any
 

 

- Division of Regional Medical Programs

o Aswe approach congressional hearings on the legislation extending the
‘ guthority for Regional Medical Program grants, we believe strongly

legislative proposal submitted by NIH on October 12, 1967, stated the

Projected Operational Grant Awards

Philip R. Lee, M.D., Assiatant Secretary pe a Fobruary 16, 1968
for Health and Scientific Affairs : ooo.

Assoctate Director, NIH, and Director

Projected Need for Regional Medical Program Grant Funds = Fiscal a
Years 1969-1973 ae

that the most important objective to be sought in the legislative
action is an authorization level for future years sufficient to insure
the continued viability of the Regional Medical Programs. The

 

 

 

authorization levels needed through fiscal year 1973 as follows:

“og

Fiscal Year |. Authorization (million of dollars)’
agg tog ee
19700 oo 200 a _ . oo

L97L a 300 | Co .
1972 : | “oo oy

1973 a 500°

Further information and analysis confirms and strengthens these
projections of need. '

The essential component of our projection of needs is the estimate of

. effective demand for operational grants based on our initial experience

with operational grant applications extended to the other Regional

'-. Medical Programs and projected to 1973.

This projection of program needs is based on our initial experience with

_ the award of operational grants during fiscal yeara 1967 and 1968, and

the subsequent growth of the first operational Regional Medical Program |
through supplemental grant awards. This projection is confirmed by ae
{nformation obtained from all Regional Mcdical Programs during the week ‘|. -
of February 12, 1968. However, we should emphasize that the projections
given are not requests for funds but estimated awards allowing for.

‘.  yveduetion of requests by action of the National Advisory Council. A

full description of the derivation of the projections is given in a
later section of Ghis memorandum, = a Ee He

: oa,
. t
Projected Operational Grant Awards
ae Recional Medical Frograms

1667-1973 s oe
(million of dollars). ak a ees

2 ~- . 7
oe.
= i's)

‘Fy.1967 «1968. «19691970 19711972973

Initial operational avard - TO ae se oe - mee Se ae

during fiscal year 1967 . Lt 6.1 . © 9-2 — 16.2 21.7 | . 28.2 33.3. 40.0
(4 regions) aan A Ok nt ,

Initial operational avard* fo a , mo Pi
during fiscal year 1968" eee 40.5 60.8 116.4 157.1

(20 regions). Do. oe eS OR Se ee Bae ea -

Initial operational award
during fiscal year 1969 . ee
le (39 ~ gions) oO : “ a os

 

Total e/ lective demand “for CP

 

  

  

operational grant awards. = -6.1 49.7 320.8 420.4 x
“s te a : . .

 
“4 th,
ab . :
' - :
* 1 u : .
ag
wee, : 3
el we
. ’
best, y
ee ; 1
oe
nM «
aN

Jo It is obvious that these projections of need give a totally different
<, pheture of the future of Regional Medical Programs than tho projections
ey included in the Health Memorandum for the Programming, Planning, and

Budgeting System. In fact, the divergence is so great that it is our

firm conviction that if the PPB projections were translated {nto

authorization ceilings for the next five years the efforts now underway,
in Regional Medical Programs would fall far short in achieving the
program objectives and in many regions the progress already made will
be dissipated, The following factors strengthen the force of our
conclusion:

 

 

eS 1, The requests for funds received by the Division of Regional Medical
ae al Programs represent the end product of a regional decision-making process
04, ,.. that has set priorities for action and haa provided a review of the
quality of spocific projects being proposed, Tha grant application
represents a sclection af the RMP level among the activities to meet

- patient needs proposed from within the region. The establishment and

~. functioning of this regional decision-making framework, which involves
’ considerable investments of donated time by the participants, can be
maintained only if there is a reasonable expectation that their efforts
“will result in a workable program that can make substantial progress

-. towards their regionally determined health goals. ,

2. The previous history of this program, including tho original HEW ;
cost projection stated during the hearings and the authorization ceilings |
of P.L. 89-239, have set the expectation levels of the individuals and
institutions involved in the Regional Medical Programs. If these

‘.,. expectations are shattered, these groups could lepitimately claim that
ct \. they have been misled by the Federal Government and the resulting a
“4 dfsillusion could impede further Federal efforts to stimulate cooperative -
“tos. aetion in the health field.

