oversight

Planning, Construction, and Use of Medical Facilities in the Cincinnati, Ohio, Area

Published by the Government Accountability Office on 1971-07-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

UNITED   STATES   SENATE   /a, *-
                                 COhW=l-ROLLER         GENERAL         6F      THE   UNIT?%       !ZATES,
                                                 .   WAStiINGTON.       D.C.     20548




         B-167966



         Dear     Mr.     Chairman:

                    In accordance            with your request                dated September            18,
         1969, the General               Accounting          Office      has examined          into the co-
         ordination          among       Federal      and State agencies                and local      organi-
         zations       in planning         and constructing               short-term-care             hospitals
         and skilled-nursing-care                   facilities         in certain        metropolitan
         areas.        We have examined               also into the extent                to which      certain
         medical         facilities      and services            are shared         among      hospitals.
         This     is our report           on planning,           construction,          and use of medi-
         cal facilities            in the Cincinnati,           Ohio,      area.

                   The responsible     Federal,     State, and local     health     organi-
          zations    have not been furnished        with copies    of this report         for
         their    review   and comments;        however,   the information         developed
         during     our review     has been discussed      with these      organizations.

                    We plan to make         no further      distribution      of this report
         unless       copies    are specifically       requested,        and then we shall                   make
         distribution        only after    your agreement             has been obtained.

                                                                    Sincerely            yours,




    JJ                                                              Comptroller               General
                                                                    of the United             States
%
         The Honorable         Abraham               A. Ribicoff
         Chairman,        Subcommittee                on
                                                             ,,&
              Executive      Reorganization
         Committee        on Government                   Operations
         United    States    Senate
                               Contents
                                                                         Page

DIGEST                                                                        1

CHAPTER

   1      INTRODUCTION                                                        4
              Hill-Burton         program                                     4
              Cincinnati         health   service     area                    6

   2      PLANNING, CONSTRUCTION, AND USE OF SHORT-
          TERM-CARE HOSPITALS                                             14
              Hospital      occupancy                                     16
              Use of private       funds in hospital  con-
                 struction                                                19
              Conversion      of medical facilities   con-
                 structed     with Federal grants to uses
                 not specified       in Federal grant ap-
                 plications                                               20

  3       PLANNING, CONSTRUCTION, AND USE OF SKILLED-
          NURSING-CARE FACILITIES                                         23
              State plan for skilled-nursing-care
                 facilities                                               24

  4       COORDINATION AMONG ORGANIZATIONS FOR SHARING
          MEDICAL FACILITIES                                              27
              Maternity   beds                                            27
              Pediatric   beds                                            28
              Cobalt units                                                28
              Common-purchase agreements                                  29

  5       SCOPE OF REVIEW                                                 31

                                ABBREVIATIONS

CORVA     Health    Planning      Association       of Central   Ohio River
          Valley

GAO       General    Accounting       Office

PHS       Public    Health      Service
COMPTROLLER  GENElUL'S P&PORT.                              PLANNING, CONSTRUCTION, AND
TO THE SUBCOMMITTEEON                                       USE OF MEDICAL FACILITIES IN
EXECUTIVE REORGANIZATION                                    THE CINCINNATI, OHIO, AREA
COikfUTTEEON GOVERNMENT  OPERATIONS                         B-167966
lJb'ATTED
        STATES SENATE

DIGEST
------

UHY -THEREVIEW WASI%~DE
        At the request of       the Chairman of the Subcommittee on Executive Reor-
        ganization,    Senate    Committee on Government Operations,         the General
        Accounting Office       (GAO) examined into the coordination         among Federal
        and State agencies       and local organizations         in planning and construct-
        ing short-term-care        hospitals
                                          _-._ and skilled-nursing-care      facilities    in
        certain metropolitan        areas.

        GAO also reviewed the extent to which certain            m94acilities            and
        services are shared among hospitals.

        The reviews were made in Baltimore,           Maryland; Cincinnati,       Ohio; Denver,
        Colorado;  Jacksonville,     Florida;    San Francisco,      California;    and Seat-
        tle, Washington.      GAO did not review the quality          of care being pro-
        vided by the short-term-care        hospitals    and skilled-nursing-care       facil-
        ities.

        This report represents       the results    of GAO's review     in the Cincinnati
        health service area.


FINDINGS AND CONCLUSIONS
                                     P<iq r-
     1 The Ohio Department of Health administers              the grants made by the Public
     LHealth       Service (PHS), Department of Health, Education,             and Welfare, un-    '2~~
      'der     a program--commonly    referred      to as the Hill-Burton      program--for
         construction     and modernization      of hospitals    and other medical facili-
         ties.     The State agency annually prepares a State plan setting                forth
         an estimate of the number of short-term-care             hospital   beds and skilled-
         nursing-care     beds needed for the ensuing 5 years.             GAO did not evaluate
         the appropriateness     of the methods prescribed         by PHS for use by the
         State planners in determining         future bed needs.       (See p. 5.)

        According to the tentative  1971 State plan, the Cincinnati    health               ser-
        vice area will need 4,494 short-term-care   hospital   beds by 1975.                The
        projected  total capacity of all hospitals  in the area in 1975 is
        4,694 beds, or 200 in excess of the projected    need.

Tear Sheet




                                                               JULY15J9-71
State planners,     when formulating     a State plan, are not required     by PHS
regulations     to consider planned increases in total bed capacity.            The
State agency considers only facilities          in operation  and those under
construction.      Two hospitals    were planning a total of 100 additional
beds, but completion       dates and financing    arrangements were indefinite.
Therefore     by 1975 the Cincinnati     health service area could have 300
beds in excess of the projected         need. (See p. 14.)

State agency officials        explained      that control  over privately funded
construct'on       did not exist but that, when Federal funds were used, some
control could be exercised.            If construction    of a proposed hospital or
skilled-nursing-care       facility      is to be financed with Federal assistance,
the State agency must determine that there is a need for the facility
before Federal assistance           is given.

The 1971 State plan shows that 6,839 skilled-nursing-care       beds will be
needed by 1975. As of December 31, 1969, 6,441 skilled-nursing-care
beds were in service and 398 additional     beds were under construction
in two facilities.     According to the State plan, the beds in existence
and under construction    will meet the needs of the Cincinnati    health
service  area in 1975.

GAO, however, has some reservations    as to the validity        of the data in
the State plan because it is based on estimates of use--provided            by
areawide planning agencies in four major Ohio cities--and           is not in-
dicative of actual use. The skilled-nursing-care        facilities     do not
report occupancy data in a consistent     and reliable    manner.

