July 31, 2009

DOH ADMINISTRATIVE ORDER NO. 2009-0015

 

I. Rationale

Section 11, Article XIII of the 1987 Constitution provides that: "The State shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost".

In formulating an integrated and comprehensive approach to health development, nonetheless, the Philippine government, in light of globalization and technological development, has recognized the emergence of global healthcare or medical tourism as a growing segment of the country's tourism and health care sectors. Accordingly, several laws and executive issuances covering investments in various fields, including health infrastructure, health services, technology, research and development, were issued to take advantage of the growing medical tourism.

Additionally, the government has recognized the invaluable participation and contribution of the private health sector in the emergence of medical tourism in the country. As a matter of fact, the Department of Health (DOH), in its National Objectives for Health (NOH) 2005-2010, has acknowledged the roles and responsibilities of the private sector as producers of goods, services and technology for use by health providers and consumers. Succinctly, medical tourism has the capacity to improve the healthcare system by generating additional resources for investment in healthcare; it can become an important source of foreign exchange earnings; and it can add to the multiplier effects of tourism-related activities. aIHCSA

Accordingly, Her Excellency President Gloria Macapagal-Arroyo issued Executive Order No. 372, series of 2004, to create the Public-Private Sector Task Force for the Development of Globally Competitive Philippine Service Industries, in order to develop the potential of the country's globally-competitive service industries to generate employment and earn foreign exchange. Moreover, Executive Order No. 571, series of 2006 was issued to create a Public-Private Sector Task Force on Philippine Competitiveness which would promote and develop national competitiveness by seeing to the implementation of the Action Agenda for Competitiveness.

In support of E.O. No. 372, s. 2004, the Board of Investments included the health and wellness products and services in the 2005 Investment Priorities Plan (IPP). On November 14, 2006, the Philippine Economic Zone Authority (PEZA) issued Board Resolution No. 06-512 approving the Guidelines for the Registration of Medical Tourism Special Economic Zones (Medical Tourism Parks/Centers) and Medical Tourism Enterprises under Republic Act No. 7916, as amended.

Although there are already administrative issuances, namely Administrative Order No. 6, series of 1998, and Administrative Order No. 81, 2000, issued by the DOH pertaining to guidelines for endorsement of applications for BOI registration of healthcare projects, there are, as yet, no guidelines for endorsement of applications for PEZA registration of Medical Tourism Special Economic Zones (Medical Tourism Parks/Centers) and Medical Tourism Enterprises. More importantly, at the moment, the DOH has yet to formulate and issue a National Policy Framework for the Implementation of Medical Tourism Program.

Be that as it may, pending the composition and issuance of the National Policy Framework for the Implementation of the Medical Tourism Program, the DOH recognizes the need for an interim set of policies and guidelines governing the endorsement of applications for registration of global healthcare or medical tourism projects under the BOI and PEZA. However, in issuing these interim policies and guidelines, the DOH recognizes the following risks in pursuing medical tourism, namely: (a) it may create a dual market structure with higher quality care being supplied to affluent consumers to the detriment of the health care needs of poorer segments of the country; (b) the potential crowding out of the population from higher standard health facilities at the expense of the public healthcare system; and (c) it may attract scarce human resources for health away from public healthcare institutions.

Accordingly, the issuance of these interim policies and guidelines aims to make a convergence and collaboration between the public health sector and private sector initiatives to achieve sustainable and equitable medical tourism in the country.

II. Scope

The scope of this Order shall cover endorsement by the DOH of applications for BOI registration of health care projects; applications for medical tourism economic zone developer/operator; applications for PEZA registration of health facilities as medical tourism enterprises, medical tourism parks and/or centers in medical tourism economic zone; and evaluation of medical devices and equipment being applied for duty-free and tax-free importation required for the technical viability and operation of the registered activity/ies. This Order shall apply pending the formulation and issuance of the National Policy Framework for the Implementation of Medical Tourism Program. DECSIT

III. Objectives

This Order is being promulgated to provide an interim set of policies and guidelines governing the endorsement of applications for registration of global health care or medical tourism projects under the BOI and PEZA. These interim policies and guidelines shall apply pending the formulation and issuance of the National Policy Framework for the Implementation of Medical Tourism Program.

