B&B ImFoRmAkriom          ImAmE M^m^=EmENT
                           300 @ow4ce n--*=iVn R=uLxv
              Upoosca M,%nLmomc2, MA Pro ZC'77Z 0 U MA 11 CXC 1) 2410-01 1 0


                    STENOGRAPHIC                      TRANSCRIPT

                         DEPARTMENT OF HEALTH$ EDUCATION$ AliD WELFARE

                                 MEETING ON AIREAWIDI PLANNING

                                                 S:Llver Spring'  Maryl

                                                 8 Ju:Ly 196
                                                            3

                                 -ACE. FEDERAL REPORTERS, INC.
                                         @O   a I Reporters
                                          ffici
                                                          K4; W
                                         Constitution Aven6
                                                    I!L D'
                                         .'Washington
                                                        C.

                 Telephone:
                 393@01 1


    Craft/Renzi  1                                   DEPARTMENT OF HEALTH, EDUCATION, AND WEIYARE

                             2                                                           - - -

                             3                                     MEETING ON AREAWIDE PLANNING

                             4

                             5

                             6

                             7

                             8
                                                                                             Room 921,
                             9                                                               7915 Eastern Avenue
                                                                                             Silver Spring, Maryland
                          ,lo                                                                Monday, July 8, 1963

                                                     The meeting convened                    at 9:20 o'clock a.m., Dr.
                          12
                                  Jack Haldeman presiding.
                          13
  FR                      14

                          15

                          16

                          17

                          18

                          19

                          20

                          21

                          22

                          23

                          24

                          25

   ACE-FEDERAL REPORTERS, INC.
 261  CO,'4STITUTION  AvE  N.W
       WAIHINGT ON 0 C.


                                                                                                                                             2

                                                                               I N D E X

                            2    Agenda item                                                                                               P@e
                                       1
                            3     Discussion on implementation - Dr. C. Rufus Rorem                                                          8

                            4     Discussion on implementation in Southern New York
                                           Mr. Joseph Peters                 . . . . . . . . . . . . . . . ...                             48
                            5

                            6

                            7

                            8

                            9

                          10

                          1 1

                          12

                          13
  FR                      14

                          15

                          16

                          17

                          18

                          19

                          20

                          21

                          22

                          23

                          24

                          25

  ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AVE    N,W.
      W ASKINGTON. D. C.


                                                                             3

                                          P R 0 C E E D I N G S
                                           - - - - - - - - - -

               2            DR. HALDEMAN: I wonder if we could  get  on  with  our
               3  hog killing. I guess everybody is here  except  somebody  from

               4  Blue Cross.  McErner told me either he would be here or someone

               5  from his office would be here.

               6            I don't know whether we need  any  introductions.  I
                                                             t 1
               7  think we might go around and just rapidly call off.
                                  -auctions were made.)
               8            (Intro

               9            I think the purpose of this is probably three-fold.
              10            The first purpose, I think, is to get  a  discussion
              11  of methods of implementation of areawide planning.    George
              12  and I argued over this term "implementation" throughout the
              13  deliberations on the so-called Bugbee Committee,, and I  don't
 FR           14  think we ever found, really, a better word.
              15            MR. BUGBEE: The argument was on  the  semantics,  an
              16  idiosyncrasy of mine. I don't like the  word  "implementation",,
              17  but I have given up.
              18,           DR. HALDEMAN:  In the Bugbee Committee there  was  a
              19  lot of difference of opinion,, and the report as it came out
              20  contains very little in terms of specifics in terms  of  various
              21  methods that might be used for implementing  areawide  planning.
              22            Part of it was deliberate, I think, because we didn't.
              23  feel we were wise enough to make recommendations in  a  document
              24  such as this that would be applicable universally.
              25           And secondly, I think there might be some real
 ACE-FEDERAL REPORTERS,  INC.
26 1 CONSTITUT'ON  AVE.,   N.W.
   W4."N.TQI, 0. (;.


                                                                             4

               I  minority opinions if we had taken one side or another.  There

               2  were those on the committee that felt very strongly that  there

               3  should be franchising or the equivalent.  There were others

               4  that felt equally strongly in the opposite direction.  And I
               5  think both the Public Health Service and the American  Hospital
               6  Association that were sponsoring the committee had not taken

               7  any particular position in regard to this.
               8            It se@ to me like the time has come for setting
               9  down and at least discussing various methods that are being usad
              10  throughout the country to implement areawide planning, what ha3
              11  worked, what hasn't worked, and get a general discussion of th-@

              12  subject.

              13            I myself have mixed feelings on this  subject  because
 FR           14  it seems to me like it is an essentially negative  approach  and
              15  a lot of our hospital planning agencies, a great deal  of  their
              16  time is taken up in stopping construction of one kind or
              17  another.
              18            It seems to me like in the course of our  discussions,
              19  we might want to discuss what are some of the positive  element4
              20  in planning. I was right impressed with the  recent  article  by
              21  Bob Sigmond of Detroit in which he took off in depth on the
              22  positive elements of planning.
              23           The second general sub ect is one of priorities.
              24  I would like to make an assumption in this part of the discussion
              25  that the areawide planning agency is responsible for the
 ACE-FEDERAL REPORTERS. INC.
 261 CO"STITUTION AvF N   W.


                                                                             5

               I  distribution of capital construction funds, whether they be
               2  Hill-Burton or a modernization program,, Federal funds, or
               3  whether they be capital construction funds raised in the

               4  community such as in Columbus.

                            I think this problem of priority is one which in the
               5

               6  future years the Hill-Burton program is going to be faced with muc
                                                             1
               7  more than they are now because the current priority system under
               8  Hill-Burton which is largely a matter of relative need is
               9  fairly simple, end it works relatively well in rural  areas,
              10  but when you get into a metropolitan area, it obviously breaks
                  down.
              11
              12            And if we get a modernization program, every State
              13  Hill-Burton agency and every local areawide planning  agency
 FR           14  is going to have a problem of priority, not only in the general
              15  hospital category, but among categories.  And so I would hope
              16  that we would take a hypothetical situation, perhapsI, in a
              17  community and see what we can develop in the way of priority
              18  principles.

              19           I have always felt that if we get  a  modernization
              20  program -- Well, first, our specifications for a modernization
              21  program do require the areawide planning agency  be consulted,
              22  but secondly, will not spell but in any detail priority principles,
                  leaving that to the State Hill-Burton agency as well as local
              23

              24  Rill-Burton agencies.
              25           I thought probably that the process would be locally
 ACE-FEDERAL REPORTERS,  INC.
 2 61 CONSTITUTION AVE N     W


                                                                              6

               I  a good deal like an NIH study section would be,  pooled  profes-
               2  sional judgment based against certain general  guidelines  which

               3  are developed.
               4             Now,, the third thing I would like for us to  take  up
               5  is whether it would be desirable to have  what  might  amount  to
               6  a national meeting of personnel of local areawide planning
                                                              1
               7  agencies.  The American Hospital Association, Hi Sibley, and
               8  Public Health Service have just completed a series of seven
               9  regional meetings which were intended originally to  be  sort  of
              10  a field testing-for a cookbook that we had developed, based
              11  largely on these committee reports, but going  into  more  detail
              12  some detail as to the data needed for planning, the analysis
              13  of the data and what not.
 FR           14            I don't think any of these meetings really served
              15  that purpose.  And the reason it didn't serve the purpose was
              16  that the groups that participatd were, not only people from
              17  areawide planning agencies, but were a lot of  people  that  were
              18  broadly interested. And they served a useful  purpose,  I  think,
              19  in that it stimulated interest in areawide planning.
              20           As I was saying, I think those sessions  served  a  very
              21  useful purpose, but it was not as useful in terms  of  people  in
              22  areawide planning agencies who are actually doing the work in
                  areawide planning agencies, having an opportunity to get down
              23
              24     discuss more or less detailed questions and  to  discuss  the'
              25     gs that the staffs of areawide planning agencies are
 ACE-FEDERAL REPORTERS, INC.
 2 6 1 CONST'TUTION AVE N   W,
   W-@'llcl,ol L2@ C,


                                                                              7

                   interested in.

               2             So we wondered if there wasn't a need for a  meeting

               3   that would be pretty well confined to the individuals in

               4   working an the staff areawide planning agencies and, if so,

                   how should such a meeting be structured, when it should be
               5

                   and what not.  And I would like to take some time in this
               6

               7   area.

               8             As far-as I am concerned,, the meeting these two days
               9   is quite unstructured, and if you want to take off and consider
              10   other things, that is quite appropriate. I am not  quite  sure
                   what we will do with the proceedings, but we are having them
              11
                   taken down so that we can develop some sort of a report if  it
              12
              l@3  appears that many pearls of wisdom are being dropped.
 FR           14             George, do you want to discuss this from the standpoint
              15   of the background as chairman of the Committee on Areawide
              16   Planning?
              17             MR. BUGBEE: I think you have covered it  very  well,
              18   Jack.  I think we are all conscious of some worry about how
              19   far you go with legal sanctions, but I don't know that anybody
              20   feels terribly strongly.
              21             It is kind of an academic argument and  probably  not
              22   the most important method of-implementation anyway.
              23             So I suppose you go through the whole range.  Even in
              24   the informal conversation of last evening,, it seems to me people
              25   are developing quite a little experience in how to put these

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AvE   N.W.
    W.,@"G,oI0. C,


                                                                              8

               1  things in motion.

               2            I like your idea of positive as well as  negative,  too.

               3            DR. HALDEMAN:  I think when we talk about implementation

               4  we might try to bring in this element of positive action.

               5  Suppose I just go around the table and comment what you are-
               6  doing in this area and what you would like to do, what has

               7  worked and what has seemed not to work.

               8            Rufus, do you want to lead off?

               9            DR. ROREM:  Yes, I would be glad to be first to

              10  speak because I-am going to be the first to leave.  I have a

              11  9:00 o'clock plane tonight so I wonft be here tomorrow.

              12            Well, I think that we like to characterize our  effori:s

              13  as primarily being interested in stimulation of individual
 FR           14  hospitals to do planning on their own account and then stress
              15  in that the fact that the self-interest of an individual
              16  hospital means that they must be familiar with and aware of
              17  what the other institutions are doing.  And we have urged
              18  every hospital to appoint a long-range planning committee for
              is  its own institution, composed of representatives of the manage-
              20  ment, of the trustees, and of the attending staff and, if they
              21  wish to cooperate, community members -- it is all to the  good  --
              22  as well.
              23           Conversely, we work with  community  groups  particularly
              24  in areas where there is no hospital to study  the  characteristics
              25  of their own area to see whether and what kind of a health

 ACE-FEDERAL REPORTERS  INC.
261 CONSTITUTION AVE   N.W.
   wAstieNGTON o@ C.


                                                                              9

               I  facility may be needed.

               2            Now, one of the things that you will have to take

               3  away with you is our work document or guide for the use of

               4  long-range planning committees of individual  hospitals.  And

               5  in this, there is a tabulation of the results of our resident

               6  survey applicable to the year 1960 which shows in tabulations
               7  of 29 districts where the people of that area with  hospitals
               8  go as inpatients7of each of the 29 districts.

               9            In other words, when a person wants to  say:  Where
              lo  do the people who live around me go? -- the tabulation  shows
              11  where each of the 29 districts that are classified here  were
              12  hospitalized and, conversely, the planning committee of a
              13  hospital can see where its patients come from.
 FR           14           We will find, for example, that they might get 40
              15  per cent of their patients or some other figure from a particular
              16  geographic area.  Yet, they may only serve 10 per cent of the
              17  people from that geographic area.

              18           Our idea is that this would serve as the basis for the
              19  hospital to plan ahead and as to what areas it wants to be more
              2o  active in, the areas where it will encounter already entrenched
              21  position on the part of other institutions.
              22           This is strictly superficial.  It does not devise
              23  the services in terms of medical, obstetrics, pediatrics, and
              24  in this particular guide does not deal with outpatient service
              25  or nursing homes or many of the other important facts.

 ACE-FEDERAL REPORTERS,  INC.
 261  CONSTITUTICON   AVE.,   N.W


                                                                            10

               I            I mention this as a method because we use this as

               2  a backdrop for appraisal of any projects for expansion or for
               3  new institutions strictly as a guide and as a backdrop and
               4  try to keep this interest going.

               5            I might say that all of our general hospitals have
               6  now established long-range planning committees and four of our
               7  eight nongeneral hospitals, nursing homes, and things of that-
               8  kind and rehabilitation centers and home& for crippled childrea,
               9  have also done so.

             10             Just as far as implementation is concerned we use
                  no implementation except that of persuasion and the announcement
             12   of an official position which our organization takes after
             13   going through a series of hearings which we call nonlegal
FR                hearings.
             14
             15             If a hospital has a program on which they would like
             16   to have our opinion, it,goes through four steps.  They first
             17   have a conference I call a conference of the hospitals most
             18   likely to be affected.
             19            Now, after three and one-half year4,, those are very
             20   lively discussions and the insttitutions now are getting so
             21   their representatives -- these are administrators -- speak up
             22   frankly in their own self-interest which for a while they were
             23   very self-conscious.  It was a log-rolling affair.
             24       Then, it is brought formally between a committee of the
             25   administration and hospitals involved.  The institutions are

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE   N,W,
   WIIIIIIIIA, D. C@


                                                                               11

               I   always there, and that second group actually take a vote as to

               2   whether they think it is a good idea.

               3             DR. HALDEMAN:  What is the difference between the

               4   composition of the two groups?

               5             DR. RCREM:  The first group is the hospitals most

               6   likely to be affected, which means those are probably contiguous

               7   areas.  The second is a representative group of all the

               8   hospitals in th6'area elected by them --'seven people.  Then,

               9   that recommendation goes to all the hospitals in the area.

              10             Euphemistically, I guess I would say that every
              11   hospital administration is a member of an advisory committee tD
              12   us whether he likes it or not.  He just is.  And that group
              13   hear a statement description of it, and they take a vote.
 FR           .14            MR. BUGBEE:  In a meeting?

              15             DR. ROREM:  In a meeting.

              16             DR. HALDEMAN:  Open meeting?

              17             DR. ROREM:  Open meeting.  And they take open votes

              18   up to now.  We are talking about making it private, but it
              19   isn't  now.

              20             MR. SIBLEY:  How often do you meet?

              21             DR. ROREM:  About twice.  We meet in between times tD
              22   hear committee --

              23             MR. SIBLEY:  This group meets twice a year?
              24             DR. ROREM:  We have met twice this year because of
              25  special things that have come up.

 ACE-FEDERAL REPORTERS,  INC.
261  CONSTITUTION  AVE:.,  N  W,
         a C.


                                                                                12

                1            DR. KLICKA:  May I interrupt you?

                2            Is this meeting structured in such a way that you or

                3  your organization makes its recommendations on the basis of your

                4  guidelines to this group?

                5            DR. ROREM:  That's right..

                6            DR. KLICKA:  Before they start their discussion?

                7            DR. ROREM:  Not at these points.

                8            DR. KLICKA:  What do they base their consideration

                9  on?

              10             DR. ROREM:  Well, on the merits of the case.

              11             DR. KLICKA:  This is what I mean.  Who presents
              12   the merits of the case in a so-called scientific way?  Do you
              13   do this or do you permit the hospital that wants to do something

 FR
              14   to present its case alone?

              15             DR. ROREM:  The hospital is present.  The hospital
              16   really takes over and questions are asked in terms of the

              17   standards.

              18             DR. KLICKA:  But you don't evaluate this first for
              19   the group on the basis of your studies as to whether you think
              20   this is good or bad.

              21             DR. ROREM:  In the sense of in writing?
              22             DR. KLICKA:  No, it wouldn't make any difference, but
              23   it would seem to me that the group who were to be affected
              24   would first like to have the opinion of the Planning Committee
              25   relevant to how this would fit in the scheme of things.
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE    N.W
          7. C.


                                                                            13

                           DR. ROREM:  By the time it gets there, they know

               2 how or staff understands.

               3           DR. KLICKA:  How do you do this?

               4           DR. ROREM:  The first meeting, I introduce.  The
               5 first meeting is really a go-around, just a general talk.
               6  The second meeting, by that time, I have an opinion which I give
               7 a tentative -- no, it doesn't crystallize until after the thirl
               8 meeting.  Then, It crystallizes definitely.  And it still is
               9 a wandering discussion the first three times around.

             10            DR. HALDEMAN:  What is the third one?

             11            DR. ROREM:  Then, the third one is with the entire

             12  group of hospital administrators.
             13            And then, the fourth is with the Planning Committee
 FR          14  of our Board of Directors.

             15            MR. BUGBEE:  But each of the three groups has an
             16  official vote they pass On to the next one for examination.
             17            DR. ROREM: The very first one has no vote at  all,
             18  but the representative committee, the advisory committee as
             19  a whole., and the Planning Committee, and it goes to the Board
             20  with a specific recommendation that is very short.  And as it
             21  goes along, I make summaries of these which are acceptable
             22  to the institution, one-page-statement of which they might have
             23  had 20 pages. And they accept it as to whether or not it  is
             24  factual, but not analytical at that time. But after it  goes
             21  through the third one, we take a very definite position.  The

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvF   N.W@
         C. C.


                                                                              14

               1  recommendation goes to our Planning Committee.  And this is

               2  consistent with sound public policy and coordinated  planning

               3  in our area.

               4            DR. HALDEMAN:  What is the composition of your

                  Planning Committee?
               5
               6            DR. ROREM:  The Planning Committee is selected strictly
               7  from the Board of Directors.  It happens to be seven members;
               8  it could be eight.
               9            DR. HALDEMAN:  What is the composition of your Board
               10 of Directors?
               11           DR. ROREM:  Our composition of our Board of Director3
               12 is all laymen, some of whom may be hospital trustees.  They
               13 are the presidents of large corporations -- that is, financial,
 FR            14 industrial, and mercantile    plus several clergy and plus soma
               15 educators.

               16           We have an advisory committee, this  representative
                  committee that I spoke of,, of hospital administrators.  The
               17
               18 chairman meets with our Executive Committee and Board of Directors
               19 the Advisory Committee of Hospital Administrators and an
               20 advisory committee of the medical society, the profession., but
                  it is appointed by the president of the medical
               21                                                 society,  six
               22 people, with the president always ex-officio.  And we have
               23 quite a few meetings on the side.
               24          A3 far as priorities are concerned., I might say that
               25 priorities are f ound on page 11 of this report when we get to
 ACE-FEDERAL REPORTERS. INC.
 261 CONSTITUTION AvE  N.W.
         C. C.


                                                                               15

               I  it,, and these are the ones we have used.  They are a little

               2  bit generalized if you want to call it that, but the highest
               3  priority with almost no quibbling at all is to any programs
               4  which will contribute to greater coordination of  patient  care
               5  within the community rather than mere sanction of existing

               6  types of facilities and services.

               7            The second program goes to those which  will  achieve
               8  more effective tae of existing plant and personnel.  Moderniza..
               9  tion, of course, would be a part of that.
              10            The third is something like the second,, those  which
              11  will prolong the useful lives of existing facilities without
              12  jeopardizing the standards and efficiency.
              13           At the bottom of our list are programs which will
FR                increase bed capacity because we are caught up.  We are dealin@,
              14
              15  from a position of surplus rather than of scarcity.
              16           We all know it is easier to plan for scarcity than
              17  it is for surplus.  It is like the sailor says with the rope.
              18  He was really in a terrible jam because he had a rope that was
              19  too long.  He didn't know what to do.  He said, "If it was too
              20  short, I could splice it, but it is too long.  I don't know
              21  what to do.  I don"t know where to st!trt.
              22           So for what it is worth, that's what we do.  I didn't
              23  mean to take so much time.
              24           DR. HALDEMAN:  I think we ought to ask questions so
              25  we thoroughly understand how it works.

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE    N.W@
   W4'@ll"@' C C,


                                                                              16

               I             Does your Planning Committee ever override your

               2  committee  of administration?

               3             DR. ROREM:  It has not yet; it might.

               4             They have approved ten projects up till now expressly
                  and disapproved one.  And all of those up till
               5                                                  now were

               6  recommendations of the advisory group.

               7             But I might say that we haven't been brought into
               8  court as one of the people last night mentioned they have.
               9  We have been brought into the court of criticism and public
              10  dissatisfaction on the part of the client that wasn't happy,
              11  and they have used up till now their response and method of
              12  expressing dissatisfaction as being what the lawyers would
              13  call "ad hominum.11
 FR                          They put it, not on my Board of Directors  but on
              141                                                     9
              15  the staff  as being unreasonable and intransient.

              16             MR. COUSIN:  Jack, may I ask a question?.

              17             DR. HALDEMAN:  Yes.
              18             MR. COUSIN:  Rufus, what does it mean to a hospital
              19  in your area if your group gives its approval or turns
              20  thumbs down?
              21             DR. RUREM:  It means they can quote wherever they se(!
              22  fit the fact it has been approved by the Hospital Planning
              23  Association.
                             MR. COUSIN:  Does this have any real impact?
              24

              25             DR. ROREM:  Yes, for both small and large contributixisl

 ACE-FEDERAL REPORTERS,  INC.
261  Cot@STITUTION  AVE.,   N,W.


                                                                              17

               1  particularly for large and somewhat small.

               2            MRS. COLEMAN:  Has any hospital elected to not ask

               3  your opinion?

               4            DR. ROREM: Up to the present  time,  we  haven't  moved
               5  in and given it anyway, but we are thinking of doing that.
               6  If they don't ask our opinion, we are very  likely  to  adopt  the
               7  position of giving it anyway.
               8            MRS. @MAN:  How  big  a  projedt?  For  small  things,,
               9  I suppose they have no obligation to consult you at all.

             10             DR. ROREM:  No. but the Hospital Council of Western
                  Pennsylvania which works very closely with us  has  expressly
             11
             12   and by resolution suggested and admonished the  hospitals  to
             13   report and ask for approval whether or not the  public  campaign
FR           14   was contemplated and whether or not the amount was large.
             15             We are not defining the word "large."
             16             MRS. COLEMAN: Suppose they just wanted to  put  in  an
             17   intensive care unit or something like that.  Would that be
             18   something they should bring to you?
             19             DR. ROREM: As a matter of fact,  one  hospital  did
             20   exactly that about $125,000 they wanted to  spend.  They  did
             21   bring it to us. And in the condition like that, it doesn't
             22   go through all the channels.  It goes straight from the staff
             23   to the representative committee and Planning Committee.  The
             24   Board never hears about it.
             25             MRS. COLEMAN:  suppose it was something that di&lt

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE   N.W@
         C. C.


                                                                                 18

                1  cost very much money, but was a vital change in  scope  of  the

                2  hospital like they wanted to take out pediatrics or put in

                3  pediatrics or something like that,, but they  weren't  increasing

                4  the beds.

                5            DR. ROREM: The hospitals that  want  to  do  anything

                6  like that generally take the initiative and want  to  get  some
                7  approval because they know they will,  probably.  And  so  there_
                8  is no special peoblem. And in a few cases,  they  have  done  so.

                9            We have a hospital which this week on Friday will

                10 announce that it is closing its obstetrical department and thaL
                11 all obstetrical services will be going to a hospital two blockg

                12 away as of next Monday.  It is a 300-bed hospital with a 36-bel
                13 obstetrical unit. And the hospital that is  going  to  pick  it
 FR             14 up is a 550 bed, mainly maternity hospital.  And the doctors hive

                15 been on both staffs all the time.

                16           They are going to close it. And on  that,,  we  worked
                17 with them all through this. I can't say we  were  more  than  an
                18 influence. That hasn't gone through  two  channels  at  all.  It
                19 was applauded from the beginning, and it.- is now a reality.
                20           MRS. COLEMAN: So whether  it  goes  through  channels
                21 or not depends pretty much on the amount of money involved.
                22 Is that more or less true?

                23           DR. R@: I  would  say  so  pretty  much  and  whether
                   or not there is to be a public camp#
                24                                     ,ign, the  two  combinations.
                25           One hospital has announced by 1970 it  plans  to  build

  ACE-FEDERAL REPORTERS, INC.
 2 6 1 CONSTITUT'ON AVE N   W.


                                                                             19

               i  a doctors' office and interns and residents home  and  expand

               2  and improve its emergency and outpatient department which

               3  obviously would be improved. They have  got  the  money.  But

               4  they can't spend it until the urban redevelopment association

               5  has declared an area that is blighted. So they  had  to  make

               6  this statement of this policy in order to help the urban

               7  redevelopment.,
               8            There -is a case where the facts have been known to

               9  us, but no formal application.  We are just a little bit

              io  embarrassed that it broke in the papers, and I have told peoplB
                  I think in their self-interest they ought to have their

              12  program on record with us as it develops.

              13            All isn't perf ect with us.
 FR           14            DR. HALDEMAN:  You say that in ten instances,, they
              15  approved the contemplated action of the hospital and  in  one
              16  instance they did not, is that right?

              17            DR. ROREM:  That's right.

              18            DR. HALDEMAN:  So usually, they go along.
              19            DR. KMEM:  Usually, the institution goes along.
              20            As a matter of fact., we turned down two.  But
              2i  before it came to a vote of our board, the hospital said,
              22  "Would you mind if we just withdrew the application completely
              23  which they did.  They came back a second time six months later
              24  and it was approved.

              25            DR- HALDMAN:  If you had it to do over again,

 ACE-FEDERAL REPORTERS, INC.
 261 CONST TUT ON AvE   N.W,
         C. C.  l@


                                                                              20

                I  would you use the same mechanism or a different one?  It seems

                2  to me it has the element of a little bit of back scratching

                3  if the decisions are pretty well made by administrators.

                4            MR., BUGBEE:  Does it?  Or if you have 26 of them or

                5  25 always supercritical of the 26.

                6            DR. ROREM:  I might say that this last one, the one
                7  that is now coming through a second time, is one that decided_
                8  to ignore -- Thi-s is one that was turned down, went right
                9  ahead anyway.  It happened they got Hill-Burton money and had
                10 that to go on. And they went ahead anyway.

                11           And, incidentally, the two we turned down both
                12 received Hill-Burton money because of the particular gerrymand.-r-
                13 ing at that time of the area.  And the one that recast its
 FR             14 program, we approved.   The other one, we haven't approved, ani
                15 it is well along.

                16           Off the record.

                17           (Discussion off the record.)
                18           MR. BUGBEE:  Rufus, to this point Jack raised, thoUgIL,
                19 would you find the 26 administrators when you get to that stag(,,
                20 or as they filter up from representatives,, are they fairly
                21 Judicious, or do they log-roll?
                22           DR. ROREM:  Let me tell you what happened this last
                23 time.  Usually they are unanimous.
                24           This last one is going through the channels a second
                25 time.  And of 18 out of 26 that could have been present, 11
 ACE-FEDERAL REPORTERS, INC.
 261 CONST'TUTION AVE . N@W.
          C. C,


                                                                           2 1

               I  voted to let the old disapproval stand.  Four decided that it
               2  ought to be changed.  One of those votes was the institution
               3  itself.  And four decided they didn't want to take a position
               4  and abstained.  So it is not always unanimous.
               5           DR. KLICKA:  As you evaluate this kind of a situation,
               6  what is their reasoning based on -- a prett 7 sound analysis of
               7  the material that you presented to them?
               8           DR. R@M:  I would be willing to say yes.
               9           DR. KLICKA:  You agreed with it, didn't you?
             10            DR. ROREM: @Yes.

             11            Mr. Willis was present at all of these.
             12            Dave, why don't you get into any points as long as we
             13  are discussing this?  You are at a distance now where you can
FR           14  think back where we could have done something different. Is
             15  what I have been saying somewhat similar to what you might hitviE
             16  said?

             17           MR. WILLIS:  Yes.

             18           DR. RMEM:  Up to now?
             19           DR. HALDEMAN:  First, I think Jack Cousin had a question.
             20           MR. COUSIN:  I wanted to know,, do you work with ostec-
             21 Pathic hospitals andt secondly., how does Government react to
             22 this?
             23           In Other words, if there is a city, State or a county
             24 institution, or even if there is a health problem involving the
             25 cityo State,, and county, Federal Government.  We don't have
ACE-FEDERAL REPORTERS, fNC.
61 CONSTITUTION AVE N  W.
        D. C.


                                                                               22

               1  much luck except with Hill-Burton, but the city, State and Coulty,

               2  for example, if it is a city hospital and they want to cut  out

               3  pediatrics, does this get to you either from the hospital or

               4  from the city council or the Board of Health?

               5            DR. ROREM: 'Let me say first of all, and this  makes
               6  us unique, this happens to be a trading area in which there  is
               7  no local government hospital, the largest one in America by far.

               8            Secondly, there is one 25-bed osteopathic hospital in

               9  this whole area.

             10             And the third is that there is no proprietary
             11   hospital in the whole area.  It makes the issues a little

             12   sharper.

             13             Another fact is that at the present time we don't
FR           14   know of any M.D.s who want a staff appointment that donle  have

             15   one.

             16             Now, the osteopaths, however, they have a nice
             17   hospital, and you,go 25 miles out or 30, osteopath hospitals
             18   start up again.  But in Pittsburgh, they haven't up to now.
             19             MR. COUSIN: What would you do if you had  a  request
             20   for an osteopathic hospital and you could pretty well  develop
             21   that the osteopathic physicians had much fewer beds  available
             22   to them than the M.D. hospitals, and they wanted to put a
             23   hospital up where there was a surplus of beds, but not of
             24   osteopathic beds?
             25             DR. ROUM:  I know.  I don't know what we would do

 ACE-FEDERAL REPORTERS I NC.
261 CONSTITUTION  AVE  .  N  W.
   W@ ........ 0. C.


                                                                                                                                               23

                            1     at  this  point.    I  suppose  after we  got  over  the  faint,  the
                            2     faint  of  the  first  time,  we would see what  could be  done  about
                            3     taking  care  of  these  people  because  our  State  is  very  similar
                            4     to Michigan  except  that  here  the  M.D.s  have  the  lily-white
                            5     concept which  is  pretty well accepted  in the  general  community.
                            6     That  is  strictly M.D.
                            7                       I  don't  know  of  any  institutions  in  the  immediate
                            8     area  that  have  any M.D.  hospitals  that  have  osteopaths  only-
                            9     not  a  single  one.
                         10                        MR.  COWIN:    We  have  something  like  2,000  osteopathic
                         11       beds  out  of  17,000.    We  have  one  county where  something  like
                         12       15  per cent  of  the  people  in  the  county are being  cared for b
                         13       osteopaths.
 FR                      .1.4                     DR.  ROREM:    We  have  less  than 50  out  of  8,000.
                         15                       MR.  COUSIN:    And you are  not  going  to change  that;
                         16    we  are  not.
                         1.7                      MR.  BUGBEE:    I  don't want  to stop  at  the  osteopath,
                         18    but  I want  to ask you,  you have been a  little  elusive  about
                         19    who  presents  the brief  for  the  hospital.
                         20                       In fact,  as  you are  describing  it,  the  hospital
                         21    presents  its  data  and you and all  the  rest question the  data,
                         22    but  it  is  really  the applicant's  responsibility  to present  all
                         23    the  data.

                         24                      DR.  ROREM:    Yes.

                         25
                                                You  understand  that  this  has  all  reached  them before
 ACE-FEDERAL REPORTERS. INC.
 61 CONSTITUTION Avc  N.W,
     W         a c


                                                                           24

               I  they come to the meeting.
               2           MR. BUGBEE:  That's right, but still, it is their
               3 presentation rather than the planning staff.
               4           DR. ROREM:  Up until it reaches our Planning Committae,
               51 then I am in there giving my opinion pretty strongly.
               6           MR. BUGBEE:  Or you might question them or ask them
               7 for new data or bring in your own data.
               8           DR. R@:  That's right.
               9           MRS. COLEMAN:  Do you tailor their program somewhat?
             10  Do you modify it?  In addition to approving or disapproving,
             11  do you change?
             12            DR. ROREM:  I would say it is fair to say that most
             13  of the programs by the time they even reach the representative
FR           14  committee have been changed materially.
             15           Wouldn't you?

             16           MR. WILLIS:  Yes.
             17           I think it is part in answer to your question and Mr,
             18 Bugbee's to note that there is a working schedule set up.  Eveiy
             19 hospital must have its long-range planning committee, which
             20 committee must announce long in advance of the time it comes
             21 to these official committees what its tentative plans and
             22 programs are.  And then the staff works with them.  And most
             23 of the modification and so on occurs there in the early
             24 planning stages before it ever comes to the committee.
             25           DR. ROREM:  I might say we have Postponed I would sa]p
ACE-FEDERAL REPORTERS, INC.
61 CONSTITUTION AvE  N.W.
  W45.1,@'ON, 0. C


                                                                             25

                  at least a dozen projects, not disapproved, just postponed.
               2  And just they were out of this world and weren't to be considered
               3  at all.  One project was for complete rebuilding of a mental
               4  hospital.  Th ey were going to spend money for renovating first
                  and $5 million for a nonprofit unit of about 300 beds  and it
               5
               6  looks now as if they are going to just drop it completely and
               7  'go out of the-nurses home business and set these people up over
               8  in their big nufges home.  And this is an illustration.
               9           DR. KLICKA:  In these meetings, Rufus, is there a
             10   complete agreement on the accepted bed need for an area between
             11   your organization and the State organization that is responsible
             12   for the administration?

             13            DR. RCREM:  And the Hill-Burton.  There is now.
FR                         DR. KLICKA:  Do they accept your figures or you
             14

             15   accept theirs?
             16            DR. ROREM:  They are the same figures.
             17            DR. KLICKA:  You are not answering my questions.
                  Are they yours or their f igures?
             18
             19            DR. ROREM:  We gather the figures for them.  There
             20   is no conflict as to what the mathematics is.
             21            DR. KLICKA:  Who computes the beds?  Do you do it
             22   or the State do it?
             23           DR. ROREM:  For the State plan?
             24           DR. KLICKA:  No. for these regions that you are
             21 talking about where a hospital comes in and says, "We want to
ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE    N.W@
        i7. C.


                                                                            26

               I  develop a program that will add 200 beds.  Does that 200-bed
               2  figure come within your purview or is it the State plan?
               3            DR. ROREM:  It isn't cut that fine, really.  We typi-
               4  cally would accept as available beds some that might have been
               5  thrown out as non-fire-proof which ate in use.  The State'
               6  uses a strictly mathematical formula for engineering for
               7  acceptable and nonacceptable beds.  So we would be inclined to
               8  have on balance -included in the list of beds some that we
               9  know to be closed down, for example, which the State wouldn't
             10   know because they don't go behind that., and some which the
             11   State would regard as nonacceptable.
             12            DR. KLICKA:  All right.  There is a problem there,
             13   but I am talking about the overall bed need for a region.  Who
FR
             14   compiles that bed need?  Do you do it or the State do it to
             15   sItart with?  This is a fundamental thing.
             16            MR. WILLIS:  The State does it.
             1.7           MR. BUGBEE:  Who said you are f lush.7 in beds?  You
             i8   started out a while ago saying you have more beds than you
             ig   need.  Who said that?

             20           DR. ROREM:  We assert that on the basis the beds
             21   are not used to capacity and on the assumption we keep current
             22   records of bed use.  And on this simple principle, if beds areIL't
             23   used to reasonable capacity, there isn't a need for more in
             24   the totality.  And this isn't just a single figure.  The bed
             25 vacancy is a composite.

ACE-FEDERAL  REPORTERS,  INC.
(51 CONSTITUTION  AVE  .  N.W
        o@ C.


                                                                              27

                             Whatever the bed vacancy, maybe more than half of
               2   those  are maternity and pediatric and something else, less
               3   than  half are medical and surgical.  And one of the things that
               4  we work toward and are trying to bring about is the transfer
               5  of medical, obstetrical, and pediatric facilities for use'for
               6  general beds.  And if that were done, it would relieve the
               7  need completely even in periods in the winter peaks.
               8             MISS ANKINS:  You mean for medical-surgical,, diverting
               9  O.B. and pediatrics to medical-surgical?
              10             DR. ROREM:  Yes, and we are trying to get more
              11  hospitals to drop this obstetrical entirely.
              12             I hasten to say the hospital that is doing this isn't:
              13  doing this as a matter of abstract theory.  It is a very
 FR           141 practical administrative decision on their part.    We don't
                1
              15  hope for anything more than enlightened self-interest, at least
              16  I don't.  I hope every hospital would be guided by what it
              .17 thinks is best for itself, but would also know what is going or.
              18  around it so it would be an enlightened self-interest and
              19 Inot a short-sighted one.
              20            MRS. COLEMAN:  Do you have very much difference in
              21 quality between your hospitals?  I mean, do you have very good
              22 ones and very poor ones?

              23            DR. ROREM:  Yes.
              24            MRS. COLEMAN:  This presents a real problem.  If a
              25 good hospital wants to add beds, but there are enough beds if
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT ON AvE.,  N  W@
         a C


                                                                           28

               1  you count all these raggedy beds around, what do you do in
               2  those instances?  You say you can't build any more beds
               3  because we have enough beds in this area?

               4           DR. ROREM: You asked what do we do. We do  the  best

               5  we can.  But what do we think or what do we say?

               6           MRS. COLEMAN:  Yes.

               7           DR. ROREM: We try to take a look at the  particular_
               8  need.

               9           For example, one hospital adding beds for research
             10   work in metabolism, we don't consider that as having to competB
             11   with the medical-surgical cases.
             12            Likewise, another hospital has added which we approved
             13   just recently a building program which is going to add eleven
FR           14   intensive care beds and a few more for rehabilitation.  They
             15   don't have to scramble for our office's priority concept.
             16            And another one is going to put up, which we approve4l,
             17   a 78-bed chronic care unit right on the grounds of the
             18   institution.  We don't regard that as being competitive with
             19   the addition of general care beds.
             20           MISa' JENKINS:  Rufus, do you examine those parts sucli
             21   as the chronic and long-term care units and so on on the basis
             22   of the hospitals justification, will it be financially sound
             23   if they want to do a certain type of research?  Do you discuss
             24 with them are they going to utilize this facility? It is  goini
             25 to be a charge to the general patients to underwrite it, or  dc
ACE-FEDERAL REPORTERS, INC.
261 Co STTTUT ON AVE N  W


                                                                           29

               I  you go into this at all?

               2            DR. R@:  The only place that research has come up
               3  has been in connection with the university medical school and
               4  affiliated institutions.

               5           MISS JENKINS:  That's enough said right there.
               6           DR. KLICKA:  Do you think that's the role of 'the
               7 Planning Council?

               8           MISS J M INS:  To some extent.
               9           DR. ROREM:  We get into the operations, if you mean
             10  by that --

             11            DR. KLICKA:  I wonder if we could put this on the
             12  agenda.  I think it is a very important question.
             13            MISS JENKINS:  Do you think it is basically wrong,
FR               Carl, if they are going to put a particular special service in
             14
             15  which they have not well programmed?
             16            DR. KLICKA:  We are talking about research?
             17           MISS JENKINS:  Oh, no.  I am talking about research
             18 where it involved beds and what the financing of that research
             19 will be.  I am thinking only in terms of beds -- that is, beds
             20 that would support research.
             21           DR. KLICKA:  This wouldn't be very many beds.  You
             22 are talking about a small 7- or 8-bed ward to support a
             23 specific research.
             24           MISSJENKINS:  I would not be involved in that.  I
             25 thought Rufus was talking about something a little bigger than
ACE-FEDERAL  REPORTERS,   INC.
61 CONSTITUTION  AVE  .  N  W,
        0. c


                                                                           30

               i  that.

               2            DR. ROREM:  We do have one 24 beds.

               3            MR. WILLIS:  I would like to add something to Dr.
               4  Roremis last three comments, first, to Dr. Klicka.
               5            When Dr. Rorem was just getting started, the state
               6  agency computed bed needs simply on bed population  ratio.  And
               7  all of their ratios were much higher than locally was  believed
               8  to be necessary.- And this created, you can well imagine,  some
               9  problems.  Money was dangling there and plenty of empty beds
              10  around.

              11            Two things occurred to change that situation.
              12  First and most important was that the state Hill-Burton began
              13  to modify the bed population ratios by direct inclusion of
FR            14  utilization data in their concept of need.
              15           The second was the Hill-Burton areas  themselves  were
              16  redefined so that the city boundary was broken.
              17           Now, in Pittsburgh, as in most cities, there was an
              18  excess of beds to population.  Once you broke down the city
                  boundaries as arbitrary limits of an area, you throw those
              19
              20  excess beds into the suburb calculation and you imediately
              21  watered down that need, too.
              22           So both these things happened at the same time.  And
              23  interestingly, the local hospital when presented with the idea
              24  of changing the Hill-Burton areas this way, knowing in advance
              25 that this was going to virtually wipe out any Hill-Burton
ACE-FEDERAL REPORTERS,  INC.
26 1 CONSTITUTION AVE.  N@W
   W@LH@NGT @, D@ C.


                                                                            31

               I  priorities for general beds, still went along and voted for
               2  it.  And the express comment was, 'We better learn how to use
               3  what we have before we ask for more, it which was pretty good.
               4            I am not sure all of them really knew what they were
               5  voting for, but they did.  And the Hill-Burton agency adopted

               6  the same areas.