Without more reliable  data the PHS formula cannot be used properly     to
determine whether a health service area has too many beds or needs
more beds for skilled  nursing care.   GAO believes  that there is a
need on the part of the State agency to properly    accumulate and ana-
lyze data from the conamunity, to enable the preparation    of a more
reliable  planning document for use as part of the State plan.     (See
pp. 23 to 26.)

GAO's review showed that two hospitals         had received Hill-Burton        grants
for the construction   of skilled-nursing-care        facilities      for 195 beds.
These beds had not been used as skilled-nursing-care               beds, however,
but had been converted   to short-term-care       hospital       beds. The change
in the category of bed use at the two hospitals            caused part of the ex-
cess short-term-care   hospital    beds shown in the 1971 State plan.             (See
pp.   20 to   22.)

PHS does not have adequate authority     to require     that health facilities
be used for the purpose specified    in the Hill-Burton      grant applications,
and the Hill-Burton   Act does not effectively      preclude reclassification
of such facilities   so long as they are used for one of the types of
health facilities   specified in the act.




                                     2
       To minimize future conversion       of health care facilities      from one cate-
       gory to another9 the State agency estab7ished         a policy in April 1970,
       which required    that an applicant    certify  that a facility      would be used
       for the purpose s-&ted in the Hill-Burton        grant application       and that a
       petition  substantiating   the need for a change in category be submitted
       to the State agency if a facility       desired to make such a change.

       GAO found that there was some sharing of specialized       medical and other
       services    among hospitals.    There was a potential, however3 for more
       sharing of such services.       It was noted that more could be done in the
       sharing of maternity      and pediatric beds and in the utilization  of cobalt
       facilities.     (See pp. 27 to 29.)

       GAO believes     that, before this potential     can be fully  realized,  studies
       will be required      TV determine what services    can be shared and how such
       sharing can be accomplished       to benefit  all concerned,    The greatest    op-
       portunity    to achieve the benefits    of sharing appears to be in planning
       for new facilities.




‘1’r.u Shrct
                             INTRODUCTION
       At the request of the Chairman of the Subcommittee on
Executive Reorganization,        Senate Committee on Government Op-
erations,    the General Accounting Office examined into the
coordination      among Federal and State agencies and local or-
ganizations     in planning and constructing         short-term-care
hospitals    and skilled-nursing-care      facilities       in certain
metropolitan      areas. We did not review the quality of care
being provided by the short-term-care          hospitals      and skilled-
nursing-care      facilities.    We considered the actions taken
to effect the sharing of certain facilities             and equipment
among hospitals.
      Metropolitan     area z covered by our reviews included Bal-
timore, Cincinnati,       Denver, Jacksonville,     San Francisco, and
Seattle.    These areas were selected on the basis of the Fed-
eral financial     participation     in the construction        of short-
term-care hospitals       and skilled-nursing-care       facilities     and
on the basis of the wide.dispersion           of the cities throughout
the United States.        This report presents the results of our
review in the Cincinnati health service area.
HILL-BURTON PROGM
      Title VI of the Public Health Service Act (42 U.S.C.
2911, commonly known as the Hill-Burton    program, authorizes
the Public Health Service to make grants to States for tie
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 annually a
State plan projecting   the need for medical facilities   and
comparing that projected need with the resources expected to
exist in each designated health service area of the State.
      The Ohio Department of Health, herein referred to as
the State agency, is designated to administer the Hill-
Burton program in Ohio. In accordance with the method pre-
scribed in PHS guidelines,   the State agency annually esti-
mates the need for short-term-care    hospital beds and


                                    4
skilled-nursing-care             facilities       for    the   ensuing      5 years     for
the State of Ohio.

      We did not evaluate       the appropriateness       of the method-
ology used Ln arriving       at these estimates.         We accepted the
State plan estimates       of the status and projected          need of
medical facilities      in the Cincinnati       health   service     area.
The State plan estimates        are arrived     a&in    accordance with
PHS guidelines,    without    considering     the bed capacities         of
the PHS, Veterans     Administration,       or military     hospitals.

         The basic data used by the State agency to project                          the
need for short-term-care               hospitals       and skilled-nursing-care
facilities       in the Cincinnati           health     service       area consists     of
 (1) current       and projected        population       figures       furnished    by
the Bureau of the Census, (2) hospital                      utilization         data fur-
nished by the hospitals,               and (3) estimates           of occupancy for
skilled-nursing-care           facilities         furnished       by areawide plan-
ning agencies in four major Ohio cities.

        To arrive      at a projected             average daily         census of pa-
tients,      the State agency multiplies                     the projected      population
by the use rate (the number of days of inpatient                               care for a
year for each 1,000 population)                      and divides        the result      by
365.     For hospitals          the projected           average daily         cerpsus is
divided      by 80 percent           and increased           5y 10 beds to arrive          at
a total      estimate       of beds needed, assuming SO-percent                      occu-
pancy of hospital            facilities.            The projected         average daily
cezlsus for skilled-nursing-care                     facilities       is divided      by 90
percent      and increased           by 10 beds to arrive             at an estimate        of
beds needed, assuming go-percent                       occupancy of skilled-
nursing-care        facilities.             The result         of these calculations
provides       a va-zancy rate to meet emergencies                      of about 20 per-
cent for short-term-care                   hospitals       and ll> percent       for
skilled-nursing-care               facilities.

       The State agency has established              special priorities        for
the distribution      of Hill-Burton         grant funds to be used for
construction     of buildings         to accommodate city health         depart-
ments; shared facilities             when two or more hospitals         agree
to share; outpatient         facilities      serving   the needs of the
disadvantaged     in low-income         areas; and hospitals      with re-
search and training         programs that are owned by, or affiliated
with, medical      schools.
         The State agency is also responsible                for licensing          ma-
 ternity    and psychiatric      hospitals      and maternity       and psychi-
 atric   units  of hospftaks.         Hospitals     and units      of hospitals
 are not Bicensed,       except for these types of facilities.                  The
 State agency, however, requires hospitals                  to register axmu-
 ally and to submit reports           which provide       most of the data
 for the State plan.         IHursing homes me licensed             by the State,
 except in three cities,         including      Cincinnati,      where l.Pcens-
 ing authority     is delegated       to city health        departments.

       The State of Ohio wasallotted,         under the Hill-Burton
program during    fiscal    years 11945 through 1970, $68 million
in funds in the foPlowIng        categories.      The Cincinnati      health
service   area was allotted      $7.2 million     of this   $68 million.

