quality care at lower costs, the new service will be disapproved if the state regulating agency determines that the need is already being met." "30 In a study of the Section 1122 review process, Lewin and Associates discovered that 16 percent of all proprietary certificate-of-need requests were rejected compared to only 3 percent of the non-profit requests and 4 31 percent of the public or voluntary requests." Could this be a freeze out of competition by vested interests? Maybe. Further indications are present in testimony of witnesses who appeared at the 1976 HEW regional home health hearings. In answer to the question, "Should proprietary agencies participate in Federal programs?", more than 50 percent of the witnesses said "no". In addition, 80 percent of the representatives from the voluntary, non-profit sector were in opposition. 100 percent of these same voluntary public and governmental leaders favored 32 inclusion of home health care in certificate-of-need programs. It appears that CON could become yet another arbitrary hurdle that can be put in the path of proprietaries -- especially because some states already are grandfathering in non-profits while forcing existing proprietary agencies to seek certificates-of-need. In order to recommend issuance of a certificate-of-need, a Health Systems Agency must be able to prove a demonstrated need for the service. How this is accomplished is a mystery. Even HEW is only now coming to the realization that no formula has been developed to determine need for home health care. The problem stems from the lack of data on home health care. Hospital beds and occupancy can be measured. Home health care utilization cannot because it has been such a small program with so few providers eligible under government programs. Thus, until need can be determined as it can for hospitals, 30 31 Ibid. Lewin and Associates, Inc. "Evaluation of the Efficiency and Effectiveness of the Section 1122 Review Process," Washington, D.C., September, 1975. it seems foolish and premature to establish an artificial level of home health care based on legend, rumor and instinct. Data must be developed as a precursor to establishment of an accurate formula for need. At this point in the development of the home health care industry, "It is a misconception to equate regulation with planning."33 The planning process for home health care is non-existent. In a very real sense, the Medicare restrictions on the home health care benefit do not allow it to be a viable program. It is difficult to understand how this program can be regulated successfully by CON when the information is so sparse and the program so constricted. A serious problem grows out of the composition of the Health Systems Agencies. Most HSAs are loaded with non-profit representatives and, naturally, the developing trend is for HSAs to favor those interests committed to institutional care along with scattered representation from the old established voluntary home health interests such as Visiting Nurse Associations. When these institutional interests are given the power under the certificate-of-need process to regulate home health care entry, the results are predictable -- and unacceptable if home health is going to be used to reduce improper utilization of institutions. Just as hospitals and nursing homes view the expansion of established voluntary home health agencies as a threat to their control, established voluntary home health care agencies (in collaboration with the institutional providers and some consumers) view the proprietary agencies as competing for clients. Such conservative policies hurt the expansion of home health care by keeping out new providers who would vie for the turf. Under the present system, there is a great unmet need. Bureaucratic "territorial imperative" is short sighted and counter-productive. 34 At the annual meeting of the National Association of Home Health Agencies in 1976, planner Milton Gan stated: "Some of the very forces which most directly influence the health care delivery structure have a fundamental conflict of interest with respect to encouraging the growth and expansion of home health services ... as long as a hospital has empty beds that pose a threat to the economic capability of the hospital, the policymakers of that institution would be derelict in their duties if they encouraged the development of those alternative modes of delivery which could further exacerbate the economic threats to the institutions." Established home health agencies fear the entry of proprietaries into the home health field because they pose a strong economic threat. This threat takes the form of certain innovative management practices such as offering services on a module basis, on a 24-hour basis, and on the basis of providing lower cost personnel. By using corporate management practices and taking advantage of economies of scale, proprietary agencies have been able to significantly reduce overhead costs all of which help keep costs down. - Unless vested interests are prevented from using the certificate-of-need process as a blockade, L. R. Gary, a CON expert, believes that: "competition will be restricted, the benefits of pluralism will be limited to the older 35 established groups and innovation may well be squelched." Says Gary: "CON should not even be considered until home health care is incorporated into the national health planning goals and integrated into state and regional health plans. Such planning must precede CON regulations and should not be confused with it."36 The common sense in Gary's statement cries out for the attention of rational persons charged with making our health delivery system more effective and less costly. LEGISLATIVE ACTIONS NEEDED 1. 2. 3. MANDATE THE ESTABLISHMENT OF STANDARDS FOR THE HOME ESTABLISH HOME HEALTH CARE AS A NATIONAL HEALTH PRIORITY FURTHER APPLICATION OF CERTIFICATE-OF-NEED REQUIREMENTS |