NINETEENTH CONGRESS                  )
REPUBLIC OF THE PHILIPPINES    )
First Regular session                           )
HOUSE OF REPRESENTATIVES
RECEIVED
BATE:9
T"E;nl+
BY:ill
Introduced b
resentative Rufus a. Rodri
House Bi-ll No.  53 76
EXPLANATORY NOTE
The Constitution, Art. XIll,  See.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.


NINETEENTH CONGRESS                  )
REPUBLIC OF THE PHILIPPINES    )
First Regular session                            )
HOUSE OF REPRESENTATIVES
Introduced by Representative Rufus a. Rodriguez
House Bill No.  RES
AN ACT
REDUCING   HEALTH   CARE   COSTS   BY  REQUIRING  TERTIARY  AND  SPECIALIZED
HOSPITALS TO SHARE CERTAIN SERVICES AND EQUIPMENT
Be it ep?ct.ed by the Senate and  House of Representatives of the Philippines in Congress
assembled:
SECTION  1.  Short Ti.I/e. -This Act may be cited  as the  "Hea/fh Servi.cos  Cost Contro/
Act,,.
SEC 2. Dec/arafi.on of Po/i-ey. - lt 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,  heartlrelated 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. |ecr\nolo_gy 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.  Serv/-ce  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 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 -
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.
SIC  i. Allocation Of Grant Funds. -
(a)                 ln  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.


(b)
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)  ln  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
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 -
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. Appropri.afi.ons -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.   Separab/-/i.fy   C/ause   -   lf   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.  Repea//.ng  C/ause  -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. Effecfiv/.fy C/ause -This Act shall take effect fifteen (15) days after its publication
in at least two (2) newspapers of general circulation.
Approved,