IV. Definition of Terms

Medical Tourism — is the travel to the Philippines for the purpose of availing quality but affordable healthcare services or treatment of illnesses and health problems in order to maintain one's health and well-being.

Medical Tourism Economic Zone (MTEZ) — a selected area which is highly developed or which has the potential to be developed into a Medical Tourism Park/Center whose metes and bounds are fixed or delimited by Presidential Proclamation. Medical Tourism Parks/Centers shall be planned and designed in accordance with the standards of the Department of Health (DOH) and the Department of Tourism (DOT) to have support facilities and services required for health and wellness.

Medical Tourism Center — either a medical hospital or a stand-alone building attached to a hospital that hosts specialized medical clinics and other specialized medical related activities, in compliance with DOH requirements, the whole or part of which has been developed to provide infrastructures and other support facilities required by Medical Tourism Enterprises, and which may also provide amenities required by foreign patients including professionals and workers involved in medical tourism activities. Other than a medical hospital, a stand-alone building attached to a hospital shall have a minimum floor area of five thousand (5,000) square meters for Metro Manila and Cebu City, and two thousand (2,000) square meters minimum floor area for the provinces and cities outside of Manila and Cebu City. ACTEHI

Medical Tourism Economic Zone Developer/Operator — a business entity duly endorsed by the DOH and registered with PEZA to develop, operate and maintain a Medical Tourism Park/Center and with required infrastructure facilities and utilities such as light and power system, water supply and distribution system, sewerage and drainage system, pollution control devices, communication facilities, and other facilities as may be required for a medical tourism economic zone.

Medical Tourism Enterprises — a corporation or other form of business entity which has been endorsed by the DOH and registered with the PEZA to engage in the practice of medical health services with foreign patients as primary clientele.

Medical Tourism Park — an area which has been developed into a complex capable of providing medical infrastructures and other support facilities, in compliance with DOH and DOT requirements, such as but not limited to medical accommodations, wellness centers, spa, health farms, sports and recreational facilities, and rehabilitation facilities required by Medical Tourism Enterprises, as well as amenities required by foreign patients including professionals and workers involved in Medical Tourism activities. A Medical Tourism Park shall have a minimum lot area of one (1) hectare.

Philippine Council for Accreditation of Healthcare Organizations (PCAHO) — non-government organization involved in accreditation of facilities engaged in international medical travel services using recognized standards in quality, safety and medical travel. CDTSEI

Joint Commission International (JCI) — not-for-profit organization focused on improving the safety of patient care through the provision of accreditation and certification services as well as through advisory and educational services aimed at helping organizations implement practical and sustainable solutions.

V. Interim Policies

1. Global healthcare or medical tourism projects under BOI and PEZA, including the creation of MTEZ, medical tourism centers, medical tourism parks, and medical tourism enterprises, must be considered as part of the Philippines' integrated and comprehensive approach to health development which endeavors to make essential goods, health and other social services available to all the people at affordable cost.

2. Registration of global healthcare or medical tourism projects shall always take into account its impacts on the Philippines' public healthcare system. Hence, the DOH shall exercise prudence and sound judgment in issuing endorsements of applications for registration of global healthcare or medical tourism projects, taking into consideration that such endorsement may lead to the creation of a dual market structure with higher quality care being supplied to foreign patients and affluent consumers to the detriment of the health care needs of the poor; the potential crowding out of the population from higher standard health facilities at the expense of the public healthcare system; and internal flight of limited human resources for health away from government hospitals and public healthcare institutions.

3. Applicants for registration of global healthcare or medical tourism projects must provide programs, mechanisms, or strategies which share the benefits of medical tourism with the public healthcare system through public service, which include but not limited community-building projects, sponsorship of PhilHealth premium, expansion of service wards and facilities, scholarship programs, training agreements between public hospitals and private hospitals and health promotion activities. TacSAE

VI. Interim Guidelines

1. Applicants for registration of global healthcare or medical tourism projects under BOI and PEZA, including the creation of MTEZ, medical tourism centers, medical tourism parks, and medical tourism enterprises, who/which seek the favorable endorsement of the DOH must secure a referral letter from either the BOI or PEZA, as the case may be, where they filed their registration applications. Such referral letter, which must be addressed to the Office of the Secretary of the DOH (DOH-OSEC), shall be accompanied by the following supporting documents and shall show the prima facie registrability of the enterprise or activity with the BOI or PEZA:

