United States General Accounting Office

GAO Report to Congressional Committees

September 1995 HEALTH CARE

SHORTAGE AREAS

Designations Not a

Useful Tool for

Directing Resources to

the Underserved

GAO/HEHS-95-200

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-259394 

September 8, 1995

Congressional Committees

This report was prepared at our own initiative in response to the growing number of federal

programs using health care shortage areas to determine who can apply for federal assistance.

Our report discusses how the Department of Health and Human Services’ systems for

identifying health care shortage areas are currently used to target resources to the underserved,

and Department proposals to combine these systems. We include recommendations to the

Congress that could result in a better match of federal program resources to needy

communities, and eliminate funding where there is not a demonstrated need for federal

assistance.

Mark V. Nadel

Associate Director,

 National and Public Health Issues
B-259394 

List of Addressees

The Honorable Bob Packwood

Chairman

The Honorable Daniel P. Moynihan

Ranking Minority Member

Committee on Finance

United States Senate

The Honorable Nancy L. Kassebaum

Chairman

The Honorable Edward M. Kennedy

Ranking Minority Member

Committee on Labor and Human Resources

United States Senate

The Honorable Michael Bilirakis

Chairman

The Honorable Henry A. Waxman

Ranking Minority Member

Subcommittee on Health and Environment

Committee on Commerce

House of Representatives

The Honorable William M. Thomas

Chairman

The Honorable Pete Stark

Ranking Minority Member

Subcommittee on Health

Committee on Ways and Means

House of Representatives

Page 2 GAO/HEHS-95-200 Health Care Shortage Areas
B-259394 

Page 3 GAO/HEHS-95-200 Health Care Shortage Areas
Executive Summary

Purpose Many Americans live in places where there are barriers to obtaining

primary health care. These locations range from isolated rural areas to

inner-city neighborhoods. In fiscal year 1994, the federal government spent

about $1 billion on programs for alleviating access problems in such

locations. To work effectively, these programs need a sound method of

identifying the type of access problems that exist and focusing services on

the people who need them.

The Department of Health and Human Services uses two main systems for

identifying such locations. One designates Health Professional Shortage

Areas (HPSAs), the other Medically Underserved Areas (MUAs). Over half of

all U.S. counties are designated as HPSAs or MUAs, and over another fourth

have HPSAs or MUAs somewhere within their borders. As part of the broad

federal effort to improve access to care, GAO reviewed the two systems to

determine (1) how well they identify areas with primary care shortages,

(2) how well they help target federal funding to benefit those who are

underserved, and (3) whether they are likely to be improved under

Department proposals to combine them.

GAO’s review included evaluating the systems’ criteria for identifying health

professional shortages and medical underservice, measuring the accuracy

and timeliness of the data in the databases and in a statistical sample of

HPSA applications, and discussing the systems with managers who use

them to allocate program resources.

Background The primary care HPSA system focuses on whether an area has a critical

shortage of physicians available to serve the people living there. A HPSA

can be a distinct geographic area (such as a county), a specific population

group within the area (such as the poor), or a specific public or nonprofit

facility (such as a prison). The system was first used in 1978 to place

National Health Service Corps employees and those providers receiving

scholarships or repayment of student loans in exchange for service in

shortage areas. Its use has expanded to nearly 30 other programs, each

having a different strategy to improve access to care. In fiscal year 1994,

combined funding for programs using the HPSA system was about

$473 million.

The MUA system identifies areas or populations with shortages of health

care services using several factors in addition to the availability of health

care providers. These factors include infant mortality rate, poverty rate,

and percentage of population aged 65 or over. Developed at about the

Page 4 GAO/HEHS-95-200 Health Care Shortage Areas
Executive Summary

same time as the HPSA system, the MUA system has been used for a more

limited range of programs—mainly to identify areas eligible for federally

funded community health centers. The Community Health Center

program, with fiscal year 1994 expenditures of about $663 million, is still

the system’s main user.