 

'. 3, The magnituda of the challenge represented by the charge to
“cons. Regional Medical Programs has become more apparent as regiono have
-* ). oxpanized themselves for thie offort. The size and difficulty of the
initial organizational efforts has delayed movement of the programs into
the operational phase, but these same factors contribute to the magnitude =, *
of the operational activity that emerges from these organizational and
‘planning efforts. It takes longer to plan and organize a large activity
than a small one.

 

For these reasons, we are absolutely convinced that the authorization
-- ceilings proposed by the Administration during the hearings on extension
‘of the program must approximate the projections provided in this >
‘memorandum if Regional Medical Programs are to succeed in accomplishing
'” . thedy role in achieving major national health goals. .
bie PS Basia for the Projections

oF , Operational experience to date, coupled with recent Regional Program
"Ss 4. egtimates of their future fund "requirements," indicates that the
““ageregate effective demand". for RMP grant funds will be as follows:

 

-spyeo : FY7O . FY7L FY22) FY23

ls? planning YY § 24.8 $ 12,5

 

<fyics. Operational $131.9 $215.8 $320.8 _ $420.4 $533.1

“os goTAL = $156.7 $228.3 $320.8 $420.4 95331

    

~-. Uecontinued planning becomes an integral part of operational programs
as RMP develops

"he principal factors shaping aggregate effective demand are:

. Tho number of operational Regional Programs; and
tho saliont characteristics of those Regions (a.g.,
health resources, incidence and prevalfnce of disease,
population).

 , Their "demand" for funds as expressed by operational } -
grant requests (isa., applications already reviewed and =;
approved by the Regional Advisory Group). we

. The merits of such proposals in terms of achieving
‘the purpose of the program as detcrmined by the review
and approval process (e.g., National Advisory Council).

The grant requests reflect regional judgments and decisions with respect
existing resources and their own state of readiness.

oe As indicated, projected aggregate effective demand will substantially
“er "+ @xeeed $100 million in 1969, surpass $300 million by 1971, and reach ‘
wc’ $500 million or more by 1973. Tho calculation of these projections is

set forth in Table 1. In summary:
my ; 1.

 

_, By the end of the current fiscal year, approximately 24 -
(or slightly less than one=half) of the 54 Regional Medical ©
- Programa will have entered the initial operational phase; —
and by the end of fiscal year 1969, all of tha Regionsl
WLLL be operational. ©.) 7 a a

"

 

to their particular needs and scheme of priorities, taking into account | ah
'« The aggregate effective demand of the 20 additional
Regions that will become operational this year
totals about $40 million in their base year (01);

_ and that of the 30 Regions becoming operational
in fiscal year 1969, approximately $55 million.

', In extrapolating tha initial aggregate effective demand
of operational Regions, a growth rate or factor of 50%
is indicated in their second year (02); and 75% in
their third year (03). A declining growth rate is—
indicated in succeeding years=-04 (35%), 05 (302),

06 (25%), and 07 (20%).

Several assumptions have been made in the above projections is RMP
aggregate effective demand through 1973,

. Regions will become operational during fiscal yeare oe
1968-1969 as predicted.

'. OPerational experience to date, though Limited, .
* . provides a reasonably valid and relevant basis ©
for gauging the aggregate effective demand for |
- RMP funds over the next 3-5 years. That is: ©

= Initial operational grant requests and ee
- approvals will coughly follow tha pattern) - i
established by the first operational avards ot
already made, me

- » The "growth rata" will roughly correspond o oo
"to that already suggested by the first oo my
operational programs and the considered
predictions of the Regional Programs,

_,° The level of RMP appropriations during this period "|
will not be so significantly below the aggregate
effective demand ag to materially alter that demand
in succeeding years.