               7           Then'the matter of quality.  When these areas were
               8  redefined, a big teaching hospital and a good hospital  was
               9  put at the core @f each area.  So every area has got at least
              10  one good hospital and every area has got at least one bad
              ii  hospital.  So the good hospital begins to protect the interes.tii
              12  of that area, and it will always be given a higher priority to
              13  try to protect that way.
FR            14           On the matter of getting involved in  program  and
                  1
              15  1financing, I would like to point out a difference that  has
              16  impressed me between the way this is happening in New York and
              17  the way it happened in Pennsylvania.
              18           In New Yorkp statistically, there is a great unmet
              19  need for long-term care beds and virtually every hospital in
              20  the Rochester region is putting in an application for nursing
              21  home beds and chronic disease beds and so on.  This was quite
              22  a marked contrast to the situation in Pittsburgh where C. Rorem's
              23  group had gotten so involved with each institution pointing out

                                                                            mmin
              24  the difficulties in financing and in staffing and in progra   &
              25  and how this will relate to the short-term care and so  on.
 ACE-FEDERAL  REPORTERS,  INC.
26 1 CONST'TUTION AVE   N.W
   W@ ;HINIIQN 0. C.


                                                                              32

               I  There were very few tears because they anticipated the

               2  problem, whereas in New York they were doing it simply on the

               3  basis of beds and available money and nobody is really terribly

               4  concerned about how this is going to be financed or what  the

               5  program is going to be.

               6            One, you have a plethora, and the other one a dearth.

               7  I don't know which is better.
               8            MR. C6@IN: Rufus, if I  understood  you  correctly,
               9  before a project comes to your attention, each hospital has
              10  to have a long-range planning committee and a long-range plan.

              11            DR. ROREM:  That's right.

              12            MR. COUSIN: Now, has your Planning  Council  okayed
              13  all of these long-range plans because it is conceivable --
 FR           14            DR. RCREM:  We haven't even received them all.

              15            MR. COUSIN:  It is conceivable to me a hospital coull
              16  come to you with a short-term project that fits in very nicely
              17  with a hospitals long-term planning, but the long-term planniig
              18  doesn't tie in at all with the long-term community  planning.
              19            DR. ROREM: Right, it could be. We do  the  best  we

              20  can.

              21            For one thing, we just continually repeat in variatiims
              22  on this theme that it isn't the first cost, it is the  upkeep
              23  that causes the most of the problems for the institution  and
              24  the community.  A $4 million hospital is going to cost $60
              25  million before it is discarded.   Somebody is going to have to

 ACE-FEDERAL REPORTERS,  INC.
261 Co"45TITUTION AVE    N.W
   w@lh(II-1-01 0 c


                                                                              33

                  pay t     divided by three for the annual operating budget for
               I       hat,

               2  rough-and-ready purposes and figure the length of life.
               3 And so you aren't just committing yourself to $4 million;  you
               4 are committing yourself to $64 million, assuming no change  in
               5.the price level.

               6           MR. SIBLEY:  It sounds like marriage.

               7            (Laughter.)
               8           MR. COtbIN:  Do you intend to eventually O.K. all of
               9 their long-range plans?

             10            DR. ROREM:  We aspire to that, yes.  I don't want
             11  to give the impression that this is -- You know, a guy always
             12  can talk more freely away from home.  I imagine the rest of yoii
             13  are doing the same thing.
FR           14            (Laughter.)

             15            DR. HALDEMAN:  Rufus, behind your whole discussion
             16  and the effectiveness of what you have done, isn't this the fact
             17  that there are relatively few major sources of capital construc-
             18  tion funds,, a few industrialists provide a fairly large bulk?
             19            DR. ROREM:  I would like to answer that.  That's what
             20 'I thought when I came there.

             21           DR. HALDEMN:  But it isn't true?
             22           DR. ROREM:  It is not true.  Big industry provides
             23 in the gross something less than -- I thought in the  aggregate
             24 about a third of all capital funds, corporate contributions.
             25 It isn't true.  It is not more than 20 per cent, and it is

 AGE-FEDERAL REPORTERS.  INC.
261 CON-TITUTION AVF    N.W@
   K@    0. C,


                                                                           34

               1  concentrated in the areas up till now where the big industries
               2  have their concentrations of employees.  And suburban hospitals,
               3  just for general purposes and convenience of travel, have a
               4  very hard time getting big corporate support.  I mean the
               5  new residential suburban hospitals.
               6           Now, a town like Homestead or McKeesport or Sewickley
               7  where there are heavy concentrations of employees, they
               8  continue to give-very, very good support once a thing has gone
               9  through.

             10            DR. HALDEMAN:  Conversely, if your organization did
             11 I'not recommend that there be an addition to a hospital, would it
             12   be very difficult for them to raise the capital construction
             13   funds?

FR
             14            DR. ROREM:  Yes, it would -- has been.
             15            DR. HALDEMAN:  In other words, in the last analysis
             16            DR. ROREM:  Even if they weren't going to give an
             17  awful lot anyway, it still throws a pall over the campaign,
             18 no doubt about it.
             19           DR. HALDEMAN:  But you do in a situation wheteyour
             2o real implementing force is the influence on the givers of
             21 capital construction funds.
             22           DR. ROMM:  Especially big givers.
             23           MR. BWBEE:  The thing you brought out last night
             24 that is important, too, you say 20 per cent big givers and 20
             25 per cent small givers, your small earners and bank loans and
ACE-FEDERAL  REPORTERS,  INC.
61 CONSTITUTION AV E  .  N@W@
        0. C


                                                                            35

               I  bank loans are affected by sanctions$ too, you see.

               2            DR. ROREM:  That's right.

               3            MR. BUGBEE:  I don't know as much as they should be
               4  but didn't you and Jack both say that the loaners are beginning
               5  to talk about what the recommendation is?

               6           DR. ROREM:  That's right.
               7       I might say also that we haven't had a general hospital
               8  even give any tCought to a big program unless they got Hill-

               9  Burton money.

             10            MR. BUGBEE:  Unless it got?
             11            DR. ROREM:  Yes.  And up to now, some are starting
             12   to talk about it, but it is all for expansion or for non-bed
             13   activities and no bed expansion has even been thought of
FR
             141  except in terms of Hill-Burton support.
             15            And up to the present time,, there is no difference
             16   of judgment between the Harrisburg office and ours.
             17            MR. BUGBEE:  You mean from the present on, not up to
             18   the present time.

             19            DR. ROREM:  No, actually, the very first six months we
             20   were there,, we disapproved two plans.  Both of them a month
             21   after we disapproved them were approved by Hill-Burton, both
             22   of them.  And we are still wrestling with that fact.
             23           We later approved one, and we still haven't approved
             24   the other.

             25            DR. HALDEMAN:  Off the record.

AGE-FEDERAL REPORTERS, INC.
261 CONSTITUTI(ON AVE    N.W@


                                                                            36

               1            (Discussion off the record.)

               2            DR. KLICKA:  I hope we can come back to this.

               3  This question is beginning to be a real problem in Illinois.

               4            DR. HALDEMAN:  Well, I don't mind opening discussion.
               5            Well, we will put it on the agenda to discuss.

               6            MR. BUGBEE:  Let me ask, Rufus, has Hill-Burton
               7  designated you? Do they before they grant money now  ask  your_
               8  recommendation?-'Is there any official or unofficial  agreement
               9            DR. ROREM: Yes, in writing, and I have to  quote  it.
              10  They will make no final decision on a request for Hill-Burton
              11  funds until they ask our organization whether it is  consistent
              12 with the broad plan for Allegheny County.
              13            MR. BUGBEE:  It hasn't gone long enough for you to
FR            14  tell except those rec    ndations.
              15             DR. ROREM:  After those first two went through, there
              16 has been no difference of opinion.
              17           MR. BURLEIGH:  What kind of a time interval elapses,
              18 Dr. Rorem, the time you first have a project until the time the
              19 Council --
              20           DR. ROREM:  First brings it to our attention, put it
              21 that way.
              22           We don't always live by, but we have set an eight
              23 months time lag, eight months lead time'.  And we have spent
              24 that particularly with respect to Hill-Burton recommendations.
              25 But sometimes it is two years.  Sometimes it is quite a while.
 ACE-FEDERAL REPORTERS, INC.
261 CONST'TUTION AVE    N.W,
   W@,.:N"ON 0. CI


                                                                           37

               I            I know I am taking up a lot of the time, but I am

               2  getting my money's worth in here because I can't be here

               3  tomorrow. But I might say that we had two hospitals that were

               4  all ready to go. They were going to apply for Hill-Burton.

                  It was pretty clear they weren't going to get it, so they
               6  relaxed. So they are now getting down to the merits. They

               7  can get it now.

               8           They we're four miles from each other. They had
               9  almost identical short-range and long-range problems. The short-
                  range problems, they both had unsuitable facilities being used,
             10

             11            One happened to be the obstetrical department which
             12   was in the prime location and was too big and the medical and
             13   surgical facilities needed to be replaced.
FR           14            The other had exactly the opposite. The obstetrical
                  department was in bad space in old buildings and medical and
             15
                  surgical was running high. So they both had to do something
             16
               7 quick within five years, also in three years, but also something
             18   quick.

             19            So we focused their attention, each one, upon what
             20   they could do without -- using the expression -- doing anything,
             21   what administrative decisions could be made.
             22           And in cooperation with the Hospital Council and a
             23   physician on their staff, we made administrative and space
             24   utilizations of what they now got.  As a result of the
             25   inspection, we turned up the equivalent of about 25 beds in
ACE-FEDERAL REPORTERS, INC.
261 CONST TUTION AVE    N.W.
        0. c


                                                                             38

               I  one institution that could be had just for administrative

               2  decisions.

               3            For example, a certain segment of pediatrics could
               4  be used for medical and surgical.  That's  one  illustration.
               5            The director of nurses had herself and her assistant;
               6  right in the middle of the patient care area with empty space
               7  in the nursing home 50 feet away.   All she had to do was move-
               8  out and there were eight beds.
               9            Another was an introduction of a  discharge  timing
              10  which by announcement,curiously enough was accepted by the
              11  'doctors and had the equivalent of opening up another eight
              12  or ten beds as far as this total was concerned.
              13           So they are back to normal again, but still need to
                  I
FR                do something.
              1.4
              15           And the other hospital wasn't full except in the
              16  medical and surgical.
              17           The point I am coming to is this simple that at
              18  several meetings, I finally got the representatives of the
              19  boards of both hospitals together, Willis with me. We  had  a
              20  long session and I talked freely.  When I wrote up the minutes,
              21  I called it a su  ry. I even gave it a  title  --  "Challenge
              22  and Opportunity." And the challenge and the  opportunity  was
              23  to work together. And I recommended that they have a list of
              24  about 20 things in which the hospitals were alone and seven
              25  things that they could do together and recommended they have a
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE   N.W.
         D. C.


                                                                            39

               I  joint consultant on a program.
               2            And they have agreed to this and are going to pay
               3  out cash for a joint consultant.  And it will be a physician
               4  in our area.  They have agreed on someone.  It looks now as
               5  if it is going to be one of the members of the school of publi:
               6  health, Dean Clark, you all know him.
               7            So we get neck keep into operation and into operatin@
               8  finances.  And w-e have the advantage that there is nothing
               9  except sympathy and understanding from the Hospital Council.
             10   And Mr. Sigmond's -- who is so interested in this -- main
             11   criticism of us is we don't do enough, we don't get deep
             12   enough into operations.  We should be doing more; we should
             13   be pressing harder.
FR           14            So the criticism we get isn't that we are interfering
             15   too much, but we aren't interfering enough, which as a short
             16   round is a good criticism to have.
             17            MR. PETERS:  I am inclined to say -- you mentioned
             18   eight months and as high as two years for a proposed study --
             19   in New York there is a proposed bill which hasn't got a committee
             20   yet, but it will probably have a committee this year which says
             21   that the regional council should make c   nts on establishment:
             22   of new construction in 45 days and 60 days on expansion of
             23   facilities.  And this has bothered a lot of us because we won-
             24   dered how with our particular committee structure we could get
             25   an opinion out in 45 days that represented anything than an
ACE-FEDERAL  REPORTERS,  INC.
6 I CONSTITUTION AVE .  N,W.
  WA,qr@c@@N D. c


                                                                             40

               I  off-the-cuff opinion.

               2            George can comment on that because George was

               3  chairman of one of our committees for years and knows  how

               4  difficult it is to extract an opinion in 45 days.

                            MR. BUGBEE:' He is probably right   Eight months

               6  is about what it takes.

               7            MR. PETERS: That's pretty much  our  experience,

               8  about eight montfis.

               9            MISS JENKINS:  This is consoling, Joe.  We had one
              10  demanding an opinion next week,.,and it has been four months
              11  now, and we are taking a beating over it. And we  are  not

              12  about to render an opinion yet.

              13            I will go back and quote you.
 FR           14            DR. ROREM:  A3 it goes forward and the other describe

              15  their procedures, I would be very much interested to know what
              16  reactions you folks have to getting the administrators and

              17  representatives of other hospitals involved because as far as
              18  I know, we are the only ones that get the other  hospitals
              19  involved with anything like this depth.  And I might say this
              20  was written into our bylaws, this advisory committee of
              21  hospitals, before I came and at the insistence of the hospitals
              22  at that time.

              23            I say "hospitals," the presidents and management.
              24            MRS. COLEMAN:  What is the range in size among the
              25  hospitals?

 ACE-FEDERAL REPORTERS,  INC.
261 CONSTITUTION AvE   N,W.


                                                                           41

               1            DR. ROREM: Our smallest hospital, general  hospital,

               2  short-term hospital, is 119 beds.

               3            MRS. COLEMAN:  And the largest?

               4            DR. ROREM:  About 650.  We have four of those.

               5            DR. HALDEMAN:  I don't want to prolong this.  There
               6  is one other area, though, I think we ought to get into.in
               7  relation to each of the communities we are going to talk about.
               8  And that is the @entral city versus suburban problem and what
               9  the problems are and how you are meeting it because it seems
              10  to me like an areawide planning group, this is one of the hardest
              11  problems to tackle.

              12            You may have a surplus of beds in a central city, bul:
              13  you have suburban areas growing up which are going to, in many
 FR           14  instances, get proprietary beds if you don't let them have their
              15  own beds.

              16            You might speak to that point.
              17            DR. ROREM:  We take the position that suburban,
              18  through statistical facts which are true which we point out.,
              19  a number of statistical facts, one is that at the present time
              20  there are not many specialists living in suburban areas having
              21  offices in suburban areas.  They haven't come out there in part
              22  because there haven't been hospitals.-
              23           But we have suggested that the principle of the
              24  satellite hospital be used and even if it is a,bed facility that
              25  it be an offshoot or be sponsored by one of the larger

 ACE-FEDERAL REPORTERS. INC.
261 CONSTITUTION AvE..  N  W,
   wqs@'Na@ON, 0. C.


                                                                              42

                I institutions in order to reduce overhead costs and duplication

                2 of facilities.

                3           There is an emotional appeal in the new  areas,  of

                4 course., for an institution that will be identified and be  a

                5 part of it.  But when the chips are down for money, they don't
                6 come forward with the money.  And even this institution, thi-S
                                                              1
                7 $4 million institution, that is going forward, after three
                8 years, they hav4-'raised and have got $1 million in pledges, caith

                9 some portion of it. And it is not  identified.  We  tried  to

              10  get them to identify it whether it be an offshoot  or  branch
              11  of one of the other larger hospitals, but it is an old institution
              12  with a good name, and they wanted to continue it.
              13            They are moving away from an area of great need, but
 FR           14  also an area quite uninteresting to the institution because it

              15  is a blighted area.
              16            MR.BUGBEE:  You know, Jack, on this issue you raise,
              17  it is like the question of the administrators  conference,  I
              18  think.  One of our major problems is trying to establish
              19  procedures and principles that apply to different sized metro-
              20  politan areas.

              21            I suspect New York, Chicago, probably Detroit,
              22  Pittsburgh, is probably the size where you can do it, Cleveland,
                  Rochester, Columbus.
              23

              24            DR. ROREM:  That's right.
              25            MR. BUGBEE:  For the administrators council, but i
 ACE-FEDERAL REPORTERS, INC.
 26 1 CONSTITUTION AVE   N.W@
          0, C.


                                                                             43

               I  think the questions of suburban versus central city  are
               2  almost equally separated.  And we talked last night, and Rufus
               3  got this page where he has five regions.
               4           Well, you could make an argument about central city
               5 serving the entire area much more validly than you could in
               6 Detroit, I would guess. I think your  issue  is:  Do  you. want'
               7 your beds spread that way?  The old Hill-Burton geography
               a points towards sireading, but I don't know that the travel
               9 anywhere here is prohibitive.
               10          DR. ROREM:  There isn't anybody who is more than
               11 one half-hour from a hospital.
               12          MR. BUGBEE: You at least by travel have  the  option
               13 Of having the hospital in the center or outlying.  Then, the
FR             14 question comes where it should be and that's the part I  don't
               15          DR. ROREM: I used statistics that I am sure  I  call
               16 attention to in one item of the travel.
               17          One, I point Out that after all, these fine roads
               18 that cause people to move out to the suburbs run both directions.
               .19 So, you see, it is just as easy to get back as it was to go out.
               20         And the other is that as far as bed cire is concerned 31
               21 on the average, a person is bedded down at the advice of a
               22 doctor about once every eight years.  But on the average, he will
               23 see a doctor about live times a year.  So only one out of 40 that
               24 see a doctor.  So the important thing is to have doctors in the
               25 community that are handy and quick.
ACE-FEDERAL REPORTERS, INC,
61 CONSTITUTION  AvE  N  W.
  W@.",NG,ON , D, C,


                                                                                  44

                1             We had a situation in our area where a man    . a
                2  department head of one of our large corporations, worked his
                3  heart out on a drive for a hospital that was only going to be
                4  a half-mile from his house.  He thought, "How wonderful when
                5  you wake up in the night and the kid has a cramp and rush him
                6  to the hospital."  And just before the ribbon cutting, he wa@
                7  transferred to Milwaukee and had to start all over again.
                8             (Laughier.)

                9             So this idea of convenience to a hospital.
               10             And another case, one of the fellows working on this,
               11 j'his wife got sick while up in Butler County and had to come
               12  back 20 miles.

               13             MR. BWBEE:  Rufus, you are talking about the five
 FR            14  visits versus once in eight years.
               15             Jack, even that little research you did or your
               16  department did pointed out that parking was the crucial thing.
               17  See,.even for the five visits a year, if you had your doctors
               18  where there was ample parking, probably the half-hour isn't
               19  prohibitive to take the child, leave out the emergencies.
               20             DR. RMEM:  In the study of emergencies. we found thiLt
               21  the people that are medical emergencies or psychological
               22  emergencies where they travel fast to get somewhere, they waited
               23  longer before they were seen than they did the time traveling
               24  to get there.
               25            MR - S IB LEY: I  w.ant to follow.Rufus' point a little
 ACE-FEDERAL REPORTERS, INC.
261 Co"ST'TUTION AVE N    W.
          0 c


                                                                           45

               i  more because it leads into a broader subject perhaps which you
               2  just ended by saying you are planning for the location of
               3  physicians and you are not using physicians at all in your
               4  procedure by which you review hospital plans or patient care
               5  facility plans.  You are using only hospital administrators.
               6           And at this point, the question comes,, is the hospital
               7  administrator capable of speaking for his medical staff, or
               8  are medical staff's willing to abide by the speaking of the
               9  administrator when the review takes place?
             10            DR. ROP-EM: It is up to the institution to have
             11   cleared all of this before it comes to us.  And some of these
             12  bring physicians along to these meetings.
             13            I might say further that we propose from now on because
FR           14   of the interests of this committee of six doctors to use them.
             15   They have even said they would be willing to go on record as
                  taking a position on plans.
             16
             17            MR. SIBLEY:  So this would be another planning
             18   procedural step-
             19            DR. ROREM:  It would be a parallel one or participating.
             20            MR. SIBLEY:  You gave us four steps.  Would you put
             21   it in here some place in the four steps?
             22            DR. ROREM:  It would be a parallel one.  The six
             23   doctors are invited to all these meetings. A couple of times,
             24   they have come.
             25            MR. SIBLEY:  So up to now, your physicians, the
 ACE-FEDERAL REPORTERS. INC.
261 CONSTITUTION AvE     N.W
         t. c.


                                                                          46

               1  representatives of organized medicine, because I presume this
               2  is what they are, have not felt threatened, so they have not
               3  begun to appear.
               4           DR. RMEM: That's right, but they say now they are
               5 willing to and would like to. There is no provision for them 'to
               6 take an official position, but the chairman has said they
               7 would be willing to take an official position. And I have got-
               8 to'bring that to my board and see if we want them to.
               9           DR. HALDEMAN: Jack.
             10            MR. COUSIN: I was going to ask something else, but
             ii  this physician discussicnchanged it a little bit.
             12           When we did a patient distribution study, the same
             13 as you did, we also did physicians.
FR
             14           DR. ROREM: We did, too, but we can't analyze it
             15 statistically.  It is too vague.
             16           MR. COUSIN:  We are going to do this over again-about
             17 every five years.  But meanwhile, we have done it-from time to
             18 time in certain study areas for certain specific purposes.
             19          DR. ROREM:  You mean just the facts where the doctors
             20 leave their offices?

             21          MR. COUSIN:  Yes.
             22          DR. ROREM:  We have done that.
             23          MR. COUSIN:  We have discovered a great many more
             24@pecialists out in suburbia than you seem to indicate.
             25          DR, ROREM:  We are getting more, too.  The last three
ACE-FEDERAL  REPORTERS,  INC.
26  1  CONSTTTUTION  Avc.,   N.W,
   W45HII-I@N 0. C


                                                                             47

               1  years made a difference.
               2            MR. COUSIN:  Getting back to the central city versus
               3  the suburbia and probably the size of the city metropolitan
               4  area has a lot to do with it, but besides, what about suburbanite
               5  not wanting to come downtown because of the parking, and not
               6  only because there is this terrific emoticqal play in having
               7  a hospital in X,, Yo Z suburb, many of the patients and
               8  perhaps even a higher percentage of physicians do not like some
               9  of the social changes that are taking place in the metropolitan
             lo   hospitals.
             11            You could give them the world's best parking lot and
             12   you could have all these beautiful highways running back and
             13   forth, but they just don't like going to some of these formerl3 an(
FR           14   still well-known top-flight institutions where the complexion
             15   of.the patient load is changing rather drastically.
             16           MR. COUSIN:  The nice people want to be in the-country.
             17           MR. BUGBEE:  Be sick with other nice people.
             18           MR. COUSIN:  And some of these hospitals out in the
             ig country are having a higher percentage of specialists than they
             20 had previously. And gain of the top-flight run at  the  Harpers
             21 and Graces and Mt. Carnals and so forth -- well, Mt. Carmel  is
             22 semi-suburban -- but saw of these top-flight @town hospital
             23 are losing a@ of their better men, particularly the follows
             24 50 years and under who &re moving their offices out into the
             25 Birmingham's and the Grosse Points and so forth.
ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT'ON AVE .  N@W
  W,    0. C.


                                                                               48

               I             So that I am not so sure that the roads and the

               2  parking are all the answers.

               3             DR. ROREM:  Oh, no.

               4             DR. HALDEMAN: I think we perhaps ought  to  move  on
               5  to Southern New York.  I do this with a bit of anxiety, you
               6  might   say.

               7             During the Bugbee Committee deliberations, we had
               8  four representat7ives of this metropolitan area on the committee
               9  and we finally had to pass a rule that New York City couldn't
               lo be mentioned in this-committee -- (laughter) -- that we would
               ii never come up with a report on areawide planning.
               12            In recent weeks, I have had a chance to talk to a
               13 number of the people in New York interested in this metropolitan
 FR            14 planning group.  And that is to the coaching by lbvg Coleman.
               i5 I think I was assured that something could be done in this area.
               16            So, Joe, I wondered if you would lead off, and-Georg(@
               17 might like to speak, anyway you want to present it.
               18            MR. PETERS:  Again, we seem to be outnumbering the
               19 rest of you three to one, although George is a  Chicagoan  now.
               20            MR. BUGBEE:  Alumni.

               21            MR. PETERS:  But a very important alumni.
                                                                        4b
               22            Actually, as far as New York is concerned, you  have
               23 got to think in terms of two distinct organizational structures.
               24 First is the 24 years continuous existence of the Hospital
               25 Council of Greater New York.  And then, more recently, during
 ACE-FEDERAL  REPORTERS,   INC.
261 CO@NST'TUTION AVE,.   N.W
   w@sHt,qG,QN, C. C.


                                                                            49

               1  the past year and a half or so, the Hospital Review and

               2  Planning Council of Southern New York.

               3            Even though there is a tie between the two, they are

               4  structured somewhat differently, although a good deal of the

               5  history of the former has been inherited so far by the latter.

               6            Let me talk first about the Hospital Council of

               7  Greater New York which I said had 24 years of existence and
               8  which was the first planning council which purported to

               9  represent the community and which had a community-based  board

              10  of directors.

              11            We devised a master plan when Dr. Pastore was  there
              12  in the middle 140's.  This master plan, as you all know, and
              13  I won't go into it in detail, is based on the bed-death  ratio
 FR           1,4 and established a certain number of beds and made some arrange..
              15  ments for distributing these beds primarily by teaching functions.
              16            Over the years, we found that it was of little.use t4)
              17  us. And during Dr. Nickelson's regime, we pretty much discarded
              ,8  it, although we have still continued to use a  modified  figure
              19  based on the bed-death ratio.  And I say, "modified". we modif],
              20  it pretty much the same as,you all do on the experience of
              21  demand,, use.  If we find facilities aren't being used, quite
              22  obviously, we have a sufficient number of beds.      0
              23            In New York City in general, I am talking about  the
              24  five boroughs of New York City, we have a sufficient number of
              25  bedsl although as is true of probably all of your areas., they
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT ON AVE N   W,
        I(
   WASHIIGTON. D. C.


                                                                           50

               i are very poorly distributed. Manhattan has many,  many  more

               2 beds than it needs and roughly about 60 per cent of all  the

               3 patient care rendered in Manhattan hospitals is rendered  to

               4 Manhattan patients.  The other 40 per cent of the patients

               5 come from all over the'city and all over the region and even,.

               6 from all over the country.

               7           So our big problem in gew Yor@ which parallels

               8 pretty much what-br. Rorem talked ab out here, we have an  area

               9 where we have enough beds.  We found out that the population

             10  'of New York City.has gone down since 1950 and little change is

             11  expected in the next 20 years.

             12            In fact, we have just published, and I am sure all

             13  of you have a copy of it, a monograph dealing with the  future
FR           14  population of our region.  We find that in New York City, as I

             15  said, we expect little or no change in numbers of people,

             16  although we expect at least a 2 million growth in the  other

                 counties outs ide of New York City, primarily Nassau, Stiffolk
             17

             18  and a few of the ones up north of the city. So  this  presents

             19  a new problem for the new Council.

             20            First of all - what do you do with New York City?

             21  And secondly, what do you do to meet the growing needs in  the

             22  suburban Counties?

             23            We haven't done much about the latter, and one of the
             24  big things we have done during this first year of our new
             25  existence has been to .spend as much time as our small  staff

 ACE-FEDERAL REPORTERS, INC.
 61 CONSTITUTION AVE   N,W.


                                                                            51

               I  would allow to get familiar with the problems and the character-
               2  istics and the hospitals of the other nine counties outside of
               3  New York City.  And this is a tremendous job.  We are talking
               4  about now outside of New York City more hospitals than probably
               5  any of you have except Dr. Klicka.  We are talking about 100.
               6  hospitals outside of the five boroughs of New York City and
               7  140 general hospitals in the five boroughs of New York City,
               8  a total of 240 tf6spitals with roughly 115,000 beds, I believe.
               9  We are talking about a huge complex.
             10             I dreadit)o think what would happen if our present
             11   staff got the long-range plans of every one of these 240
             12   hospitals.

             13             (Laughter.)
FR           14            I wouldn't know how to file them, much less how to
                  interpret them.  It isn't a problem.
             15
             16            Ours is a problem of dimension to a great extent.
             17   So let me talk about how the old Council operated and then go
             18   into very briefly how the new one hopes to operates
             19            The old hospital council did not get involved --
             20   correct me if I am wrong, George, because you were on the
             21   policy end, I was really on the staff end -- the old hospital
             22   council did not get involved in studying hospitals or giving
             23   advice unless it was formally asked.  This is pretty much like
             24   you said your early days were.  We did not do any studies.  We
             25   did not render any opinions.  We did not make any recommendations
ACE-FEDERAL  REPORTERS,  INC.
26 1 CONSTITUTION AvF  N,%Iv


                                                                              52

               I  unless the group or the hospital or the agency wrote to our
               2  Board of Directors and our Board of  Directors took this up at
               3  its next meeting and passed a resolution that the staff should
               4  or should not work on the problem.
               5            This was the pattern for at least during my stay there
               6  and I am sure it was a pattern for all the 24 years of the old
               7  council.  This meant and still means that a lot of institutions,
               8  a lot of agencidi, do what they darn well please because unless
               9  they ask us, we have never given our advice.  And,, unfortunately,
              10  an awful lot of.hospitals haven't asked us.
                            In fact, some of the greatest institutions have never
              11
              12  asked us about our opinion.  And until very recently, none of
              13  the proprietary hospitals of which we have about 40 in New
FR            14  York City and another 20 outside to make a total of 60  have
              15  never asked our opinion, although in the past year this  has
              16  changed drastically. But this is not because of  any  action
              17  which our Board has taken, bCit the action which Dr. Trussel
              18  and Doug Coleman of the Blue Cross have taken.  That is, they
              19  now ask us to give our advice on these institutions.
              20           So we are now advising on the need for proprietary
              21  hospitals, but as many people say, it is closing the barn door
              22  after the horse has left.   We have 60 now.  The problem now
              23  is to keep those 60 at that number.
              24           I say we did studies.  Actually, we did three major
              25  types of studies over the years.  We studied individual
AGE-FEDERAL REPORTERS, INC.
61 Co STITUTION AVE   N,W


                                                                            53

               I  hospitals at their own requests and I would suspect we have
               2  done about 100 of those in the past 24 years.  Our batting
               3 average has been very good, I think, on the individual hospital
               4 studies.

               5           We have had our failures, but we have had some
               6 great successes, particularly in recent years.
                                                            I'
               7           Now, individual hospitals ask us questions.  A usual
               8 question, of cou-r,se, is:  Should we add more beds, inaugurate
               9 a new service or new program and so forth.
                           We study those and write a written report which in
               10
               11 the old Hospital Council was sent to a committee which we
                 called the Master Plan Committee.
               12

               13          Now, the Master Plan Committee was structured as a
FR             14 combined committee of the Board of Directors and a group
               15 of outstanding, for want of a better word, technicians.  We ha@
               16 about a dozen people on that committee and about half of them
               17 Were board men.  George Bugbee was the last chairman of the
               18 Master Planning Committee.  We don't have it any more as such.
               19         And we had men such as the Commissioner of Hospitals
               20 of New York City.  That is the man responsible for the operation
               21 of the city's municipal hospital system.  We had some knowledgeable
               22 physicians who were engaged in research.  We had Blue Cross
               23 who is on it at this time -- Doug Coleman.  Even before he was
               24 on the Board, I think.  But we had that type of person plus
               25 Board people, knowledgeable people, who could give us technic 1
ACE-FEDERAL  REPORTERS.  INC.
61 CoNSTITUTION AvE N     W.
        0 C


                                                                              54

               I  advice and Board people who could give us the reaction of the

               2  community.

               3            DR. ROREM:  Any voluntary hospital administrators

               4  on that?

               5            MR. PETERS:  Yes  we usually had one who came usually
               6  as a representative of the Greater New York Hospital Associati,Dn.
               7  which is the trade association.  In the past few years, it has
               8  been Martin Ste:C@berg who, as you can well imagine, brings  a
               9  much broader approach than that of a  hospital  administrator.
              10            The hospital administrators we have had on  it  have
              11  been selected, not primarily because they were hospital
              12  administrators, but because they could give us a broad picture
              13  They were not there because they served one hospital or one
 FR
              14  group of hospitals.

              15            The Master Plan Committee reviewed the staff's
              16  recommendation. The staff would write a report  and  bring  it
              17  directly to the Master Planning Committee at which time the Maj;ter
              18  Planning Committee would discuss it at great length.  And
              19  George can tell you what great length means.  They  would  ask
              20  all sorts of questions because you had very knowledgeable peop e
              21  on this committee who could ask very specific questions and gi-e
              22  very specific reactions to the report.
              23            In some instances, it was necessary to bring the
              24  report back on a second or third occasion until it met the
              25  approval of the Master Planning Committee.
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE    N,W,
   W@5@"GTON 0. C.


                                                                            55

               I            MR. BUGBEE:  I never was sure whether it was the

               2  function of the council, but I would say they were as detailed

               3  and probably better than most consultants would do on a

               4  community plan. They might have 100 pages in great  detail.

               5            MR. PETERS:  The average report ran about 30 pages, 3ome
               6  went to 100, some reports even went into more than that.
               7           When-the Master Plan Committee approved the report,
               8  and I might add that they rarely approved the report without
               9  putting some sort of word change or something. They  always
             10   put their hand on the report.  It never came out precisely
                  'as it went in. There was always some change, either a word
             11
             12   change or policy change or adding a recommendation or taking
             13   out a recommendation, although in general, the sense of the
FR           14   report always was the same as it went in.  I don't know of
             15   any time when the staff was completely overruled.
             16            When the report was approved by the Master Plan
             17   Committee, it went to the Board 'of Directors. The Board of
             18   Directors, of course, then did the same thing to it, but with
             19   not quite the elaborate discussion that you would get in the
             20   Master Plan Committee.  And this is the report that was sent
             21   to the hospital.
             22            Now, the biggest problem we faced then and still
             23   face to some extent is how do you assure that the hospital
                  or the group to whic h you are addressing the report will do what
             24
             25 Youwant them to do.  And this was the great problem that

 ACE-FEDERAL REPORTERS,  INC.
 6 1 CONSTITUTION AvF     N.W
         o@ C. ii


                                                                               56

               1  plagued the old Hospital Council.

               2            We did have one great instrument and  one  which  was

               3  very helpful over the years. And that is,  we  with  the  Hill-

               4  Burton agencies were working with the State of New York on

               5  a contractual basis to administer Hill-Burton  funds  locally,..
               6  So a great deal of our leverage we had during the last @YS
               7  of the old Council was based on this Hill-Burton leverage.
               8  We could actuall-@ make specific recommendations on  where  the
               9  Hill-Burton money in the five boroughs of New York City should
              10  go and this gave us, as I said, a great deal of leverage.
                            And there are many people who believe that many
              12  hospitals asked us for studies merely to get on  our  good  side
              13  so they could get Hill-Burton money. I  suspect  this  is  true.
                i
FR            14  It is certainly not a bad thing.

                            It is certainly better to have a hospital come to us
              15
              16  for Hill-Burton money after we have  made  recommendations  than
              17  have them come to us cold.  So we didn't look upon this as
              18  such a terrible thing.
                            We used it  and I think we used it to good advantage
              19                      9
              20  in many instances.  For that, I would say some of our best
              21  Hill-Burton grants came out of the fact we did do  a  study  and
              22  some of our worst came out of the fact we didn't know too much
              23  of the hospital because we haven't had a chance to study them Ln
              24  depth.
              25           We had our failures, and let  me  tell  you  something
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT'ON AVE N   W
   V,, - , , , ,, C, C


                                                                             57

               1  about the failures. You learn a lot by the failures.

               2            One of our most persistent group of failures over
               3  the recent years has been what do we do with the specialty
               4  hospital of New York City. New York City still has a number
               5  of specialty institutions. It has, I believe, four or five
               6  well-known institutions which provide care for eye, ear, nose.,
               7  and throat patients.  At least two of these are among the
               8  greatest institutions of their kind in the world.
               9           MR. BUGBEE:  With the first physical plant.
             10            MR. PETERS:  Both of them have old physical plants.
             11   'One goes back to the 1890's, the other goes back to the early
             12   1900's.  Both of these institutions have looked to the HospitaL
             13   Council for advice.
FR           14            One of them has come to us from, I think, the first
             15   study the Council did in 1939.  It was the New York Eye and
             16   Ear Infirmary.  And one of the last studies we did prior to
             17   taking on the new Council was New York Eye and Ear Infirmary.
             18   We did three studies,, and in all three institutions we urged
             19   them to close down their present plant because it was inadequate
             20   and to merge with another institution.  The hospital still
             21   exists independently, so you can-see how successful we have
             22   been.
             23           Another hospital, Manhattan Eye and Ear, was a little
             24   smarter. They never officially asked our opinion, but they
             25   constantly worked with Us.  They never wrote that all-importart
ACE-FEDERAL REPORTERS, INC,
26 1 CONSTITUTION AvE: N    W.
   W..... @,, 0 C


                                                                             58

               1  letter to the Board requesting a survey.  But  their  President

               2  has worked very closely with us over the  years.  And  again,

               3  it has been a failure even though they have had the  best  of

               4  instructions. They have taken every step  possible  to  merge

               5  with institutions, but have never been able to work out  a

               6  program of mutual satisfaction of both institutions.
                                                             T
               7            And the hospital now with the advice of one of the

               8  outstanding coni-iltants in America is planning to rebuild next

               9  door to its present location.

              10            Those.have been two of our  great  failures.  These
              11  have been the knottiest problems because I say we are not
              12  dealing here with the kind of hospital which we  so  frequently
              13  deal with in Now York City -- that is, the  inferior  hospital.
 FR           14  Here, you are talking about great institutions, institutions oF
              15  world leadership. And I don't think I am  exaggerating  to  say
              16  these are world leadership institutions. And  this  has  been
              17  the.problem.  What do you do with the specialty hospital.
              18            We have argued about this. We have  long  lived  with
                  this concept that there is no need for a specialty hospital.
              191
              20  Yet, when you get down to a particular institution, particularly
              21  a great institution, you begin to wonder what do you do with
              22  them.
              23            DR. KLICKA:  You succeeded with one, Women's Hospital.
              24            MR. PETERS:  Yes.
              25            Well,, we succeeded, but it is still occupying  its

 ACE-FEDERAL REPORTERS. INC.
261 CONST TUTION AVE N   W.


                                                                            59

               1  present plant.  Its plan is to merge, but until it actually

               2  closes down, we haven't succeeded.

               3            MRS. COLEMAN:  It is being merged administratively.
               4            DR. KLICKA:  They are building a new building.

               .5           MR. PETERS:  Yes.

               6            We have succeeded with others, New York Orthopedic
               7  and one or two others.  It hasn't been all failures by any
               8  means, but thes@two have been the knottiest ones.

               9            MR. SIBLEY:  You regard this as a problem because
              10  this is criteria you are talking against.  You set up a criteria
              11  there shouldn't be specialty hospitals.
              12           MR. PETERS:  Yes, our Board says we shouldn't have
              13  specialty hospitals.
 FR           14           DR. KLICKA:  What if you had a children's hospital?
              15  Do you think that Board would be against this?

              16           MR. PETERS:  Yes.
              17           MRS. COLEMAN:  Not adamantly so.  Even though they
              18 take a position, they are not married to it to such an extent
                 they want to see good care stopped in order to prove something.
              19

              20           DR. KLICKA:  Wouldn't you consider a children's
              21 hospital a specialty hospital, but being a little different
              22 really, than an ear, nose, and throat hospital?
              23           MR. PETERS:  A children's hospital is really nothing
              24 more than a general hospital for little people.  We are not
              25 against all specialty hospitals.' We have certainly not
 ACE-FEDERAL REPORTERS. INC.
 261 CONSTITUTION AVE    N@W
         @ C


                                                                            60

               I  resisted the movement of the hospital for special surgery.
               2             Of course, they are affiliated with somebody else and
               3  are working closely with New York Hospital, New York-Cornell

               4  Complex.

               5            What we are trying to do with each of the specialty.
               6  hospitals is to get them to affiliate with another institution
               7  and if and when the time comes to replace their plants to get-
               8  some sort of geographical proximity.  And here is where your
               9  problem comes in Nw York City, Manhattan particularly, where
              10  land becomes a very expensive commodity.
              11            Well, that's the type of hospital we have had
              12  failures with.   One of the big problems is everybody hasn't
              13  asked our opinion.  Unfortunately, some of the greatest institi-
 FR           14  tions haven't asked our opinion, but these are great institutions,
              15  and they have tended pretty much to do what is in the best
              16  interests of the community.
              17           Now, let's go into the new plarming agency, the
              18  Hospital Unit Plarming Council of Southern New York.
              19           DR. HALDEMAN:  Joe, I hate to interrupt, but one or
              20  two people have indicated that a break might be in order.
              21           MR. SIBLEY:  Jack, I don't think everybody knows
              22  Jim Ensign from the Blue Cross Association who has come in.
              23           (Whereupon., a recess was taken.)
              24           DR. HALDEMAN:  I wonder if we can get on with our
              25  hog killing.

 ACE-FEDERAL REPORTERS, INC.
26 t CONSTITUTION AvE N   W.
         0, C.


                                                                                61

                I             MIS3 JENKINS: Jack, that typifies  you  as  coming  fro
                2  Oklahoma.

