ct « + 7" ti ilk ac Sa Sa ait ne ge ees aN soup hia alatiadid oSina cate NaS Mp ARE iho SF ee e ‘ <” Hore.—_DO NOT USE THIS ROUTE SLIP TO DATE SHOW FORMAL CLEARAHCES CR APPROVALS d TO: . AGENCY. BLOG. ROOM . Mr. Riso fostwids * (DD APPROVAL () REVIEW (] PER CONVERSATION [0 SIGNATURE ( NOTE AND SEE ME () AS REQUESTED [) COMMENT C) NOTE AND RETURH =O NECESSARY ACTION [) FOR YOUR INFORMATION (0 PREPARE REPLY FoR SIGNATURE OF = ia naam NETS, REMARKS: You will find section on RMP (p.5-8) : _ of interest. (Fold here for return) t ' bom Vs. Beverlee A. Myers an BUILDING ROOM 32630 T7A-12 rom HEW-30 revs RROUTE SLIP coro: ur o- «em rage Mp eR RBM MRA RIERA fearing atte = DASPE = Pt Ea HNEW 5A SHSA = Quid (Me. Health) a SEPART MENT OF HEALTI 5, EDUCATION, AND WELFA) a - + a a Se OA YY v7 Y i. 7 *. fh : Lie Skeid oh Che AV os . OFF te Or PE SECKE OPARY ~ Co ee eee tT . aray :. The Sacretury - DATE "hrough: O35/ES A Sogn de gs 7 « Assistant Secretar a Wpaleh Wise: . . OT ent on On Heaitn vLcn. uwNB es. - he VOU buGLLNg ? an - weet RST fe ACTION WC EMORANDU: Ti + Mery en “y- . lea Tee nm ? + ay yee P has the decision papers Gu heeltn planning anc 7 aac t ate} creoss ne hg cee ms “ae . imple ames OTR GALA grant consolidacien, ‘Ne comments pelow ave organized eccording to the concurrence Summary which | . is atteches. CHP to provice mele 3. ms was ge <~% 7 mwork together. Wo a@ylea with a e elected represaniatives. tow your previous decision that provider re although limited to 24% of total council mambership. MUacLon OG od + © rey oe ry 2 3 1 : ‘ ti e. Hili-Burton Counciis. ‘One way is to merce them with the implementing agor cle fnother way, and the one reconences Sy A and P in the previour is se them with tne Chay agencies. Five States have cs Z yoare net prohibited from ither the CHP or “£1 1-Burto u legislation. In view of the t “rc implementing agenei yet been developed and because Seffner of Beebe and CHY .sunells appears to be an obtainable objc.cive, P recommends that you ho u previous decision to merge eo. ENO councils sather then wa blin ; Legislation “ot , gencihes., However, staff fTunevions the implerenting agency. uch mergers, sin wiew of VA end Dod Projects t only cotmaunity projects of VA and Don be i .wiuded in (© @be attemocing to strengthen be unwise te burden them with VA and ted Rejects. It should . . o Z is that Salt re The Secretary ‘ Le o 2. also be realized that many Va ene DoD activities provide services to indimniduals from areas ot the roth those cncompassed, by the local CilP agency. LA - Funding of Local CHP Asencics c g will be needed. Only a small numdec y with the recommended authorization level of $60 million. ated overall need to fully dmploment CNP is about $120 H. AD independant 2 analysis funded through million, as stated by this office came te a similar estimate. The question, therefore, is whether we vant to reach this level and now quickly we want to do it. P belicves that with vigovous cffort by liShila, full implementation of CHP can be achieved within the next three years. Authorization levels should, therefore, be cither “such sums as mey be required," or $100 million (about 80% of the total estimated need). iwo factors have been cited as retarding the im plementation of CHP Ll) tack of trained manpower, and (2) administrative difficulties i ? in organizing CHP egencies. P cisagrees with H that 3,000 planners rh ained "planners" are of CHP agencies ¢ C needed for cach agency; most of the staff ined in a variety of related Ss Ti are presently individuals who were such as economics, st health fields, Even i urvey by the Journal o approximately 4,500 ind ucation in U.S. univer: aby planning educa mi is that. of organiz business administration, m& tet i] ist 3 Beal pete ns ce GS wD ” O99 be ocr bt oa Qu < a 4 ° G Ph fe & rican Hospital Association s now receiving health | 2S, In addition, many y others are tion. A second factor in the rate of £ ing the agencies. At present there c ») agencies... Fira plans have been made for an additional neies in FY 1973. Some States are organizing these agencies Federal funds at present in anticipation of future Federal t. Thus, at the end of FY 1973 only about 40 additional agencies be required for full national coverage. wv QO tu Ww YS (> he <4 rR i oor oN G 4B ~ Furding of State CHP Agencies P concurs with the H recommended authorization level of $20 million. for State agencies, Although no analysis was conducted in arriving at this figure, a rough estimate indicates that such a sum would “purchase”. ‘aout 16 staff members for each of the 56 State and Tercitorial (a) agencies (at Epp oronimately $22,000 in total adrivistrative costs per staff member). Given the greater financial resources of States as opposed to local areas, the States can and shouid supplement Federal, funds sufficiently to add needed staff above this level. ny Lo ecretacy , ey 2° % 04 4c and 4D - Consolidation of ENP and lili-Barton Planning into CHP P recommends that planning autnor sey for RAP and Riltl~Burto on be specifically placed inta ‘CHD in order to clarify the relationships among these programs, However, rather than transferring funds, budgets can simply be adjusted by the proper amounts. 