Federal programs use the HPSA and MUA systems in varying degrees as a

screen to determine eligibility for federal funding.

Results in Brief The HPSA and MUA systems do not effectively identify areas with primary

care shortages or help target federal resources to benefit those who are

underserved. For programs relying on the systems for these purposes,

there is little assurance that federal funds are used where most needed.

Data and methodology problems are widespread, severely limiting the

systems’ ability to pinpoint the extent of need in underserved areas. For

example, the HPSA methodology may be overstating the need for additional

physicians in HPSAs by 50 percent or more, and the designations in both

systems are often based on inaccurate or outdated information.

Even when the systems accurately identify needy areas, they often do not

provide the information needed to decide which programs are best suited

to the area’s particular need. As a result, a program without additional

screening processes may be applied that does not directly benefit the

specific subpopulation with insufficient access to care. An example is the

Medicare Incentive Payment program, which provides bonus payments to

all physicians treating Medicare patients in geographic HPSAs, even though

a different group than Medicare patients—such as migrant

farmworkers—may be those actually underserved.

The Department’s proposals for combining and streamlining the systems

are unlikely to solve the problems we identified. But fixing the systems is

not the only option—and probably not the best one. Instead, all but one of

the individual programs already have criteria and application processes in

place that may be more easily modified to identify where a need exists and

whether the program is an appropriate remedy.

Page 5 GAO/HEHS-95-200 Health Care Shortage Areas
Executive Summary

Principal Findings

Systems Do Not Effectively

Identify Shortage Areas

The HPSA methodology for identifying the extent of primary care shortages

is flawed. It tends to overstate the need for additional primary care

providers because it omits several important categories of providers

already in place. For example, it does not count National Health Service

Corps providers, U.S.-trained foreign physicians (unless they are

permanent residents), and nonphysicians such as physician assistants,

nurse practitioners, and nurse-midwives. These omissions have substantial

effects. For example, adding just physician assistants and nurse-midwives

known to be practicing in countywide HPSAs would decrease the number of

providers said to be needed in such HPSAs by at least 22 percent.

Similarly, the MUA methodology does not accurately identify the

geographic areas and populations that have the greatest health service

shortages. When the methodology was initially developed in the mid-1970s,

independent testing showed that rural areas designated as MUAs did not

differ greatly from non-MUAs in terms of access to care. The methodology

has remained virtually unchanged; but since 1986, the law authorizes the

Department of Health and Human Services to designate underserved

populations that do not meet the requirements of the MUA methodology, if

so recommended by a state governor on the basis of unusual local

conditions.

System Data Are Neither

Accurate Nor Timely

GAO estimates that about 20 percent of geographic HPSAs were designated

in error or without sufficient supporting documentation in the application

file. For example, the number of available physicians listed in some

applications was understated by up to 50 percent when compared with

information in other sources (such as physician directories) for the area.

HPSAs are also not being reviewed on a timely basis to determine if they

still qualify or should be dropped from designation. Department policy

calls for HPSAs to receive a comprehensive review every 3 years, but

31 percent of current HPSAs have not been reviewed within this time

period.

The list of MUAs has gone substantially unchanged since it was established

in 1976. Although new MUAs have been added, the overall list has not been

reviewed systematically to update scores or to propose areas for

dedesignation since 1981. GAO’s review of current countywide MUAs

Page 6 GAO/HEHS-95-200 Health Care Shortage Areas
Executive Summary

showed that if the designations were to be reviewed using 1990 data,

almost half would lose their designation.

Systems Do Not Effectively

Target Funding to the

Underserved

In many shortage locations, access to care is a problem for only part of the

population. For example, most residents in a city may have adequate

access to care, but the poor may not. However, most HPSA and MUA

designations do not identify the specific subpopulations having difficulty

obtaining access to care. Instead, they identify an area only by its

geographic boundaries.

