Emergency services were to be provided “without regard to the person’s ability to pay” (¶1). A 1961 medical facilities bill expanded grant money to states for public health services, nursing homes, and planning for hospitals, as well as for out- patient services for elderly and chronically ill. Expenditures for this act ended in 1975, but it has provided close to 500,000 hospital beds, and has had a lasting effect on the U.S.
health care system. Few people remember that this bill was sponsored by the American Hospital Association in response to a proposal by President Harry Truman to add a compre- hensive medical insurance program to Social Security—an effort to provide universal health coverage (Brookings Insti- tution, 2007; Perlstadt, 1995).
The Maternal and Child Health and Mental Retardation Planning Amendments of 1963
Although the Social Security Act of 1935 provided for some services for “crippled children,” the Maternal and Child Health and Mental Retardation Planning Amend- ments of 1963 opened the door for improved services to selected mothers and children. Recognizing the nation’s high infant mortality rate and the accompanying problems of premature births, handicapping conditions, and mental retardation, Congress—through this law—authorized grants to fund projects offering comprehensive care to high-risk, low-income mothers and children. It also pro- vided grants to states to design comprehensive programs addressing mental retardation (National Center for Educa- tion in Maternal & Child Health, 2007).
The Heart Disease, Cancer, and Stroke Amendments of 1965 (PL 89–239)
The Heart Disease, Cancer, and Stroke Amendments of 1965 are noteworthy for their establishment of regional medical programs, one of the first real efforts at compre- hensive health planning. Fifty-six regions in the United States were designated, and each was charged with the responsibility to evaluate the overall health needs of its region and cooperate with other regions for program devel- opment. Although the amendments initially were categori- cal (limited to heart disease, cancer, and stroke), amend- ments in 1970 expanded the legislation’s focus. The act was important for two additional reasons: it encouraged local participation in health planning, which was previously done at federal and state levels, and it funded program operations and planning (National Library of Medicine, 2003).
The Social Security Act Amendments of 1965 (PL 89–97)
The Social Security Act Amendments of 1965 addressed a concern for some version of national health insurance.
Title XVIII, Medicare, provided federally funded health insurance for the elderly (65 years and older) and for dis- abled persons. Title XIX, Medicaid, is a joint federal–state welfare assistance program that serves the blind, certain families with dependent children, the disabled, and eligi- ble elderly. These two pieces of legislation have enabled many of the poor, disabled, and elderly to receive quality
(text continues on page 140)
LWBK151-3970G-C06_121-171.qxd 11/19/08 12:03 AM Page 137 Aptara Inc.
138
❂
UNIT 2 Public Health Essentials for Community Health Nursingdenial of federal funding. In 1983, Professional Review Organizations replaced PSROs. These private organiza- tions, employed by government agencies to review med- ical records and avoid excessive and inappropriate costs to taxpayers, strive to identify “best practices” (Dranove, 2000).
The Health Maintenance Organization Act of 1973 (PL 93–222)
In a cost-controlling move, the Health Maintenance Orga- nization Act of 1973 added federal support to the concept of prepayment for medical care. President Nixon, a pro- ponent of wage controls, was concerned about the rising costs of health care for employers and citizens. Congress authorized funding for feasibility studies, planning, grants, and loans to stimulate growth among qualifying health maintenance organizations (HMOs). In addition, this act required a business employing 25 people or more to offer an HMO health insurance option, if available locally. A subsequent law, the Employee Retirement Income Security Act (ERISA), passed in 1974, served to protect HMOs from many malpractice lawsuits, even though the intent of the law was to standardize employee benefit laws among the states (Wood, 2001).
The National Health Planning and Resource Development Act of 1974 (PL 93–641)
The National Health Planning and Resource Development Act of 1974 was a major breakthrough in comprehensive health planning. Replacing the Partnership for Health Act, it combined Hill-Burton, comprehensive health planning agencies, and regional medical programs into a single, new program. It fostered not only comprehensive health plan- ning, but also regulation and evaluation, and it promoted collaborative efforts among regional, state, and federal gov- ernments. An important contribution of this act was its emphasis on consumer involvement in health planning. The act was divided into two titles. Title XV, National Health Planning and Development, established national health pri- orities and assisted the development of area-wide and state planning through Health Systems Agencies (HSAs) and state health planning and development agencies. Title XVI, Health Resources Development, coordinated health facili- ties planning with health planning, replacing the Hill- Burton Act. The HSAs set targets and limited services, reviewing certificates of need (CON) for all health care facilities seeking to expand. If a facility expanded without HSA approval, its Medicaid and Medicare reimbursements could be denied. Because many providers were members of the HSA and supported each other’s projects, and others learned to “work the system,” these cost-control systems failed to produce the desired results and were ended during the Reagan era (Dranove, 2000).