3. 1. i 4¥, 6G and 41 - Matching Level, Matching Funds and iluman Sorvices Planning P agrees with the recommendation by H that the matching level be set at 60/20, that (b) agencics be allowed to use "clean" private funds (but not provider funds), and that States be encouraged to cooxdinate CHP with other planning agencies « llowover, we foresee a serious problem arising for some (b) agencies in obtaining the 20%, watching share, Most (b) agencies axe private, non-profit agencies which receive little public money. Few States have enacted enabling legislation for CHP. In response to the encouragement of OMB Circular No. A-95, and in an attempt to coordinate planning agencies being established by several Pee feral programs (transportation, urban development, economic development, health, etc.), almost all States have established sub- State vant ning and development districts. A+95 requires Federal prosrams to cbserve those geograpnical ¢ areas. Some States have also established regional planning councils in those districts which serve 4s umbrella agencics for all the planning * agencies. State tax funds are then provided to the planning agencies through the regional planning councils. P believes that coordination of planning and sharing of staff and facilities can best e accomplished through such umbrella agencies. Therefore, P recommends that model legislation be developed for States authorizing such regional planning councils and also providing State and local funding for CHP agencies through them. As an alternative approach for funding health planning, P suggests that the possibility of a Federal tax on health insurance be explored. The costs which a comnunity pays for health insurance is in proportion to the services it uses and the benefits it receives. One of the benefits of comprehensive health planning should eventually ‘be to reduce or retard the growth of health coscs. A mechanism for relating benefits to costs is to require a portion or all of the expenses of CHP to be paid by third party reimbursers, including Medicare and Medicaid. Such a tax, if used only for the 20% community share would amount to about 1/10 of one percent of premium charges. If all CHP costs were borne this way, the rate would be between 1/4 and 1/2 of one percent. She Secretary . 5A «- Advisory Council wore pe ze « e G2 4S " Q 7 bes) Sa ch the H recommendation that the imp vemen tans agency 1 rather than a policy board fe £Leel eve is to involve citizens. “both in iding the implemcntation of projects. ¥ ‘councils have not worked well in the past because the a = a Mi rare) 3 oO ~ ort °C 6 A ts iB 33 - te nm 2 Sat : : fn No a 2 ao fF Pho RA t a sually makes all the decis on and the council serves simply : tA Rt elo & $0 Moet n o> my Pr au 5 o 3 f window dressing." The CHP and RMP councils are both policy \ i both have been very successful in effecting citizen ement; the councils actually make the decisions. Therefore, sacnds that the implementing agency have a policy board, Si OH cout P recommends that the CHP statute be changed to “specify that the councils be policy boards. tr =f n 4 5B - Membershin of Implementing Council yith the H recommendation that the council of the c wency be required to have a majority of consumers and officials, although both of these groups should be represented. rpose of implementing agency councils is to provide technical tance in developing projects. Thus, it may be appropriate for a rity of the members to be providers. ‘The CHP agencies will have a i rity of consumers and will have approval authority over all projects of the implementing agency, so consumers will have effective control over providers in thet way. (See further comments on 5D.) 5C - Public Hearing on Plan of Implementing Agency P disagrees with the H recommendation. that the implementing agency be required to hold public hearings on its plan. P