Health Care Reform

Each year, conservative estimates indicate more than 400,000 Americans sustain head injuries and approximately 27,000 survive with moderate to severe impairment. (34) If organized regional systems of trauma care were universally available, many of these individuals could be restored to full productivity with enormous accompanying savings in direct and indirect health and social welfare costs. Reductions in potential malpractice claims alone could finance the implementation of systems. If 30 malpractice claims at an average pay out of $2 million were prevented because of the availability of definitive trauma care services, $60 million could be saved -- the amount Congress has authorized for implementation of P.L. 101-590, the Trauma Care Systems Planning and Development Act.

Despite evidence of their cost-effectiveness, many areas of the United States do not have fully implemented organized regional systems of trauma care, causing unnecessary death and disability particularly in rural areas.

A 1991 study of trauma system development found that 19 states had no process for trauma center designation, 23 states had a process in place, and 9 were actively developing a process. (9) Many states do have fully implemented organized regional systems of trauma care serving major metropolitan areas, but lack a statewide system. This means many injured Americans are not getting the care they need.

Lack of a statewide trauma system especially impacts rural areas where the death rate from unintentional injury is twice the rate for the largest cities. (10) Two of every three deaths involving motor vehicles occur in rural areas. (11)

A retrospective analysis of nearly 40 studies indicates that each year 20-25,000 lives are lost needlessly because organized regional systems of trauma care are not universally available across the United States. (32)

Hawaii is one of the states that does not have an organized regional system of trauma care and has no process for trauma center designation currently in place. Hawaii is often looked to as the positive model for "managed competition." However, a comprehensive analysis of its emergency medical services system in May of 1991 by the U.S. Department of Transportation's Division of Emergency Medical Services found no system for responding to major trauma. (35) The state has since applied for a federal grant under P.L. 101-590 to begin the process of developing a organized regional system of trauma care. (36).

Hawaii's basic benefit package under its State Health Insurance Program (SHIP) also does not make appropriate allowance for severely injured patients. Under SHIP, indigent beneficiaries are covered for 5 hospital days. (37) The average length of stay for all trauma patients treated in a Level I trauma center is approximately 10 days. (14) Severely head injured or spinal cord injured patients frequently require much longer hospital stays.

Managed Care and Organized regional systems of trauma care.

Managed care clearly benefits from the cost efficiencies inherent in organized regional systems of trauma care. Promoting universal implementation of organized regional systems of trauma care and supporting universal access through appropriate payment policies can only add to cost efficiencies for managed care plans.

Alternatively, attempts to undermine implementation and access to qualified trauma care services by providing care in facilities that do not meet national standards not only deprive injured individuals of appropriate care, but add to health and social welfare costs. Efforts to achieve short-term cost-savings at the expense of greater longer term health and social welfare cost savings must be strongly discouraged.

Organized regional systems of trauma care are an essential component of modern day health care. Any health system reform proposal that fails to ensure access to definitive trauma care and early rehabilitation services for seriously injured Americans will both fail to benefit those who are injured and will fail to realize potential cost savings.

References

1. Wallack. Stanley, S.: Managed care: Practice, pitfalls, and potential. Health Care Financing Review, 1991 Annual Supplement. HCFA Pub. No. 03322. Office of Research and Demonstrations, Health Care Financing Administration. Washington. U.S. Government Printing Office, March 1992: 27-34.

2. Jencks, Stephen, F. and Schieber, George, J.: Containing U.S. health care cost: What bullet to bite? Health Care Financing Review, 1991 Annual Supplement. HCFA Pub, No. 03322. Office of Research and Demonstrations, Health Care Financing Administration. Washington. U.S. Government Printing Office, March 1992: 1-12.

3. National Academy of Sciences: Injury in America. National Academy Press. Washington, D.C. 1985.

4. Rice, Dorothy, P. and MacKenzie, Ellen, J. and Associates: Cost of Injury in the United States: A Report to Congress. San Francisco, CA: Institute for Health and Aging, University of California and Injury Prevention Center, The Johns Hopkins University, 1989. 5. American College of Surgeons: Resources for optimal care of the injured patient. American College of Surgeons. Chicago 1990.