                3             DR. HALDEMAN: Five years from now  I  won't  say  that$
                4  probably,  after being exposed to New York.
                              DR. ROREM:  You will move up the animal kingdom and )e
                6  sacrificed at some other level.
                7             DR. HALDEMAN: I might even be seen  with  an  umbrella-
                8 Where I came fro-m', a man who walked down'the street with an
                9 umbrella would get laughed off the street.
              10             MR. BLUBEE:  I suppose you will appear at the last
              11  meeting with a Hamburg
              12             DR. HALDEMAN:  O.K., gentlemen.
              13             MR. PETERS:  Let me run down very briefly the organi,,,,a-
 FR           14  tion structure of the new Council and then let  me  give  you  some
              15  background on the criteria that was distributed to  you  today  ilk
              16  this material because I think you might find it of some interest
              17  in your work.
              18            The new Hospital Planning Council of Southern New
              19 York is a successor agency to the old Hospital Council.  It
              20  officially came into being last spring which makes it over a
              21 year old now.  It covers 14 counties, the five counties or
              22 boroughs Of New York City, and the nine Outlying counties whict
              23 take it out as far as Montauk Point on Long Island and a little
              24 bit north of Poughkeepsie in New York.  It is the southern tiez
              25 of counties in New York.

ACE-FEDERAL  REPORTERS,  INC.
61 CONSTITUTION  AVE  .  N,W.
  WASI'A@ION, 0. C,


                                                                               62

                I            There were many problems in structuring this, and
                2  there is nobody more qualified to tell you about the  problems
                3  that were faced in this than George Bugbee because he was the
                4 chairman of the group that brought this about.
                             For your information, Georgq, there are  still  some
                6 unresolved problems.

                7           MR. BUGBEE:  I know.
                8           MR. PETF.RS:  Particularly with relationships of
                9 one of the subgroups in the area which is constantly giving
              10  indication they.would like to break loose and go out on their
              11  own, saying they would like to plan-for the 2 million people
              12  in their area which makes a pretty good sized planning area.,
              13  by the way, 2 million people.  But they originally consented
FR            14  to join us, and one of the big problems in the immediate future
              15 is going to be how can you work with these people, still givin,,r.
              16  them some degree of autonomy in their local affairs  and  still
              17 bringing them into the whole regional complexion.
              18            This is going to be perhaps one of the most difficult:
              19 organizational problems that the Council is going to face in
              20 the coming months.  But the new Council, as -I said., covers
              21 14 counties, and it was structured so we would get representation
              22 from the entire region.
              23           We have a Board of Directors of 43 people, 36 of whcxi
              24 are elected and seven are so-called ex-officio members who
              25 represent county commissioners of  health,  county  commissioners
ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE  N.W,
        0 C,


                                                                                          63

                 1   of welfare, and the various commissioners in New York City.
                 2   It is much larger than the old Council.

                 3              The old Council Board, as I recall, was about 30.
                 4   This is 43. Although it is very encouraging to say that the
                 5   attendance even though some of these men come from 150 miles
                 6   away, has been remarkably good. I certainly can't say that th!
                 7   Board is too,big in terms of attendance., We certainly are
                 8   getting 30, 31, jeople at.every-meeting, morelthan that. And
                 9   some of the one,-- who don't ,come are the ones locally.
               10               In fact,--the,ones from outl;of thecity have been
               ii    'very diligent in attending,,,and, .we, certainly have ,no problems
               12    in that.
               13              As to whether    the Board is too big    to  managed Ao far:
FR             14    it,,,has,been no problem,  b
                                                 ut :,it. - is :,r-c)nceive k:th4kt.
               i5    P:ri* lem,irk .the f tk@ure. W-P- hadAk. master. p@.-lan,; tommittee.,.bef ore
               16    whic@hliacted asL sort.@of
                                              a,n,@ executive COmmitt,,Oe "in, -t;l'lat it;,;revieiFed
               17    all - the- -studies and made recommendations Lprior to giving it -to
               ,8    the Board.. That.,committee h4A.Officially been abandoned, but
               19    in its place, we have-set uP,One:Of,a prpposed,four.committees
               20    the Facilities ,plarming Committee
                                                            whir-hwill represent,one of
               21    the maj.or functt@s,,..of the Counci@$,,-.4nd this-,wi.11 be
               22    @Ommitt;ee
                                                       k             s      xp
                                                       w:Lt:,h -prob leck -. o-e ans.ion,,,.-.
                     a
               23    f f illiation, ancl.,,,so .,f orth.@1%
               24          t@ We,, Plan tP., -a et up three,,.other, Llommi-ttects@,,.:and three
               25    otheroperat-ing@:
                                                        n                                    Ss
ACE-FEDERAL  REPORTERS,  INC.
61 CONSTITUTION AVE N  W,


                                                                               64

               1  and administrative services.

               2            MR. SIBLEY:  Would you define each one a little more'

               3            MR. PETERS:  Sure.

               4            Facilities planning will deal with the problems of

               5 construction, expansion, location of  hospitals  in  Accordance.

               6  with measures the committee needs.  They will probably be pretty

               7  much in the entire area te old Council stressed.  That is,

               8  resources, physical resources, how you distribute them  and  so

               9  forth. This is nothing more than an expansion of  our  old  role

              10            We are hoping to get into the whole area  of  medical

              11  services. Here we are thinking in terms  of  the  problem  that
              12 Ann Coleman raised, the problem of quality,  quality  of  medical
              13  care, which is a bit of a problem in New York City bec ause  in
 FR           14  New York City, you have,, I won't call it unique, but  certainly
              i5  its-dimensions are greater.  You have some of the world's

              16  greatest institutions side by side with some hospitals which
              17  wouldn't.pass muster in some of your rural areas, even.  You
              18  have got a lot of small hospitals.
              19            Rufus said the smallest hospital was 119 beds.- I
              20  wish we could say that in New York City.  We can't say that.
              21  We have a lot of them 80, 90, 75 beds.  A lot of these are
              22  proprietary hospitals.  Particularly in Brooklyn, there are
              23  a good number of small voluntary hospitals.  Some of these
              24  are good institutions, some of,them are not so good.

              25            A large number of the proprietary hospitals  have  not

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUT'ON  AVE.,  N.W.
   W ...... @,, D@ C.


                                                                               65

               1   even met the standards of the Joint Commission on Accreditaticn
               2   of Hospitals.  And even though they have passed those standards$
               3   it still leaves much to be desired as far as good hospital
               4   care to the community is concerned.
               5             We are concerned about this, and we are also concerned
               6  about another problem which Rufus doesn't seem to have.  And
                                                               1
               7  that is the problem of medical  staff  appointments.  I  wish  we-
               8  could say that every doctor in New York  had  the  appointment  he
               9  wanted or has an appointment.
              10             DR. ROREM:  Not the one he wanted.  They have got
              11  some.

              12            MR. PETERS:  Some appointment.
              13            We found on the studies we have done that 70 per
FR                cent of all the doctors in New York City do not have a voluntary
              14

              15  or municipal hospital appointment.
              16            I mean, 70 per cent have and 30 per cent  do  not  have.
              17 Seventy per cent have a municipal or voluntary appointment and
              18 30 per cent do not have.
              19            This does not say that 30 per cent do not have.
              20 proprietary appointments or do not have courtesy appointments.
              21 We have no way other than contacting each doctor individually
              22 of knowing this.
              23           At the present time, the medical directories in New
              24 York State do not give courtesy appointments or proprietary
              25 @"O$Pital appointments, 'Although we have been led to believe  thal:
ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT'ON  AVE.,   N.W.
   WASHINGION- 0, C-


                                                                             66

               I  the new directoiywhich comes out this year will give proprietary
               2  hospital appointments.  So we will get a little better picture
               3  this year when we get the new directory in.
               4            So we have the problem of what do you do with these
               5  30 per cent of the doctors who do not have voluntary or
               6  municipal hospital appointments.  This is another problem which
               7 we hope the medical services division will be  dealing  with,
               8 and the whole p@ablem of medical education and so forth would
               9 be part of the function of this medical services division'.
             10  together with the problem of utilization, studying of utiliza-
             11  tion, under utilization, overutilization.
             12            We also hope to set up a Division of Financial
             13  Planning, and this will entail bringing together, coordinating
FR           14  many of the activities of other agencies which are presently
             15  doing some work in this field.  With the exception of Blue
             16  Cross which is responsible for 17 counties, 14 of the 17 count-..es,
             17  there is nobody in the area, in the region, that collects
             18  data, financial data, or autopsy data from all the  hospitals
             19 in the region because we have three major groups of hospitals.
             20 We have proprietary hospitals which pretty much act  on  their
             21 own.  We have a whole complex of governmental institutions of
             22 which the largest is 18 or 20 hospitals operated by the New
             23 York City Department of Hospitals.  And then, we have five
             24 State hospitals which are all mental in New York Cityand a
             25 Couple more in the region.  And then,, we have a large n@er o.
AGE-FEDERAL REPORTERS, INC.
61CONSTITUTI NAv  N,W.
  WASAIN6TONO D. C:


                                                                             67

               I  government institutions which are beyond this that we have no

               2  relationship to speak of at the present time.

               3            MR. BURLEIGH:  To what extent are the proprietary

               4  hospitals a relatively regional

               5           MR. PETERS:  The proprietary hospitals have been
               6  with us in New York City since the 19th century.  And prior to
               7  the onset of the Depression, there were more proprietary
               8  hospitals than there are now in terms of number of hospitals.
               9  There are less hospitals now, but more beds.  A good many of
             10   these have come about since World War II and even a great
             11   flurry in the past three or four years.

             12            Part of the flurry of proprietary hospitals in New
             13   York Citytook place because of changes in the zoning laws in
FR           14   New York City  And the date was set up ahead.  So in order to
             15   get under the wire, a great many of these plans were filed to
             116  get under the deadline so they could make best use of the

             17   space prior to these requirements.

             18            So you have had, I would expect, around 1,000 built
             19   in the past few years, but around 1,000 proprietary beds in
             20   New York City.

             21            MRS. COLEMAN:  But the point is really what caused
             22   it, not the zones -- that was just the timing   but what
             23   caused it, we had a growth of population in one particular
             24   borough without a corresponding increase in voluntary hospital

             15   beds.

ACE-FEDERAL  REPORTERS,   INC.
2 6 1 CONSTITUTI(ON AtE   N@W
  W4SHTNGTON. 0. C. l@


                                                                             68

               I            DR. KLICKA:  This is Queens?

               2           MR. PETERS:  The Borough of Queens, yes.  This is tha
               3  most rapidly growing borough of the five in New York City.
               4  And there were a small number of voluntary hospitals, none of
               5  which were very strong economically.
               6           MRS. COLEMAN:  Only one of which was very good
               7  medically.

               8           MR. B    IGH:  I was wondering about the absence
               9  of staff privileges in voluntary hospitals.  -
             10            MR. PETERS:  There is no question but this has something
             11   to do with it.  flow you measure it, I don't know.  This has a
             12   great deal of bearing, but I find in many institutions, the
             13   ones in private are also on voluntary staffs in the same area.
FR           14            MR. BUGBEF.:  It could also be with a lot of foreign
             15   professionals and this is sort of the European pattern with the
             16   big teaching hospitals.  The big hospitals in Hanhattan have
             17   50 per cent in wards and free cars.  There isn't much room for
             18   private patients in them.  It is the sort of nursing time thiqr
             19   that they have on the Continent and England where I guess it
             20   goes back to that part.
             21           DR. HALLDEMAN:  How much of it is due to the fact thal:
             22   in the suburbs, the voluntary effort just @n't caught up?
             23           MRS. COLEMAN:  That's certainly true in Queens.
             24           MR. PETERS:  Queens up until recently was a suburban
             25  type of borough of New York City, and that's where you have h&41
ACE-FEDERAL REPORTERS. INC.
61 CONSTITI'TION AVE  N.W


                                                                              69

               I  your growth because your population has grown spectacularly

               2  with the small number of voluntary hospitals, but poor financial

               3  condition, couldn't move fast enough.

               4            And in this respect, the proprietary hospitals,

               5  for all we have said against them, have had one great virtue,

               6  and that is they have met a need and met a need  very  rapidly

               7  because you can get a proprietary hospital built  and  occupied_
               8  in two years. Y6u can't even get the committee  of  a  voluntary

               9  formed and working in that time.

              10            DR. KLICKA:  Yes,,you can.

              11            MR. PETERS:  But it Queens it wasn't very easy to do.

              12  Queens is a peculiar borough. It is  a  middle-class  borough.

              13  You go through the entire borough, you see very  little  wealth.
 FR           14  It is a low middle-class borough. Some areas  have  high  middle
              15  class, but there is no real money in the borough of Queens likB
              16  there is in some of the older sections of New York  City  such

              17  as parts of Brooklyn and Manhattan.

              18            MRS. COLEMAN: And it was  probably  overbedded  with

              19  municipal beds so that the poor population could be  taken  care

              20  of in municipal hospitals.

              21            MR. SIBLEY:  I am going to lead you back to financial
              22  planning because I am interested in what you people see as
              23  your role in financial planning in New York City.
              24            The Commissioner of Insurance has required you to
              25  review Blue Cross, hasn't he?

 ACE-FEDERAL REPORTERS,  INC.
26 1 CONSTITUTION  AVE.,  N  W@


                                                                            70

               I            MR. PETERS:  Yes.  We will get into the whole problem.

               2            One of the major things we see ourselves  doing
               3  immediately is capital financing which is pretty much akin to
               4  our present role of planning, but we are hoping to get involver
               5  as all regional councils are expected to get involved in New
               6  York State in judging the adequacy of Blue Cross rates, Blue
               7  Cross payments to the hospitals and all the other things that_
               8  so-called studi6i of efficiency, studies'of the cost of
               9  hospital care and so forth which we have been instructed to

              10  get into by the.gcvvernor's administrative order.

              11            MR. SIBLEY:  Are you going to do this for the State
              12  Welfare Department as well?
              13           MR. PETERS: We @haven't worked anything out in this
FR            14  area at all.  This is one area we have merely set down as a
              15  potential division.  The relationships are extremely complex.
              16  You have United Hospital Fund which represents 80-some voluntary
              17  hospitals in the five boroughs of New York City, but does not
              18  represent voluntary hospitals in the other nine counties.
              19  You have the Department of Sodial Welfare which collects finan(ial
              20  data on all hospitals for which the governmentpays for care,
              21  which in this instance is voluntary hospitals and also municipal
              22  hospitals.  They don't collect any material from proprietary
              23  hospitals so far as I know with maybe one exception which
              24  does take care of some government indigent patients.
              25           DR. ROREM: You say, "proprietary  hospitals  can
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION  AVE.,  N.W


                                                                            7 1

               1  accept indigents."

               2            MR. PETERS: It so happens Manhattan  General  does.

               3            DR. ROREM:  Nothing in the statute of limitations

               4  that avoids it?

               5            MR.,PETERS:  This was raised at the last Board

               6  meeting, this very question. There is nothing  that  prevents
               7  them from taking care of indigent patients if they are  given
               8  to them. We have' to get the approval of the Commissioner  of

               9  Hospitals and so forth.

             10            We have financial data collected by the United
             11   Hospital Fund for voluntary hospitals in five counties., and
             12   not all the voluntary hospitals, only those that are  members

             13   of the Fund.
FR           14            You have the Department of Social Welfare collecting
             15   financial statistical data for all the voluntary hospitals
             16   which accept city charges and mental institutions. But  then,
             17   you have got Blue Cross which collects financial data from all
             18   the hospitals.  So that is the only source at the present time
             19   of financial data from all the hospitals in the 14 counties.
             20            The big problem of the new Council would be when
             21   it sets up its division,, how much are we going to do and how
             22   much are we going to have to take from somebody else.  ObviousLy.
             23   you have got people doing it.  Blue Cross has got a legal
             24   responsibility.  They collect data anyway for their own operat on.
             25   So you are going to have to work with Blue Cross., You are-goiig
ACE-FEDERAL  REPORTERS,  INC.
261 COt4STITUTION AVE  .  N  W
  W41HI'@'@l, 0. C. il


                                                                             72

               I  to have to work with the Department of Social Welfare and with
               2  the United Hospital Fund which, again, has a chartered

               3  responsibility to do certain work in this field.
               4            They would have to change their.whole role if  they
               5  didn't  do this.  So it is going to be a very delicate arran'geam!nt.
               6            Fortunately, we have very good working arrangements
               7  with all these groups, particularly Blue Cross, which finances-
               8  us to a tune of ine-third of our annual operating expenses.
               9  United Hospital Fund finances us to the tune of about one-SiXtIL
              lo  of our operating expenses.  So you have a working relationship
              ii  'there.  It is a matter of who is going to do what and how.
              12           Certainly, we are going to have to do substantially
              13  what we have done in the past but how far we are going to go or
                                              .9
 FR           14  this is a matter of development and evolution.  It is going to
              15  be a slow process.
              16           The medical service division, on the other hand,  is
              17  one.that our Board has given the highest priority other than
              i8  our present activities, getting involved in that area, quality,
              19  standards of care, medical staff appointments.
              20           And the other would be administrative services.  This
              21  one has been tabled.  This one is the area where so far as the
              22  official position of our Board of Directors is concerned will
              23  await further discussion. And this is not anticipated this woull
              24  be started for some time.
              25          MR. SIBIEY:  How did that one get included?  What
 ACE-FEDERAL  REPORTERS,  INC.
26 1 CONST TUTION AVE.  N@W
      I
   WA.HIIN@ION D. C.


                                                                            73

               1  was the thinking behind it?

               2            MR. BUGBEE: I think the whole question of the economics
               3  of operation. Also, I think under there is concern with
               4  teaching, nursing, and all kinds of educational projects and
               5  the hope for a general drive on economy or, at least, a medium
               6  for use by the hospital.
               7            MR. PETERS: It gets in the whole area of nonprofes@
               8  sional staffing dnd professional staffing other than doctors.
               9  Certainly, you have to take into consideration your planning
             10   procedures.

             11            MR. SIBLEY:   I want to get on this because it is f or
             12   a purpose. These are all considered in your agency to be
             13   planning, you see. This is a very broad definition of planning.
FR           14            MR. BUGBEE:  It is Trussel's definition.    You may
             15   recall it is his planning and review council. And the review
             16   assumes operations and quality.
             17            I think there is one other thing that has some interEst
             18   here and that is the Blue Cross is planning, not only to
             19   support it, but probably to contract with this agency.  And
             20   I would guess that probably they are patterning it to some
             21   degree after what you are doing, Jack, in Detroit, but with the
             22   thought that enforcement of economic sanctions against construc-
             23   tion and various other things could better be handled by Blue
             24   Cross contracting through this agency than Blue Cross trying to
             25   do it itself.

 ACE-FEDERAL REPORTERS. INC.
261 CONSTITUTION AVE:    N.W.
   V, @SH?NGTON@ 0, C.


                                                                            74

               I            They have talked about contracting in support up
               2  to half a million dollars.  I don't know whether it will, but
               3  it would make possible the staffing of some of these other
               4  ventures'if they do.

               5            MR. PETERS:  At the present time, Blu'e Cross has
               6 guaranteed us $100,000, but not to exceed one-third of the
               7  total of our contributions from all sources, including themselves.
               8  So.last year we lot $95,000 or some such figure, $94,,ooo.
               9 So we are pretty close to getting the 100 per cent contribution
             10  from Blue Cross-as they presently see it,, but this is only
             11  an interim contribution.  It is not for all time, we hope.
             12            MR. BUGBEE:  I think the other unique thing is you
             13  get about $30,000 from the State as your function at the Hill-
FR           14  Burton agency.
             15            DR. HALDEMAN:  Jack, did you want to speak?
             16            MR. COUSIN:  Yes.  I have a question.
             17            Because what you are planning to do there in some
             18  ways is what we are planning to do except you formalize it a
             ig  little more than we have and you are apparently going into it
             2o  a little deeper than we have.
             21           MR. PETERS:  We are only formalized in our paper,
             22  Jack, so far.
             23           MR. COUSIN:  This may be an embarrassing question,
             24 but
             25           MR. PETERS:   If it is so embarrassing., I won't answ!r
ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE  N.W
  W _
   A INGTO.N 0, C.


                                                                            75

               1           MR. COUSIN:  What does this do to your other Hospita,-

               2 Council in New York?

               3           The reason why I am asking it is because my organiza..
               4 tion does planning, but it is also the trade association.
               5 And while some of our administrators feel that we should have
               6 planning in the trade associadDn separate, our public represenl;a-
               7 tives who are the ones that,pretty much control us feel that we
               s are better off i@ the long run in doing planning and all the
               9 trade association work because you can't divorce the two.
             10            They tell me what we are really doing is health
             ii  economics, not planning.
             12            MR. PETERS:  First of all, I am on the board of the
             13  Greater New York Hospital Council.  The Executive Director of
FR           14  the Council is automatically ex-officio member of the board
             15  and the association.
             16           We don't see any real conflict.  First of all, they
             17  are admittedly the spokesman for the voluntary hospital system.
             18  It is their job to see that the interests of the voluntary
             19  hospitals as a group are promulgated.  Our Jo b is to look at
             20  the thing from a different point of view, the point of view
             21  of the community.
             22           This may not be the same as the interests of the
             23  voluntary hospital either collectively or individually.  Fortunate-
             24  ly, it has been, but it is not necessarily the same thing.
             25           We look at things differently.  We don't go down to
ACE-FEDERAL REPORTERS., INC.
261 CONST'TUTIONAVE N.W
   W@ @,NGrot,. 0, C.


                                                                            76

               I  the city hall nor to the State chambers to lobby for passage

               2  of a certain bill or lobby against the passage of a  certain

               3  bill like the association does. We are not involved  in  the

               4  whole problem of unionization of hospital employees, which they

               5  are. We are not involved in seeing at the present  time  the

               6  voluntary hospitals get the most advantageous raise for

               7  Blue Cross when the third party pays.
               8            We will be involved in rates, but from the point  of

               9  view of whether the community is getting the best value  for
               10 its money, not in terms of whether the hospitals are getting
               11 the most they can from the agencies. It is a  different  point
               12 of view, and I think there is room for both.

               13           MR. BUGBEE: There is another thing,  Jack.  This  is
 FR            14 as touchy as anything, and the Greater New York  was  very
               15 concerned with this development, but the fact remains they
               16 have never done anything but representation. They  have  never
               17 done economic activities or joint purchasing or any of the
               18 things that are conceived to be a Council function  except
               19 representation.  And maybe there is a role for them in represeiita-
               20 tion in relationship to Council, but they were worried  to
               21 a degree it pre-empts part of the assignment that should  have
               22 been theirs.

               23          MR. PETERS:  George, since you left., the Greater
               24 New York Hospital Association was studied.  Like most hospital
               25 they got their study, too. So they brought in  an  outside

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AVE  ,  N.W
   W@5-INGTON 0 C


                                                                             77

               1  consultant to look at what the role of the Greater New York
               2  Hospital Association would be.  And even though they are
               3  structured in a very complex way, the consultant recommended
               4  a very complex structure.  Actually, there wasn't quite as mucli
               5  conflict as one would think would arise.
               6           Sure, they would have a Division 'of Financial Planniiig.
               7  But this is purely from the point of view of representation to.
               8  gather material from the hospitals to present a brief to the
               9  city or to Blue Cross or to any other third party for
             lo   getting better reimbursement patterns for the voluntary
             11   hospitals which they represent.
             12            They are talking about studying personnel, but their
             13   1study of personnel is going to be a little different than ours,
                  I
FR           14   They are talking about salary, salary and wage procedures
             15   policies regarding employment, collectivization so they can
             16   work with unions because as of July Ist, the hospitals of
             17   New-York City are no longer exempt.  So they have to live with
             i8   Iunions and like it as of seven or eight days ago.  So there is
             19   a different type of thing.
             20           Even though they are expanding just as we are expanding,
             21   I still see very little conflict except in this one area of
             22   administration.

             23           MR. COUSIN:  Which you have taken.
             24           MR. PETERS:  Which we have taken, but partly because
             25   of this because this is a very, very delicate area, and this
ACE-FEDERAL REPORTERS, INC.
61 CONSTITUTION AVE .  N,W
  W4@@'ll,r@7, 0, C.


                                                                               78

               I  is the area where we are going to have to, over a period of

               2  time, our committee has recommended we have  joint  conferences

               3  with the Greater New York Hospital Association and United

               4  Hospital Fund which also does work on administrative research.

               5            For example, on methods of improvement and things
               6  like that which Charlie Roswell has done with  Government  aid.
               7  There is where your great area of conflict may be.  This is th@
               8  area where it is-conceivable we may never be operate.
               9            MR. SIBLEY:  Joe, we are already into this area of
              10  administration, and this is why I am particularly interested
              11  in how we look at the images of our job, which is  really  what
              ,2  you are describing, how you compare your image with the imag  e
              13  of the associadm.  And we got caught into it.
FR            14            I think for a number of reasons,, but the one that caiie
              15  out was when Frank Gromer was president, he insisted there musi:
              16  be a code of conduct of hospitals which was in the organization
              17  management end of things.  And we have developed now what we
              18  call organization and management standards which are going
              19  to our House of Delegates in New York in August.
              20           We realize that they are going to be revised many
              21  times and worked over many times, but they are now in very
              22  definitive form, very specific.  There are about five general
              23  headings and about seven to tan under each one.  But we don't
              24  know how to administer them., and we have been discussing this.
              25           Our Board discussed it  at  considerable  length.  You
ACE-FEDERAL REPORTERS, INC.
261 CONST TUT ON AvE  N,W
        0, C.


                                                                            79

               1  see, this was a promise that Frank Gromer made to the
               2  Blue Cross Association that the quid pro quo was between
               3  hospitals and Blue Cross.  And I think it is probably the
               4  same with the insurance commissioners and welfare departments
                  around the country that the hospitals have to demonstrate,,,or
               5
               6  there has to be some mechanics of demonstrating, that they are
               7  doing the things, they are being well organized and well
               81 managed.  That :Ci,, if they then proceed to say that good
               9  patient care gets some good organization and good management,
              10  which I think we accept as a basic premise, although we are
              11  not s ure that this is correct.
              12            So we have moved into this field rather gingerly
              13  ourselves because we are not sure, but we felt we couldn't waii.
 FR           14  any longer and with the Trussel report kind of activity -- that:
              15  -is, if you follow out the concept of that report.  And as far
              16  as I am concerned, in my thinking., these are all facets of the
              17  more general problem that hospitals, not being in the profit-
              18  making activity, have to find mechanisms for demonstrating the3,
              19  are using the money which comes to them which is, in a sense,
              20  in trust, in trust for Blue Cross or in trust througitaxes,
              21  or in trust through insurance or in trust whatever the mechanism
              22  is -
              23          We answer that question we are taking the necessary
              24  steps to use this money wisely, and this is basically, I suppose,
              25 what You are set up to do.

ACE-FEDERAL  REPORTERS,  INC.
261 CONSTITUTION AVE ,  N.W
          C


                                                                          80

               I            MR. P.ETER3:   By the way, this is not to say that
               2  the Hospital Council has had blinders insofar as these other
               3  aspects of hospital planning are concerned.  I think if you
               4  look at the study which we prepared a few years ago -- about
               5  a year or two ago -- on the so-called municipal-volunta@
               6  hospital relationship study where we analyzed the role of the
               7  voluntary and municipal hospitals in New York City, which
               8  came out as a 600-page book in the beginning of this year,
               9  you see, we at that point had come to the awareness that we
              10  just could no longer think in terms of facilities and services.
              II- We had to talk in terms of organization, administration,,
              12  availability of personnel, standards of care, all these things
              13  finances.
 FR                         In fact, if you look at that book, you find that more
              14
              15  than one-third of that book deals with finances.  The role of
              16  government money,, voluntary money, philanthropic sources and
                  private payment goes to one-third of that book over and over
              17

              18  again.
              19           We also talked about the ability of the municipal
              20  hospital system to administer itself properly, the organization
              21  of municipal hospital system, and how it should relate to the
              22  organization in voluntary hospitals.  And we talked about
              23  all these things, and this was the first time where we officially
              24  really got way beyond our previous limited scope.
              25           Do you think so, George, when we got into this
ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE  N.W,


                                                                              81

               1  municipal voluntary, maybe not to live with it, but maybe
               2  accidentally.  We got into all the areas.

               3            DR. ROREM:  I would like to ask a question, technical

               4  question.

               5            Did I understand you to say the municipal hospitals
               6  do not have membership in or are not represented by the
               7  Greater New York Hospital Association?
               8            MR. PEFERS:  Yes, they are.

               9            MR. BTJGBEE:  Proprietary are not.
              10            MR. PETERS:  Municipal are, but actually,, if you lool-.
              ii  at the Board of Directors of the Greater New York Hospital
              12  Association, you see that the Commissioner of Hospitals is
              13  like I am, an ex-officio member of the Board,, and he is the
FR            14  only administrative hospital person that is on that Board.
              15            So even though there are 18 hospitals, 18 hospital
              16  superintendents, they play a very negligible role in the polic5-
              17  making of the association.  So even though they are members,
              i8  they come to all the general meetings, but as far as the Board
              19  of Directors, as far as holding office  is  con.cerned, historically
              20  the municipal hospital executive had played no role.
              21           DR. RMM:  Except their primary concern is with the
              22  voluntary hospital.
              23           MR. PETERS:  No question.  The other ones don't even
              24  pay the same dues.
              25           For want of a better word, they would be an associate
ACE-FEDERAL REPORTERS, INC,
261 CONSTITUT'oN AVE , N  W
   W4'1  0. C,


                                                                            82

               I  type of membership because the problems that the Greater New

               2  York Hospital Association deals with are primarily the problems

               3  in the voluntary hospitals.

               4            DR. HALDEMAN:  Is there an association of proprietary
               5  hospitals?

               6            MR. PETERS: Yes, there is at least one. There is

               7  one, anyway, Association of Private Hospitals., Inc.
               8            MR. SI-BLEY:  Are you on their 'Board, Joe?
               9            MR. PETERS:  No. but they are on our Board.  And
             10   George can tell,you about all the travail that went through
             11   on that one.  They are on our Board, and I may say that I feel
             12   sorry for Dr. Berson who represents it because when the vote
             13   comes 40 to 1. he has long since now just stopped and sits
FR           14   and listens.

             15            All it does, really, in many respects, is assure
             16   that they will know what we are doing, not that we know what
             17   they are doing.  In other words, any time we prepare a document,
             18   you can be sure that the Executive Director of the proprietary
             19   hospitals has a copy of it on his desk the minute it is off
             20   our press because we send it to our Boardman.  He probably
             21   gives it to him.  So it is a one-way communication at the

             22   presenttime.

             23            But certainly, I would say that it was a wise move
             24   to bring him on.  If you are going to try to get them to upgarle
             25  their standards, you ought to at least let them have so= voice

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE: N     W,
         0, c


                                                                           83

               1 in it because one man can't dominate the group. Hopefully,
               2  we try to let him see the broad picture and are hopeful he

               3  will bring this back to his members.

               4            Let me get to the criteria because this is a good

               5  point.

               6            DR. KLICKA:  One question before you do that.  Either
               7  I missed it or you didn't make it clear. I think I missed it.
               8            In all-of this structure., are you talking about
               9  planning as it relates to hospitals, or as it relates to
             10   total health facilities which include nursing homes?

             11             MR. PETERS:  Total health facilities.

             12             DR. KLICKA:  And long-term care facilities,, all of
             13   these things?
 FR          14             MR. PETERS:  We have done a little bit of work in
             15   nursing homes, and we occasionally have some relationship with
             16   other types of institutions, but this has been more accidental
             17   than deliberate in the past.
             18             Dr. Coleman, who was our Association Director prior
             19   to going to Johns Hopkins was farmed out for a period of time,
             20   working with the Department of Mental Health Council which
             21   represents the Department of Hospitals, Health, Welfare, and
             22   Mental Hygiene, in New York City.  And he did some work on
                  nursing home facilities.  And he came out with a figure that
             23
             24   in New York City we need approximately 15,,OOO more nursing
             2s   home beds by 1970.

 ACE-FEDERAL REPORTERS, INC.
26 1 CONSTITUTION AvE   N.W,


                                                                            84

               I            So we have some guideposts in this area to work
               2  with.  This was done, not by the Council as a council, but
               3  one of the staff members loaned out.  As I recall, that wasn't
               4  even approved, didn't even go to our Board of Directors, his
               5  report.  It went directly to the group, but we have used it,
               6  and it does represent a landmark which we can work under.
               7  We need more nursing home type facilities in New York  City,
               8  and we have been working a great deal with hospitals on this
               9  trying to get individual hospitals to expand their scope.
             lo   And I suspect we are going to get involved in other  things.
             11   We have to get involved in this.  We certainly can't limit
             12   ourselves to the general hospital.
             'L3            If we did, we would be limiting ourselves to  only
FR           14   just one segment.  It is hoped we can get more involved in the
             15   whole problem of care for the mental disease patients,, care
             16   of the aged.  We find ourselves getting working time with
             17   homes for the aged.
             18            Mrs. Coleman worked with some last year., as I recall
             19            DR. KLICKA:  I am going to ask you a ridiculous
             2o   question.  Does anyone have the opinion you are extending
             21   yourselves too far and trying to do too much in your organiza-
             22   tional structure?

             23            MR. PETERS:  I would suspect there are.
             24            DR. KLICKA:  I am asking a serious question.
             2S       MR-PETERS:  Seriously, first of all, I told you about the,.

ACE-FEDERAL REPORTERS,  INC.
61  CONSTIITUTION  AvE.,  N   W.
  W@""G,O, D. C,


                                                                           85

               1  fact many believe we are trying to extend ourselves too far
               2  geographically.

               3            DR. KLICKA:  No, I am talking about --
               4            MR. PETERS:  That's one area.  I am sure that I
               5  could think of at least one member of our Board of Directors
               6  who must think we are out of our mind getting involved in this
               7  medical services concept.  He has very often spoken up that
               8  the problems of medical care are the domain of the medical
               9  society and doctors that practice medicine.  And since we have
             10   very few doctors on our Board that even touch a patients
                  therefore  what right do we have to make pronouncements about
             11           %
             12   quality of medical care?  This is a medical problem, and you
             13   laymen, no matter how well intentioned you are, should get
FR           14   away from this.  And he has spoken this out at every single
             15   Board meeting he has been at.
             16            I would suspect there are one or two other members
                  of our Board who are also physicians,, and I might even say
             17
             18   one or two of our lay members, who would say he is perfectly
             19   right.  This is one area where we know there is some controversy,
             20   at least some:doubts, in the members of our own Board of
             21   Directors.
             22           I know that there is at least one member of our Boar@
             23   of Directors who thinks -- at least one, maybe more than one --
             24   the idea of the whole new Council, its structure, its organiza-
             25   tion, its concepts, its geographic responsibilities, is all wet.
ACE-FEDERAL REPORTERS, INC.
61 CONST TUTION AVE  N.W.
  WASHIINGTON, D. C.


                                                                           86

                i And he will not come, he doesn't come, to any Board  meetings.
                2 I would say one of our best Boardmen, one of the men who
                3 could make some real substantial contributions.

                4           So I would suspect there are many individual
                5 hospital administrators who would say that we are out of our
                6 minds.   Particularly ones we leave the area of facilities and
                7 get into anything beyond facilities, there are a lot of people
                8 I am sure who ar-e going to resist us.
                9          We haven't met that resistance officially because we
              10  haven't gotten into these areas as yet, but I suspect we  will
              11  get it.  And I don't think the committee, when they formed
              12  this Council, ever thought it was going to be an easy job.
              13  They realize the problems,, and it is going to be difficult.
FR            14           DR. KLICKA:  O.K., you answered it.
              15           DR. HALDEMAN:  Could we go on to the principles?
              16           MR. PETERS:  We got involved in this criteria.
              17           As I say, we know quite a bit about New York City.
              18 After all, we have been working in New York City for 24  years,
              19 but to be completely frank, there are a lot of things we
              20 don't know.  But we know quite a bit about it.
              21          As of a year ago, we knew nothing about the eight
              22 counties Outside of New York City.  So one of our first jobs,
              23 as I said earlier, was to broaden our knowledge of the  100-odd
              24 hospitals outside Of New York City to get some idea of all  the
              25 things that were happening that affect medical care and
ACE-FEDERAL REPORTERS, INC.
261 CONST TUTION AvE  N.W.
        C@ C.   I


                                                                              87

               1  hospital care outside New York City.

               2           Quite apparently while you are getting this information,
               3  you still have got to make decisions.  If an agency is going to)
               4  wait until it gets all the facts and is not going to make any
               5  decisions until all the facts are,in, he is not going to do
               6  anything.  We have got to plan regardless even with our

               7  limited knowledge.
               8            Once w@ were organized, people 'started asking us
               9  questions, and we had to give answers to these questions.  So
              10  it was quite obvious that we had to have some broad outline
              11  criteria to guide the Facility Planning Committee and the
              12 Council as a whole in making decisions both for New York  City
              13  and for the other nine counties outside the city.
 FR           14           So we had criteria, one-page criteria on New York
              15  City which we assembled about two years ago.  And this, we
              16  were operating under for the past two years.  When we became
              17  a new regional council, it became quite obvious that we had
              18  to broaden our principles to take into account the other nine
              19  counties and the differences between the other nine counties
              20  and New York City.
              21           As I said, the other nine counties have an  expected
              22  population growth.  New York City is expected to remain static
              23  So we were told to expand our principles for New York City to
              24  cover nine counties.
              25           There was some thought that perhaps we would have to
 ACE-FEDERAL REPORTERS, INC.
261 CONST TUTION AVE  .  N.W.
   WASH(INGTOPI, 0. C.


                                                                           88

               1  have two sets of principles., one for New York city and one
               2  for the expanding nine counties. We thought that it would be
               3  possible tddevelop a set of principles which would apply to
               4  the region as a whole, it was no longer feasible to try to make
               5  distinctions.  We ought to start thinking as an integrated
               6  region rather than as three separate groups within the region.
               7  So staff devised these criteria.  And as you will notice, they
               8  are very general:.-
               9            I suspect there is nothing in here which is new with
              10  perhaps one exception, and that is the very strong position that
              11  was taken on the fact that every hospital should attempt to serve
              12  all income groups within the population.  This is quite a
              13  dramatic jump in New York City because, as I say,,we have
FR                municipal hospitals to serve the indigent.  We have proprietary
              14
              15  hospitals which serve the pay patient or Blue Cross patients.
              16  And we have voluntary hospitals which serve all patients, but
              17  as George pointed out, they carry a large share of the indigene:
              18  patient load in the city.
              19           This is not true outside the city because there are
              20  no local government hospitals outside New York City.  There
              21  are one or two, but they are a very small group compared to
              22  New York City.
              23          The problem was we felt that to perpetuate hospitals
              24 with such limited functions in serving limited segments of the
              25 community made our planning a great deal more difficult and
ACE-FEDERAL  REPORTERS,  INC.
6 1 CONSTITL,'TION AVE  N  W@
        0 C


                                                                            89

               I  probably resulted in a need for more beds if you are going to
               2  start splitting the community up into small groups because you
               3  havelost one element of flexibility automatically by having
               4  hospitals which take care of the pay patient and hospitals
               5  which take care of the,poor and hospitals which do both because
               6  these populations are not static, they change.  As the
               7  economy changes, the number of people who require care in
               8  municipal hospicals, at least theoretically, changes.  And what
               9  happens in New York City is we find, particularly as areas
              10  change, an area could be a middle-class area today., ten years
              11  from now could be a blighted area or alum.  It could have
              12  enough hospital beds,, but supposing all these hospital beds
              13  were proprietary hospital beds?  Who is going to take care of
FR              i
              14  the needs of tlwse changed areas?
              15           or, conversely, suppose the area was a slum and
              16  through redevelopment became a good are& and you had a municipal
              171 hospital servi6ing it.  Who is going to take care of the needs
              18  of the private patients in that area because, by law,, the
              19  municipal hospitals are limited primarily to care for the
              20  indigent, although they can take emergency cases for pay
              21  patients.
              22           So we wanted to recognize two problems, the problem
              23  Of changing economic conditions and changing community conditions,
              24  the declining neighborhood or area that was changing for bettei-
              25  or for worse.  So we felt in our future planning, we should
ACE-FEDERAL  REPORTERS.  INC.
61 CONST'TUTION AVE N  W@
  W45H"Nc"@, D C


                                                                            90

                  attempt to have hospitals that would service whatever type of
               2  patients were there at the time.

               3            In other words, hospitals that would take care of
               4  the indigent and the pay patient in various proportions, depend-
                  ing on the need at the time.
               6            So this, in essence, really meant that we were going
               7  on record as being against private hospitals.
               8            MRS. C'OLEMAN:  And municipal.
               9            MR. PETERS:  And municipal, but you notice on page I
                  under "flexibility", we put a little out on municipal hospital;
              10
              11 by saying, "It is recognized that, because of local traditions
              12 and statutory policies, there are often marked differences in
              13 the roles of government institutions in servicing various
 FR           14 groups within the population."
              15           We left a little loophole there, although I might
                 say we have been pretty much in the past few years discouraging,
              16
              17 and.in this, Dr. Trussel shares our views,completely, the
              18 addition of more municipal hospital beds in New York City.
              19           DR. HALDEMAN:  Is there any move to open up
              20 municipal hospitals to paying patients?
              21          MR. PETERS:  There has been talk about it as far bacb
              22 as the hospital survey of New York which was in the ear ly
              23 130's.  One hospital in New York city, Sydnum Hospital., which
              24 was a voluntary hospital in the Harlem area which face d great
              25 f inanci-a- 1 dif f iculties . and in the late -40's became  a
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE    N@W.
   W.SHIN<"rot, 0, CI


                                                                              91

               I municipal hospital with the stimulation that probably  100  per

               2  cent of its 200 beds would be for private patients, but this wits

               3  a recognition of the peculiar problem facing the Negro  doctor

               4  in the Harlem area.