recommends that the implementing agency hold no public hearings on either its plans or its specific projects, although its business certainly should be conducted in public. A public hearing on projects conducted by the implementing agency would effectively preclude the CHP agency from. disapproving any project. Instead, P recommends that the CHP agency ah * Tie Secvetary 5. ts plan and on specific projects as needed Law) ~ = a4 rs a oO ' > o> pe 5 2 4 © % o} P submits the following discussion of RMP for the ¢ Secretary’ s consideration. ‘ onfActivities Most of the major criticisms of RHP have not been with the administering mechanism itscif nor even with the “revenue sha arin funding approach; e justeed they have been criticisms of the mission, of the activities supported by RMP's There are three basic questions concerning the mission of RMP: 1. . What mission does the Department desire for RMP? Z. What mission is RMP capable of and willing to accept? 3. To what extent do these coincide? x, The present mission of RMP is basically that*of improving the quality cf the provider/patient encounter. A number of subordinate questions arise concerning the continuation: of that present mission or the possibility of an alternative one. te 1. Is the present mission of RMP ~ that of supportiig education and | q training programs for providers wno are already employed - an | appropriate use of Federal tax funds? Should providers be lt expected to provide high quality care without such incentives? r 2. Lf Federal intervention is required to assure high quality. care, is this form of intervention the most desirable? The RMP system relies enti rely on voluntary participation. [It offers no extrinsic rewards; it possesses no sanctions. Should the Federal government instead require performance review, in “order to assure quality? H has indicated that RMP ‘may be a useful instrument to undertake the role of utilization and performance review, since it is provider controlled but is more inclusive than medical societies. In their national meeting in St. Louis last January, however, RMP's strongly rejected this "policeman"! role. _ ’ ae my . / The Sceéretary ., cs “ 6. tee 3, What results is the present RMP system really achieving in improving quality of care? Are adequate data available to provide significant measures of results, or are only anecdotal data available? Are those providers being reached who most need aid? 4, What priority does the present RMP mission merit compared with that of assuring access to any quality of health care for those who do not now receive it? 5. H has pointed out that RNP and CHP should be viewed together and that RMP might begin implementing the plans of CHP. Since CHP is mainly concerned with improving access - the distribution of health manpower, facilities, and services ~ should the mission of RMP be changed accordingly? To what extent would the RMP's be willing to accept this new mission? 6. As a result of various legislative and administrative decisions, several activities for improving the quality of care formerly supported only by RMP are now being supported by other HEW organizations. The Administration's new cancer and heart initiatives nave placed quality improvement programs for those diseases into the respective institutes of,.NIH. Following enactment of the Administration's new health manpower legislation, the Department has placed responsibility for the development ‘of general continuing education and upgrading training programs into BHME.. Responsibility for developing’AHEC's was also placed into , BHME. Should the Department have several agencies supporting the ‘same activities? Should support of these activities by RMP be ‘terminated? 7 , - The RMP Administering Mechanism 1. H has pointed out that much time, effort, and money have been devoted in the past seven years in developing the RMP mechanism ~ the RAG's and the core staff. In 1972, approximately $44.4 million A (about 40% of program funds) was used for support of the RMP mechanism; i.e., administrative costs and staff activities. Core staffs now average about 30 full-time equivalent positions, and staff salaries run as high.as $45,000 per year. However, H has pointed out that the RAG's, not the core staff, form the linkages with the community. By comparison, CHP State agencies have an a average staff size of about six. ws a” . . me yhe Secretary ss 7. How much money should the Department continue to provide to support the RP mechanism? What size should core staffs be? Should salary levels be brouglt into line with those in the Federal government? 