Reconsidering Community Health Planning for New York City

Transcription

1 Reconsidering Community Health Planning for New York City AN ISSUE BRIEF

2 OFFICERS J. Barclay Collins II Chairman James R. Tallon, Jr. President William M. Evarts, Jr. Patricia S. Levinson Vice Chairmen Derrick D. Cephas Treasurer David A. Gould Sally J. Rogers Senior Vice Presidents Sheila M. Abrams Deborah E. Halper Vice Presidents Stephanie L. Davis Corporate Secretary DIRECTORS Richard H. Bagger Jo Ivey Boufford, MD Rev. John E. Carrington Derrick D. Cephas J. Barclay Collins II Richard Cotton Richard K. DeScherer William M. Evarts, Jr. Michael R. Golding, MD Thomas L. Harrison Josh N. Kuriloff Patricia S. Levinson Howard P. Milstein Susana R. Morales, MD Robert C. Osborne Peter J. Powers Katherine Osborn Roberts Mary H. Schachne John C. Simons Howard Smith Michael A. Stocker, MD, MPH Most Rev. Joseph M. Sullivan James R. Tallon, Jr. Frederick W. Telling, PhD Mary Beth C. Tully Howard Smith Chairman Emeritus United Hospital Fund The United Hospital Fund is a health services research and philanthropic organization whose mission is to shape positive change in health care for the people of New York. We advance policies and support programs that promote high-quality, patient-centered health care services that are accessible to all. We undertake research and policy analysis to improve the financing and delivery of care in hospitals, clinics, nursing homes, and other care settings. We raise funds and give grants to examine emerging issues and stimulate innovative programs. And we work collaboratively with civic, professional, and volunteer leaders to identify and realize opportunities for change. HONORARY DIRECTORS Donald M. Elliman Douglas T. Yates Honorary Chairmen Herbert C. Bernard John K. Castle Timothy C. Forbes Barbara P. Gimbel Rosalie B. Greenberg Allan Weissglass

3 Reconsidering Community Health Planning for New York City Sean Cavanaugh James R. Tallon, Jr. UNITED HOSPITAL FUND

4 Copyright 2008 by United Hospital Fund ISBN For additional copies, write to the Publications Program, United Hospital Fund, 350 Fifth Avenue, 23rd Floor, New York, NY , or call (212)

5 Contents FOREWORD iv INTRODUCTION 1 COMMUNITY HEALTH PLANNING DEFINED 1 RIGHT CLIMATE, RIGHT TIME 2 HEALTH PLANNING: A BRIEF HISTORY 2 New York City: A Private, Voluntary Effort 2 Federal Planning, 1930s-1970s 3 Focus on Hospitals 3 A Broader Perspective 3 Certificate of Need 4 The Federal-Local Disconnect 5 Deregulation 5 Expanded Entitlement versus Cost Containment 6 NEW YORK CITY S HSA 7 The Health System Plan 7 The Annual Implementation Plan 8 Certificate of Need Project Review 8 Taking the HSA s Measure 9 LOCAL HEALTH PLANNING TODAY 10 CONCLUSION: A NEW VISION 12 APPENDIX: THE HEALTH PLANNING ROUNDTABLE 15 REFERENCES 19 iii

6 Foreword Health planning is considered out of style now policy journals barely mention it anymore but for many decades it was the cutting edge of health policy. Many of us in my generation of health policy wonks cut our teeth in health planning jobs. The belief that disparate interests could gather on a regional basis and reach consensus on important issues related to the structure and performance of the health care system has been viewed as quaint and naïve for the past decade. And yet, this is exactly what is happening today in states throughout the country, where public-private partnerships are being created to foster cooperation on efforts to improve health care quality, control health care costs, and enhance the use of new health information technology. Increasingly, efforts that look a lot like planning are seen as a promising new tool for improving health care. In this report, Sean Cavanaugh and I briefly review the history of health planning in New York and look for lessons to guide future policy development in this area. We consider this the beginning of an ongoing process of defining a new generation of health planning that could have broad-based support and be the impetus for positive change in our health care system. JAMES R. TALLON, JR. President United Hospital Fund iv

7 Introduction In recent months, interest in revitalizing local health planning has been growing among health care leaders throughout New York. This interest has been stimulated by the conclusion of the work undertaken by the Commission on Health Care Facilities in the 21st Century (known as the Berger Commission, after its chairman Stephen Berger), the closure of hospitals and clinics in underserved neighborhoods, and broader health care reform efforts under consideration at the federal level and in many states. In this report, the United Hospital Fund (the Fund) reviews the history of local health planning in the United States and New York, including the work of the former New York City Health Systems Agency, and discusses the possible future of community health planning in New York City. 1 We conclude with a review of the conceptual questions that need to be answered as New York City policymakers consider reviving local health planning. This study was made possible through the support and interest of the New York City Council. To jump-start our thinking on this topic, the Fund convened a roundtable discussion in the fall of 2007 bringing together health care leaders with extensive knowledge of local health care planning in New York and nationally. 2 We surveyed articles on the history and effectiveness of local health planning in New York and elsewhere, and reviewed health systems plans, implementation plans, and other documents produced by the New York City Health Systems Agency (HSA). Fund staff also met several times with the leadership and staff of the Finger Lakes HSA one of only two HSAs currently operating in New York to discuss their strategic planning process and current operations. We met, too, with the staff of the New York State Department of Health s Office of Health Systems Management to discuss the future of state health planning and the role of local input in state planning processes. Phone interviews were conducted with staff from the New York City Department of Health and Mental Hygiene, the Central New York HSA, and the American Health Planning Association. Finally, we benefited greatly from discussions with the Coalition for Community Health Planning, a new organization that comprises community-based organizations, advocacy groups, and community health centers concerned with disparities in health care access and outcomes for vulnerable populations in New York City. Community Health Planning Defined In Planning for Health, Henrik Blum (1981) defines planning as the deliberate introduction of desired social change in orderly and acceptable ways. That desired social change, in health planning, is usually improvements in health status or improvements in the efficiency of the health care delivery system. In community health planning, the process focuses on improvements in the health status of a specific community, usually defined by geography. But the planning process can also be meaningfully informed by the community itself. In this case, community can include health care providers, third party payers, government, and consumers or residents of the geographic community. We therefore define community health planning as the deliberate pursuit of improvements in the 1 Throughout this paper we use the terms community health planning and local health planning interchangeably. 2 See the Appendix for a summary of these discussions and a list of participants. Reconsidering Community Health Planning in New York City 1