                            DR. HALJ)EMAN: I am thinking of the situation  in-'
               61 Kansas City where the municipal hospital is, now opening its

               7  doors to pay patients.

               8            MR. PETERS: There has been talk about it,  but  the

               9  Council has resisted it pretty much officially, and there  has
              10  been very little talk about it in recent years.
              11            DR. ROREM: In New York States, as I  understand  it,

              12  upstate, a number of these so-called county hospitals are

              13  open to the general public.
 FR           14            MR. PETERS:  Herkimer.

              15            DR. ROREM: Are any of those in the lower  tier  like

              16  that?

              17
                            MRS. COLEMAN:  There is one in Westchester that will

              18  take special types of patients.

              19            MR. PETERS:  Alcoholic, mental disease.
              20            MRS. COLEMAN:  It was used when we had polio.
              21            DR. ROREM:  Nothing like the one in Utica, for example.
              22            DR. HALDEW: Joe, I wonder if we  could  go  on  and
              23  get some of the various methods that are being used to try and
              24  implement because, as I understand it, there are a number  of
              2,5 forces, not all within the Council, but within cooperating
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE   N.W.
   WASHINGTON, 0, C.


                                                                             92

               I  groups such as Ray Trussells authority in relation to licensure
               2  of proprietary hospitals that are having an impact on it --
               3  the use of the 5 per cent funds in the Blue Cross and other
               4  things that amount to trying to implement,good planning that
               5  are bringing forces to bear from a variety of directions..
               6            MR. PETERS:  The Hospital Council has traditional
                                                             t
               7  authority in terms of there were three ways in which we  could-
               8  influence hospit-a'l planning.
               9            And first of all, that was moral suasion.  The  other
              10 was through financial controls) contributions and so forth.
              11 And a third was legal sanctions and government authority.
              12 We have used all three, but have relied primarily on  the  first
              13 moral suasion.
FR            14           So far as government is concerned, it is a  very  com-
              15 plicated pattern in New York City area On gove     nt controls
                                                                                30
              16 and there isIa document available which summarizes all the
              17 various ways government gets into the picture.
              18           But the one way which I think you would be  interested
              19 is most, in New York City, the Commissioner of Hospitals,
              20 Ray Trussel in this instance, licenses proprietary  institutions
              21 at his 'discretion.  And he has interpreted this to mean he
              22 can withhold a license to a proprietary hospital and  discourage
              23 their expansion or even discourage their opening in the first
              24 place.  And he has relied On Council to assist him in giving
              25 advice under which hospitals should be approved and should not
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE.   NW
   W NG@@N
       ,  0, C


                                                                             93

               1  be approved so far as opening, so far as new construction or

               2  expansion is concerned.

               3            And we have in the pastyear in particular -- two

               4  years, actually -- been advising him on a number of proprietary

               5  hospitals.  All we do is advise him.  He has not been able  -to

               6  make all of these stick.  He has had to give in.

               7            DR. KLICKA:  Why?  How does he give in?  Is he sued-

               8  or how does he give in?

               9            MR. PETERS:  He hasn't been sued, but apparently
              io  all kinds of pressures have been placed upon him.

              11            MR. BUGBEE:  He moved in when some of these were
              12  already in construction.  That was a little hard to stop.

              .13           MR. PETERS:  He came in too late in some instances.
 FR           14  Others, a little give and take.  Some others, he let add a

              15  small number of beds.

              16            Here is the problem they face.  We talk about
              17  efficiency of operations.  Some of them were small and wanted
              18  to become a little bigger, wanted to add 50 beds,, and also
              19  wanted to add ancillary services.  But to add the ancillary
              20  services, economically, they couldn't do it unless they had
              21  the beds.  So he would have to give in and say, "O.K., 20 beds,
              22  but make sure you build up your X-ray department and modernize
              23  your obstetrical department or modernize your operating room
              24  suite," or such things as that.
              25            He realizes in some instances asking the man merely
 ACE-FEDERAL REPORTERS,  INC.
2 6 1 CONSTITUTI0N  AVE  .  N.W.
   VVA9H!NC,"ON C, C


                                                                                94

                1  to do one without doing the other was economically impossible

                2  for them. So he had to face the problem if  you  want  a  second-

                3  rate hospital w@Ath inferior ancillary services that continue

                4  to exist, or do you want to upgrade them a little bit, let

                5  them expand their ancillary service, but also expand their

                6  beds to some limited extent.  And he gave in there to some

                7  extent.

                8            But, di-! the other hand, I think we have done a  great
                9  deal to discourage.  I think the day of explosive expansion
              10   of proprietary hospitals is past so far as New York City is
              11   concerned so long as you have a Commissioner of Hospitals who
              12   is willing to put his neck out. If and when  you  get  a  Commis-
              13   sioner of Hospitals who is not willing to  take  drastic  action,
 FR
              14   no one can tell.  But I think the day is -- but you have another

              15   control,, you have Blue Cross.

              16             DR. KLICKA:  He has just made one of the most important
              17   statements that have been made today, though, and  I  would  like
              18   to emphasize this.  He talked about courage.  And believe me,
              19   don't ever discount this in this field.

              20             Go ahead.

              21             MR. PETERS:  Courage?

              22             DR. KLICKA:  That's right.
              23             MR. PETERS:  I think Ray Trussel is an outstanding
              24   example of courageous action.

              25             DR. KLICKA:  That's right. That's why I wanted to

 ACE-FEDERAL REPORTERS,  INC.
26 1 CONSTITUTION AvE.     N.W.


                                                                            95

               1  give it emphasis.

               2            DR. HALDEMAN: What other methods are being  used  in

               3  the area?

               4            MR. PETERS:  Then, of course, these are legal.

               5  Theoretically, on the books, according to the administrative

               6  procedures of the Department of Social Welfare, the  Department

               7  of Social Welfare -- this is administrative now, on its
               8  administrative cZde -- in considering an'application for the

               9  granting of a charter to a new hospital should take into

              lo  consideration need, the need for the hospital. This is  not  in

              11  the law; it is in their working arrangements. And in  the  past

              12  two years, the Department of Social Welfare has come to us  and

              13  asked us our opinion.
 FR           14            But I might also add that they have disregarded  our

              15  opinion after we gave it to them.

              16           MR. BUGBEE:  Licensure is a jungle.  It is between
              17  the municipal, delegated to the Commissioners of Rospitals,  or

              18  the State.  You would have to read the book because for

              19  proprietary and voluntary in the five boroughs and out, the
              20  rules are all different, aren't they?

              21            MR. PETERS:  It is a very complicated structure.
              22  But suffice it to say that the Department of Social Welfare
              23  has within its rights the ability to withhold a charter to  an
              24  institution that is not needed, a voluntary institution  which

              25  is not needed.

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AVE   N.W.
   WAS@OIIGTON. 0. C,I


                                                                                96

                1            DR. ROREM:  I might say in Pennsylvania the law now

                2  States that a voluntary hospital has to  have  a  certificate

                3  of need and a proprietary does not.

                4            MR. PETERS: Proprietary in New  York  does  not  either

                5  except in New York State, the Department of  Social  Welfare  can

                6  withhold the charter to a new  voluntary  membership  corporation

                7  which wants to start a hospital.

                8            They have not for some reascnor another in our

                9I region.  We have on three or four occasions in the past two

              10   years told them this hospital is not needed,  and  they  have
              11 'chosen to go ahead anyway and give the charter out.  So that

              12   means we do have some legal control, but  the  Department  of

              13 i Social Welfare for some reason or another does not choose to
                 I
 FR           14   follow  it.

              15             MR. BUGBEE: You  have  some  other  idiosyncrasies.
              16   The Department of Social Welfare is a board, nonpolitical and
              17   nonapproachable through administrative controls or anything else.
              18   So they have done pretty much as they want.

              19             MR. PETERS: As far as  the  proprietary  hospitals  are
              20   concerned and municipal hospitals, we have the Commissioner
              21   of Trusts of Municipal Hospitals,  Department  of  Hospitals.
              22             Take the municipal-hospitals.  We have worked with all
              23   the commissioners over the past years very closely, and they
              24   have come to us asking our advice about the building of
              25   municipal hospitals.  We have a lot of municipal hospitals that

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AVE N \jV,
          C@ C


                                                                           97

               i  are in inadequate facilities, and there has been some discussion

               2 whether they should be closed or replaced.  We rendered our Own

               3 opinion on a number of these.

               4           Dr. Trussel has agreed completely with us that we

               5 were right, but here again, we got into the whole area of politi-

               6 cal forces and both Dr. Trussel and we have been defeated.

               7           I think that Fordham Hospital, which was a hospital
               8 we said should be closed, Trussel said it should be closed, al3
               9 the knowledgeable people said it should be closed, but local
             10  political pressures have kept it open.
             11            I think of Gouverneur Hospital which we said many
             12  years ago should be closed, Trussel said should be closed, he
             13  closed it.  But as of a week ago, we have reversed our decision.
FR           14  It is now going to be built.

             15            MR. BUGBEE:  Who has reversed this decision?

             16            MR. PETERS:  The hospital council because of the fact

             17  we were going to make Bellevue  Hospital smaller.

             18           MRS. COLEMAN:  Don't try to understand it.
             19           MR. BUGBEE:  Ninety million isn't enough for
             20  Bellevue Hospital?
             21           MR. PETERS:  The problem with some of these things
             22  here, you mentioned before about location of the hospital --
             23  I think it was Dr.. Rorem mentioned -- this is a problem we
             24  faced.

             25           The planner can say, "Thirty minutes traveling time,'

 ACE-FEDERAL REPORTERS, INC.
261 CONST'TUTION AVE., N.W,
   w@SHING@ON, 0, C.


                                                                           98

               I  and Gouverneur-Bellevue is a good example.  Gouverneur Hospital
               2  was a small hospital which lost accreditation, small municipal
               3  hospital, with 200 beds in the tip of lower Manhattan.  Within

               4  15 or 20 minutes travel time by bus, you came to Bellevue

               5  Hospital which is the same type of-hospital except ten times
               6  as big, staffed by three great universities -- Cornell,
               7  Columbia, and New York University medical schools -- one of
               8  the great hospitals of the world that was actually servicing
               9  this area anyway in unsuitable facilities, going to be rebuilt.

               10           The question was should you rebuild an X-sized
                  Bellevue Hospital or an X-minus 200-bed Bellevue Hospital
               11
               12 with 200 new beds down in lower Manhattan?
                           We said  t'No build the X-sized Bellevue Hospital
               13                  0    0
FR             14 and forget about the 200-bed satellite down in the southern
               15 part of Manhattan which, don't forget, had lost its accreditation,
               16 lost its approval, all its residency approvals, a poor institu-
               17 tion.  But the Mayor had promised in his first campaign they
               18 would get a new Gouverneur Hospital.  And despite what you
               19 say about the Mayor, in this instance, he was tenacious.  He
               20 kept to his promises.  He never gave in.  And Trussel advised
               21 him to close it, and he closed it, but nobody could make it
               22 stick.
               23          Here, you have the local community very vocal,
               24 demanding something and the planning agency and all the
               25 knowledgeable people saying, "No, you don't need this, it is

ACE-FEDERAL   REPORTERS,    INC.
261 CONSTITUT ON AVE     N@W
        C. C    I


                                                                                99

               I  not for your best interests."  How do you reconcile this problem?
               2  We are a community agency.  We purportedly speak for the
               3  community, but are we speaking for the community when the
               4  community says they want this and we say no, you don't need it?
               5             DR. ROREM:  If this had been a voluntary hospital,

               6  you could  have made it stick.

               7             MR. PETERS:  How?

               8             DR.R       They have to get the money from somewhere.
               9             MR. BWBEE:  They wouldn't have raised it down there

              10  either.

              11             DR. KLICKA:  You didn't change your position?
              12             MR. PETERS:  We changed it the last meeting because
              13  of the rearrangement of cutting down, if they cut down BellevuB.
FR            14             DR. RCREM:  You saved face by cutting Bellevue back
                  200 beds?

              16             MR. PETERS:  Yes.

              17             DR. HALDEMAN:  Is there affiliation with Bellevue?
              18             MR. PETERS:  No. they are going to affiliate with
              19  Beth-Israel, which is in the area.  It is a peculiar thing.
              20  We are going to get a Department of Health, Welfare, Hospitals
              21  and Mental Hygiene to work together.  It is very unique.
              22  They are planning on an interdepartmental complex to make certain
              23  pioneer efforts in providing care locally.
              24            MR. BLUBEE:  They are rationalizing the Mayor's

              25  commitment.

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT'ON AVE   N.W
   W41@l,IGI.l O@ C.


                                                                             100

               I            DR. HALDA%N: I think their batting  average  may  be

               2  pretty good. There are at least two or three  municipal  units

               3  that are being built around and will be operated by a voluntary

               4  nonprofit hospital.  And it does always seem to me like in the
               5  last analysis, you usually have to compromise some things in

               6  order to get the major things you want.

               7            MR. PETERS:  Let me get into the idea of how we
               8  work with voluntary hospitals.  This is the area where we have
               9  done a great deal of our work in the past. And here  is  where
             10   we probably have had the greatest success, partly because, as E
             11   said, people ask us to study them. So the mere fact  they  ask
             12   us indicates they may abide by our recommendation.  They
             13   don't have to ask us under the present circumstances.
FR           14            They ask us for our recommendation. We  do  a  study.
             15   We come up with an answer.

             16            In this instance, I think the greatest tool  we  have
             17   had to use has been Hill-Burton money, being the local agent
             18   for Hill-Burton for the State and five boroughs of New York
             19   City which has given us a tremendous weapon, actually a weapon
             20   far beyond the actual amount of money involved.  You are talkiitg
             21   on an average of $1.5 million or $2 million a year, most of
             22   the grants being made half a-million dollars, $300,000, $200,0()Ov
             23   relatively small.grants in terms of the total amount  of  money
             24   which is being expended for capital construction.

             25            Here is where we have influenced hospitals a great

 ACE-FEDERAL REPORTERS, fNC.
261  CONSTITUTION  AVE,,  N.W.
   W4@@IIG@@, 0, C,


                                                                           101

               I  deal and gotten hospitals to do largely what we would like to
               2  see them do. Here we have gotten beyond merely the approval
               3  of a grant. We have told them to add outpatient departments,
               4  new services. We have attempted in many ways to get them to
               5  do substantially more than they intended to do originally,. And
               6  I think they have been very successful here.
               7            DR. ROREM:  I would like to ask a question.  You
               8  said originally that no approval or disapproval was expressed
               9  unless requested by the institution.  I-s'that still the case?
             10            MR. PETERS:  Yes, with the exception now that Dr.
             11   Trussel was coming to us asking about specific proprietary
             12   hospitals.

             13            DR. ROREM:  Somebody asks you, though.
FR           14            MR. PETERS:  And Blue Cross is coming to us, so
             is   somebody is asking us at the present time.
             16            DR. ROREM:  You don't move in on the basis of sound
             17   public policy,you feel you ought to move in on a situation?
             18           MR. PETERS:  I think in time, it is the intent we
             ig   will move in.
             20            DR. ROREM:  I have a reason for asking.  I am import med.,
             21   don't wait until they ask you.  Tell them first.
             22           As the day goes on, I want to hear more about that.
             23           MR. PETERS:  Actually, if you look at the new structure
             24  of the Council, what it stands for, there is no question about
             25  it.  It was the intent that we move in bef ore we are asked.
ACE-FEDERAL  REPORTERS,  INC.
61 CONSTITUTI(ON AVE .  N,W@
  W SH,N,
   4 "ON@ 0. C


                                                                            102

               I            DR. HALDEMAN:  Staffwise, you really wouldn't be

               2  able to.

               3            MR. PETERS:  Right now, we have got a small staff.

               4  We have got a backlog of requests.  We have so much work to

                  do just to keep abreast of all the official requests.  We.have
               5

               6  got half a dozen we are working on right now, and our staff
               7  has not grown since the Council has expanded.

               8            DR. KLICKA:  How many studies have you done of this

               9  type in the last three or four years?

               10           MR. PETERS:  Last three or four years?  I guess abou:
               11 25 or 30 in the past four years.  We do about,,seven a year.
               12           DR. ROREM:  Special studies, specific institutions.
               13           MR. PETERS:  And also special studies of specific
 FR            14 problems or community problems.

               15           For example, we are still studying the hospital neecb
                  of a certain area.  It is the converse way of going at it
               16
                  because a local group says  "Study the area." And we look and
               17
               18 evaluate the area needs and the hospitals role in meeting
               19 these, and we do special problems, particularly voluntary
               20 relationship, which is a very complicated one in New York.
               21           Several years ago, we studied problems of providing
               22 ambulance service to New York City residents.  Things like that.
               23 We get involved in all types of studies, but as I said, the
               24 bulk of them are studying an individual hospital'& program for

               25 the future, whether they should affiliate, close, merge,

 AGE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AVE  N.W.
   WASeiNCTON, 0, C@I


                                                                               103

               I  expand, relocate.

               2            We have relocated several hospitals in New York.

               3  There are two that were relocated very successfully, both of

               4  which have expanded upon relocation -- Misericordia Hospital

               5  and Booth Memorial in Queens.  Here, we took existing hospitals

               6  in Manhattan, which is substantially averbedded, and told them

               7  the plants were inadequate, not to build where they were, go
               8  somewhere else "ere they are needed more'.  We did this on

               9  two occasions in recent years so successfully  these  hospitals

              lo  were expanded, but they were too small when they moved.

              11            We have kept one hospital from moving away from a

              12  deteriorated neighborhood, and this, I think, has been  one  of

              13  our greatest successes. Here is an area  that  went  bad.  Here
FR            14  was a hospital that was doing a service.  They wanted to go

              15  out to the suburbs where the nice people are, and we said,,
              16  "No. stay where you are because this is an area of great need,

              17  impoverished."

              18            DR. ROREM:  In Manhattan?

              19            MR. PETERS:  In Brooklyn.  We have areas of Brooklyn

              20  that are just as bad as some of the areas of Manhattan.

              21            DR. HALDEMAN: You have had  several  instances  where
              22  hospitals have consolidated'. haven't you, two or three
              23  hospitals together to build a new hospital?
              24            MP,. PETERS:  We have one recently, Prospect Heights,
              25  which was a hospital in Brooklyn, a bad plant, one of the

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE   N,W.
   WASHINGTON 0. C,


                                                                           104

               I  kind of hospitals that was mentioned give us concern about

               2  the quality of care rendered.  The hospital was old, almost

               3  100 years old.  We got them to close and merge with another
               4  hospital.  The other hospital is still operating as a satellite,
               5  but in time they will close the building.  The building is no.

               6  good.

               7           We have done this on other occasions.  Ann is working
               8  on one right n@which gives every hope of maybe three

               9  hospitals merging.

             10            MRS. COLEMAN:  Three hospitals and an old-age.
             11            MR. PETERS:  A related facility.
             12            We have done this thing that Dr. Rorem mentioned,
             13   instead of replacing a municipal hospital on its present site
FR           14   which has problems in staffing, problems in getting doctors,
             15   good doctors to give sufficient amount of time because they
             16   can't bring their patients there anyway, we have got these
             17   inferior plants to get these hospitals rebuilt on the
             18   grounds of voluntary hospitals or else to get voluntary hospitals
             19   to aid these institutions in staffing.  And we have been very
             20   successful in that.
             21            We have one hospital in the Bronx that is going to
             22   move with a great voluntary hospital, and we set the pattern.
             23   I think this is one of the best contributions we have made so
             24   far as relations between the two types of hospitals are concerned
             2S   in the past years.  I think probably Hay Nickelson's greatest
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE   N.W.
   W@SHINGTON. 0 C.


                                                                             105

               1  contribution to the Council was in getting this concept acrossl.

               2  It was essentially his concept.

               3            DR. HALDEMAN: To get back to implementation.,  what
               4  about the Blue Cross, the 5 per cent fund, the Blue Cross

               5  collection?

               6            MR. PETERS:  We have done nothing on that.

               7            DR. ROREM:  What is that?
               8            MR. PttERS: In the recent Blue Cross  formula,  the
               9  hospitals can put away 5 per cent, but this cannot be expended
              10  without approval.  It can only be expended for rep lacement or
              11  expansion.  It cannot be used.to underwrite deficits.  And
              12  this is, as you can well imagine in a city which has so  much
              13  money expended for medical care as New York City or the 17
 FR           14  counties of the New York area which Blue Cross is responsible
              15  for., a tremendous amount of money. It has been going on  now
              16  for about two years accumulating.  And within a few years, you
              17  are going to be talking about millions and millions of dollars
              18            DR. ROREM:  Is this 5 per cent paid over to the
              19  hospital or given --
              20           MR. PETERS:  Given to the hospital, but they have
              21  to set it aside.  They have to fund it or they may.
              22           MR. PETERS:  They-have to.
              23           DR. HALDEMAN:  And isn't it also true the purposes
              24  for which it can be funded have got to meet approval of Blue
              25  Cross?

 ACE-FEDERAL  REPORTERS,  INC.
26 1 CONSTITUTioN AVE     N.W
   W@SH",,ON 0 C. @l


                                                                              106

               I           MR. PETERS:  Blue Cross.

               2           DR. KLICKA:  Blue Cross or the Council?  Please

               3 repeat.  Blue Cross., not the Council yet.
               4           DR. HALDEMAN:  The feeling, as I understand it, is
               5 they may ask the Council's advice  but I think there is a
               6 legal question which Jim might raise later on as to whether
               7 they could turn over the responsibility to the Council.  I
               8 think there is a question whether that would be legal.
               9           MR. PETERS:  One of the problems they face is the
              10 fact how much autonomy these other agencies can give up.  Blue
              ii Cross can ask our opinion.
              12           DR. ROREM:  Is this actually a 5 per cent plus over
              13 and above depreciation allowance?
.r@ R         14           MR. PETERS:' No, this is the equivalent.
              15           DR. HALDEMAN:  Jim, would you want to touch on this?
              16           MR. ENSIGN: I want to say Doug Colemants  concern  has
              17 been all along with some parallel action on the Blue Cross
              18 Board, advice given it by the planning agency. And  the  opinion
              ig that has been given them by the legal counsel is if they  merely
              20 accept as their ruling the opinion of the planning agencies,,
              21 they might be in trouble with restraint of trade or collusion.
              22 And so, therefore, I guess the approach is they ask the advice
              23 and then act upon that advice.
              24          MR. PETERS:  Trussel faces the same problem as
              25 Commissioner of Hospitals, precisely the same problem.
ACE-FEDERAL  REPORTERS,   INC.
61  CONSTITUTION  AvE.,   N.W.
  W,4sm@,cr,N. D. C.


                                                                             107

               1            MR. BUGBEE:  And the welfare,too.

               2            MR. PETERS:  Welfare does, too.

               3            MR. ENSIGN:  And I think in Michigan, Jack can probably

               4  comment on this, Blue Cross gets advice from the  Detroit  area
               5  Hospital Council or Hill-Burton authority, other State areas.'
               6  and acts accordingly and may use other evidence that they
               7  gather themselves to reach the decision they finally reach.
               8  But usually, it is in line with recommendations of the planning

               9  unit.

              10            DR. HALDEMAN: Are those pretty well  all  the  imple-
              11  menting devices that there are available to the Council  or  in

              12  New York?

              13            MR. PETERS: Of course, there is also  the  fact  that
FR            14  groups like United Hospital Fund and so forth can  use  certain
              is  sanctions - depending, to implement our recommendations, but
              16  United Hospital Fund at the present time doesn't  get  involved
              17  in construction, merely giving contributions for free care.
              18           But if United Hospital Fund gets involved in a
              19  capital fund drive, which they have been seriously  considering
              20  for years and which officially they are going to  probably  get
              21  involved in next year, it is their intent that in  distributing
              22  the monies raised, they will turn to the Council again as
                  Doug Coleman tur ned to us for advice.
              23
              24           Whether they will take our recommendations 100 per
              25  cent is the same problem that was ra ised before, but  they  will
 ACE-FEDERAL REPORTERS, INC.
261 CONSTI TUTION  AvE.,  N,W.
   WAStliNGTO'4. 0. C.


                                                                             108

               1  turn to us because we have the mechanism to determine  need,

               2  and they haven't got it.  They have got the money.  They have

               3  got to give it uut according to some rational basis.

               4            They will turn to us, seeing they will support  us

               5  anyway to the tune of $80,000 a year, turn to us for  advice

               6  on how to distribute this money.  They are talking about

               7  tremendous sums of money.
               8            DR. R@:     I would like to ask just so I get it
               9  straight, I have suggested from time to time on my own as I am
             10   concerned with a broad problem that Blue Cross  depreciation
             11   allowances might very well be made in a central fund to be
             12   used for general hospital construction as an institution need
             13   may appear instead of paid out to the individual hospital.
FR           14   Has that been picked up and laid down or not picked up?
             15            MR. ENSIGN:  There has been a lot of discussion on ii:.

                           MR. PETERS:  I can say you wouldn't be elected man
                  of the year by the voluntary hospital boards.
             17

             18            MR. ENSIGN: We discussed this and  did  some  legal
             19   research on the question, and it was found you run into some
             20   problems like with withholding money ostensibly which belonged
             21   to and was the right of the hospital to receive as a  proper
                  reimbursement, diverting it into a central pool.
             22
             23            I don't know that it has ever been tested.  I don't
                  think it has.  It is something peo le talk about, but they are
             24                                    p
             25 all af raid of .

 ACE-FEDERAL REPORTERS, INC.
261  CONSTITUTION  AvE..  N,W,
         cl. C. I


                                                                           109

               1            DR. ROREM:  There are things, too, whether or not a
               2  big responsible agency like that does not have an obligation
               3  to see that the total properties are kept in balance  rather

               4  than the individuals.

               5.           DR. HALDEMAN: How about priority  and  principles?
               6  What have you other than these basic principles.
               7            MR. PETERS:  We haven't enunciated anything in writing,
               8  but we operate pretty much with priorities. and the Board

               9  operates.

             10             Obviously, we are always interested, for  example,
             11   in replacing unsafe facilities.  This is one of the priorities
             12   which has been given. We have always given a great  deal  of
             13   emphasis to this both in administration of our Hill-Burton
FR           14   program,locally and in our studies. We have always  given  a
             15   great deal of stress to hospitals which exercise a great
             16   influence on the region.
             17            For example, the great university teaching institutions.
             18   We try to strengthen them as much as possible because when you
             19   build up a Columbia-Presbyterian or New York-Cornell Medical
             20   Center, you are not talking about a hospital now which is
             21   servicing a local community.  You are talking about a hospital
             22   which services the entire region, both in terms of patient
             23   care insofar as many of the very difficult cases are sent there.
             24   It is leadership in terms,of medical education and research.
             25   And these institutions, there is no question you get a great
ACE-FEDERAL REPORTERS,  INC.
61   CONSTITUTION   AVE.,   N,W,
  W45HINGTON, D. C.


                                                                            110

              I  deal of support from the Council.

              2             In other words, what we are trying to do if we could
              3  do it, we would like to build up the strong and starve out
              4  the weak because it is awfully difficult, we find in the past,
              5  to try to build up the weak, particularly if they are occupying
              6  some poor plants.

              7            MR. COUSIN:  Mr. Chairman, I would like to ask a
              8  question.  We, I-think, tend to have a little bit of that
              9  philosophy except that you can then be accused, you know, of
             10  backscratching, and we are occasionally.
             11            What do you do when you have a suburb where they
             12  have all the dough in the world and they have an awful lot of
             13  the good medical staff that are in these so-called great
FR           14  institutions.  And you know darn well that this now hospital
             15  is starting out, it may be 200 or 300 beds, but that eventually,
             16  in the future, it probably, too, will become a great institutiim.
             17           Now, do you encourage it to go up to 4002 500, 6009
             18  700?  There is need out there.  Or when a great institution
             19  in downtown New York where there is a surplus of beds wants
             20  to go from 1,000 beds to 1,300, you just give them your papal
             21  blessing because they are so-called great hospitals?  You tell
             22  them, O.K., automatically, go an extra 300 beds where actually
             23  those 300 beds you could put up a good argument they should be
             24  in Bronxville or Queens or some other place?
             25           DR. HALDEMAN:  In other words, you are entering anotiLer
ACE-FEDERAL  REPORTERS,  INC.
61 CONSTITUTION AvE  N,W.
  W"@'ll'ON. 0. C,


               I  dimension, the suburban and central city.

               2            MR. PETERS: I have been talking primarily in terms
               3  of what I know about the most, New York City. Getting into
               4  the suburban area, you have an entirely different problem,
               5  no question about it. You certainly don't expect them to.come
               6  from Poughkeepsie to go to downtown Manhattan togpt their
               7  medical care. You have to provide a lot locally and no
                                  -it. You are going to have to strengthen the
               8  questions about

               9  suburban hospitals the best you can.
             10             But when you come to the other problem you mentioned,,
             11   there are decisions you have to make.

             12            MR,., COUSIN:  The decision we have in our area , Ford
             13   Hospital came to us and wanted to put up 300 or 400 beds.
FR           14   We have to admit it is a great hospital, but an the other
             i5   -hand, it is in an area where we have got   I can't remember
             16   offhand -- 2,00 or 3,000 surplus beds.
             17            MR. PETERS:  I would tell them not to do it, then,
             18   if you can get away with it.

             19            DR. KLICKA:  If we can ask Mr. Peters to summarize
             20   the points of strength of implementation and the points of
             21   frustration, areas that he wished they had greater support thall
             22   frustration, see if he can put them into a concrete ball of wa:c
             23   for us here.

             24            MR. PETERS:  I would say one of the things we wish
             25  we knew about the most is we could know the plans earlier,
ACE-FEDERAL REPORTERS, INC.
61 CONSTITUTION  AVr.,  N  W.
  W49HINGTor,. 0 C


                                                                                       112

                1   the plans of all the hospitals, what they intend to do,
                2   because I think this is one of the things we are weakest on.
                3   We don't find out about things until it is too late to do  any-
                4   thing about them.  And if we could have a mechanism whereby
                5   we would be assured that -- I am.not talking about after the
                6   plans have been approved  by  the  Board;  I  am  talking  about  when
                7   the first seed comes in somebody's mind        we would like to
                8   do something that we would know about it and we would be able
                9   to give our reaction to it.  I said,     flour reaction"  either
               10   our approval, disapproval, caution., or whatever we want toldo.
               11   But if we could get a mechanism where we could get that for al.
               12   the hospitals, I think we would be a great step forward.
               13   It wouldn't solve all our problems by any means, but it would
FR             14   certainly be a great deal better than what we are doing now
               15   because now we find it is half done sometimes.
               16             MR. SIBLEY:  You must have that for a very      high per-
               17   centage of your hospitals already, don't you?
               18             MR. PETERS:  Yes, but we don't have all of them.
               19             MR. SIBIEY:   What you mean is you don't have every
               20   one. You  have'a lot.   You sounded as if you didn't know.
               21             MR. PETERS:   We don't have them for all of them.
               22             MR. SIBLEY:   You have  got  to  find  ways  of  cultivating
               23   the hospitals that so far haven't cooperated.
               24             MR. PETERS:   I am talking about at the present time
               25 we get a great deal of it through our inventory.  Once a year
ACE-FEDERAL  REPORTERS,  INC.
'61 CONSTITUTION AVE.,  N.W
   W@,,/ ... ON, 0. C.


                                                                            113

               I  we take an inventory of all hospitals, and we ask them) 'What

               2  are you planning to do?"  A great deal of the information we

               3  get has already been approved by their Board.  They have
               4  hired an architect or they have got a consultant working.

               s  We would like to get down even before that.

               6            MR. SIBLEY:  I agree, but once a hospital sets up
               7  a master plan for itself, you are pretty much aware of what
               8  direction it is ioing.

               9            MR. PETERS:  Yes, but it maybe would not be  what

              lo  we would like to see them do.

              11            MR. SIBLEY:  You do on a master plan.

              12            MRS. COLEMAN:  We don't get that.
              13            MR. SIBLEY:  I realize this is one of the techniques
FR            14  we are talking about, certainly. One Hill-Burton  agency  I
              i5  know of will not consider a hospital proposal until they have
              16  seen the master plan of that hospital.
              17            MR. PETERS: There are darn few hospitals  in  New
              i8  York that have master plans in that sense.

              19            MR. SIBLEY:  This is long-range,
              20            MR. PETERS:  Very few of them do have.
              21            MRS. COLEMAN:  When they apply for Hill-Burton, that's

              22  narrow.

              23            MR. PETERS:  It is much more the immediate program.
              24            MR. BUGBEE:  I think there is one point to be made
              25  here, though, about reviewing.  And I think Rufus is beginning
 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT ON AvE   N.W@
   WASHINGTON. 0. C-


                                                                            114

               1  to get individual plans. The New York area exaggerates it,
               2  but everyone of them, you can't just read a plan and say yes
               3  or no and add any depth to it. If you are going to go out

               4  and really look into it, you are talking about a lot of staff

               5  time as well as a good deal of wisdom.

               6           So if they all came at you  I don't know what you
               7  would do because you can't hardly cope with those that do

               8  come to you as a staffing job.

               9           MR. PFTERS:  Certainly, if they gave me all the
             10   plans tomorrow, we would probably put them all in the file case
             11   because we don't have the staff to analyze through and pick up
             12   as we need it.  But as we grow and develop, I would hope we
             13   could get this type, being advised as early as possible as to
FR           14   the planning of each individual hospital.
             15            DR. ROREM:  I would like to make one observation
             16   there.  I wouldn't think you would have-to be completely
             17   frustrated if you got a flock of plans.  Just an arithemtic-
             18   alignment of what they added up to would probably show you it
             19   was impossible and just to let the other hospitals know that
             20   the one up the street is planning the same thing you are has
                  a tremendous chilling effect.
             21
             22           The very first thing we did when we got in Pittsburgl,,
             23   we did this.  We asked for the plans'.  It added up to a tremendous
             24   amount of money, in this case, a small area, $90 million and
             25   2,000 additional beds.  We just added them up.  We didn't

AGE-FEDERAL REPORTERS,  INC.
6 t  CONSTITUTION  AVE  .  N.W.
        0. C.


                                                                                115

               I   evaluate them at all.    And we reported them to the group,

               2   this advisory committee as a whole.

               3             You would have thought, goody,  goody,  think  of  all

               4   that money.  They said, "My god, we will all go broke together."

               5   That was the reaction.

               6             MR. BUGBEE:  It sounds like to you are answering-

               7   "I am not right in this."  You may be able to make such an
               8   answer, but when-you come to work with  them  as  alternatives.,
               9   then you are just not talking about an  office  procedure  by  a

              10   long  shot.

              11             MR. COUSIN: Another  problem  you  get  into,  because
              12   we did this very samd thing.  We did just add them all up,

              13   and we came out with a $125 million.  What did this do?  This
FR            14   had a chilling effect on the voluntary, the truly voluntary
              15   system, particularly the corporate givers.  But it had a blow-

              16   torch effect on the hospitals that didn't  intend  to  ever  hit

              17   the corporate givers anyhow.

              18             We didn't do this, but what happened was that the
              19   better hospitals had to suffer about a six-year moratorium
              20   before they could get any money while the Hospital Council
              21   studied the situation. But  approximately  an  equal  amount  of
              22   unsatisfactory beds of a quasi-proprietary nature were built.
              23             MR. BUGBEE: What conclusion  do  you  draw  from  that
              24   Jack?  What do you mean?  Ycuwould be opposed to announcing
              25   the $125 million until you had your study or

 ACE-FEDERAL REPORTERS,  INC.
261 CONSTITUT  ON  AVE  ,  N.W.
        IC
   WA$MFNGTON@ 0. C.I


                                                                                 116

                1            MR. COUSIN:  No.  I think we finally resolved the

                2  situation, but it was after the horse was  stolen.  And  that  is

                3  we got the Blue Cross eventually put through its standards

                4  that they wouldn't take anybody on as  a  participating  hospital

                5  until they had been approved. So now, if  we  were  to  announce

                6  $125 million worth of construction, any of these  guys  who  do
                                                               t
                7  not intend to hit the community for philanthropic funds or evell

                8  hit Hill-Burton,-- they would still be faced with  the  fact  that

                9  if they built their hospital, they would eventually have to

                10 go to Blue Cross for participation and Blue  Cross  would  turn

                11 to us, and we T,,ould say we never heard of this hospital.

                12           DR. HAI.DEMAN:  What type of hospital'7

                13           DR. KLICKA: I would  answer  that  more  specifically
 FR             14 because we have the data, and we wouldn't publish  it  for  this

                15 reason. The very worst thing that we have  in  Chicago  is  the

                16 State survey and planning as an example of this because we
                17 think it exaggerates the need for beds in our whole metropolitan
                18 area.  And the people who shouldn't be building beds are
                19 continually pointing to this State survey and plan as their
                20 justification for doing it.

                21           MR. PETERS: I can tell  the  New,York  City  experience
                22 with the same thing. They had a meeting just  the  other  day  on
                23 this very subject.
                24           MRS. COLEMAN: The problem is we  have  a  high  figure

                25 on bed requirement on the State plan, and we  know  it  is  high.

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AvE   N.W,
    WA@Hlkr.TnN D CI


                                                                           117

               I  I am quite sure that if our beds were properly distributed)
               2  we could lower the bed requirement figure by as much as perhap3
               3  4,000 beds.  But the point is we do not operate under these

               4  circumstances.

               5           We have too many maternity beds. We have  too  many
               6  specialized beds in specialized hospitals. We have too  many
               7  beds in small hospitals.  And under these circumstances, we
               8  do need approximately what is called for in the State plan.
               9           Doug Coleman raised the point that the people are
             10   quoting this figure to him, this bed requirement figure.  So
             11   we sort of compromised on disclaiming the figure by a footnote.
             12   Actually, it shouldn't be used as a planning figure.  It is
             13   what we need now.
FR           14            MR. BUGBEE:  Are these Hill-Burton figures, the beds
             15   per thousand ratio without adjustment for use, or what are the]r?
             16            DR. HALDEMAN:  No, even with adjustment --
             17            MR. BUGBEE:  Still high.
             18            DR. HALDEMAN:  -- they are still high.
             19            I don't think the purpose of this meeting is to go
             20   into Hill-Burton planning, but we are working very hard, as YOIL
             21   know, George, revising our procedures and policies.  We want
             22   to get away completely from ratios.  We want bed need determined
             23   on the basii of projected population, taking into consideration
             24   utilization by major service.
             25           The main problem is the small one, even in New  York

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE. N.   W.
  W @ @ H I N (-, TN D C


                                                                             118

               1  city, lack of manpower.  The tendency an the part of Hill-

               2  Burton agencies is to go in and study areas that they know

               3  they are going to have to project in the next two or three

               4  years, and they are kind of treading water with this thing.

               5            As a result, here in Washington, D. C., for example,
               6  Hill-Burton plans for Maryland and Virginia greatly overstate
                                                              t
               7  the need in the suburban areas which are growing rapidly
               8  and can take additional beds.  But at the same time, you can
               9  go to the plan, and it is very unrealistic planning.

              10            Getting this thing over onto a more realistic basis
              11  is a more complicated thing than we had originally anticipated
              12  We have had a committee meeting almost monthly now for about
              13  a year and a half particularly considering such things as,
FR            14  first, what is the definition of a bed capacity because Hill-
              15  Burton agencies have agreed to develop a uniform bed capacity
              16  so one State's plan can be realistic in terms of another State s
              17  plan.

              18            For instance, if you just change a minor definition
              is  on State plan, you may overnight change the bed need factor by
              20  several thousand beds.

              21            Secondly, the definition of suitable or unsuitable
              22  has varied all 4mrer the place.  California until this year
              23  hasn't admitted there is an unsuitable bed in the State from
              24  the standpoint of fire safety.  If they license it, it is suitable.

              25 Whereas in New England, about 20 per cent of the beds in the

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE    N.W.
   WASICINGTON 0. C.


                                                                           119

               I  State agencies are declared unsuitable.  And this is an

               2  extremely complicated subject which we are moving on as
               3  rapidly as we can,, but which with the present state Hill-Burtoa
               4  agencies staffs is going to take time to develop in each
               5  community because there is no substitute for detailed study
               6  of the individual community.

               7           Now, our hope is that the areawide planning agencies.
               8  are springing up-all over the country literally.  Today, we
               9  invited purposely representatives from areawide planning
             10   agencies that have been in existence and had some experience
             11   but we have got, as you know, a large number of agencies that
             12   are coming into being.
             13            DR. R@:  bid you count the list that Hi sent us$
FR           14   21 full-time and 19 part-time?
             15            DR- HALDEMAN:  What will happen five or ten years
             16   from now, I think will be much different, and I think in most
             17   instances, the State Hill-Burton agency will utilize the plans
             18   as developed within a State.
             19            I think the State agency is faced with developing
             20   areawide planning agencies that will approach a problem somewhtt
             21   consistently.
             22            You take Ohio, Columbus, Cleveland, Akron, Cincinnati,,
             23   all use different definitions of what is beds or different
             24   principles in evaluating projects, not that every community ha,
             25   to do the same.

