muna
 

 

HEALTH
PLANNING

A Systematic Approach

 

 

 

SECOND EDITION

 

 

 

Herbert Harvey Hyman, Ph.D.

war

 

AN ASPEN PUBLICATION*
Aspen Systems Corporation
Rockville, Maryland

“~ London

Anan

 
8 HEALTH PLANNING

Sanitary reform movement, which remained within the domain of local
community government, captured the consciences of the majority of the
American public. Although enlightened studies in the field of health care
promoted modern concepts of preventive medicine, the institution of such
programs met largely with opposition from the centers of power that would
have been able to make them realities. The most progressive changes were
to evolve in the early decades of the twentieth century. But again, these
remained sporadic forays into the realm of modern health care and were
thwarted by a public that could not be convinced to support with taxes the
kinds of programs that would have been required. The trend toward gov-
ernment intervention in health matters was slowly, but definitely, emerg-
ing. Society’s inability to control its purse strings and the creation of the
federal income tax accelerated the inevitable formalized type of central
help.

SIGNIFICANT HEALTH ISSUES: 1920 TO PRESENT

Prior to World War II, health care delivery and efforts to coordinate and
plan health services were generally initiated by private (voluntary), non-
government agencies at the state or local levels. Studies and planning
efforts were usually disease oriented, categorical or fragmented in
approach, directed toward specific health problems.!? Efforts were initi-
ated by voluntary health groups such as the National Tuberculosis Asso-
ciation, the American Cancer Society, and the American Public Health
Association. In an attempt to coordinate the activities of these voluntary
health agencies, the National Health Council was created. The experience
of the depression of the 1930s, World War II, the profound rise in medical
care costs resulting from the increasing imbalance between supply and
demand, and the expanding role of the federal government in providing
economic assistance conditioned a steady expansion of government par-
ticipation in the planning, financing, and delivery of health care. This shift
to increased government involvement in Meeting health needs is best
illustrated by examining the major health issues of the pre-and post-World
War II periods and the responses of the private and public sectors to those
issues,

Between 1920 and 1965 several major health issues emerged: regionali-
zation of health facilities (provision and coordination of health facilities),
alternative methods of health care delivery, financing of health care, the
impact of biomedical research, and health personnel. It would appear that
the most consolidated effort was initiated by the voluntary and public
sectors in response to the need of regionalization of health facilities.

 

 

 

 

History 9

Regionalization of Health Facilities

Population growth, the movement from rural to urban areas, and rising
medical costs were instrumental in the regionalization of health facilities
as early as 1920. Regionalization was the response to such needs as ade-
quate provision of health care facilities—expressed by many studies in
numbers of hospital beds per unit of population—and facility coordination
within a region.° Prior to 1945, the private sector played the dominant
role in initiating efforts to study these needs. Each effort undertaken by a
voluntary group focused on a particular locality and generally remained
separate from similar efforts undertaken by other voluntary groups. Asa
result, criteria varied from study to study.

In 1920, the New York Academy of Medicine studied 180 private and
municipal hospitals in New York City to determine if there were enough

hospital beds to care for the sick. The standard measure of need used by

the academy was the Public Health Service estimate-that, at any given
time, approximately two percent of the population would be sick. Finding
that one hospital bed existed for every 200 people, the academy concluded
that the health needs of the population were being met. This study marks
the first formal recognition of the necessity to plan hospital needs in the
United States and was followed by anumber of local and regional studies.?!
These studies were obviously categorical in approach; questions of geo-
graphical distribution and availability of hospital care to all facets of the
population were never studied.

A more comprehensive study of hospital needs, ‘‘The Need for More
Hospitals in Rurals Areas,”’ by A. B. and P. Mills, was published in
1935.22 The authors studied the question of population density, the
number and training of physicians, and other factors related to determin-
ing need. This was the first study concerned with health service centers,
facilities of 250 or more beds designed to serve a population within a
50-mile radius of the cities where they were located.23 Again, the empha-
sis was on the number of beds available to a population. The important
point of this study was the Mills’ concern with the question of regional
health services.