8 health status of a community or the efficiency of the health care system through a public process that allows all members of the community to have significant input. Right Climate, Right Time The reconsideration of local health planning today is timely. The recommendations of the Berger Commission are reshaping the New York City provider environment in an attempt to more closely align health care facilities with the needs of communities. 3 In many ways, the Berger Commission is simply accelerating the effects of market forces, but with more judicious targeting. An unpublished Fund study shows that market forces and the Berger report both targeted small, financially vulnerable hospitals, but the Commission s selection process did a better job of protecting safety net facilities. As faith in unbridled market forces wanes and the Berger recommendations take effect, leaders throughout New York State and New York City are searching for a new approach to health care policy in general and health planning in particular. The political climate seems right for the introduction of such new thinking. Governor David Paterson and his health care leadership are supportive of health policy that identifies unmet needs and addresses disparities in health outcomes. In addition, the New York State Department of Health (DOH) is reconsidering the future of state health planning and is seeking local input and ideas. The state budget sets aside $7 million for grants to support local health care planning activities. Locally, Mayor Michael Bloomberg has displayed a strong interest in planning for many local needs, including those related to the environment, economic development, physical infrastructure, and public health. The New York City Council has expressed an interest in local health planning through the creation of its Hospital Closing Task Force in response to the Berger Commission s recommendations and through its creation of a process to support plans for ten new community health centers. Important changes in thinking about health system performance are also taking place nationally. In the 1990s, many looked to the federal government for health system reform, and conventional wisdom held that there were inherent trade-offs in trying to achieve universal access, quality of care, and cost containment. In recent years, however, states have been taking the lead in efforts to improve health system performance, and are proceeding with the assumption that access, quality, and cost containment are interdependent. Health Planning: A Brief History New York City: A Private, Voluntary Effort Health planning in New York City arguably started with the United Hospital Fund s efforts in the early 1900s to collect uniform cost reports and other hospital data to better direct philanthropic giving to hospitals and to advance the cause of improving clinical management. In upstate Rochester, local hospital administrators similarly formed the Community Chest to review hospitals capital requests. In subsequent decades, the Fund and the New York Academy of Medicine continued to periodically survey hospital supply and demand to influence policy and philanthropy. The goal of these efforts was to meet New York City s need for acute hospital beds without duplicating services. Although this planning was focused 3 The Commission on Health Care Facilities in the 21st Century was a nonpartisan panel established by Governor George Pataki and the New York State legislature to propose the right-sizing of health care institutions, including the possible consolidation, closure, conversion, and restructuring of hospitals and nursing homes. 2 United Hospital Fund

9 on local needs, it did not provide for consumer or neighborhood input in the decision-making process. Rather, this era of health planning was best described by one observer as a private, voluntary effort to induce the selfgoverning elites of the hospital world to engage in self-limitation in the public interest (Melhado 2006). Federal Planning, 1930s 1970s The federal interest in health planning started in 1933 with a report by the Committee on the Costs of Medical Care (1932), which promoted the concept of rationalizing health care delivery by organizing health facilities regionally: teaching hospitals would be located in the urban core; smaller, community hospitals would service suburban areas; and clinics would provide care to rural areas. In New York, the Hospital Council of Greater New York and the Rochester Hospital Council were both supportive of this principle of regional organization of health care facilities. Although concerns about costs were an important part of the origins of health planning, equally important were the early planners concerns about ensuring access to care for all segments of society. Focus on Hospitals The first federal financial commitment to health planning occurred with the enactment of the Hill-Burton statute in 1946, which provided funds for construction of hospitals and required states to create a plan to guide the distribution of those funds. Hill-Burton focused on state plans and did not require local input. It was only in 1961, with passage of the Community Health Services and Facilities Act, that the federal government began providing modest support for local planning demonstrations. At the same time, in Rochester, Marion Folsom 4 formed the Patient Care Planning Council to assess Rochester s hospital bed needs. The Council carefully reviewed the community s need for hospital beds and compared those findings with the hospitals capital requests. By doing so, the Council reduced the hospitals joint capital drive from $30 million to $14 million (Steen 2007). A Broader Perspective The next federal planning initiative was the creation of Regional Medical Programs in 1965, to encourage and assist in the establishment of regional cooperative arrangements among medical schools, research institutions, and hospitals for research and training, including continuing education, and for related demonstration of patient care... Then, in 1966, the Partnership for Health Care Act broadened the federal interest in health planning from a focus on hospitals to comprehensive planning, and formally recognized both state ( 314a ) and local ( 314b ) health planning agencies. 5 This growing federal interest in state and local health planning was driven by concerns about escalating hospital costs. Those costs were being fueled by the post-world War II growth of employerbased, third party health insurance and the 1965 creation of Medicare and Medicaid. Moreover, Medicare, Medicaid, and Blue Cross paid hospitals cost-based reimbursement for capital expenditures. Starting in the early 1960s, non-profit hospitals gained access to tax-exempt bond financing as a result of a favorable Internal Revenue Service ruling and, in 1968, access to tax-exempt bond financing and subsidized mortgage insurance through the Federal Housing Administration (FHA). (New York hospitals have been the principal beneficiaries 4 Marion Folsom held numerous senior positions in the federal government, in addition to having worked at Eastman Kodak in Rochester. In 1955, President Eisenhower named him the first secretary of the federal Department of Health, Education and Welfare. 5 These designations refer to sections of the Partnership for Health Care Act, P.L (1966). Reconsidering Community Health Planning in New York City 3

