Because health services are organized and provided on a local basis, broadly representative mechanisms to identify community needs, assess the capacity to meet these needs, allocate resources, and resolve conflicts are essential to health care reform. These mechanisms must be based upon a public decision-making process which is sensitive to community values, the concerns of consumers/providers/payers, and the needs of underserved populations. They must assure that the supply and distribution of health resources are commensurate with the needs of the population.

Without these mechanisms, many of the problems of our existing health care system, which are glaringly apparent in rural areas and inner cities, will continue. Equitable ways are also needed to reduce or redirect excess capacity, and to create new capacity as appropriate.

Given that the full community has a stake in the decision-making processes that will shape the framework and operation of a local health system, an objective and independent entity is needed to ensure that broad community input, needs, and values determine the overall design and direction of that system. Community-based health planning provides the mechanism for identifying those needs and resolving the conflicts inherent in the allocation of health resources.

Key LOCAL PLANNING FUNCTIONS that must be integrated into any future health care system include:

Identifying community health care needs and establishing priorities;

Developing plans to allocate health resources;

Assisting in resource allocation decisions;

Monitoring and evaluating progress toward meeting community needs; and

Assuring that all sectors of the community participate in the planning and design of the health system.

Key STATE PLANNING FUNCTIONS that must be integrated into any future health care system include:

Developing appropriate legislation and policy;

Fostering coordination of state agencies and resources; and

Supporting cooperative efforts in communities and among organizations.

Key FEDERAL PLANNING FUNCTIONS that must be integrated into any future health care system include:

Articulating and supporting in legislation national health care principles;
Undertaking health technology and complex service assessments;

Financing health services; and

Supporting the state and local planning infrastructure with data, technical
information, and funding.

HEALTH PLANNING AT ALL LEVELS of governance into any future health care system must also include:

Compiling, analyzing, and disseminating technical information and data identifying
statistical trends and gaps in services;

Promoting appropriate capacity investment and development;
Educating the public on health care issues;. and

Solving problems, resolving conflicts, and building consensus.

AHPA believes that incentives for planning must be specifically incorporated into reform if its goals for cost, quality, and access are to be achieved, and if health care is to remain a community affair.

Excerpted from National Directory of Health Planning, Policy and Regulatory Agencies published by the American Health Planning Association, December 1993.

State Certificate of Need Review Thresholds (in dollars)

Chairman STARK. Mr. Gumbs.

STATEMENT OF ROBERT D. GUMBS, VICE CHAIRMAN, NEW YORK STATE ASSOCIATION OF HEALTH PLANNING AGENCIES, INC.

Mr. GUMBS. Good morning, Mr. Chairman. I am Robert Gumbs and I am the vice president of the New York State Association of Health Planning Agencies, a consortium of eight regional grassroots

Chairman STARK. Do you have any relatives in Oakland, Calif.? Mr. GUMBS. Not in Oakland, but I have one in San Francisco.

I am also the executive director of the Health Systems Agency for New York City, the largest one in the State of New York. I also serve as the chairman of the Service Delivery and Organization Committee of Governor Cuomo's Health Care Advisory Board, a board established to make recommendations to the Governor for reforming health care in New York State. You have my prepared statement.

For almost 20 years, HSAs have played a prominent role in efforts to improve quality, accessibility and cost effectiveness of health care services in New York State. HSAs have pursued these goals by functioning as a coalition that includes health care institutions, health care personnel, public officials, community and business leaders, labor and representatives of the State's diverse population.

HSAS strong ties with State and municipal government have resulted in their working with public officials to develop and implement major public policy initiatives in health care. HSAs strongly support the need for health care reform in the many areas being discussed. Universal coverage, insurance reform, standard benefit packages, innovative payment methods, global budgets, increased emphasis on primary and preventive care and the creation of a comprehensive health care network are among the measures that must be considered in developing an effective health care reform. The problems of health care in America are complex and varied. Success in health care reform requires a plan that addresses systematically all the impediments of providing high quality, accessible and affordable care.

Deficiencies in the organization of health care services are the cause of many of America's most serious health care problems. Although health care includes a highly complex and specialized range of services, delivery systems are generally not structured to provide coordinated and comprehensive services in a way that effectively or efficiently meets patient needs.

