: , -i ! t ,. i . , c I Dear Mr. Chairman: This is the report on our review of the planning, con- struction, and use of medical facilities 2~ the Baltimare, Maryland, are a. The review was made in response to yuur request of SeptemIxr 18, 196% Tl~e responsible Federal, State, and local health or- ganizations have no”t been given an opportunity to forma&r examine and comment 0x1 this report, although most of the matters were discussed with their representatives during the review. port unless copies are specifically requested, and thm we shall make distribution oziiy after your agreemeat has been obtairied, Sincerely your 13; Gomptrcd-ler General of the United States I I . * Contents . Page . * e DIGEST 1 CHAPTER 1 . INTRODUCTION Hill-Burton program Baltimore area health complex Healthiplanning organizations 2 PLANNING AND CONSTRUCTION OF HOSPITALS Planned changes in hospital bed capac- ity 9 Utilization of existing hospital beds 12 Federal hospitals 14 3 PLANNING AND CONSTRUCTION OF SKILLED- NURSING-CARE FACILITIES 15 Planned changes in bed capacity in skilled-nursing-care facilities 16 4 CONTROL OVER THE DEVELOPFIENT OF MEDICAL FACILITIES 17 Approval of Columbia Hospital 18 Planning for medical facilities 18 5 PLANNING FOR AND CONTROL OF SPECIALIZED MEDICAL SERVICES 20 6 SCOPE OF REVIEW 22 AJ3BRWPATIONS General Accounting Office Department of Health, Education, and Welfare Public Health Service Veterans Administration, DIGEST --- --- - ??HYTHE REVIEW G?.iS!4ADE At the request of the Subcommittee's Chairman, the General Accounting Office (GAO) examined into the coordination among Federal and State agencies and local organizations in planning and constructing hospitals and skilled-nursing-care facilities in certain metropolitan areas. GAD also reviewed the extent to which certain medical facilities and other _._ -, services were shared among hospitals. The reviews \vcre made in Baltimore, Cincinnati, Denver, Jacksonville, San Francisco, and Seattle. These cities were selected on the basis of the levels of Federal financial participation in their construction of hos- pital and skilled-nursing-care facilities and their wide distribution throughout the United States. GAO did not review the quality of care being provided by hospitals and skilled-nursing-care facilities. Federal, State, and local health-planning organizations have not been given an opportunity to formally examine and comment on the contents of this re- port. ~~3lDI':iGS AND CONCLUSIONS / The Medical Facilities Development Division in the Maryland Department o#~YS~ Health and Mental Hygiene (State agency) administers Hill-Burton grants rladc L by the Public Health Service (PHS) for construction and modernization of /bo , hospitals and other medical facilities. The State agency annually prepares a plan setting forth an estimate of the . number of acute-care hospital beds and skilled-nursing-care beds needed for 5 years in the future. Although GAO verified the mathematical accuracy of the State agency's conputaticn of future bed needs, an evaluation was not . made of the appropriateness of the methodology prescribed by PHS for use by a . the State planners in determining future bed needs. (See pp. 4 and 22.) -. :: Gy 1975 the bed capacity in Baltimore area hospitals roughly wil7 equal . the need. - According to the 1971 State plan, the Baltimore area will need 7,361 . hospital beds by 1975. As of December 31, 1970, facilit'es for 7,318 beds were in operation or under construction. By 1975 tile a:;lpac-ity, estimated by GAO on the basis of plans for future construction, will have increased to 7;497 beds, or 736 beds in excess of the need pro- jected in the State plan. (See p. 9.) The 1971 State plan showed that 744 hospita'i bed spaces in the Baltimore area did not conform to Hill-Burton construction standards. These beds, however, are considered by the State agency to be safe for patient care and are avai'iable to meet the current and future patient-care needs. (See p. 9.) SkiZZed-nursing-care bed need The Baltimore area has more skilled-nursing-care beds at the present time than it wilJ need by 1975. According to the 1971 State plan, the Baltimore area will need 6,628 skiJJed-nursing-care beds by 1975. As of December 31, 1970, facilities for 7,502 beds were in operation or under construction. By 1975 the ca- pacity, estimated by GAO on the basis of plans for future construction, will have increased to 8,104 beds, or 1,476 beds in excess of the need projected in the State plan. (See p. 15.) The 1971 State plan showed that 2,436 skilled-nursing-care bed spaces did not conform to Hill-Burton construction standards. These beds, however, are considered safe by the State agency for patient care and are available to meet current and future patient-care needs. (See p. 15.) Control over the deve2opmex-L of medica facizities If the sponsors of a hospital or skilled-nursing-care facility seek Federal financial assistance under the HiJl-Burton program, or from the Federal Housing Administration or the Small Business Administration, assistance will not be provided unless the State agency determines that there is a need for the proposed medical facility. On July 1, 1970, the Maryland Health Facilities Certification and Licensure Program took effect. This Jaw requires the review and approval as to need for all hospitals and related nonprofit facilities (i.e., nonprofit skilled- I. - nursing-care facilities), including those privately financed, by the appro- priate areawide comprehensive health-planning agency before Jicenses to operate may be granted. . - . Although the organization and concept of comprehensive health planning is new, the State comprehensive health-planning agency and the Baltimore 2 . . .:, ..I f Regiona'l Pla~x<:~;l Council, the areawide'agency for the Galtimore area, have developed criteria for determining the need for medical facilities. Officials of both planning agencies said that they did not fully accept 'the planning concepts used by the State Department of tlea!th and Eental tfygiene in preparing the 1971 State plan. Consequently the plznning I agencies did not use the estimates of future bed r,seds con'&Snet; in the . State plan for the purpose of evaluat'ng the need for proposed faci iities. In the 1970 State p?an, the State agency said that it and the State areawide comprrhenslve health-planning agencies should collaborate and shouJ4 coordinate their information and planning. The State agency in- dicatea that an initial step would be a study of the planning areas of the respective organizations with the objective of obtaining concurrence on regional boundaries. (See p. 19.) ContrcI over specialized scvic2s In reviewing medical facility projects pursuant to the certification and licensure program, the Baltimore Regional Planning Council considers identi- fication of the possible economies and improvements in service that may be derived from the operation of joint, cooper-alive, or shared health-care resources. In this way the council can control the establishment of spe- cialized medical facilities and services and encourage the sharing of avail- able specialized services. Recently passed Public Law 9'1-296, which increases Federal financial partic- ipation in projects involving the sharing of health services, should pro- vide hospitals which are seeking Federal grant funds Mith an incentive to share services. GAO obtained information on the utilization of four specialized medical services--open-heart surgery, cardiac catheterization, radiation therap!', and artificial-kidney machines. Hospitals providing open-heart surgery, cardiac catheterization, and radiation therapy were sharing these services with other hospitals in the Baltimore area. Regarding artificial-kidney machines, information developed by tb,e Maryland Regional Medical Program shopied that there was a need for additional services in the Baltimore area. (See pp. 20 and 21.) At the time of GAO's review, the Ealtimore Regional Planning Council had initiated a study of specialized medical services in the Baltimore area. Officials of the council stated that data developed during the study would better enable them to control and coordinate the establishment and use of specialized medical services in the Baltimore area. 3 CHAPTER 1 INTRODUCTION Title VI of the Public Health Service Act (42 U.S.C. 2X), commonly known as the Hill-Burton program, authorizes the Public Health Service (PUS), Department of Health, Edu- cation, and Welfare (HEW), to make grants to States for the construction of medical facilities. PHS, under the Hill- Burton program, requires each State to designate a single agency to administer the program and to prepare a State plan annually~ projecting for each designated service area of the State the need for medical facilities and comparing that projected need with the resources expected to exist. Pursuant to Maryland Law, the Medical Facilities Devel-.- opment Division of the Naryland Department of Health and Mental Hygiene was designated as the State agency respon- sible for administering the Hill-Durton program. The State agency annually prepares an estimate of the number of acute- care hospital beds and skilled-nursing-care beds needed in Maryland for the ensuing 5 years. Estimates are made for each service area within the State. The basic data used by the State agency to estimate.the need for hospitals and skilled-nursing-care facilities in Maryland consists of current and projected population data furnished by the Bureau of the Census and hospital and skilled-nursing-care facility utilization data, expressed in terms of patient-days during the most recent year, furnished by the facilities. The PHS guidelines for preparing the State plan do not require that PHS, Veterans Administration, or military facilities-- or the days of care that were ren- dered in these facilities --be consLdered in the planning process. To arrive at an estimated average daily census of pa- tients, the State agency tiltiplies the projected popula- -. - tion by the current use rate (the number of days of inpa- tient care in the most recent year foT @a&i 1,000 popula- tion) and divides the result by 355. The ~~~2ltfng average ._ ‘. daily census is divided by 80 percent for hospitals and '90 percent for skilled-nursing-care facilities to arrive at an estimate of beds needed, assuming an 80-percent occupancy rate for hospitals and a 90-percent occupancy rate for skilled-nursing-care facilities. This provides an estimated ZO- or lO-percent,vacancy rate to meet emergencies, An ex- tra I.0 beds are added to the estimated number of hospital beds needed as an additional precaution to provide for treat- ment of emergency patients. BALTIMORE AREAHEALTH COMPLEX The Maryland State agency has