10 of the FHA program.) Together, these forces lowered the cost of capital for non-profit hospitals, allowing a rapid growth in facilities and services (GAO 1996). At the same time, regional planning councils were concerned with the growing middle-income flight to the suburbs that left concentrations of poor and minority patients in the inner cities, threatening the viability of urban hospitals. These developments challenged the early planners vision of urban hospitals as the center of a regional health care system (Melhado 2006). Among public policymakers, a belief was growing that the cost growth and other developments could be contained rationally and efficiently by state-led but regionally focused analysis and planning. Although the American Hospital Association had opposed health planning for many years, the industry was gradually warming to the planning movement, accepting the implicit agreement that hospitals would receive greater access to capital in exchange for promises to use it more judiciously. Certificate of Need With the enactment of the nation s first Certificate of Need (CON) legislation in 1966, New York introduced prospective capital controls into the national planning movement. 6 The new law was based on the recommendations of a statewide committee chaired by Rochester s Marion Folsom. The Folsom Committee envisioned a three-step state health planning process that became a model for other states: first, identify and inventory existing health care resources; second, define a system that would better match resources with needs (based on historical and projected utilization patterns); and third, design a plan of action to move from the present system to the desired system. Although the planning movement was broadening its scope from hospitals to the overall health care system, a primary focus on hospitals persisted. The Folsom Committee viewed CONs and operating certificates as the policy tools for implementing the plan of action (Legislative Commission on Expenditure Review 1977). These tools allowed the state to control the addition of health care services (through CONs) and mandate the deletion of health care services (through operating certificates). In practice, it appears that the state never actually used its ability to withdraw an operating certificate to pursue planning goals until the Berger Commission process was put in place. Although Folsom s roots were in local health planning, the tools created by the legislation were controlled by the state. The intellectual basis of CON as a cost containment tool is Roemer s law, which hypothesizes that hospital supply can induce hospital demand (or hospital utilization) when there is third party reimbursement (Roemer 1961). That is, hospital capital investment can, by itself, generate demand and ongoing hospital operating expenses. Since the cost of operating a hospital bed over its lifetime will far exceed the initial capital outlay to create that bed, it was believed that preventing unnecessary capital investment could reduce future health care costs. Acceptance of Roemer s law grew over time and most states ultimately implemented some form of state CON review, although Roemer himself ultimately disavowed prior capital constraints as a means for combating health care inflation. CON received the federal imprimatur in 1972 when Congress enacted Section 1122 of the Social Security Act, denying Medicare and Medicaid reimbursement for any capital projects that did not have state planning approval. CON and the Section 1122 amendments embodied 6 A Certificate of Need is required in New York State to establish and construct health facilities and conduct certain other specified activities related to acquiring major medical equipment, changing ownership, and adding services. 4 United Hospital Fund

11 the growth of hard planning, or enforcement through regulatory action, a departure from the softer planning tools of consensus building, advocacy, and enlightened selfrestraint, which were the hallmarks of the early planning movement. The Federal-Local Disconnect In 1974, the National Health Planning and Resources Development Act (Health Planning Act) ushered in the modern era of planning for most of the country. The essential elements of this legislation local health planning agencies and CON were already in place in New York, but the federal legislation provided new guidance, funding, and expectations for those efforts. New York s 314b community health planning agencies were converted into Health Systems Agencies (HSAs), which were subject to numerous federal statutory and regulatory requirements. Under the Health Planning Act, all Public Health Service-funded projects had to comply with local planning. Earlier federal health planning programs (Comprehensive Health Planning, Hill-Burton, and Regional Medical Programs) were subsumed under the Act. Both in New York and throughout the country, the Health Planning Act was a significant boost to the local health planning movement. But federal money came with constraints. The HSAs were established to meet federal objectives and had to obey federal rules relating to board structure, health system plan development, and other essential functions. The disconnect between federal and local priorities and expectations was a contributing factor in the eventual demise of community health planning. In the 1970s and early 1980s, with hospital spending making up a majority of overall health care spending, hospital cost containment became nearly synonymous with health care cost containment (Health Systems Agency of New York City 1982). As inpatient hospital costs grew at an astounding average annual rate of 15 percent between 1970 and 1981, so grew a sense of urgency about controlling those rising costs, which were seen as unsustainable and a threat to the prospects for national health insurance (Potetz 1982). A number of states New York, New Jersey, Massachusetts, and Maryland most aggressively initiated experiments with hospital rate regulation, which was expected to contain hospital operating costs and complement the CON controls on hospital capital expenses. The federal government supported these efforts with waivers granting the state regulatory agencies control over the allocation of Medicare hospital payments. But the federal experiment with HSAs and hospital rate regulation was short-lived. Deregulation With the election of President Ronald Reagan in 1980, an era of deregulation swept through the country. Republicans in the administration, Congress, and in many states were openly hostile to health planning and hospital rate regulation. Efforts by Congressional Democrats to defend health planning were undercut, in part, by studies that failed to demonstrate cost savings from these programs (Potetz 1982). Less attention was paid during these debates to the other goals of health planning, such as ensuring access to care for underserved communities and addressing disparities in health outcomes. Congress terminated funding for HSAs in 1983 and repealed the Health Planning Act in Support for using prospective limits on capital expenditures to control health care costs was waning nationally. In New York City, however, local health planning survived with state and local funding until Interestingly, when the Reagan administration needed a cost containment strategy for Medicare s hospital expenses, it picked a highly regulatory pricing system, Reconsidering Community Health Planning in New York City 5