                                                                   Amount
                         Category                           (000,000     emitted)

Hospitals      and public    health       centers                      $34
Long-term      care (includes       skilled      nursing
   care>                                                                18
Rehabilitation                                                           3
Modernization                                                            8
Diagnostic      or treatment     centers                                 5

       Total                                                           $68

During fiscal    year 1970 the State of Ohio was allotted
$7.7 milHion.     The Cincinnati     health service area was not
allocated   funds for fiscal     year 1970.



       The State agency divided    Ohio's 8% counties          into 46
health   se-mice areas by designating       selected    cities      as kos-
pita1   centers, with the county or countc%es surrounding               the
cities   forming the boundary lines      for the health        service
areas.     Counties with smal"s populations       or without      hospitals
were combined 9 in who%e or in par+ts with adjacent              counties
after   determining    what medica% fa&%Lties        the residents        of
the counties      were usfng.

        CinchnatE,       heated     in the southwest        corner of Ohio in
I-Iamilton     county,   is bordered      on the    south   by Kentu&y        and
on the west by Indiana,       Ohio csmties   adjacent   to Hamilton
are Butler     and Warren to -tie north and Clermont to the east.
A map of the area is shown on page 8. The Cincinnati           health
service   area includes   Hamilton   County, the western part of
Clermont Coasrdy , and the southern part of Warren COW&Y.
The Cincinnati     health service  area is represented    by the
shaded areas on the map.

        As of December 31, 1970, there were 22 hospitals                         in the
Cincinnati     health      service     area.      Of these 22 hospitals,             14
are short-term-care          hospitals       (see ch. 2 for discussion),                in-
cluding     a hospital      operated      by the Veterans       Administration;
two are long-term-care            hospitals       which provide       skilled      nurs-
ing care, (see ch. 3 for discussion);                   and four are psychiat-
ric or tuberculosis          hospitals,       which are not discussed              in
this report.        In addition        to the existing       16 short-term-care
hospitals,     there are two short-term-care                hospitals       under
construction,       one of which will           replace    an existing        short-
term-care     hospital.        The locations         of the hospitals         within
the Cincinnati        health     service     area are shown on the map on
page 9.

        Generally      there are two types of nursing                    homes--those
which provide        care for convalescent                or chronic-disease          pa-
tients     requfring      skilled        nursing     care and are under the gen-
eral direction         of persons licensed              to practice        medicine     or
surgery in the State and those which. provide                           primarily     domi-
ciliary      care.     Only the homes providing                 skilled     care qualify
for Hill-Burton          grants.         Our review covered only those nurs-
ing homes providing             skilled      nursing      care.       There are 100
skilled-nursing-care             facilities        (two long-term-care            hospi-
tals,    three units of hospitals,                 and 95 separate          nursing
homes) in the Cincinnati                 health    service      area, many of which
are located        near the hospitals            in the Cincinnati           health      ser-
vice area.

       Diagnostic   and treatmeflt     centers provide   services     for
outpati~ts.       A public   health    center is a community outpa-
tient    facility  which provides      services to prevent     disease,
prolong     life, and maintain     a high degree of physical       and men-
ta'k efficiency.     These centers were not included         in our re-
view.
                                  CINNCINNATI             AND THE SURROUNDSNG AREA



                                                                     OHIO                ---
                                                                                        I                      ---------,
                                                           ____--------
                                                                                                                                     r
                                                                                                                                     I

                                                                         BUTLER                     I          WARRE


                              INDIANA




0           6          12
            ,
t           I          I
    SCALE   IN MILES




                            /‘,         ,r-           -   1 GRANT                  :    PENDLETON                 i


                                                                                    \
                                                                                    \
                                                                                     \
                                                                                      \,,_r‘--
                                                                                   A
                                                                                                    CINCINNATI    HEP ,LTH
                                                                                                    SERVICE    AREA
                                                                                                    COMPLETED         IN7 ‘ERSTATE
                                                                                                    HIGHWAYS
                                                                                       @@@ea@e      PLANNED      INTERSTATE
                                                                /                                   HIGHWAYS
                                              -I\,”
                                                                        KENTUCKY




                                                                    8
           HOSPITAL       LOCATION
0-Q           See Listing

                                         -N-
           COMPLETED        INTERSTATE
           HIGHWAY


_    ___   PLANNED       INTERSTATE
_-mm
           HIGHWAY




                                               9
                       HQspitals la dz21e
                                        cincimazi
                               Health Service Area
sbsrt-term-care         hospi$aPs:

     1. Providence           Hospital          (under     const~ction~

     2. St.       George     Hospital

     3. Shriners        Burns      Hnstitde

     4. Childrenss           Elospftal

     5, Christ        Hospital

     6. Christian           R. Hohes           Hospital

     7. Cincinnati           General      Rospita31

     8. Deaconess           Hospital

     9. Good Samaritan             Ho+9ita%

   10. Jewish        Hospital

   11.   St.      Francis     Hospital

   12.   St. Mary Hospital.              (to     be replaced        by the Providence
            PSospftal.1

   l-3. Veterans        Administkatfon                Hospital

   l-4. Bethesda        Hospfta%

   15. Bethesda         North      Hospital           (opened. in June 3.970)

   16. otto       c. Epp l!lemorial             EQspieal

   17. ckir Lady OS Mercy                ~Hos=$ta~

   18. Clemsnt         County Csmmdty   &x3gitaf  hot shown 0x1 map;
          uder        construction axi wiHB be located     about I.5
         miles        east of Our Lady cxf PIemy HospftaI>

                                                 ao
l




    Long-term-care        and psyehi.aZric         hospitals:

        19. RolPman Psychiatric               Hospital

        20. Csnvalesc~t            HospitaP     fQk Children

        21.          am Hospital      of HamiHton          County        (tubercuEosEs)

        22. Daniel      Drake l!femorPal        Hospital

        23. Emerson A. North           Hospital          (psychiatric)

        24. Longview       State     Hospital      (psychiatric)
           Statistics       for the 12 months ended March 31, 1967, in-
    dicate      that most pati            s admitted       to the Cincinnati     area
    hospitals       resided     in        ifton   Col.mtyo       These were the most
    recent statistics           available       at the tPme sf our review.            Be-
    cause the Cincinnati             health     service      area has a large9 cen-
    trally      located    hospital       comj%ex which includes           the College
    of Medicine,         University       of Cincinnati,         it receives   special-
    ized medical cases from surro~ding                       counties   of Ohio, Pndi-
    ana0 and Keneucky.              About 12 percent          of the patients    admit-
    ted to the Cincinnati             hospitals       reside in surrounding         coun-
    ties.

