REGIONAL HEALTH PLANNING

The National Health Planning and Resources Development Act of 1974 created a network of U.S. regional agencies to develop health plans that would result in a health care system that met the health needs of individuals while also containing costs. These health systems agencies (HSAs) were empowered to implement their plans by using mechanisms such as Certificate of Need (CON) and Appropriateness reviews. CON review requires hospitals, nursing homes, and clinics to submit an application for proposed capital expenditure and service expansion projects to a regionally based board of trustees. The board evaluates each project to determine whether it meets the criteria established through the plan development process and whether the applicant should be permitted to proceed. Appropriateness review would have enabled the HSAs to consider existing services to determine if they were needed. Appropriateness review was never fully implemented, however.

From the start, HSAs were controversial— some physicians and health care facilities didn't believe this type of oversight was necessary. The composition of voluntary regional boards of trustees was prescribed by the law to include a majority of consumers (reflecting the area's demographics) and certain providers. Local board composition was sometimes challenged; and although the boards reported directly to the national Health Care Financing Administration (HCFA), HSAs sometimes found themselves at odds with state and local political agendas.

In the mid-1980s, federal funding for HSAs was discontinued. The HSAs that remained were created by state legislatures with less ambitious goals and usually a stronger focus on CON review than on plan development. As the 1990s evolved and the backlash against regulation grew, the federal and state governments, along with the private sector, expanded their reliance on the health care market to control health care costs and to force a rational delivery system to develop. Corporate "shopping" and health maintenance organizations were expected to afford incentives to providers to deliver quality health care at a reasonable price. The focus of government intervention changed to providing information to purchasers and users of health care to help them become better consumers. Although there are some areas where local health planning and Certificate of Need review continue on a limited basis, a federal role in the process is gone, and state funding for this purpose continues to decline.

Nancy J. Roth

(see also: Health Care Financing Administration; Health Maintenance Organization [HMO]; Planning for Public Health )