ACE-FEDERAL  REPORTERS,  INC.
61  CONSTITUTION  AVE:.,   N,W,
         C


                                                                             12

               I            And I think what has been said today illustrates
               2  the fact your approach in areawide planning has got to be
               3  different according to the characteristics of your community.
               4  But there are certain overall principles, at least.  These
               5  certainly are going to be tremendous when they start handing
               6  out the money for a modernization program because Cincinnati
               7  might get twice as much per capita merely on the basis of your.
               8  criteria for evaluating obsolescence being different in one
               9  community than in another.  But this is a hard pull.
             10             Now, we have not given any demonstration grants in
             11   areawide planning where there hasn't been a cooperative
             12   arrangement worked out between the State Hill-Burton agency
             13   and the local areawide planning group.  I don't think they can
FR           14   completely give up their responsibility, the State can't, but
             15   1 think in almost all instances, they will take the recommenda-
             16   tion of the local areawide planning agencies.
             17            MR. DRENNAN:  This past year, we worked very closely
             18   with the boys in that.  The weekly utilization, we turned up
             19   occupancy rates and utilization they used in formulating the
             20   areawide State planning as far as our particular area was
             21   concerned.

             22            MR. BLCBEE:  Did it change the bed requirement?
             23            MR. DRENNAN:  Slightly.  It reduced it because we
             24   learned alot about occupancy rates of small hospitals and so
             25   forth during the Past year.

ACE-FEDERAL REPORTERS, INC.
2 61 CONST)ITUTION AVE    N.W.
   WA SHIN GION. 0, C@


                                                                                  121

                I             DR. HALDEMAN: I think we  have  got  a  lot  more  to

                2  learn about what constitutes bed need.  We have had two

                3  national conferences on this subject which at least from my

                4  point of view -- I don't know how  you  felt  --  it  showed  up

                5  the problem areas more than  any  solution  because  I  can't

                6  for the life of me  understand  why  Indiana  should  only  have
                7  2.7 beds per thousand and Missouri have 4.5 beds per thousand.-
                8  There is the same  disparity  between  Idaho  and  Montana,  for
                9  instance.  And it isn't all in connection with the way they deter-

               10  mine what is a hospital bed.

               11             There are some factors we simply don't know about.
               12  That's why I feel so strongly that bed need should be determined
               13  based on a local study, using utilization, but using judgment
 FR            14  factors that can't be derived from figures.

               15             Because if you get a new  highway  going  out  in  an
               iB  area, it is going to have an impact   , or, you know,, a  big
               17  industry is coming  in.  Those  things  aren't  derived  from

               18  statistics.

               19             In the last analysis, bed need, I think, in the
               20  light of our present knowledge has  to  be  the  analysis  of
               21  available data plus pooled professional judgment.
               22             I think perhaps we  should  break  for  lunch.  Let's
               23  try to be back at quarter of two.
               24             (Whereupon, at 12:40  o'clock  p.m.,  the  meeting
               25  'recessed, to reconvene at 1:45 p.m. the same &y.)
 AGE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE . N.W@
   WASHINGTON, 0. CI


                                                                               122

   SHORT        1                       AFTERNOON SESSION
   AEW
   July 8       2                                                     1:45 p.m.
   fls Ace
                3            DR. HALDEMAN:  The meeting will convene again.

                4            Are there any further questions any of you want to

                5  ask Joe Peters about the New York program?

                6            Anything further, Joe, that you or Ann  would  like  to

                7  add?

                8            If ino@Z I think we ought to go.on to Sue  Jenkins  and

                9  see still another distinct variety of planning activity.

               10            MISS JENKINS: I will try to  make  this  brief  because

               11  we are dealing with a much smaller area and  problems  that  look

               12  big to us, but I can see them shrinking in size.  This is a

               13  consoling thought.

               14            I will briefly describe the  characteristics  of  the
   SR
               15  area, the hospital and nursing home situation of the planning
               16  agency, the methods of implementation, and share  with  you  some
               17  of my apprehensions about some of the  points  of  establishing
               18  priorities and in the possible light of  coming  Federal  funds
               19  for modernization I should like to share them  with  you,  too,

               20  if I may.

               21            Our area is one of 1,200,000  people  involving  five
               22  counties in two states; three counties in Missouri, two coun-
               23  ties in Kansas. In that area  there  are  twenty-two  hospitals
               24  if we include our Veterans Administration Hospital and our
               25  United States Air Force Base Hospital which  are  not  involved

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION  AVE  .  N.W.
    W."",-,. D. --.f


                                                                          123

     2         1  in planning except the USAF hospital was and wanted to add

               2  twenty OB beds and we stymied it through contacts of the

               3  Bureau of the Budget in Washington, they did not think they

               4  had the OB beds.

               5            These twenty hospitals range in size from the smallei5t

               6  of forty-five beds to the largest of 500 beds. There  is  one

               7  medical school hospital there at the present time, the Univer-

               8  sity of Kansas, which draws its patient load from all over tho

               9  State of Kansas as well as the metropolitan area and Missouri.

              10            A new and illuminating factor which Dr. Haldeman is

              11  very familiar with and has served as consultant to is our

              12  municipal hospital system which has gone under a private volun-

              13  tary board operated under contractural relationship with  the
  SR          14  city which now is affiliated with the University of  Missouri
              15  School of Medicine presently located in Columbia but extending

              16  post graduate work and looking ultimately, Jack, in the  last

              17  few weeks even towards the faster coordination of a medical

              18  school in Kansas City.

              19            We have no proprietary hospitals with the exception

              20  of one little twenty bed osteopathic proprietary hospital. We

              21  have succeeded in killing three proprietary projects.  We  do

              22  not anticipate that we will always have such a good batting

              23  average.

              24            DR. HALDEMAN:  How did you kill them?

              25
                            MISS JENKINS:  Two of them through the planning

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AVE    N.W.


                                                                             124

     3          1  agency.  one of them in the suburban areas simply by communica

                2 tions with and about a twenty-page report to a couple  of  the

                3 medical leaders simply scared the parts off of them about the

                4 possibility of their ever being able to operate at a financial

                5 level that would permit it to pay itself out.  The  other  two

                6 through simply conferences with the planning group  which  we

                7 were able to persuade them Dot to go aheadtwith it.  We do hav(

                8 the two Federal hospitals, the USAF Base and of course the

                9 Veterans Administration hospital.

                10          This five county area contains the four city and all

                11 suburban areas.  The suburbs do not yet go beyond the periphery

                12 of the five counties. We do have a  very  close  relationship

                13 with the two state Hill-Burton agencies an excellent one with
  SR            14 Kansas, not too good with Missouri, but at least a working
                15 relationship. We have been dealing very heavily  in  the  past

                16. six months in the nursing home picture where we are ceding, as

                17 most urban areas are, a tremendous surge of the  building  of

                18 the proprietary nursing home, many of them  with-FHA  secured

                19 loans or reaching through the Small  Business  Administration,

                20 some with private financing.

                21          The planning agency itself was established  by  the

                22 hospital organization.

                23          DR. KLICKA:  You do not get into the control of that

                24 at all?

                25          MISS "NKINS:  The what?

 ACE-FEDERAL   REPORTERS,   INC,
2  61  CONSTITUTION   AVE,,   N,W,
         0. C.


                                                                             125

       4        1            DR. KLICKA:  The nursing home field.

                2            MISS JENKINS:  Yes, indeed.  We are working almost

                3 exclusively.

                4            ER,.. KLICKA:  You have approved them?

                5            MISS JENKINS: In Kansas we have  a  relationship  with

                6 the State  of Kansas that they will not approve any--nursing homE

                7 project in the two county urban area on the, Kansas side that

                8 does Dot have our approval first.

                9            DR. HALDEMAN:  What is that?

              10             MISS JENKINS: They try to make it  for  licensing.  If

              11  private finance comes in and wants to build in  that  area,  they

              12  check first with the Kansas State Board of Health, their

              13  Facilities Division, for what they will require for life

              14  insurance and so on.  They are referred to us before the
   R
              15  Kansas agency will even talk with them practically.  Whether

              16  we could stop them has not come to a test yet of those that

              17  are totally privately financed so we have not had any built

              18  yet.

              19             For FHA they have to have our approval on the

              20  Missouri side.  We could not get the state to say they would

              21  not issue a certificate of need unless a need could be demon-

              22  strated.  They blanket issue a certificate of need in Missou3t.

              23  Simply, if their quota says there is a need, they issue it.

              24  We got around this by establishing really a very fine working

              25  relationship with the FHA people who have decided that they

 ACE-FEDERAL REPORTERS,  INC.
2  61  CONSTITUTION  AVE.,   N.W.
   WASHINer@@. D. C. I;                                                           I


                                                                       126

 5              I  will not talk with them until they have come and talked with

                2 us and had a report on it.

                3           MR. BUGBF.E:  Have you said no to anybody?

                4           MISS JENKINS:  Yes, to I expect a half dozen.

                5           MR. BUGBEE:  Not on need but on sponsorship?
                6           MISS JF.NKINS:  Actually we are right up at what we',

                7  may consider the top area of need insomuch'as the market demanol
                8  indicates this because most of these big promoters are coming
                9 in with a high priced home up in the four, five, six hundred
              10  dollars a month bracket.  We have a report we will be sending
              11  to you hopefully within the next week to ten days of a researci
              12  study in which we cooperated with community studies on the
              13  market demand for nursing homes which gives a pretty fair
  SR          14  picture of the existing licensed homes, all of those that are
              15  projected and those that are in the process of construction
              16  and those that are in the dreaming  s-tage and have just barely

              17  contacted us about them.

              18            We have gone into, 1 think, a pretty fair analysis
              19  of demographic data, income brackets, those on old age assis-
              20  tance, what the Blue Cross plan does, what the insurance pro-
              21  grams do and so on.  We have been dealing then with a planninE
              22  agency that is involved in facilities and services in the
              23  hospital and nursing home area.  We have not gone beyond that,
              24           The planning agency itself, the planning committee,
              25  the basic committee, is a fifteen man committee which has beei

ACE-FEDERAL   REPORTERS,   INC.
2 6 1 CoN!3TiTUTION AVE..     NW
  W,@Hl,,r@, 0 c-,


                                                                        127

  6             1  functioning since 1957.  It is required that a majority,

                2 actually I thiDL- nine of the fifteen, are now totally non-

                3 hospital related individuals.  We are most inadequately

                4 staffed. The staffing is a little different than it  looks  on

                5 paper in that we do have a very able and very highly recognized

                6 non-profit research organization in the area of community

                7 studies incorporated with whom we collaborate in research  and

                8 who produce some research for us. We also have  a  relationshi-
                                                                               p

                9 with the Blue Cross plan which provides us mimeograph, address.-

              10  ograph, photocopying, handling of all mail and all this  type

              11  of thing which we do not have to staff for.

              12            Blue Cross does all of our IBM work, all of our

              13  statistical work. We do have a continuous  reporting  program
  SR          14  which is now in its seventh year, and this is all on IBM  and
              15  is maintained for us by Blue Cross.

              16            The planning committee functions in a  relationship

              17  to the hospital organization in, I think, a very comparable

              18  way with Jacques Cousins in Detroit. He has  complete  economy;

              19  it is not controlled by vested interests, it is not a  corpor-

              20  ate structure, it shares staff and it is inadequately  staffed.

              21            MR. BUGBER:  You are going too fast.  I thought there

              22  was one structure that did both.

              23            MISS JENKINS:  Yes.

              24            MR. BUGBER:  You are doing both?

              25            MISS MMKINS:  Yes.

 ACE-FEDERAL  REPORTERS,  INC.
2 61 CONSTITUTION  AVE  .  N  W
         0. C.


                                                                            128

     7          1            MR. 13UGBEE: I see.  But in spite of that 50 per cenl

                2 of yoLr board is public members rather than hospital members?

                3            MISS JENKINS:  No, the planning committee must be

                4 maintained at over 50 per cent non-hospital related.

                5            MR. BUGBEE:  I see.

                6            MISS JENKINS:  The over-all board of directors of th(i

                7 hospital organization is a public trustee medical staff and

                8 administrative.

                9            DR. HALDEMAN:  Does your planning committee report

              10  directly to the public?

              11             MISS JENKINS:  Directly to the public, never to the
              12  board.  It makes no report to the board, it has no strings to
              13  the board at all.  Its principal relationship to the board is
              14  that the board has to see that it is provided with staffing.
  SR
              15  The board appoints the chairman, no others of the planning

              16  agency.

              17             MR. BUGBER:  Who does appoint him?
              18             MISS JENKINS:  Actually, the nucleous-of the plannin@
              19  committee  was first named by the board.  Beyond that it is a
              20  self-appoii)tive body.

              21             MRS. COLEMAN:  Responsible to whom?
              22             MISS JENKINS:  Responsible to itself.and the commup-
              23  ity I should say.  It is no different than if it were separately
              24  incorporated actually in this respect.  Represented on it are
              25  trustees and physicians but it is dominated by your industrial

ACE-FEDERAL REPORTERS, INC.
261   CONST'TUTION AvF   N.W,
   W.@"I.roN. 0. C. it


                                                                             129

  8-            1  and your civic representatives.

                2            It was possible to get at least all of  the  major
                3  hospitals to develop their long range  planning  committees.
                4  The first couple of years actually the function..   of  this
                5  planning committee was conferences, not only one but several,
                6  with each individual hospital regarding the development of the
                7  planning committee in an effort to determine to the extent the
                8  planning group could the desires and aspirations of this par-
                9  ticular hospital; the direction it hoped to go, the type of
              lo   service in which it was interested, whether it was in expansion
              11   of its teaching programs, development of research and the
              12   chronic long term care or what it might be.
              13            We have certain peculiar problems, the osteopathic
              14   thing is one of them.  Jack, I did not realize you have this
   ,R
              15   to the extent you apparently have.  We have in Kansas City one
              16   of the osteopathic colleges, of which I believe there are stilL
              17   five in the country, are there not?
              18            DR. HALDEMAN:  Michigan is trying to establish

              19   another one.

              20            MISS JENKINS:  Are they really?
              21            MR. COUSINS:  Yes.

              22            MISS JENKINS:  Where?
              23            MR. COUSINS:  In Michigan.
              24            MISS JENKINS:  Goodness.
              25            DR. HALDEMAN:  Of course it is quote possible that
                   i]3 Kansas City that this osteopathy school will become the
 ACE-FEDERAL REPORTERS, INC,
261 CONSTITUTION AVE.   N.W
         0. C.


                                                                           130
     9         1  medical school at the Kansas City Medical Center.
               2            MR. BUGBEE:  Kansas City?
               3           DR. HALDEMAN:  Yes.  There is talk of it.
               4           MISS JENKINS:  We have encouraged it.  We have had
               5 the municipal system actually have four hospitals, now have
               6 three.  They did have General  No. 1 for white and General No.
               7 2 for Negro.  It has been integrated for se'veral years Dow.
               8           MR. BUGBEE:  Which state is that?
               9           MISS JENKINS:  Missouri.
              10           Actually, we have in the area four major municipali-
              11 ties.  There are some eighty lesser.incorporated municipalities
              12 that make up the urban comples in this area.
              13           MR. BUGBER:  Does Kansas City, Kansas, have a muiii.;
              14 cipal?
  SR
                          MISS JENKINS:  No, Kansas City, Kansas, has a long
              16 and conditional relationship between the hospitals and the care
              17 of the patients, also the University of Kansas City.  The
              18 [Jiiiversity of Kansas-has done a great deal of this work for the
              19 Kansas side.  The Missouri side has had the General Hospital
              20 which is now the General Hospital Medical Center.
              21
                          The osteopathic situation is one of the problems of
              22
                 .31anniiig.  We have fewer than one one bed fe;r osteopath and fivi)
              23 Eor the MDts.  There is Do crossover at the present time except
              24 )ut in the region.  Not within the planning area but within the
              25 .region we have some of the small county hospitals with both the

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE@    N.W.
   WASHIP.IION, D@ C.


                                                                          131

   10          1  MD and osteopathic on the staff.

               2            As Dr. Haldeman mentioned there has been some  talk,

               3  and we have been doing some talking, about the KaDsas City

               4  College of Osteopathy and Surgery forming a Duclear of a Dew

               5  medical school.  Whether this can come to fruition, Jack,

               6  within the time necessary is the factor there.  There does Dot

               7  appear to be the major resistance of the organized medical

               8  profession against it that there was, say, even five years ago-

               9           Another problem relates to three very small Negro

               10 hospitals in an area that has made very forward steps toward

               11 integration within the past teii years.  Each of these Negro

               12  hospitals wants the community to build a new hospital, each

               13 three times the size that it presently has, when they are

               14 runining two of the smallest ones, only about 40 per cent
  SR
               15 occupancy at the present time.

               16          This is a difficult one to deal with, Dot in size

               17 but in all of the sociological aspects of the thing.  We are

               18 hopeful, Jack, that we can help resolve the Negro thing througIL

               19 the General Hospitals taking pay patients. Many of  the  Negro

               20 lgroup that are in the largest of the small Negro hospitals,

               21 100 bed, are very marginal cases, This hospital  is  operating

               22 at four dollars per day below its cost structure and its charges

               23 at the present time without any means of supporting it  finan-

               24 cially except the Catholic Diocese.  We are hopeful that the

               25 small segment of the Negroes who do not have a place to

 ACE-FEDERAL   REPORTERS,   INC.
26 1 CONSTITUTION AvE.     N.W.
   W."",-" D. C.


                                                                                 132

                 I  practice may be accepted by the General and thereby manage to

                 2  close.

                 3             Somebody here commented  how  difficult  it  is  to  close
                 4  a hospital that has ever had existence.  If anybody knows any
                 5  easy way to go about taking  out  an  entity  that  is  in  miserable
                 6  financial condition, that is carrying a far below optimum
                 7  patient load and all and still take them out of existence, I

                 8  don't know.

                 9            Of this group of hospitals there were only two
               10   specialty bnspitals, one a children's hospital and the other
               11   a  75  bed  psychiatric  hospital.  The  childrents  hospital  situa-
               12   tion has been reasonably resolved again through the really ver:r
               13   good work of the planning agency in that it will affiliated
               14   with the General  as  a  part  of  this  Missouri  University,complex
  SR

                    now.
               16             DR.  HALDEMAN:  Not  only  affiliate,  they  are  going  to
               17   replace the two hospitals with a single physical structure.
               18             MISS JF.NKINS-.  What are you referring to as the two
               19   hospitals?
               20             DR.   HALDEMAN: The children's hospital and --
               21             MISS  JF.NKINS: You mean Mercy?
               22             DR.   HALDEMAN: Yes.
               23             MISS   JENKINS: That will provide the facility.  It
               24  will Saintai@ separate operation, however.
               25             DR. HALDEMAN:  But there will not be a duplication

 ACE-FEDERAL  REPORTERS,  INC.
2 6 1 CONSTIITUIION AVE,.  N@W
   W-SHiN.10N. 0. C.


                                                                           133

   12          1 of kitchen or X-ray laboratory or whatnot.  At  least,  that  is

               2  the hope.  I thought that was nailed down.

               3            MISS JENKINS: I thought it was  nailed  down,  too,

               4  but it is not nailed down at all. They are  even  saying  they

               5  are going to build their own labs, X-ray, kitchen  and  every-

               6  thing else.

               7            DR. HALDEMAN:  It is very interesting experience

               8  where we talk for a day and a half, a  half  dozen  foreigners

               9  sitting down with the planning group and the  board  trustees  of

              10  these two hospitals, and at the end of it I  thought  they  had

              11  agreed to build only one new structure and  maintain  the  iden-

              12  tity of Children's Hospital.

              13            MISS JENKINS: But to share, not to  put  in  laundry,
  SR          14  not to put in power plant. They are  still  abiding  by  these
              15  two. They are not abiding by the fact they  are  not  going  to
              16  have their own X-ray and their own laboratory  and  their  own
              17  kitchen and all that, except a factor coming  to  light  within
              18  the past two to three weeks may reinstate  your  hopeful  prog-

              19  DosticatioDs on this.

              20            This hospital first was talking about 200 beds  and
              21  the planning committee kept pushing them back and pushing  them
              22  bac4: on it. They decided to build 115 beds. They  have  103
              23  beds at the present time and the General Hospital and  Medical
              24  Center has 40. They agreed upon 115 finally. It  was  not  easy
              25  to get it to that but they come out that this 115 bed  hospital

 ACE-FEDERAL  REPORTERS,  INC,
2 6 1 CONSTITUT'ON   AVE.,   N.W.
   WA SH it4GTON, 01 C.


                                                                             134

     13         1  was going to cost $5 million.  They started on a fund drive

                2 for three and a quarter million dollars saying that the balance

                3 would come out of their endowments and what they  could  recover

                4 from some of their properties at the old site.  The  fund  drive

                5 has been going on for many weeks Dow and instead of  just  pour-
                6 ing money into it, Jack, as they felt the community would do,
                7 they have about $700,000 on the three and a' quarter  million.
                8 It is not likely. perhaps, that they may,be able to ko beyond

                9 a million on the fund drive.

              10            MR. BUGBEE:  Did your agency endorse their fund

              11  drive?

              12            MISS JFANKINS: Yes. Not for that amount  of  money,  I
              13  am sorry. I should not have said  that,  George.  They  endorsed
  SR          14  the project because they had over a period of three years a
              15  very strong hand in the location of this hospital.  It had
              16  intended first in locating in a relationship with the Universi-ly
              17  of Kansas Medical Center. We very strongly  opposed  this  for

              18
                  some very good reasons.
              19            Missouri will not pay any welfare  payments  outside
              20  the State of Missouri at all.  They would have lost their
              21  whole welfare picture out of Missouri, they would have lost

              22
                  much of their properties in Missouri.  They have some very
              23  fine acreage in Missouri but a good portion of this  would  have
              24  reverted to the heirs who gave it to the hospital had they
              25  moved the hospital outside the state.

 ACE-FEDERAL  REPORTERS,  INC.
261 CONSTIITUTION AVE.   N.W
   W.S@INGr.l. 0. C.


                                                                              135

   14           1            MR. ROREM:  Did you give the area and number of

                2  hospitals before I came in?

                3            MISS JENKINS: Our area is one  of  1,200,000  people

                4  involving five counties in two states.  In that area there are

                5  22 hospitals representing approximately 5,000 beds.

                6            MR. ROREM:  Thank you.

                7            MISS JFNKINS: The 22 hospitals  iDclude  the  United

                8  States Air Force.Base hospital and the Veterans Administration

                9  hospital.

               10            MR. ROREM:  Are they big?

               11            MISS JF.NKINS:  The Veterans Administration hospital

               12  is a 500 bed hospital, it is a Very little hospital,  and  the

               13  Air Force Base 50.
   SR          14            MR. ROREM:  How many?
               is            MISS JF.NKINS:  Fifty, somewhere around there.  It
               16  may even be fewer than that.  All we know about them, as 1
               17  mentioned, Rufus, they wanted to add 15 or 20 beds to  the  OB
               18  departments and all the OB departments on the south side of
               19  the city were running a low occupancy.  We could not get any-
               20  where with them so we went to the Bureau of the Budget and the-
               21  never got the appropriation for it. That was  a  sneaky  thing
               22  to do and I do not know yet whether the USAF hospital knows we
               23  did it or not. All they know is that they did  not  get  their

               24
                   money. It would have been rather  pointless,  really,  because
               25  most of these people on the base live in the city anyway.

  ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUT'ON  AvE..   N.W,


                                                                          136

   15           1           DR. KLICXA: I take it you did not send it  to  the
                2 hospital.
                3           MISS JENKINS: We did not. The  hospital  is  our
                4 member and one of our dues paying members and one of the  most
                                                                I
                5 cooperative in the Hospital Association that we would hope  to
                6
                  have. We felt like heels about it. They were  very  fine  to

                7                                           t
                  work with.  We felt like heels about the little sneaky deal.

                8
                            MR. BURLEIGH: Dontt feel you have it  licked  yet.

                9
                            MISS JENKINS: This is so little I  cannot  imagine
              10
                  Congress concerning itself with it, frankly.

              11
                            The osteopathic problem and the Negro problem  and
              12
                  the problem of how you develop in harmony and in  coordination

              13
                  with a private voluntary hospital system a new medical  center

              14
  SR              and potentially a new medical school is a very difficult thing.
              15
                  We have had very little cooperation and planning from  the
              16
                  University of Kansas Medical Center because it serves  the

              17
                  whole statewide area.  We had our first request from them here
              18
                  within the last six months when they felt that ihe  planning
              19
                  committee could be of help to them.
              20
                            The Shriners were going to build four burn centers
              21
                  over the country, and one of them they were thinking about
              22
                  building in Kansas City, Upsas. K. U.  came  right  straight
              23
                  to us to exert what pressures we could on getting this  insti-
              24
                  tution in connection with theirs.  It is a small number of
              25
                  beds which would deal with out of area patients  entirely.

 ACE-FEDERAL REPORTERS, INC.
2 61 CONSTITUT ON AvE N  W,
         0. C.  I                                                               I


                                                                          137

  16           1  The planning agency approved it and K. U. thought it was

               2  wonderful. The next time they want something they may  be  back

               3  I dontt know.

               4            With the General Hospital and Medical Center their

               5  cooperation with planning has been excellent and I think it

               6  will continue to be so.  It represents problems which frankly

               7  we do not know how to cope with and which the private voluntary

               8  hospitals of the.area are extremely apprehensive about,  Jack,-

               9  as you could well imagine, in the taking of pay patients,  part

              10  pay patients and so on in this big facility.

              11            MR. BUGBER:  Is your area over-bedded?

              12            MISS JENKINS:  It is over-bedded on general beds.

              13  We have never had a problem with Hill-Burton regarding  general
  SR          14  beds because we have not had a priority for a general bed in
              15  the area since 1949 except that we did work with the two state'

              .16 Hill-Burton agencies in the redistricting where Missouri had

              17  a base area line that cut right through the corporate munici-

              18  pality-,Of Kansas City., Missouri, and in the Kai3sas side the

              19  the two counties of Johnson and Wyandotte.  Johnson County,

              20  the suburban county, where the population shoves right up

              21  against the line, that was a base area line and we got them

              22  to revise their base areas to include the five county, two

              23  state area as a single area for planning.  That was good

              24  cooperation.
              25            Jack, didn't you sit with the planning committee

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE    N,W,
   WASHINGTON. 0. C.


                                                                        138

   17          1  when they heard Shawnee Mission of the suburban area in

               2  Johnson County that already had a Hill-Burton grant approved

               3  and they went ahead and built a 65 bed hospital in the suburbai)

               4  area to which we were opposed not only in conference but  pub-

               5  licly and through public disclosure they built it  anyway?  It

               6  is interesting to note it will probably be the best example  of

               7  what not to do in suburban areas that we have.

               8            They built a 65 bed hospital and a nursing home.

               9  They cannot get the occupancy of 80 per cent of the  nursing

               10 home.  The occupancy of the 65 bed hospital has beeD running

               11 40 to 50 per cent. Their financial problem is  simply  incred-

               12 ible. They have been open a year and they have not  even  paid

               13 for the roof that went on the nursing home which was the  first
  SR           14 unit that was built three years ago. They are  operating  at
               15 $43 a day on the short-term hospital where the hospitals  with

               16 a full array of service are $35 to $36 a day. Theyare going  to

               17 add 75 to 150 more beds.,  they say, if they could get anybody

               18 to finance them. I would say their costs woul4d-shoot to  at

               19 least $50 a day on the thing.
               20           MR. BUGBER: How did they get the  Hill-Burton  grapt?
               21           MISS XWKINS: They got the  Hill-Burton  grant  before

               22
                  this redistricting was done when the line was still one  county
               23 and one district and another.  The @nt was secured about

               24 1958 before we got the redistricting taken care of, so  they
               25 went ahead and built. I dontt know, we Dow are  probably  goinE

 ACE-FEDERAL  REPORTERS,  INC.
261  CONST  TUTION  AvE..  N.W.
     11
   WA SH INGTON. C,


                                                                            139

 18-            1 to get them back before the planning agency with, What  do  we

                2 do now?

                3           There are two or three hospitals that would have

                4 some willingness to attempt to operate a  satellite  operation

                5 on this but taking this indebtedness would be a horrible

                6 factor.  I don't know how they would live with it.  I don   it

                7 know how they are going to live with it.

                8           MR. BUGBEE: Who loaned them  the  money,  insurance

                9 or banks?

                10          MISS JENKINS: George, I don't  know.  I  don't  know.

                11 They have put out a brochure now to any financing  house  who

                12 will even consider this on a basis of refinancing.  I  do  not

                13 see really how anybody can refinance it.  Actually  the  factor

                14 is an implementation which is used or persuasion,  public  dis-
  SR
                15 closure, where one has to. It is unpleasant and has  not  been

                16 done in two instances.

                17          DR. KLICKA:  How do you do this, newspaper?

                18          MISS JENKINS:  Newspaper.

                19          DR. KLICKA:  Do you send out a release?

                20          MISS JENKINS:  Actually, one of the officials of the
                21 Kansas City Star, which is our only newspaper, is a member  of
                22 the planning agency., one of the non-hospital related individuals

                23 on the planning agency.

                24          DR. KLICKA: So he sends a reporter out to see  you?
                25          MISS JF.NKINS:  In fact, he writes the story.  He and

 ACE-FEDERAL  REPORTERS,  INC.
261  CONSTITUTION  AVE..  N.W.


                                                                           140

   19           1  I sit down and write the story with a reporter.

                2           MR. BUGBEE:  And I suppose you dramatize it on a

                3 television program.

                4           MISS JENKINS: No. The  largest  voluntary  hospital

                5 in the area was actually done by the reporter on this  except

                6 it was the planning agencyls decision to and this was not over

                7 any major thing.  It was a hospital that desired to add in its

                8 modernization program 100 beds when it had been approved  to

                9 add only 27 beds in a part of the reshuffle of the moderniza-

              10  tion program.

              11            They went out for $2 million, hopefully going to get
              12  about $3 million.  Their fund drive was completed over a year

              13  ago. They have not got the $2 million yet because we  have  a

              14  little control. That is your next factor in  the  implementa-
  SR
              15  tion, indirect control over funds.  Our areas, you probably all
              16  know, attempted to put on a united campaign three years  ago
              17  and it fell through primarily because of one or two hospitals
              18  that felt they could get more money on their own,  including
              19  this one big one really, but major industry is pretty well
              20  represented on the planning agency.
              21           For example, Ford and General Motors are represented
              22  with top executives of both and the corporate giver will  not
              23  give unless the project has been approved by the planning
              24  agency. The report is issued to the hospital  and  condensed
              25  into a letter, and also a letter given to them which they

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE..  N,W.
  WAS.ILVCION. D. C.


                                                                             141

   20           1  quote from, use.  One hospital in fact blew the letter up

                2  into a one page ad and bought advertising space in  the  Kansas

                3  City Star'. This was research, Jack, on the  big  hospital.  So

                4  you have some element of help and  implementation  there.  We

                5  have a great deal of help, we feel, through  the  Hill-Burton

                6  agencies.

                7            In Missouri if anybody files an Application  that  we

                8  have not seen, we try to know what these are before  they  90

                9  in. The state Hill-Burton agency advises us  and  furnishes  us

              10   with a copy of the project. We may then call  the  hospital  in

              11   and talk about it.  We give a report to the state on every

              12   project which is before them, and up to this point neither

              13   state has ever approved one that we said not  to  approve.  I

              14   think again this is possibly luck in good part but they have
  SR
              15   never approved one over our state disapproval.

              16            MRS. COLEMAN: How do  you  state  your  disapproval?

              17   Committee action?

              18            MISS JENKINS:  Committee action.

              19            MRS. COLEMAN:  A letter to the Hill-Burton agency?

              20            MISS JENKINS:   A report, yes. We write  a  report  on

              21   each project.

              22            MRS. COLEMAN:   At the Hill-Burton request?

              23            MISS JENKINS:   Yes.

              24            The nursing home situation, as I sayo is one that is
              25 Icreating  a great deal of problems.  Many hospitals have desirea

 ACE-FEDERAL  REPORTERS,  INC.
 2 6 1 CONSTITUT1014  AVE..  N.W,
         0. c@


                                                                          142

     21        1  to move in the direction of chronic and long-term care in the
               2  nursing home and so on.  It takes a hospital so very much
               3  longer to plan a project than for Holiday Inn to come in and
               4  say we are going to build three of these now, United Convales-
               5  cent Hospitals in California say we are going to come in and

               6  build a big one.

               7            MR. BUGBEE:  Is that proprietary?
               8            MISS JFANKINS:  These are all proprietary.
               9            I think we have heard from most of them but the real
              10  problem is if you approve very many of these you do satellite
              11  your area with nursing home beds.  Then when a hospital comes
              12  along probably we have one hospital that has been working for
              13  five years in cooperation with the planning agency on the
  SR          14  development of long-term beds and it is a hospital that is
              15  adjacent to another big hospital and we started them on the
              16  road toward an urban redevelopment project which would clear
              17  a big area right in the center of Kansas City and let them
              18  share parking lots and laundry and various things and let this
              19  one hospital build a sizable number of nursing home type beds.
              20  It has taken them five years to get their plans in shape prac-
              21  tically for this, and by the time they get around to asking
              22  for Hill-Burton money we may have filled the area with pro-
              23  prietary nursing home beds.
              24           DR. HALDEMAN:  Sue, isn't it really skimming the
              25  cream off the crop; they have filled up the demand for those

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE   N,W
   WAIIIIC@L, D. C@


                                                                             143

   -22         1  that can pay three or four hundred dollars but you still have

               2   this group of public assistance and others that cannot afford

               3   three or four hundred dollars that have a real need?

               4             MISS JENKINS:  That is right.  This is what our

               5   report will show.  However, we are getting some proprietaries.

               6   We had a staff conference with one just a couple of days ago,

               7   that wants to move into the urban area operators that operate

               8   two homes in small towns in Kansas, very good homes.  I mean

               9   we checked their operation, checked them out with the Kansas

              10   State Board of Health.  They are going to build facilities

              11   that will price $130 to $200,possibly $250 at the top.

              12             MR. ROREM:  What is that?

              13             MISS JENKINS:  Nursing home care.  These are the
  SR          14   ones that we want to encourage and do encourage.  The ones
              15   that are asking four, five and six hundred dollars a month are

              16   going to lose their shirts, I dontt think there is any question

              17   about it. They still make your area look as if you  have  an

              18   adequate supply of nursing home beds under Hill-Burton  when

              19   it comes to approving hospitals, do they not?

              20             MR. ROREM: I have a theory that the  nursing  home
              21   problem is going to be solved not at all b'y voluntary philan-

              22   throphic services but by actions of the two extremes, straight

              23   commercial investment for profit at one end and governmental

              24   institutions at the other end.  I think we can make some

              25   passes maybe here and there where it can be done  reasonably

  ACE-FEDERAL REPORTERS, INC,
 2 61 CONSTITUTION AVE  N,W.
          0. C,


                                                                          144

     23        1  well.  A general hospital might have a unit.

               2            MISS JENKINS: I think it is a  limited  number  prob-

               3  ably.

               4            MR. ROREM:  I bet that is not going to be the

               5  problem.

               6            DR. RALDERAN:  Apropos of that, Rufus, I was very

               7  surprised at our recent survey of homes iia'the nation.  It  has

               8  not been published yet except for the summary that  showed  the

               9  number of Dursing home beds has almost doubled since  1954  when

              10  we did our last survey but the ratio between  non-profit,  gov-

              11  ernment and proprietary has remained almost constant.  I thought

              12  the trend would be a higher percentage. Still about  7  out  of

              13  10 beds are proprietary and about 9 out of 10 homes are pro-
  SR          14  prietary.  So you cannot analyze them that way, you do Dot
              15  detect the trend.

              16            MISS JENKINS:  Yes.

              17            MR. ROREM: You do pot  detect  it  towards  nonprofit?
              18            DR. RALDEMAN:  Either way.
              19            MR. PETERS: They are keeping pace  with  each  other.
              20            MR. ROREM:  It varies.
              21            DR. RA@MAN: Take  Minnesota,  for  instance;  70  per

              22
                  cent of the beds are voluntary.
              23            MISS JENKINS: I don't know what the  answer  is  going
              24  to be. I am surprised at the naivete and  lack  of  sophistica-
              25  tion of some of these big promoters on nursing homes who rea llr

 ACE-FEDERAL REPORTERS,  INC.
 26  1  CONSTITUTION  AvE.,  N,W.
    W."",-" 27. C.


                                                                             145

   -24          1 have not the slightest concept when you sit  down  and  talk  with

                2  them of what it is to provide care. They think  of  it  in  terms

                3  of another motel and you hire an RN to be around once in a

                4  while and that is the limit. At lunch time I  asked  if  they

                5  have a recreational program and they said yes, they have a

                6  swimming pool.

                7            I donllt know.  These are all in anticipation  that

                8  there will be a Federal program that will pay nursing home

                9  care for the aged and they simply want to be in there and on

              10   the bandwagon. We really feel if we  can  provide  enough  infor-

              11   mation showing what the market demand is in the  area  that  they

              12   may quiet down a little bit in the building of this more expen-

              13   sive type of facility; at least they are reasonable  to  talk

              14   with.
  SR
              is             We are spending an immense amount of staff time in

              16   talking with them, I never saw so many people in  my  life.

              17   They apparently want to start building  nursing  homes.  In

              18   Chicago I had seen a tremendous surge of building.  Carl,-you

              19   no doubt wish to comment on that.  I talked to Miss Nickelson

              20   in Chicago a week or two ago and she bore this out,  the  low
              21   occupancy in these beautiful big new'..homes and how they are

              22
                   going out and building back to back and in areas  that  could

              23   not possibly sustain them.
              24            DR. KLICKA: There are 2,000  empty  beds  and  the
              25   trend is to convert them into hospitals.

 ACE-FEDERAL  REPORTERS,  INC.
26 1 CONSTITUTION AVE.   N.W.
         0. C.


                                                                             146

  25            1           MISS JENKINS: This would be the  most  alarming  thing
                2 we might run into in this.
                3           MR. BUGBEE:  Portable X-ray.
                4           MISS JENKINS: We do not have the  support  of  Blue
                5 Cross that Jack has in Detroit. We hopefully  are  moving  in
                6 this direction. If we can get our Blue Cross  board  to  have

                7
                  the courage and the guts to go ahead with something  on  this,
                8 this is what it Certainly is going to require.  All  that  we
                9 are doing Dow, Jack, is a bit of a cutback on  this  Shawnee
              10  Mission. They are taking a cutback under  a  special  contract
              11  at Blue Cross which causes them to lose more money as they go
              12  along.  I think when Jack reports to you his story on the
              13
                  decision in Michigan on this maybe it will persuade more Blue
              14  Cross plans to do this.
  SR
              15            However, when we move into the era for  funds  for
              16
                  modernization in the urban areas and priorities, I  can  see

              17
                  this develop as one of the finest dog fights we  could  ever

              18
                  expect to have,-and I am sure this will occur iii any  metro-

              19
                  politari area. Surely there will not be enough money to  do  any

              20
                  more than a drop in the bucket job at the start on  a  program

              21
                  such as this.

              22
                            MR. BUGBEE:  Such as what pow?

              23
                            MISS JENKINS: Federal funds  for  modernization  and

              24
                  renovation of aging hospitals or plants.
              25
                            MR. BUGBER:  You have plenty of them?

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION  AVE.,  N,W
   WA"I"-,. D, --.                                                               I


                                                                         147

  26           1            MISS JENKINS:  Yes., we have plenty of them.  How you
               2  will decide who is up for grabs on this money is going to be
               3  an extremely difficult thing.  In our area we have a big new
               4  General Hospital and Medical Center going up with a replacement
               5  building and medical school. Undoubtedly they are  going  to
               6  feel they ought to get these funds; they are already  saying
               7  this when they come through.              t
               8            You have some hospitals that are going to have
               9  trouble getting matching funds for money. Maybe  their  need
              10  is very great, maybe you cannot do very much towards  seeing
              11  that they get matching funds for it.
              12            David Willis posed a question over a good hot sand-
              13  wich during lunch, at a delicatessen incidentally, Should this
  SR          14  money become avail-able, do you spread it through your area
              15  giving a little piece here and here and here, or do you  try
              16  naturally to determine priorities and try to do a full and
              17  complete job with one of them if your money is limited?  The
              18  det ermiiiatioi3 of priority such as this concerns-us very much.
              19  Hopefully I thought some'of the great brains around this table
              20  would have some very enlightening ideas about it.

