~ MRVORANDIM DEPARTMENT OF HEALTH, EDUCATION, AND WELEA
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A” LAUAVENAENLR AN ET EIN PUBLIC HEALTH SERVICE
HEALTH SERVICES AND MENTAL HEALTH ADMINISTRA‘TIO.
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TO ? Assistant Secretary for Health & 19%

and Scientific Affairs

FROM : Administrator

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SUBJECT: Role of RMP and Special Health Revenuc Sharing

The discussion of RMP in the latest eratt papers on special health

revenuc sharing does not adequately r epresent my View on the RMP

role and function. I believe this caused the tentative but adverse
recommencation of the Secretary on KY contained in the August 7 -
memorandum from Tom Reutershan:

I hope the attached Giscussion presenting my vies wS On RMP will help

to cl avrify the

matter, I request that you submit the attached to

the Secretary et the time you submit our other (comments on the

revenue sharing proposal,

Att tachment

hit

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acinar neha entree

direct as well as indirect leverage on the providers to bring about
' desired change. The Regional Medical Programs constitute that arena.

RECIONAL MEDICAL PROGRAMS: A HEALTH CARE PROVIDER CONSTITUENCY

HEW is, appropriately, a consumer oriented agency, dealing with people -
and their potentials as well as their problems. In our service oriented
functions, the Department emphasizes the potential of consumers to make
their own decisions, and the right and responsibility of consumers to

make their own choices. In health care, this is reflected in the
Department's movement toward investing the right to health care in the
individual - not in institutions - through various forms of health

insurance and health care benefit packages.

_ While maintaining the consumer orientation, it is at the same time

essential - particularly in the health care arena — that the Department
have a locus for decling with the provider constituency. If we are to
impact on the "health care crisis", to improve access to health care,
contain costs, improve productivity and quality, then it is the providers”
that need to be changed so that consumers can, in fact, exercise their
choice in a more rational environment. Consumers, exercising their

-choices on an essentially individual basis, can have little impact on

the health care system in their communities. The consumer-oriented

CHP agencies can be a collective, consumer yoice to deal with community
health care systems, through more rational planning of the allocation
of resources. , ,

But it cannot be expected that a consumer-oriented CHP alone can be an
effective lever in moving providers, individually or collectively, to
change, improve, and evolve to more consumer-sensitive institutions.
CHPs cannot be given the dictatorial power and authority to bring about
these changes, nor can they attract the expert knowledge which could
effect change, in the absence of public authority. The aura of the
physician, the prestige of the hospital, the science of the medical
center, precludes equality of discussion between providers and consumers
on the majority of matters pertaining to health care change and improve-
ment.

There’ must therefore be an arena of equals through which the Department, , 5
if it is to develop a successful National Health Strategy, can exert fe

   

Loss of a direct Departmental role in relation to health care providers,
either through abolishing RMP altogether or folding it into special
health revenue sharing, would mean loss of contact with the most

influential constituency that the Department seeks to change. The primary

 

function which RMP serves, and which only RMP serves at this time, is
as provider change agent. It does not function as a source of provider
support nor, as some have charged, as a "provider revenue sharing"
mechanism. It is provider dominated, purpesefully, but not to maintain
the provider status quo, as has been suggested. RMP has, in part, a
categorical emphasis, but that is because providers are specialized.
To bring about change most readily and efficiently, one applies the

lever close to the object to be moved, not at a distance from it. -
Gaining the confidence and cooperation of providers to change in areas

of their interest, permits additional more positive movement beyond

their immediate specialized concerns. And this is accomplished not

just because RY funds provide a stimulus, but because the providers
themselves invest in maintenance of improvements and continuing changes.

While the performance of RMPs has been variable, there is ample evidence
that moyement is taking place ip most parts of the country because of

RMP leadership. RMP projects are operated on an essentially seed money

_ Basis, so that once activities are off the ground and proven, their ~~
“support must come from the local area. Evidence suggests that this is,
in fact, happening.

When major new national initiatives proposing new directions in health
care delivery are announced, it is the provider constituency which

must respond, and it is RMP which has the communication with, and the
confidence of that constituency to persuade their cooperation. For
example, the $8 million allocated nationally to an emergency medical
services initiative, was matched with an additional $8 million programmed
by the providers through RMPs.

The stimulation of H4O0s represents another example of how RMPs, by their
provider orientation, were able to further a major Administration policy.
Fourteen RMP. regions had as a major objective the stimulation of HMO
development.) In those regions, 33 HNO applications have been funded,

or an average of almost 3 HMOs per region. In only one RMP that had

HMO development as an objective, were no HMO grants received. On the
other hand, 42 RMPs had little HMO activity, and in these regions some
53 HMO grants were funded, or a muca lower average per region. In 13

of these regions, where there was little RMP activity related to HMOs,
there were no HMO grants.

This example is not meant to suggest that RMP was the only stimulus, or
even the prime stimulus, to HMO development. It does suggest, however,
that where an RMP takes an initiative and gives it provider sanction,

then the climate for change among providers can be improved. It will
require, perhaps, increased leadership at the Federal level to assure

that all RY¥Ps seek to translate national priorities into local initiatives.

In summary, the Department cannot lose, cannot ignore, the need for a
provider constituency in its efforts to improve the delivery of health
care. Without that constituency, we cannot hope to effect changes in
provider behavior. With CHP serving to identify needs and establish
priorities, R¥P can be the provider arm of the planning process in
suggesting how priorities can’ be met. Similarly, in relation to an
Implementing Agency which operates to allocate funds in accord with
the CHP plan, RMP can be the mechanisn which assures provider participation
in the implementing process. The Regional Medical Programs represent. our
primary and unique vehicle to communicate with providers and to exert
the leverage necessary for change.

HSMIA - 8/10/72