This approach presents a problem because, unlike the Community Health

Center program, other assistance programs do not go beyond the MUA or

HPSA designation to identify who is underserved, and why. As a result, a

disconnect can occur between the reason for underservice and the remedy

provided. This disconnect is particularly apparent for the Medicare

Incentive Payment program. The program, which pays a 10-percent bonus

on Medicare billings, was established in 1987 to address concerns that low

reimbursement rates could discourage physicians from accepting

Medicare beneficiaries as patients. Current evidence indicates that this is

no longer a significant problem. However, in 1994, this program provided

almost $100 million in bonuses to physicians in all HPSAs, despite the lack

of evidence that Medicare beneficiaries in these areas have difficulty

obtaining access to care. GAO believes the use of this program as a remedy

for underservice merits close scrutiny.

Systems Do Not Merit

Upgrading

The Department has efforts under way to address some of the problems

with the two systems, but for several reasons, GAO questions whether these

efforts will provide significant benefits to the federal programs using them.

First, while the proposed changes may streamline the systems’

administrative processes, the more significant problems of identifying

underserved populations and the type of federal assistance needed will

remain. Addressing these problems could be difficult and costly, in part

because the data needed to verify primary care capacity in locally defined

service areas are often unavailable at the national level. Second, for all

programs except the Medicare Incentive Payment program, the

Department already has alternative criteria and application processes in

place that would appear to be more easily modified for targeting federal

resources. Third, neither of these systems is a suitable match for the

Medicare Incentive Payment program because neither specifically

identifies or addresses Medicare-related demographics.

Page 7 GAO/HEHS-95-200 Health Care Shortage Areas
Executive Summary

Department officials said that maintaining a national shortage designation

system for some other purposes (such as general planning and monitoring

with regard to health care shortages) would be useful. However, the

Department has another effort under way that may address these issues. A

cooperative agreement between the Department and the states has

provisions for identifying underserved populations and improving their

access to existing health care delivery systems by integrating federal

assistance with state and local resources.

Recommendations to

the Congress

GAO recommends that the Congress remove legislative requirements for

HPSA or MUA designations as a condition of participation in federal

programs. Instead, GAO recommends that the Secretary of Health and

Human Services be directed to develop and use program-specific criteria

that will best match the type of program strategy with the type of access

barrier existing for specific underserved populations. GAO also

recommends that the Congress direct the Secretary to suspend funding for

the Medicare Incentive Payment program until the Department can ensure

that funding is specifically targeted to situations in which Medicare

beneficiaries have a demonstrated difficulty accessing a physician because

of low Medicare reimbursement rates for primary care services.

Agency Comments GAO requested written comments on a draft of the report from the

Department of Health and Human Services, but did not receive the

comments in time for publication. However, GAO discussed an earlier draft

of the report with the Department’s management officials responsible for

the HPSA and MUA systems. These officials offered observations about GAO’s

analysis and findings, and their comments were incorporated as

appropriate.

Page 8 GAO/HEHS-95-200 Health Care Shortage Areas
Page 9 GAO/HEHS-95-200 Health Care Shortage Areas
Contents