6. Champion, Howard, R., et al: The Major Trauma Outcome Study: Establishing national norms for trauma care. Journal of Trauma. November 1990; 30(11): 1356-1365.

7. National Association of Manufacturers: Buying value in health care. National Association of Manufacturer's Industrial Relations Department. Washington, D.C. 1991. 8. U.S. General Accounting Office: Trauma care: Lifesaving system threatened by unreimbursed costs and other factors. Washington, D.C. GAP/HRD-91-57, May 1991. 9. Mabee, Marcia, S.: Summary and commentary accompanying preliminary survey of U.S. trauma centers and state-by-state analysis of trauma system development for the Eastern Association for the Surgery of Trauma, September 4, 1991, unpublished.

10. Baker, Susan P., et al: The Injury Fact Book. 2nd edition. Oxford University Press. New York, Oxford: 1992.

11. National Safety Council (1992): Accident Facts, 1992 edition. Itasca, IL.

12. Champion, Howard, R., et al: Major trauma in geriatric patients. American Journal of Public Health. September, 1989; 79(9): 1278-1282.

13. MacKenzie, Ellen, J. et al: Acute hospital costs of trauma in the United States: Implications for regionalized systems of care. Journal of Trauma. September 1990; 30(9): 1096-1101.

14. Mabee, Marcia S.: Financing high tech trauma care. Address before the 14th annual R. Adams Cowley National Trauma Symposium. Baltimore, March 8, 1992.

15. Trunkey, Donald D.: Trauma. Scientific American. August 1983; 249(2): 28-35. 16. Cales, Richard, H. and Trunkey, Donald, D.: Preventable trauma deaths: A review of trauma care systems development. JAMA. August 23, 1985; 254(8): 1059-1063. 17. Baxt, W., and Moody, P.: The differential survival of trauma patients. Journal of Trauma. Vol. 27, 1987: 602-606.

the medical audit committee:

18. Shackford, S., et al: Assuring quality in a trauma system Composition, cost, and results. Journal of Trauma. Vol. 27, 1987: 8.

19. Shackford, S., et al: The effect of regionalization upon the quality of trauma care as assessed by concurrent audit before and after institution of a trauma system: A preliminary report. Journal of Trauma. Vol. 26: 9.

20. Rutledge, Robert, et al: Multivariate population-based analysis of the association of county trauma centers with per capita county trauma death rates. Journal of Trauma. July 1992; 33(1): 29-37.

21. Cales, Richard, H.: Trauma mortality in Orange County: The effect of implementation of a regional trauma system. Annals of Emergency Medicine. January 1984; 13(1): 15-24. 22. First year trauma system assessment: County of San Diego, August 1984-July 1985. San Diego County Division of Emergency Medical Services. November 1985.

23. National Highway Traffic Safety Administration's emergency medical services program and its relationship to highway safety. U.S. Department of Transportation Technical Report. DOT HS 806 832; August 1985.

24. Champion, Howard, R.; Sacco, William, J.; Copes, Wayne, S.: Improvement in outcome from trauma center care. Archives of Surgery. March 1992; 127(3): 333-338. 25. Smith, Stanley, J. et al: Do trauma centers improve outcome over non-trauma centers: The evaluation of regional trauma center care using discharge abstract data and patient management categories. Journal of Trauma. December 1990; 30(12): 1533-1538. 26. MacKenzie, Ellen, J., et al: Functional recovery and medical costs of trauma: An analysis by type and severity of injury. Journal of Trauma. March 1988; 28(3): 281-295. 27. Rhodes, Michael, et al: Quality of life after the trauma center. Journal of Trauma. July 1988; 28(7): 931-936.

28. Haller, Alex, J., Jr., and Buck, James: Does a trauma-management system improve outcome for children with life-threatening injuries? Canadian Journal of Surgery. November 1985; 28(6): 477.

29. Kivioja, Aarne, JH. et al: Is the treatment of the most severe multiply injured patients worth the effort? -- A followup examination 5 to 20 years after severe multiple injury. Journal of Trauma. April 1990;30(4): 480-483.