(a) Background information on applicant;

(b) Detailed description/feasibility study;

(c) List of medical devices and equipment, including specifications and quotations/costs of each item;

(d) Documentation of efficacy and safety of the technology/equipment;

(e) Sworn statement stating all the information and data submitted are true and correct;

(f) Authenticated proof of authority for signatory of applicant in the submitted documents (either Secretary's Certificate, Board/Partnership Resolution, or affidavit);

(g) Proof that foreign clients are the primary clientele; and

(h) Sworn statement affirming compliance with the conditions after BOI or PEZA registration provided in this Order. THaAEC

(i) Proposed social responsibility actions and funding commitments.

2. Upon receipt of the BOI or PEZA referral letter and supporting documents, the DOH-OSEC shall forward it to the Technical Evaluation Committee (TEC), which shall be responsible for the evaluation the applicants for registration for health care projects under BOI and for registration of health facilities under PEZA under the various existing categories. The TEC shall be created through a Department Personnel Order (DPO) and shall be chaired by the Undersecretary for PSDT Regulatory Cluster and vice-chaired by the Assistant Secretary for Office for Special Concerns. The following bureaus and offices shall be members of the TEC: Bureau of Health Facilities and Services (BHFS); National Center for Health Facility Development (NCHFD); Bureau of Food and Drugs (BFAD); Bureau of Health Devices and Technology (BHDT); Health Policy Development and Planning Bureau (HPDPB); Bureau of International Health Cooperation (BIHC); Research Institute for Tropical Medicine (RITM); President, Association of Health Administrators, Inc.; Center for Health Development (CHD) having jurisdiction over proposed location of the healthcare or medical tourism project; and such other bureaus, offices, and persons deemed relevant and competent by the DOH-OSEC.

3. The TEC shall have the following functions:

(a) Validate the veracity of documents submitted for evaluation.

(b) Review and evaluate the guidelines, the application for BOI registration of health care projects and PEZA registration of health facilities as medical METZ, medical tourism centers, medical tourism parks and medical tourism enterprises.

(c) Recommend endorsement or non-endorsement of these applications to the Secretary of Health.

(d) Recommend that guidelines/requirements relative to the aforementioned processes are updated when necessary. EcSCHD

4. The TEC shall determine and confirm if the proposed global healthcare or medical tourism project shall engage in the following facilities or activities, such as but not limited to:

(a) Facilities — Level III or Level IV General Hospitals and/or Medical Centers; Level III or Level IV Special/Specialty Hospitals and/or Medical Centers; Level III General or Specialized Diagnostic Imaging Centers; Tertiary General Diagnostic Clinical Laboratories; Special Clinical Laboratories for Molecular Biology and Biotechnology; Physical/Occupational/Speech Therapy Rehabilitation Facilities; Substance Abuse Treatment and Rehabilitation Centers (TRCs); Acute-Chronic and/or Custodial Psychiatric Care Facilities and other health facilities for the mentally ill; Ambulatory Surgical Healthcare Facilities attached to Hospitals; and other facilities attached to a hospital that provide health or health-related services.

(b) Hospital-Based Services — Medical Services (Allergology, Clinical Immunology, Rheumatology, Cardiology, Clinical Genetics, Clinical Nutrition, Emergency Care, Endocrinology and Metabolism, Gastroenterology, Infectious and Tropical Diseases, Nephrology, Neurology, Psychiatry, Radiology, Radiotherapy, and Interventional Radiology, Hematology, Oncology or Cancer Medicine, Pulmonology, Critical Care, Geriatric Care, Lifestyle Health Service, Dermatology, Pain management, Complementary and Integrative Medicine); Surgical Services (Neurosurgery, Cardiothoracic surgery, Gastroenterology surgery, ENT, Ophthalmology, Urology, Orthopedics, Cosmetic, Plastic, and Reconstructive Surgery); Obstetric and Gynecologic Services; Pediatric, Perinatology and Neonatology Services; Dental and Orthodontic Services; Optometry and Orthoptic Services; Spa and Health Farms; and Drug Addiction Treatment and Rehabilitation Services. Provided that, any proposed healthcare or medical tourism project that will provide transplant surgery services shall not be endorsed by the DOH.

