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The Ohio State Medical Association must protest strongly the overt activities of the Health Resources Administration, U. S. Public Health Service.

I refer specifically to a threatening letter written by Henry A. Foley, administrator of the HRA, January 17, 1978, addressed to the Ohio Director of Health, John A. Ackerman, M.D., M.P.H.

The letter is a patent and transparent effort by Mr. Foley to insert himself and his office into differences of opinion over the needed expansion of medical facilities in an Ohio community.

It is an almost incredible fact that Mr. Foley saw fit to "leak" to the opponents
of the expansion of two medical facilities his letter several days before Dr.
Ackerman received the letter. To do so is gravely insulting to a dedicated
public health physician, to those of us in Ohio who are striving to make health
planning succeed, and to Congressman Paul Rogers, the author of the planning
legislation.

Mr. Foley's insult to Dr. Ackerman is further compounded by the fact that he did not extend this respected state official the courtesy of even discussing the matter with Dr. Ackerman before writing him the threatening letter.

Mr. Secretary, the "leak" technique may be and is used in Washington with considerable frequency, but there is no place for it here in Ohio. Also, I would ask you to remind Mr. Foley that Mr. Rogers, in explaining the purpose and intent of his legislation before a national meeting of medical leaders stated:

"And we've written the planning bill. Contrary to what some may think, it doesn't put all the power in the Secretary because we wrote it where it wouldn't."

If your Mr. Foley had taken the time to discuss the issue with Dr. Ackerman, he would have easily learned that (1) present and future projections clearly demonstrate that the approved projects are necessary and in the best interests of the

DISTRICT

COUNCILORS:

FIRST-STEWART 8 DUNSKER, MD. CINCINNATI
FOURTH-C DOUGLASS FORD, MD OO
SEVENTH-ROBERT I RINDERANICHT, MD COVER
TENIN MUTCHISUN WILLIAMS M.D. LOUVUS

BECOND-W. J. LEWIS, MD. DAYTON
FIFTH-THEODORE J CASTELE MO. CLEVELAND
EIGHTH RICHARD HARTLE MD. LANCASTER
ELEVENTH-S. BAIRD PFAHL, JA, ND... SAMBA Y

THIRD-ALFORD C DILLER, M.P. GEMIJY
SIXTH-C. ECWARD PICHETTE M. YOUNGSTOWN
NINTH-THOMAS W. MORGAN, KD
TWELFTH-WILLIAM DORNER JH MD, A

consumers they are to serve, (2) the projects were thoroughly reviewed over a considerable period by experienced local health care delivery experts, (3) the projects were approved for Medicare and Medicaid purposes by the U. S. Department of Health, Education and Welfare, (4) Dr. Ackerman gave very serious and very conscientious attention to these matters, working in constant communication and in a spirit of cooperation with the local interests (a quality your Mr. Foley appears to lack).

If health planning is to succeed, it must be carried on in a spirit of cooperation, openly and above board. It must be approached with an reasonable attitude, and it must involve all interests equally.

We here in Ohio abide by those principles. We expect the Department of Health, Education and Welfare to do the same.

Sincerely,

William M. Wells, M.D., President
Ohio State Medical Association

WMW: ii

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The Renal Physicians Association seeks the opportunity to present the following statement as a matter of record concerning the hearings and deliberations on The National Health Planning and Resources Development Act (PL-93-641).

It is our desire to comment first on the program in a general way, relative to certain basic concepts concerning the law, its goals and their impact, and then in a specific way as it relates to the Medicare ESRD Program enacted under PL-92-603.

General Considerations

The basic concept of this law was to establish local Health Systems Agencies, whose function was to contain the spiraling costs of health care through a system of coordinated planning for health care. To this end, the HSA would plan for needed services, permit orderly and progressive development of services, set standards which would either upgrade services or lead to their deletion, and prevent duplication of unnecessary services and facilities. The very essence of the law, i.e., to halt costly duplication and unneeded services is, in itself, an example of what the Medicare ESRD Program set about to prevent - duplication of already existent planning services. Much in the way of health planning was either developed, or in the process of being developed at the State level when the law was enacted. Thus, the Federal Government not only duplicated a program already in place in many areas, but did it at great cost to the taxpayer.

Should all the HSAs ultimately receive designation, the cost to the health care system will be additional billions. We believe Congress should study the cost-benefit ratio of this multi-billion dollar program the same way they are demanding such analyses of health care providers for new services, equipment, and programs - until now that has not happened.