Executive Summary 4

Chapter 1 

Introduction

12

Description of the HPSA and MUA Systems 16

How the HPSA and MUA Systems Are Used 18

Designating and Updating HPSAs and MUAs 21

HHS Plans to Combine and Revise the Two Systems 22

Objectives, Scope, and Methodology 22

Chapter 2 

Systems Do Not

Reliably Measure the

Extent of Primary

Care Shortages

24

Systems Do Not Consider All Primary Care Resources in Making

Shortage Determinations

24

System Methodologies Are Also Flawed in Other Ways 27

System Data Are Neither Accurate Nor Timely 29

Conclusions 34

Chapter 3 

Designation Systems

Do Not Provide

Information

Necessary to Target

Funding to the

Underserved

35

Designations Often Do Not Identify Demographics of the

Underserved

35

Program Interventions May Be Misdirected 38

Conclusions 40

Recommendation to the Congress 41

Chapter 4 

Major Changes

Needed in Approach

to Identifying Medical

Underservice

42

Proposed Changes Do Not Address Most Significant Problems 42

Improvements Needed May Be Difficult and Costly 43

Existing Alternatives to Revising the Systems 43

Conclusions 45

Recommendation to the Congress 45

Appendixes Appendix I: Scope and Methodology 46

Appendix II: Evaluations of the MUA Designation Methodology 50

Appendix III: Major Contributors to This Report 55

Page 10 GAO/HEHS-95-200 Health Care Shortage Areas
Contents

Table Table 1.1: Federal Programs Allocating Funds Using the HPSA

and MUA Systems

20

Figures Figure 1.1: U.S. Counties With HPSAs and MUAs 14

Figure 1.2: Types of Primary Care HPSA Designations 17

Figure 2.1: Years Since Last Update of Individual HPSAs, as of

August 1994

32

Abbreviations

DSD Division of Shortage Designation

HHS Department of Health and Human Services

HPSA Health Professional Shortage Area

IMU Index of Medical Underservice

MUA Medically Underserved Area

MUP medically underserved population

NHSC National Health Service Corps

OTA Office of Technology Assessment

USIA United States Information Agency

Page 11 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

The Department of Health and Human Services (HHS) spends about

$1 billion a year on programs for improving access to health care for areas

with shortages of primary care physicians and health care services. Many

of these programs depend heavily upon systems to identify and designate

specific areas and populations that are underserved. HHS has two such

systems: The Health Professional Shortage Area (HPSA) system identifies

underservice caused by a shortage of health professionals, and the

Medically Underserved Area (MUA) system more broadly identifies areas

and populations not receiving adequate health services for any reason,

including provider shortages. About 88 percent of all U.S. counties contain

HPSAs, MUAs, or both (see fig. 1.1).

Page 12 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

Page 13 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

Figure 1.1: U.S. Counties With HPSAs and MUAs

Page 14 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

HPSAs and MUAs in U.S. Counties

(Data as of June 1995)

Has a whole-county HPSA or MUA (1,658)

Has a partial-county HPSA or MUA (1,108)

Does not have a HPSA or MUA (375)

Page 15 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

Source: GAO analysis of data from HHS’ HPSA and MUA databases.

Description of the

HPSA and MUA

Systems

A primary care HPSA is an area designated by HHS as having a critical

shortage of primary health care providers.1

 These include areas with no

providers or areas with an insufficient number of providers to serve the

population living there. Designation as a HPSA is generally based on the

following:

• the specified geographic area must be rational for the delivery of health

services;2

• the area must have a population-to-provider ratio of at least 3,500 to 1 (or

3,000 to 1 under certain circumstances); and

• adjoining areas must have provider resources that are overused, more than

30 minutes travel time away, or otherwise inaccessible.

In 1994, there were 2,538 primary care HPSAs reporting a need for 5,133.8

full-time-equivalent physicians. About 45 million people reside in these

HPSAs.

HHS designates primary care HPSAs in one of three ways:

• a general shortage of providers within a geographic area, such as an entire

county or group of census tracts;

• a shortage of providers willing to treat a specific population group (such

as poor people or migrant farmworkers) within a defined area; or

• a shortage of providers for a public or nonprofit facility such as a prison or

hospital.3

As shown in figure 1.2, most primary care HPSAs are geographically

designated. Of the geographic HPSAs, 845 comprised an entire county and

1,107 comprised other types of self-defined geographic service areas.4

1

Separate HPSA systems are used to identify and track provider shortages for dental and mental health

care.

2

For example, a rational service area may be defined as a county, or group of contiguous counties,

whose population centers are within 30 minutes travel time of each other.

3

Hospitals are only eligible for designation when they have insufficient resources to treat underserved

populations from an existing area or population HPSA.

4

A geographic service area can be a portion of a county, portions of multiple counties, or an urban

neighborhood.