(c) Medical Tourism Parks/Centers to be located in accordance with and subject to the conditions provided in PEZA Resolution No. 06-512.

5. The proposed facility or activity must strictly comply with all existing laws, rules, regulations and issuances pertinent to hospital operations, health services delivery and regulation.

6. The TEC shall determine and confirm if all of the following conditions are present in case the proposed facility or activity claims for fiscal incentives in relation to medical devices or medical equipment, viz.:

a) The medical devices or medical equipment must be brand new and up-to-date.

b) Procurement and use of the said medical devices and equipment must have complied with all the necessary health regulatory documents and permits from the country of origin and from the BHDT. AEIcTD

c) The medical devices or medical equipment shall be solely used for therapeutic and/or diagnostic purposes limited to the medical tourism services.

d) The medical devices or medical equipment shall have a minimum freight-on-board (FOB) unit cost of One Hundred Thousand US Dollars (US$100,000.00). The minimum FOB cost shall be determined and periodically reviewed every two (2) years by the BHDT based on the prevailing cost of medical devices or equipment. The BHDT shall recommend basis for future determination of the minimum FOB cost of medical devices or equipment which may be used as a basis by the TEC.

e) The medical devices or medical equipment must be fixed to or owned by the proposed facility or activity and cannot be considered as personal property.

f) The medical devices or medical equipment must not be locally-manufactured.

7. The proposed healthcare or medical tourism project must use health care technology that has been scientifically proven effective, safe and evidence-based.

8. The proposed facility or activity must provide the same quality of care, technology and services for Filipinos, foreigners and foreign-based patients. It must also provide the same quality healthcare to service patients. cHCIDE

9. Facilities must submit a detailed program, mechanism, or strategy which provides public service, such as, but not limited to, community-building projects; establishment of service beds numbering at least ten percent (10%) of the authorized total bed capacity pursuant to Administrative Order No. 2007-0041; scholarship programs; and training agreements between public hospitals and private hospitals.

10. The TEC shall have thirty (30) working days to review, validate, evaluate, and issue its recommendations as regards the applications to the DOH-OSEC. In case the TEC cannot complete its evaluation and recommendations in 30 working days, it shall inform the DOH-OSEC and the applicants of the need to extend the proceedings and the additional period of time required to finish it but in no case shall the extension be longer than sixty (60) working days.

11. The TEC shall forward its written recommendations to the DOH-OSEC for final approval or disapproval by the Secretary of Health.

12. The DOH-OSEC shall transmit the approved or disapproved endorsement to the BOI or PEZA. A copy shall be furnished to the secretariat of the TEC.

VII. Conditions After BOI or PEZA Registration

1. Global healthcare or medical projects that have been granted approved endorsements by the DOH shall provide a certified true copy of their BOI or PEZA registration to the DOH-OSEC within fifteen (15) days from issuance thereof. SDHAEC

2. Facilities that have been granted an approved endorsement by the DOH shall secure the following licenses and/or accreditation within the prescribed timeframe:

(a) License to Operate from the BHFS or the CHD, as the case maybe, prior to the start of operations;

(b) Accreditation from the Philippine Health Insurance Corporation (PhilHealth) after three (3) years from issuance of the License to Operate in case of new facilities. Provided that in case of existing facilities, the PhilHealth Accreditation must be secured within 3 years from the issuance of the favorable DOH endorsement;

(c) Recognition as a "Center of Excellence" using the PhilHealth Bench Book standards within five (5) years from issuance of the License to Operate in case of new facilities. Provided that in case of existing facilities, the "Center of Excellence" recognition must be secured within 5 years from the issuance of the favorable DOH endorsement; and 

(d) Accreditation from PCAHO or JCI within three (3) years from issuance of the License to Operate in case of new facilities. Provided that in case of existing facilities, the PCAHO or JCI Accreditation must be secured within 3 years from the issuance of the favorable DOH endorsement.