The National Center for Health Statistics of 1974 (PL 93–353)
The National Center for Health Statistics (NCHS), estab- lished in 1974, arose from the earlier National Office of Vital Statistics and became part of the Centers for Disease Control (CDC) under the Public Health Service in 1987.
The NCHS operates data collection systems that provide health care that otherwise would not be available to them
(Scutchfield & Keck, 2003; Williams & Torrens, 2002).
The Comprehensive Health Planning and Public Health Service Amendments Act (Partnership for Health Act) of 1966 (PL 89–749)
The Partnership for Health Act of 1966 promoted further advances in comprehensive health planning. It established comprehensive health planning agencies and coordinated the many categorical health and research efforts into an integrated system. It emphasized comprehensive health planning and cost containment at local, state, and regional levels. Its goals were improved efficiency and effective- ness of health care, and it also provided for some public health services and training (Brookings Institution, 2007).
The Health Manpower Act of 1968 (PL 90–490) The Health Manpower Act of 1968 increased the supply of health personnel by providing federal money to educa- tional institutions for construction, training, special proj- ects, student loans, and scholarships. This act replaced sev- eral previous acts that had similar goals but resulted in only fragmentary efforts to address the problem. Among them were the Health Amendment Acts of 1956, the Nurse Training Act (1966), and the Allied Health Professions Personnel Training Act (1966). In 1976, Congress passed the Health Professions Education Assistance Act (Pub. L.
No. 94–484) to effect a better balance between the coun- try’s health needs and the supply of available health pro- fessionals. One of its major emphases was to address the problem of physician misdistribution between underserved (rural) and overserved (urban) areas through educational incentive programs (National Institutes of Health, 2007).
The Health Professions Education Extension Amendments (1992) also provided educational assistance to many in the health professions (Duffy, Chen, & Sampson, 1998).
The Occupational Safety and Health Act of 1970 (PL 91–956)
The Occupational Safety and Health Act of 1970 provided protection to workers against personal injury or illness resulting from hazardous working conditions. It estab- lished the National Institute for Occupational Safety and Health (NIOSH) and OSHA—the Occupational Safety and Health Administration (U.S. Environmental Protec- tion Agency, 2007).
The Professional Standards Review Organization Amendment to the Social Security Act of 1972 (PL 92–603)
The Professional Standards Review Organization (PSRO) Amendment to the Social Security Act of 1972 had two goals: cost containment and improved quality of care.
The PSRO legislation created autonomous organiza- tions, external to hospitals and ambulatory health care agencies, to monitor and review objectively the quality of care delivered to Medicare and Medicaid patients. The PSRO review boards, composed mostly of physicians, examined such things as need for care, length of stay, and quality of care against predetermined standards developed locally. Failure to meet standards could mean
LWBK151-3970G-C06_121-171.qxd 11/19/08 12:03 AM Page 138 Aptara Inc.
CHAPTER 6 Structure and Economics of Community Health Services
❂
139required certain employers to provide extended (eventu- ally up to 36 months) group-rate insurance coverage for laid-off workers and their dependents. This expense is paid by the former employee, but cannot exceed 102%
of the cost for other employees (U.S. Department of Labor, 2007). In 1989, a further OBRA expansion regu- lated fee schedules for physicians and mandated other measures to attempt to slow the growth in both Medicare and Medicaid (Kaiser Family Foundation, 2007b). Also under OBRA 1989, nursing home reforms were instituted, and the Agency for Health Care Policy and Research was established to study the effectiveness of health care services.
The Medicare Catastrophic Coverage Act of 1988 (PL 100–360)
The Medicare Catastrophic Coverage Act (MCCA) of 1988 expanded Medicare benefits significantly. Coverage was extended to include a portion of outpatient prescrip- tion drug costs and greater post-hospital extended care facility and home health benefits. Also, the MCCA set limits on beneficiary liability and provided increased inpatient hospital benefits, as well as set up a commission to examine the possibility of providing long-term care benefits through Medicare (Kaiser Family Foundation, 2007b). In 1989, a second MCCA rescinded the drug benefit and the limits on out-of-pocket spending, among other things.
