The Bureau of Health Services Research is authorized under sections 301 and 304 of the Public Health Service Act to plan, support, and conduct health services research. New legislation has been enacted, P.L. 93-353, the Health Services Research, Health Statistics, and Medical Libraries Act of 1974. The new Act gives BHSR authority under Section 304 (b) with respect to training, and 305 and 308 with respect to research, demonstration, and evaluation projects for health services research. In addition, Section 308(1) (1) states that 25 percent of the funds appropriated should be spent for research "directly undertaken" within HEW. The dollar figures in this document represent general areas of health services research and do not distinguish between that which is carried out as part of a direct research program and that which is carried out by indirect means.

The need for an effective program of health services research is clear. Major new Federal initiatives, such as national health insurance, health maintenance organizations, and professional standards review organizations, now offer opportunities to bring about changes in methods of organizing, delivering, regulating and paying for health services. Such changes, if based upon sound information, precise identification of need, and thorough examination of alternatives, will go far to address long-standing problems of inequities of access to health services among different socioeconomic groups and geographic areas, the unduly rapid rise in costs of health services, and the changing health needs of the population, and new solutions themselves produce further changes of a broad nature. Such changes, and the emerging problems they present, will in turn represent a need for a continuing program of research.

An important part of the Bureau's work will be devoted to providing information relevant to policy questions central to the efforts of the health agencies of the Department to design and mount such new programs as national health insurance and health maintenance organizations, and to be responsive to the needs of the Congress for information to guide legislation.

The following material provides a general description of projected health services research activities for Fiscal Year 1975. At the end of this document, a number of more specific special emphasis areas for health services research are described.

(1) Research and Evaluation Grants and Contracts:

I. Organization and Management of Health Services

Management and coordination, organization and distribution of health services are key concerns in improving accessibility and efficiency, containing costs, and ensuring quality of health services. In 1974-75 new organization forms, new regulatory efforts, and improved sources of information for planning will be demonstrated and evaluated. Study will be made of issues of health manpower licensure and certification, including institutional credentialing, and impacts upon distribution, competency, and functional effectiveness of health manpower and, in turn, upon cost, quality, and the availability of health services. The problem of health planning will receive attention, including adapting health services planning methods developed in other fields, such as urban planning, and adapting other research findings of the Bureau for use in planning.

Effects upon cost and accessibility of certificate-of-need laws, institute in many states to strengthen the planning process by reducing duplication of or overbuilding of hospitals and other facilities, will be evaluated. Methods wil be developed to examine the impact of investing in new or existing State agencies the authority to control rates for services.

As key elements in medical care and medical and health decision-making, the physician and the physician's preferences will play an important part in evolution of new organizational patterns in health services. Ongoing efforts of the Bureau include projects designed to assess physicians' attitudes toward Medicar and Medicaid, toward solo versus group practice, and toward formation of consumer-provider affiliations.

The role of the public and the patient in delivery of health care will be studied from the standpoint of effects of consumer health education upon appropriate use of services, compliance with health care, and health knowledge, attitudes and practices. Other studies will continue to examine barriers to the utilization of preventive health services.

A project in rural New York and Pennsylvania will study the utility of various community services in identifying and addressing the health needs and preferences of the public. Another in Wisconsin is planning to study the effect of a program of environmental changes, including economic and social measures, upon community health, and will compare these effects to those of an intensive, "free" medical care program. The relationship of the type of hospital organization to population, community, and regional health needs is being studied in a project to evaluate the impact of medical centers upon the patterns of health care delivery in under-served communities. One form of regional organization of medical care will be tested in rural Oregon, where a remote satellite clinic will be established, staffed by nonphysician personnel with electronic communications linkages to medical supervision and guidance and transportation linkages to more intensive care levels. In another project, "Broadband" communications technology, including use of the "picture-phone" and cable linkages for transmission of medical records, will be tested in an inner-city area as instruments supporting the development of a comprehensive primary health care network for an underserved population.

The Bureau supports 19 Experimental Health Services Delivery Systems. These projects are working with total communities or states to develop a system of planning and managing health services delivery. By developing, planning, and delivering health care services to an entire geographically-defined population, utilization of resources, accessibility, and accountability can be improved. One such project in a partially urbanized area of the northeast, has successfully conducted an organizational experiment and studied the effects of hospital mergers as a device to improve a region's capability to deliver services. Development of "model systems" for outpatient care, which have achieved useful results in the past, will continue in 1975. Both primary care

and emergency services will be studied.

In 1975, an estimated $6,248,000 will be used to support studies on the organization and management of health services.