12 the Medicare Prospective Payment System, first developed by state hospital rate-setting agencies. The effect of the deregulation movement, therefore, was not to reduce the use of regulatory tools by the health care community, but to reduce the opportunity for them to use these tools in concert with each other. In the coming years, the perceived success of some payers in controlling their own costs (especially Medicare and Medicaid) led to cries of cost-shifting by other payers and providers. The anti-regulation movement reached New York when Governor George Pataki took office in Governor Pataki pushed for deregulation of hospital rates, reduced CON oversight, and the elimination of local health planning. The Health Care Reform Act of 1996 implemented these strategies by terminating hospital rate regulation (while retaining somewhat reduced funding for public goods such as uncompensated care and graduate medical education) and ending funding for HSAs. Governor Pataki appointed individuals to the State Hospital Review and Planning Council (a New York State DOH advisory body that rules on certain CON certificates and regulations) who were sympathetic to his goal for a less regulatory approach to the CON system. Managed care and market competition were seen as the new cost control strategies. Today, of the two surviving HSAs in New York, only the Finger Lakes HSA is a fully functioning agency similar to those that existed prior to In late 1997 an effort to revive the New York City HSA with city funding was spearheaded by the Commission on the Public s Health System and other advocacy groups. The Greater New York Hospital Association (GNYHA) vigorously opposed the legislation before the New York City Council, largely on the grounds that New York City hospitals and nursing homes would be at a disadvantage if they were subject to an additional layer of CON review that would not apply to their competitors outside the city. GNYHA also argued that the state CON process afforded ample opportunity for public input in planning decisions. 7 Although GNYHA s opposition to the legislation focused on the proposed HSA s authority to comment on CON applications, supporters testified that Certificate of Need activities should be a small part of the proposed task of the local health planning agency, and any reviews could be performed concurrently with the state review process therefore not adding to the time required for approval or disapproval of a CON application. 8 Supporters also spoke of the need for a planning entity that could focus on the market s blind spots: establishing, maintaining, and expanding services that are not profitable, but still needed. 9 In the end, hospital opposition led to the defeat of this effort. Over the next ten years (1997 to 2007), health care policy in New York was dominated by the move to managed care for Medicaid, coverage expansions for the uninsured through the creation of Family Health Plus and the growth in Child Health Plus, and state budgetary concerns. Little attention was paid to health planning until the creation of the Berger Commission. Expanded Entitlement versus Cost Containment In summary, health planning started as a locally driven attempt to direct philanthropic and public funding for hospitals and to 7 Greater New York Hospital Association (December 1). Testimony before the New York City Council Health Committee in opposition to proposed Int. No A on health systems agency creation. 8 Commission on the Public's Health System in New York City (December 1). Testimony before the New York City Council Health Committee on the need for a health planning agency in New York City. 9 Commission on the Public's Health System in New York City. Undated Executive Summary, via personal communication. 6 United Hospital Fund

13 prioritize and limit hospital capital requests using coercion and appeals to public interest. Later, as the federal government became more interested in planning, the focus of health planning initially shifted to the states, and states adopted harder planning tools such as CON. Planners adopted a more comprehensive view of the health care system and the health status of a population. The federal government subsequently provided support for both state and local planning efforts, with hard planning tools wielded by the state and soft planning tools utilized by local health planners. Ultimately, the federal government terminated support for state and local health planning because of ideological opposition to using regulation to make broad-based changes in the health care delivery system. Also, defenders of health planning could not identify savings associated with the process. Throughout the history of planning, the opposing forces of expanded entitlement and cost containment could never be reconciled. This tension continues today. New York City s HSA The activities of the Health Systems Agency of New York City evolved during its twentyyear history (1976 to 1996), in part due to changes in federal priorities and funding. Two bodies of work the five-year Health System Plan and the Annual Implementation Plan guided the agency over time, however. The Health System and Annual Implementation plans were used to support all of the major activities of the HSA, including lending technical assistance to local providers and consumers; developing resource-specific documents such as the Medical Facilities Plan, which inventoried existing resources for each service area subject to CON; reviewing the appropriateness of institutional health services (Appropriateness Review); reviewing the need for proposed new institutional health services (CON Project Review); and making recommendations to state agencies regarding local services and priorities among those services. The Health System Plan The Health System Plan (HSP) had two major components. First, it offered a population-based assessment of the health status of New York City and its various communities, using U.S. census and city planning data to describe the city s population in its entirety, by borough, and by health district, in terms of age, sex, ethnic diversity, income/poverty, housing composition, population density, disabilities, and education status. Second, the HSP provided a comprehensive plan for improving the health status of New York City residents and increasing the efficiency of the city s health care system, based on indicators including maternal and child health outcomes, causes of mortality (for example, heart disease, cancer, homicide), and the prevalence of tuberculosis, sexually transmitted diseases, HIV/AIDS, and other conditions. Data for those measures came from vital statistics and city health department surveillance programs. Numerous goals, objectives, and recommended actions were included in the plan. Goals described desired health status levels for area residents, such as, Available prenatal care and related services should be promoted among all pregnant women in ways that will ensure the seeking and acceptance of such care and services. Objectives were usually quantified statements of desired performance within a specified time period, such as, By 1990, the number of women reporting late or no prenatal care at time of delivery should be reduced by one-third in each of the six health center districts reporting the highest infant mortality rates and incidence of low birthweight of infants. Finally, recommended actions were Reconsidering Community Health Planning in New York City 7

14 specified for instance, Each health facility and each primary care practitioner in each district should be informed of the perinatal mortality rate in the district and asked to provide prenatal care or to refer pregnant women for such care to an appropriate provider (Health Systems Agency of New York City 1985). Improving the efficiency of the health care system relied, in turn, on health system goals that identified long-range changes needed in the amount, type, organization, and distribution of health services and resources (Health Systems Agency of New York City 1985). The plan reviewed the status of various sectors of the health care system (such as public health, ambulatory care, acute care, and long-term care) and identified specific goals, objectives, and recommended actions necessary to create a health system capable of achieving the HSP s health status goals. Health system goals were also developed where there was no direct link with health status, such as in the area of cost control. The Annual Implementation Plan Although the Health System Plan included specific recommended actions for every health status and health system measure, the HSA also produced an Annual Implementation Plan (AIP) establishing a short-term action plan and reviewing progress toward goals and objectives in the previous year. The recommendations in both the HSP and AIP called for actions by the Health Systems Agency, professional groups, health care institutions, the city s Department of Health, public and private health insurance plans, individual health care providers, other city, state, and federal government agencies (including legislative bodies), and the public. The development of both a Health System Plan and an Annual Implementation Plan by all HSAs was mandated by the federal government (Health Resources Administration 1979). The New York City HSA saw the development of the Annual Implementation Plan as a prime opportunity for community engagement in its decision-making. Certificate of Need Project Review The Health Systems Agency also reviewed all Certificate of Need applications in New York City and made recommendations on approval and conditions to the State Hospital Review and Planning Council. Although CON review was theoretically a subsidiary activity in service to the Health System and Annual Implementation plans, this activity was a federal priority, consuming significant time and resources, and was the focus of much controversy. The Folsom Committee of the mid-1960s considered CON the primary tool for implementing the state health plan. At that time, however, the health plan was focused on the structure of the health system, not on population-based health status. The focus changed, but the tools did not. Conceptually, CON was a tool for controlling cost, which was not a health status goal, and was only one of several major health system goals of the HSA. In practice, the HSA often leveraged its authority over CON to extract other behavioral changes from hospitals. To support the CON review process, the HSA published a medical facilities plan to inventory the resources that were available for each service area subject to CON (medical/surgical services, obstetrics, long-term care, and so forth). The plan also examined current and projected utilization patterns for institution-based services and projected future capacity needs. These need projections were performed for the boroughs and health planning areas initially, and later at the institution-specific level. The medical facilities plan included an assessment of 8 United Hospital Fund

