(If more space is required, use full sheets of paper approximately the same size as this page. Show exhibit number, name and location of applicant, and project name on each sheet.)

SECRETARY OF HOUSING AND URBAN DEVELOPMENT, Washington, D.C., April 18, 1969. Hon. JOHN JARMAN, Chairman, Subcommittee on Public Health and Welfare, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C.

DEAR MR. JARMAN: This is in reply to your recent letter requesting a report concerning the activities of this Department which involve construction and operation of hospitals, diagnostic and treatment centers, nursing homes, extended care facilities and other health related facilities, and the extent to which these programs require coordination with other health programs.

I am enclosing a report which has been prepared in response to your request. As you know, this Department does not provide directly any health or medical services, although we do administer several programs involving construction of physical facilities which may be used for health-related activities.

I hope this information will prove helpful to you in your consideration of legislation to amend and extent the Hill-Burton Construction Act.

Sincerely yours,

GEORGE ROMNEY.

MORTGAGE INSURANCE FOR NURSING HOMES

PROGRAM DESCRIPTION

Section 232 of the National Housing Act authorizes the Secretary of Housing and Urban Development to insure mortgages on proprietary nursing homes and on nursing homes sponsored by private nonprofit corporations or associations. The mortgage may cover proposed construction or rehabilitation as well as the cost of major equipment used in the operation of the nursing home. The amount of the mortgage may not exceed 90 percent of the value of the property when the proposed improvements are completed up to a maximum of $12.5 million. A combination FHA-insured mortgage and Federal grant or loan made by the Department of Health, Education and Welfare under the Hill-Burton program is permitted. Through December 31, 1968 mortgages on 554 projects providing a total of 52,439 beds have been insured under this program. The dollar amount of insurance written totals $363,056,102.

PROGRAM COORDINATION

Before insuring any mortgage under section 232, FHA must have, from the State agency designated in accordance with Title VI of the Public Health Services Act (Hill-Burton):

Certification that there is a need for the home.

Certification that there are in force in the State (or its political subdivision) reasonable minimum standards for licensing and operating nursing homes. Satisfactory assurance that such standards will be applied and enforced with respect to any nursing home in the State in which FHA provides mortgage insurance.

These are statutory requirements and must be complied with in every case. When first implementing this program this Department consulted with representatives of the Department of Health, Education and Welfare concerning the establishment of proper property standards for those facilities.

MORTGAGE INSURANCE FOR NONPROFIT HOSPITALS

PROGRAM DESCRIPTION

Section 242 of the National Housing Act authorizes the Secretary of Housing and Urban Development to insure mortgages covering new or rehabilitated hospitals (including initial equipment). To be eligible for such insurance, the mortgage may not exceed $25 million or 90 percent of replacement cost, and the hospital must be owned and operated by one or more nonprofit organizations. A certification that the hospital is needed, and that State or local laws providing for minimum standards will be applied and enforced, is required from the State health agency designated for the State involved under section 604 (a)(1) of the Public Health Service Act. The Secretary is directed to encourage programs providing comprehensive health care, including outpatient and preventive care. As of March 1, 1969, no mortgages had been insured under section 242.

PROGRAM COORDINATION

On January 18, 1969, the Secretaries of Health, Education, and Welfare and Housing and Urban Development entered into an interagency agreement allocating the functions involved in administering section 242. The Department of Housing and Urban Development delegated to the Department of Health, Education, and Welfare, the authority to review proposals for mortgage insurance for nonprofit hospitals under section 242. The Department of Health, Education, and Welfare, in turn, through the Health Facilities Planning and Construction Service of the Health Services and Mental Health Administrtion, agreed to process such proposals and make determinations of approvability in accordance with the following criteria:

The appropriate provisions of Title VI of the Public Health Service Act; consistency with the applicable State health plan; the quality of the proposed program of services; the feasibility of the staffing pattern within the proposals; the nonprofit status of the prospective mortgagor; the ability of the facility to provide a community service; mortgage credit and architectural review; the reasonableness of construction and equipment costs; the appropriateness of the size, type, location and need for the hospital; the abilityof the mortgagor to amortize the mortgage from the projected income and expense; to make inspections during construction; and when found necessary, review and approve construction change orders.