              21
                           MR. ROREM:  You came too late.  Three years ago we
              22  could all have told you.
              23           MISS JF.NKINS:  Really., it is I think a very serious
              24  problem. If Uncle Sam were going to cut loose with enough
              25  money to do a complete job with all urban areas in the countr@,

ACE-FEDERAL  REPORTERS,   INC.
2 6 t CONSTITUTION AVEN.  W.
        D. C


                                                                            148

    27         1 this would not pose any problem realizing that it will  be  an

               2  infinitesimal fraction of the job to be done. If you  do  get

               3  such funds, then the determination of these guide lines for

               4  priorities become very important.  If you don't get them estab-

               5  lished and reasonably accepted, you could break up some  very

               6  good planning agencies over this type of thing.

               7            DR. HALDEMAN:  You have several communities that

               8  have had to face up to that and have faced up to it.  We have-

               9  one here, Columbus, Ohio.  You may not agree with their solu-

              10  tion but at least they faced up to it. Rochester,  New  York,

              11  is another one that has.

              12            MR. BUGBEE: I think you are a  little  pessimistic,

              13  Sue.  I think a little money might be able to cope with it

              14  better a little at a time than it might all at one shot.
  SR
              15            MISS JENKINS:  Frankly I would like to cope with it

              16  a little at a time, even in an area no larger than  ours.  We

              17  are not very apprehensive about it.

              18            MR. BUGBER:  I did not mean. to indicate you were not

              19  entitled to that.

              20            DR. HALDEMAN:  Any questions?

              21            MR. BUGBEE:  For the minutes, I think the long range

              22  planning committees in each hospital - I do not know that

              23  Rufus' Appendix B answers all the problems but it is an

              24  awfully nice outline of how to constitute such a committee.if

              25  they ever write this up and want to look at it, it is in  his

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION  AVE.,  N.W.


                                                                             149

     28         1  Alleghany County book, Appendix B.

                2            MR. BAUM.@..@On your fund raising campaign that you

                3 are talking about, was this not conducted at the  same  time  in

                4 Kansas City, Kansas, or Kansas City, Missouri?

                5            MISS JENKINS:  On a united effort that did  not  get

                s off the ground, is that  the one you are referring to?

                7            MR. BAUM:  It did not get off the ground?

                8            MISS JENKINS:  No.

                9            MR. BAUM:  That answers my question.

              10             MR. BUGBEE: You mean by that you never  got  to  the

              11  money raising part?

              12             MISS JENKINS:  It was a totally separate organization.

              13  It was a community organization, you see.  It  was  not  either

              14  our hospital organization or the planning agency, it was a
  SR
              15  community organization set up to hopefully get the capital

              16  funds necessary to implement the recommendations  of  the  plan-

              17  ning agency. The planning agency did not  put  price  tags  upon

              18  these projects.  The community organization left much to be

              19  desired in its structuring.

              20             The planning agency in the area hospital association

              21  certainly endorsed it wholeheartedly. It did  not  get  any  job

              22  done, however.  As a consequence each individual hospital.,went

              23  out on its own -- not each, several of them  did.  Out  of  the

              24  several that did and are still planning to go out on their

              25  own, only one of these broke the line with the recommendations

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION  AVE..  N  W,


                                                                           150

     29         1  of the planning agency.  This was the one that went to the

                2 public disclosure and did not get all of its money.

                3           DR. HALDEMAN:  Any further questions?

                4           If riot, Dave, you may proceed to talk about the

                5 Rochester regional planning board or about Monroe County  if

                6 you prefer.

                7           MISS JENKINS:  What is Monroe Codrity?

                8           MR. WILLIS:  It is the home county for New York.

                9 It is a trade association made up of hospitals and related

              10  facilities all of a voluntary nature and  governmental,  not

              11  private, covering eleven counties. It includes Rochester.,  no

              12  other very large cities, and some sizable towns scattered

              13  around Elmira and Corning.

              14            For some years the Council has had a  relationship
  SR
              15  similar to the Hill-Burton which Mr. Peters had in New York.

              16  In Rochester though, unlike New York City, there was a trade

              17  association that had a planning function as a delegated repre-

              18  sei3tative of the state Hill-Burton agency.

              19            Starting now the regional hospital council has set

              20  up a separate review and planning committee within the  struc-

              21  ture of the hospital council with membership of about  forty

              22  people on this committee wit h a smaller steering committee  of

              23  twenty people. The size of the committee structure  I  think

              24  is important as an asset and a limitation at the same  time.

              25            I think rather than tell you specifically about  the

 ACE-FEDERAL REPORTERS, INC,
261 CONSTITUTION AVE N    W.
   WA SH? NGION D c


                                                                             151

    30          1 projects that have been undertaken I would like  to  discuss

                2 some of the problems that I see in here and I think  may  be

                3 related to some other areas as well.

                4           First as to the matter of whether or not an eleven

                5 county area wherein the central core of the area is about 120

                6 miles away from its farthest point  constitutes significantly  a

                7 single service area, I think it is  questionable. A  three  hour

                8 drive from one end to the other, especially when your medical

                9 center is that far distant, I question whether or not  this  can

              10  really be done to the fullest extent.  The old concept of

              11, regionalization, if it is to get beyond just a matter of

              12  grading the size of facilities as you proceed out  from  the

              13  core and if it is to get on into a functional differentiation
  SR          14  and rational utilization of these, has got to  obviously  depend
              15  upon medical organizations and medical staffing.

              16            All of the specialists in this eleven county area,

              17  or virtually all of them, are concentrated 120 miles  away  from

              18  the more rural areas. In the Rochester area  it-is  a  rather

              19  stable population. There are some  developing  suburbs,  none

              20  of them mushrooming. It is largely  a  clearcut  distinction

              21  between urban areas and rural areas.  The rural areas jealously

              22  guard their differences from the urban areas and  the  county

              23  boundary is a very important social, political  and  economic

              24  unit to those areas.

              25
                            Every time you have a committee, or at  least  the

 ACE-FEDERAL  REPORTERS,  INC.
 261  CONSTITUTI(ON   AVE..   N.W,
    WA ...... ON, a. C.I


                                                                         152

   -31         1 feeling so far is you cannot constitute committees  based  upon

               2  problems or proposed solutions to problems but you must estab-

               3  lish committees based on geographical  representation.  With

               4  eleven counties you start off having at least eleven  people

               5  on every committee. You then have within the urban  area  such

               6  a wide gulf between the medical school and the hospital  and

               7  the other hospitals that you have a twelfth representative  on

               8  every committee.

               9            Then you must bear in mind that in New York  State

              10  the Department of Social Welfare and the Department of  Health

              11. have been battling for some time and the battle as  assumed

              12  recently is a rather heated debate in the press and in  any

              13  public meeting, so you have got to have in each of these
  SR          14  counties someone from Health and someone from  Welfare.  So

                  you are Dow up to twenty-four members on any committee.
              .16           The matter of supervision of hospitals, some of  the
              17  facilities are supervised by Welfare, some are supervised by
              18  the Health Department. I dontt know, in New York City  we  may
              19  have been able to overcome some of this. In Upstate  New  York
              20  it has been rather difficult to date. Therefore,  I  wonder
              21  whether such a broad area necessitating such large committee
              22  structure for any action has not got in itself some built-in
              23  needs of its own making, but be that as it may I dontt  know
              24  yet.
              25            We have the forty member review and planning

 ACE-FEDERAL REPORTERS, INC.
26 1 CONSTITUT'ON AVE.,  N.W
   WAS@(NGTON, 0. C.


                                                                          153

    -32         1  committee which now acts as the Councilfs screening and

                2 approving body for all of Hill-Burton applications.  The

                3 steering committee reports back to the reviewing committee

                4 which reports to the executive committee which reports  to  the

                5 entire board of the Rochester Council and then in turn  to  the

                6 state Hill-Burton agency.  The Hill-Burton agency has really

                7 been quite wonderful.  I just had my firsttexperience in

                8 sitting with Jack Burke and seeing how they determine bed

                9 need. It is a weird and wonderful thing  that  defies  descrip-

              10  tion but I have not yet seen a formula which approaches it

              11  for good soundness of the end result.

              12            DR. KLICKA:  Those are inconsistent statements.

              13            MR. WILLIS:  We will argue later.

              14            The approach to date is that before they had  a  full
   SR
              15  blown planning function the Rochester area has been  largely  a

              16  numerical legalistic sort of planning, largely a determination

              17  as to the size and location of facilities with very little

              18  inquiring except into the content of medical care programs.

              19  Recently the major part of the retention has been developed

              20  to two essential problems, nursing home and related  long  term

              21  care facilities and psychiatric facilities.

              22            Quite interestingly in the Rochester region these

              23  two problems have been brought to focus largely because of the

              24  presumed threat of proprietary facilities going into the area.
              25  Aside from a single psychiatric unit of Strong Ifemorial Hospital,

 ACE-FEDERAL  REPORTERS,  INC.
 2 6  t  CONST'TUTION AVE  .  N  W
         0. c


                                                                             154

33              1 which is the teaching hospital in Rochester, there is not  one

                2 hospital in the entire eleven county area which  will  overtly

                3 admit patients requiring psychiatric care aside from the state

                4 institution.  A proprietary group wanted to build a psychiatric

                5 facility and this caused a re-evaluation of the entire program.

                6 Now everyone wants psychiatric facilities, anything to keep th

                7 proprietary people up.

                8           MR. SIBLEY:  Did you put this group up to this?

                9           MR. WILLIS: No, but I bless them for  it.  I  cannot

              10  say that in Rochester but I say it here.

              11            The same thing with nursing homes. I  do  not  think

              12  this is unrelated to what Sue Jenkins mentioned there.

              13            MR. ROREM: With respect to what?  Who  is  concerned
  SR          14  over sponsorship rather than service?
              15            MR. WILLIS: I think the  Regional  Hospital  Council

              16  and the civil leaders have been taught to be more concerned

              17  'with whether or not it is voluntary, non-profit or proprietary

              IB  rather-than is the service needed or do we have-a better

              19  alternative now or in the foreseeable future.  I think in

              20  Rochester we come up with the same answer that was implied

              21  in Sue Jenkins' comment, we would rather do  without  services

              22  than wait for nod-profit.

              23            MISS JENKINS:  No.. I did not mean to imply that.

              24  We have no objection at all to the good proprietary or com-
              25  mercial nursing homes, they are very helpful.

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE N   W
         0. C.


                                                                         155

   34          1            MR. WILLIS:  My charter does not admit proprietary

               2  facilities to its membership, which does not put it in a very

               3  good position to work with proprietary groups to encourage

               4  them to amend-their programs and so on to fit in with some

               5  overall planning.  The Regional Hospital Council has also

               6  taken sides in this fight between Welfare and Health.

               7            MR. BUGBER:  Which side, the Health?

               8            MR. WILLIS: Yes. They have publicly  cast  their  lot

               9  with the Department of Health which means that they are on  the

              10  outs with the Department of Welfare and get very little cooper-

              11  ation from that department which is the department overseeing

              12  most of the proprietary facilities.  This is a kind of unfortu-

              13  inate situation. I do not know how you have handled this  thing
  SR          14  in New York City.
              15            MR. PETERS:  We have not taken sides at the moment

              16  although if the vote were taken  I think probably Health
              17  because of the composition of our board -- probably, I Am not
              18  sure -- the state hospital association of New York.

              19            MR. SIBLEY: So your association does not  agree  with

              20  your state associatiop?

              21            MRS. COLEMAN:  Our group is not quite clear in its

              22  mind.

              23            MR. PETERS:  They might go for Health, I think.
              24            DR. HALDEMAN: I was interested in the  concept  which
              25  1 have never heard you enunciate, Hi, in implying that an  area

ACE-FEDERAL  REPORTERS,   INC,
26 1 CONSTITUTICON AVE    N.W
   W.SH".,ON, 0. C.


                                                                              156

35              1  wide planning agency was a local arm of a state hospital

                2  association.  You didn't mean that, did you?  If we are con-

                3  sistent with our concepts, it seems'to me we have  to  say  it

                4  is an independent entity.

                5             MR. ROREM:  Are you pulling his leg or do you think

                6  he said this?  I did not hear him say it.

                7             MR. WILLIS:  He took the position.

                8             MR. PETERS: He said we are in  New  York  State  so

                9  therefore  we have a New York State association.

               10             DR. HALDEMAN:  I think this is an important concept

               11  because I  do not think an areawide planning agency should look

               12  upon itself as a sister organization, as another hat for the

               13  hospital association.  It seems to me they have to maintain
  SR           14  that relationship with the state hospital association.
               is             MR. PETERS:  It is partly wheia you have  the  dual

               16  role like Jack has and  Sue and so forth that you come in

               17  contact with the state  association. We  have  no  contact  at

               i8  all with the state association.

               19             DR. HALDEMAN: I say it was  in  that  context  that

               20  you made your remark.

               21             MR. SIBLEY:  As long as it is in your state, that

               22  is all.

               23             MR. BUGBER: Since you are at a  dead  end,  let  me

               24  add one thing that has been on my  mind  for  months.  I  wish

               25  we would stop talking about the trade associations when what

 ACE-FEDERAL  REPORTERS,  INC.
2 61 CONSTITUTION AVE N   W


                                                                         157

   36          1  we mean are the traditional functions of hospitals.

               2            MISS JENKINS:  Three cheers.  I do not like to call

               3  them trade associations.

               4            MR. BUGBEE:  I don't know who started that.  I do

                  not like trade associations used for hospital associations.

               6   I trust they are not trade associations.

               7            MISS JMINS:  We are not a tradd association.

               8            MR. BUGBEE:  Member association.

               9            MR. WILLIS:' I agree with you, it would be nice if

              10  most of them were.

              11            MR. BUGBEE:  All right.  Do you want to take over

              12  on another argument?

              13            MR. WILLIS:  Touche'.
  SR          14            MR. BUGBEE:  That is a dangerous viewpoint for
              15  planning.

              16            MR. WILLIS:  I would just like to add a few more

              17  points.  To go back for a moment to the size of an area
              18  encompassed by one planning activity, we run into the problem
              19  that we span three different Blue Cross plans, four different
              20  medical society organizations in addition to eleven county
              21  organizations, three different Welfare Department districts,
              22  four different Health Department districts and so on.  Whether
              23  or not this naturally forms a single area I do not know but
              24  it is difficult to margine all four.  This will be true in
              25  any very large region I think.

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT'ONAVE  N,W.
   WASH.""-O, r) c


                                                                       158

  37            1            So far as the role of the hospital and planning

                2  goes, we are going to be aiming at much the same sort of thing

                3  that Dr. Rorem outlined, to get the hospital outlined in its

                4  own planning.  Further, the idea is to get each logical group-

                5  ing of counties to set up their own areawide planning council

                6  or conference which will be unofficially an arm of the regi onaL

                7  planning group but can keep a greater contact with local prob-

                8  lems, local needs and relate better both ways.

                9            MRS. COLEMAN:  Excuse me.  How many people are in

                10 your  area?

                11           MR. WILLIS:  About 1,300,000 in the eleven counties.

                12           MR. ROREM:  How many short term hospitals, Dave?

                13           MR. WILLIS:  About thirty-five.
   SR           14           MR. BUGBEE:  You say how many, 1,300.,000?
                15           MR. WILLIS:  Yes.  About 600,000 in Monroe County.

                is It is rural area with a few little towns.

                17           DR. HALDEMAN:  I think you have to use one more

                18 statistic on that.  How many beds?

                19           MR. WILLIS:  I donrt know.

                20           DR. HALDEMA.W:  One thing that I think is in their

                21 minds in that area is the manner in which capital construction

                22 funds are raised and are distributed.  I can say that if the

                23 planning council is going to have a force in the distribution

                24 of locally raised capital construction funds, the overall

                25 eleven county council, the local group will not accept the

  ACE-FEDERAL REPORTERS,  INC,
 261 CONSTITUTION AVE: N   W.
    WA,SHft,GTON. 0. C.


                                                                           159

   38           1  dictates for the total final decision on that.  Even though

                2 Meriam Folsom is chairman of both the planning  council  for  the

                3 region and the planning council for Monroe County,  I  heard  him

                4 say more than once that the determination of how  that  money  is

                s spent has got to be largely in the hands of  Monroe  County.

                6           Now what would have happened historically  if  the

                7 regional council had gotten off the ground,prior  to  the  Monroe

                8 County, I don't know.  Inasmuch as Monroe County came first an'il

                9 was a strong organization from the standpoint  of  planning  when

              10  the regional council came along.. it posed a real problem for

              11  the regional thing.

              12            MR. ROREM:  You mean to say there are two hospital

              13  councils there now?

              14            DR. HAILDEMAN:  There was a regional council which
  SR
              15  had a membership function and has a long tradition  of  very

              16  excellent service to 'Phe member hospitals.  Then  Monroe  County

              17 'Orior to the time the regional councils were given review and

              18 planning functions had a very strong  patient  core  planning

              19  agency which in effect was a hospital planning --

              20            MR.. PETERS.,  In New York City, isn"t it, pretty

              21  much?

              22            DR. HALDEILAN: Yes. It does not  have  a  long  history

              23  but they had control of all capital construction  funds  and

              24  were able to implement what they did., and I think that  has
              25  had an impact on the Rochester region. I  think  it  is  probably

 ACE-FEDER.AL  REPORTERS,   iNC.
2 6 1 CONSTITUTION AVE.    NW
   W.S@INGIO'. 0. c


                                                                              160

  39           1  a sound provision.  Where you have a large regional area, if

               2  your funds are going to be raised locally there has to be  a

               3  relationship developed locally with the region. What  that  is

               4  1 am not so sure. I think it will follow some  pattern,  but

               5  the local people will Dot hold still for every decision  being

               6  made in Rochester, Rochester being a hundred miles away.

               7            MR. WILLIS:  You have the fund raising in Monroe

               8  County which is the patient care planning committee.  We hope-

               9  to set up in other areas, too, which may report to their

              10  local communities so far as the local Deeds of the  programs

              11  go but which report to the program councils as far as the

              12  Hill-Burton goes because that is not the official  designee.

              13            DR. HALDEMAN:  But you hope to provide the staff
  SR          14  services for these local planning groups, the data  collection
              15  and analysis?

              16            MR. WILLIS:  Yes, that is right.

              17,           MR. PETERS:  You are facing exactly the same problem

              18  where we had three local Hill-Burton councils, one which was

              19  in New York and the others in Long Island, which had a hospital

              20  administrator working X number of hours a year on a per them

              21  basis part time, which still exists in Long Island.  That  was
              22  a Hill-Burton council with a part time executive secretary  an

              23  hour or two a week. These two still continue  to  exist.  They

              24  are theoretically part of us but have their own  stationery.
              25            The one in Long Island has recently  incorporated,

 ACE-FEDERAL REPORTERS, INC,
261 CONSTITUTION AVE,. N  W
   W.SH".@ON, 0. C.


                                                                         161

   40           1  become a membership corporation of the State of New York,

                2 continues to exercise the Hill-Burton functioning with our

                3 blessing.  But how do you keep them from breaking away and

                4 exercising the total function without our blessing?  In other

                5 words, we are talking about in Long Island, for.example,  two

                6 million people more in population than Dave has, and Dave has

                7 a problem.  I can see right now you can imhgine what the

                8 problem is with Long Island with two million people and

                9 possibly double within the next twenty years.

              10            DR. HALDEMAN: I think we are going to hear  from  the

              11  Columbus regional area. They perhaps have not had  their  local

              12  committees organized long enough to evaluate but at least  they

              13  are the only area in the country that I know of where there

              14  are local committees established in relationship to a  region
  SR
              15  wide planning body that is in operation. I think it  will  be

              16  interesting to hear that.

              17            MR. PETERS: It depends on which comes  first.'  The

              18  sequence of events I suppose is very important in this  whole

              19  thing.

              20            DR. HALDEMAN:  They fortunately did not have to
              21  contend with a previously established group.
              22            Do you have anything further, Dave?

              23            MR. WILLIS:  No.

              24            MISS JENKINS:  May I ask what is your relation to
              25 decision making out in these areas removed from  Monroe  County?

 ACE-FEDERAL REPORTERS, INC,
 261 CONSTITUTION  AVE.,  N.W,


                                                                            162

  41            1  Are you going to allow them a degree of autonomy in making

                2 their own local decisions or do they have to  be  approved  by

                3 your group in Rochester?

                4           MR. WILLIS: If we are going to  have  any  concept  of

                5 a regional group, at some point it should have some approval

                6 from Rochester.  I think the greatest responsibility and a

                7 good deal of autonomy should go to the local areas.  I am

                8 convinced myself that you cannot go on indefinitely sticking to

                9 counties as meaningful areas, the people just don't live their

                10 lives accordingly.
                11          DR. KLICKA:  Is this the way the state plan is set

                12 up?
                13          MR. WILLIS: On counties.  At  best  they  are  willing
                14 to accept individual areas, groups of counties.
  SR
                is          MR. BUGBER: Yes, but your whole  area  is  a  region
                16 for the state plan.
                17          MR. WILLIS: It is a region,  and  the  areas  within

                  the region are counties.
                19          DR. KLICKA:  In other words, your planning would sho,v
                20 specific bed needs for each one of these counties?
                21          MR. WILLIS:  That is rights by county.
                22          MR. PETERS: That is right.  If  you  get  the  state
                23 plan which is published each year, you will see it  is  a  tabu-
                24 latioi3 of all the counties of New York State  listed  according
                25 to Deed with the ones of the greatest need being on top county

 ACE-FEDERAL REPORTERS, INC,
 261 CONSTITUTION AVE N    W


                                                                                163

  42            1  by county; number of beds, percentage of bed needs and so

                2 forth.

                3            MRS. COLEMAN:  Except in New York City where five

                4 counties are treated as one.

                5            MR. WILLIS:  Yes.

                6            MR. BUGBER: There is no simple way  to  do  it.  There
                7 might be wiser and more acceptable ways but I do not think

                8 anyone had any data.

                9            MRS. COLEMA14: No.

              10             MR. WILLIS:  I think the best thing that can  be  done
              11  now is work towards perhaps groupings of counties, but on the
              12  county boundaries sticking to county  boundaries.  All  the  date
              13  is only available by the county basis.
              14             DR. KLICKA:  You use, of course, state lead figures
  SR
              15  in your planning, do you not?
              16             MR. WILLIS: Yes, they are worked out  with  the  state
              17             DR,. KLICKA:  So there is complete agreement here.
              18          ..@MR.-WILLIS:  We just sat around the ta-ble and went
              19  back and forth and in a couple of hours had a-11 the problems
              20  solved.
              21             DR. KLICKA: Shows what people with good  will  can  do
              22             DR. HALDEMAN:  Go ahead, Dave.
              23             MR. WILLIS:  It looks like, to summarize, what I
              24  think are  in the operation of one agency the major problems
              25  we have got to ,,re@p, with the first few years. I  don  tt  know

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE . N  W
         0. C


                                                                              164

  43            1  what the answers are.  One is what do you do in the interim?

                2 Until you have got your principles and priorities and some

                3 concept of a plan laid out., how are you going to handle  the

                4 backlog of requests for projects?  How large can the area

                5 effectively be? What.is the role of the  medical  school  and

                6 teaching center? Aside from saying this is  the  place  where
                7 you send your special cases, what influenc6 is this really
                8 going to have on the operation of the  individual  hospitals?

                9           I think in 'most areas the medical school is a little

              10  bit diffident of anything that smacks of community  service  in
              11  an effort to preserve our teaching and  research  functions.  I
              12  don't think we can go on indefinitely holding back some of the

              13  other areas because of feed back.
  SR          14            MR. BUGBER: Worth Carolina has some  research  but  I
              15  don't know if they can get out beyond it, can they?
              16            MR. WILLIS: The thing I have in mind  is  a  hospital
              17  that is a 200 bed hospital half a mile from a  medical  school.

              i8
                  Any kind of logical finding should be different-from a-hospital
              19  which is 200 miles from the medical school, yet I dare  say  it
              20  is the rare exception where the proximity to a  medical  school
              21  is really affecting the nature of the hospital,  its  program
              22  and so on.
              23            Unless there be a very real and close affiliation,
              24  which I think is going to be the exception, what  should  the
              25  role of medical schools be.  aside from just saying that their

 AGE-FEDERAL  REPORTERS,  INC.
2 61  CONSTITUTION  AVE,,  N,W.
         0. C


                                                                           165

   44           1 roles are going to preserve the selectivity of what  they  want

                2 to take in and what feed back they are going to have?

                3           DR. ILALDEMN: Again in North Carolina  there  has  now

                4 been set up an office so the university teaching hospital is

                s playing what I think will be an increasing role in community

                6 hospitals outside the state. They are  working  on  standardiza-

                7 tion of laboratory techniques and a great mai3y things and I

                8 think it is possible but you have to set up an independent

                9 activity. It caD't be integrated very well.  I  think  there  in

              10  Rochester you have several examples that are coming about  as  a

              11  part of the patient planning care council that is markedly

              12  expanding the role of the medical school within  the  Rochester

              13  area.

              14            MR. THEWLIS: Dave, you mentioned  the  medical  school
  SR
              15  itself.  I was thinking throughout the country, and this

              16  thought has occurred to some of us in the larger teaching

              17 -hospitals, whether they are associated with the  medical  school

              18  or not, what impact can they,have or do they have with the

              19  hospitals?

              20            MR. WILLIS:  Yes, I mentioned the considerations.

              21  This is not just an academic question. When you  get  out  into

              22  an area such as the Rochester area you get into rural areas

              23  and the smaller towns. There becomes a very  real  question  as

              24  to how much and how far you can expect these smaller  groups  tc

              25  go towards limiting their medical care programs  and  referring

 ACE-FEDERAL  REPORTERS,   INC,
2 61  CONSTITUTION  AVE,,  N.W.


                                                                             166

   -45         1 things in because in every case the referring doctor  is  going

               2  to lose the case.

               3            Now much of this is going to ultimately have to

               4  involve our planning not just facilities but I dare say  going
               5  to have to involve some planning on medical staffing and  the.

               6  use doctors are making of the respective facilities to  which

               7  they are entitled to practice.  We find in'some areas, for
               8  example, right in the City of Rochester that the hospitals

               9  that have some affiliation with the medical school are the
              10  very ones that are endeavoring to duplicate everything that is
              11  in the medical school. Their medical staffs have a  taste  of
              12  some of the things which are available, yet they cannot  make
              13  full use of all of those things in the medical school  setting
              14  because of the restrictions on privileges, so they go back  to
  SR
              15  their other hospital and that is where they are agitated.

                            I think it is where they are closest with the  medi-
              17  'cal school they use the greatest energy to duplicate.  Where

              18
                  the hospital is far removed from any kind of affiliation it is
              19  as if it is less interested and less duplicated in  expensive
              20  facilities and services.
              21            With that I will quit.
              22            DR. HALDEMAN:  Any questions?
              23            MRS. COTEMAN:  This is not a question but I think
              24  distance has really no part of this, we see the same  picture
              25  in New York City right within one borough. The  little  hospit

ACE-FEDERAL  REPORTERS,   INC,
6 1 CONSTITUTION AVE,   N,W
  W4sHl,,,o,. D. C,


                                                                           167

  46            1 is not very ambitious, the one that needs an  affiliation  the

                2 most is the least interested in it.

                3           MR. PETERS:  It can be a four or five blocks walk

                4 away.

                5           DR. HALD W N:  I think the activities of the

                6 Rochester phase in planning their council is au excellent..

                7 example  of a situation where the planning 6ouncil does control

                8 the distribution.of funds for capital construction and it has
                9 a tremendous impact on the area.  Initially the hospitals
              10  added up the total bill and it came to something  like  forty-
              11, five or fifty million dollars short range Deeds of the Rochest)r

              12  hospital.
              13            The planning committee knew that they could probably
  SR          14  only raise at this phase of the construction program about
              15  $13 million.  The projections, based on utilization and popu-
              16  latioin growth, indicated a need in the next three or four  or

              17
                  five years of some 500 additional short term  beds.  In  addi-
              18  tion  they had-one-hospital that was quite obsolete and needed
              19  to be replaced.
              20            The significant step they took, I thinks is the
              21  study of the in-patient population, a review by both inside
              22  physicians and physicians from outside of Rochester of the
              23  patient population characteristics.  In other words, how many
              24  patients were in the hospital that did not need to be there
              25  by virtue of the medical needs of the patient, and if not what

 ACE-FEDERAL  REPORTERS,   INC.
2 6 1 CONSTITUTION AVE .  N  W,
         C. C.


                                                                         168
   47             1  type of institution should there be?  In some cases it was
                  2perfectly evident they could be in their own home, others a
                  3home care program, others on a long term care program and
                  4whatnot.
                  5        The upshot of it was that they decided to change the
                  6method in which they were going to cut the pie.  They got three
                  7of the hospitals to agree to establish what I believe they are
                  8alliilg Continuation care, you might say, for patients that do
                  9Dot need the services of short term hospital but do Deed active
              10  medical care, with the thought they would go ultimately to
              11  nursilag homes.
              12           They have instituted a home care program which has
              13  grown very rapidly.  Last week I was in a meeting with the
              14  Visiting Nursing Association.  She said there are about 200
  SR
              15  patients on their own care program, a large percentage of which
              16  wou ld be using beds.  They are only expanding about 125 beds
              17  as contrasted to 500 beds.
              18          They have done a lot of other things that go into
              19  patient care.  They have developed with the community college
              20  an associate degree nursing program which all the major hospi-
              21  tals are associated with.  They are establishing a common
              22  aundry.  They have considered the possibility of centralizing
              23  , rtain expensive laboratory tests, and I think that is still
              24  inder study although I think there is an agreement in Rochester
              25  -here they have had a long history of cooperation where certain

ACE-FEDERAL REPORTERS, I,-IC.
61 CONST'TUT'ON AvE     NW
        DI c


                                                                          169

   48           1  hospitals would do a given test and other hospitals would send

                2  samples in to them.

                3            They have worked out a program for eliminating the

                4  tuberculosis-hospital and transferring the residual  hospitals

                5  to a county infirmary. They have worked out  an  affiliation

                6  between the university teaching hospital and the county infirm-
                7  ary to upgrade the medical care.  They ard in the process of
                8  transferring the municipal hospital which was a part of  the
                9  university teaching hospital to the university so that  they

                10 would be operated as a single unit.

                11           These are just some of the activities that the

                12 patient planning care council, and I must admit I think it  is

                13 the top lay leadership because in talking to the health  offi-
  SR            14 cer and some of the physicians I doubt if the physicians would
                15 really have gone alo@g,because they wanted more beds, if  it
                16 had not been for the caliber of the lay leadership in the

                17 community.

                18          Do you want-to add anything to this?
                19          MR. WILLIS:  I think there are some interesting
                20 differences between what goes on in Monroe County and what  we
                21 are doing in the western region because the Monroe County
                22 planning commission is largely community representation  and
                23 it has not a label locally nor is it in fact an arm of the
                24 hospitals, which means that many of these accomplishments  you
                25 speak of have been accomplished in spite of the hospital.  The

 ACE-FEDERAL REPORTERS, [,'!C.
26 1 Co"ST'TUTION AVE    N.W.
   WAS@RNGTO, D. C,


                                                                           170

                1  governmental people have an idtereating rezction.  They saidp
                2  Isi3lt it wonderful to see what can be done when you get the
                3  good lay leadership to back up the government., which has been
                4  their reaction because many of these things are things they
                5  wanted to accomplish.

                6           When the planning is more closely related to the
                7  hospitals it takes on a slightly different 'r coloration.  They
                8  are trying to bring the government in to face the purveyors
                9  of health care rather than the other way around.  I do not
              10   know which one is going to have the pattern for the future but

              11   it is quite different.
              12            DR. HALDENO: Well, we might go  on  to  Columbus  then.
              13   Grant, do you want to proceed.
              14            MR. DPJMAN:  I think the previous speakers have all
  SR
              15   outlined the problems we have and are contending with in
              16   Columbus.  I think Davels situation is probably closest to our
              17   own.  The type,of organization regional planning is a depart-
              18   ment of the federation which is a triple headed-monster and
              19   community oriented and a non-profit organization.  Our board
              20   is composed 25 per cent of hospital administrators., 25 per cent
              21   hospital trustees and 50 per cent members at large which  repre-
              22   sent manufacturers, religion, medicine purveyors of insurance,
              23   both Blue Cross and private insurance companies.
              24           Our Blue Cross coverage is less than 30 per cent in
              25   the general area. The population is somewhere around  a  million

ACE-FEDERAL  REPORTERS,   INC.
61 CONSTITUTION A\,,E . N@  W.
  WASHINGTON, D. C.


                                                                             171

                I  and a half in the regional area, 700,000 of it in Franklin

                2  County which is our base county'in which the federation has

                3  been operating for eighteen years in the planning, financing
                4  and council services field.  We have a regional planning
                5  committee which operates with the federation and under the

                6  federati(>i)fs board of trustees.

                7            1 should say here that what I am"saying now is outlined
                8  in our guide lines and is being tested.  We have three years
                9  to make up our mind what sort of structure we are actually going
              10   to, use when we get through with the demonstration grant and the
              11   study.  Thus far most everything that we have set out in the

              12   guide lines was found to be workable.

              13             The regional committee was not started first.  We
  SR          14   have gone down to the grass roots, so to speak, the same as
              15   in Pittsburgh.  We have asked each hospital to set up a plan-
              16   ning committee or building committee.  In some places they call
              17   it a bIuilding committee, in others a hospital planning committee
              18   for the individual hospital.  That is for each hospital within
              is   a community.
              20            Then we have gone to the county level and asked that
              21   each hospital have a representative of-its board of trustees,,
              22   representative of its medical staff and its administrator to
              23   serve on the county committee.  Along with that we ask the
              24   County Health Commissioner, in some cases we have District
              25   Health Commissioners which serve two or three of the smaller

 ACE-FEDERAL  REPORTERS,  INC.
2 61 CONST TUTION AVE.  N,W
   WASHINGTON. 0, C.


                                                                          172

                I  counties, a representative of the County Medical Society,  one
                2  representative representing all the nursing home operators  in
                3  the county, and members at large which may be named from

                4  industry and others.

                5            DR. HALDEMAN:  How many counties?
                6            MR. DRENNAN:  Thirty-six.
                7            Six of those counties have no hospitals and most  of
                8  them are too sma.11 probably to have a hospital, at least we
                9  are trying to convince them of that fact. We are going  to  do
                10 some special studies in that area.
                11           MR. ROREM:  How many short term hospitals?
                12           MR. DRENNAN:  Fifty-five.
                13           I think there are 200 some nursing homes; probably
  SR            14 50 are nervous, meIntal, tuberculosis and so  forth.  These  are
                15 all listed in the guide lines.
                16           MR. BUGBEE:  Have most of them got county homes?

                17
                             MR. DRENNAN:  Yes.. but not all of them have county

                18
                   hospitals.  We have a couple that have 9--co'mbinatioii in'
                19 geriatrics, or it may be somewhat acute in its function for
                20 the presence of the home.
                21           We got to the cc>unty committee.  These county
                22 committees are already functioning in almost all of the 36
                23 counties.  They discuss problems, shoot us requests for infor-
                24 mation and also send us some of their difficult problems.  The
                25 osteopathic problem is the one we mentioned.  In rural areas

 ACE-FEDERAL  REPORTERS,  INC.
261 CONSTITUT ON  AVE  .  N,W,
        IC
   WASHINGTOf4, D. C@


                                                                             173

                I we are operating joint staffs, newly built hospitals.  In one

                2 case the other day the Administrator said it was just working

                3 wonderful.

                4            MR.- ROREM:  You mean a general hospital?

                5            MR. DRENNAN: These are two general  hospitals  that

                6 have osteopaths on their staff. The  osteopaths  are  probably

                7 in a minority.  In each case it will be anM.D. and be accep-

                8 table for accreditation by the joint commission.

                9            One case is working out well and another is the  suit

              10  being filed now to break the lease I think on the hospital

              11  because they are not admitting osteopaths in  their  hospital.

              12  So we have all kinds of problems there.

              13             In the county committee all the hospital  voluntary

              14  non-profit administrators or governmental  administrators  are
  SR
              15  in at the county level.

              16             MR. BUGBEE,.  How often do those county committees

              17  meet?

              18             MR. DRF.NNAN: As often as they can. We do  not  staff

              19  the county committee meetings at all.  We provide data and

              20  information.

              21             MR. BUGBEE:  Do you have difficulty having them

              22  meet?

              23             MR. DN"AN: Probably one-third  of  them  are  metting

              24  pretty regularly now. Others, it depends on  how  serious  theix

              25  problems are.  If there is more than one hospital in the

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION  AVE.,  N.W,
         0. C.


                                                                          174
                I  county, they are probably meeting more often to discuss their
                2  problems.

                3             Then we come to a zone committee which is a combina-
                4  tion of three, four or five counties which  we  thought  were
                5  geographically located.  Six months study indicated we better
                6  reorient some of our zones because the  hospital  patients  are
                7  going more to another zone than the one thtt we  had  in  mind.
                8             DR. RAILDEMAN: You set them up before you  did  your
                9  study on patient origin?
                10            MR. DEMAN:  Yes.  We took the 36 county area whici

                11
                   is the dentralldistrti;!t of the Ohio Hospital Association  and
                12 actually the same counties.
                13            MR. BUGBER:  Hill-Burton region, too?

                14
  SR                          MR. DRENNAN:  No, sir, the Hill-Burto@ region
                is extends all over the map.  There are three Blue Cross plans

                16
                   within the region.  I dontt know how many Health districts,,

                17
                   a great number of them.

                18
                              At the zone committee we have the chairman and each
                19 vice chairman so at most you have at least ten officially
                20 designated representatives that come to  the  zone  committee
                21 plus members at large, primarily from industry  or  from  the
                22 community power structure.
                23            MR. BUGBER: Do you staff  those  zone  committees?
                24            MR. DUMAN:  Yes. sir, every one of them.
                25
                              MRS. COIJMN:   @gular meetings?

ACE-FEDERAL    REPORTERS,     INC,
2 6 1 CONSTITUTION AVE         NW
   WASH)Na,ON. D.C


                                                                           175

               I            MR. DRENNAN:  Regular meetings every two months or

               2  so.

               3            Dr. Volpe is a roving ambassador, our organizer in
               4  our meeting with zone committee people.  Ed Lentz does a great
               5  deal of the writing.. While lwear two hats, I am very much
               6  interested in what goes on in regional planning.
               7            MR. ROREM:  Full time for each z'ope committee?
               8            MR. DRENNAN,.  Full time staff members, yes, sir.
               9  They go out to the meetings.  We have ten zones.  Right now we
              10  have two staff members.  Their time is divided.  We are in an
              11  advisory capacity.  They do not meet without Dr. Volpe or Ed

              12 Lentz.

              13           DR. HALDEMAN:  We did have an application that would
              14 provide for three positions in this area.
  SR
              is           MR. DRENNAN:  Four.  We are hiring on that basis.
              16           DR. HALDEMAN:  I did not include the statistician.
              17           There were some wonderful opportunities to do some
              18 special studies but we had another purpose in this.  With the
              19 shortage of personnel with experience in this field we would
              20 like for some of the areawide planning agencies that have on-
              21 going programs to have some young people that are doing a good
              22 job but actually looking towards increasing the manpower in
              23 this area.  The greatest problem we are facing is getting
              24 trained personnel for areawide plannil),g agencies.
              25          MR. ROREM:  Could I just quiz you a little further

 ACE-FEDERAL REPORTERS, INC.
2 6 1 CONST'TUTIONAVE   NW
   W,5""G@om. 0 C,


                                                                          176

               I on that. Do you mean there are provisions  by  which,  assuming

               2  there is work to be done, people can be engaged for jobs  for

               3  some sort of pay without going through the regular routine  of

               4  a grant?

               5            DR. HAIADE@: No, it has to go  through  the  regular

               6  routine of a grant but it is a special demonstration sort  of

               7  a grant and is the criteria which we evalubte it as different.

               8  You have to write up a study of some kind or a service program

               9  of some kind. On the other hand it is with the  thought  of

              10  having two objectives, one to strengthen the agency but

              11  secondly to provide a. training ground for some bright young

              12  people in areawide planning.

              13            MR. DRENNAN: I have one from Cornell  but  little
  SR          14  experience in the health and hospital planning field, and  his
              15  primary subject will be investigation of what to do with

              16  counties that have no hospitals. He will be going  out  and

              17  'meeting with the county and zone committees under Pete VolpetE

              18  guidance but all the time his major concentration will be  on

              19  providing services for counties without hospitals.  He will

              20  acquire all the techniques in the planning field and the

              21  other studies that go along with it.
              22            DR. RAIJ)EMAN: One of the interesting things  their

              23  initial study showed was that the counties that did not  have
              24  a hospital, the u-#lization of hospitals by the residents  of
              25  those counties was 120.

 ACE-FEDERAL  REPORTERS,  INC.
2 6 1 CONSTITUTION AVE.   N@W
   WASHt'iGTON. 0. C.


                                                                                 177

                1             MR. BUGBEE:  Comparable  counties  or  compared  with  --

                2             MR. DRENNAN: These  are  all  rural  counties  that  have

                3   no hospitals.

                4             MR. BUGBEE: Is that  typical  of  a  rural  county,  that

                5   it has 120?