2, At present, RNP's are accountable to themselves and to RMPS in HSMIA. And yet, RMP is discussed as a form of e revenue sharing. . ‘ What is the desirability of a revenue sharing program which is not accountable to locally clected officials? What is the likelihood that the Administration or the Congress would propose to continue such a revenue sharing program? Funding Mechanism The funding mechanism used for RMP activities is basically a modified revenue sharing approach, although contracts and specific project grants are also used for certain activities. Some of the most visible accomplishments of RMP to date have resulted from activities supported by contracts or earmarked grants; e.g., the development of emergency medical systems projects and HMO project grants. True revenue sharing might place no restrictions on grant funds; however, - the Administration's special revenue sharing programs all have some earmarks. Should RMP basic grant funds be earmarked? ‘Should the basic brant be used to implement CHP plans with additional activities, such as "monitorin quality," supported by earmarked funds? , — RMP as an Implementing Agency - . . The basic purpose of an implementing agency is to provide the technical assistance necessary to develop projects. Simply publishing a request for proposals is not sufficient to implement a grant program. Someone has to provide assistance to communities to develop projects in response to those requests. Some of the clearest successes of RMP have been in providing such "implementing" assistance. RMP "Ss have helped to develop projects for heart, cancer, stroke, and ‘kidney disease care all over the nation. Both the Administration's Emergency Medical Systems Program and the RMP EMS program have been implemented through RMP'’s. And many other smaller health services delivery projects have been implemented through RMP, including ambulatory care projects amounting to $14.6 million in FY 1972. Thus, RMP has ‘proved to be a very effective “implementing, agency" in the past, although it has not acted as an implementor of CHP plans. The Secretary co, - 8. Pecommendations for RMP p makes the. following recommendations for RMP: 2” “a 1. The RMP mission should be changed to that of improving access to care, although additional activities hight be supported through the RMP mechanism with the use of contracts or earmarked grants, One additxonal activity should be utilization/ performance review of providers. 4 RNP should be made the implementing agency for CHP plans. Hence, RMP projects should be in accordance with and pursuant to the plans of CHP. in agreement with the Secretary's decision, CHP should review and approve projects of RMP. Activitics oS of RNP's should be carefully monitored to assure that they do not undercut the planning cfiforts of CHP. RMP should also be used to aid in implementing other service development programs of HEW. In addition to EMS and BHO, RMP could help to implement the Hill-Burton loan program, National “Health Service Corps, CMIC's, Neighborhood Health Centers, Family Health Centers, etc. Departmental support for education and training programs should be funded through BHME and should be limited to the development of programs; tuition charges should pay educational costs in full. . Departmental support for cancer and heart activities should be | funded only by NIH. RMP support of these aétivities should be ~ terminated. . . (reine ane testa mee bate mes nee te ce nettiens means . . ws Lee eae eye ee eente eee nnn _An analysis of desirable staffing levels and consequent funding levels of the RMP mechanisms themselves is needed. Staff and salary levels appear too high at present. * Since CHP will review and approve RMP projects, RMP's should be brought into conformance with State boundaries. At ON pat hte oS cee mene ete igo nyt eam ~ —. aot Until the new mission of RMP is clearly established, the RMP. funding mechanism should not be revenue sharing. Instead its activities should be carefully monitored with earmarks applied where necessary... - a ee Jhe Secretary - Health. Revenue Sharing JA - Purpose of Health Grant Consolidation The issue paper discusses four purposes of present grant programs (page 51). These same four purposes might be restated in the following way: 1. Financing of health services, "mea. a. Protection, prevention, and disease control services, b. Provision of health services for Certain target groups. ’ wo 2. Support of State and local health departments, 3, Development of new health planning and implementing agencies, “yy 4. Development of new comnunity health resources. Each of the four categories of grants is discussed below, and the recomnendations of P for a consolidated grant program are summarized. 