           In I.957 the Greater     Cincinnati     Hospital      Council was es-
    tablished      to coordinate    hospital     pPanning.        The hospital
    emnei% is composed of the hospital              a    inistrator      and a rep-
    resentative      of the board of trustees            OA each of the member
    hospitals      in an eight-comty       area.    The hospital        council  was
    formed for the following         purposes.

          --TQ promote voluntary      eoopera       among member hospi-
             tals in dealing  with eomon            istrative  and opera-
             tional  problems by a free e           e sf ideas9 policies,
             and infomtion     regarding    methods of a inistration,

          --To coordinate    the effo732s of hospitals,in                      general9   in
             the fields   of @Evil defense2 disaster,                       and general   com-
             munity health   prob"aems 0
.




           The activities       of the hospital          council     are limited       to
    promoting      cooperation,         It has no direct         or indirect        control
    or authority        over finances5        policies,      and internal        procedures
    or practices        of its members.          Ihrough     planning     efforts      of
    the hospital        council    partially       financed     under section         318
    of the Public Health Service Act for areawide health                            facil-
    ity planning,         an extensive       series of construction            programs
    were initiated         between 1960 and 1965 with financing                   from
    bonds issued by Hamilton              County and the city of Cincinnati,
    gifts,    private      borrowings,       and Hill-Burton       funds.

           Public Law 89-749, approved in November 1966, established
    comprehensive      health   planning.        It authorized    the Surgeon
    General,     PHS, to make grants to States and local communities
    to plan for health        services,    facilities,       and manpower re-
    lating     to physical,    mental,    and environmental       health.

          Comprehensive      health     planning      is a continuous    process
    which requires       the participation          of both providers     and con-
    sumers of health        services      to identify     health   needs and re-
    sources,    establish     priorities,        and recommend courses of ac-
    tion.     In 1967 the Governor of Ohio designated                 the Ohio De-
    partment    of Health and its Office              of Comprehensive    Health
    Planning    to carry out the program.               As of December 1970, 11
    areawide agencies3        involving       all but seven of Ohio's 88
    counties,     had been established.

           The Cincinnati     areawide comprehensive          health   planning
    agency was established          in July 1968.        This agency, known as
    the Health Planning        Association       of the Central      Ohio River
    Valley    (CORVA), serves four counties            in Ohio, eight in
    Kentucky,     and t-go in Indiana.          CORVA is an independent,        non-
    profit    corporation     chartered     under the laws of Ohio and reg-
    istered    and recognized       in Kentucky and Indiana.           Since 1968
    the agency has been supported             for organizational       purposes
    by Federal grants of about $271,000 and by matching non-
    Federal    funds.      The map on page 8 shows the 14 counties              in
    Ohio, Indiana,        3nd Kentucky     served by CORVA.

         CORVA's pri-aary goal is to provide        the local cornnrrmaity
    with a mechanisn to participate       in the plans and development
    of health  progruns.   The hospital     council    served as the pri-
    mary community wealth planning      organization     until CORVA was


                                              12
established.    COWA has contracted       with the hospital    corn-
cil to assist   in hospital  facilities      planning in the Cincin-
nati area.    The hospital  council     no longer receives   funds
under section   318 of the Public Health Service Act, repealed
in November I.966 with the passage of PubSbe Law 89-749.




                                 13
                                   CHAPTER2

                    PLANNING,     CONSTRUCTION, AND USE

                     OF SHORT-TERM-CARE HOSPITALS

       According     to the 1971 State plan, the Cincinnati                  health
service    area will need 4,494 short-term-care                 hospital     beds
by 1975(l)     and the projected          capacity   of non-Federal,         short-
term-care     hospital      beds in 1975 is 4,694 beds or 200 beds
in excess of the projected             need.     In addition,     two hospitals
were planning       a total     of 100 additional       beds, but completion
dates and financing          arrangements      were indefinite.          Therefore
by 1975 the Cincinnati           health    service   area could have 300
beds in excess of the need now projected                   in the State plan.
The State plan shows that,             of  the   66 health    service     areas
in the State of Ohio, the Cincinnati                health    service     area is
50th in priority        for construction         of short-term-care        hospi-
tals.

       The State plan shows also that,             of the projected        4,694
bed spaces by 1975, 341 bed spaces in four of the 16 non-
Federal,    short-term-care        hospitals    do not conform to Hill-
Burton construction         standards.       We noted that 285 of the 341
bed spaces did not meet Hill-Burton              construction       standards
because the buildings          were not constructed        of fire-resistant
materials,    had wooden roofs,          or had exit doors not as wide
as required     by Hill-Burton       standards.

        Although       these beds did not conform to Hill-Burton              con-
struction      standards,       Cincinnati's     Building   Department     and
the Fire Prevention            Bureau approved their       continued    opera-
tion because the facilities               met the building      code require-
ments when they were constructed                and because safety pre-
cautions      existed,      such as sprinkler      systems.      Local fire
inspection       officials      stated that these facilities          were


1On March 1, 1971, the State plan for fiscal       year 1971 had
 not yet been published.     The information  included   in this
 report was furnished    to us by the State agency from its
 most recent draft    of the 1971 State plan.
relatively     safe for patient         care.   The State       plan recognizes
that these     beds are available          to meet current       and future
patient-care      needs.

       The number of beds in short-tern-care                hospitals      in the
Cincinnati      health  service    area has been increasing,              and the
number of nonconforming         beds has been decreasing             since 1964
when the hospital       councilgs     Committee on Hospital           Facilities
Research completed a plan for expansion                  and modernization
of hospitals      in Hamilton     County.     That planning        effort      was
funded partly       by PHS through     section      318 of the Public
Health     Service Act, which section         authorized      grants to local
organizations       for areawide health       facilities      planning.          Sec-
tion 318 was repealed         in November 1966 with the passage of
Public Eaw 89-749.

        Since 1964     construction     programs have been undertaken
which will    total     about $100 million.        Funds were provided
primarily    by city      and county bond issues ($34.2 million)         and
through private        means ($58 million);      the Hi‘BE-Burton   program
contributed     $7.2    mil1io.n    over a period of 6 years.
P




           Acccsrding to the armuah reports         submitted     to the State
    agency by the non-Federal,        short-term-care       hospitals,      the
    beds in the Cincinnati     health     service     area averaged 87-
    percent    occupancy during calendar        year 1963.      Beds desig-
    nated for medical and surgicall         use averaged 89-percent           oc-
    cupancyo while beds designated          for maternity      or pediatric
    use averaged 74- and 7%percent           occupancy,     respectively.