Eight Regions already have been awarded initial operational grants.
Applications of 9 others have been submitted and are under revicw,
and a large numbor of Regions are known to ba developing applications. ~
It is anticipated that 7 or 8 of this group will submit their initial
operational grant applications in time for them to be acted upon and

awards made oY June a , (eee Table 0 Theso operational Rogiona--the |

"

 
7 4 funded in focal year 1967 and tho 20 that it in anticipated will ba
funded this year--oncompass approximately 45% of tha Nation's population,

It is fully antictpated that tha remaining 30 Regiona will entor

thea operational phase in fiscal ycar 1969. A recent survey of all '
Regional Programs support this estimate as does the general pattern

of operational grant submissions to date,

 

‘The aggregete effoctive demand for the base period+-20 Regions in
oe £iseal year 1968 and 30 in fiscal year 1969--has been calculated so as
“fia ° to correspond roughly to that reflected by the 8 initial operational
“cou + awards made to date. (Sea Table 3) In per capita terms, tho aggregate |
oot effective demand reflected by these awarda comes to noarly $.503; and
ra - thus, the first-year amounts for the 20 Regions (population 81 million)
becoming operational this yaar would be $40.5 million, and $55.5 million .
for the 30 Regions (population 110 million) in fiscal year 1969.

“\ Growth rates of 50% to 75% respectively in the second and third years
were employed since available date provides good evidenea that the a
aggregate offective demand will more than double in the firet three 1
years. For example, the projected second-ycar increase for those 4 ve
Regional Medical Programa which were awarded their initial operational ..-.
grants in fiscal yoar 1967 is roughly two thirds. (Sea Table 4) -
This increase reflects the fact, expected to ba typical, that initial 1
operational awards represent only the first otage of the operational ,
program, The expectation of stepwise development is stated in the
Division of Regional Medical Programs’ Guidelines. All Regions were
recontly surveyed as to their estimated annual fund requirements during
vel the perlod 1969-73, <A comparison of the estimated third-year roquircments
-" | for those 8 Regions which already have first-year operational programs
underway shows an anticipated third-year need that is nearly double
rE thoir first-year level of funding. (See Table 7) Thus, the growth rates
att. €@pplicd would appear, if anything, to "understate" the aggregate effective .
oF domand,

 

 

Because thera is little or nothing in the way of a relevant data base
‘ and since regional "predictions" three or four years henao are doubtless
a2". lesa vellable indicators of aggregate effoctive domand, forcenating .
Dok prowth rates for succeeding years io far more difficult. Repional
aoe “pradictiona" do suggest decline in the growth rate in the fourth and
ol, £ifth years, but there is no indication that @# sharp leveling off will
en occur and a "plateau" reached until the sixth or seventh years at the
“i earliest. Thus, a rate declining to 20% in the seventh ycar has been
ot used, Such a percentage increase, it might be noted, perhaps comes close
“He to what cost-of-living increeses, population syowth, and esa tee factors
fhe might require. a |

 
 

Additional Growth Factors

A number of other important factors which are likely to influence the
future development of Regional Madical Programs during the 5 ycars
ahead are not specifically encompassed by the projections described in
this memorandum since the projections are based on extrapolations from
current RMP experience, This is not the place for a full discussion
of these factors yet a brief mention of some of the more important

provides a better sense of the framowork of the problems of the

orgenization and delivery of health services into which Regional Medical,

' Programs are being projected:

..°  L. Regfional Medical Programs came into being because of the idonti-

 

fication of the gap between tha level of care baing mada possible by

. the advance of medical knowledge and the actual care being delivered

to most of the population. With the continued development of madical
scienee and the full realization of our still limited experience with
a sizable medical roscarch establishment, the next 5 years are likely

‘to witness important advances in medical capabilities that will need

to be implemented into the broader health-cara system. Many of the
major medical research activities alrcady underway, such as the artifical

heartemyocardial infarction rascarch program, the virus-Leukemia programy 2)

and others, are deliberately intended to create the kind of medical
advance that could logically be implemented through the Regional Medical —

