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CHAPTER V SUMMARY OF FINDINGS AND RECOMMENDATIONS This concluding chapter reiterates the findings and recommenda- tions of the committee, and summarizes the most important supporting discussions from Chapters II, III and IV of this volume. Selected Issues in Health Planning At the end of this second year of the study, the committee reaf- firms its first year's finding that the current health planning program has substantial potential for helping to achieve certain important social goals, through local planning for improved local health care systems. In general, the health planning program in the United States may be characterized as a citizen-dominated trusteeship in the field of health. At its best and at its most inspiring theoretical level, it may be seen as a new institution charged with helping to ensure that individual institutions or actors will promote, or at least not ad- versely affect, the development of a health care system that provides for all the citizenry "access to quality health care at reasonable cost." Like all of our social institutions, when operating and viewed up close, the picture is sometimes less inspiring, and suffers from human failures. As always, there are problems in devising arrangements and methods for structuring the unusual American institution that is health planning. In particular, the committee wishes to encourage much more flexibility in administration and, where local communities desire it, experimentation. The intentionally decentralized process for plan- ning and resources development should be viewed as an opportunity for learning how to help deploy health resources in this country. Expectations for planning agencies must be consistent with the tools provided them. Too often, the local and state health planning agencies become the arena for attempts to resolve-federal or national problems, but the resources and authorities necessary for resolving such problems remain outside the local agencies' control. Similarly, federal administrators tend to look at the broad mandate given -71-

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-72~ planning, and assign new responsibilities, ignoring the limited author- ity and resources of the agencies. Observers have also noted federal direction that is inconsistent with the Congress' expressed desire to decentralize the health planning and resource allocation process, placing a community's health destiny in its own hands. It would be logical to assume that a program with the structural complexity and breadth of responsibility of the health planning program would create divergent expectations at the various levels involved. The committee found this to be the case. Not surprisingly, given variations in perceived program goals, changes in the political and social environment, and shifting demands on the agencies, the "successes" attributed to health planning have been limited, and dissatisfaction with the program has been expressed. The committee believes that the program deserves time to mature and to be evaluated with measures consistent both with its mission and its resources. To date, evaluation has focused almost exclusively on capital expenditure control. But the planning program was not intended to be a major cost containment device and it lacks the authority needed to effectively control expenditures. That the results have been less than desired should surprise nobody. Rather than focusing on narrowly defined planning goals, the planning system should be viewed as an important, somewhat experimental effort toward forming relationships among agencies of government, between the public and private sectors, and between the processes of politics and technology. The HSAs should be evaluated as to whether they fulfill criteria of a democratic process, including fairness, openness, potential for par- ticipation, and extent to which they employ data and information appropriately. That health planning also, when it works retell, as an inherently political process that, which, must also be kept in mind when evaluating the program. Failure to do so may lead to incorrect and even damaging conclusions concerning the program's effectiveness. To judge the program by theoretical standards of rational decision- making would be inappropriate. Built-in limitations on effectiveness of the planning program are sometimes overlooked by critics. Naive expectations persist about what is possible for the health planning network. It was assigned a lofty and laudable but difficult set of goals; that is, to assist in "the achievement of equal access to quality health care at a reasonable cost. r' It was intentionally not given any real budgetary or regulatory powers by which to accomplish these goals. It was asked to focus on objectives that are often contradictory such as improving health status and controlling costs. As is often the case in U.S. politics, a crisis atmosphere and inflated promises accompanied the passage of the planning Act. The committee believes that there is a need to scale-down the unrealistic expectations of the health planning program. The political process seems to require rhetoric and overselling in order to maintain a