divided the State into 19 service areas. According to PHS regulations, a service area is: "The geographic territory from which patients come or are expected to come to existing or pro- posed hospitals, -kk* or medical facilities **Jr." The Baltimore service area includes the city of Balti- more, Baltimore County, and Howard County. It is the largest urban area in.the State and includes about 43 percent of Maryland's population. As of December 31, 1970, there were 22 hospitals in the Baltimore area. Of these hospitals, two are operated by the veterans Administration (VA) and one by PHS. In addition, construction of a non-Federal hospital was started in April 1971. The locations of hospitals in the Baltimore area are shown on the map on page 7. Generally there are two types of nursing-care facili- ties--those which provide care for convalescent or chronic- disease patients requiring skilled nursing care and which are under the general direction of persons licensed to prac- tice medicine or surgery in the State and those which pro- vide domiciliary care. Only the facilities providing skilled nursing care qualify for Hill-Burton grants. Our review in- eluded only those facilities providing skilled nursing care. There are 79 skilled-nursing-care facilities (eight chronic- disease hospitals, two nursing units of hospitals, and 69 separate nursing homesj in the Baltimore area. daily census is divided by 80 percent for hospitals and 90 percent fo, 7 skilled-nursing-care facilities to arrive at 'an estimate of beds needed, assuming an 80-percent occupancy rate for hospitals and a go-percent occupancy rate for skilled-nursing-care facilities. This provides an estimated ZO- or lo-percent vacancy rate to meet emergencies. An ex- tra 10 beds are added to the estimated number of hospital beds needed as an'additional precaution to provide for treat- ment of emergency patients. BALTIMORE AREA HEALTH COMPLEX The Maryland State agency has divided the State into 19 service areas. According to PHS regulations, a service area is: The geographic territory from which patients come or are expected to come to existing or pro- posed hospitals, -kJrk or medical facilities ***.'? The Baltimore service area includes the city of Balti- more, Baltimore County, and Howard County. It is the largest urban area in the State and includes about 43 percent of Maryland's population. As of December 31, 1970, there were 22 hospitals in the Baltimore area. Of these hospitals, two are operated by the Veterans Administration (VA) and one by PHS. In addition, construction of a non-Federal hospital was started in April I-971. The locations of hospitals in the Baltimore area are shown on the map on page 7. Generally there are two types of nursing-care facili- ties --those which provide care for convalescent or chronic- disease patients requiring skilled nursing care and which are under the general direction of persons licensed to prac- tice medicine or surgery in the State and those which pro- vide domiciliary care. Only the facilities providing skilled nursing care qualify for Hill-Burton grants. Our review in- _. - eluded only those facilities providing skilled nursing care. There are 79 skilled-nursing-care facilities (eight chronic- i. - disease hospitals, two nursing units of hospitals, and 69 separate nursing homes) in the Baltimore area. 5 . .. HEALTH-PLANNING GR!XNIZATIONS . *. Public Law 89-749, approved November 3, 1966, created the Partnership for Health Program which introduced the con- cept of comprehensive health pfarzG.ng. This new type of planning envisions that both kyro:Gers and consumers of health serviceswill pa,rticipate in identifying health needs and resources, establishing priorities, and recommending courses of action. The Maryland Comprehensive Health Planning Agency is responsible for administering and coordinating comprehensive health planning at the State level. The Baltimore Regional Planning Council is the areawide comprehensive health- planning agency. Its service area encompasses the city of Baltimore and Anne Arundel, Baltimore, Carroll, Harford, and Howard Counties. In 1968 Maryland enacted legislation,commonly known as the Maryland Certification and Licensure Program, which re- quired, effective July'l, 1970, that the need for all hos- pitals and related nonprofit health facilities (i.e., non- profit skilled-nursin,- 0 care facilities) to be constructed, expanded, altered, or relocated must be reviewed, in accor- dance with prescribed guidelines, and must be approved by the areawide comprehensive health-planning agency before a license to operate may be granted by the State Department sf Health and Mental Hygiene. There are four areawide comprehensive health-planning agencies encompassing 13 of the 23 counties in Maryland. The remaining 10 counties do not have areawide comprehensive health-planning agencies. In the absence of an areawide agency, the Maryland Comprehensive Health Planning Agency must review and approve the proposed project. Health-related proprietary facilities, such as skilled-nursing-care facili- ties operated for profit, must be licensed to operate but are exempt from review as to need by the areawide comprehen- sive health-planning agency. . . Guidelines prescribed for administration of the-Certi- fication and Licensure Program have been promulgated by the Maryland Comprehensive Health Planning Agency for use by areawide agencies. These guidelines provide that the 6 . . . I. iMLTlt4ORE~CITI 2. BMI SECDURS 3. ChURCIl 4 GOM) 6 LUllif 7 WRYLAND HOME wJ4AR~TAN 5. JOHNS HOPKINS HOSPITAL HOSIWAL AND HOSPITAL HOSPITAL HOWTAL RAN HOSPITAL GENERAL HOSPITAL *-.