Programs,

. 2. The initial operational activities of the Regional Medical Programs

now underway do not affect equally all of the population groups and
geographical areas within the Region. Most of the Regions are developing _

.. subregional frameworks for planning and action, which will insure the

extension of RMP activities to all areas of the Region over time.
However, the initial operational grants do not reflect in any case the

7 full coverage of the population of a Rogion. ‘This underestimation of

tha ultimate magnitude of an RMP is further accentuaged by the slower
progress in developing RMP activitics for specific population groups
which raiso particularly difficult hoalth-care problems, such as the
population of the "urban core." The ultimate involvement in effective
action of tha full array of health resourcos within a Region and thea
extension of tha benefits of the program to the total population, which
4s its ultimate objective, could expand the scope of Regional Medical
Programs beyond that reElectad in thease projactions,

3. The particular needs for improvement in the organization and delivery

of health services for which the Regional Medical Program mechanism

is wall designed will become more clearly evident in the coming 5 years.  -
The need for improved mechanisms of ambulatory cara, for example, and
 

 

 

 

 

tha velatfionship of those mechanisms to the broader health-care syaten
will be a particular challenge for the Regional Medieal Proprams as
they attempt to relate the full capability of a Region for high-cuallty

health services to the array of necds within that Region. The pressures

from the rising coats of medical care will also lend preater onmphasis
to improvements in the efficlency and effectiveness of the health-care
system with move- attention to the interrelationships of tha spoctalized
elements of tha system,

“4. Thera will ba a cross-fertilisatlon of ideas and proven developments

among, Regional Medical Programs as cach of the Regional Medical Prorrams
develops. Tha potential of the Regional Medical Programs learning from
cach other in the development of effective programs was demonstyxated

“. fmpressively at the recent Confercnce-Workshop on Regional Medical

Programs attended by over 800 persons. This Confercnce-Workshop was
the first fallescale exemple of the ability of Regional Medical Proprams

» to learn Zrom cach other, This factory is inadequately repeesented in
- the first operational activitics, which have risen primarily from ideas ©
: within tho particular Region's capabilities.

‘
‘

. 1
i re na ‘ , . ,
Pre . we md _ 4

‘Robert Q. Marston, M.D.

ite

‘ a

ec: Myr. Govham on i
Mz. Kelly 0. ee ae ee
De. Stewart “. ° Co eg
Dr. Shannon wee

 

 

4
 

 

 

 

 

| TABLE 1
o pe 5 PROJECTION OF RMP AGGREGATE EFFECTIVE DEMAND
SO tg (in millions) = | ot
Pope ge es
 F¥67: 3. «© 4 Regions at OL Level (Base) va 6.2
rn 2 : | TOTAL «$6.2
a ., & Regions at 02 level ($6.2 x 1.5) - - § 9.2 ‘
wey 20 Regions at 01 level (Base) _ “4 40.5
no ni ‘3 , TOTAL | $ 49.7
FY69 fn : 4 Regions at 03 level ($9.2 x Ll. 15) —§$ 16.1
we ' 20 Regions at 02 level ($40.5 x l. 5) o 60.8
oo “e. 30 Regions at 01 level (Base) oS 55.0
3 ‘| _ TOTAL $131.9
| ONTO: + & Regions at 04 level ($16.1 x 1.3 5) a —$ 21.7
bla, rol). * 20 Regions at 03 level ($60.8 x 1.75) ° 116.4
BE ‘' a... 30 Regions at 02 level ($55 x 1.5) oo 77.5
* i TOTAL $215.6
SFY ' & Regions at 05 level ($21.7 x 1.3) ) $ 28.2
Te 20 Regions at 04 level ($116.4 x 1.35) 157.1 a
e: . - 30 Regions at 03 level ($77.5 x 1.75) :—. 135.5.
oo. : ' / } MOTAL $320.8 | '
| au / he a . Wy 1
o FY72s.- * 4 .4 Regions at 06 level ($28.2 x 1.25) ey —$ 33.3 I a
cvs! 4°} 20 Regions at 05 level ($157.1 x 1.3) - 204.2
cor "30 Regions at 06 level ($135.5 x 1. 35), ; 182.9
: Red mo _ TOTAL $420.4
“) & Regions at 07 Level: (533. 3 x 1.2) i $ 40.0.
' 20 Regions at 06 Level ($204.2 x 1.25) «" 255.3
‘30 Regions at 05. level. (6182. 9) x 1.3): on 237.8
i Ty TOTAL. - $533.1,