Also during the 1930s, a joint committee of the American Public Health
Association and the National Health Council studied the provision of full-
time local health services in the United States. This study emphasized the
provision of services nationwide rather than in specific localities. The
Emerson Report, as it came to be called, was not released until the end of
World War II.?4 The recommendations in this report concerned traditional
issues of public health services: sanitation, communicable disease control,
maternal and child health, vital Statistics, and public health laboratory
services. The report is connected to those nreviouslv dicencead hu ttn
10 HEALTH PLANNING

statement of minimal standards for local health services in terms of the
number of health personnel and number of beds per population unit, and
per capita expenditure. The study was notable for its new direction, but,
by the time of its publication, public health services had so expanded that
the standards recommended were inadequate.5

Several ambitious efforts were undertaken to coordinate health care
delivery during the 1930s. In 1931, the Bingham Associates Fund, a private
foundation, established a program based in Pratt Clinic and New England
Hospital in Boston to encourage coordination and integration of medical
services for residents in rural areas of New England. The program was
conducted in conjunction with Tufts Medical School. In 1933, the Com-
mittee on the Cost of Medical Care published a report that recommended
the coordination of local health services and personnel to provide maxi-
mum productivity of the scarce personnel and equipment.?®

Thus, it can be seen that, prior to 1940, numerous studies of health care
services had been undertaken by diverse participants in the private sector.
These studies were conducted in response to a growing concern for ade-
quate provision of health facilities for a growing and more transient pop-
ulation and health services coordination to avoid duplication of services
and to combat rising medical costs.

Federal response to the issues in the 1920s and 1930s was limited.
Traditionally, personal health care was provided by the private sector,
primarily in a one patient-one physician situation. Further, domestic
unemployment and economic instability and the ensuing World War II
absorbed federal efforts and dominated federal concerns. With the con-
clusion of the war, however, the federal government had more time and
money with which to examine those issues raised by the private sector.
The passage of the Hospital Survey and Construction Act (Hill-Burton
Act, PL 79-725) in 1946 was a major breakthrough in coordinating and
providing health care facilities nationwide.

The Hill-Burton Act provided federal aid to states for hospital facilities.
To be granted funds, however, a state had to create a hospital planning
council responsible for assessing the need for new hospital construction.
Because of this condition for funding, states were forced to survey existing
facilities (number of beds per unit population) before they could apply for
construction grants. The intent of the act was to coordinate new construc-
tion with need and with existing facilities.

In 1954, the Hill-Harris Amendments to Hill-Burton revised and
expanded the program to include funding exclusively for modernization
or replacement of public and nonprofit hospitals. As a result, the number
of institutions applying for alterations and additions increased. Emphasis
shifted from providing hospital care in rural areas to altering urban facili-

 

History Ul

ties. A most significant change wrought by the amendments was a shift in
emphasis from construction to planning of health services. Under the Hill-
Harris Amendments, state plans had to apply a new formula for assessing
bed need, incorporating utilization data, projected population, and occu-
pancy factors.

The Hill-Burton Act and amendments are often criticized as focusing
too narrowly on construction, with little stress on organization and distri-
bution of health care facilities. It should be remembered, however, that
Hill-Burton not only introduced systematic statewide planning and mini-
mum national standards for assessing hospital need, but also improved the
quality ofcare in rural America.?’ The act and its amendments were limited
because the establishment of a formal relationship among hospitals or
health agencies was not made mandatory.”8

With the passage of Hill-Burton and the expenditure of vast funds for
hospital construction, the federal government firmly and irreversibly
became part of the American health care system. National health planning
had been introduced. This fact, coupled with the great rise in medical costs
despite federal assistance, led to the formation of a joint committee of the
American Hospital Association and the Public Health Service in 1958. The
joint committee sponsored four regional conferences to develop guidelines
for planning a coordinated community health service system. Three years
following the conferences a report was issued. A rationale for areawide
health planning had been provided.?9

The joint committee recommendations were formally recognized and
expanded by the public sector in 1963 when the U.S. Public Health Service
issued Procedures for Areawide Health Facility Planning. While the joint
committee studies were being conducted, the American Public Health
Association and the National Health Council sponsored an ambitious
project to produce a blueprint for a system of preventive and curative
medical services and environmental health protection for the next ten
years. Whereas the joint committee was a cooperative public and private
sector venture, the National Commission on Community Health Services
was largely a voluntary venture. The commission was funded by both the
private and public sectors through grants from private foundations, the
U.S. Public Health Service, and the Vocational Rehabilitation Adminis-
tration.