15 facilities capital plans and the suitability of projects in the context of the HSP, a plan for eliminating excess capacity, and recommendations for strengthening linkages within boroughs and between institutions. All of these activities were the underpinnings for the methodology to evaluate CONs. The HSA role in CON review, however, was as an advisor to the State Hospital Review and Planning Council and the Public Health Council, which had the ultimate regulatory authority to approve or deny a CON. Taking the HSA s Measure The single greatest shortcoming of the New York City HSA shared by HSAs throughout the country was its inability to implement the Health System Plan. Generally, HSAs focused far more on plan development than on plan implementation (Sofaer 1988). Federal planning regulations and funding did not give high priority to plan implementation and HSAs understandably focused more on what they could control the composition of the plan than on what they could not the functioning of the health care system. HSAs had no direct control over the policy levers within the health care system (for example, reimbursement) or outside of it (sanitation, housing, and so forth) necessary to execute their plans. The agencies therefore had to rely primarily on consensus building and advocacy. The one policy lever the HSA did possess, the ability to evaluate and comment on Certificate of Need applications, did not have a clear nexus with most of the agency s goals and objectives. The HSA itself acknowledged that health planning and resource allocations play limited roles in health status improvements. Such other factors as environment, life-style, housing, and genetics have a significant impact on health status (Health Systems Agency of New York City 1985). The CON process was reactive, so providers, not the HSA, drove the agenda. There was no guarantee that CON applications would have any relevance to the health status and health system goals established in the Health System Plan and the Annual Implementation Plan. The relative weakness of the HSA was intentional. HSAs were supposed to serve as forums in which consumers, providers, payers, and government could come together to work cooperatively for the public good. In that paradigm, the HSA does not need regulatory powers. At different times and for different reasons, however, consumers, providers, payers, and government did not accept the legitimacy of the HSA as a necessary and valuable player in their decision-making processes. Providers, in particular, chafed at the external oversight and limitations on their development of new services. Government agencies were reluctant to cede decision-making to nongovernmental bodies. The New York City HSA went to great lengths to allow public participation in its processes to improve decision-making and to foster public buy-in for important and sometimes controversial policies. But some consumers were still unconvinced of the worthiness of the agency. At one point, the New York City HSA board had 107 members, including forty-eight providers and fifty-nine consumers. The Health System Plan for cites the involvement of six task forces, four work groups, and three technical advisory groups in the development of the plan. The New York City HSA had thirtythree district councils that reviewed the sections of the Health System Plan applicable to their health districts. 10 Despite these inclusive structures and processes, elements of the community sometimes felt their input was downplayed or ignored. It was important to achieve the proper 10 The thirty-three district councils were later collapsed to five borough-wide councils. Reconsidering Community Health Planning in New York City 9

16 balance between community input and the expertise of professional health planners, and the New York City HSA struggled to adopt policies that would reflect such a balance. While some community stakeholders believed the board itself was captured by provider interests, others viewed the HSA staff as exerting undue control over the board. Some observers criticized the federally mandated board structure as unlikely to generate radical changes in the health care system. Bruce Vladeck, administrator of the Health Care Financing Administration from 1993 to 1997, believed that the consumer representatives on HSAs were likely to represent special interests themselves (labor unions or specific communities, for example) and, therefore, were likely to provide an institutional forum for legitimizing existing patterns of power distribution (Vladeck 1977). He proposed that health planning be conducted by local government to make it more accountable to the community. Some critics thought the HSA was too focused on CON review and facilities to the detriment of factors that affected people s health status more directly. In fact, the HSA did have a strong interest in population-based health status, and the Health System Plans reflected this priority. The HSA s time and attention, however, were frequently drawn to controversies over facilities because that was where the agency s clearest statutory authority and responsibilities lay. In the end, without power or full cooperation the HSA s ability to achieve its goals was hamstrung. HSAs could not withstand the deregulation movement because they had failed to convince a sufficiently broad-based constituency that their efforts added value to improve health system performance. Providers disliked the second-guessing of their capital investments, and payers and the federal government did not see the cost savings for which they had hoped. Local Health Planning Today According to the American Health Planning Association, very few HSAs survive in the United States. Virginia is the only state with HSAs five in total covering the entire state. Florida also has five HSAs. These agencies typically produce service-specific local health plans and community needs assessments, although some still evaluate and comment on CONs. 11 The days of HSAs producing community needs assessments that are integrated into a comprehensive state health plan have ended. With, as mentioned previously, only two surviving HSAs, New York State no longer has a statewide health facilities plan, formerly required under the Health Planning Act. 12 Local health planning continues in other forms. Throughout New York State, each voluntary, non-profit hospital is required by Article of the Public Laws of New York to produce a community service plan every three years demonstrating the hospital s commitment to meeting community health care needs. The law requires hospitals to solicit the views of the communities they serve in establishing performance and service criteria. The Health Research and Educational Trust, the VHA hospital cooperative, the American Hospital Association, and other organizations are developing new tools to assist in these institution-specific planning efforts (Landrum, n.d.). The level of rigor and community input involved in these planning activities varies considerably among hospitals in New York. 11 Information regarding HSAs nationally comes from a phone conversation with Dean Montgomery, executive director, American Health Planning Association. 12 Phone conversation with Karen Lipson, director of policy, New York State Department of Health, Office of Health Systems Management. 10 United Hospital Fund

