oversight

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)

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                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
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                                                                                                Page
    .


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            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



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      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
         . .                      .




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          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