-.-.-‘C. I - a8 . -‘-.-‘-‘I.-.-.~.-.~., 8*LI,Yo”L 1 18 CIl I LlUlrl i i 0 12 04 _.._^._.. 016 i* 18 19. ST JOSEPII FRANKLIN “OSPITAL SQ”A”f HOSWTAL Ie-1 20 ?I CoLlULOlA PUBLIC l1”WlTlL HEALTH StnvlCE WHDER CONsTAuCTIm4) ImSPITAL !; 010 i? DALTIMORE VETLRAIIS *DMIHISTRATION HOSPITAL 020 s areawide agencies, in reviewing project applications,nmst .. consider --the need for health-care services in the area and the - . requirements of the population to be served by the project; I --the availability and adequacy of health-care services in the area's existing health facilities which con- form to Federal and State standards; --the availability and adequacy of other health ser- vices in the area, such as preadmission, ambulatory, or home-care services, which may serve as alterna- tives or substitutes forthe whole or any part of the services to be provided by a proposed facility; --idencifieation of the possible economies and improve- ments in service that may be derived from the opera- tion of joint, cooperative, or shared health-care resources; I --the development of complete medical services, includ- ing inpatient, outpatient, and emergency-care facili- ties in the community to be served; and --in the case of relocation, ensuring that adequate health services will continue to be available to the comity served by the old facility. -* . CHAPTER2 PLANNING AND CONSTRVCTION OF HOSPITALS According to the 1971 Maryland State plan prepared by the State agency using PHS guidelines, the Baltimore area will need 7,361 hospital beds by 1975, As of December 31, 1970, facilities for 7,318 hospital beds were in operation or under construction in the Baltimore area, and, if plans of hospital officials are carried out, we estimate that the total capacity of non-Federal hospitals by 1975 would be increased to 7,497 beds, or 136 beds in excess of the need projected in the State plan, Of the 19 non-Federal hospitals in the Baltimore area, seven had 744 bed spaces in use, or available for use, which did not conform to Hill-Burton construction standards be- cause the buildings were not constructed of fire-resistant materials or did not meet other safety requirements of the Hill-Burton construction standards. All seven hospitals complied with State and local licensing requirements. Fur- ther, the Maryland State fire marshal informed us that the hospitals containing the nonconforming bed spaces complied with the requirements of the Life Safety Code of the Na- tional Fire Protection Association and, in his opinion, were safe for patient use. According to the State plan, the 744 nonconforming bed spaces would require modernization to conform to Hill-Burton standards. The State plan, in accordance with PHS regulations, recognized the availability of these beds to meet current and future patient-care needs. PLAWED CHMTGES IN HOSPITAL BED CAPACITY In accordance with PHS regulations for including facil- . ities in the State plan to meet the need for beds 5 years hence, the State agency does not consider planned increases or decreases in bed capacity--only facilities under Construction. To obtain information on planned changes, we revcewed the records of the Baltimore Regional Planning Council which was responsibile for reviewing all proposed projects involving construction, expansion, alteration, or relccation of 170spita1 facilities in the Baltimore area un- dcr th- Certification and Licensure Program. Following7 is an analysis of the projected changes in bed capacity in the Baltimore area by 1975. Bed capacity Estimated at Decem- Incresse or increase or Co-ity ber 31, l%?, decrease(-) Bed capacity decrease(-) Projected and oer r- in beds at Decem- in beds-- bed capacity hospital State agency during 1970 ber 31, 1970 1971-75 by 1975 Baltimore city: Baltimore city 537 -ma 497 497 Bon Secours 270 270 270 Church Home and Hospital PI; 297 28 325 Good Samaritan 67 67 67 Johns Hopkins 1,089 1,089 1,089 Lutheran 240 240 240 Maryland General 650 450 450 Kercy 416 414 41; North Charles 155 155 63b 218 Rovidant 122 1;0= 272 272 St. Agnes 425 425 425 Sinai 688 488 488 South Baltimore General 3.56 366 366 Union tkzmorial 414 414 322 University 648 - 648 - 648 Total 5,982 110 6,092 -1 6.091 I Baltimore County: Baltfmore County General 94 94 94 R8nklin Square 300 300 300 Greater Balti;mrre'Hedical Center 404 iO0 400 St, Joseph 432 z 432 - 432 Total 1,226 1,226 1,226 Hovard County: Columbia General -180 180 Total g5 7.497 %der construction. Remodeling of existing facility will redxe capacity by 40 beds. b Planned addition will add 63 acute-care hospital beds and 32 skilled-nursing-care beds. %nder construction, Projecr fnciudes replacesant o f existing facfiity by construction of a new facility vith a capacity of 272 beds. % eliminary plans call for construction Of a 322-bed faCilLty t0 aVe?tually replace the existing 416bed facility. Obstetrical and pediatric beds initially vi11 be retained in the old facility and then these services gradu1l.y will be phased out. FoPlowing are the four major hospital construction projects which the Baltifnor e Regional Planning Council had approved or was studying at the time of our review. Facility Estimated cost . ‘.’ Union Memorial Ecspital $25,926,500 i 1 Columbia Hospital and Clinics 3,750,ooo I North Charbcs General Hospital 6,370,OOO Church Rome and Hospital 3,968,OOO Union Memorial Hospital plans to build a new facility with a capacity of 32.2 beds. Three hundred medical and . surgical beds, the emergency room, the outpatient clinics, and medical and administrative service units of the exist- ing 414-bed facility will be located in the new facility. Hospital officials plan to maintain pediatric and obstetri- cal beds in the existing facility for a period and then phase these beds out of service* It is planned that the new facility will not offer pediatric or obstetrical care. At the time of our review, the hospital had raised about $5 million through a public fund-raising drive. Both the State agency and the Baltimore Regional Plan- ning Council approved the Union Memorial Hospital project, primarily because the majority of the existing hospital's beds did not conform to Hill-Burton construction standards, The Columbia Hospital and Clinics Foundation plans to build a 180-bed hospital and an outpatient clinic in Howard County. The hospital and clinic are intended for use by subscribers to the Columbia Medical Plan, a prepaid group practice medical program that has been offered to area residents. The Baltimore Regional Planning Council approved the project in June 1970. Construction of the first phase of the hospital, containing 60 beds and the outpatient clinic, began in April 1971. Approval of the Columbia Hospital is discussed further on pages 18 and 19. North Charles General Hospital plans to build an addi- tion to its existing facility which would increase its capacity from 155 beds to 218 beds, The Church Home and Hospital facility is planning to increase its capacity from 297 beds to 325 beds. At the time of our review, both projects were in early stages of planning and were under review by the Baltimore Regional flanning Council. II . UTILIZATION OF EXISTING HOSPITAL BEDS To measure the utilization of existing hospital facili- ties in the Baltimore area, we computed the occupancy rate for each of the 19 non-Federal hospitals by dividing the average daiiy patient load (patient-days divided by 365; during calendar year 1969 by the bed capacity. The aver- age occupancy rate for the non-Federal facilities had been about 80 percent during that year. These were the most re- cent statistics avslilabfe at the time of our review. The following table shows the bed capacity and the oc- cupancy rates of the 19 non-Federal hospitals in the Balti- more area. Bed capacity at Average occupancy December 31. 1969 rate (nore a) Licensed Survev Licensed Survey Cormunity and hospital (t-me b) (note c) caDacftg capacity Baltimore city: Beltimore City 484 537 66.41 59.8% Bon Secours 254 270 80.9 76.1 Church Home and Hospital 297 297 86.2 86.2 Good Semar i tan 67 70.1 70.1 Johns HopkLns l,OE 1,089 98.9 93.9 Lutheran 240 240 98.7 98.7 Ksryland General 440 450 75.4 73.8 &rcy 334 414 81.6 65.8 North Charles 151 155 87.1 84.9 Provident 118 122 77.3 74.7 St. Agnes 425 42s 89.8 89.8 Sil-Bi 488 488 88.1 88.1 South BaltFnore General 366 366 62.6 62.6 Union Memorial 414 414 85.7 85.7 University 648 f&L u Total L7s 1.982 g& Baltimore County: Balthore County General 93 94 96.4 95.4 Franklin Square 156 300 (d) cd) Greater Baltimore Wical 400 4oJl 87.9 87.9 St. Joseph 346 432 u m Total 222 L226 && a.& Total w m m u %ased on occupancy statistics for the period January 1 to December 31, 1969. b Lkznsedbeds represent therz%XfEumrnrsber o-f beds tfvrt the State authorieed the facile lty to operate. 'Surwy beds represent the available bed capacity aa determined by the Stste ag- ag- plying PHS criteria. This deeterminati~ is bSed pTk%rlly Oc B ahinn rquirant of square fLootage of usable floor space per bed. ffini~~a rqlred -re footage is & fined as ii30 square feet per bed in a single foam and 83 aqume feet per bed in a multi- bed roam. , % lacenent facilfty of ?KN be& cqleted in Deader 1969. The replaced hospital had - a capacity of 170 beds with an occupants race of 54 ?arcat. Rx Wmpancy rate was ad- versely affected by the gradual p:haSeout of ue faC;iiLY. Most of the non-Federal hospitals in-the Baltimore area offer pediatric and obstetrical care in addition to general medical and surgical care. Our analysis of OCCU- panty statistics for non-Federal fi9spital.s in the Baltimore area for calendar year 1959, corr,piled by the Mi;r;iland Hos- pital Association, showed that the okcupancy rates for the total pediatric and obstetrical beds were lower than the occupancy rates for the total medical and surgical beds. Occupancy rate Medical and Pediatric Obstetrical Period surgical beds beds beds Jan. to Mar. 1969 87.4% 63.3% 74.3% Apr. to June 1969 86.8 63.4 72.3 July to Sept, 1969 87.8 62.6 76.9 Oct. to Dec. 1569 87.9 60.9 74.9 Calendar year 1969 86.6 62.5 74.7 Two VA hospitals and one FHS bos?ital are in the Balti- _ - 'ilore area, One VA hospital, located in Baltimore city, is 9 general medical and surgical hospital rqith a 291-bed ca- saci ty . The other VA hospital is located in the Fort Howard area of Baltimore County. This facility is a general medical and surgical hospital with a capacity of 338 beds. During fiscal year 1970, the Baltimore and Port Howard VA Hospitals had occupancy rates of 74 percent and 80 percent, respec- tively. In its fiscal year 1971 appropriation reqest, VA re- quested $21 million to construct a 450-bed hospital to re- place the Fort Howard facility. The other VA hospital in baltisore would continue in service. The proposed facility would be located Ln Baltimore city contiguous to the Uni- versity of Maryland Medical School, with which it would be affiliated. In requesting replacement of the Fort Howard Hospital, VA stated that the Fort Howard facility was phys- ically obsolete, isolated from the Veteran population, dif- ficult to staff, and a great distance from the affiliated University of Maryland Medical School. At the time of our review, the proposed replacement facility had not been ap- proved by the President of the United States. 