 

   
 

  

 

 
  
 

ie in

.
1

 
  
  

 
  

  

OPERATIONAL REGIONS - “ACTUAL AND ANTICIPATED
Do _ Gy June 30, 1968)

 

Awarded (4) 4
Albany cae Kansas
Intermountain 90 i): Missouri

  

FY68 ~ 20 (est.)
',; Awarded (4) ae
Rochester me “Washington-Alaska.

Tennessee Mid-South ..° — Wisconsin atte

 

Pending Review (9) Fed, on
California - ) °° * North Carolina: ||. °
Central New York . - Oregon vo
Metropolitan D.C... —«. ~-South Carolina...
Mountain States | Western New York
New Mexico «=. 7):

” Michigan .

. Northeastern Ohio
“0 Northern New England
Northlands |
Oklahoma

 
  

Alabama
Central Ohio
Connecticut .

  

    
   
   
   
     
 
 
      
    
     
       
   
   
   
      
  
  
    
   
 

 

oo TABLE 3
3 ' a
' INITIAL OPERATIONAL GRANTS .
aa (Awarded to Date) wi
o's “A First Year vs ' Population ae
Region . oa Grant Award co (in millions) eS
Albany | “ $ 915,000 © OF LA ; eae
Kansas + $1,077,000 — Be 2.3
Intermountain a $1,748,000 2.2
Missouri ~, > ' $2,494,000 2.2
Rochester a $§ 255,487 1.3
Tennessee Mid- “South - $1,630,304 2.7 :
Washington-Alaska “=: . $1,032,003 3.4
Wisconsin < ae - § 541,434 4.2
20.2

 

 
— wee ed TABLE 4&

ESTIMATES OF SECOND-YEAR FUNDING —
OF FIRST FOUR OPERATIONAL REGIONS
(Rounded to nearest thous.)

 

 

 

(1) (2) (3) . (4)° . (5) a (6) (7)
, Supp lementals ar

First Year . ; ce Second Year Total
Grant Award Region | Approved Pending Anticipated Est. Base Second Year
$ 919,000 Albany $ 4,000 $ - $ 160,000 — $ 919,000 $1,180,000

1,791,000 Kansas oe _- 445,000 2,000,000 1,076,000 2,299,000

1,076,000 Intermountain 247,000 _. 800,000 1,791,000 2,439,000

2,494,000 _ Missouri 387,000 1,252,000 880,000 2,494 ,000 3,954,000
$6,280,000. $637,000 $1,692,000 $3,840,000 $6,280,000 $10,482,000

 

 

 

NOTE: Total second Year (col. 7) computed on the basis of continuation of the actual initial First Year... .:.

4vard (col. 1) at that same level (col. 6), plus supplements already Approved (col. 3), plus 50% - 7° =)
of Pending (col. 4) and Anticipated (col 5.) supplements. Anticipated supplements are based upon -
a recent telephone survey. Past experience indicates that amount actually requested exceeds such — _
"predictions". (See Table 5.) Furthermore, approvals of both initial and supplemental operational - _
grant applications has been approximately 60% of the amounts requested. (See Table 5.) This et
gives a projected increase for these Regions of $4.2 million or 67% over their first year totals. -

 
 

  

sce . 1
rate TABLE 5

Mee ANTICIPATED AND ACTUAL

OPERATIONAL GRANT REQUESTS

. Region Indicated Actual

“California . $1,200,000  , $3,500,000

“o- Central New York mae 320,000 | 251,775

District of Columbia  ~ 800 ,000 696,328

Mountain States : 100 ,000 206,913
r. New Mexico 180,000 634,974

North Carolina 1,000,000 1,570,067
"©." Oregon 200 ,000 179,242

_ Rochester ne 210,000 359,985.