             The hospital      council    realized,     through its statistical
    programs,      that the birth       rate had been dropping         from 1957,
    which caused a need for fewer maternity                  and pediatric     beds.
    Actions     taken by the hospital           council    to reduce the number
    of maternity       beds and the possibility            of reducing     or con-
    solidating       pediatric    services      are discussed     in chapter 4.

            The following                                            table shows the 1969 occupancy data for
    the 15 non-Federal,                                                short-term-care hospitals that were in
    operation     in 1969.

                                                          Hospital     Beds in Use in Calendar         Year 1969 and
                                                  Avers       Short-Term-Care     Hospital-Bed       Occupancy   for 1969
                                                  aeported          by Cincinnati   health     Service     Aiea Hospitals
                                                                     to the Ohio Department       of Health
                                                                 Medical
                                                              and surgical                              Maternity                      Pediatric                             Total
                                                                       Percent                                Percent                          Percent                               Percent
                  Hospital                                  Beds     occupancy                     Beds      OCCUPCUXY             Beds      occupancy           Beds           occupancy

    Bethesda                                                      37?a              75                80               78                                             457
    Catherine    Booth (note                 b)                                                       24               35                                                                ::
    Children's                                                                                                                      2;5              7;               2:zc
    Christ                                                        524                                 56               ;6            25d             59               605                ii
    Christian    R. Holmes                                        48535             Ei                                                                                5::                96
    Cincinnati     General                                                                            62               ;4             ;4a            76
    Deaconess                                                     224           1::                                                                                   224               108:
    Good Samaritan                                                513            95                   s5               s5             ;5                              673
    Jewish                                                        367                                 50               90             23             :02              44Of               8:
    Otto C. Epp Memorial                                                         z85                                                                                   60                88
    Cur Lady of Mercy                                              ;;           104                   28               ;4                                             103g               96
    St. George                                                      75                                                                                                  75               92
    St. Francis                                                   210                                                                                                 210                95
    St. Mary                                                      152               80                                                -2              6;              154
    Shriners    Burrs    Institute                                                                                                  30               98          30                    - ;08
          Total                                                                                                                     394
                                                                                                                                    -                Li          3,894                 -87
    aAlthough    377 beds were in use on December    31, 1969, about 100 of that total                                                         were opened in June                   1969.
     The average    occupancy of bed3 available   for use would,   therefore, be greater                                                        than 75 percent.
    bClosed       in    September        1969.
    'In   1972 a 45-bed             addition        and space             for   another           36 beds      will     be completed.

    dne    hospital          administrator              said       that     there        were     68 pediatric          beds but      that    only     25 were    in use.
    eCincinnat1          General       Hospital          has 66 pediatric                  beds     but     reported        only   24 in     use.
    f In 1970,         22 beds were            opened       for      service.

    gin   1970,        50 beds were            completed.




                                                                                                     46
        A State agency official          told us that an 80-percent           oc-
cupancy rate was desirable           and allowed efficient          operations.
The executive       secretary     of the hospital       council    and Cincin-
nati Blue Cross officials           said that a hospital          should op-
erate at 95-percent         occupancy to be efficient,            because hos-
pitals    staffed    for a higher      rate of operation        than they nor-
mally experienced.          Other estimates       given to us by admin-
istrators      of hospitals     in the Cincinnati        health    service area
were between 85- and 97-percent              occupancy.      We were unable
to obtain      a consensus as to an occupancy rate which would
enable a hospital        to operate most efficiently.

        Many factors        influence       the occupancy of hospitals,            in-
cluding      the availability           of health     insurance     coverage for
alternative       methods of care and the willingness                   of the phy-
sicians      to transfer        patients      to nursing     homes.     The hospi-
tal council,       in studies of patients               in hospitals,     concluded
that 17 to 20 percent of the patients                      in hospitals     could
have been transferred              to slcilled-nursing-care           homes for
treatment.        Cincinnati         Blue Cross officials         said that they
were aware of estimates               made by physicians         and hospital      ad-
ministrators       that from 10 to 30 percent of hospital                    patients
could receive        needed care in nursing homes.                  In that connec-
tion,     the president         of the Cincinnati         Academy of Nursing
Homes stated in a letter                to GAO dated January 22, 1971,
that:

       "At the present     time,     existing    Nursing Homes have
       1,000 beds that are vacant and it is generally
       felt   that this is due to the policy             of local hos-
       pitals    retaining   patients       for hospital     care, who
       could be transferred        to a nursing       home."

        The executive      secretary      of the hospital    council     and the
president      of the Academy of Pkdicine           informed   us that,    be-
cause most health        insurance      plans did not provide        coverage
for nursing-home       or outpatient        care or for care in physi-
cians'    offices,    patients     often were admitted       to hospitals
so that    the costs of treatment           would be covered.        These of-
ficials    said the system of hospital            insurance    payment pro-
vided no incentive         to use the least costly means of treat-
ment.



                                          17
        In July 1970 Blue cross, in an attempt to reduce hos-
pitalization,    began a 6-month experiment in southwestern
Ohio, providing payment for cobalt treatments on an outpa-
tient basis.     In January 197% BPu.e Cross was continuing the
experiment while evaluating     the results of the test,




                              18
USE OF PRIVATE FUNDS IN HOSPITAL CONSTRUCTION

        The executive    secretary    of the hospital      council     informed
us that some construction          was undertaken    which had not been
contemplated      in the expansion      and modernization      plan pre-
pared by its research        committee.     He said, however,        that the
hospital     council   had no control     over the use of construction
funds.     In its expansion      and modernization      plan,    the research
committee     commented:
        "Questions     have arisen concerning       the professed
        plans of certain       hospitals     to go on their     own ini-
         tiative   beyond the limits       recommended by the over-
        all hospital     plan.    Your Subcommittee        recognizes
         the danger inherent       in any policy    restricting       ex-
        pansion of facilities         where such expansion        is to
        be accomplished      with funds provided       by the insti-
         tution."

The research committee recommended that facilities               con-
structed   with public     funds be stringently      held to the over-
all hospital     plan but that hospitals       not be restricted       in
privately    financed  expansion   and modernization.          The re-
search committee urged, however,         that every hospital        under-
take only expansion      that was consistent      with community needs.

         State agency officials     stated    that control       did not ex-
ist over privately        funded construction      but that, when Fed-
eral funds were used, some control            could be exercised.          If
construction       of a proposed hospital       or skilled-nursing-care
facility      is to be financed   with Federal       assistance,       the
State Hill-Burton       agency must determine        that there is a need
for the facility       before Federal     assistance      is given.