3HS operates a 261-bed hospital in Baltimore. PHS hos- pitals provide care principally to American seamen, U.S. Coast Guard personnel, PHS commissioned officers, and Envi- ronmental Science Services Administration personnel. Active and retired military perso-nnel, and their dependents, are admitted to PHS hospitals on a space-available basis. Dur- ing the year ended September 30, 1969, the occupancy rate of rhe Baltimore PHS hospital was about 76 percent. - . . 14 PLANNING AND CONSTRUCTION OF SKIlED--hm'INGCARE FACILITIES According to the 1971 State plan, the Baltimore area will need 6,628 skilled-nursing-care beds by 1975. The capacity of skilled-nursing-care facilities in the Baltimore area as of December 31, 1969, was 6,885 beds. As of Decem- ber 31, 1970, facilities for 7,502 beds were in operation or under construction, and, if plans of local nursing home and hospital officials are chrried out, we estimate that the total capacity by 1975 would be increased to 8,104 beds, or 1,476 beds in excess of the need projected in the State plan. According to PHS guidelines, skilled nursing care is the provision of 24-hour service which is sufficient to meet the total nursing needs of all patients. This in- cludes the employment of at least one registered profes- sional nurse responsible for the total nursing seruice and of a registered nurse or licensed practical nurse in charge of each tour of duty. Of the 79 skilled-nursing-care facilities in the Salti- more area as of December 31, 1969, 43 had a total of 2,436 bed spaces in use, or available for use, which complied with State licensing and safety requirements but which did not fully conform to Hill-Burton construction standards, mainly because the facilities were not constructed of fire- resistant materials. All skilled-nursing-care facilities complied with State and local licensing requirements. The Naryland State fire marshal informed us that the facilities containing the nonconforming bed spaces complied with the requirements of the life SafetyCode of the National Fire Protection Association and, in his opinion, were safe for patient care. The 1971 State plan showed that these bed spaces would require modernization or complete replacement to conform to Hill-Burton standards. The plan recognized,- in accordance with PES regulations, that these beds were available to meet current and future patient-care needs. 15 On the basis of patient-day statistics for calendar year 1969, we estimated that the average occqa~c;~ rate for skilled-nursing-care facilities was about 77 perccnc. Ar; occupancy factor of 90 percent is prescribed in PHS rogula- tions for use in coxputing the number of beds needed in a seruj.ce axa. PLANMZD CH.ANGES.IN BED CAPACITY IN SKILLED-NURSINGCAXE FACILITIES Our analysis of data maintained by the State agency showed that officials of skilled-nursing-care facilities expected to add 1,219 beds by 197.5. As of December 31, 1970, three nursing homes with a capacity of 017 beds were under construction and four nursing hones with a capacity of 530 beds were planned for construction. tither, one nursing home planned to add 27 beds, a chronic-disease hos- pital planned to add 13 beds as part of a modernization project, and one acute-care hospital planned to add a 32-bed skilled-nursing-care unit. We estimate that, if these plans are carried out, the total capacity of skilled-nursing-care facilities in the Baltimore area by 1975 would be increased to 8,104 beds, or 1,476 3eds in excess of the need for 6,628 beds projected in the State plan. Following is an analysis of projected changes in bed capacity by 1975. Bed capacity Increase at Ikcember 31. in beds Bed capacity Increase Projected 1969 during at December 31, in beds bed capacity Type of facility blote a> 1970 m 1971-75 bv 1975 Chronic-disease hospitals 1,016 1,016 13 1,029 Long-tern-care units of hospitals 815 815 Nursing homes 5.054 5i.z u 52: 6.2: Total 6.885 617 7,502 602 8.104 aBased on State agency's statistics and infoncatfon. CHAPTER 4 CONTROL OVER THE DEVELOPMENT OF MEDICAL FACILITIES Ifa proposed hospital or skilled-nursing-care facility project is to be financed with a Hill-Burton grant, the State agency must determine that there is a need for the project before the grant can be made. The Federal Housing Administration and the Small Business Administration recently have instituted procedures whereby' financial assistance will not be provided by these agencies unless a certificate of need has been issued by the State agency. The certificate of need is issued by the State agency on the basis of the need for the