It was also agreed that the criteria used by the Department of Health, Education, and Welfare in the administration of Title VI of the Public Health Service Act in respect to standards for construction and equipment, construction contract bidding, lump sum contracts and other requirements would be employed in the administration of the program.

In all cases of group practice sponsors, the Health Services and Mental Health Administration, Department of Health, Education, and Welfare, also agreed to insure that initial review of the proposal would be directed to the determination of the viability of the group practice organization seeking mortgage insurance assistance. This would include an examination and evaluation of the proposed program to be provided, the proposed medical and supportive staffing patterns, and a determination that there is a defined population to be served by the group practice program.

After a full review and approval of a project proposal by the Health Services and Mental Health Administration, the Federal Housing Administration of the Department of Housing and Urban Development agreed to process the application from the mortgagee; issue the insurance commitment; endorse the mortgage note initially and finally; and approve mortgage advances.

Also, the Federal Housing Administration agreed to pay the Department of Health, Education, and Welfare for the costs of the services rendered by that Department under the Agreement. The payments are to be made in accordance with an annual budget to be agreed upon in advance by the two Departments.

MORTAGE INSURANCE FOR GROUP PRACTICE FACILITIES

PROGRAM DESCRIPTION

Title XI of the National Housing Act authorizes the Secretary of Housing and Urban Development to insure mortgages financing the construction or rehabilitation of facilities and equipment for the group practice of medicine, optometry, or dentistry, particularly in smaller communities. The mortgagor must be a private nonprofit corporation, although both profitmaking and nonprofit groups may utilize the facilities.

As of December 31, 1968, only one mortgage had been insured under Title XI, a $1,450,800 mortgage financing a group practice facility designed to serve 20 full time professional personnel.

PROGRAM COORDINATION

Section 1105 of the National Housing Act authorizes the Secretary of Housing and Urban Development to (a) provide or obtain technical assistance in the planning for and construction of group practice facilities; and (b) utilize available services and facilities of any government agency in carrying out the various : provisions of the title.

Pursuant to this section, on February 24, 1967, the Assistant SecretaryCommissioner, Federal Housing Administration and the Surgeon General signed an agreement setting forth the services to be provided by the FHA and by the Public Health Service under Title XI. The PHS, through its Division of Medical

Care Administration agreed, to the extent that its budget permits, to provide techanical assistance in developing group practice projects to prospective applicants for mortgage loan insurance referred to it by FHA. In addition, prior to any commitment to insure by the FHA, the PHS, Division of Medical Care Administration, agreed (on a reimbursable basis) to conduct a Preliminary Analysis Review of project applications referred to it by the FHA. This Review, designed to take maximum advantage of PHS staff and expertise in administering the medical aspects of this program, is directed at providing answers to the following questions.

1. In the judgment of the Public Health Service, is the group practice organization eligible under the law and regulations and does it give reasonable assurance of viability?

2. In the judgment of the Public Health Service, does the market justify the income projections submitted by the group practice organization and will such projected amounts be sufficient to meet established operating obligations?

MODEL CITIES

PROGRAM DESCRIPTION

Title I of the Demonstration Cities and Metropolitan Development Act of 1966 authorized HUD to provide grants and technical assistance to cities of all sizes, to assist in planning and carrying out local model cities programs to improve the social, economic, and physical living conditions of people living in selected large slum or blighted areas. These include grants for planning and developing a model cities program, supplemental grants to carry out innovative projects and activities under the program, relocation grants, and grants for administrative costs. Cities participating in the program are expected to make use of other appropriate Federal programs, including those providing assistance for housing, renewal, transportation, health, education, and job training.

It is the model cities process that communities, during their planning stage, will identify and analyze their problems and then develop a 5-year forecast of program approaches to solve those programs. Each model cities plan to date has had a health plan within it, and each has proposed changes in the delivery of health services. These plans have included provisions for personal health services, including dental, psychiatric, environmental health, maternal and infant care, and family planning, group practice facilities, and nieghborhood health centers. The supplemental grants authorized under the program in many cases will be used to effectuate these health related proposals.

