THE NATIONAL HEALTH PLANNING AND RESOURCES DEVELOPMENT ACT OF 1974

Grants for State
Health Planning and
Development Agencies

Amend Section 1525 to read as follows:

"(a)

The Secretary shall make grants to the State health planning and development
agencies designated under subsection (b)(2) or (b)(3) of Section 1521 and the
State mental health authority designated under subsection (a) (2) of Section
1523, to assist in them in meeting the costs of their planning functions. The State
mental health authority shall make grants to or contract with local and regional
agencies or entities competent in planning for and financing of mental health
services and facilities. These grants and contracts shall assist the develop-
ment of the mental health components of the HSPs, AIPS and the State health
plan. Any grant made under this subsection to a State Agency or State mental
health authority shall be available for obligation only for a period not to
exceed the period for which its designation agreement is entered into or
renewed. The amount of any grant made under this subsection shall be
determined by the Secretary, except that no grant to a designated
State Agency may exceed 75 per centum of its operation costs (as determined
under regulations of the Secretary) during the period for which the grant is
available for obligation."

My name is John F. Horty. I am President of the National Council of Community Hospitals, which represents the community hospitals of this country. NCCH members represent a broad spectrum of hospitals in every section of this country and of every size. Collectively, they provide more than 27,000 acute

care hospital beds.

This

I am pleased to be able to testify on S. 2410. Bill would make needed technical amendments to the National Health Planning and Resources Development Act of 1974. Most importantly, it focuses for the first time on some of the major issues that are developing under the Planning Act. Your staff has performed prodigious feats in considering some of the deficiencies of that intricate Act. We believe a number of additional amendments and deletions are necessary at this time to improve the operation of the Planning Act, to make it more equitable, and to better reflect what we understand to be the intent of this Committee and of Congress.

I would like, however, to express my disappointment at the narrow scope in which amendments to the Planning Act are being considered. Although at one time health planning may have been NATIONAL COUNCIL OF

COMMUNITY HOSPITALS

CH

assumed automatically to be a good thing, this is no longer true.
In no other sector of American society does the public believe it
advisable or possible to have the Government "plan" who shall pro-
vide what services where and when. We seriously doubt it is possi-
ble realistically to plan the health care delivery system in the
way assumed by the Act. There are no "right" answers as to how
many beds there should be per thousand or how many CT scanners
there should be or who should have them. Planning by its very
nature promotes rigidity. Current orthodoxy will be encouraged;
the creative urge of thousands of people trying other solutions
will be submerged.

Even if the planning process were operated in a totally independent manner, the decisions it would make would not infrequently be arbitrary, unfair, and just plain wrong.

Could plan

ning, for instance, have anticipated the downturn in the birth
rate? Is planning going to close beds on the basis of that
downturn when indeed there are indications now that the birth
rate has not in fact declined, but been stretched out?

In addition, the planning process formulated by the
Planning Act is largely political, rather than cooperative;
centralized, rather than local. The final planning decisions
are made by the SHPDA and the SHCC, both of which are to
various degrees controlled and appointed by the Governor.
Further, HEW reserves for itself the power to determine
whether or not the planning agencies are doing a job that

NATIONAL COUNCIL OF
COMMUNITY HOSPITALS

satisfies it and thus has the ultimate authority over the

planning process.

Although this Committee and Congress, as we understand, intend planning decisions to be made locally, the process actually works otherwise: the Planning Act confers only advisory authority on the HSA's; the States make the actual decision; and HEW has a club to ensure that the decisions are acceptable to it. It is thus inevitable that major planning decisions will be made on a political basis and far from the locality where their impact will be felt. We seriously question if that is the proper way to allocate health care resources. Such a process may result in the protection and enhancement of "establishment" health care institutions who can have more political influence on the state level. It will intrude HEW, the State, and eventually even Congress into demands by every sort of special interest health care consumer. It will interject numerous political factors, unrelated to health care needs, into the decision.

We would, therefore, have preferred to see the debate focused on whether planning is a proper subject of Federal legislation in the first place. NCCH well understands the importance of the problems the Planning Act is intended to address. However, that Act is constructed on principles and assumptions that are philosophically bankrupt. The problems the Act wishes to address can be resolved, if at all, only by making fundamental reforms in the health care delivery system. We do not believe that adding mandated planning to the existing system is any NATIONAL COUNCIL OF COMMUNITY HOSPITALS