shall be subject to the laws on public bidding,

(G) Establishment of a District Hospital, Medical Center and Specialty Hospitals
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 health
boards.

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

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

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

(©) 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: (a) Representative of the Congressional District for hospitals: in his
political district;

(b) Senator of the Republic for all medical centers and specialty hospitals,

(©) Amuyor of the catchment area of the district,

Members common to the district hospitals, medical centers and apcauny hospitals
health boards: *

(@_ Representative of the Philippine Hospital Association,

(© [Representative of the Philippine Medical Association;

{

(® ‘Representative from the non-government organizations involved in health

services;

(g) Representative of the religious sector,


“@ ‘Representative of the private sector;

‘The Chairman, Vice Chairman and the members of the district hospital Health
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 health boards shell 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 health boards shall be
appointed by the Chairman of the respective health boards.

Power’ and Functions. - 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 governor, 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 « mechanism for iternal control; "

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

(G) ‘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 specialty 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; -

(2) 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 original
charter, shall exercise the powers and functions of the hospital health board under this
section, in addition to the powers vested in it undér existing laws.

Meetings and Quorums. ~ (a) The Board shall 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 government officials
or employees shall be entitled to nevegsaly travelling expenses and, allowances
chargeable against the funds of the health boards of the district hospital, medical center
and specialty hospitals subject to the accounting and auditing rules and regulations,

SBC. 6. Period of Implementation. - The Program shall be implemented over a
period éf three (3) years from the approval of this Act. ;

SEC. 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


heteby appropriated out of any funds of the National Treasury not otherwise
appropriated

(&) Continuing Appropriations, - The Department of Budget and Management
(@BM) 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 be from the following:

(i) The total cost of devolved functions to be deducted from the Internal Revenue
collections subject to the following principles:

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

(b) The cost of devolved functions shall be taken from the sixty oT (60%)
share of the national government; :

@) Twenty percent (20%) of the net earnings from the Philippine Amusement and
Gaming Corporation (PAGCOR);

@) Twenty percent (20%) net eamings ofthe Public Estate Authority; and

(4) Loans, grants, bequest, or donations, wtiether from local or foreign aoutoes

SEC.-8. Implementing Rules dnd Regulations. ~The Department of Health (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
implemedtation of this Act within sixty (60) days from its publication in two (2)
newspapers of general circulation.

SEC. 9. Repealing Clause. - All laws, orders, decrees, rules and regulations inconsistent

with the provision of this Act are hereby repealed or modified accordingly.


SEC. 10. Separability Clause. - If for any reasons or reason, 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.

SEC. 11, Liffectivity. - This Act shall take effect upon its approval.

Approved,