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CHAPTER III NATIONAL HEALTH PLANNING GUIDELINES: Introduction A DISCUSSION The National Health Planning and Resources Development Act re- quired the Secretary of Health, Education, and Welfare (HEW) to issue, by means of regulation, guidelines for national health planning policy. These were to include health planning goals and standards respecting the supply, distribution, and organization of health resources. In 1977, the Secretary issued the first proposal of standards for nine health services, aimed at controlling costs, reducing hospital capacity, and improving quality of health care. The public response from some commu- nities, especially small towns in Iowa and Texas, was overwhelmingly negative because residents feared the closure of their hospitals. This caused so much concern in Congress that the responsible subcommit- tee of the House of Representatives held a special hearing.* The reac- tion also prompted reassessment of the standards, led to revisions reducing their stringency, and brought recognition of the need to find a better way to develop and promulgate guidelines. There was also in- creased emphasis on the appropriate use of guidelines by local agencies, including a formal process for "adjusting" the resource standards to the local circumstances, as described in Appendix B. The history and subsequent reaction at the local level were documented by Zwick (1978) and Danaceau (1978~. In this section, in order to understand policy and research issues related to the guidelines and to help set the stage for recommending better systems for development, the concept of national health planning guidelines, as exemplified by those mandated in the health planning act, is examined. The committee was particularly interested in: -- whether guidelines can be aids to a planning process, vehicles for collaborative establishment of broad national policy, DREW received over 55,000 cards and letters. Some Congressmen reported thousands of contacts from constituents opposing the standards. - 29

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- 30 - -- what types of guidelines could be most useful for health planning, -- whether goals and/or standards are an expression of aspiration, an index of comparison, or a means of control. Background: The Guidelines as National Planning Policy Congress' charge to the executive branch was to develop a coherent, comprehensive national health planning policy. It was intended to make federal health programs and priorities more consistent, and to inform the planners and the rest of the nation of the goals toward which the country would be working. To begin the task, Congress listed ten national health priorities in the statute, to which another seven were added in 1979. Congress wanted DREW to initiate a federal planning process that would assure the development of a consistent, coherent national health policy and effective state and areawide health planning and resource development. There was support for a national health policy at several levels, but this was translated in the legislative process to a national health planning policy--a less controversial idea. Local planners testified on behalf of the need for a national health policy because its absence created problems for them (Most, et al, 1976; Committee on Interstate and Foreign Commerce, 1974; Zwick, 1978~. Several observers noted its lack as one of the flaws in previous programs, such as the Regional Medical Program and the Comprehensive Health Planning Program (Hilleboe, et al, 1972; Klarman, 1976b). Without federal guidance, some felt that the composition of governing bodies and other structural features became the preoccupation of health planning participants, to the neglect of substantive concerns (Klarman, 1976b). Others noted that a health planning policy by itself can serve a valuable educational function, as well as a means to mobilize information and organize resources (Taylor, 1972~. The rationale for such a policy, called for by numerous planning observers, was summarized by Gottlieb (1974~: As a nation we must . . . begin to define and agree on a realistic set of goals for planning. We cannot continue to indulge our- selves in our national propensity for flitting from one mechanism to another to get results if we really want the planning function to achieve its defined goals. The review by this committee of selected experiences with health planning guidelines in other nations also revealed interest in setting forth national policies for planning. In Great Britain, it has been recognized that planning cannot be done without a health policy agreed upon by a national majority (Macmillan, 1978), and the 1974 reorgani- zation led to the development of a general policy for health care in