The study was conducted in three parts and required four years. Part I,
the National Task Forces projects, consisted of numerous autonomous
studies; consequently, the recommendations of each task force were dis-

jointed and published individually. Part Il, the Community Act Studies,
studied 21 individual communities throughout the United States. The find-
ings of each of these task groups provided the basis for recommendations
12) HEALTH PLANNING

to be presented during the third part of the project—the Communications
project. This part of the project tested public reaction to the recommen-
dations at four different regional conferences, The commission’s report,
published in 1966, made the following major recommendations:
1. Community health services need greater federal participation.
2. Comprehensive health planning must be undertaken ona continuing
basis.
3. Regional or areawide planning bodies must be established to corre-
spond to problem health areas.
4. A single system must be established to provide personal health
services that eventually will combine all parts of public and private
health care.3°

Concurrent with these efforts by the voluntary and public sectors to
coordinate health services, the Commission on Heart Disease, Cancer,
and Stroke was formed by President Johnson in 1963 to recommend steps
to reduce the incidence of these illnesses through new knowledge and
more complete utilization of existing medical knowledge. The recommen-
dations of this commission were enacted into law as the Heart Disease,
Cancer and Stroke Amendments of 1965 (PL 89-239). Even though the
initial study was categorical in approach, the establishment of the Regional
Medical Programs (RMPs) was a comprehensive response. Cooperative
regional arrangements were to be organized from existing medical centers,
Clinical research centers, and hospitals, Fifty-six health regions were
established and charged with evaluating the overall health needs within
each region. Initially, the act covered only heart disease, stroke, and
cancer, but the 1970 amendments expanded the program. Two important
aspects of the act distinguished it from previous legislation and voluntary
group emphasis on the coordination and provision of health services. First,
the act provided for local participation in planning. This approach de-
parted significantly from purely state and federal planning of facilities that
were provided for in the Hill-Burton Act. Second, funding of projects was
provided for both planning and operating.

Once regions were awarded planning grants, they became eligible to
apply for funds to cover operating expenses of all projects in their juris-
diction. Initially, funding was devoted to continuing education and train-
ing, but this emphasis has shifted to organization and delivery of patient
services, and improvement of personnel productivity and distribution.3!
Unfortunately, the RMPs were not incorporated into existing federal and
state programs, causing both duplication and gaps in delivery of services,
personnel training, and research,

The passage of the RMP legislation, together with the recommendations
of the National Commission and the guidelines published by the joint

 

History 13

committee, culminated in a regional comprehensive philosophy of health
planning as opposed to the emphasis on facilities that had dominated
voluntary concerns during the 1920s and into the 1940s. This new philos-
ophy became law with the passage of the Partnership for Health Act of

1966.

Health Care Delivery and Financing of Health Care

The regionalization of health care is only one such issue to emerge
between 1920 and 1980. The rising cost of medical services resulted in a
move to coordinate and regionalize facilities in order to make more effi-
cient use of the health care system and to avoid duplication of services.
Rising costs also produced new trends in the delivery of health care and
the financing of health services.

In 1933, after a three-year study of the existing system of personal health
services in the United States, the Committee on the Cost of Medical Care
published a report that illustrated the inability of a large portion of the
population to obtain high-quality medical care, owing to rising costs. The
most significant recommendation from this committee was the concept of
‘‘pre-paid medical groups.’’ The report states that:

medical service, both preventive and therapeutic, should be fur-
nished largely by organized groups of physicians, dentists, nurses
and pharmacists and other associated personnel. Such groups
should be organized around a hospital for rendering complete
home, office and hospital care. The form of organization should
encourage the maintenance of high standards and the develop-
ment or preservation of a personal relation between patient and

physician,32

According to the committee, this system of health care services offered
the community the maximum potential for productivity of scarce profes-
sional personnel and expensive equipment.

The concept of prepayment and group practice expressed in 1933 was
incorporated into the pattern of health service delivery. In 1965, a survey
conducted by the Department of Health, Education, and Welfare (HEW)
of 582 group plans showed that the plans fell into five categories, depending
on sponsor or consumer orientation.33 The community-consumer plans
are nonprofit plans designed to serve the general community ora particular
group. These plans incorporate prepaid medical services on a private
basis, not a group practice basis. The Health Insurance Program (HIP) of
Greater New York and the Kaiser Plan are well-known examples of