         The need for a new facility            in a health     service  area
 is based on a comparison              of the current    bed capacity    of fa-
cilities       (in service        and under constructional      with the pro-
jected     need as shown in the State plan,                In this way the
State Hill-Burton            agency    can prevent    the construction    of ex-
cess medical       facilities        which are financed      directly   or indi-
rectly     with Federal         assistance.

        The executive secretary  of the hospital              council   stated
that,    because Ohio had no hospital   licensing             or franchising

                                         19
law which required       that a community need be demonstrated             be-
fore hospital    beds could be constructed,          the organizations
which,    in his opinion,     could assist    in preventing       overcon-
struction    were those which paid for health           care services.
He also said that these organizations           should establish        poli-
cies of not paying for any part of a construction                 program
(the cost of which is included          in the health      insurance    reim-
bursement rate structure)         unless construction       was approved
by the areawide comprehensive          health planning       agency.

        Blue Cross of Southwest        Chio and F/ledicrji:e pay about 75
percent     of hospital     costs in the Cincinnati          area.      In this
regard,     officials    of   Blue Cross    stated    that   they   hoped      to
issue such a policy         in the near future,         if it was determined
to be allowable       by State law, to assist           in reducing       rising
hospital     costs.     (See p. 22 for a discussion             of the effect
of overconstrucr-ion        on a hospitalss       operating     costs.)


CONSTRUCTEDWITH FEDERAL GRANTS
TO USES NOT SPECIFIED IN
FEDERAL GRANT APPLICATIONS

        The State agency awarded Hill-Burton                         grants     to two hos-
pitals     in the Cincinnati             health      service      area to construct
skilled-nursing-care             facilities.             Cne grant was for 120
skilled-nursing-care             beds in the Cincinnati                 General Hospi-
tal.      The other grant was for the St. George Hospital                            which
was to be a 75-bed,            chronic-disease,             skilled-nursing-care
hospital.          The 120 skilled-nursing-care                  beds completed        in
September 1969 at the Cincinnati                       General Hospital,          however,
had not been used for skilled-nursing-care                            patients,     and the
75-bed,      skilled-nursing-care              facility,       which was completed
in November 1968 at the St. George Hospital,                             was being used
as a short-term-care             facility.

         In July 1965 Cincinnati          General Hospital      was awarded a
Hill-Burton       grant of $500,000 to assist            in construction       of
the 120-bed,        skilled-nursing-care         unit,   on the basis of the
need for these bzds shown in the 1965 State plan,                      as part
of its 650-bed,           short-term-care    hospital.      The 1970 State
plan indicated         that the hospital       changed the category        of the
skilled-nursing-care             beds to short-term-care       beds.
According    to a State agency official,  the beds had not been
used for skilled     nursing care but the change in category
W;LS approved.

       A State agency official            told us that, when construction
was under way, hospital          officials         decided that skilled-
nursing-care       space was available           in the Daniel Drake Memo-
rial   Hospital,      and therefore       skilled-nursing-care        beds at
Cincinnati       General Hospital       would not be needed for extended-
qpe patient        care,

       In June 1965 St. George Hospital          was awarded a Hill-
Burton grant of $700,000 to assist            in constructing         a chronic-
disease,    skilled-nursing-care      hospital.      In September 1970
the State agency inquired        into the overall         use of the hos-
pital,   because the hospital's       annual reports         indicated     that
it was being used as a short-term-care            facility.

         State agency officials             said that a petition,,       which in-
cl.uded information          concerning         the need for a change, would
be necessary        to change the hospital             to a short-term-care
facility      because Hill-Burton             funds were involved.         The hos-
pital     administrator       replied       that many of the patients         were
chronic-disease         patients      but that increasing         demands were
being made on the facility                for emergency and short-term-care
cases.       The administrator         requested       the State agency to
change the hospital's            classification          to a short-term-care
hospital.       The State agency said that the request would be
reviewed      by CORVA and advised              the hospital,   as follows:

       "The proof of need to change the qpe of faciliq
       including    proof of the greatest       need in the com-
       munity is required.          In other words proof that a
       general   hospital   is more needed in the area than
       a long-term-care     facility.       Also the effect    such
       a change would have on adjoining          existing   hospi-
       tals which have been meeting needs over the years
       must be considered."

State agency officials    told us in January                1971 that     they   and
CORVA were studying    the situation.

       PHS does not have adequate authority                 to require      that
health   facilities be used for the purpose                 specified     in Hill-
Burton pmt          applications,         and the Kil1-Burton           Act does not
effectively        preclude     reclassification          of au& facilities           so
long as they are used for one of the types of health                           facil-
ities     specified      in the act.         The PHS General! Cmmsel ruled
that a grantee could reclassify                  beds as long as cl.1 the fa-
cility      was not sold or transferred               to, am ineligible      program
applicant       and (2) the hospital            continued    to qualify      as a
pubBic or nonprofit            hospital.

       Through Hill-Burton          grants the Governme:;&t can contribute
to the construction         of hospital       facilities        which can become
part of the overall         excess bed capacity             in the area,       By the
conversion     of Hill-Burton-financed              skilled-nursing-care         beds
to short-term-care        beds, which were not necessalry to meet
the overall     needs in the area, it could be argued that Gov-
ernment funds indirectly            contributed         to the construction       of
excess short-term-care           hospital     bed capacity          in the area.
In this regard,       changing the category               of bed use at the two
hospitals    from skilled        nursing     care to short-term           care
caused part of the excess short-term-care                      hospital    beds
shown in the 1971 State plan.

       Low utilization,      which is a natural.            result    of excess
medical facilities      , generally      results       in higher      operating
costs for each patient-day.             Since the Government reimburses
hospitals   and skilled-nursing-care             facilities        under the PIedi-
care and Medicaid       programs,     the Government can be expected
to share in the higher        operating      costs.

         To minimize     future   conversion     of health     care facilities
from one category          to another,     the State agency established
a policy     in April      1970 that required       an applicant's       govern-
ing body, upon award of a Hill-Burton                grant,    to certify      that
the faciliq        would be used for the purpose stated              in the
Hill-Burton      grant application.           The policy    required     also
that,     if the facility       desired    to change the category          of use--
as did the St. George Hospital--the               faciliv      submit to the
State agency a petition           substantiating        the need for such a
change in category.




                                           22
                                   CHAPTER 3

                   PLANNING,      CONSTRUCTICN, AND USE

                  OF SKILLED-NURSING-CAPE            FACILITIES

        According     to the 1971 State plan, the Cincinnati
health     service   area will    need 6,839 skilled-nursing-care
beds by 1975.        As of December 31, 1969, 6,441 skilled-
nursing-care       beds were in service         in 100 non-Federal        nursing
homes and hospitals.           In two facilities        398 additional       beds
were under construction.           According       to the 1971 State plan,
the 6,441 beds in service          and the 398 under construction
will    meet the needs of the health            service   area in 1975.
We have some reservations,          however,       as to the validity        of
the State plan data for skilled-nursing-care                  facilities,
since it is based on estimates           of use which may not be re-
liable.