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- 31 - terms of service priorities and resource distribution. The LaLonde Report from Canada is the best single example so far of a broad state- ment of national goals accompanied by specific statements of the directions in which policies and investments should be moving.* It also meets the desirable criteria of being understandable to the public, and concentrating on certain broad but useful goals.** Experiences in Germany and other countries attempting health plan- ning indicate a similar need for articulating broad policies. A decen- tralized administration of programs worked well only after there was a consensus on the goals to be reached (Altenstetter, 1978~. It is the committee's judgment that there is an important role for a national health planning policy. Developing such a policy could help to to identify issues and inconsistencies within health, and begin to move the nation toward some agreement on what the nation should be working toward. Because broad-based agreement, acceptance, and credibility are important, the processes of development and pro- mulgation are important. This is discussed in detail in Chapter IV. The national health planning policy should be expressed in the form of guidelines, as required by the Act. The establishment of the guidelines "by regulation", which refers only to the required use of the formal rulemaking process, ensures that the federal government has to develop the guidelines in a prescribed manner, proposing them and allowing time for public reaction, before they become regulations. The Act defines the guidelines as health planning goals and re- source standards, an unusual definition specific to this Act. In this discussion, the committee uses the term guidelines to include goals and standards, as does the statute. The committee finds that the national health planning guidelines . . provide a promising opportunity to express national interests and con- cerns, and can help to achieve a more effective allocation of health . . resources. The committee believes that properly formulated national guidelines can help identify what is a more equitable allocation of . . . . resources among localities, allow for local variations in needs and * Although that plan is an excellent example, the committee appreci- ates that its implementation illustrates how difficult it is, under the best of circumstances, to effect change in the health system, especially in times of fiscal constraint. ** The National Council on Health Planning and Development similarly called for concentrating on a small number of achievable goals and allowing the "ripple effect" to encourage the development of other goals once the promise has been realized.

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- 32 - preferences, while advancing toward an equitable "minimum" level of health care for the entire nation and toward comparable levels of prudent health resource management. Some areas of the United States . have substantial health resources and other areas few or none. Guide- lines, including normative resource standards, can be used to set targets and to measure progress toward a more equitable, but not necessarily uniform, distribution nationally. The delivery of health care is predominantly a local enterprise, and decisions concerning the most effective arrangements are best made at the local level within broad federal guidance. But the federal government has an important stake in what happens at the local level, both because of its role in ensuring equity and access, especially to the underserved, and its role as a major financer of services. Although federal involvement in shaping the health care system is sub- stantial and occurs through other mechanisms, the government also has an interest in effective planning. To represent the federal perspective and requirements, the planning Act contains positive and negative incentives to encourage movement in directions that the federal government can accept. Without guidelines expressing national needs at local levels, incentives at the local level are for medical care and the newest technologies, which, under current financing, are paid to a considerable extent by outsiders, especially the federal government. The guidelines provide a way to question and shape such financial ~ - aeclslons. The committee believes that the national guidelines serve impor- tant national interests, but it also believes that guidelines are an . . . essential and useful part of local and state planning if applied flex- ibly. They can be aids to local planning as indices of comparison, as benchmarks, and as quantitative measures for expressing national health planning priorities. Areawide planning is an intricate process, influenced by local conditions and aspirations. No one, including the federal government, is able to articulate what health services arrangements will work in each community. The committee concluded that useful guidelines might take a variety of forms, including indicators of health policy direc- tion, statements of principle, process guidelines, as well as goals and resource standards.* This would permit promulgation of policies that are important, but about which there is insufficient certainty, or consensus, for formulating specific goals or standards (as in care for the elderly), or where the public process is seen as preeminently important. For example, in examining guidelines for long-term care for * A guideline might also be stated in the "negative" where there is consensus or certainty about what is undesirable. For example, there should be no complicated obstetric deliveries in hospitals lacking certain equipment and services.

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- 33 - the elderly, the committee was reminded that making policies and regu- lations in any one area has other effects, and in making specific guidelines, administrators must be sensitive to such effects. The committee noted that guidelines development would most sensitively be undertaken within a framework of broad principles that express the complexity of the topics and express some of the important environmen- tal factors and pertinent policy problems. The committee observed in its study of access to health care that some minimum level goals and guidelines on the process of planning for access would be useful, but it also emphasized that better goals and standards should be developed at the local level. From its study of guidelines in the configuration of hospital ser- vices, the committee concluded that, for some problems, process guide- lines should be developed. For instance, as part of the local planning process, acute care hospitals should be required to describe their pro- grams and their program's compatibility with other hospitals in their community as part of the plan development or function of the HSAs. This process would bring hospital administrators and trustees face to face with other community interests involved in the planning process, foster the view that individual hospital programs should not be viewed independently of others, and encourage better institutional planning. The committee believes that guidelines should encourage changes in capacity that improve the appropriateness of services available. Although reducing bed capacity is not suitable as a sole goal, the committee believes that excess capacity has no redeeming utility and efforts should be made to eliminate it. The inappropriate use of acute care hospitals should be regarded as excess. However, reduction should not be undertaken without consideration of overall needs and assessment of the availability of alternatives. Guidelines could mean indications or an outline of policy or conduct; such a definition reflects Congress' intent in 1974. Or, guidelines may be expressed as goals in the form of statements of desired future states or results toward which effort is directed, such as health status improvement. A goal may be expressed as a minimum acceptable level, as a range (because ranges help accommodate differing conditions in various parts of the country), or as a maximum achievable. But whatever their form, guidelines are important as starting points and benchmarks for analysis at the local level. The Act defined a standard as a measure of the resources (personnel, facilities, services, or programs) needed to achieve a goal. Like goals, standards may be minimum levels necessary for pro- gress toward a goal, average levels reflecting customary practice, or desired level of excellence or expeditious movement toward a goal. The use of a range rather than a single number has advantages. The purpose of the guidelines, how they should be derived and ex- pressed, and who should be directly affected are all questions that need to be addressed more systematically and analytically. The