One of the key goals of health care reform should be to reduce the financial burden resulting from a poorly organized health care delivery system. Unlike some aspects of health care reform, the difficult changes that will be required of providers to improve service delivery cannot be achieved by regulatory authority or market forces alone, nor can the process of change ignore very significant differences among communities throughout the United States.

The correction of deficiencies and the operation and organization of health care services is particularly difficult to address from the national perspective. Differences in regional and communities

needs, resource availability, cultural considerations and historical practice trends vary widely throughout the United States. Means must be found to recognize and take these differences into account. In my testimony, you have the equivalent of what the President's proposal refers to as a health plan. It is essentially an integrated network of services. These models do not exist in urban or rural areas of New York State, nor do they exist in many other parts of the country. A vehicle thus is needed to move the system from its current fragmentation to a more coordinated system. Planning is that vehicle.

In New York State, we have had a long history of planning, and my testimony indicates some of the areas where I think we have been successful. The New York State Association of Health Planning Agencies believes that it is essential that the Federal health care reform bill ultimately agreed to by the President and Congress must include provisions providing incentives for States to establish regional health planning programs.

We believe the key functions for planning bodies and implementing reform would include identifying community health care needs, establishing health priorities and more importantly, strategies to encourage appropriate network development consistent with an overall community health plan, as well as the unique needs of local communities; transition planning needed to assure continued provision of needed services as States and localities implement individualized reform plans; assisting in regional allocation decisions with the goal of assuring the assessment of the adequate supply and distribution of health resources.

This would include a role in guiding and restructuring the health care delivery system, including reductions in excess capacity, building new capacity for needed services and shifting from institutional to ambulatory care and other means of achieving efficiencies; compiling, analyzing, publishing technical information and data for planning purposes by networks and for providers to increase consumer knowledge; negotiating contracts or exclusive franchises. with provider networks to provide services to special populations, underserved communities and high priority program development; monitoring and evaluating progress by networks toward meeting community needs.

Many of these things we have been doing in New York State and again I have included some of that in my testimony. The chairman has generously let me continue to talk while the red light has been on. I will stop talking before he cuts me off.

Thank you.

Chairman STARK. Thank you.

[The prepared statement and attachments follow:]

STATEMENT OF ROBERT D. GUMBS

VICE CHAIRMAN

NEW YORK STATE ASSOCIATION OF HEALTH PLANNING AGENCIES, INC.

Honorable Pete Stark, Chairman, Subcommittee on Health and members of the committee, it is an honor and a privilege to speak before you today. My name is Robert Gumbs, I am the Vice President of the New York State Association of Health Planning Agencies, a consortium of the eight regional grass roots health planning organizations actively functioning in New York State (the Health Systems Agencies - HSAs), and the Executive Director of the largest of these organizations, the Health Systems Agency of New York City. I also serve as the chairman of the Service Delivery and Organization Committee of Governor Cuomo's Health Care Advisory Board, a board established to make recommendations to the Governor for reforming health care in New York State.

For almost twenty years, HSAs have played a prominent role in efforts to improve the quality, accessibility, and cost effectiveness of health care services in New York State. HSAs have pursued these goals by functioning as a coalition that includes health care institutions, health care personnel, public officials, community and business leaders, labor and representatives of the state's diverse population. HSA's strong ties with state and municipal government have resulted in their working with public officials to develop and implement major public policy initiatives in health care.

Recently, New York State government highlighted the importance of health care planning, using planning as the centerpiece of New York's hospital based reimbursement methodology legislation, called New York State Prospective Hospital Reimbursement Methodology or NYPHRM-V. The intent of the legislation states that health care planning and decision making at the regional level "is vital to the creation of an overall system to properly meet individual and community health care needs. Further, the Legislature notes that the emphasis on regional and local responsibility encourages flexibility, innovation, and cost-effective decision making and services.

The same legislation also establishes a stable mechanism for funding the eight regional Health Systems Agencies (HSAs) in the State, through a rate structure add-on to hospital inpatient rates, which will raise $5 million annually for the HSAs. The new law, which