30. Becker, Donald, P., et al: The outcome form severe head injury with early diagnosis and intensive management. Journal of Neurosurgery. October 1977; 47: 491-502.

31. Personal communication from Ted R. Miller, Senior Research Associate, The Urban Institute, to Marcia S. Mabee, June, 1992.

32. Champion, Howard, R. and Mabee, Marcia, S.: An American crisis in trauma care reimbursement. Emergency Care Quarterly. July 1990; 6(2): 65-87.

33. Hospital bypass challenge. Emergency Department Law. October 26, 1992; 4(18): 1. 34. Kraus, Jess F., et al: The incidence of acute brain injury and serious impairment in a defined population. American Journal of Epidemiology. 119(2): 186-200.

35. National Highway Traffic Safety Administration Technical Assistance Team: State of Hawaii: An assessment of emergency medical services, April 30-May 2, 1991.

36. Division of Trauma and Emergency Medical Systems, Bureau of Health Resources Development, Health Resources and Services Administration, U.S. Department of Health and Human Services: Title XII Trauma grant projects: FY 1992.

37. Basic benefits have many variations, tend to become political issues. JAMA, Medical new and Perspectives. October 28, 1992; 268(16): 2140.

Chairman STARK. Mr. Robinson.

STATEMENT OF KEN ROBINSON, SENIOR VICE PRESIDENT, EAST ALABAMA MEDICAL CENTER, ON BEHALF OF THE RURAL REFERRAL CENTER COALITION

Mr. ROBINSON. Thank you Mr. Chairman. I am Ken Robinson, senior vice president, East Alabama Medical Center, Opelika, Ala. I am pleased to appear before the subcommittee today as a representative of the Rural Referral Center Coalition. This informal coalition represents the interests of hospitals designated as rural referral centers under Medicare.

East Alabama is a large, 324-bed acute care, not-for-profit hospital with over 100 active physicians on its medical staff. We are the largest rural hospital in Alabama, one of two RRCs in the State, and a rural disproportionate share hospital.

We believe that, indeed, RRCS offer both quality and cost effective care for rural populations.

A critical problem that has been identified in rural health care delivery is the lack of physicians and other professionals who are willing to locate in rural communities. Because RRCS are the larger rural health care institutions and offer a wide range of services, we are more successful than are other providers in recruiting and retaining physicians and other professionals.

In addition, RRCs are positioned to support primary care providers in outlying areas and spearhead network development and referral arrangements. For instance, East Alabama has placed the only primary care physician in an outlying rural community with a population of 15,000, even though this community actually is closer to the Columbus, Ga., metropolitan area. East Alabama also has established eight cardiology outreach clinics in underserved rural areas within a 30-mile radius.

I want to spend the rest of my time highlighting issues affecting RRCs that should be addressed under health reform.

First, while there is widespread agreement that rural America has unique characteristics that demand special consideration under health reform, pending proposals do not adequately address these circumstances. For instance, the proposals which envision a competitive marketplace do not address the widely acknowledged reality that most rural areas cannot support multiple health plans. Further, while managed care has become a significant presence in urban areas, it is barely present in most rural areas. Second, the

Clinton plan would promote incentives for urban health plans to expand to rural areas. This approach is not the answer for rural communities. Rural providers, who are stakeholders in their communities, should be the leaders in rural health care delivery. Indeed, many urban institutions are struggling to adequately serve urban populations. They are unfamiliar with and uninvested in our issues.

Third, Medicare's special payment adjustments to RRCS were designed to ensure their continued role in providing geographic accessibility to a wide range of services for rural populations. Indeed, special payment adjustments may need to be devised for rural providers under health reform, including for RRCS, to ensure that rural populations have geographic accessibility to not only primary care providers, but also specialty care providers. Fourth, the Medicare and Medicaid programs may need to be folded into reform in rural communities because their beneficiaries comprise such a high percentage of the rural patient base. East Alabama's patient population is approximately 50 percent Medicare and 10 percent Medicaid, with another 7 percent in charity care.