1. Financing of Health Services As indicated in the issue paper, there are basically two kinds of grant programs which pay for health ‘services. ; ‘a. Protection, Prevention, and Disease Control: Formula and project grants in this category support what can be termed traditional public health activities. Included are the basic formula grants under section 314(d) and tose activities, funded under section 317 and 314(e) for communicable disease control, venereal disease, TR, rubella, rodent control, and lead based - paint poisoning prevention. These grants are awarded to State and local health departments which usually provide the services directly. P recommends that these grants be included in grant consolidation. , b. Services for Particular Project Croups: YP recommends that project and formula grants in this category which are presently made to State and local health departments for the direct provision of servites in public health clinics be included in grarit consolidation. Included are NCH formula grants and project grants for dental health for children. The Seerctary. . | "10. On the other hand, P recommends that those grants which pay for services in private health care organizations not be included in grant consolidation. Since these services are similar to those provided directly through public health clinics, some States may decide to stop funding private projects and instead use the funds for public health services. P feels that the Federal government should avoid the expansion of the public provision of health services; instead, Federal funds should be used to subsidize the payment for serviccs through the private sector, Our concern is not with who controls these programs, but who provides services. Rather thin include these grants in grant - consolidation, P recommends that they be maintained at the national level temporarily and terminated as national health insurance’ assumes payment for the services. Social and outreach services not covered by health insurance can be reimbursed through other financing mechanisms, such as Title IV-A. Included here are project grants which were originally intended as development projects but which are currently used primarily for financing services in centers already developed; e.g., M& I, C&Y, and 314(e) centers. . Future project grant programs should be restricted tothe provision of seed money for the development of services and should not be used as services financing mechanisms. 2. Support of State and Local Health Departments A portion of the Federal grants to State and local health departments for provision of services is also used to support the health departments themselves - staff salaries, administrative costs, etc. Thus, grants for the provision of services by health departments and support of health departments can be considered together. 3. Development of New Administering Mechanisms for Services Development . , . In the same way that health departments administer grants supporting the provision of services, the purpose of planning and implementing agencies is to administer services development activities. The development of planning agencies is underway, but many changes are required to improve their effectiveness. Your previous decision was not to include CHP grants in grant consolidation. As discussed above, P recommends that RMP be made implementing agencies but that they not be included in grant consolidation. a) « st . . . / : wot oo. ee . ‘ *y The Secretary _ a , 11. . 4.° Development of New Community Health Resources For reasons specific to each program, P recommends that services o evelopment programs not be “included in grant consolidation. the reasons for not including RMP are given in 5D above. - As discussed in item SC below, P and H will be recomnending to you in a separate analysis that Hill-Burton grants be eliminated. Inclusion of the MMO and Tamily Health Centers programs has not been discussed; the EMO program is new, and Family Health Centers are domonstration grants. Other programs, such as those for Neighborhood Health Centers and Community Mental Health Centers which were originally designed as service development programs but have since become mechanisms for Federally subsidizing health care are discussed above. Summary On the basis of the above, P recommends that the following programs be included in grant consolidation: ‘ Formula Grants . , Project Grants 314(a) , Dental Health for Children MCH -Lead Paint Poisoning Prevention Crippled Children | Communicable Disease Alcoholism 314(e) Family Planning ; - Rodent Control Rubella Vaccination Venereal Disease Tuberculosis Control Community Health Grants which P recommends not. be included in grant consolidation are the following: , , Formula Grants Project Grants Hill Burton mo, , Children and Youth : Maternal and Infant Care oe Migrant Health SF . 