“+ Tennessee Mid-South ae 2,400,000 3,059,872 ‘
|. Washington~Alaska 7 1,000,000 1,234,293

Subtotal - _ $7,410,000 ___ $11,693,449 (158%)
‘\.. Kansas (Supplement) $2,400 ,000 $ 446,671 a/
“>! Missourl (Supplement) 1,100,000 1,251,818
S eS Subtotal © $3,500,000 __ $1,698,489 __(49%)
cy OMAR Us $20,920,000 $23,391,938 (1232)

 

 

 

 

 

 

NOTE: Based upon a telephone survey of all Regional Programs made in early
. October 1967, it was estimated that 34 initial and 13 supplemental operational
__.° grant proposals would be submitted by June 30, 1968, with 20 of these submissions
-, scheduled to take place by February 1, Twelve of the 20 were actually submitted .
py that date. While submissions have been slower than was indicated, the .
3, amounts actually requested exceed those "oredicted" by the regional respondents
“at the time of the survey. | a coe

" af Region has since indicated that it plane to submit another supplemental
request for $2 million later this year. re .
1 - mm a tee

: pt '
. : . a ,
f ‘, . oy eo tp
i : : : “ woo re
; : oa

1
yea
    

s Yee, .
.* *
s . a ‘
oh
Bp an ° ' ‘
+ t
2H ‘ ' ‘
y :
nat : yo
ves “4
. me ; a
‘", > Region
me,
ya t Tndetal: a
«- Albany
‘Kansas
ws Intermountain ‘
vo. Missouri
', Rochester

“ot Tennessee Mid-South °
'" Washington-Alaska

os Albany ns
Intermountain
Missouri .
Wisconsin

eo otis

  

a
oi hy
a

  

 

  
  
         
 
  

Wisconsin . — poe

D:. We Supplemental: - ae

--*.) OPERATIONAL GRANT AMOUNTS
_° | REQUESTED AND_AWARDED

zy

 

TABLE 6

 

 

 

 

 

 

ore Requested Awarded
$1,702,423 $ 918,665
2,811,072 ' “1,076,600
2,238,315 - 1,790,603
4,326,996 2,493,841
279, 040 255,487
°3,033,514 1,630, 304
1,290,919 1,032,003
541,434 541,434
$16,223,713 $9,738,937 (60%)
pa Be 2,845 $ 2,845
ey 798,480 247,520
; 387,000 394,062
99,215 88,715
$1,297,040 $733,142 (57.4%)
' $17,520,753 _ - $10,472,079 (59.7%)

 

 
PROJECTED THIRD-YEAR OPERATIONAL FUND REQUIREMENTS FOR SELECTED REGIONS
(Rounded to the nearest thousand)

we

First Year

'

~~

Third Year
Fund Requirements

TABLE 7 |

Projected Increase

 

Region Grant Award Amount Per Cent
Albany © $ 918,000 $3,155,000 $2,236,000. 243%
Intermountain 1,790,000 4,200,000 2,410,000 135%
Kansas 1,076,000 4,400,000 © 3,323,000 309%
Missouri | 2,493,000 6,000,000 3,506,000 — 141%. °
‘Rochester 255,000 2,300,000 2,045,000 8027,
Tennessee Mid-South 1,630,000 3,000,000 1,370,000 847%
Washington-Alaska 1,032,000 2,600,000 1,568,000 152%
Wisconsin 541,000 4,000,000 3,549,000 6407:
$19,126,000 ~~ 197%

$29,655,000

TOTAL $9,739,000

 

NOTE: There is a strong correlation between those Regions projecting significant increases in thei

third year requirements and those with small initial operational grants in per capita terms, ~

e.g., Wisconsin (13¢), Rochester (21¢), and Kansas (49¢). Application of the aggregate
effective demand "formula" for these same 8 Regions indicates a third-year fund requirement

of $25.6 million. .