medical facility as shown in the State plan. Thus the State agency can prevent Federal financing for the construction of medical facilities which it considers to be in excess of the needs of an area, Recognizing that overbuilding of health facilities is wasteful of public funds and results in higher patient-day costs, Partnership for Health legislation, discussed on page 6 s and the Health Facilities Certification and Licen- sure Program in Maryland have sought to establish control over the development of unneeded privately funded medical facilities. The Maryland Health Facilities Certification and Licen- sure Program became effective July 1, 1970. This law re- quires the review and approval of all hospitals and related nonprofit.health facilities by the areawide or State com- prehensive health-planning agency before licenses to operate may be granted by the State Department of Health and Mental Hygiene. (See pp. 6to 8.) Health-related proprietary fa- cilities, such as skilled-nursing-care facilities operated for a profit, are exempt from review by the areawide or State comprehensive health-planning agency. * . Although the organization and concept of comprahensive I health planning is new, the Maryland Comprehensive Health Planning Agency and the Baltimore Regional Planning Council i-iave developed criteria for determining the need for medical Eaciiities, Officials of both agencies told us that they 17 I. . did not fully accept the planning concepts used by the State Department of Health and Mental Hygiene in preparing the State plan, and consequently the planning agencies did not - . use the estimates of future bed needs contained in the State plan in their evaluations of the need for a proposed medical facility. Fbe noted one instance, discussed below, where the construction of a hospital was approved by the Baltimore Regional Planning Council although the hospital was consid- ered unnecessary according to the 1970 State plan. APPROVAL OF COLUXBIA HOSPITAZ, In November 1969 the Columbia Hospital and Clinics Foundation applied to the State agency for a Hill-Burton grant to assist in the construction of a 180-bed hospital and an outpatient clinic in Howard County. (See p. 11.1 The State agency denied the request for a Hill-P-xton grant because the 1970 State plan showed that no additional hos- pital beds were needed in the Baltimore area. The Columbia Hospital and Clinics Foundation arranged for private financ- ing and in January 1970, because the Certification and Licen- sure Program was to become effective on July 1, 1970, re- quested the Baltimore Regional Planning Council to review . its project plans for the purpose of certifying to its need. The Baltimore Regional Planning Council approved the project in June 1970 because (1) Howard County had no has: pital, (2) the population of eastern Howard County was ex- pected to increase from 60,000 to 200,000 during the period 1980-85, and (3) the proposed facility would emphasize pre- ventive treatment on an outpatient basis. PLANNING FOR NEDICAL FACILITIES As we noted previously, officials of the Baltimore Re- gional Planning Council told us that they did not fully ac- cept the planning concepts used by the State agency in pre- paring the State plan and consequently did not use the esti- i * r mates of future bed needs contained in the State plan in the evaluation of the need for medical facilities. In analyzing the concepts underlying the State plan, officials of the Baltimore Regional Planning Council noted that a major part of Hill-Eurton funds was allocated for 18 . I 1 C. . the construction and modernization of inpatient facilities / a. and that, as a result, the current health-care delivery / I system, with its emphasis on inpatient treatment Of ill- / nesses, was perpetuated. It . , Officials of the Baltimore Regional Plartiling Council informed us that they evaluated each project, such as the Columbia Hospital, on the basis of how well the proposed facility would meet specific needs of the community, namely., the need for (1) providing preventive care, especially on an outpatient basis, (2) delivery of health services to the medically indigent, the chronically ill, and the elderly, and (3) development of relationships with other institutions to facilitate the coordination of services to be offered. In the 1970 State plan, the State agency noted that, because of mutual responsibilities of itself and the State comprehensive health-planning agency and the areawide com- prehensive health-planning agencies, it was incumbent upon all to collaborate and to coordinate their information and planning. The State agency indicated that an initial step in the collaboration would be a study of the planning areas of the respective organizations with the objective of ob- ,taining concurrence on regional boundaries. Asnoted on page 6, the service area of the Baltimore Regional Planning Council encompasses the city of Baltimore and Anne Arundel, Baltimore, Carroll, Harford, and Howard Counties. For planning purposes, the State agency has com- bined the city of Baltimore and Baltimore and Howard Counties as one service area; Anne Arunde1, Carroll, and Harford Counties are separate service areas. At the time of our review, concurrence on regional boundaries had not been achieved, L . CHAPTER5 * l - ,- PLANNING FOR AND CONTROL OF SPECIALIZED MEDICAT, SEWICRS Health-planning