314(e) Centers é : CMHC “ , Family Planning CHP © RMP oO The Secretary . . i 12, 7F - Maintenance of Effort : os * P disagrees with the recommendation of li that maintenance of effort be required. Such a reguirement would penalize States which have put forth the greatest effort in health. In addition, such a requirement would be very difficult to alminister.- The Federal requirement on level of effort by the States can be considered to be the matching ratio of the grants. ¥inally, inflation would blur the impact of such a proviso over time. - BA - 314(e) Grants in Grant Consolidation P recommends that all the activities now supported by 314(e) funds except health centers be included in grant consolidation. Consistent, with the reasons given in 7A above, P recommends that grants for Neighborhood Health Centers and Family Health Centers not bé included, 8B ~ Include RMP in Grant Consolidation The recommendations of P for RMP are given in item 5D above. gc - Include Hill-Burton_in Grant Consolidation P agrees with H that Hill-Burton grants should not be included in grant consolidation, but for different reasons. As mentioned in the rationale statement by H, an analysis of the Hill-Burton program is underway. In an issue paper being prepared for you, H and P will recommend that the Hill-Burton grant program be eliminated. Therefore, P recommends that it not be included in grant cousolidation unless Congres refuses to go along with the request to terminate, the graut portion of the program. You may prefer to withhold decision on this program until the issue paper is forwarded to you. , wk ~ ‘8p - Include Migrant Health Grants in Grant Consolidation, For the reasons given by H, P agrees that migrant health grants > should not be included in grant consolidation. , 9A and 9B ~ Earmarks for MCH and Mental Health P recommends that no earmarks be imposed unless a strong case can be made that the States will divert most of the funds to activities The Secretary - a 13. ‘not supported by the present programs. Present health department expenditures of State and local funds appear to coincide with Federally funded activities. 9C - Earmark for Innovation In the first issue paper, P opposed an earmark for innovation, and our position is unchanged. It violates the principle of local determination, which is the essence of revenue sharing. It would generate administrative problanas regarding what constitutes innovation and could resuit in ill-planned change. Innovations and demonstrations of national concern should be administered out of Washington through project grants. Is J Laurence E. Lynn, Ir. PREPARED BY: CTAYLOR/DMcCLOUD: ASPE: 8/ 14/72:x34204 | liealth Planning and Implementation Comnents of Pp Wealth Councils 1A. 18. 1c. 1D. State Health Council Arcawide Health Council Hill-Burton Council Training Agency Staffs 2n, 2B. Salary Merit System Scove of Review 3A. 3B. 3C. .3D. 3E. 3F. Appeal to State Appeal to Secretary Manpower OEO Projects VA Projects DOD Projects ‘Funding 44, 4B. 4c. 4D. 4E. 4r. 4G. 4H. 41. Local health planning State health planning RMP Hilli-Burton Medicare Matching level Matching funds Se Certificate-of-Need Human Services Planning Agree i x Written, , Disagree Comments = x x x x x a x x x x x x x x x x x x ty Comments of 7 ; Written - Agree Disagree Cormments if Implementing Acency x“ avisory Council x embership of council — x eaxring . “SD, RMP- > a ta Ur Or MN ti tt A ” xi OQ bet whe 3 a * x Health Revenue Sharing (Grant ConsoliGation) . . Abstain 6A. Future action General Principles 7A. Purposes — x x 7B. Elected officials x ‘70. Formula 7D. State plans | 7E. Matching x 7F. Maintenance of Effort . x . - x Funding SA. 314 (e) 8B. RMP . . 8c. Hill-Burton a ; ‘ 8D. Migrant , 8E. Formula 8F. Matcning ml "| bad 4 ” Program Emphases _ oy yt CA. MCH a - * . * 9B, Mental Health 9C, Innovation © * ” | Structure of Legislation © * 10A- Separate proposals ° Xx i . i/ Please check if written comments on the item are presented.