17 In New York City, the Department of Health and Mental Hygiene has taken up the New York City HSA s public health agenda through its Take Care New York initiative, using empirical data, including community health surveys, to identify the top opportunities for improving the health status of New Yorkers, with a particular focus on health conditions most amenable to change. The Department structures its programs and public awareness campaigns to achieve specified improvements in health status and recruits non-governmental partners to complement its efforts. According to Department staff, Take Care New York also seeks to engage the medical care community in service to traditionally public health goals. The Department annually measures progress toward the Take Care New York goals, and publishes the results (New York City Department of Health and Mental Hygiene 2005). By doing the analysis and planning internally, the Department reaps several benefits: it can work efficiently and make decisions quickly; it can rely largely on the expertise of health professionals; and it can closely link planning to plan execution because it runs the needed public health programs and works closely with partner organizations. The Department has also been effective in prioritizing goals by identifying health indicators most amenable to change, as noted above. These benefits come at a potential cost, though: because the city s communities are not involved in the planning, they may not feel invested in the execution of the plan and may, in fact, disagree with the priorities established by the Department. In Rochester, the Finger Lakes HSA takes a different approach to community involvement. In 2005, the agency undertook a strategic planning process to redefine its mission (Finger Lakes Health System Agency, n.d.). The plan that emerged did not eliminate existing responsibilities (such as institution-focused needs assessments and CON reviews), but rather added a new function of promoting community engagement. It does so by forming ad hoc coalitions to address timely community health needs (for example, prevention of lead poisoning) through information dissemination, education, and advocacy. Previously, the HSA had regional review panels and sub-area councils that were geographically oriented; the new community engagement function has a problem-focused orientation instead. (In the past, the New York City HSA played a similar role in the city s response to HIV/AIDS.) While there has been no formal evaluation of the effectiveness of the Finger Lakes HSA s new strategy, the process appears to enjoy broad public support. At the state level, health planning remains a facility-focused process, but that may be changing. The New York State Department of Health has initiated public discussions to reform the Certificate of Need review process. Although this process is not expected to radically change the CON focus on facilities, there does appear to be greater communication between the public health offices within DOH and its financing and facilities arms the Office of Health Insurance Programs and the Office of Health Systems Management (OHSM). This new approach to planning is perhaps best embodied in a tool that OHSM is developing to measure community health needs, using the Prevention Quality Indicators developed by the federal Agency for Healthcare Research and Quality (AHRQ). These indicators identify hospital admissions that could have potentially been avoided through high-quality community-based primary care; they are one measure of a community s access to quality care (Agency for Healthcare Research and Quality, n.d.). OHSM is developing a Web-based tool to make prevention quality indicators publicly available so consumers can better understand Reconsidering Community Health Planning in New York City 11

18 the relative health of different communities. It will be interesting to follow the Office s integration of population-based health status indicators into the evaluation of facilities CON applications. Many other planning-related activities are also under way. New York State and New York City are both investing substantially in health information technology, with the goal of improving health system performance. The Berger Commission recommendations are also being implemented with substantial state support many of the Commission s recommendations regarding reimbursement are under review or being implemented within the state Medicaid program. Medicaid s administration, too, has been substantially reorganized. New York State has also raised the eligibility for Child Health Plus to 400 percent of the federal poverty level as a first step toward achieving universal coverage. Conclusion: A New Vision Policymakers throughout New York are facing a stark contradiction. A growing chorus of interests is calling for the re-creation of community health planning. At the same time, there is almost universal dissatisfaction with the prior era of community health planning. The trick to resolving this dilemma is to define a new form of planning suitable for our current health care system, informed by the knowledge gained about the strengths and weaknesses of the prior planning movement. Rather than starting from where planning ended in 1996 with the structure of the Health Systems Agency and the preoccupation with Certificate of Need the city and state must start anew. To do that, any reconsideration of health planning should acknowledge four forces that are at play in New York: government, payers, providers, and consumers. While New York City is at the very earliest stage of designing the future of health planning, it has already made significant investments in improving the health of its communities. Activities related to that goal include everything from the longstanding investment in the nation s largest public hospital system, the New York City Health and Hospitals Corporation, through the recent Take Care New York initiative, to the impending expansion of primary care services funded by New York City with the support of City Council Speaker Christine Quinn and Mayor Bloomberg. Many of these actions are influenced by state policy decisions. At the same time, there is a growing recognition that consumers in New York City s diverse communities need greater standing in state and local discussions of health care policy. Low-income communities, in particular, see hospitals and clinics closing and fear the worst for their health care. Consumer groups lack the resources, information, and power to challenge these changes. They seek a forum in which non-market values, such as equity, receive greater deference. Providers are also approaching the post- Berger world with some trepidation. The hospital closures recommended by the Berger Commission will provide some marginal financial benefit to a small subset of surviving hospitals, but many hospitals will continue to have nominal or negative operating margins, which will limit their ability to adapt to the new world of technology and pay for performance. Questions about the appropriate level and mix of capital investment in our health care delivery system will also continue to be raised. There is growing interest in making substantial investments in high-quality ambulatory care systems, at the same time that New York City s inpatient facilities are falling further and further behind national standards in capital investment. A planning process that brings an informed local voice to these deliberations could add great value to public policy. As the state government completes the implementation of the Berger Commission recommendations, it is giving new thought 12 United Hospital Fund

