oversight

Level and Range of Services Provided by the Public Health Service Hospital System

Published by the Government Accountability Office on 1977-05-26.

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

                         DOCUMENT RESUME

02221 - [A1532525]

(Level and Range of Services Provided by the Public Health
Service Hospital System]. HRD-77-111; B-164031(5). May 26, 1977.
Released May 31, 1977. 4 pp.

Report to Sen. John L. McClellan, Chairman, Senate Committee on
Appropriations; by Robert F. Keller, Deputy Comptroller General.

Issue Area: Health Programs: Quality Care and its Assurance
    (1213).
Contact: Human Resources and Development Div.
Budget Function: Health: Health Care Services (551).
Organization Concerned: Public Health Service.
Congressional Relevance: Senate Committee on Appropriations.
Authority: Department of Defense Appropriation Authorization act
    [of] 1974 (P.L. 93-155).
         The Public Health Service (PHS) hospital system should
attempt to maintain a level and range of direct patient care
services comparable to 1973, as required by law.
Findings/Conclusions: However, in attempting to maintain these
services during a period of spiraling inflation and limited
budget increases, the PHS hospital system has been unable to:
prevent a reduction in the level and range of other
health-related activities, including training and research;
maintain authorized staff ceilings; maintain adequate
inventories of drugs and other supplies; maintain an adequate
program for replacing obsolete equipment or purchasing new
equipment required by advancements in modern medical practice
and technology; and spend funds needed to maintain and repair
existing facilities and equipment, resulting in the continued
deterioration of the hospitals. Recommendations: In consided.ng
funding for the PHS hospital systems the Congress should address
whether or not the United States intends to realize the
potential of the PHS hospital system as a resource for medical
care at a reasonable, controllable cost. Congress should
consider the potential savings from providing health care
services to military dependents and to Medicare and Medicaid
beneficiaries in federally controlled PHS hospitals and clinics;
the economics and efficiencies of PHS hospital participation in
regional and local health planning and resource allocations; and
the potential role of the PHS hospital system as a primary or
standby health care provider in any future national health
insurance program. (SC)
                     PTROLLER GENERAL OF THE UNITED STATES
                             WASIlNGTON. D.C. XOM


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B-164031 (5)   by te Office at Ongresnal EolatlWs..

                                                    May 26, 1977

The Honorable John L. McClellan
Chairman, Committee on Appropriat.ons
United States Senate
Dear Mr. Chairman:

     The Committee's March 24, 1977, report on the Supple-
mental Appropriations Bill, 1977, directed us to report
within 60 days as to whether or not all services and person-
nel at the Public Health Service (PHS) hospitals and clinics
are operating at the 1973 level as required by law (sec-
tion 818(a) of the Department of Defense Appropriation
Authorization Act, 1974, P.L. 93-155). The law specifically
requires the PHS hospitals to provide a level and range of
services at least equal to that provided on January 1, 1973.

     We obtained and verified selected work measurement,
budget, and other indicators of the level and range of
services provided by the PHS hospital system for fiscal year
1973 through December 1976. However, it should be recognized
that merely maintaining services at the 1973 level may not
reflect optimal health care delivery because (1) in the era
before 1973 the PHS hospital system was under threat of
closure and (2) since 1973 there have been advancements in
medical practice and technology. Also, systemwide utiliza-
tion trends, funding experience, etc., cannot be applied
to every hospital and clinic.
     Because we had to respond to the Committee's directive
within 60 days, our verification of the data and comments
provided by PHS officials and employee union representatives
was limited. However, the PHS statistical and budgeting data
provided us was generally accurate and, with minor exceptions,
correctly reflected inpatient and outpatient utilization and
expenses incurred to operate the PHS hospitals and clinics.




                                                               HRD-77-111
 B-164031(5)



     Our review indicated that, although some direct patient
care services have been terminated since fiscal year i973,
others have been added. Also, PHS hospital and clinic offi-
cials identified additional services needed to keep pace
with advancements in modern nmedical practice and trends in
patient care. Because of the limited time available, we could
not verify either the need for or the cost effectiveness of
such services.