                6             MR. DRENNAN: There is  no  typical  one  in  our  region,

                7   George, actually because we have some  down'on  the  border  line

                8   of Ohio and West Virginia where 65 per cent of their admissions

                9   come across the border.  So when you link that to the county
               10   population figures, you are all out.  They  have  over  six  beds
               11   per thousand down there and it is not enough  when  you  base  it

               12   on county population alone.
               13             Their occupancy rate is still  only  in  the  nedghbor-
  SR           14   hood of 75 to 80 per cent of the roll.  That is not typical
               is   but these admissions, it just happens that we have some that
               16   are surrounded by territory on which we have reports.  We havc
               17 'nothing outside the region to compare it with, but tn these
               18   counties that have no hospitals they are  all  in-the  80  per
               19   cent admissions that were admitted  to  hospitals  within  our
               20   region.
               21             This much we know.  We do not know how many are
               22   outside but the captive ones,, I am sure'this is accurate.
               23             MR. ROREM: Have you  said  in  other  similar  rural
               24   counties, similar in every respect but  having  a  hospital,  how
               25   much higher was the annual admission fee?

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT ON AVE.     NW
       I(
   W-5,Hf'.TON, 0. C@


                                                                               178
                I             MR. DRENNAN:  We had admission rates of ninety.
                2             MR. ROREM:  Ninety'?

                3             MR. DRENNAN:  Yes.

                4             MR. ROREM:  That is what I am saying.
                5             MR. DRENNAN:  Others, 105 or 135.
                6             DR. HALDEMAN:  It was the average  that he was talk-

                7  ing   about.

                8             MR. DRMAN:  One hundred twenty.
                9             MR. ROREM:  I wanted to ask, do you have any theory
               10  as to why  these particular ones?
               11             MR. DRENNAN:  I dontt know.  We hope to find out
               12  within the next year.
               13             MR. ROREM:  I mean are they a different kind of
  SR           14  people, O;der or younger, or richer or poorer?

                              MR. DRFMAN:  Over 65 or 75 had no relationship in
               16  the hospitalization except we know that the over 65 patients
               17  stay twice as long.
               18             MR. ROREM:  What is the ratio of dGcters?
               19             MR. DRFNNAN:  We are in the process ofei@diing that
               20  out, too.  Some of these counties are coal mining, strip
               21  mining areas, others are just forest areas and they vary from
               22  about 12,000 ill population.
               23             MR. ROREM:  Are these counties of that general
               24  nature?
               25             MR. DRENNAN:  Twelve and twenty thousand.

ACE-FEDERAL REPORTERS,  INC.
2 61 CONSTITUTION AVE   N,W.


                                                                           179

               I       MR. ROREM: The reason I ask that, in suburban  areas  a

               2  district of teD to twenty thousand, a medium sized district,

               3  which is a very small district as far as we are concerned,

               4  there seems to be no correlation at all between districts, froi,

               5  the hospital and number of admissions per thousand.  If we

               6  probe that a little we might see a difference in the character

               7  as far as the number of admissions does not seem to affect it.

               8  I dontt know why.

               9            Where there are variations there are two kinds  of

              10  explanations; there are different kinds of people, older  or

              11  younger,, and we do not have other data. They go  elsewhere.

              12            MR. DRENNAN:  We know from what county every patient

              13  came and for our purposes at the moment we think this is

              14  enough.  We have a big work sheet map of the counties showing
  SR
              15  the number in a six month period that went into each  county

              16  from qnother county, and it is amazing. They travel  120  or

              17  140 miles to come for neurosurgery or open heart surgery  or

              18  things of this kind.  We are only getting into this.  We have

              19  some data now, we can Pegin to investigate a little more

              20  thoroughly.

              21            We are back at the zone committee level.  Then from

              22  the zone just the chairman of the zone committee is represented
              23  on the regional committee from each one of these zones,  ten
              24  members there.  So we have screened it out.  This may be a
              25  hospital administrator.  He is the best man in his zone.  We

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AvE    N.W.
         0. C.


                                                                           180

                1  have no objection to his being on the regional committee- or

                2 it may be a health commission, or it may be the owner  of  a

                3 pottery or an Ohio power company is very influential in our

                4 rural areas. -We have representatives on some committees in

                5 the Ohio Power Company.

                6           MR. BUGBEE: How many administrators  are  there  among

                7 the ten on your present committee?

                8           MR. DRIMAN:  I think there is one actually.

                9           MR. ROREM-.  Big city man?

              10            MR. DRENNAN.,  Yes, as a matter of fact, and he

              11  represents all the administrators in FraDklin County.

              12            Then we get into the other state power  structures  or

              13  the branches of the state in the region.  The United States

              14  Medical Association has a doctor in the academy  of  general
  SR
              15  practice. We have one labor representative  in  that  group.

              16  Th e Ohio Hospital Association has a representative  in  that

              17  group.

              18            MR. BUGREE:  These are the ten zone representatives

              19  that you have mentioned and you are mentioning  the  others?
              20            MR. DRENNAN: Yes. We hope the ten  we  have  from  the
              21  zones are going to be tentacles of the power structure of the

              22  zone that they represent.

              23            DR. KLICXA: What is your score  plus  or  minus?  Have
              24  you encouraged successfully or discouraged?
              25            MR. DRF.NNAN: I could not enumerate.  We  have  gotten

 AGE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION AVE N    W.
    WASHINQTON. 0. C@


                                                                          181

                1  rid of a burn center that was tried to be brought in, two

                2 hospitals. The newspaper story created quite  a  sensation;  the

                3 university wanted it and Childrenlls wanted it and so forth.  It

                4 ended up I thiDk neither one of them will get it.

                5           We discouraged the cancer hospital.

                6           DR. HALDEMAN:  You have a differentiation between

                7  Columbus and the other counties.  He has not mentioned it but

                8  that Columbus community supervised the distribution of

                9 $70 million in the Columbus area since the war and  there  has

              10  been literally no construction in general hdspitals in the

              11  Columbus area that has not been recommended by  that  council.

              12  Also, you have handled the actual distribution of funds.

              13            MR. DR M AN:  That is right.

              14            DR. HALDEMAN:  You are awarding the distribution of
  SR
              i5  funds out of that office.

              16            MR. DRENNAN:  But the choice of architects and

              17  whether they want a yellow brick or red brick or whatever',

              18            DR. HALDEMAN: It is unique in the  country  in  this

              19  regard to the control, really.  The only other place that

              20 @comes close to it is Rochester, New York.

              21            MR. DRUNAN: He asked some  of  the  failures.  We  did

              22 have 66 beds that were built there by a group  of  doctors  who

              23  were not welcome on the other hospital staffs.  Started  out  as

              24  a proprietary until they got the loan and got it built and then

              25  they took advantage of Blue Cross and other thi@ngs.

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTioN  AvE..  N,W.


                                                                         182

                1           MR. BUGBEE: In processing applications from  the  36

                2 counties now?

                3           MR. DRENNAN:  Yes, sir.

                4           MR. BUGBEE:  Are they tuning in?

                5           MR. DRENNAN: Yes, sir. We  were  designated  before

                6  as an approval.  We did Dot hand out funds for Hill-Burton.

                7 That was Dr. Dubois' provision. He did  a'fine  job.  We  were

                8 designated by the Ohio Hill-Burton authority as the  approval

                9 agency for Franklin County. This has been back two  or  three

              10  years now and we had reasonably good success with  that.  For

              11  the 36 counties at least nothing happens down there within  our

              12  area that  Bill Worp or 'AVr. DuBois or some of our staff are nol

              13  conversant with or getting argument for or against.  It has
  SR          14  been wonderful cooperation.
              15            MRS. COLEMAN: What do you do about  Franklin  County
              16  and the rest of the counties? How do you get these  two  groups

              17  into it?
              i8            MR. DRENNAN: Well, we have not  really-brought  them
              19  together and yet we have not kept them apart. We  have  brought
              20  representatives together but we would not try to get 55  admin-
              21  istrators together.  The representatives, we tried to stimulat(
              22  these local communities and counties to do a job.
              23            MRS. COLEMAN:  The counties have some form of organi-
              24  zation that meets once in a while?

              25            MR. DIMNNAN:  Yes.

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION  AVE.,  N.W.


                                                                          183

                I           MRS. COLEMAN:  Then the zones?

                2           MR. DRENNAN: Yes, four or  five  counties.  One  person

                3 from each zone.

                4           MRS. COLEMAN:  Who comes from Franklin County?  How

                5 do you get Franklin Co.unty into this scheme?

                6           MR. DRENNAN:  Franklin County is part of Zone I.,

                7 There are five or six counties that surroun4 Fra*klin County

                8 plus one that is somewhat remote and still very much related

                9 to Franklin County. We were originally going  to  carve  Columbus

               10 out as a separate zone. We decided against that  before  we  went

               11 into the organization.  So Franklin County is part of Zone 1

               12 and when they meet one representative comes to Franklin County

               13 representing the administrator's council.

               14           MRS. COLEMAN: You have two-thirds  of  your  population
  SR
               15 represented by one person and the other one-third represented

               16 by ten?

               17           MR. DRENNAN:  No, less than half.  Less than half of

               18 Franklin County compared to about a million and a half.
               19           MRS. COLEMAN:  But Franklin County is not the whole

               20 of Zone  1?

               21           MR. DRENNAN:  No.  That is right.
               22           MRS. COLEMAN:  How many people are represented by
               23 Zone 1 population?

               24           MR. DMMAN:  Oh, boy.
               25           MRS. COLEMAN:  It does Pot matter really but the

  ACE-FEDERAL REPORTERS, INC,
 261 CONSTITUTION AvE   N.W.


                                                                        184

               I  point is

               2           MR. DRENNAN:  There are other representatives from

               3 Franklin County who come to Zone 1.  They have representatives

               4 from city planning.

               5           MRS. COLEMAN:  From city planning only one person

               6 comes.

               7           MR. DRENNAN:  We make an exception in this case.

               8           MRS. COLF.MAN:  Yes.

               9           MR. DRENNAN:  In this one zone we do have members at

             10  large primarily from Franklin County.  If we find people of thE

             11  caliber and experience in planning groups and civic groups

             12  outside of Franklin County, they will be brought into the zone

             13  committee.  Since the zone committee is not a determining poli(y
             14  committee level you are not too worried actually except keepini
 SR
             15  it a reasonable size.  We are not bothered about,the balance o

             16  power.  Regionally we are, very definitely.

             17         .  Now where did we get to?  We got the regional commit--
             18  tee representing medical, labor, Blue Cross, insurance compan-
             19  ies, manufacturing and so forth.  All of the zones are repre-
             20. sented and this committee meets about every three months.
             21           MRS. COLEMAN:  That must be a pretty large committee
             22           MR. DRFWNAN:  About thirty-five'.
             23           MR. BUGBEE:  When you say they are representing all
             24  those zones, they are large but they may come from Franklin or

             25  down south or anywhere.

ACE-FEDERAL  REPORTERS,   INC.
6 1 CONSTITUTION AVE.     NW
  WASHIlar.,. D. c.


                                                                         185

               1            MR. DRENNAN:  Yes.  Ten zone chairmen are there

               2  representing the zones.  Then the others are people like

               3  Margaret Dubois who are there from Hill-Burton in an advisory

               4  capacity.  There is one labor representative.

               5            DR. HALDEMAN: In relation to Franklin  County  you  do

               6  really control the distribution of capital  construction  funds,

               7  What is going to be the relationship in som of these other

               8  counties?

               9            MR. DRENNAN: We are probably going to  be  an  advisor

              10  to hospitals and other groups outside of Franklin.  When  I  say

              11  "advisor." you have heard very much about the Hoffman Act whici

              12  permits counties to hold bond issues to construct hospitals

              13  which can be leased back to  non-profit  organizations.  Right

              14  now we are advising Cleveland County on  that  implementation.
  SR
              15            We will do the same thing for the counties within

                  our region in advising Margaret Dubois or Bill Worp  or  whoever

              17  -is going to be in Ohio of the amounts of money that are  avail-

              18  able from Hill-Burton, from the bond issues which  the  county

              19  might put on, plus any other sources of funds, plus  the  cam-

              20  paign council if they do not have that information  to  advise

              21  them as to two or three companies that we know that are in

              22  the business of fund raising and might assist -- not ope, but

              23  we will do the same as architects, we will name three good

              24  ones and approved and'ldt them make their choice.

              25            We do not collect information at this time on

 ACE-FEDERAL REPORTERS, INC.
 261 CONST TUTION AVE,,  N  W
      I
   WASHIINGTON. 0. C,


                                                                          186

                I  operating funds, expenses, or sources of revenue.  The Ohio
                2  Hospital Association does this with the Ohio Health Department
                3  They are taking their data such as needed for planning purpose
                4           You.ask what the county committees do at the meetings.
                5  We have sent out about three planning  requirements  memoranda.
                6  The first one was on what are their plans for the next five
                7  years. It was informal but still stated iii writing as  to  how
                8  many pediatric beds, how many medical-surgical beds and so
                9  forth do they anticipate they will need by 1970.  Also, how
              io !many private, semi-private, ward accommodations?  What is their
              11  anticipated cost?  What are their anticipated sources of revenue?
              12   Does the hospital hand down funds from which this is  obtained?
              13            I dontt know what we have now.  Probably thirty of
              14   them are in.  At each one of the zone meetings Pete Volpe is
  SR
              15   collecting from the representative. County-wide  nursing  homes
              16   and health care centers Of all kinds are included in this  mem-
              17   orandum.  That is one form.
              18           The other is a manpower needs requirement memoranda
              19   which has to do with medical staff and per medical personnel.
              20 'If they are going to have 500 beds in 1970, how many X-ray
              21   technicians, how many nurses, how many doctors and so forth  do
              22   they anticipate they will need? We are backing this up  with  a
              23   print out from a company in Chicago from all the medical peopliE
              24   in the 36 counties which we now have and which we are going
              25   over and checking against staff affiliations. So we  have  them

 ACE-FEDERAL  REPORTERS,  INC.
2 61 CONSTITUTION AVE.  N.W
   WA.,,,cr.,, 0. C.


                                                                        187
               1  by specialty and we have them by age and so on and so forth.

               2            Someone mentioned the importance of planning for

               3  medical but we want to know where they are.  The communities

               4  know to some extent where they are.  The county in Athens tells

               5  us Dow that they have three or four that are up to age 70, the5

               6  are going to retire, and where are they going to get some morer,

               7  The Ohio State Medical Association has givem their cooperation

               8  to a very full extent in this study and they are also working -

               9  with us on determination of medical levels, regional center

              10  and so forth.  If we have a regional medical center in

              11  Columbus and Zanesville and Springfield and so forth, what is

              12  given there and on down to Marietta or Cambridge or some of

              13  the outlying communities.
  SR          14            MR. BUGBEE:  Do you discuss what they should do or
              15  what surgery should not be done there?

              16            MR. DRFMAN:  I do not know what is going to come ou--

              17  of that but -I would say something like open heart surgery,

              18  ineurosurgery, some of the other procedures they-would recommend

              19  to keep in Columbus.  Once again we are not doing this, the

              20  medical profession is doing it.  They are givi*g us the advice

              21  and all we are doing is putting it down and talking it.over

              22  with various counties.  It may be theoretical or idealistic

              23  but we think it is fundamental in the staffing of beds and so

              24  forth and the kind of beds you need.

              25            MR. BUGME:  Remarkable.

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE N    W,
         i7, c,


                                                                        188

               I           MR. DRENNAN:  We are trying lots of things, let's

               2 put it that way.

               3           We are not doing anything in the disease field now

               4 because the City Health Department has a grant from the State
               5 Health Department and the facilities for care of both by
               6 voluntary health agencies and the hospitals are cooperating
               7 and the state institutions are cooperating., When we know

               8 something more about their methodology and the success of it

               9 -- Ed Lentz happens to be the Project Administrator on that

              10 study -- then we may try and apply the 36 county area.
              11           We have unfortunately stayed out of the nursing home
              12 area because we have been besieged with Holiday I=sand Nursini
              13 Inns of America and so on.  We did I think block a 300 bed

              14 nursing home right opposite Riverside Methodist Hospital by
  SR
              15 the Nursing Inns of America.  I think it was twelve stories
              16 high and had provisions in it for surgery.  Our architect
              17 discovered this for us.  It could have been very easily con-
              18 iterted to a 300 bed hospital with general care. -They were
              19 doing it entirely under the guise of a nursing home.
              20           General beds were tight, medical-surgical beds are
              21 running about 90 per cent in Franklin County and about 85 per
              22 cent outside.  Like some of the others we are trying to dis-
              23 courage any building of maternity beds and converting wherever
              24 possible.  One hospital in Columbus has given up its ten bed
              25 maternity section and another one of the rural counties we hop(

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE.  N,W
        0. C.


                                                                         189

                1  is going to shortly.  Twenty miles to the next nearest maternity
                2 section.
                3           Now Columbus, we have been collecting data there for
                4 eighteen years.  We are pretty well certain as to what the
                5 trends are there.  We will need about 500 general beds by 1970
                6 Some of them are already in the  stages  of  construction.  One
                7 satellite hospital is coming up with about'125 beds.  We expeci;
                8 to build another.200 bed hospital in the far  eastern  part  of
                9 the county.
                10          MRS. COUMN:  How do these satellite hospitals work','
                11          MR. DU"AN: I don It know, ask Ruf  us.  Ours  won  It
                12 be open until October 1.  It will have no maternity, no
                13 pediatrics, no medical-surgical. The laundry  will  be  at  the
                14 main plant. Mostly administration will be at  the  main  plant.
  SR
                is          MR. ROREM: I might say I had  quite  a  time  getting
                16 a project director or the hospitals to allow that name to
                17
                  appear in his final total.  He wanted to call it multiple unit
                18
                  hospital. I said that is all right for  a  scientific  document
                19 but put satellite hospital first and then submit it because
                20 satellite means one of several hospitals under the same manage.-
                21 ment.  Sometimes the satellite becomes bigger than the home
                22 office, but the main thing is the joint management.  Sometimes
                23
                  their specialization of patients is quite common, let us say
                24 obstetrics can be done at the one.
                25         MRS. COLEMAN: Do you arrange this  by  mergers  or  by

ACE-FEDERAL    REPORTERS.     INC.
261 CONSTITUTION AVE.       N.W
   WASH,NCTON, D. C.


                                                                          190

                I hospital?

                2           MR. DRENNAN: You are talking  about  satellites  we

                3 have treated?

                4           MR. RORFM: Except one is  under  construction  now.
                5 That is strictly an outpost of an existing institution.
                6           DR. HALDEMAN:  They have had a grant to study exist-
                7 ing satellite institutions and have a publication out if You

                8 are interested.

                9           MR. ROREM,.  Just out within the last month.

              10            MR. DRENNAN.-  This satellite that is going into
              11  operation is osteopathic. They have 225 beds  now  and  their
              12  present site will not lend itself to expansion.  They have a
              13  concentration of the staff members in the far western part of
              14  the county so it seemed like an ideal situation to experiment
  SR
              is  on it.

              16           MR. BUGBER:    Are you going to give medical staff

              17  appointments, one staff?
              18           MR. DRENNAN:  As far as the osteopaths are concerned,
              19  I am not sure.  We are coming very close in some circles in
              20  Franklin County of excellent cooperation between the osteopaths
              21  and the others but there was no need for it because we had  a
              22  very., very fine osteopathic hospital in Columbus which took
              23  care up to the present time of all the staff needs of the
              24  osteopath.  As they continue to grow there may be more and morE
              25  pressure.  Throughout the Ohio area where the hospitals are

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE  N.W.
   W4sHl,Gr@,, D. C.


                                                                         191

               1  developing there is more and more willingness to accept these

               2 kinds of positions on their staff.

               3           MRS. COLE3LAN:  I was not aware of that.  Are they?

               4           DR.-HALDEMAN:  The number of graduates has remained
               s fairly constant up to last year when the schc>ol.in California

               6 was converted to a medical school, so the numeric drop in them
               7 was by virtue of that.  This will be offset by the new school
               8 in Michigan if they go through, but I think the trend is goine

               9 to be towards conversion of osteopathic schools to medical

             10  schools.

             11            MR. DRENNAN:  I think our choice has been the indivi-

             12  dual patient's choice, and once we buy that premise then  the
             13  community has a responsibility to provide hospitals for osteo-

             14  paths as well as M.D.s.
 SR
             15            MRS. COLEMAN,. I was a little surprised because  we
             16  ha ve them in New York City but they are not important.
             17            DR. HALDEMAN:  I have very mixed opinions and feel-
             18  ings on this.  As I know some of you know, I have been working
             19 lin terms of planning for medical facilities for the last three
             20 years. I have mixed feelings.  Today  post  graduate  training
             21  in medical residency is more and more important in the training
             22  of a physician. If you look at even the  university  teaching
             23  hospitals for osteopathic schools there are institutions of
             24  100 beds, and you look at the residency :).- training opportun-
             25  ities and they are relatively nil.

ACE-FEDERAL  REPORTERS,   INC.
61 CONSTITUTION AVE.    N.W
  WASPI&arcll 0. C.


                                                                       192

               I            I think we should Him in the long range for upgrading

               2  the school of osteopathy.  On the other hand, I think I agree

               3  with Grant that with the present shortage of physicians that

               4  there should be places for them to practice.  I would much

               5  rather it would be done through opening the existing hospitals

               6  to osteopaths rather than continue the osteopath hospital.

               7            It is just like the problem of your small Negro

               8  hospital.  In Kansas City I think that it would be much better

               9  for them to be given'staff privileges at Kansas City General

              10. in spite of the fact that some of their practice would have to

              11. be limited rather than perpetuating a specialized hospital.

              12            MR. DRENNAN:  This is one good reason for having

              13  M.D.s on your planning committees.  As you notice we have one
  SR          14  from each hospital, a representative from the County Medical
              15  Society, plus the County Health Commissioner, all on this

              16  level where staff privileges may be discussed.

              17            We have a number of communities that are refusing

              18  them in their hospitals so the M.D.s want to build another

              19  hospital with in-patiept beds.  It is a problem that we are
              20  continually facing.  If you do not have the cooperation, I
              21  do pot know how you are going to solve the problem.
              22            MISS JFNKLNS:  Do you have any osteopaths on your
              23  operating group?
              24            MR. DMMAN:  Yes.

              25
                            DR. HALDWN:  How late do you want to go this

 ACE-FEDERAL  REPORTERS,  INC.
2 6 I CONSTITUTION AVE   N,W
         0. C.


                                                                          193

                   afternoon?  I am taking count as to where we stand.

                2            I would like to complete the  circuit  this  afternoon

                3  if we could and maybe work until five thirty, because in the

                4  morning I would like for us to approach this questiop of imple-

                   meDtatioD from a more theoretical standpoint  rather  than  what

                6  you are actually doing, what are the areas that  have  promise,@

                7  and sort of list them.

                8            I do not think we need to perhaps talk about
                                   -1
                9  priorities to any extent because it is evident that our mind

               10  has not crystalized far enough on  this.  I  would  likeiD  then

               11  have a chance to talk about whether there is a need for a type

               12  of meeting of individuals from staffs  of  area-wide  planning

               13  agencies sometime this fall@ and if so, I would  like  for  us

               14  to have enough time to maybe just structure  such  a  meeting.
  SR
               15            I was hoping we could work through  in  the  morning

               16  until say one o'clock and get away.  Does that seem like a

               17  -reasonable arrangement?

               18            All right.

               19            In view of the fact we are going to  five  thirty,  we

               20  will take a five minute break.

               21            (Whereupon, a short recess was taken.)

               22

               23

  pk fls       24

               25

 ACE-FEDERAL REPORTERS, INC.
261 CONsrITUT ON AVF,,  N.W
        IC
   WA.@l,@@ON 0. C.


                                                                           194
pk/@@hort       I            DR. HALDEMAN:  Dtve, do you want to proceed?
 f @
Short           2            Hi, I don't want to pass you up.
  7-8-63
HEW             3            MR. SIBLEY:  Go ahead.

                4            DR.. HALDEMAN:  You don't represent a planning

                5  council.

                6            Jacques, do you want to tell us about Detroit?

                7            MR. COUSINS: Yes.  In  sitting  here  and  listening

                8  to the other side of the table I feel like  the  President  of

                9  Dogpatch Airlines comparing his operations with Pan Am or

              10   TWA or Awrican Airlines.  We don't do a lot of these things.

              11   I guess we ought to and maybe we will but right now we don't.

              12             We have about 4 million people.  We  do  the  tradi-

              .13  tional assosication type work amd th6n the hospital planning.

              14   The hospital planning is conducted by a planning committee
  SR
              15   which is made up of about two dozen or more people, somewhat

              16   over half of whom are public representa@es and the others

              17   are distributed among other hospital trustees and hospital

              18   administrators and we have the county health officer, the Dean

              19   of the Medical School, and the  President of  the  Hill-Burton

              20   Advisory Commission on our Planning Committee, all with votes.

              21             The staff of the Hill-Burton Agency  is  invited  to

              22   attend all of our meetings, and unless there is  snow  on  the

              23   ground they do attend all of our meetings.

              24             Likewise, I seem to have an invitation to attend any

              25   of their meetings whenever they discuss Detroit.

 ACE-FEDERAL REPORTERS,  INC.
2  61  CONSTITUTICON  AvE..  N,W.


                                                                             195

       pk 2     1             We started out by doing population  studies  and  by

                2  doing engineering studies of all of  our  physical  plants  and

                3  then while we were doing this we developed you might say,

                4  some criteriacr general policies.

                5             one has to do with the size  of  the  hospitals.  We

                6  like 200 beds of a minimum in the metropolitan area although

                7  we will make exceptions in certain circumstances.

                8             DR. HALDEMAN:  What are the circumstances?

                9             MR. COUSINS:: Primarily if it is  out  in  the  more

              10   3ural parts of the area or if it is in a situation where we are

              11   faced with being able to put up a 125-or 150-bed hospital, well,

              12   we cannot put up any more but if we don't put that one up or

              13   encourage it, some fly-by-night or 50-bed institution will get
  SR          14   in there, so we kind of bend over backwards.
              15              Usually we try to merge the two  groups  together  and

              16   we have been successful in a few instances in doing this.

              17              We have been doing patient  distribution  study  since

              18   about four or five years ago so we know where our physicians

              is   are and where our patients are, and I hope we will  be  doing  it
              20   next year again.

              21              MR. SIBIEY:  Do you have any relation of those?

              22              MR. COUSINS@.: No, we just counted  noses,  where  the

              23   patients come from and where the physicians have their offices.

              24              MR. SIBIEY:  But you have not drawn any critera fromt

              25   that?

 ACE-FEDERAL REPORTERS, INC.
261  CONSTITUTION  AVE.,  N,W.
   W.,@".-" 0. C.


                                                                                196
   -Pk 3         1             MR. COUSINS:  No, we really have not.  We have
                 2  broken    it down so that, for instance, we know how patients
                 3  pay    their bills, you know, length of stay, what kind of
                 4  specialist they go to and so on and so forth.
                 5             We have never written anything up on these statistics,
                 6  We use them almost daily.
                 7             MISS JENKINS:  On your doctors did you get their
                 8  age and specialty?
                 9             MR. COUSINS':  The age of the physician?
               10              MISS JENKINS:  Yes.
               11              MR. COUSINS:  We can get that.  We don't have it on
               12   the IBM card.  In other words, you can name any physician in
               13   Detroit and we can tell you where he has his patients in six
               14   months.
  SR
               15              MISS JENKINS: We maintain an IBM card on that.
               16              MR. COUSINS: We discovered that some hospitals that
               17   we thought they were getting the bulk of the man's work were
               18   not getting nearly as much and we were able to predict with
               19   considerable accuracy what happened to your,hospital, and by
               20   physician we can tell you what happened.
               21              MR. PETERS: Contact the doctor himself? How did
               22   you get the information, contact each doctor individually?
               23              MR. COUSINS: No, we told the hospitals we were
               24   going to do this and we did it.
               25              MR. PETERS: You got it from the hospitals?

ACE-FEDERAL  REPORTERS,   INC.
6 1 CONSTIRUTION AVE     NW
   W4sqt,.,o,@ C. C.


                                                                            197
      Pk 4      1             MR. COUSINS:  Yes, we had bushels of mail coming
                2  in every night showing all the discharges.
                3             MR. ROREM:  You mean you do this currently?
                4             MR. COUSINS: We did it during  the  six-month  period.
                5            MR. ROREM:  225,000 discharges?  How many?
                6            MR. COUSINS:  225,000 discharges, all on IBM.cards.
                7  It is very he lpf ul.

                8            Well, on a quarterly basis the staff gives to this
                9  Planning Committee, which incidentally over the past seven
                10 years has not changed very much, continuity on that Committee
                11 now, we give them on a quarterly basis an analysis of need
                12 based on population and this does not change very much.
                13           Then we show them the number of acceptable beds, the
                14 total number of beds in the 10 study areas that we have in our
  SR
                15 six counties, the number of beds under construction, the
                16 number of beds that we have approved for construction -- this
                17 differs sometimes -- the number of projects that they have
                18 approved for future construction, the number of -projects and
                19 the number of beds that the Committee has approved for future
                20 construction, the number of beds that are being tabled  or  undez
                21 study by name of hospital, and then we have another column , -
                22 which is all the projects that have come to the attention of

                23 the staff.

                24          We have about two projects a month; that  is  about  the
                25 average comming to our attention. I would say  about  20  percent

 ACE-FEDERAL REPORTERS, l@'!C.
 26 1 CONSTITUTION AVE     N,W
    W@.( N@@o, 0 C


                                                                              198

     Pk 5       1   of them never get beyond the staff because  we  usually  are  able
                2   to say to these people, 'Well, you want an  area  where  they  are
                3   over-bedded, 11 or we point out some of the financial problems

                4   involved.

                5             So about 20 percent of the  projects  never  get  beyond
                6   us, although any project coming to our attention and they
                7   write us a letter and insist on meeting with our Planning
                8   Committee, they do meet with our Planning Committee.

                9             Now our Planning Committee  meets,  oh,  anywheres  from

                10  six to 30 times a year, it depends on the volume of work

                11  involved.  Sometimes they have various projects to consider anl

                12  sometimes it is strictly housekeeping  work  that  they  perform.

                13            Now I think probably the area in  which  we  have  been

                14  most successful has been in the implementation of this and I
   SR
                15  think the reason for it is because of the power structure in

                16  Michigan or Detroit.  We are somewhat like in Pittsburgh.

                17            You get a few corporations and a labor union to agree

                18  on something and it is pretty difficult to buck it, at least

                ig  for any major project.  This creates other problems.

                20            For example, when we were first set up to do plannin4,1

                21  these same corporations and the union set up a capital funds

                22  corporation called the Metropolitan  Detroit  Building  Fund  and

                23  these people took about five years to  raise  $15  million  which

                24  was then spent pretty largely on  our  recommendations  after  we

                25  had spent five years studying the needs in the area.

  ACE-FEDERAL   REPORTERS,   I,':C.
 261 CONSTITUT ON AvE    N,W
    W.5
      INGTO'i, 0 C


                                                                               199

     pk 6       1             They didn't take our  recommendations  in  toto  and

                2   they double-checked us by hiring  Jim  Hamilton  and  Associates

                3   to cone in and do a double survey.  They didn't follow

                4   Hamilton's recommendations 100 percent either.

                5             Hamilton's recommendations and ours were almost

                6   identical. our nu@er two  choice  might  have  been  his  number

                7   five choice.                                t

                8             MR. BUGBEE:  Why didn't they follow it?

                9             MR. COUSINS:  Well, there were a couple   of reasons.

               10   There were one or two instances of honest differences of

               11   opinion where Hamgton thought our recommendation was wrong and

               12   we thought his was wrong.

               13             Then there were a couple ofother problems.  The

               14   capital funds corporation covered only  three  counties  in  our
  SR
               15   six-county area.

               16             Hamilton, of course, studied only the three counties,

               17   we studied six. So in  our  recommendations  to  the  Building

               18   Fund we told them if the corporations in their budgets set up

               19   "X" amount of money contributions  to  hospitals  they  should

               20   donate to the Building Fund "X" minus a certain amount because

               21   there were three counties outside of this area that have

               22   legitimate needs.

               23             So you have some  responsibilities  to  these  other

               24   counties and this is another place where we have a difference

               25   but by and large, I think you have to  say  that  Hamilton  used

 ACE-FEDERAL  REPORTERS,  I,'!C.
26 1 CONS R(TUT'ON AVE,  NW
   W. SH IN<;TON@ L,, C.


                                                                        200

      7         1  our figures so it :6 really a matter of judgment more than
                2  anything else.
                3            The other area in which we have been able to
                4  implement things has been excellent cooperation with our State
                5  Hill-Burton program.  I cannot think of any project that we
                6  turned down that Hill-Burton gave any monies to.  I can think
                7  of a few projects that we approved that Hill-Burton didn't give
                8  money to but no@ the other way around.
                9           The other thing is that we have had a very good
              10  working relationship with Blue Cross.  The first document that
              11  we ever published had a list of about 11 philosophical
              12  expressions of the new hospital planning.
              13            one of them was that we should work closely with
              14  Blue Cross, one with the size business that I mentioned, and
  SR
              15  another one was that hospitals should be truly community
              16  oriented and not corporate setups,that we have so many hospitals
              17  where a proprietary type corporation operates a voluntary non-
              18  prof it corporation,
              19           We also said that we should give priority to com-
              20  pleting hospitals that had been recommended for expansion before
              21  we build new hospitals if everything else happens to be equal.
              22           We also said that we didn't like to see any expansion
              23  of hospitals that had not been built originally for hospitals
              24  and that we would turn down automatically any hotel conversion
              25  job or motel or private home.

 ACE-FEDERAL REPORTERS, I!!C.
 261 CONSTITUTION AVE   N.W.
    WA9KtN(iTON 0, C,


                                                                          201

       8        1            Then Blue Cross came along a few years later,  about
                2  three years ago, and set up standards for newly  participating
                3  hospitals.  in these standards for newly participating
                4  hospitals one of the standards says that the hospital has to
                5  be built in response to demonstrated community need.
                6            So when a new hospital applies for participation  in
                7  Blue Cross, Blue Cross writes us a letter @and says, "Is this
                8  hospital needed?"

                9            I guess we have had about 18 of these letters in the
                10 past three years.  I guess we have said probably "yes" to
                11 about 10 or 12 and we said "no" to the rest of them.
                12           Blue Cross has backed us up on every single one of
                13 them except one and that is one where the hospital had started
   SR           14 construction just about the time these new standards came  in.
                15 Now it has reached the point where anybody who wants to  start
                16 a hospital and addition --
                17           MR. BUGBEE:  Either a new hospital or an addition?

                18
                             MR. COUSINS:  Well, within the past three weeks
                19 unless f4icbigan Blue Crossbas adopted new standards, the
                20 standards for existing participating hospitals and the
                21 additions to existing hospitals are going to have to be
                22 approved by us or approved by Blue Cross.
                23           Blue Cross will turn to us and Hill-Burton for

                24
                   advice.
                25           DR. HALDEMAN:  Could you get those criteria and send

  ACE-FEDERAL REPORTERS, I,'!C.
 261 CONSTITUTION AVE     N,W


                                                                         202
       9        1  it to us?  I got a copy from McCarthy a couple weeks ago but
                2  I don't know what happened to it.
                3           Have they been formally adopted by Blue Cross in
                4 Michigan or was it just a draft we were looking at?
                5           MR. COUSINS:  No, they have been adopted now.
                6           MISS JENKINS:  Have they been adopted as that draft
                7 indicated?

                8           MR. CO-LTSINS:  Yes.
                9           MR. ROREM:  I don't remember having received any.
              10            MISS JENKINS:  I received one.
              11            DR. HALDEMAN:  I might say that I hope that all of
              12  you perhaps wculd take the mailing list -- do we have a vAilizu,l
              13  list of this group? -- and send to us copies of any written
              14  material that you have'about what you have been talking about.
  SR
              15           I know in a number of instances ynu do have it
              16  written up in one form or another.  Is there a mechanism for
              17  getting information a-round?
              18           MR. ROREM:  None that has been formalized that we
              19  know of.
              20           MR. SIBLEY:  Since I left Chicago or since I left
              21  theoffice, which is practically two weeks, we have made out
              22  a list of the 40 Planning Councils which have executives that
              23  we know of and asked them to do the thing that we require, we
              24  ask our State hospital associations and Metropolitan hospital
              25  Membership councils to do, which is to put each other on their

ACE-FEDERAL  REPORTERS,  I'!C.
2 6 1 CO STITUTION AVE N    W
   Wr.4@.IIITI  @l
      - , , L, C


                                                                             203

       Pk 10     I  mailing list so that anything they have to mail goes auto-

                 2  mtically without coming through our office.

                 3            That has now just been initiated and we will send

                 4  this revised list out, I guess, semi-annually.

                 5            DR. HALDEMAN:  Is there some way we can get on that
                 6  mailing list?  I don't know.  Ken, do we get it?

                 7            MR. BAUM:  No, we don't.         i

                 8            MR. SIBLEY: I have already written  it  down,  it  is

                 9  in my pocket.

               10             DR. HALDEMAN:  All right.

               11             MR. DRENNAN:  I think everybody in New York gets our
               12   mailing list.  We send it routinely and I think we send you

               13   several copies.

               14             DR. HALDENAN:  We get lots from Columbus.
  SR
               15             MR. DRENNAN:  Nonprofit mailing franking.

               .16            DR. HAIDEMAN:  Well, pardon me for the interruption.

               17             MR. COUSINS: Now it has gotten  to  the  point  where

               18   it is almost impossible for anyone to  think  about  starting  a

               19   hospital in southeastern Michigan without  getting  tangled  up
               20   with the State Health Department, Blue Cross  or  the  Hospital
               21   Council, because whenever any.-one of these three agencies ever

               22   hears about a project -- when I say "hear" I mean I was in

               23   Chicago the other day speaking to a group of the House of

               24   Delegates of the Osteopathic Association, and I heard about

               25   a project.

 ACE-FEDERAL  REPORTERS,   I':C.
2 6 1 Co STITUT ON AV!: N     W
         LI 7


                                                                            204

                I            Well, copies of this have already gone  to  our  State
                2  Health Department and to Blue Cross. Now  nothing  may  come  of
                3  this but we alert one another immediately and we always tell

                4  anybody that contacts us that we have to contact the other two

                5  people.

                6            So the net is pretty well drawn and it   is almost

                7  impossible to get around this.

                8            Now we.have problems.  our  problems  are  osteopaths,
                9  small hospitals that do not ever intend to receive philanthropic
               10  funds or even Hill-Burton funds, and who in the past have
               11  always been able to secure adequate financing.
               12            Now this is beginning to tighten up a little bit
               13  because as a result of what I guess the  community  thinks  is
   SR          14  a reasonably objective job I would say, that  every  major  bank
               15  in town, many of the national insurance  companies,  the  larger
               ,16 ones, particularly those that have some sort of a group office
               17  or district office in Detroit, contact us  whenever  they  are
               18  asked f or a mortgage.
               19            This has bean remarkably effective  judging  by  the
               20  number of times we get called by different banks  as  we  keep
               21  saying we either never heard of this project  or  we  disapprove

               22  of it.
               23            The hospitals apparently have to hunt a little longez
               24  to get this money.  So this is helpful.
               25            DR. KLICKA:  Did this just grow or did you do

 AGE-FEDERAL REPORTERS, I,'!C.
 261 CO-STITUTION AVE . N  W
    W4@ p t %"_., @- n r


                                                                           205

    12          1  something?

                2            MR. COEJSINS:  This grew.  We talked about doing some-

                3  thing but our attorneys told us we would get into serious

                4  difficulties if we ever called a meeting of the banks and

                5  insurance companies to talk about it.

                6            But through our service association type work and ou::

                7  relationship with the Health Insurance Couhcil and other groups
                8  such as that, this is how it has spread..

                9            We are having nursing home problems now.  We  hope  to

               10  get into this.

               11            We have Negro problems, that is one of our real big

               12  ones.

               13            We have a problem in timing. As you may recall  a  few
  SR           14  moments ago, I said that we send out these quarterly reports
               15  for a Planning Committee showing what the need is in the

               16  different sub-areas and how close we are to meeting  that  need.

               17            Well, a hospital will appear before us in 1959 and

               18  it wants to build something.  Well, we don't like what they

               19  want to build or we don't like the corporate setup and we

               20  don't tell them "no".

               21            In some instances we do tell them. Let's  say  in  one
               22  instance we don't tell them "no"/ We tell them that if they

               23  revise their project, the corporate structure, we will then

               24  consider them.

               25            We have a few of these that over the past couple of

 ACE-FEDERAL REPORTERS, l@!C,
 261 CONSTITUTION AVE N   W
         0. C.


                                                                         206
     13         1  years because of our prodding, because of Blue Cross I prodding
                2  because of some work done by the McNearny group in Ann Arbor,
                3  they have revised their corporate setup and they have revised
                4  their projects.