         PHS guidelines      state that skilled            nursing    care is 24-
hour care which is sufficient                 to meet the total        nursing
needs of all patients,              This care requires           the employment
of at le.%? CISt one registered          professional       nurse responsible
for the total        nursing     service     and of a registered          nurse or
licensed     practical      nurse in charge of each tour of duty*
Facilities      providing      primarily       domiciliary       care were not
included     in our review.

         The 1971 State plan noted that 3,968 bed spaces, in
use or available        for use in 79 of the 100 skilled-nursing-
care facilities       in the Cincinnati        health       service     area, did
not conform to Hill-Burton          construction         standards,         because
the buildings      were not constructed         of fire-resistant              mate-
rials     or did not meet other Hill-Burton              fire     and safety       re-
quirements.       These beds are recognized            in the State plan as
being available      to meet current       and future          patient-care
needs and are licensed         to operate by the Ohio Department                     of
Health or by the Cincinnati          Health Department.                Officials
of the Ohio Department         of Health     informed        us that these fa-
cilities     were safe for patient        care, according            to their
standards     which required     inspections        for building          and fire
safety     by the State Fire Marshall.
                         .


                                          23
        Federal      involvement          in construction       of skilled-nursing-
care facilities            in the Cincinnati          health    service      area has
heen very limited             in recent years.           Most skilled-nursing-
care facilities            in the area are operated             for profit,         al-
though Hill-Burton              assistance      is available       only to nonprofit
orgapizations.             In recent years (1967-701,              the Federal          Hous-
ing Administration             has insured        only two mortgages for
skilled-nursing-care              facilities       and the Small Business Ad-
ministration        has guaranteed           only one loan for a skilled-
nursing-care        facility.           One skilled-nursing-care            facility
received      a Hill-Burton           grant in 1963.

STATE PLAN FOR
-.---
SIXLLED-NURSING-CARE             FACILITIES

        To determine       whether additional          facilities      are re-
quired,     the 1971 State plan for skilled-nursing-care                       facili-
ties projects        the gross need for facilities                for each desig-
nated health        service    area for the ensuing 5 years and com-
pares such needs with facilities,                   in existence      or under
construction,        that conform to Hill-Burton'construction
standards.        To determine       the gross need, the past year's
use of skilled-nursing-care              facilities       is related      to the
current     population      of persons 65 years of age or over to
determine      the number of patient-days              used for each 1,000
population.        The formula      assumes that an increase              in the
population       of persons 55 years of age or over will                    result
in a proportionate          increase     in the use of skilled-nursing-
care facilities.

       Although    data to project     gross need is available             on
the use of long-term       hospitals     and units     of hospitals,         we
have found that it is not readily            available     for nursing
homes which make up a major part of the total                 skilled-
nursing-care      beds in the Cincinnati       health     service      area.
A State agency official         said that nursing       homes were re-
quired    to submit monthly occupancy reports             but that only
60 percent      of the nursing     homes submitted      the reports.          He
said also that the requirement          had not been enforced             be-
cause the State agency believed           that emphasis should be
placed on establishing         a system of good patient          care rather
than on reviewing      reports.



                                            24
       A State agency official          told us that the data on use
of nursing     homes in the State plan was estimates             based on
information     obtained     from areawide planning       agencies     in
four major Ohio cities.           The State plans for fiscal         years
1969 and 1970 were based on estimates              of 95-percent     occu-
pancy p and the State plan for fiscal            year 1971 was based
on go-percent      occupancy.       State agency officials       said they
had had difficulty         in deciding     what estimate    to use for
nursing-home     occupancy for the 1971 State plan.              The first
draft    of the plan was based on loo-percent            occupancy,     but,
after    some deliberation,       the occupancy rate was revised           to
90 percent.

         The only occupancy data for nursing                homes prepared
regularly      by a central       source includes        only those beds cer-
tified     as extended-care        facilities       for Medicare.     The hos-
pital     council   has maintained           data on the use of those fa-
cilities      since 1967.       According        to that data the occupancy
of extended-care       facilities          was maintained     at a level   of
about 90 percent       through July 1969,              By December 1969 the
occupancy rate had declined                to about $7 percent.

       The Cincinnati     Academy of Nursing Homesp an organiza-
tion of proprietary       nursing      homes, surveyed Cincinnati
nursing   homes to determine         the occupancy rates and reported
in January 1971 that the average occupancy was about 80
percent.    In accordance with PEE guidelines,               a go-percent
occupancy factor      was used in the State plan for estimating
future   bed needs.      The following       chart, using different
levels   of occupancys compares the bed-need determination
with the inventory       of facilities       to be available      in 1975 in
the Cincinnati     health    service     area.

Percent of          Projected    bed                             Bed need
 occupancy                need              Available          or excess(-)

      80                 6,179                 6,839                -660
      90                 6,839                 6,839
      95                 7,169                 6,839                  330
     100                 7,496                 6,839                  657

    Without more reliable          data concerning       occupancy rates
in skilled-nursing-care         facilities,        the PHS formula cannot
be used properly        to determine        whether a health   service area
has too many beds or needs mOFe beds              for    Skilled      nursing
care.   We   believe    that   there   is  a need     on   the   part    of the
State agency to properly          accumulate    and analyze date from
the community,       to enable    the preparation        of a more meaning-
ful planning      document for use as part of the State plan.




                                     26
        We obtained     information      m. the extent  to which certain
medical facilities         and services     were shared among the Cincin-
nati area hospitals.           Our review irduded      maternity and pe-
diatric    beds md cobalt mits,             We dso examined into the
US@ Qf gr        -purchasing      arrangenen-Cs as a means of reducing
hospital    costs.