The Family Support Act of 1988 (PL 100–485) The Family Support Act of 1988 reformed the federal welfare system to emphasize work and child support. It established child support programs, work opportunities, and basic skill and training programs. It included a requirement that recipients seek employment and that states establish an education, training, and work program, along with the child care support. It established the Com- mission on Interstate Child Support to aid in locating absent parents and assure payment of child support. It also provided for paternity testing and withholding of wages in cases in which child support was in arrears (Office of Inspector General, 1989).
The Health Objectives Planning Act of 1990 (PL 101–582)
The Health Objectives Planning Act of 1990 was signifi- cant for its support of the report by the Institute of Medi- cine, Healthy People 2000, with funding to improve the health status of the nation. Funding for health promotion and disease prevention was added in the 1991 legislative session (Centers for Disease Control & Prevention [CDC], 1991). Ten years later, Healthy People 2010 followed.
Preventive Health Amendments of 1992 (PL 102–531) The Preventive Health Amendments of 1992 placed a focus by the federal government on preventive health and primary prevention initiatives. It added prevention to the CDC (now the Centers for Disease Control and Preven- tion). It enhanced services to Migrant Health Centers, especially in maternal and child health and community education, as well as lead poisoning prevention. It pro- moted international exchange programs for public health vital information for public health planning and service
delivery (National Committee on Vital and Health Statis- tics, 2000).
The Omnibus Budget Reconciliation Act of 1981 (PL 97–35)
The Omnibus Budget Reconciliation Act (OBRA) of 1981 had a profound effect on public health. In this act, Congress halted the progress made in most of the pub- lic health laws of the previous 45 years, substantially reducing their funding authorization. To shift more power to the states and reduce the budget, the Reagan administration consolidated categorical grants into four block grants (Centers for Medicare and Medicaid Ser- vices, 1981). The first block grant targeted general pre- ventive health services; the second addressed alcohol, drug abuse, and mental health; the third focused on maternal and child health; and the fourth addressed pri- mary care, which covered federal support for commu- nity health centers. Although block grants provide some advantages, these came with limiting restrictions on the amount and use of the funds. The result was a significant reduction in funding for state and local health programs, but states worked to better coordinate health promotion and disease prevention (Scutchfield & Keck, 2003).
The Social Security Amendments of 1983 (PL 98–21) The Social Security Amendments of 1983 became law in response to accelerating health care costs. The act repre- sented a major reform in health care financing from ret- rospective to prospective payment. It introduced a billing classification system consisting of 467 diagnosis-related groups (DRGs), with Medicare payments provided to hospitals based on a fixed rate set in advance (Social Security Online, 2007). The fixed payment could not be increased if hospital costs for care exceeded that amount.
Conversely, if costs were less than the paid amount, the hospital could keep the difference. Thus, a positive incentive was introduced to reduce hospital costs and promote timely patient discharge (Institute of Medicine, 2001).
The Consolidated Omnibus Budget Reconciliation Act of 1985 (PL 99–272)
The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 extended the Medicare prospective payment system. The act also expanded Medicaid serv- ices and permitted states to offer hospice services to ter- minally ill recipients (CMMS, 1985). It also authorized demonstration projects to determine the effectiveness of health promotion and disease prevention services for Medicare recipients. The 1990 extension of this act man- dated longer-term evaluation of the demonstration proj- ects. Results of the experimental design showed a 12%
improvement in self-reported health status and better results in the areas of exercise, seat belt use, recent mam- mograms, and alcohol consumption (Gale Group, 2004).
Omnibus Budget Reconciliation Act Expansion of 1986 (PL 99–509)
The OBRA Expansion of 1986 extended the prospective payment system for hospital outpatient services, and
LWBK151-3970G-C06_121-171.qxd 11/19/08 12:03 AM Page 139 Aptara Inc.
140
❂
UNIT 2 Public Health Essentials for Community Health Nursinginput from female legislators, the bill is well designed to address several issues contributing to the nursing short- age. It emphasizes a media campaign to promote the nurs- ing profession, offers scholarships for nursing students who agree to work upon graduation in an agency facing a critical shortage of nurses, cancels student loans, provides grants to hospitals and other medical facilities that are willing to offer career incentives to nurses to advance in their field and to take on larger responsibilities for organ- izing and directing patient care, and includes strategies to attack the burn-out and frustration that are driving many people out of nursing. It also promotes career ladders, recruitment of minority students into nursing, increased interprofessional collaboration, encouragement of nurses to focus on community-based practices and to address the needs of vulnerable populations. It provides forgivable loans for new nursing faculty as well (Donley et al., 2002).
