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III.

Involving the public in crucial health planning decisions is, perhaps
one of the few rational approaches to the overall cost containment
in health services. Comparing agencies covering 40,000 square miles
and spending fifteen percent of their budget on travel with those of
400 square miles and spending less than five percent, is a major
point that Congress should review and consider after the Oversight
Hearings are conducted.

RURAL PROBLEMS

A. Previous Congressional Reports such as The Economic and Social

Condition of Rural America in the 1970's (prepared by the United States
Department of Agriculture, December 1971) have found that rural
Americans do not share proportionately in programs funded by the
Federal Government. Federal spending on Human Resource Development

(Education, Health, Welfare, Vocational Rehabilitation, Manpower

Training and Development) favors metropolitan counties over rural

areas.

Examples are as follows:

per capita outlays under conditions of pronounced population
decline for health services are 4 times greater -- welfare
payments 4 times greater -- manpower training and development
3 times greater in metropolitan counties than in rural ones;

-

rural counties account for 66% of all substandard
housing units but receive only 16% of all Federal housing
assistance;

-

rural counties account for 50% of all children between the
ages of 6 and 17 in poverty level families, but receive only
20% of all Federal child welfare service funds 24% of Federal
aid to families with dependent children -- 26% of Federal
headstart and followthrough assistance; and 41% of Federal
outlays for elementary and secondary educational programs aimed
at meeting the specific needs of disadvantaged children in
low income areas.

The entire history of Federal support for local regional health planning
has been one of underfunding for rural areas. While 27% of Americans
live in rural areas, only 15 to 20% of the health planning money went to
the rural areas. Comprehensive health planning for rural areas tended to

be done by the State agency rather than by an areawide rural health planning agency.

Although the present health planning legislation provides for total geographical coverage by Health Systems Agencies and a minimum funding level of $175,000 for less populous agencies, we suggest that health planning in rural areas remains underfunded. A large part of the work of the rural Health Systems Agency is in the Plan Implementation/ Resources Development function, in addition to being concerned with some cost containment issues relating to inappropriate service development. This commitment to resource development should be evident from the correlation between "Critical Health Manpower Shortage Areas" (CHMSA) and "Medical Underserved Areas" (MUA) and the areas covered by rural Health Systems Agencies. Furthermore, the need for making health services

B.

more available and accessible in rural areas has been recognized by Congress, as evidenced by item (1) of the "National Health Priorities of

P.L. 93-641:

"Sec. 1502. The Congress finds that the following deserve
priority consideration in the formulation of national health
planning goals and in the development and operation of Federal,
State, and area health planning and resources development
programs:

"(1) The provision of primary care services for medically
underserved populations, especially those which are
located in rural or economically depressed areas.

"

Because of the added challenge of resource development (in addition to other problems noted previously), we submit that rural Health Systems Agencies should be funded higher than urban areas. This proposition is as reasonable and logical as understanding that per capita public assistance payments (and many other Federal spending programs) will always be higher in urban areas and attempting a rural-urban equalization for income maintenance (and many other programs) would not be feasible.

Increasing the minimum funding base for rural Health Systems Agencies will not only strengthen the implementation of P.L. 93-641 in approximately 40% of the area of the Nation, but it will help to provide necessary resources to planning agencies attempting to ensure the most effective and efficient utilization of resources. Adequate financial support is essential for effective rural health planning which is a requisite for assuring that health care services are available, accessible, and acceptable for all residents of rural areas.

Historically, Federal approaches to health problems have been categorical; most programs have focused on individual groups or populations with specific problems or diseases or special beneficiary status. While we understand there are complex pros and cons concerning categorical programs vs. block formula grants and the revenue sharing approach, the dominance

of categorical programs places a great burden on Health Systems Agencies, especially minimally funded agencies with few staff resources. Health Systems Agency staff must become familiar with hundreds of programs and dozens of personnel in several departments in order to plan and develop resources consistent with legal and other constraints within which these programs must operate. Again, the rural Health Systems Agencies require additional resources in order to relate properly and effectively with Public Health Service Program Chiefs to assu assure that the allocation of Federal categorical funds are consistent with the Health Systems Plans (HSPs) of Health Systems Agencies. The establishment of these important relationships are obviously more difficult for agencies with severely

limited staff resources.

C. Although P.L. 93-641 was very successful in consolidating the Regional Medical Programs, Comprehensive Health Planning and Health Service Demonstration Projects, there still remains fragmentation of health planning efforts in most health service areas. Planning for implementation of Emergency Medical Service is an example. The insulation of the Federal Veterans Administration and their own internal planning is another. Furthermore, there are many state efforts (often with Federal support) that further fragment health planning in rural areas.

D.

More recognition and support on the part of all Departments and Programs of the Federal and state governments could go a long way to assist rural health planning agencies in acquiring the critical mass necessary to accomplish their planning and development responsibilities.

There are great difficulties for rural Health Systems Agencies in developing an adequate data base. There are a number of factors contributing to this problem. Among them are insufficient assistance

IV.

from the Department of Health, Education, and Welfare and most State Health Departments and State Health Planning Department Agencies with present legal restrictions on the collection of primary data in the absence of assistance from other sources. Rural Health Systems Agencies are also dependent upon data from health care providers, such as small rural hospitals, who often do not keep records on such items as discharge diagnosis or, in cases where they do, they are often not uniform with other hospitals in the area. In addition, Health Systems Agencies are

held accountable for cost containment but the Federal and State

Governments do not disclose or provide adequate financial information that is routinely provided by health care provider groups.

E. Another concern of the rural Health Systems Agencies are the recently
proposed and revised Department of Health, Education, and Welfare
Guidelines for Health Planning. The group supports the need for a
balanced approach which includes strong health planning, appropriate
health service development, and regulation.

The group supports active participation in the development of cost
containment strategies that accurately reflect the unique needs of their
Health Service Area residents. It should be recognized that the Guidelines
are useful in establishing debate and focusing concern on necessary
cost containment initiatives. It should be remembered that the Guidelines
are, in fact, only experimental estimates which should serve as guidance
but not Law.

RURAL HEALTH PLANNING SUCCESSES

A. Despite the problems, limitations, and constraints under which rural

Health Systems Agencies must operate, they have experienced some rather

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