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- 34 - committee believes that guidelines should reflect national concerns and aim broadly at serving the public interest. The specific interpreta- tions of the congressional intent should be developed under the auspices . of the National Council on Health Planning and Development in an open, participatory process involving business, industry, labor unions, consumer groups, providers, educators, and others who affect or are affected by any significant change in the health system. Although the guidelines would be used principally by health plan- ning agencies, with only HSAs and SHPDAs being required to use them, the committee believes that the guidelines can be usefully incorporated into programs throughout the nation, including other programs inside and outside DREW. This is occurring- to some extent, as third party payers look to the existing standards as a guide for reimbursement. At least seven of the resource standards issued in 1978 are already part of reimbursement formulas in some states and some Blue Cross/ Blue Shield plans. In all approaches, the committee feels that guidelines should be flexible and responsive to change. Changes in the knowledge base, the . nature of the data, as well as the need to use judgment in many areas, shifts in other factors, and results of evaluation indicate that guidelines should be periodically reassessed and modified as appropriate. The committee recommends that guidelines be promulgated with documentation Of the bases for the guidelines, including, where applicable ? the'methods and data used for their development. Complete documentation should enhance the credibility, increase use, and strengthen local planners' abilities to plan well and negotiate sensitively. A Structure for Public Policy Debate The health planning program provides the structure and forum for public discussion of important health policy issues. Its collaborative partnership between the private and the public sectors should develop, apply, evaluate, and modify' the guidelines to ' strengthen health plan- ning and improve the quality of decisions'. To develop the policy needed, representatives of major interests will have to reach agreement on what our major health problems are, what broad national health goals should;be pursued, what resources are needed, and how much of our total resources should be devoted to health. The role of the federal government should be to facilitate the development of agreements on all of these issues, not to dictate the answers, although its interests are important and it has consider- able reason for its concern about rising health care expenditures and the need for a more effective and efficient health system.

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- 35 - The emphasis on cost containment by the executive branch and the setting of goals to improve the health system are not incompatible. The planning program is aimed at improving the effectiveness of the delivery of health services, not solely at controlling costs. It is to take note of divergences between the private and public interests and to effectuate the latter. Goals and standards can be used to elimi- nate the redundancies and wastefulness in the system caused by under- utilized services, or reduce the use of inappropriate high cost services. Health planning goals must be broad, both to ensure some stability over time and to allow for flexible application of various approaches which are consistent with the goals. Several general national goals --already stated in the legislation--can be divided into subgoals that are more specific, but still broad enough to apply to the entire nation and yet permit variation. For example, a national health plan- ning goal of reducing the overall supply of beds by 10 percent within five years makes sense, both because some beds are not needed and their existence is believed to contribute to increased utilization and greater health care expenditures. Such a goal would provide an oppor- tunity for areas that are especially overbedded or pressed by cost inflation to have more stringent bed reduction targets. Areas that are underserved would have the flexibility needed for expansion. Once goals are agreed upon, one method of developing standards is to outline alternative approaches to reach the goals. The approaches could differ, for instance, and be expressed in alternative resource standards. They could be specific and technical, but they could also be regarded as models to be adapted to local conditions or preferences. The national priority of service to medically underserved areas, for example, could be approached in a variety of ways, such as physician's placement or employing other professionals linked through technology to physicians and hospitals. Ideas, particularly those proved effective in application, could be shared as part of a "package" of alternative means toward a given end and the related resource standards as "rules of thumb" to help those doing the local planning. Much of the reaction to the proposed standards and debate about the guidelines has stemmed from a question of whether there should be a commitment to a common set of goals, or whether the aggregate goals of individual communities and states, working without a common frame- work and a national health policy, will be more likely to serve the public good. The Use of Standards* The use of standards, as one type or form of guidelines, is more controversial than the establishment of goals. Some planners have * This discussion is based largely on the works of Blackman, 1969; Blum, 1974; and Midwest Center for Health Planning, 1978.