East Alabama presently owns and operates an emergency transport and county rescue system, but at a loss. With financial support, RRCs also would be positioned to launch managed care arrangements and innovative networking relationships.

Fifth, antitrust laws should be reexamined as applicable to rural communities to maximize cooperative relationships amidst limited resources. Many rural providers do not pursue mergers simply because the legal fees in obtaining antitrust representation are so prohibitive.

Finally, rural providers must be protected from unreasonable financial risk in order to assure that they offer geographic accessibility to rural populations. We are extremely concerned that global budgets, spending targets, fee schedules and the use of historical spending as the basis for these mechanisms could result in significant underpayments which ultimately would erode further the provider base in rural America. Fair financing must be assured under health care reform for all providers, but particular attention must be paid to designing fair financing appropriate to the rural environment, given public policy priorities of assuring geographic access to quality care in rural communities.

Lawmakers must be mindful that health care providers are a basic element of the rural economic infrastructure. Since RRCs are fundamental to this health care infrastructure, every effort must be made under health reform to assure RRC's continued role as essential providers of a broad range and depth of health care services in rural communities.

Thank you.

[The prepared statement and attachments follow:]

TESTIMONY BEFORE THE HOUSE WAYS & MEANS
SUBCOMMITTEE ON HEALTH

PUBLIC WITNESS HEARING ON HEALTH CARE REFORM

FEBRUARY 4, 1994

Introduction

I am Ken Robinson, Senior Vice President, East Alabama Medical Center, Opelika, Alabama. I am pleased to appear before the Subcommittee today as a representative of the Rural Referral Center Coalition (the RRC Coalition). This informal Coalition, which has been active in the federal arena for over nine years, represents the interests of hospitals designated as rural referral centers (RRCs) under the Medicare Prospective Payment System (PPS). Two hundred fifty-six hospitals currently are RRCs and receive special payment adjustments under the Medicare PPS program in recognition of their additional costs in providing specialty care to rural populations.

East Alabama Medical Center is a 324 acute care bed not-for-profit hospital with over 100 active physicians on its medical staff. We are the largest rural hospital in Alabama, one of two RRCS in the state, and a rural disproportionate share hospital (DSH).

RRCS Are Central Players In Assuring Access To Care In Rural Areas

The RRC Coalition supports guaranteed universal health insurance coverage for all Americans. We are concerned, however, that universal coverage is meaningless in rural America unless providers are geographically accessible to rural populations. As providers of primary, secondary and tertiary care in rural America, RRCs assure geographic access to residents of their immediate and surrounding rural communities. At East Alabama, 50% of our admissions derive from other rural areas out of our county. The next closest hospital is 22 miles away. We are the main referral facility for six other rural hospitals. If our services were not available, patients who use our specialty services, including obstetrics, cardiology (open heart surgery), radiation therapy, nephrology, orthopaedics and gastroenterology, would have to travel an additional 40 to 90 miles to receive these services. Indeed, RRCs offer both quality and cost-effective care for rural populations who otherwise would have to travel long distances for similar medical care. In some cases, this distance could mean the difference between life and death. In addition, the geographic accessibility of RRCS offers the intangible benefit of proximity to family members and saves families from costly stays in faraway urban areas. At East Alabama, we find that many rural residents elect care at our hospital over an urban hospital because they find rural providers to offer a more nurturing environment and cultural affinity.

A critical problem that has been identified in rural health care delivery is the dearth of physicians and non-physician professionals who are willing to locate in rural communities. Because RRCS are the larger rural health care institutions and offer a wide range of services, we are more successful than are other providers in recruiting and retaining physicians and non-physician professionals. In addition, RRCs are positioned to support and/or place primary care providers in outlying areas and spearhead network development and referral arrangements. For instance, East Alabama has placed the only primary care physician in an outlying rural community with a population of 15,000. This community actually is closer to the Columbus, Georgia metropolitan statistical area than to East Alabama, but the Columbus hospitals have not taken any action to place a primary care physician in the community, because of their assumption that the rural patients would travel to Columbus. East Alabama also has established 8 cardiology outreach clinics in underserved rural areas within a 30 mile area, providing preventive and specialty services.

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