                5           They are now coming back to us but the need has
                6  changed in this area.  In fact, from here I am going back to a
                7  meeting where we have to decide what to do"with one of these
                8  which is now as clean as a hound's tooth but there is no need
                9  and he owns the land.  I don't know what we are going to do.
              10            Another problem that we have, although I think it is
              ii   beginning to change a little bit, is with governmental
              12   officials.  originally they paid no attention to us, the city
              13   and county level.  Now they are beginning to pay a little more

              14   attention to us.
  SR
              15            Certainly the City of Detroit is now asking us to
              16   sit in as members of various committees appointed by the State
              17   Council or by the Board of Health to decide what to do with the
              18   Board of Financing of indigin'ent care, providing psychiatric
              19   facilities in the city hospital, in relationship of the city
              20   hospital to the Medical School and other things, but we earned
              21   this, I think, over the past six or seven years.
              22           Suburban officials are still extremely leery of a
              23   "Detroit group" telling them what they should do, but I think
              24   there are some improvements made along that line.
              25           Another problem that we face is in relationship with

 ACE-FEDERAL REPORTERS, I.'!C.
261 CONSTIITUTior, AvE N   W
   W's@IN.ToN 0 C@


                                                                          207

   14           1  county medical societies. we have one big one,  the  Wayne

                2  Medical Society, and while our relationship and service

                3  association is excellent with them, in the planning work the

                4  relationship is very good with some of the members but  the

                5  County Medical Society is a very difficult animal to  work

                6  with. They will never commit-@themselves, at least ours won't.

                7            They change their leadership every year and this can

                8  mean a 100 percent change in the philosophy of the  County

                9  Medical Society.  Sometimes the guys that are in leadership

              10   positions don't represent really what the membership feels.

              11   So we have some problems there.

              12             By and large, I guess you would have to say that  as

              13   far as implementing things were concerned we have as  tight

              14   control, I think, as any other area which had hospital council
  SR
              15   and this bothers me, frankly, because I am not so sure that we

              16   are that right all the time.

              17             one paradox, as a result of our work we have probably

              18   delayed the construction of needed good facilities  because

              19   everybody says we have to study this thing, and  meanwhile,

              20   somebody else has sneaked in and filled up the vacuum. -

              21             I think this is changing a little bit,  particularly

              22   due to Blue Cross' standards and the fact we won our  lawsuit.

              23   This means that these fly-by-night operators, I think,  are

              24   going to have to think twice before they think to build
              2S   hospitals in Michigan*

 ACE-FEDERAL REPORTERS, INC.
 261  CONSTITUTION  AVE..  N.W.
   W..""-,. D. C.


                                                                        208

     is                     I must say that when the corporation set up this
               2  United Fund drive, capital financing, then we had a recession
               3  in 1958, I kept telling the chairmn of Ford and Chrysler that
               4  they were crazy to let a minor recession delay this fund drive
               5  for about two years for the very simple reason that if they
               6
                  didn't kick in the money in capital fund-raising they were
               7  going to pay for facilities anyway, because somebody would
               8  build these add:(tional facilities.

               9
                            Since Blue Cross in Michigan is financed largely by
               10 the big-3 and since Blue Cross in Michigan allows for
               11 depreciation, the corporations are in a peculiar position.  If
               12 they don't give the money, they bargain for it over the bargain-
               13 ing table with the UAW and they wind up paying for it anyway.
               14
  SR              So this $15 million drive which was supposed to produce about
               15 800 new beds, I think in modernization about 500 or 600 other
               16 beds, this thing was delayed for a couple of years and mean-
               17 while, we saw almost an equal number of beds put up in
               18 situations that we didn't think particularly desirable.
               19           MR. BUGBEE:  What sort of situations, small
               20 hospitals that had an accumulation?

               21             %
                            MiR. COUSINS:  Yes, 50-bed hospitals that decided to

               22
                  become 125-bed or 150 that decided to become 210 or a new out-
               23 and-out construction project.
               24          An osteopathic hospital in Pontiac, a new hospital
               25 just 10 miles from,Ann Arbor and a few other hospitals of this

 ACE-FEDERAL   REPORTERS,    INC.
261 CONSTITUTION AvE:.      N@W.
   WASN)NOTON, D. C.


                                                                          209
         16    1   nature, but none of these people are going to the corporations
               2  for funds and most of them are not even going to the Hill-
               3  Burton for funds.
               4            I don't know whether in the future we are going to
               5  be able to control this any more. I know that  our  United
               6  Foundation has recently set up a capital gifts provision which
               7  intends to set up a blueprint to study and'then to provide the
               8  financing for 20 years worth of needs in.health, welfare and
               9  recreational activities in the greater Detroit area.
               10           Now how effective this is going to be I don't know.
               11           MR. SIBLEY:  This being a part of the giving scheme
               12 on the part of corporations?
               13           MR. COUSINS:  Yes, five years and they fill up the
  SR           14 pot and the pot would be empty.
               15           MR. SIBLEY: But it is regular giving each  year?
               16           MR. C(xiSINS:  Yes, and they would hope by doing this
               17 they could then control things even more than they do  now.
               18 See, we are faced with a developing medical center that  is
               19 going to hit the community sorwwhere f or $180 million.  Sorne
               .20 of this will be Governmnt money but a lot of it will not be
               21 Government money.  This has to be tied in.
               22
                           The last two capital fund drives have been largely
               23 in suburbia.  Now we are beginning to pay attention to what has
               24 to be done downtown.
               25          MR. SIBLEY:  Do you .,,.@call this positive planning,

ACE-FEDERAL    REPORTERS,     INC.
61 CONSTITUTION Ave.        N.W
  wAsHiNGrot,. D. C.


                                                                         210

       17      1  Jack?

               2           DR. FLNLDEMAN:  Yes.

               3           MR. SIBLEY:  I certainly agree with You.  Now we hav(
               4  to face large amounts of money that are going to be needed and
               5  not just let it slide along.
               6           MR. COUSINS:  In a nutshell, Tack, I have pretty well

               7  covered what we do.

               8           DR. HALDEMAN:  I am interested a little more about
               9  the implications of the court decision.  Idon't know, Jim,
             10   whether you were going to talk about that.  Is it going to be
             11   appealed or is this just the first bout, the first round of

             12   a fight that will go on?

             13            MR. COUSINS:  Well, the court decision was rendered
             14   now I think about two weeks ago, and the losers had 20 days in
 SR
             15   which to appeal either for a new trial -- boy, I sure hope the,r
             16   don't -- or to appeal to the Supreme Court.
             17            This court decision was the situation wherein an
             18   existing downtown hospital that had been a grou@ participating
             19   hospital for 30 years set up a new corporation and created a
             20   satellite hospital in a building that was 35 years old and in
             21   the eyes of our Planning Committee and I-Iill-Burton did not
             22   warrant having any money put into it in an area where neither
             23   Hill-Burton nor our area Council thought there was need.
             24           The hospital finally came to our Planning Committee
             25   in order to secure our advice but the first thing they told us

ACE-FEDERAL  REPORTERS,   INC,
61 CONSTITUTION AVE,    N.W
  WA../,Gro,. D. C.


                                                                          211
       18       1  was that they had already bought the land, hired the architect,
                2  it cost them $700,000 and regardless  of our decision they
                3 were going to go ahead and do it.
                4           We told them they were nuts, that it would cost
                5 them more than $700,000,, probably close to a million.  We
                6 were wrong, they have spent a million and a half already and
                7 the hospital is not open yet.
                8           They then went to Blue cross to get the participation,
                9 and based largely on our findings and on the findings of the
              10  Hill-Burton Agency, Blue Cross turned them down.
              11            The hospital then sued Blue Cross and we were in
              12  court, I think, for the better part of five weeks.  Carl was ai
              13  expert witness on behalf of Blue Cross and Charlie Laturno
              14 was an expert witness on behalf of the hsopital.
  SR
              15           Charlie set it up beautifully for Carl and for me
              16 because our attorneys asked him how did he know that this
              17 hospital needed to be built and he said, 'Well," he had driven
              18 around the neighborhood for an hour and the kind-of houses thal
              19 were going up were very similar to those in Chicago where they
              20 needed new hospitals.
              21           So then they asked him had he ever done any area-wide
              22 planning and he said, "Yeah, hundreds of times."
              23
                           We then asked him how he did it and he told us how he
              24 did it.  We asked if he did it for this particular project and
              25 he said,"No," he had not.

 ACE-FEDERAL  REPORTERS,   INC.
261  CONSTITUTICON  AVE.,  N.W.
   WAs@iNc,.N, D. C.


                                                                        212
        19     1            Then Carl came along and said how he did it and we
               2  told how we did it.  Charlie gave a textbook approach to the
               3  thing although he had not done it for this particular hospital.
               4            Interestingly enough, an important decision which was
               5  favorable to Blue Cross was favorable on the point of law and
               6  that is that the Blue Cross Enabiing Act may contract hospitals.
               7            The judge said that it was not w'ithin his province t:)
               8  stipulate that they must contract but then he tore into -- I
               9  don't think you are named in the findings by name, I am.
              10            The judge disagreed on our determination completely
              11  and said we were all wrong and he arrived at his own deter-
              12  mination.  He just took the population from Macomb County and
              13  multiplied by 3.5 or 4.0 and he came up with a figure.
  SR          14           MISS JENKINS:  The judge did?
                           MR. COUSINS:  Yes.  What the judge ignored was that
              .16 Macomb's population is all along the southern border of the
              17  county and there is a whole string of hospitals anywhere from
              18  a quarter of a mile to three miles just south of- that line and
              19  this is where most of those people go.
              20           Personally, as far as we are concerned, there is no
              21  reason why they should not go.
              22           MR. BUGBEE:  When is the 20 days up?
              23           MR. COUSINS:  I think the end of this week.  I think
              24  Friday or Monday.
              25           MISS JENKINS:  Do you think they have the money to

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT'ON AvE.   N.W
   WAS@INGI.I. 0. C.


                                                                         213

     pk 20     1  continue the litigation on it?
               2            DR. HAIDEMAN:  They have in the Detroit area a very
               3  difficult time of filling many beds without the assistance of

               4  Blue Cross.
               5            MR. COUSINS:  Yes, but they get only $15 a day from
               6  Blue Cross.  Now this has some very serious implications
               7  because we have a couple of other projects'that are under con-
               8  struction right now.
               9            MISS JENKINS:  But you were not sustained on the
              10  basis of the plan, you were sustained only that Blue Cross
              11  does not require?
              12           MR. COUSINS:  We have another court decision
              13  involving that.  Now this is the reverse.  This is a situation
  SR          14  of where we approved of a hospital and the Community Planning
              15  Commission of this particular community also approved the
              16  hospital and the Zoning Board approved the hospital but the
              17  City Council turned it down, so there the hospital is taking
              18  the City Council to court to force the City Council to give
              19  them a permit to build.
              20           MR. BUGBEE:  Why did the City Council object?
              21           MR. COUSINS:  The City Council objected because they
              22
                  got something like 10 square miles and they have just had thre?
              23  new hospitals under construction there and they don't want any
              24  more nonprofit organizations in the community.
              25           When we testified in court it was intereatiN to hea@

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE.   N,W
   WA"?N,-" D. C.


                                                                          214
     21        1   the judge in his opening remarks say that he didn't want any-
               2  body from Hill-Burton testifying because he was sick and tired
               3  of Government intervention in the county and he didn't want any-
               4  body from the Hospital Council and he didn't want any outside
               5  experts, this was a matter f or citizens.
               6            It is still in litigation.
               7            MR. ROREM:  You know they say yo'u have not arrived
               8  until you have be-en sued a couple of times so that will be
               9  next.
              10           Have you been hauled into court yet, yourself?
              11           MR. COUSINS:  No, the Hospital Council has not.  It
              12 has always been Blue Cross or the hospital or a unit of
              13 Government hauled into court but we are always asked to testif,r.
              14           I was in three different courts in two consecutive
  SR
              15 days and I had to get my stories straight because I had to
              16 reverse it in court hearings.
              17           DR. HALDEMAN:  Off the record.
              18           (Discussion off the record.)
              is           DR. HAIDEMAN:  My theory on the record is that the
              20 way you win these cases you just worry about them enough.  It
              21 seems to m we had something on Hill-Burton every month it
              22
                 comes up, just felt like we were never going to get solved and
              23 I worried about it enough.
              24          MR. SIBLEY:  I thought you made John and Bill do youi
              25 worrying f or you.?

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE  N,W.
  WA@lf,VGIOI. 0. C.


                                                                         215
    22         7.            DR. HALDEMAN:  I do, but we worry.
               2             Purtlier comments

               3             Questions?
               4             MR. ENSIGN:  Jack, the judge's discussion on the
               S  need for the hospital was based on cutting up  the  area-wide
               6  pie in terms which seemed to fit the plaintiff's pattern,
               7  the plaintiff gerrymandered this thing to make it work for
               8  himself.
               9            MR. COUSINS:  Yes.
             10             DR. HAIDEMAN:  What is the implication of this ruling,
             11  Jim?
             12            MR. ENSIGN: it is difficult to say  because  it  was
             13  decided only on a point of law which happens to be in Michigan,
             14  enabling legislation.  it means different things for different
 SR
             15  plants, some of which have no control whatsoever in the contra:t
             16  with them and some plans laid down in the statute with the
             17  contract, all licensed institutions and others.  The language
             18  is different.
             19            I would say that we would be very happy about it had
             20  the judge supported the concept of area-wide planning.  We hop4!
             21 that the case would come up where that ruling takes  place  but
             22 if it cows up the point of law is not present.
             23           This one would have been turned down and  this  would
             24 have had serious implications.
             25           DR. RAIDENAN:  There are other Blue Cross groups thai

ACE-FEDERAL  REPORTERS,   INC.
61 CONSTITUTION AVE,.   N@W
  WAsmi,.r@,. D. C@


                                                                       216
       23      1   are planning on taking need and consideration?
               2            MR. COUSINS:  There are, indeed.
               3            MR. ENSIGN:  In Arizona, the Arizona plan adopted
               4  the same exact language that the Michigan plan has in spelling
               5  out what a participating hospital must pay which states that
               6  the hospital must have been planned and built in response to
               7  a clearly evident need for additional beds'in its community
               8  and so forth.
               9            Just because you didn't know that this was the rule
             10   does not let you off the hook, so there are a number of plants
             11   that are picking up this kind of thing.
             12             In Arizona, it would help to head off the eight per-
             13  centers.  in fact, it has caused a lot of bondholders heart-
             14  ache.
 SR
             15            MR. COUSINS:  Trying to be objective, I sat through
             16  most of this trial.  If I had been the judge, I don't know
             17  which way I would have gone because Dr. Klicka confused me,
             18  Hill-Burton confused me, the expert on the other side confused
             19  me.
             20            My own County Health officer was adamant that it was
             21  wrong and immoral.  Macomb County mothers had to go to another
             22  county to be delivered of babies.
             23            The president of my County Medical Society said that
             24  there was a need for beds, and by applying the formulas used
             25  by myself and Dr. Klicka and forgetting about all the hospitals

ACE-FEDERAL REPORTERS, INC.
61 CONSTITUTION  AVE  N.W


                                                                         217
      24       1   'that were a quarter of a mile to three miles Outside the area
               2   I would very easily arrive at a very fantastic need for Macoml
               3   County.
               4            That judge must have been bored silly or thoroughly
               5  confused because I think I know what I am doing, I will  tell
               6  you after having been cross-examined and after having to  say
               7  why did we use this formula, what formula clid they use in
               8  Pittsburgh? what did they use elsewhere? why were they dif-
               9  ferent? how did I arrive at 175 population for these particular
              io  sub-areas of the county when Hill-Burton arrived at  192,000?
              11  why was there a dif f erence?
              12            You know, you get a lot, of experts together and a
              13  guy who just depends on ordinary common sense just says the
              14 hell with all the experts.
  SR
              15           MR. BUGBEE:  That is what he said, I guess.
              16           MR. COUSINS:  That is what he said, took several
              17 pages to say it.
              18           So we have a lot of work to do in the-selling and
              19 the public relations end of this thing.
              20           DR. HAIDEMAN:  Well, I think we better get on.
              21           Any other questions?  I will go to Carl.
              22           DR. KLICKA: I will kind of make mine brief,  I  will
              23 have to.

              24           MR. SIBLEY:  Ten minutes, Carl.
              25           DR. KLICM:  Ten minutes.

ACE-FEDERAL REPORTERS, fNC.
26 1 CONSTITUTION AVE. N.W@
        D. C.


                                                                          218
      25       1             I think it is of some nterest to tell you that
               2   very early in my work with the Council    I have been there
               3   now four years as of the first of July    I was impressed by
               4   the fact that we had no committee organization at all.  We had
               5  a Board of Directors and that was it.  So everything was flush
               6  with the hospital field knowing what they did in New York.
               7            I proposed a number of special a@ea committees that
               8  included on the-membership a number of professional experts
               9  and laymen who were active in the health field.
              10            There were, I think, five or six of these committees
              11  and I was very proud of them, I thought I had structured them
              12  very well.
              13           Well, this recommendation went over like the pro-
              14 verbial lead balloon and I can still remember Mr. Ryerson
  SR
              15 accepting my recommendation graciously but saying, "Carl, we
              @16 are not going to run this Council this way.  We want you and
              17 your staff to do the work, you make your recommendations to th..s
              18 Board or to the Executive Committee which we wil]L form,"which
              19 they subsequently formed an Executive Committee, this smaller
              20 @group made up primarily of the officers.  Let's see what
              21 happens.
              22          Well, since that time we have reviewed 161 hospital
              23 proposals.  Now of this 161, 78 wereproposals for brand-new
              24 hospitals.  Of the 80 proposals that were for revisions of
              25 programs of existing hospitals, whether they would be expansio

ACE-FEDERAL  REPORTERS,   INC.
61 CONSTITUTION AVE.    N.W


                                                                          2 3.9
      26        1  or contractions or relocations, all but three followed the
                2 recommendations that were finally made by the staff and
                3 endorsed by the Executive Committee.
                4           I want you to know that the key here in  being  able
                5 to do this and to have such a turnover has to do with the
                6 fact that we do not do studies in depth as they do in New York
                7           We have been the greatest thing 6hat  ever  happened
                8 to Chicago, I g@tss, as far as professional consultants are
                9 concerned, because in most of these instances we have urged
              1() them to have thorough surveys done.
              11            In the early days this got us into trouble because
              12  we found ourselves getting into more and more disagreement with
              13  the phase of the study that related to bed need and this is
              14  because these consultants used the only material that they
  SR
              1,5 could and this was the State survey and plan.
              .16          The more our research staff came up with data the
              17  more we began to appreciate that the State survey and plan was
              18  much too generous and inconsisten.
              19           We began telling consultants as they cam into the
              20 'area that we would provide-@-.them with the bed need recommend-
              21  ations and rely on them to do everything else in the  hospital
              22  which had to do with detailing of the long-range program,
              23  internal organizational studies, in relationship to various
              24  relationships that they might establish for other agencies  in
              25
                  the community and so forth.

ACE-FEDERAL   REPORTERS,   INC.
61 CONSTITUTION AvE.    N.W
  WA.@haroN, D. C.


                                                                         220

      2 7      1            Then what we have done is to have taken these
               2  studies, to have reviewed them and then to have discussed
               3  them with our Executive Committee.  We have worked very
               4  closely with the professional consultants that have come into
               5  the area and as far as I can tell, they have been just as
               6  happy as we have been and we have been very happy with the
               7  relationship that has been evolved.
               8            Now with the new hospital proposals we have had a
               9  little different set of circumstances.  Of the 78 proposals,
              10  about 60 of them were proprietary in bature.  Every single
              11  one of these were proposed by people who had had vast
              12  experience in establishment of discount houses and shopping
              13
                  centers.
              14           Without exception they wanted to place them in areas
  SR
              is  where we thought the need was already well met or was to be
              16  met by programs that are already jelled and moving along.
              17
                           Sponsorship was not only by the real estate developers
              18  but in most instances there were a few doctors who were part
              19  and parcel of these organizations.
              20
                           It was difficult to get the details of the organ-
              21  izations but most of them were the small corporations of 10
              22
                  people or less.  This is the saw kind of a partnership arrang
              23  ment you know that permits the owners to take advantage of
              24  depreciation on their income tax venture and which is really
              25  the big appeal in this whole thing.

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT'ON AvE   N,W


                                                                        221
       28      1            Well, of the 18 voluntary efforts for new hospitals
               2  we encouraged 90 and most of these are already under con-
               3  struction or have been built and are in operation.
               4            one of them is postponed to a later date, one of
               5  them is going to end up being a satellite hospital to another
               6  one and it is under planning.  The remaining ones we dis-
               7  couraged primarily through what we call lo'ical persuasion and
                                                            9
               8  they bought the persuasion.
               9            Sixty proprietary instituations got actively dis-
              10  couraged.  of this 60 that we actively discouraged one was
              11  built, and this one I don't think would have been built had it
              12  not been for the fact that it was financed pretty largely by
              13  crime Syndicate money.  That hospital is still in operation;
  SR          14  however, it is really on the ropes and having a very difficult
              15  time.
              16           There again, although it is not known, it presumably
              17  is being perfused by crime Syndicate money.
              18           MR. BUGBEE:  What does that mean?

                           DR. KLICKA:  This means it is being fed.  Pardon me
              20  for using a little medical jargon.
              21           Now 59 therefor have been discouraged and I think
              22  most of them successfully discouraged.  Now I would like to
              23  tell you a little bit about how we did it because this is the
              24  implementation.  I would like to use the blackboard for this.
              25           one of the things that we have discovered is that

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE.,  N.W,
  WAS'l,.,O,, 0. C.


                                                                         222

       29      1 the local officials in the community can  be  extraordinarily

               2  helpful.  I won't go through the historical development of thi3

               3  but I will bring you up to one that we worked with in the  last

               4  six months that we think is most interesting and this was  one

               5  that was a hospital that was proposed in Northbrook, a  real

               6  nice northern suburb.

               7            We learn about these and we learfted about this one

               8  through our scouts. our scouts throughout  the  metropolitan

               9  area are primarily hospital administrators.  They pick up

              10  facts relating to the establishment of these hospitals in

              11  various ways.  This one waspicked up by -- I think this

              12  particular scout happened to be Dave Kinzer who was Director

              13  of the Illinois Hospital Association. He saw a small  squib  in
  SR          14  the newspaper up there where a group had gone to the  Zoning
              15  Board and had asked for a zoning variation to permit them to

              16  build a hospital.

              17            Dave called our office and said, "Carl, do you  know

              18  about this?"  I said, "No, thank you very much."  The next

              19  move was to write a letter to the Mayor of Northbrook  telling
              20  him that we had heard about this and asking him if he knew
              21  about the services of the Hospital Planning Council for

              22  metropolitan Chicago, and if he didn't we would be very  happy

              23  to work with them in determining whether or not the  establish-

              24  ment of a hospital in Northbrook would be in the best  interest
              25  of the community.

 ACE-FEDERAL REPORTERS, INC,
261 CONST TUTION  AVE.,  N  W.
   WA@.IINCT.I. 0, C,


                                                                        223
        Pk 30  1            We subsequently heard from the attorney of the
               2  village saying, "Thank you very much, this is going to come up
               3  in the Village Council meeting where the Zoning Board is going
               4  to submit their opinion regarding the advisability of giving a
               5 zoning variation to this group and you will be permitted to
               6 come up and talk to us at the same tire.
               7           In the meantime, we did a little bit of scouting of
               8 our own.  We found out what the physicians in the area thought
               9 about this and we learned,fortunately, that they knew nothing
             10  about it, which was good because you see, this indicated that
             11  these people had not even bothered to talk with the doctors in
             12  the area.
             13           We found that they were not at all in favor of this,
 SR          14 they all had staff positions in their hospitals.  They knew
             is somethings about the man who was primarily the sponsor here
             16 and they didn't think that he would be a fit sponsor, actually,
             17 for a hospital in their area.
             18           So when it came to the Council meeting-we talked
             19 first'on the basis of our studies indicating that there was
             20 a lack of need, we thought, and that if a hospital were
             21 established it would definitely cause a hardship to the
             22 hospitals that were already supporting this area for reasons
             23 well-known to this group.
             24
                         We also felt that the sponsorship of the hospital
             25 left something to be desired and we reviewed this.  Finally, we

ACE-FEDERAL  REPORTERS,   INC.
6 1 CONSTITUTION AVE.    N,W
  WAS.1h.TOI. 0. C.


                                                                         224
     31        1  pointed out that the plans, and we had seen the plans, were
               2  minimum and although they could be approved by the State
               3  because they wet their minimum requirements, they were vastly
               4  undersized.

               15           That is, the hospital was vastly undersized.
               6  'totally, it@ only provided for something like 450 square feet
               7  per bed, and for a 150-bed hospital we thol ht they would end
                                                            ug
               8  up with a kind of hospital that would not be consistent with
               9  the other facilities in Northbrook.
              10           Anyway, we developed a case.  The doctors spoke
              11  from the audience and they made some objections.  They felt
              12  that if there was to be a hospital certainly they should have
              13  been advised of it.  They had not been asked whether there was
              14  a need and they also didn't like the idea of someone coming
  SR
              15  in and establishing a hospital and possibly bringing doctors
              16  up from the City of Chicago, doctors who already were not

              17  there.
              18           This is vested interest but this is all right
              191 because this is all part of the pattern.
              20           Finally, Dave Kinzer got up and he spoke against
              21  this hospital from the point of view of just good general
              22  principles of community hospital planning and the fact that
              23  this did not fit into it at all.
              24           The attorney for the defense did get up and he
              25  talked u  and pointed up that in this particular area there
                         p

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE   N.W
  W'SHI .. ON, 0. C.


                                                                         225
      32       1 was a need for some 300 beds and this was in  contradiction  to
               2 our recomrwndations indicating that there was a lack of need
               3 of new beds and that the area was already well supplied.
               4           This was unfortunate but he was able to do  this.
               5           1 don't want to prolong this, but the Village Council
               6 took a vote and voted eight-to-nothing against  the  establish-
               7 ment of this hospital. ,they were subsequently sued by  the
               8
                 sponsors and we had to go through all of our testimony again
               9 before the judge, it was a District Court proceedings.  The
              10 judge has not yet announced his decision but we are  hoping
              11 that it will be in favor, of course, of Northbrook.
              12           Now this technique of using village councils  has
              13 been extremely effective and we have used it many, many  times.
              14 The whole case, of course, is that we try through education
  SR
              15 to get the village to make a decision relevant to whether  or
              16 not they wish a hospital in their area. After they  have  had
              17 an opportunity to review the total picture we think they  are
              18
                 in a better position to do this than they would be if they  had
              19 not had this exposure.
              20          Actually, the Mayor raised this question:  In the
              21 course of our discussion he said, "Dr. Klicka, why do we need
              22 to worry about this, why not let Dr. Yoder in Springfield  make
              23 the decision whether we need a hospital or not up here?"  I
              24 said, "That is your privilege, but it seems to m you make
              25 quite a thing about local governrmnt, that you should  retain

ACE-FEDERAL REPORTERS,  INC.
61 CONSTITUTION AvE,.   N.W
  WAsHi,Gr.l. D. C.


                                                                            226

     33         1  the decision whether you want a hospital in your  community  of

                2  any  type."

                3            DR. HALDEMAN: Carl, what authority  would  the  State

                4  Health officer have? could the licenser  program  take  con-

                s  sideration in Illinois?

                6            DR. KLICKA: That is right. If we  were  not  in  this

                7  picture, if we had not projected ourselves in this picture,

                8  the next step would have been for assuming the variation had

                9  been given for this group to subnit their plans  to  Spring-

              10   field.

              11             If Springfield would approve their plans on the

              12   basis of the physical nature of the plans, then  they  would

              13   proceed to build.
  SR          14             DR. HALDEMAN:  Do you have authority to disapprovo-'----@;Lhe
              15   application based on lack of need for the facility?

              16             DR. KLICKA: No. This is right  but  they  could  dis-

              17   approve it 'on the basis of it being an inadequate  facility

              18   and this would be the only way they could do it.  I am going

              19   to come to that example right now.

              20             MR. SIBLEY:  Could they not do it also on the

              21   inadequate financing or not?

              22             DR. KLICKA: It is possible  that  they'could  now.

              23             MR.  ROREM:  Nonprofit  corporation?  Proprietary?

              24             DR. KLICKA: No, no; this is the new  model,  this  iE

              25   the pseudo-voluntary group. This  had  two  corporations.  Thig

 ACE-FEDERAL REPORTERS, INC.
 261  CONSTITUTION  AVE,,  N,W.


                                                                           227

     34        1  was to be owned by a small group of seven or eight  men  and
               2   then they were going to lease this on a long-term lease arrance-
               3   ment to a nonprofit corporation who would pay rent to  this
               4  group, but there was an interlocking board.
               5            All these members were also on the board  of  this
               6  corporation.
               7            MR. COUSINS:  That is the Detroit picture?
               8            DR. KLICKA:  I thought this was the Chicago pattern.
               9  Most of them are coming up this way now, this is the fashion.
              10            DR. RAIDEMAN:  They have not any trouble at all with
              11  tnternal Revneue with this?
              12            DR. KLICKA:  No, not yet.

              13
                            MR. COUSINS:  Not so far.

              14
  SR                        MR. BUGBEE:  The owners must pay tax on the property.
              15            DR. KLICKA:  These people pay property tax.  Thoy
              16  pay property tax, of course, on this hospital but that is the
              17  only tax they pay.
              18            one of the biggest things they want this for, though,
              19  is to fool the public into thinking they have themselves not
              20
                  only something for nothing but they have themselves a good non-
              21  profit hospital and they are naive enough to think this is so.
              22
                  and it maybe, I don't know.

              23
                            Now this has worked out very well until recently and
              24 we are having a serious problem.  I want to jump to this
              25 because down here at a little place called Lyle,,.it is in

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUT'ON AvE.. N @W.
   WASH(NGrOl@ 0. C.


                                                                         228

       35      1  Gladwin County, there is a doctor who was unable to get
               2  staff privileges at the Hinesdale Hospital, he had a residence
               3  there but they didn't consider him good enough to have staff

               4  privileges.

               5            Another hospital here, he is on the staff of this

               6  hospital but he is always on probation because he never has

               7  his records up-to-date and also when it c@s his turn to take

               8  call for the emergency room he is never available.  So he is

               9  always on probation but he wishes to establish a 150-bed

              10  hospital.

              11            Now he started this program about two years ago and
              12  we were working very nicely with the State on this and I

              13  thought the thing was well scotched.  The reason it was

              14  scotched is because he was waking some serious mistakes.  He
  SR
              15  was putting it in the wrong kind of a structure.

              16            For instance, he was trying to attach this to his
              17  Medical Arts Building and his plan was terribly inadequate,
              18  so it was primarily on the plan that he just was not getting

              19  anywhere at all.

              20           We thought it was abandoned but all of a sudden
              21  here in the last few'months we find he is very active.
              22            I called the State and talked with Dr. Yoder.  After
              23  I had talked with his two lieutenants, George Lindsly and Roger
              24  sondag, more or less trying to get a progress report on where
              25  this thing stoode I got a total clamming up.  He said, 'What

 ACE-FEDERAL REPORTERS, INC.
261  CONSTITUTION  AVE.,  N.W.
   W4@@".,." 0. C.


                                                                           229
      36       1  has happened?  I found that Dr. Yoder is having very severe
               2  pressure brought on him by both Republican  representatives  and
               3  Democrat representatives to permit this fellow to go  ahead  and
               4  develop his hospital and the argument that they are using is
               5  free enterprise.

               6             'We cannot interfere with free enterprise in this
               7  country, this man should be permitted to build this  hospital.',
               8            Now, unfortunately, the State plan shows that
               9  presumed need for about 300 beds in this area.  This hospital
              10  in Hinesdale was a 200-bed hospital and just added 150 beds

              11  and now has 350.

              12            Neighborville has 150 beds and are ready to add as
              13  many beds as needed when needed.  They are running very
              14  comfortably.
  SR
              15           Up here there is another hospital,  Winfield  Hospital,
              16  which is one we have been working very closely with, tuber-
              17  culosis, in the process of converting it.  It will be open in
              18  a year adding 125 beds.  This is quite a ways out from Chicago
              19           As you talk with these three groups it is obvious
              20  to them that the State survey and plan is way, way off and
              21  they are very concerned about this.  Dr. Yoder said, "Carl, if
              22  you are going to do anything about this you better do it real
              23  fast because they are moving along with a new set of plans thal
              24  I am going to have trouble starting."
              25           So a new form of impleimntation,

ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AVE.  N.W


                                                                          230
       37      1             1 met with the Joint Conference Committee of this
               2   hospital and I have Met with the Administrator of this hospitpi-
               3  who is carrying the message to his Board of Directors.  This
               4  hospital is taking an action and they have written a letter
               5  to Yoder Protesting the development of this hospital.  The
               6  doctors on the staff individually are now writing.
               7            This hospital, the Board of Dire'ctors are sticking
               8  with Yoder.  I don't know whether we are,going to get any Of
               9  the doctors to write.  It is a very interesting story.
              10            There is confusion here as far as the medical staff
              11  is concerned, because there are three general practitioners on
              12 the staff of that hospital who are using lies and all other
              13 forms of defamatory statements against community hospital
  SR          14 planning, sow of it in protesting against the medical staff
              15 taking any position on'@-this.
              16           These doctors are suspect of being part of the
              17 financial picture of this hospital.  We don't know what they
              18 will do but we believe that they will also take an action
              19 protesting the construction.of this hospital.
              20           DR. HALDEMAN:  The only fly in the ointment, Carl,
              21 is that the State Hill-Burton Agency administering a licensure
              22 act is pretty.we7l obligated to approve a plan which meets
              23 their minimum standards of construction and equipment.
              24          DR. KLICKA:  That is right.
              25          DR. HALDEMAN:  I recognize there is a little gray

ACE-FEDERAL  REPORTERS,   INC.
61 CONSTITUTION AVE@    N@W
        D. C.


                                                                          231
       38      1  area in there where they may have a little latitude but they
               2  have got to act with a fair degree of consistency.  This thing
               3  has worried me in the administration of the Hill-Burton Act
               4  because our act says you shall approve the hospital if it is
               5  in accordance with the State plan.
               6            DR, KLICK&T  There is something even worse than

               7  that.

               8            DR. HAIDEMAN:  I am not saying.that is necessarily
               9  bad, it is bad that we don't have our State plans in better

              10  order.

              11           DR. KLICKA.-  Let's recognize and not say it is good
              12  or bad, just say it exists.  IRt's assume we can be the people
              13  who take the brunt of any --
              14           DR. HALDEMN:  I was wondering why you didn't aim thi!m
  SR
              15  at the local officials the way you did at Northbrook.
              is           DR. KLICKA:  Because Dr. Sinovitz(?) here controls
              17  the City Council.
              18           MR. ROREM:  If you had said that earlier we would
              19  have understood.
              20           DR. KLICKA:  Always leave a question for dramatic
              21  effect.
              22           DR. HAT.DEMAN:  Have you not been hitting pretty hard
              23. at the people who have the money for these types of enter-
              24  prises?
              25           DR, KLICKA:  I want to make one point and I will

 ACE-FEDERAL  REPORTERS,  INC.
2 61 CONSTITUTION AVE.   N@W


                                                                           232

      39        1 answer.
                2            One of the big problems that we are having here in
                3 trying to help Yoder, recognizing the fact that he  has  son*
                4 limitations, is that he has not kept us informed  about  this
                5 particular program.
                6           They usually have talked to us about other programs
                7 that have gone on but this one he has not.' Now  I  recognize
                8 that he has been.under such great pressure down there regarding
                9 this.
              10            When I pressured him as to why he didn't keep us in-
              11  formed he astourdeS me by saying on that they have to maintain
              12  confidentiality on some of these cases.
              13           They refer to the Hospital Licensing Act, and I am
  SR          14  going to quote:  "The Department shall make or cause to be
              15  made such inspections and investigations-as it deems necessary
              16            "Information received by the Department through fileil
              17  reports, inspection or otherwise authorized under this Act shall
              18  not be disclosed publicly in such manner as to identify
              19  individuals or hospitals except in a proceeding involving the
              20  question of licensure or revocation or in other circumstances
              21  that may be approved by the hospital Licensing Board."
              22           This is something I think we will want to  get  into
              23  tomorrow. The only reason I am mkking this point is  that  in
              24
                  trying to implement you have to use all kinds of methods, even
              25
                  to the point of trying to get around, if you will, legal

ACE-FEDERAL REPORTERS, INC.
261 CONST(TUTION AvE.,  N.W.
   W.S"Nar@,. D. C.


                                                               233
      Pk 40  i  obstacles to what I sincerely say are probably good attempts
             2  at Regional Hospital Planning.
             3           Naw in our monthly report we make a point which I
             4  keep referring to relevant to the relationship with the State
             5   agencies.
             6          This is another reason, George, that I am going into
             7  this in some detail, only to point out to you the obstacle
             8  that we have here in trying to implement something which we
             9  believe is proper.
            10          MR. BUGBEE: Haven't you got any Democrats or
            11 Republicans on your own Board?
            12          MR. SIBLEY: This is the next step. I think what we
            13 have to do if we cannot get this changed is not on our own
            14 Board but to get people down in the legislature whom we can
 SR
            15 use to counter pressure the Director of the Health Department,
            is push this where necessary.
            17         DR. HALDEMAN:  Imust be defensive of the State Hill
            18 Burton Agency, Mr. Sibley, because I have to administer a Hill-
            19 Burton Act presently.
            20         There is lots in it I don't like and believe rw, we
            21 get a lot of pressure on certain projects in which we are
            22 powerless to act. I think the answer is to change the
            23 legislation and not to require the Hill-Burton Act or try to
            24 get the Hill-Burton Agency to do something which is contrary
            25 to Dr. Yoder.

ACE-FEDERAL  REPORTERS,  INC.
!61 CONSTITUTION AVE.   N.W
  W4,HlNcr@l, D. C.


                                                                          234

      41       1            MR. SIBLEY:  I am all for that.

               2            MR. BUGBEE:  I don't think the pressure is an

               3  adhesive member of the Administration. I am assuming  that  if

               4  this fellow has pressure it is the Governor or somebody like

               5  that.

               6            DR. HALDEMAN: I happen to feel that  Frank  Yoder

               7  tries to do what his best.

               8            off the record.

               9            (Discussion off the record.)

              10            DR. KLICKA: I want to make just one  last  point.

              11            I am really mixed up at the moment with four years

              12  of experience now with regard to voluntary license,  voluntary

              13  planning relevant to franchise planning.  I think if I am

              14  on one side or the other I am stronger for the voluntary  side
  SR
              is  now than I ever have been before, particularly with my  recent

              16  experience with this.

              17            MR. ROREM: What do you mean on the  voluntary  side?

              18            DR. KLICKA:  I am talking about the system we use.

              19            MR. ROREM:  I donllt quite know.  As opposed to

              20  what?

              21            DR. KLICKA.-  As opposed to ba@ing the decision as

              22  to whether a hospital can be built or not in a manner  that

              23  can be determined by law by some State agency.

              24            One of the things that we are not is that we  are

              25  not subject to pressures.

ACE-FEDERAL  REPORTERS,   INC.
261 CONSTITUTION AVE..  N.W.
  WAS.;NGro" D, C.


                                                                        235

    42         1            MR. ROREM:  Do you mean, though, that the State

               2  agency now has too much power or too little or which?

               3            DR. KLICKA:  I am saying this: that with the powers
               4  they have they must administratively be subject to the types
               5  of pressures that a political politician can bring against any
               6  politic party.

               7            MR. ROREM:  But you leave it that way, you get your
               8  pressure in there too, is that it?  I am serious, Carl.  I am

               9  not trying to be f unny.

              10            DR. KLICKA:  I know you are.  I say this: this is,

              11  I think, the way it has to be done.

              12            DR. FAIDEMAN:  Well, I would like to paraphrase what
              13  Mr. Sibley has said, that I don't think implementation can be

              14  either public or private, I think it has to be a combination.
  SR
              15  We have got to use all means, and some of those are Government

              16  and some of those are not.

              17            1 would not want it in either one hand or the other,
              18  but I would want it in an effective combination-of private and
              19  public.
              20           DR. KLICKA:  This is precisely why I am not unhappy
              21  with the situation as it exists at the moment.  In other words
              22  I am saying that now what we do have is a combination of both
              23  and I think we have to be very careful before we throw more
              24  authority for implementation into the law because of the dange:s
              25  of political pressure in this field.  I thi@ this is a very,

 ACE-FEDERAL REPORTERS, INC.
 261 CONSTITUTION  AVF..  N.W.


                                                                         236

      43       1  very dangerous area.

               2            For many, many, many years people have  pointed  to

               3  the Savings and Loan Act in Illinois as being an  example  of

               4  the way this could be done. I realize now  that  the  Savings

               5  and Loan Act is running into great problems -- that  is,  the

               6  Administration in Illinois -- and the people who are running

               7  savings and loan organizations in Illinois,are saying  that

               8  the law is not effective because when the chips are down the

               9  director who has the ability to determine whether or not the

              10  savings and loan institution will be built on the basis  of

              11  need finds himself subject to such political pressure  that

              12  unfrotunately, he goes in the direction of the greatest need.

              13            DR. HALDEMAN:  I think we are going to have to

              14  adjourn.
  SR
              15            Do you want to reconvene at 8:30 in the  morning?

              16            (Whereupon, at 5:30 o'clock p.m., a recess was taker

              17  until Tuesday, July 9, 1963, at 8:30 o'clock a.m.)

              18

              19

              20

              21

              22

              23
   pk/Short
              24

              25

 ACE-FEDERAL REPORTERS, INC.
261 CONSTITUTION AvE.  N.W