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-73- expecta~ions of the health planning program. The political process seems to require rhetoric and overselling in order to maintain a coalition. The committee feels that the effect of the overselling is not neutral. It fosters skepticism about our nation's ability to solve problems and discourages faith in any government action. If the program is not living up to all of the expectations of the various interests involved in its design and operation, the committee observed that a problem may be with the expectations, rather than the program itself. The committee concluded that the demonstrated differences between the goals professed in the Art and those applied by federal administra- tors and the Congress in evaluation may lead to invalid conclusions concerning the program's continuation. The committee recommends that a clearer statement off purposes and expectations of the health planning program be developed as a basis for evaluation of its effectiveness. This statement should recognize the limitations imposed on the program by its level of funding and authority, and provide better direction to both levels concerning the progran's activities. Clearly developed goals and expectations should protect the planning program from criti- cism that results from conflicting values and changing priorities. It is the committee's judgement that the purposes of the program for which the program could be and should be held accountable, in the order of their importance, based in the program's nature and authority, are: To establish and maintain an open, participatory struc- ture for articulating community health needs and desir- able alternatives for meeting those needs, to be used in advising both governmental and private sector deci- sionmakers who control health resources at the local, state, and national levels; 2. To contribute to the redirection of the health system through planning for a more effective, accessible, higher quality and more efficient configuration of facilities and services9 that is more closely matched to basic health care needs of the area's population. This should include developing a carefully thought-out position for dealing with the introduction of new technological advances into the health care system, with sensitive con- sideration and fair-minded appraisal of all important factors, not only costs. Done properly, this purpose should lead to a contribution in the overall containment in the rise of health expenditures, so this purpose and the next one (3) are not truly separable. However, specifying a cost containment mission, as well, within the proper context, is important to ensure that the com- mittee is not misunderstood.

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-74- 3. To contribute to the 'icontainment of health care costs, that is, to contribute to moderation in the rise of health care expenditure, primarily through planning a more cost effective health system (as noted in 2), through efforts to improve the health status of the population, especially through programs that promote health and prevent disease, and efforts to limit un- necessary capital investment and direct such investment toward more cost-effective facilities and services. It is important that this use of "cost containment" not be con- fused with budget cuts for health and social services, particularly for low income, old, and disabled citizens. A more cost-effective health system that meets the requirements of citizens can be achieved through improvements in the deployment of technology and high cost services. Planning is aimed at a better match between requirements and services, not at cutting out the services for which reimbursement is currently inadequate. These purposes are directed at improving the health of the people, the overriding goal of the planning system. However, given the some- times indirect link between changes in health services and incremental improvements in health status, and the difficulty in measuring such changes in the short term and attributing such changes to the health planning agencies' actions, it is unreasonable to judge the program on short-term health status changes in the areas' or states' population. A major interest of the committee was to call for a fair, realis- tic evaluation of the health planning program in terms of the systems that it was intended to affect, not just the nation as a whole. In effect, while the program is aimed at making an overall difference in the way that health resources are deployed in this country, any fair evaluation of the program must be disaggregated. Planning is a national investment and a fair question to ask is whether or not this is a good public investment loy the federal government. But, the answer must be reached by looking at the achievements of many different areas and whether or not the respective publics are benefitting from this planning. Agreement is needed on the definition of national interest as it relates to health planning and on what level of return for the planning investment is acceptable. Given the size and diversity of the nation the evidence will be mixed. Trends and overall findings will be the only evidence concerning what is happening. To summarize, the committee believes that it is important to state what can reasonably be expected and to assess program performance against that standard. The health planning program cannot accomplish all that political rhetoric has demanded of it. The critical ques- tions, however, are what can it reasonably be expected to accomplish?