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (PL 108–173)
Commonly known as Medicare Part D, this voluntary program was added to Medicare Part A and Part B in 2003, and extended and improved coverage for beneficiar- ies beginning in January 2006 (Medicare Advocacy, 2007). Participants can enroll in one of over 100 private plans to be covered, unlike the original Medicare program that is administered through the federal government. The plans must offer the standard benefit package, or a comparable one. The 2007 deductible was $265. Benefi- ciaries pay 25% of the cost of covered medications up to
$2,400, at which point they reach the coverage gap (or
“donut hole”) and must pay for all covered medications above the set limit. After spending $3,850 out-of-pocket in one calendar year, they reach catastrophic coverage and then pay only $2.15 for covered generic medications (Medicare Advocacy, 2007). The annual enrollment period for Medicare Part D is from November 15 to December 31. Senior citizens can change plans or begin coverage during that time period.
officials from around the world who have an interest in working in another country (Woolley & Peters, 2007).
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PL 104–193)
The Personal Responsibility and Work Opportunity Rec- onciliation Act of 1996 is commonly known as the “Wel- fare Reform Bill.” It amended the Social Security Act to reform the federal welfare system, imposing a 5-year life- time limit on welfare benefits. It ended Aid to Families with Dependent Children (AFDC) and enacted Temporary Assistance to Needy Families (TANF). It provided child care to working parents or those receiving training or edu- cation, and required unmarried minor parents to live with their parents or another responsible adult and attend school or training programs in order to receive govern- ment assistance. Finally, it restricted benefits to legal immigrants (Administration for Children & Families, 2008). As aid to children and families is usually tied to Medicaid benefits, this legislation affected health by mov- ing people off welfare rolls and onto payrolls—but often at minimum-wage jobs without insurance benefits.
Health Insurance Portability & Accountability Act (HIPAA) of 1996 (PL 104–191)
This landmark piece of legislation has two major compo- nents: one that provides protection for workers in group health insurance plans and another that protects the privacy of health records. It first became effective in 2001, with compliance dates set for 2003 and 2004 (for smaller health plans). It set national standards for protecting individually identifiable health information (including electronic health data), and limited exclusions for workers with preexisting conditions as well as prohibited discrimination based upon health status (Office of Civil Rights, 2003; U.S. Depart- ment of Labor, 2004). This legislation made it easier for people to obtain or keep health insurance.
Nurse Reinvestment Act of 2002 (PL 107–205)
The Nurse Reinvestment Act of 2002 addresses the nation’s critical shortage of nurses. Developed with support and
distribution affect consumer demand for these goods and services. The concepts of supply and demand are influenced by each other and, in turn, affect prices. In a simplified exam- ple, an increase in, or oversupply of, certain products usually leads to less overall consumption (decreased demand) and, usually, lowered prices. The opposite also is true. Limited availability of desired products means that supply does not meet demand, and prices usually increase. An example is the price of a gallon of gasoline. When demand for oil is high and supply begins to dwindle, the prices go up. When demand drops and supplies become more plentiful, prices go down to attract more purchasers. This occurs as long as there are no monopolies to artificially control prices, or only a few choices for goods and services that inhibit competition.
In health care, demand-side policies are enacted to reduce demand for health care (e.g., raising insurance deductibles and co-payments), and supply-side policies restrict the supply of resources (e.g., preadmission screening to reduce the likelihood of insuring someone with a serious
health condition, denial of coverage for specific services, utilization of preferred providers who practice within boundaries set by insurance companies) (Nyman, 2003).
Microeconomic theory is useful for understanding price determination, resource allocation, consumer income, and spending distribution at the level of individuals and organizations (Aday, 2005). Microeconomic theory comes into play when health care competition increases, because the success of the supply-and-demand concept depends upon a competitive market. Issues such as cost containment, competition between providers, accessibility of services, quality, and need for accountability continue as targets of major concern in the 21st century.
Macroeconomics
Macroeconomic theoryis concerned with the broad vari- ables that affect the status of the economy as a whole. Econ- omists using macroeconomics study factors influencing
LWBK151-3970G-C06_121-171.qxd 11/19/08 12:03 AM Page 140 Aptara Inc.