II. Resource Utilization and Productivity

"Productivity" is the relationship between the amounts of dollars, manpower, facilities and the amounts of health services produced. If a provider can produce a greater number of services for the same total resource outlay ("cost") or the same number of services for a lower total cost, then productivity would be said to increase, provided the quality of the services remained the same. Measuring productivity depends upon identifying the resources (capital, personnel, material, facilities) needed to produce services. Economies identified in current service delivery situations, such as between outpatient and hospital care, or care in different types of institutions, will suggest ways of increasing productivity. Characteristics of doctors or nurses, substitutions of different types of personnel for the physician, use of different kinds of personnel to deliver services, increased utilization of technology, substitution of capital and technology for personnel, and emphasis upon preventive care can be expected to have important effects upon productivity and are being examined. Operations research studies on the flow of patients and materials and highly detailed cost studies in hospitals will also contribute to an understanding of how the health services delivery system works and how it can be made more productive. At the same time, barriers to use of new and better methods can be studied and methods devised which will be of immediate usefulness.

A study at a rehabilitation hospital in Texas has produced a computer system to plan and monitor the care of patients and produce management information for use in improving efficiency. The feasibility of using this system to increase productivity in other hospital settings will be tested in 1975. Effects upon delivery of medical services of new mid-level "physician-extender" personnel, such as physician assistants, nurse practitioner, and the nurse midwife are being evaluated.

A pilot test of a simulation model developed by the Illinois Department of Health, of nursing home standards, facility planning, and cost reimbursement will be evaluated in six nursing homes. Experiments dealing with the efficient management of blood services, supply, quality, accessibility, and efficiency, will yield important findings for developing policy on use of this national resource. Hospital manpower allocation control systems for housekeeping, material management, and dietary and laundry services, developed through Bureau-supported research, have been used in several hospitals in the State of Connecticut and have enabled these hospitals to reduce operational costs by approximately $2,000,000 per year.

In 1975, an estimated $14,935,000 will be used to support studies in the area of resource utilization and productivity.

III. Economic Analysis and Financing

The Bureau supports studies to improve methods of financing health services and to promote understanding of the economic base of the health services industry. Rising medical care costs, problems of allocation of medical and health care resources, economic aspects of productivity and quality of care, alternative modes of insurance, payment and reimbursement, relationships between service supply and demand, alternative methods of capital-financing, all are problems that will take on additional importance in the face of national health insurance, health maintenance organizations, and professional standards review organizations. Studies must be designed to answer short-term questions and anticipate long-term needs in policy formation.

IV.

It is well known that a system of reimbursement for any service which allows for payment of the total cost of those services does not provide an incentive to find the lowest-cost method of providing the services. Yet a system which does not allow for payment of essential, irreducible costs may not motivate providers to offer the services at all, thus reducing availability. Similarly, if the out-of-pocket cost to an individual or family is lowered, as through national health insurance, possibilities of overutilization may develop in some areas, which will increase the overall cost of delivering services to the entire population. These problems of reimbursement and "pricing" are examined in order to develop the proper balances between supply, demand, and

cost.

The Bureau is supporting several studies which address these problems. In one study, a statistical model of the health care sector of the economy is being developed to provide answers on issues of this kind surrounding national health insurance. Another study is aimed at predicting growth in demand for medical care as a result of wider coverage of costs by health insurance, and will look at the rationing of services by direct and indirect means. A third examines the effects of consumer preferences on purchase of health insurance, utilization of services, and the price of medical care. The effects of different financing methods upon increased and decreased demand will be estimated by means of a mathematical model of household decision-making. Methods of cost control, incentives and regulation aimed toward pricing, market structure, and economic implications of mergers and other organizational innovations will be studied.

Anticipating the effects of national health insurance, the Bureau will explore the possibility of an evaluation mechanism to monitor, on a continuing basis, critical features of that program such as effects of reduced net prices to consumers, differing payment mechanisms and benefit packages, and revenue distribution among providers. Other aspects of health and social service policy, such as cost-effectiveness of medical care versus other types of health services, definitions of "medical indigency" and their economic implications and economic issues of geographic distribution of medical care will also receive attention through research and evaluation activities.

An estimated $7,000,000 will be used in 1975 to support studies in the area of economic analysis and financing.

Quality and Outcome of Health Services

Expanded research in quality of care will be an important new initiative of the Bureau in 1975. Previously, a significant problem in such research has been that of devising methods for measurement of quality. of great importance in measurement, as well as in the process of delivering medical care, has been the medical record. A new concept in recording medical data, the "problemoriented medical record", is the basis for an experimental health care tool now being tested in conjunction with physician-extender personnel in a variety of medical settings in New England. This new tool, a set of step-by-step guidelines to patient care, is designed to direct such personnel in making appropriate decisions, recording the treatment process and transmitting information to physician-supervisors for monitoring or referral. If successful, it could increase the productivity of a provider while assuring that quality is not sacrificed.

Underlying the problems of measuring quality of care is the difficulty in determining what is to be measured. Professional standards review organizations (PSRO's) are now developing nationwide. These organizations of physicians and other providers will offer an opportunity to direct the scrutiny of professionals in the state or locality to the quality and appropriateness of medical care delivered in their areas. Their initiation will intensify the need for well-supported information on the important elements of the process of care