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-75- would those accomplishments, if achieved, warrant continuation o the program? and are those goals being achieved? This committee has concluded that the health planning program cannot be expected, by itself, to resolve the various difficulties that the American health sector faces. It believes, however, that the program can make a contribution toward such resolution. Even the more limited objectives and expectations are worth pursuing. National, State and Local Roles and Relationships The complex health planning structure that has evolved over the past 30 years is the result of many disparate factors. These include: (1) the fragmented, diversely controlled health enterprise which con- tains public agencies engaged in financing, regulating and delivering traditional public health services which in turn coexist with a sub- stantial voluntary system for delivering similar services; (2) an historical resistance to "planning" in this country; (3) conflicting interests of national, state and local actors in the planning arena, each with their own notions of the degree to which planning should be centralized or decentralized; and (4) political processes and compromises necessary in this country to produce legislation. Given such complexity, it is hardly surprising that testimony be fore the committee included dissatisfaction with the planning program. The major areas of concern and committee recommendations follow. Relationships with Federal Medical Care Systems The medical care systems owned and operated by the federal govern- ment are significant elements in the total health care resources available to the nation. Federal beneficiaries and resources should be considered as part of the community health planning process, and planners for the federal system will undoubtedly want to take into account an area's total resources when planning for that eligible popu- lation. The committee encourages more dialogue in these matters and ac- tions that will create the most cost effective health system for all citizens, including those to whom the federal government has obliga- tions. Recommendations to Expand Coverage of the Planning Program The committee found the relatively low level of linkages between planning and financing to be a major barrier to achieving the goals of the health planning legislation. In the committee's view, strengthen- ing linkages between health planning and the reimbursement system should be a high priority for study and for experimental programs

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-76- within selected states. Such linkages might take the form of a tie between reimbursement under federal programs and findings that serv- ices reimbursed are appropriately organized and offered in accord with the plans, criteria and standards developed and applied by the health planning agencies. Expanded efforts to link planning and state rate review programs should be fostered by the federal government so that the most effective models can be identified. The Congress explicitly required health planning agencies to implement plans to regionalize health services and reduce redundant services. But the legislation contained no explicit exemption from anti-trust legislation for planning activities undertaken by providers. The issue has since been raised in the courts. The threat of anti- trust action still hangs over some implementation efforts. The committee endorses the concept of an explicit anti-trust ex- emption for activities publicly undertaken by providers in conjunction with health systems agencies, and in accord with the goals, objectives and recommended actions as embodied in duly-adop~ed health systems plans. The committee recognized that the issues involved in granting such an exemption are complex, and that the exemption language must be carefully structured to prevent abuse. In order to define the issues more carefully, and to develop the most useful legislative language, the committee recommends that the National Council on Health Plan- ning and Development working with the Department of Justice and the Federal Trade Commission establish a task force to develop proposed legislative language. As long as the threat of anti-trust action casts a shadow over efforts to secure change through cooperative actions, the pressure will mount to apply regulatory solutions where nonregulatory action would work equally as well. The committee hopes that the Council will move expeditiously to begin this important task. Recommendations Concerning Agency Diversity The committee heard testimony suggesting "over-management" by the federal administrative agency, and a greater emphasis on achieving program compliance than on providing assistance to enhance program effectiveness. The planning statute is unusually detailed, yet extensive regula- tions, program policies and guidelines have been issued. The committee believes that administrative attention might better be directed to fostering diversity in approaches used by the agencies (within the broad constraints of the legislation) and to studying the results than to efforts to achieve a high degree of uniformity through inflexibly applied supplemental regulations. The operation of this program could provide an opportunity to learn and observe what works well or poorly under different conditions. The committee recommends that the federal administrators of the program adopt a policy of promoting or allowing natural experiments in both agency structure and in methods for

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-77- carrying out agency responsibilities, and study the results. Such "experiments" already exist within the constraints of the statute. The committee feels that even more flexibility is needed to learn about how to accommodate to local conditions. Trial of some alternative approach- es to agency organizations and operation will not be possible without changes in legislation. The committee believes that to enable such ex- periments to be performed Congress, in reauthorizing the planning pro- gram, should make explicit its interest in allowing experimental ap- proaches to test different ways of health services planning and locally designed methods for advising on the deployment of health resources, especially new technology. The current "controlling" approach to ad- ministration being pursued by the federal administration denies the federal government, state government, and localities, the opportunity to learn while doing, essential in any complex program but especially one aimed at creating local institutions. The choices of experiments should be made by the planning agen- cies, according to size of grant, composition of staff and priorities and interests of the governing body and the state. These recommenda- tions will require more flexibility than program administrators have permitted in the past. The committee also recommends that some agencies be better funded to test and document possible effects of planning with greater funding. In some cases, the required supplemental money might come from third- party payers. In addition, some agencies should be allowed extra Area Health Services Development Funds for seed money to help get projects started. The Congress must make explicit its interest in genuine experimen- tation in how to effect change to find the best ways to conduct plan- ning. Contrary to the more usual uniform federal approach to problems, a major goal of this program would be to encourage variation and diver- sity to learn more about the optimal methods for allocating resources. Experimentation in Reimbursement and Capital Controls Clearly, reimbursement programs that simply accept or pass through land, plant, and equipment costs as reasonable and necessary, encourage investment, and because of their limited authority, CON and 1122 pro- grams cannot, on their own, effectively control costs. The committee finds that creative reimbursement approaches and new methods to limit non-essential or excessive capital investment are long overdue. The Congress should enact enabling legislation and authorize funds to monitor and evaluate such experiments. There are a wide range of approaches that could be considered such as:

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-78- o state setting an aggregate limit on capital purchase in health over a 3-5 year period; o state rate regulators imposing per-case reimbursement limits, or studying the experience with this reimbursement in New Jersey; o federal reimbursement experiments that limit paying for interest, depreciating rent, and other land costs. o federal or state efforts to limit the supply of private loan financing to hospitals or nursing homes. Recommendations for Stability and Funding The health structure is an enduring one, and health planning agencies are at a disadvantage in working from a base of three year authorizations. By placing the planning and control system at risk every three years, the Congress erodes its potential effectiveness. In the committee's view, longer authorization periods would help planning maintain the commitment and interest of its volunteers and combat resistance to change in the communities. Accordingly, the committee recommends that the Congress take the steps necessary to provide a greater degree of temporal and fiscal stability to the program. Among the considerations that should enter into development of improved legislation are the length of program authorization, the possibility of developing a stable financial base through use of a trust fund approach for at least a portion of the funding, and the use of guaranteed future funding to enable agencies to budget more effectively. The committee explored the potential for alternative funding sources for health planning, and particularly for HSAs. The committee concluded that funding at the local level by interested parties raised potential conflicts of interest, or the appearance of such conflicts. The possibility of influence was also a factor which makes unwise the use of money from providers or third-party payers particularly if provided on a voluntary rather than mandatory basis. The committee could not reach agreement on how funding for the planning agencies might be broadened without putting other goals, such as planning agency independence, at risk. But the committee felt strongly that any actions by the federal government based on an assumption that state and local governments or others would pick up funding would be illusory at best. The committee recommends that the National Council on Health Plan- ning and Development undertake a special study of the planning agency funding issue, with the goal of producing recommendations for

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-79- consideration by the Congress during the 1982 review of the authorizing legislation. Recommendations About Relationships Among Agencies A particular set of relationship problems for states with a single HSA were reported. In such states, where the population and resource base is not sufficient to support multiple HSAs, concerns were expressed concerning potential and actual duplication of efforts between the USA and SHPDA. The committee decided that special attention should be given to dividing functions and responsibilities so as to eliminate duplica- tion or waste. It was concerned that eliminating agencies or turning them into 1536 entities might create problems of access to the agency, especially by consumers, and reduce opportunity for citizen involve- ment. Because citizen participation is one of the strengths of the planning program, it would be undesirable to constrict it too much in the name of system efficiency. At the local level, the health planning structure has an array of horizontal relationships with both governmental and nongovernmental organizations. The range of organizations whose involvement facili- tates the planning process is broad. Among the most important of these relationships from the perspective of the committee are those with local official health agencies which are not directly required to deal with the planning agencies. An expanding interest in prevention and health promotion should help to enlist health planning agencies in such activities. Local and state health departments have the major operating responsibility in these areas. They are a repository of expertise that should be engaged in planning for such efforts. The committee concludes that closer operating relationships be- tween health planning and official health agencies should be promoted. This does not require that health planning be conducted by governmental organizations, but rather that such organizations be involved in plan- ning. Other important relationships are those among planning agencies and other federally-supported regional bodies. Such bodies, particu- larly PSROs, collect data and conduct activities which are directly related to improvement of the quality of care, also a concern of health planning. The committee recognizes the differences between the missions of the PSROs and the planning bodies and the real problems which exist concerning data confidentiality In fact, the committee felt that there is too much attention paid to their working together when their tasks are quite different and the real opportunities for working together are limited. The committee recommends that the National Professional Standards Review Council and the National Council on Health Planning and Develop- ment jointly develop a position concerning data and other information