officials have noted that one of the most promising opportunities for advances in hospital ef- fectiveness may be expected to result from the combined ef- forts of health-care institutions, areawide planning agen- cies, and State licensing authorities to encourage and, when necessary, demand the development of cooperative programs among institutions for the sharing of specialized medical services and facilities. As discussed on page 6, the Baltimore Regional Planning Council must approve all projects involving the construction of new hospitals and the expansion, alteration, and reloca- tion of existing hospitals in the Baltimore area. In re- viewing project applications, the Baltimore Regional Plan- ning Council considers identification of the possible econo- mies and improvements in service that may be derived from the operation of joint, cooperative, or shared health-care re- sources. In this way the council can control the establish- ment of new specialized medical facilities and services and encourage the sharing of available specialized services among hospitals in the Baltimore area. Under the provisions of section 113 of Public Law 91-296, which amends the Public Health Service Act, States are entitled to receive, from Hill-Burton grant funds, up to 90 percent of a projectis cost if the project offers po- tential for reducing health care cost "through shared ser- vices among health care facilities" or "through interfacility cooperation.Qg It appears that this legislation, which pro- 0 vides for increased Federal financial participation in those projects that involve sharing, should provide hospitals seeking Federal grant funds with an incentive to share ser- ? c vices. . 1. We obtained information on the utilization of four spe- < cialized medical services--open-heart surgery, cardiac cathe- \ terization, radiation therapy, and hemsdialysis--provided by 20 ‘ * . Baltimore area hospitals. We found that hospitals which z l provide open-heart surgery, cardiac catheterizations, and L. radiation-therapy services were sharing these services with - . other hospitals in the Aaltimoro area. Regarding hemodialy- sis, the Renal Disease ?roject Coordir&ator for the Maryland Regional Medical Program informed us that available hemodialy- sis facilities are-not sufficient to treat all patients with renal disease. He noted that a study performed by Johns Hopkins University showed that each year in Baltimore city at least 150 people die from kidney failure who probably could have been helped by hemsdialysis treatment. In May 1970 three area hospitals had equipment, space, and staff to maintain a total of about 20 patients on dialy- sis. By the end of 1970, five hospitals were maintaining about 30 persons on dialysis. The Director of the Maryland Regional Medical Program informed us that he anticipated that eventually seven hospitals in the Baltimore area would have the capacity to maintain a total of 56 patients on dialysis. The Renal Disease Project coordinator noted that in Baltimore most dialysis units operated on a 5- or 6-day week, one-shift-a-day basis, because there were not enough doctors, nurses, and technicians to operate the equipment 24 hours a day. He stated that personnel cost, not equipment cost, was the greatest inhibitor of an adequate treatment program. At the time of our review, the Baltimore Regional Plan- ning Council had initiated a study of specialized medical services, including hemodialysis, in the Baltimore area, This study was to include (1) identification of available specializedservices, (2) utilization of existing facilities, equipment, and personnel, and (3) measurement of community need for these services0 Officials of the council. informed I us that this data would better enable them to control and coordinate the establishment and use of specialized medical servicesSin the Baltimore area. r* s I 5, - . . . SCOPE OF REVIEW fi t 7 + m We reviewed the coordination among Federal and State agencie? and local organizations -in planning and construct- ing acute-care hospitals and skilled-nursing-care facilities in the Baltimore area. We reviewed the planning for and construction of medical facilities financed with private funds or through Pederal financial assistance. We compared the existing and planned capacity of acute-care hospitals and skilled-nursing-care facilities with projected needs as determined by the State agency. Although we verified the mathematical accuracy of the State agency's computation of future bed needs, we did not evaluate the appropriateness of the methodology prescribed by PHS for use by the State agency in determining future bed needs, We also considered the actions taken to effect the shar- ing of certain facilities and equipment among the various hospitals. Information was developed primarily on the basis of discussions with Federal, State, and local officials. We made our review at the Division of P&dical Facilities Dcvel- opment, Maryland State Department of Health and Mental Hy- giene; the Baltimore Regional Planning Council; and at Bal- timore area hospitals, skilled-nursing-care facilities, and other health organizations. , 22
Planning, Construction, and Use of Medical Facilities in the Baltimore, Maryland, Area
Published by the Government Accountability Office on 1971-10-14.
Below is a raw (and likely hideous) rendition of the original report. (PDF)