Health Perspectives Vol. III No. 4 July-August 1976 (Pub. 11/76)

Health Planning and Reimbursement

CCAHS launched into the planning sector of health care with a passion; a term of endearment now used as a mantra to market capitalistic ideas, services and products. But in the 1970’s passion was a mantra and cause for action to those consumers whose thoughts centered on the revolutionary belief that positive change was as Bob Dylan said ‘blowing in the winds”.

The placement of this belief resided within the National Health Planning and Resources Development Act (PL 93-641). This landmark federal legislation was preceded by several earlier federal acts of great import in the health delivery field leading up to the need for this legislation; most notably the Hospital Survey and Construction Act (or the Hill–Burton Act) is a U.S. federal law that was passed in 1946 and created what many Americans came to believe was an oversupply of hospital beds and services and the 1964 amendments to the Social Security Act which created Medicare and Medicaid. The former said build baby build while the second shouted we’ll pay baby pay.

Anyone ever who took economics 101 knew this was an economic formula for disaster. Today, we can see the voodoo economics of supply side economics with guaranteed financial floors via subsidies in a price insensitive market. To top it all off, the spending required little supervision and the providers controlled most decisions about the services and products to be purchased. And if a penultimate condition was required it was the fact that almost all of what was purchased had questionable value and great potential for danger to the person receiving the product or service. The combination is lethal especially when the industry is price insensitive!

As importantly, study after study showed that America was on the verge of becoming over-supplied in all medical facilities and services. Comparisons of utilization rates of hospital beds, lengths of stay and cost to the hospitals and expenses in the form of charges to patients and payers started to show a clear divide between America and the rest of the western nations. Justified by the industry based on the myths that would soon explode that American medicine and medical care in general was the best in the world sustained the status quo. As seen that was all to change within a generation.

The Act called for the establishment of over 200 Health System Agencies (HSAs) to integrate all current planning efforts. The dream was that consolidation of planning involving consumers would open a new page on the organization of health care delivery. And that in turn would wipe out unequal access, destroy the remaining discriminatory treatment towards minorities, the poor and women, improve quality, reduce payments by government and private insurers and non-insured individuals and reduce costs to providers.

Martin Luther King had a dream. For most consumers the HSA’s were a nightmare. From the start the Act’s legislated goals were counterproductive for providers and their suppliers. Consumers were outnumbered and without adequate resources. Complicated technical and legal issues could easily overwhelm those without professional degrees and/or experience. Most poor consumers had neither. Simple strategies to demean and marginalize consumers not familiar to the ways of the board room would find ‘Robert’s Rules of Order’ used to control meeting content and action. Learning and using the industry jargon also presented another obstacle. Staff hired from among the ranks of consumers soon decided that as the labor song goes, “The working class can kiss my ass. I got the foreman’s job at last.”

Yet, there were gains here and there within each HSA as individual and dedicated consumers held their ground.

This issue described the problems facing the HAS consumer representatives and the HSAs in general and implied that the HSAs could easily go the way of the CHPAs which they replaced. [Read: crisis, committee to explore the reasons causing the crisis and solution by creating a new name for the crisis and a new replacement agency to implement the needed changes.]

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