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-80- exchange which meets the legitimate need for such data for health planning purposes while observing legitimate concerns regarding con- fidentiality of individual patient data. Consumer Participation The planning Act of 1974 mandated that USA governing boards con- tain a majority of consumer representatives. The intention was to ensure that consumer preferences, values and interests would be voiced in the planning arena. It was hoped that numerical superiority of consumers would balance the greater concentration of interests, resources and political and technical sophistication of pro- vider board members. But consumer participation in health planning has been viewed by many as ineffective. Amendments to the plan- ning Act in 1979 tried to rectify some of the problems but other problems remain. The committee examined a number of issues related to consumer participation. The major topics examined were: ambiguity in the role of consumers, questions of accountability, and training to strengthen consumer effectiveness. The committee found that the health planning program is an enter- prise aimed, among other goals, at more broadly distributing political power for advising on an area's health resources. Health planning attempts to remove decision-making from provider domination and give the public more influence. The committee concluded that an important contribution of the program is the addition to the advisory process of consumers, particularly those who represent the traditionally underserved and underrepresented. The consumer role will become even more important as fiscal prob- lems lead to the need for decisions about what health services will be supported. Reductions in services are not likely to fall evenly on all citizens. The health planning agencies with their carefully constituted governing bodies can make a special effort, working with providers, to pool their skills and capacities to find new imaginative ways to adapt resources to unattended health needs and ensure that the under- served and politically powerless remain priorities. These should include but not be limited to the aged, children, and the deinstitu- tionalized mentally ill and mentally retarded. The committee found the role of consumers in planning agencies to be ambiguous. A major source of ambiguity is that it is not clear whether consumers should "mirror" the community as a whole, and, as a consequence, speak for it, or represent particular constituencies. In practice there is a mixture of such models of representation. Few consumers formally represent constituency groups, but many pro- viders do. Questions remain about which consumer interests should

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-81- be represented, by whom, and how such representatives are to be selected and held accountable. But the committee saw both advantages and disadvantages to a pluralist, interest group bargaining model. For example, while par- ticipation and accountability are enhanced, heightened conflict may weaken the ability of the board to find cooperative solutions to problems. Of particular concern to this committee is how the pub- lic interest is represented in the process. The committee discussed several approaches, including one that many agencies now use, in which some proportion of the consumers are selected by and represent different organizations and interests, and others are elected or appointed "at large" or by public officials. The committee found that there are solid arguments for not making radical changes in methods of governing body selection and composition. Many of the planning agencies already are engaged in altering those procedures to conform with the 1979 Amendments. The agencies need time to regroup and build their capabilities. Further changes should be avoided until experience has been gathered on the 1970 changes. - The results of the changed requirements have created a nation full of natural experiments with substantial diversity which can be used to improve our understanding of the factors that encourage effective consumer participation. The committee recommends that the Health Resources Administration take advantage of the diversity in the nation to evaluate different approaches to board selection, composition, and methods of fostering active participation. It will be particularly important that such evaluations be academically defensible to ensure that changes considered in 1982 be based on solid data. The committee does not think that a requirement for more formal links with constituency groups is currently warranted. Existing groups can be used to informally strengthen citizen involvement and under- standing of health planning. The attributes of clearly defined con- stituencies, experience in organizational politics, and resources can be used by individual board members. The task at hand is to overcome political imbalance within the HSA governing body to ensure that planning agencies satisfactorily address a wide range of community concerns. If this goal is achieved, board composition becomes of less importance. Questions concerning the pur- poses of participation arise anew. Is the participation of consumers so highly valued that when agencies face budget cuts the costs of con- sumer participation are still justifiable? Some advantages of the public advisory process that involves all key interests are the public discussion of both technical issues and questions of value and judgment.