3. Facilities or activities that have been granted approved endorsement shall furnish the DOH-OSEC with the following:

(a) Annual report of statistics of foreign/foreign-based medical travelers and patients who availed themselves of the specific medical and diagnostic procedures and/or facilities and other hospital services utilization statistics;

(b) Annual report of statistics on quality and safety in healthcare performance-based monitors;

(c) Annual report of actual income derived from foreign-based patients' hospitalization and also utilization of medical devices, equipment and specialized units granted fiscal incentives by the BOI or PEZA; CaHcET

(d) Annual report of actual expenditures of the health facility spent for service patients' inpatient and outpatient treatment, diagnosis of their condition, prevention and control of diseases;

(e) Annual report of statistics of service patients provided with similar medical attention and care as foreign/foreign-based medical travelers and patients; and

(f) Annual report of compliance to their detailed program, mechanism, or strategy which provides public service, such as, but not limited to, community-building projects; establishment of service beds numbering at least ten percent (10%) of the authorized total bed capacity pursuant to Administrative Order No. 2007-0041; scholarship programs; and training agreements between public hospitals and private hospitals.

(g) Annual submission of notarized list of medical devices or equipment procured/secured through DOH endorsement, specifying the brand, serial number, model, number of units, and date of purchase.

4. A quality assurance as well as quality control and safety in health care program must always be maintained by the said health facilities subject to periodic evaluation and review by appropriate DOH bureaus, centers and offices.

5. Facilities or activities must provide the same quality of care, technology and services for Filipinos, foreigners and foreign-based patients. They must also provide the same quality healthcare to service patients.

6. Facilities must dutifully comply with their submitted detailed program, mechanism, or strategy which provides public service. Compliance shall be subject to periodic evaluation and review by appropriate DOH bureaus, centers and offices.

7. Facilities must be willing to collaborate with DOH in research and training activities.

VIII. Monitoring and Evaluation of Endorsed Facilities

Facilities or activities that have been granted approved endorsements shall be monitored and evaluated on a semi-annual basis. Monitoring and evaluation shall include site visits and analysis of submitted reports to DOH and surveys, as may be deemed necessary by the DOH-OSEC. AEHCDa

Any adverse report, public health threat, market distortion and the like that are created as a result of services being provided by the endorsed facility or activity shall result in the automatic review and amendment of this Order.

IX. Investigation of Complaints, Violations, and Sanctions

Any violation of the provisions of this Order shall be reported to the DOH-OSEC and, after notice and hearing, shall be meted out appropriate administrative penalties and sanctions provided under existing laws, rules and regulations.

Meanwhile, any person or interested party shall refer the complaints or charges against the hospital or healthcare facility to the BHFS or concerned CHD. All violations relevant to hospital operations, health service delivery, and/or health facility regulation committed by the involved hospital or health care facility shall be reported to the appropriate regulatory body and shall be meted out appropriate penalties and sanctions provided under the violated law or issuance.

Lastly, any violation of or non-compliance with the provisions of this Order shall result in the imposition of the following sanctions against the erring facility, namely: (1) removal from the list of DOH partners; and/or (2) non-endorsement by the DOH of any future request of the facility, including denial of request for endorsement involving claims for fiscal incentives in relation to medical devices or medical equipment.

X. Appeal

Any applicant aggrieved by the decision of non-endorsement by the Secretary of Health shall have the right to file an appeal within fifteen (15) calendar days from the receipt of the official communication sent by DOH-OSEC. Upon receipt of the appeal, the DOH-OSEC shall refer the matter to the TEC to review the appeal of the applicant. Within 15 days from receipt of the appeal, the TEC shall forward its written recommendation to the DOH-OSEC OSEC for final approval or disapproval by the Secretary of Health, whose decision shall be deemed as final and executory.

XI. Separability Clause

In the event that any provision of this Order is declared unconstitutional or invalid by a court of competent jurisdiction, the other provisions thereof shall not be affected thereby. ASTcEa

XII. Repealing Clause

All administrative orders and other issuances or part thereof inconsistent with the provisions of this Order are hereby repealed or amended or modified accordingly.

XIII. Effectivity

This Order shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.

(SGD.) FRANCISCO T. DUQUE, III, MD, MSc.Secretary of Health