     Data provided us shows that on a systemwide basis, admis-
sions to PHS hospitals were about the same in fiscal years
1973 and 1976.  In actual patient days, the systemwide average
daily patient load decreased by 5 percent during that period.
The decline in patient load was offset by a 6 percent increase
in outpatient visits to the PHS hospitals and clinics. How-
ever, taking into account the PHS estimate of the increase in
the population eligible to receive services (a figure we did
not attempt to verify), the ratios of admissions, average
daily patient loads, and outpatient visits to eligible popula-
tion decreased by 9 percent, 13 percent, and 4 percent, respec-
tively, from fiscal year 1973 to fiscal year 1976. The PHS
data also shows that, while the number of staffed and available
beds declined by over 285 (13 percent) during the same period,
the systemwide bed occupancy rate remained below 71 percent.

     Since data on the population eligible to receive services
was not available for each hospital, we could not determine if
the systemwide changes in ratios of admissions, average daily
patient loads, and outpatient viĀ£its to eligible population
were applicable at every location. Although some hospitals
reported overall increases in both inpatient and outpatient
services, the increases could not be adjusted to reflect popu-
lation changes.

     The statutory language does not provide guidance as to how
the level and range of services are to be measured. Thus, de-
pending on which key indicators are considered, the level of
services provided by the PHS hospital system now could be inter-
preted as ranging from a point substantially below that provideL
in 1973 to a point slightly above. We believe that the PHS
hospital system is attempting to maintain a level and range of
direct patient care services comparable with 1973. However,
                                                             in
attempting to maintain these services during a period of
spiraling inflation and limited budget increases, the PHS hos-
pital system has been unable to




                            - 2-
B-164031(5)



     -- prevent a reduction in the level and range of
        other health-related activities, including
        training and research;

     -- maintain authorized staff ceilings;

     -- maintain adequate inventories of drugs and
        other supplies;

     -- maintain   an adequate program for replacing
        obsolete   equipment or purchasing new equipment
        required   by advancements in modern medical
        practice   and technology; and
     -- spend funds needed to maintain and reprir
        existing equipment and facilities, resulting
        in the continued deterioration of the hospitals.

     Most of the hospital and clinic officials and employees we
interviewed expressed concern that, if the current trend contin-
ues, it may become necessary to set priorities in patient care
and reduce the level and range of services provided. Tht data
we collected indicates that some hospitals and clinics are re-
ducing direct patient care services or are increasing the wait-
ing time to obtain such services.

     We believe that our findings raise additional issues that
merit congressional consideration. The data we have obtained
indicates that the Federal Government is supporting a hospit
system which has not been able to (1) keep pace with advance-
ments in medical practice and technology, (2) comply with min-
imum safety and professional accreditation standards, and (3)
maintain optimum utilization and productivity levels.

     We believe that in considering funding for the PHS hospital
system, the Congress should address whether or not the United
States intends to realize the potential of the PHS hospital sys-
tem as a resource for medical care at a reasonable, controllable
cost. In deliberating on this matter the Congress should con-
sider the following factors:

     -- The potential savings from providing health
        care services to military dependents and to
        Medicare and Medicaid beneficiaries in
        federally controlled PHS hospitals and clinics.

     -- the economics and efficiencies of PHS hospital
        participation in and cooperation with regional


                              -   3 -
B-164031(5)



       and local health planning and resource alloca-
       tions. This would include facility and other
       resource sharing among the Department of Defense,
       Veterans Administration, and PHS hospital sys-
       tems (an area that we are reviewing).

     -- The potential b, efits to be derived by developing
        Federal health care research and health manpower
        training at the PFtS hospitals similar to that
        conducted by the National Institutes of Health.

     -- The potential role of the PHS hospital system as
        a primary or standby health care provider in any
        future national health insurance program.

     We have discussed the contents of this letter with officialr
of the Departmaent of Health, Education, and Welfare. They said
that the letter is a fair appraisal of the current status of the
PHS hospital system.

     We trust that the preceding information satisfies the
Committee's needs.

                                        Sincerely yours,




                               DEPUTY   Comptroller General
                                        of the United States




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