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-82- Education should not be limited to consumers. Providers also need to learn about innovative and alternative service delivery' the importance of health promotion and disease prevention, consumer values, health economics, and the application of epidemiology to health plan- ning. Training should cover many of these matters, as well as methods of decision making, leadership, and conflict resolution that can be employed by governing boards. The Health Resources Administration should explore possibilities for enhancing consumer participation. For example, caucus-like activi- ties might be fostered to give consumers the kind of psychological support that other board members get from their professional, peer, and occupational roles. Consumers might establish the agenda for their own training. But attention to consumers should not detract from the importance of a combination of providers and consumers on the boards, and the support that providers can and do give to consumers. As Checkoway noted: ''providers were sometimes more outspoken than their consumer counterparts in favor of consumer interests." The function of the consumer as spokesperson for certain values and points of view is important. Consumers often will not want to become "technical" planners. Rather they will wish to maintain the primacy of their values and opinions in a complicated technical and political process. They will sometimes need more technical information to effectively interject their values into the process, and there should be reasonable availability of technical support when they want it. The committee debated whether or not consumer board members should be paid for their participation. Providers, professionals, and public officials often participate as part of their jobs or related to their professional/career interests. Many of the problems of con- sumer participation might be reduced if citizens were paid for some documented preparation time and for attendance at governing body meetings and public hearings. The committee recognizes certain advantages to reimbursement for participation, but does not feel that a recommendation in favor of that idea is appropriate at this time. First, payment only to lower income members would require a "means test," which was unacceptable to everyone on the committee. Second, the program's voluntary nature is considered important. Third, the costs would be enormous, and could absorb a major part of the budget of some agencies. The committee also discussed a possible recommendation that con- sumers have their own staff to counterbalance the advantages of pro- viders and other board members.

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-83- In general the committee concludes that it needs to know much more about the dynamics of the staff support issue. The committee applauded the changes made by the 1979 Amendments and suggestions in the legislative history aimed at strengthening consumers through staff support. It is evident that consumers seem to be more effective when they have developed good relationships with staff. Governing bodies should recognize the importance of this support and make certain that board and staff relationships are appropriately structured and in particular, that consumers feel confident in their roles. But the committee also noted the divisive potential of having separate staff members reporting to the consumers only. In general, the HSA board should clearly understand its policy making role and its "supervisory" relationship to the executive director who serves at its pleasure. Staff must bear in mind their position (under the authority of the ex- ecutive director) as staff to the governing body. Consumers need to understand that as majority members of the governing bodies, they are supposed to be in a strong position, particularly in setting policy and determining the overall agency management style through hiring and control of the executive director. Difficulties with the nature and quality of staff support should be worked out smith the director. To develop assistance for consumer representatives, the board can authorize special funds for use by consumers. Such funds could be used to hire experts, conduct research, organize meetings, and consult with local consumer and professional interests, obtain administrative and support services, and the like. The committee also discussed the possibility of recommending requirements for more insurers and third party payers on governing bodies. Some of the committee felt strongly that third party payers, insurers, and other major health services purchasers should play major roles in health planning. Others felt equally strongly that more format involvement of insurers, third party payers and purchasers would be a mistake. The base for opinion and judgment was inadequate for the committee to take a stand, although Sapolsky in Volume II takes a clear position on that topic. To conclude, the committee decided that there was a need for experiments and rigorously designed studies to learn about factors that contribute to effective consumer participation. There is ample opinion and speculation, but the knowledge base is flabby and mixed. Chapter III discusses the importance of administrative flexibility to allow experiments to be undertaken. The committee concludes that the area of consumer participation needs systematic study and attention and the Health Resources Adminis- tration should help foster such experiments.

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84 Locations In which there are strong links between planning deci- sions and third party payment should be studied. Locations where the board includes a larger proportion of payers, insurers or purchaser should also be studied to see whether or not there are dif ferences in the effectiveness of these agencies. s