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- 36 - questioned using them at all, (Blackman, 1969; Blum, 1974) others have objected to standards that are numerical (Klarman, 1979; Densen, 1979~. Still others (Gibson, 1977) question the application of national stan- dards at local levels because they may be inappropriate and even counterproductive. The committee explored the potential uses and defi- nitions of standards, as well as their application in other countries. There are at least three types of standards (Blackman, 1969~. One is a standard as a uniform measuring unit. The Hill-Burton regula- tions, for instance, have a standard width for hospital doors. While there may be reasons related to human scale or traditions of design for choosing a particular door width, what is important about this type of standard is that it is an agreed-upon technical convention. (Hospital furniture manufacturers rely on standard door width to accommodate the dimensions of their products.) The second is a standard that is a pre- vailing practice or average level of attainment. There is a standard test for a disease or the standard number of procedures performed daily by a technician--a descriptive statement about the average existing condition. Third, a standard may be a goal or a statement of what ought to be. Fewer than 4.0 acute general hospital beds per 1,000 population is an example of such a standard in the United States and is the type of standard frequently utilized in other countries. It is this latter type, also called a normative standard, that is often used in health planning. Standards may be used as benchmarks, rules of thumb, or quantita- tive measures of either the conventional wisdom or the best we know. If systematically developed and thoroughly documented, standards can help planners avoid the expense and time of conducting studies, re- viewing the research literature, and engaging expert consultants. There is sufficient commonality of problems to make analyses for one location often applicable, or at least adaptable, to other geo- graphical areas. This does not suggest that a national standard, especially one that is an arithmetic mean or median, is applicable to all areas. It does mean that data from comparable areas in different parts of the nation can assist in interpreting one's own data, and that methods can be borrowed from one area for use in another. The adaptability of others' standards or guidelines as aids to a planning process has been mentioned by Canadian planners in correspondence with the committee. Standards often have a technical or scientific base, thereby increasing their apparent objectivity. A professional source for a standard increases its credibility and reduces conflict and resis- tance to it. In an increasingly litigious society, the judiciary is increasingly likely to look to such standards for help in deciding cases. Standards often are used as evidence of some empirically validated need, rather than a social judgment about what a community wants to pay

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- 37 - for or what others believe is a socially valued good or service. Joint Commission on the Accreditation of Hospitals and Life Safety Code Stan- dards are cited as reasons for capital investments. The 1979 amendments to the planning Act require automatic approval by the state agency under certificate of need for life, safety, and other important code- compliance capital projects unless the project does not conform to the state plan or is excessive. Standards also are useful to program administrators, especially in large programs, as a source of quick and inexpensive information. Many federal government programs, such as health manpower or Health Mainte- nance Organization's ratios of resources to population are used as evi- dence of medical underservice. The simplicity and wide acceptance of those standards reduce the number of challenges to them. In the assessment of local situations, standards can help to determine whether local experiences are within reason or represent sub- stantial deviations from a national or regional norm. Abnormal statis- tics can identify problems for local health planning. If there is a tendency locally to avoid controversial or socially divisive problems, standards from other areas can keep the problems from being overlooked because blame for having to deal with them can be placed on the federal government. ~ Standards encourage agencies to discuss issues in a more orderly way, and to gather data on topics covered by the standards. Such acti- vities contribute to the specificity of the deliberations of local and state agencies. This was the reason that the National Council on Health Planning and Development agreed, after the 1977 standards were issued, that specific numbers can be useful. The Consumer Commission on Accredi- tation of Services said standards helped to equip consumers with authoritative evidence to use in efforts to change provider practices. But there also are problems inherent in the use of standards, especially for resources, even when they are developed and pro- mulgated in a technically sound and politically sensitive manner. Typically data are inadequate for setting standards and provide only a limited quantitative basis for monitoring, evaluating, or revising them. This can lead to an overemphasis on subjects or problems that technicians are able to quantify, using data that the system knows how to collect, not necessarily the problems that most need to be addressed (Klarman, 1977a) or recognition of the importance of value judgments and of substitution in production. The use of numerical standards, especially a precise-looking single number, may mask the absence of a sound empirical base. The tentativeness of estimates is less obvious when specific figures are given. For example, it is not known whether 4 beds per 1,000 is better for the health of the community than 3 or 4.5 beds, or if a minimum of 200 open heart operations per year per facility (or team) is a better