19 to how it will proceed with its health care agenda. The new funding for local health planning indicates that the state sees a need for a regional focus to its strategies. The language from the state health and mental hygiene appropriations bill makes it clear that local health planning initiatives are seen in the context of broader state health reform efforts: For services and expenses related to local health care planning including but not limited to: examining racial and ethnic disparities in the provision of health care; developing a process to measure and integrate consumer needs for health care services as the basis for health care provider planning; assessing future long term care needs taking into account consumer preferences for care; and reviewing the impact of the migration of services from hospitals to ambulatory care providers on the cost, quality and availability of services. 13 Currently, the state has significant initiatives in the areas of reimbursement reform, CON reform, the use of health information technology, and insurance coverage expansions, but there is a need for further integration of these strategies. And, with the exception of initiatives on health information technology, the state has not resolved how to harmonize its efforts with those of the private sector to broaden the impact of its initiatives. (At least twenty-one other states are involved in public/private partnerships to leverage their reforms in the areas of health care quality and efficiency [Hess et al. 2008].) This paper has identified a number of intersecting and complicated interests, of government, payers, the provider community, and consumers. It is not yet clear, however, what form of planning can accommodate the needs of each. All parties share a common interest in improving health system performance, but health system performance must be defined and measured before it can be improved. At the national level, The Commonwealth Fund has taken an initial step in this regard with its state report cards (Commonwealth Fund 2007). These are a significant contribution to the field of health system performance definition and measurement, but New York needs to create its own definition of health system performance, based on the unique needs and characteristics of our communities, and its own measurement system, based on national, state, and local data sources. Some efforts are already under way. As mentioned earlier, the state s Department of Health is making community prevention quality indicators available to the public. In New York City, the Department of Health and Mental Hygiene makes public community health profiles utilizing state and city data sets; the Department will also soon be planning the future of Take Care New York, as the initial four-year initiative expires in The epidemiology services division of the Department has also offered to provide inpatient SPARCS (Statewide Planning and Research Cooperative System) analyses to community groups free of charge. 14 These are very good first steps that, collectively, may create a possible foundation for future efforts to expand public access to information. In the long run, however, communities will need a voice in shaping data and data analyses. Because high-quality, relevant data will be so critical to the next generation of planning, a next logical step is to conduct a comprehensive assessment of all available data sets that could be used to monitor health system performance at a community level. These would include Medicare and Medicaid 13 New York State Assembly bill A09804, January Accessible online at 14 SPARCS is New York State's data reporting system for patient characteristics, diagnoses and treatments, services, and charges, for every hospital discharge, ambulatory surgery patient, and emergency department admission in the state. Reconsidering Community Health Planning in New York City 13

20 claims and encounter data, SPARCS data, Department of Health and Mental Hygiene community survey findings, and more; such an inventory could also include an assessment of various methodologies for using these data. The AHRQ prevention quality indicators, for example, facilitate the use of SPARCS data to measure health system performance. Concurrent with this assessment of data and of measurement technologies, work can continue on other aspects of designing a new planning process, including exploring different organizational structures, identifying funding sources, and defining planning strategies for continuous monitoring and improvement of health system performance. 14 United Hospital Fund

21 Appendix: The United Hospital Fund Health Planning Roundtable What role should local health planning play in the health care system of the 21st century? Given the lessons to be gleaned from the earlier planning movement, what should planning look like now? With broad agreement that the political climate is favorable for a reconsideration of community health planning, in September 2007 the Fund convened a roundtable to consider these and other questions related to the future of local health planning in New York City. The discussion brought together eleven veterans of community health planning, with a broad range of experience and expertise in the field (see box). After extensive discussion, most participants called for a new health planning process focused on measuring and improving health system performance. In the broadest terms, the group envisioned a planning process that would evaluate local health system performance from a population-based perspective, and that would inject public health goals and measures into the health care delivery system. The Commonwealth Fund s state scorecards are a good model of measuring health system performance, participants agreed, but they need to be brought down to a more actionable level (The Commonwealth Fund 2007). One participant noted that New York City Health Commissioner Thomas Frieden s Take Care New York initiative embodies these principles, but needs more teeth and follow-through. This new local health planning process, participants envisioned, could undertake both person-centered and population-based needs assessment. It would then define health system goals and outline a path to get there, including identifying the mix of public information, incentives, and regulation needed to move the health system toward these goals. Government or foundations could fund demonstration projects to stimulate greater system integration, based on goals established by a local health planning body. Some noted that this approach is consistent with the Berger Commission s true mission to align resources with need. Conceptually, it is almost identical to the approach of the old New York City Health Systems Agency. Some participants worried that this approach might promise more than it could deliver. In our pluralistic health care system, assigning responsibility for the health status of a community is difficult at best. As in the past, a local health planning process would likely not be given the power necessary to achieve the changes planners would be seeking; instead, they would be relying largely on their powers of persuasion and advocacy. The majority of the roundtable participants were opposed to reviving local health planning for the purpose of imposing prospective controls on capital expenditures. Their biggest concern was that capital review decisions would inevitably be undermined by non-policy considerations. Both their hands-on experience and the academic Reconsidering Community Health Planning in New York City 15

22 Local Health Planning Roundtable Participants CURRENT POSITION PREVIOUS PLANNING POSITIONS David Abernethy Senior Vice President, Deputy Commissioner of Health for Planning, Policy, Health Insurance Plan of New York and Resource Development, New York State Department of Health ( ); former President, American Health Planning Association Brian Biles, MD, MPH Professor of Health Policy, Staff to U.S. Representative William Roy, member of the Center for Health Services House Committee on Interstate and Foreign Commerce Research and Policy, ( ), during the passage of the National Health George Washington University Planning and Resources Development Act; professional staff to the House Subcommittee on Health and the Environment ( ) David Helms, PhD President and Chief Executive Officer, President, the Alpha Center ( ), Academy Health provider of technical assistance to health systems agencies Ronda Kotelchuck Executive Director, Vice President for Corporate Planning and Primary Care Development Intergovernmental Affairs, New York City Health and Corporation Hospitals Corporation ( ) David Lansky, PhD President and Chief Executive Officer, Former health care consumerism leader at the Markle Pacific Business Group on Health Foundation, and founding President, Foundation for Accountability David Sandman, PhD Senior Vice President, Former Executive Director, New York State Health Foundation Commission on Health Care Facilities in the 21st Century (the Berger Commission) James R.Tallon, Jr. President, United Hospital Fund Executive Director, NY-Penn Health Planning Council ( ); member of the New York State Assembly ( ) Robert Thompson President, Monroe Health Plan; Board Chairman ( ) and Executive Committee Board member, Finger Lakes member (2006-present), Finger Lakes Health Systems Health Systems Agency Agency; Deputy Director, Health Systems Agency of New York City ( ); staff to the HSA of New York City ( ) Bruce Vladeck, PhD Senior Health Policy Advisor, Administrator, Health Care Financing Administration Ernst & Young LLP ( ); former member, New York Council on Health Care Financing Arthur Webb President and Chief Executive Officer, Executive Director, New York State Health Planning Village Care of New York Commission ( ); numerous other senior positions in New York State government Fran Weisberg Executive Director, Finger Lakes Health Systems Agency 16 United Hospital Fund