PROGRAM COORDINATION

In December of 1967, the Secretaries of HUD, HEW, Labor, and the Director of OEO signed a draft cooperation_agreement establishing a Washington Interagency Working Group, Regional Interagency Committees, and City Working Groups. In addition to these four representatives, these groups now include representatives from the Departments of Justice, Commerce, Transportation, Interior and Agriculture, and the Small Business Administration. The Interagency groups meet frequently to consider policy and procedural developments affecting the program, to review applications for participation in the program, and to review completed comprehensive programs.

In addition, the Model Cities Administration of HUD has a staff member devoting full time to the health aspects of the model city planning and implementation programs. Direct liaison between model cities staff and the Center for Community Planning in the Office of the Secretary of Health, Education and Welfare is maintained. This direct liaison is especially helpful in arranging for timely HEW technical assistance services on the health aspects of a city's demonstration program.

PLANNED AREAWIDE DEVELOPMENT

PROGRAM DESCRIPTION

Section 205 of the Demonstration Cities and Metropolitan Development Act of 1966 authorizes a special program of grants to municipalities and other public bodies in multi-jurisdictional areas to supplement existing Federal assistance to certain local public facility programs, including mass transit, roads and airports, water and sewer facilities, recreation and open space programs, libraries and

hospitals. The grants may cover up to 20% of the cost of such projects but, in no case, may the combined Federal contribution exceed 80% of the project cost. The purpose of these additional Federal payments is to induce local public bodies within an area to undertake the difficult task of coordinating the activities which affect overall area development and the grants are conditioned on a demonstration of such coordination. No money has yet been appropriated for this program. PUBLIC WORKS PLANNING ADVANCES PROGRAM

PROGRAM DESCRIPTION

Section 702 of the Housing Act of 1954 authorizes interest-free advances of states, local public agencies and Indian tribes for the planning of public works. Advances are repayable when construction commences on the planned project.

The program is intended to encourage the preparation and maintenance of a current reserve of planned public works which can readily be placed under construction, and to promote economy and efficiency in planning and building public works. Advances for planning hospitals or other public health facilities are available under this program and in this case may include a general plan for the development of the facility.

In fiscal year 1968 this Department approved four applications totalling $406,000 for advances for planning hospitals or other public health facilities. In the first six months of fiscal year 1969, there were three such approvals for a total amount of $107,000.

PROGRAM COORDINATION

Departmental regulations require notice of any applications for advances to plan water, sanitary sewage, hospital, or related health facilities to be sent to the regional office of the U.S. Public Health Service for comment. The Public Health Service comments serve as additional evidence for application review.

GRANTS FOR NEIGHBORHOOD FACILITIES

PROGRAM DESCRIPTION

Section 703 of the Housing and Urban Development Act of 1965 authorizes a program of Federal grants to assist communities in providing multi-service neighborhood centers through new construction or rehabilitation. The facility, which includes social, health, welfare, recreation, and neighborhood activities, is intended to bring these activities close to those whom it serves. The grants may not exceed two-thirds of the eligible development cost of the facility, or threefourths in an area designated as a redevelopment area under Section 401 of the Public Works and Economic Development Act of 1965.

Applicants eligible for such grants are local public bodies or agencies who must in turn provide the additional financial assistance needed to supplement the Federal grant. The local public body may also contract with a nonprofit organization to undertake the project. Priority consideration is given to those applications for projects designed primarily to benefit members of low income families or to further the objectives of a community action program approved under Title II of the Economic Opportunity Act of 1964. Projects must also be consistent with the comprehensive planning for the community and be located for convenient use.

PROGRAM COORDINATION

On the Federal level, coordination of HUD's neighborhood facilities program with related programs in other agencies has been effected on a demonstration basis in the Neighborhood Center Pilot Program. In 1967, 14 cities were invited by this Department to participate in a demonstration program of inter-agency cooperation which would involve the establishment of multipurpose neighborhood centers in poverty neighborhoods. The Secretary of HUD, under an executive order, convened and chairs an interagency review committee which directs the overall development of the program. The four agencies represented on this committee are: Housing and Urban Development, Labor, Health, Education and Welfare, and the Office of Economic Opportunity. The Bureau of the Budget also participates in the program in an evaluative role.

Funds for planning model neighborhood centers over a 6 month period were provided each of the participants by the Office of Economic Opportunity and last year funds to implement approved plans were provided by each of the agencies involved.