        Although     we fcmnd that there was some sharing             of spe-
cialized       medical a.nd other services       among hospitals       in the
Cincinnati       area9 we believe     that there is a potential          for
more sharing        of such services,      We believe      also that,    before
this gotentiaf        can be ful%y realized,        studies    wi%P be re-
quired to dete-mine        what services       cxn be shared and how such
sharing      can be aecmp~ished       to benefit      all. concerned.      We
believe      that the greatest     opportunity      to achieve the benefits
of sharing       appears to be in planning        for new facilities,

       Under the provisiom             of section     X3 of Public Law
91-296, which mends the Pub%ic Health                    Service Act, States
are enti$fed       133 receive      Hi1l-Bw333n      grant funds up to 90 per-
                 gPjece vs cost if the pmjeCt             offers    Bspotential
                   health    care msf thrmgh            shared services       among
health   care fasilitiesP8          or 'atRrougR interfacikity          coopera-
tion."     It appears that this legislation,                 which increases
Federal    financial      participation        in those projects        which in-
vdve    sharing,     shmld provide          hospitals     which are seeking
Federal grant funds with a strong incentive                      to share ser-
vices.



        In A.qpst I.970 a committee,      cQ¶lpQsed of a inistrators
of ImspitaPs      having obstetrical.   units   and members of the
Cincinnati      Obstetrical  md Gynecological       Society,   was estab-
fished     to plan the fu$ure obstetrical-care          needs of the com-
munity.      The possibi%ity     of a central   obstetrical    and gyne-
cological     center at Bethesda Hospital       wzs discussed,      The
executive       secretary      of the hospital   council. said that Be-
thesda Hospital         could become one of the outstanding            obstet-
rical    and gynecological          hospitals  in the country      if such
centralization         were to take place,       The administrator       of
Bethesda Hospital           said that many problems which obstructed
centralization         existed    but that a very extensive        study
would be needed before a decision              could be made on the fea-
sibility       of centralization.

     The administrator      of Good Samaritan Hospital,   which
has a maternity    service   that exceeds Bethesda Hospital's,
was opposed to centralization      because Good Samaritan     had a
good occupancy rate in its maternity        unit which was operated
in conjunction   with a large pediatric      unit.,

PEDIATRIC      BEDS

        In December 1970 five hospitals      in the Cincinnati
health    service  area had 384 pediatric      beds in use, 71 pedia-
tric   beds under construction,     and 73 pediatric    beds not in
service    in two of the five hospitals      because of Pow occu-
pancy of pediatric     beds.    (See p. 16.1

        The executive       secretary      of the hospital           council     said
that pediatric        services      could be centralized             into one or
two of the area hospitals,              which would result             in more effi-
cient use of bed space, more efficient                    operation,         and better
patient    care.     Relative      to consolidation          at the hospital
which serves primarily           children,       he commented that many
physicians      were forced to use pediatric               facilities         at other
hospitals      because of problems with scheduling                     surgery at
the hospital.        He explained        that,     at this hospital,           faculty
members of the University             of Cincinnati        College       of Medicine
were given preferential.           treatment       and that other physicians
had difficulty       in scheduling         patients     for surgery.           In ad-
dition,    he said that higher           educational       requirements         were
imposed on physicians           seeking to practice           at this hospital.

COBALT UNITS

       In response to an inquiry      from two hospitals    in sur-
rounding    counties    concerning the desirability     of adding co-
balt equipment,      the hospital  council   reviewed   and reported
on the use of cobalt equipment        in the Cincinnati    hospitals.
           In June 1970 the hospital            council       reported     that five
*   cobalt units      in Cincinnati       hospitals       were being used at
    44.6 percent      of capacity.        The study was based on an esti-
    mate that a cobalt        device with a fresh charge feasibly
    could provide       60 treatments      a day.        Using 20 days a month
    as a base, the hospital           council    estimated         that the cobalt
    units    in existence     in June 1970 could provide                18,000 treat-
    ments over a 3-month period,               The five hospitals,            however,
    in the first      3 months of 1970, provided                8,024 treatments,
    or less than 45 percent           of capacity,         Use of a sixth         cobalt
    unit,    in a private     physician's       office      in Cincinnati,       was
    not included      in the study.        A seventh cobalt unit,              which
    was approved by the hospital              councilp     was put into service
    in December 1970 and will           probably       lower the overall         utili-
    zation     of cobalt units      in the area.

           As a result     of the study3 the assistant       executive     sec-
    retary    of the hospital      council   said that two hospitals       in
    surrounding     counties    had decided not to add cobalt        equip-
    ment but to use cobalt units           in the Cincinnati   hospitals.

    COHNON-PUPCUASE AGREEME&TS

           In October 1968 the hospital     council   began a study of
    possible    savings through group-purchasing      of liquid     oxygen,
    The following      data provided by the executive     secretary
    prompted the study.

            Thousand of
    cubic     feet a momth                         Price   for   each PO0 cubic     feet
                                                   High                             Low

            Under    25                       $0.90                               $0.64
            25 to    75                          .82                                 .42
            75 to    125                         .75                                 .313
            Over    125                          .50                                 .285

    Five suppliers      responded to the hospital  council's     invita-
*   tion to quote prices under a common-purchase        agreement,       and
e   the lowest bidder was accepted as the supplier           for the par-
.   ticipating    hospitals.             ted bid was at a rate of
    $0.275 for each BOO cubic feet for quantities         up to 100,000
    cubic feet a month with further      graduated  reductions.


                                              29
          The assistant executive secretary of the hospital      coun-
I   cil said that three hospitals   initially.had    entered into the
    common-purchase agreement and that later additional      hospitals
    had joined in the agreement. He stated that other hospitals
    which had contracts with the successful bidder also received
    the benefit of the lower rates.      As a result of the common-
    purchase agreement, some suppliers not participating       in the
    agreement aiso reduced their prices.
           The hospital  council estimated that hospitals   in its
    eight-county    area will save about $75,000 annually   through
    the common-purchase agreement.




                                  30
                                      CHAPTER 5

                                 SCOPE OF REVIEW

       We reviewed       the coordination            among Federal        and State
agencies and local organizations                   in planning         and constructing
short-term-care         hospitals     and skilled-nursing-care                facil-
ities    in the Cincinnati         health      service       area.      We reviewed
the planning        for and constr*uction            of medical facilities,             pri-
marily     short-term-care        hospitals,         financed      either   with pri-
vate and community funds or through Federal financial                               assis-
tance.       We compared the existing              and planned capacity             of
short-term-care         hospitals     and skilled-nursing-care                facili-
ties with the projected            needs as determined               by the State
planning      agency.      We also considered             the actions      taken to
effect     the sharing      of certain       facilities         and ecyclipment among
hospitals.

        The information       in this report        was based, for the most
part,    on discussions       with officials        of Federal    and State
health    agencies,     local    planning     organizations,      hospitals,
and other health-related            organizations.         The review concen-
trated    on the Hill-Burton         program,      and therefore    more of
the information       was obtained        from the Ohio Department           of
Health,    Columbus, which is the State Hill-Burton                  agency.




U.S.   GAO   Wash.,   D.C.