23 literature suggest that Certificate of Need capital controls do not reduce health care costs. Although the focus on prior capital review has a long history in New York health planning (as one participant noted, It s in our DNA ), some participants believed that Certificate of Need could be dropped without any negative effects. Additionally, a planning process focused on patientcentered care would not logically be concerned primarily with facility allocations, they noted. Interestingly, this view was somewhat different from that of the Coalition for Community Health Planning, whose members believe that the closing of certain hospitals and clinics would adversely affect the health of already underserved communities, and who look to community health planning for redress. Roundtable participants considered two possible futures for capital planning. In one scenario, local health planners would define a high-performing health system, and then communities would consider whether they had the delivery system necessary to achieve this level of performance. These considerations would lead them to make prospective capital plans with an emphasis on targeting public investments rather than restricting private investments. An alternative view garnered more support. In this scenario, overall improved health system performance would greatly reduce the utilization of some facilities, necessitating a new Bergerlike Commission that similar to the original one would embark on a mop-up expedition to rid the system of underutilized infrastructure. The group also considered the role of health information technology in the future of planning. New York State and New York City have made significant investments in health information technology in the hope of ultimately enhancing the quality of care provided to patients. Because efforts to join myriad health information technology systems into one cohesive system capable of improving health care are occurring through regional health information organizations (RHIOs), it was suggested that local health planning might help coordinate this process. Indeed, the state s work on health information technology could be a model for community health planning: a statewide public/private partnership guiding a process that is implemented through regional organizations. Participants agreed that the potential clinical benefits of health information technology are enormous and that good data are essential to successful health planning. Yet they also felt that great strides could be made in measuring system performance with existing data, and that measuring and improving health system performance did not need to await the full-scale development of electronic health records and regional health information organizations. In the long run, a local health planning process could provide regional coordination for quality measurement, technology assessment, consumer information, and regional information technology infrastructure. The relationship of local health planning to state health planning was more problematic for the group ( a conceptual impediment, according to one participant). To begin with, the future of state health planning is uncertain. State officials are considering reforms to the Certificate of Need process, but a long-term strategy for state health planning is unclear. One positive development is that state Department of Health facility and finance staff are communicating and coordinating with the Department s public health staff to a degree not seen in many years. Participants did agree that local health planning needs legitimacy from the state in order to generate stakeholder buy-in. Some wondered whether the state would truly allow local flexibility when it came to areas of traditional state authority. If not, others Reconsidering Community Health Planning in New York City 17

24 suggested it would be enough for the local health planning body to be a convener and catalyst. One participant noted that the Berger Commission model allowed local input to create possibilities that the state authority turned into probabilities ; in the future, state and local health planning should replicate this relationship, it was suggested. On at least one point there was consensus: that the mission of local health planning should dictate the structure of any new body. As for who would be represented in a local health planning process, it was noted that the new focus on chronic disease and community engagement would change the profile of planners. To truly take account of patientcentered priorities, any new system should include non-traditional participants, such as community pharmacists and providers of Web-based health information. 18 United Hospital Fund

25 References Agency for Healthcare Research and Quality Prevention Quality Indicators overview. Accessible online at Blum HL Planning for health: Generics for the eighties (Second Edition). New York: Human Sciences Press. Cantor JC, C Schoen, D Belloff, SKH How, D McCarthy Aiming higher: Results from a state scorecard on health system performance. New York: The Commonwealth Fund Commission on a High Performing Health System. Accessible online at Committee on the Costs of Medical Care Medical care for the American people: The final report of the Committee on the Costs of Medical Care. Chicago: The University of Chicago Press. Finger Lakes Health Systems Agency. n.d. Needed: A healthier approach redefining community health planning for the 21st century. Rochester, NY: Finger Lakes Health Systems Agency. GAO (General Accounting Office) FHA hospital mortgage insurance program: Health care trends and portfolio concentration could affect program stability. Washington, DC: Government Accountability Office. Accessible online at Health Resources Administration Guidelines for the development of health systems plans and annual implementation plans. Cited in the 1980/1981 Annual Implementation Plan of the Health Systems Agency of New York City, p. 1. Health Systems Agency of New York City Health systems plan for New York City, New York: Health Systems Agency of New York City Medical facilities resource component, phase II, executive summary. New York: Health Systems Agency of New York City. Hess C, S Schwartz, J Rosenthal, A Snyder, A Weil States roles in shaping high performance health systems. New York: The Commonwealth Fund. Accessible online at Landrum LB. n.d. Health planning is alive and well! (Essay on the website of the American Health Planning Association.) Accessible online at Legislative Commission on Expenditure Review Health planning in New York State, program audit. New York: Legislative Commission on Expenditure Review. Melhado EM Health planning in the United States and the decline of public-interest policymaking. The Milbank Quarterly 84(2): Reconsidering Community Health Planning in New York City 19

26 New York City Department of Health and Mental Hygiene Take Care New York: A policy for a healthier New York City. First year progress report Accessible online at Potetz L Health planning: Issues for reauthorization. Washington, D.C.: Congressional Budget Office. Accessible online at Roemer MI Bed supply and hospital utilization: A natural experiment. Hospitals 35 (November 1): Sofaer S Community health planning in the United States: A postmortem. Family and Community Health 10(4): Steen J A bit of history. (Essay on the website of the American Health Planning Association.) Accessible online at Vladeck B Interest-group representation and the HSAs: Health planning and political theory. American Journal of Public Health 67(1): United Hospital Fund

27 Additional copies of Reconsidering Community Health Planning in New York City may be downloaded, at no charge, from the United Hospital Fund website,

28 Shaping New York s Health Care: Information, Philanthropy, Policy. Empire State Building 350 Fifth Avenue, 23rd Floor New York, NY (212) ISBN