Secondly, the HSAs are faced with tasks that simply are not achievable through a body of volunteer and unskilled individuals who now operate them, and who have little or no knowledge about health care, health planning, cost analysis, cost-benefit ratios, and the other myriad of complex factors which are the components of the health care system.

Further, in many areas of the country, it has become evident that the HSAs have not drawn upon knowledgeable experts in specific fields before embarking

upon program activities within their HSPs, resulting in unreasonable and imprudent goals.

Thirdly, the composition of HSA Boards have become a crazyquilt. The manner of selection to the boards is variable from HSA to HSA, and in some instances, reflect local political controls and influences. A standardized system of board selection should be adopted in which all major providers of care, institutional and physician, are given a balanced voice on the board. The exclusion of major institutional providers of care from a voice on the board and policy making decisions is hardly a fair way to implement a health care program at the local, regional, as well as national level.

There is a major fallacy in the entire concept of "consumer" representation, as a majority body on HSA Boards. Not only is health care planning placed in the hands of unskilled individuals, but, as Medicare Director Thomas Tierney recently stated at the Blue Cross-Blue Shield Health Economics Conference in January, the "...true consumer (of health care) is the prescribing physician." Yet, physician representation on the HSA Boards and various planning functions represent less than 10% of the board composition as a national survey shows.

Consequently, the majority of board members of HSAs, as presently designed, should be changed so as to reflect a proper balance for that which is necessary for effectiveness in the health care field. Simply, all major institutional providers should be given a seat on the HSA Board by mandate, along with representatives of the physician community so as to constitute a majority of board members, not a minority as exists presently.

The proposed amendment to extend certificate of need legislation to physicians' offices is not only an intrusion into the ability of an individual physician remains unlikely as a way to achieve cost savings. Historically, treatments and diagnostic procedures are far less costly in an individual practitioner's office than in an institutional setting.

Further, the proposed CON amendment is pegged at $150,000. It would not be long before that figure would be reduced to include equipment less costly than that amount. The individual physician who wishes to practice, for example, sophisticated ophthalmology, could easily exceed these arbitrary figures and he would easily be excluded from practicing his specialty in an office setting.

The concept is wrong and the desired effect would, in the end, drive up costs because it would eliminate a now competitive side of the health care market by concentrating certain equipment and procedures in high cost settings. In addition, the expenditure for equipment purchase does not involve public funds, and should not be subject to controls directed at such funds.

The relationship of HSAs to State Health Departments will continue to be one of increasing identity struggle. The HSAs, with federal funding and the force of federal regulations, have already exerted authority in areas not properly within their realm.

The entire federal program would have been better served if funds for the

HSAs had been diverted towards strengthening State Health Agencies, given proper guidelines for planning and funding, with the resultant effect of a more efficient, better conceived, and far less costly program.

Medicare ESRD-HSA Considerations

In relation to the Medicare ESRD program and the regulations governing this service, certain HSAs in this country have taken it upon themselves in certain areas of the country to extend their authority into areas not within their purview. Unfortunately, the proposed Rules for National Guidelines for Health Planning, Federal Register, September 23, 1977, and January 20, 1978, have merely adopted the ESRD Regulations published in final form on June 6, 1976. These regulations encompass many areas other than ESRD planning and utilization. Thus, without specifying those precise areas relative to HSA functions, certain HSAs have intruded into areas of medical review, requests for cost data for operating facilities with the intent to take punitive action if the facility deviated from a median cost, and application of requirements for patient care to cite a few examples.

The ESRD regulations establish ESRD Networks and a Medical Review Board, whose functions are to advise the Secretary on facility participation and Network needs. However, there has been inconsistency in the relationship between ESRD Networks and HSAs, relative to these functions. Specific statutory language should be included in any proposed amendments which delineate what areas of ESRD planning are properly HSA function, and a requirent for HSAs to draw upon the expertise existent within the ESRD Network Councils and Medical Review Boards. Clear definitions of the HSA function relative to hemodialysis and transplantation services should be handled no differently than those delineations relative to open-heart surgery, cardiac catheterization, obstetrical services, and the other services listed in the Health Planning Guidelines.

The RPA wishes to thank you, the Committee, and its staff, for the opportunity to have its views made known on this very important legislative activity.

Thank you.

Sincerely yours,

L. P. Capelli

John P. Capelli, M.D.
President, RPA

JPC/pf

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