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- 38 - standard than 150 or 250, but the use of such numbers, based on in- formed judgment and policy choices, appears more authoritative. A spurious appearance of authority, however, can erode confidence. If a crisp number is promulgated as a standard, rather than a range of numbers justified by the evidence available, credibility will suffer. If a range is acknowledged, it is not only more likely to maintain cre- dibility but also, with additional technical notes, can encourage identification of a proper value for any one service within that range. Technical or quantitative character of the standards also may obscure the fact that value judgments undergird them. The relative contributions of knowledge and intuition at various stages in the pro- cess of standards development may be lost to the users. Fairness demands that the users not be misled, because a process dependent on the cooperation of individuals needs to be perceived as fair. Standards tend to lock in existing arrangements or procedures and to promote a single way of doing things (Lindheim, 1971~. Standards usually are not accompanied by an explicit discussion that the process of their development, especially when it is a group process, may have produced a more conservative view than might have been taken by many individuals in the group. Once issued, though, the standards assume authority that can discourage innovation and can be used by opponents to argue against change. Standards often are based on the resources considered desirable by providers, special interest groups, or others directly affected by the standards. Associations or special groups tend to produce standards that are best for their particular problem, but such standards make it more difficult to make choices or to calculate the relative costs and benefits of alternative actions. Although it was found that there is value in the guidelines taking other forms, the committee believes that resource standards, as one subset or form of guidelines, can be useful. For example, guidelines in the form of resource standards for acute care hospitals currently exist and should be expanded selectively to cover other services and facilities, such as intensive care units.* All such standards should be developed after careful review of the most appropriate type of guidelines for the problem and should be subjected to periodic reappraisal and possible modification. * While the committee did not specifically examine progress made toward regionalized networks of services, which were important goals in the Act, it is noteworthy that a number of the resource standards issued provide concrete guidance aimed at fostering regionalized systems of service that both enhance quality and conserve costs.

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- 39 - Numerical standards can be useful as benchmarks or tools to help planners, especially in subject areas around which there is consider- able consensus, such as hospital beds. But the committee recommends that goals and standards be promulgated more often in the form of . . ranges, rather than single numbers. They should be accompanied by a discussion of what variations within that range might be reasonable . . . . and the rationale for the standards. The intent would be to provide the planners with technical tools to assist in the policy decisions at the local level and to help guide negotiations, within defined boundaries. In addition, the importance of the inter-relationships among services and the effects of substitution among them should be made as clear as possible. The committee believes that, if resource standards are issued, guidelines formulation should begin with related health goals. Health goals provide a direction for planning for health service in an area and may enhance their coherence, increase opportunities for innovation, and, when numerical standards are involved, help avoid misunderstand- ings about the purposes of the standards.* In short, the development and promulgation of a national health planning policy will help to improve planning in the country by providing federal guidance to a local process. Such a policy should take a number of forms ranging from statements of principle to numeri- cal resource standards. The form should be determined by analysis of the problem and the amount of knowledge available to develop more specific guidance. The usefulness and effectiveness of guidelines will be partly determined by their credibility and acceptability. The next chapter discusses important factors in a process for developing guide- lines to enhance their value. * Health goals can increase innovation and permit appropriate substi- tution of resources at local levels. For example, to require all "health centers" to have certain plumbing, indoor toilets, and other features could preclude health stations in remote or undeveloped areas, because physical plant requirements would cost more than the cost of operating the program for two years. But if the goals called only for sanitary water and toilet facilities, those requirements could be met in less costly ways. The decision would be made on its public health aspects, not on more urban attitudes of what is needed for comfort or esthetics.

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