Page 16 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

Figure 1.2: Types of Primary Care

HPSA Designations

77% • Geographic

•18%

Population

•

6%

Facility

Note: Percentages do not add to 100 because of rounding.

Source: GAO analysis of data from HHS’ HPSA database.

An MUA is an area designated by HHS as having a shortage of health care

services. One major difference between an MUA and a HPSA is that

underservice in a HPSA is measured primarily as a shortage of health care

providers, while underservice in MUAs is measured using other factors as

well. Qualification as an MUA is based on four factors of health service

need: primary care physician-to-population ratio, infant mortality rate,

percentage of the population with incomes below the poverty level, and

percentage of the population aged 65 and older.

As of June 1995, 1,455 U.S. counties were designated in their entirety as

MUAs, and an additional 1,037 counties had at least 1 MUA designated within

them. According to HHS officials operating the system, there were about

3,100 MUAs in all. Like HPSAs, MUAs can be designated for all people within a

geographic area or can be limited to a particular group of underserved

people within the area. Most MUAs have been designated for geographic

Page 17 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

areas rather than population groups (exact figures are not available).

Unlike the HPSA system, however, the MUA system does not allow individual

facilities to be designated as underserved.

How the HPSA and

MUA Systems Are

Used

The current HPSA system was developed in 1978 as a means to designate

areas for placement of National Health Service Corps (NHSC) providers.

NHSC awards students scholarships or loan repayment for medical

education and training in exchange for service in areas with critical

physician shortages.5

 The types of primary care health professionals that

could participate in the program included physicians, nurse practitioners,

physician assistants, and certified nurse-midwives. In 1994, NHSC reported

having 1,147 physicians and 482 physician assistants, nurse practitioners,

and nurse-midwives working in HPSAs.

Besides NHSC, two other programs now require that a location be

designated as a HPSA to be eligible for participation. Like NHSC, the

Community Scholarship Program addresses provider shortages by

awarding grants to HPSAs for local scholarships in the health professions.

The Medicare Incentive Payment program attempts to ensure that

physicians treat Medicare patients by paying a 10-percent bonus on all

Medicare billings generated from a practice located in a geographic HPSA.

The MUA system was developed about the same time as the HPSA system but

independently of it. Authorized by the Health Maintenance Organization

Act of 1973, the MUA designation has been applied primarily in identifying

areas eligible to participate in the Community Health Center program. This

program awards grants for the operation of community health centers and

migrant health centers in qualifying areas. In fiscal year 1994, HHS provided

support for about 627 grantees providing services at more than 1,600 sites.

Centers that serve a designated MUA area or population also are eligible for

cost-based reimbursement under the Medicare and Medicaid programs.

Another 100 health centers (the so-called “look-alikes”) meet all

requirements of the Community Health Center program and receive

Medicare and Medicaid cost-based reimbursement, but do not receive

Community Health Center grant support.

Nearly 30 other programs use the HPSA or MUA systems to some degree,

though none rely on a HPSA or MUA designation alone to decide who can

apply for federal assistance. For example, nonphysician providers may

5

Federal intervention was considered justified only if the number of health care providers was

significantly less than adequate, indicating that the needs of these areas were not being met through

free market mechanisms or reimbursement programs.

Page 18 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

qualify for cost-based reimbursement under the Rural Health Clinic

program if they are located in a state-defined underserved area, HPSA, or

MUA. The remainder of programs in this category are health professions

education and training programs. Programs under titles VII and VIII of the

Public Health Service Act give funding preference to schools that place

graduates in medically underserved communities. Other programs, using

various designations of underservice, award scholarships or grants for

obligated service or training.

Together, the various programs that use the HPSA and MUA systems

accounted for more than $1 billion in funding and expenditures in fiscal

year 1994. Table 1.1 summarizes the various programs and their funding

levels.

Page 19 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

Table 1.1: Federal Programs Allocating

Funds Using the HPSA and MUA

Systems

Basic program Benefit provided

Number of

individual

programs

Fiscal year 1994

funding

Programs requiring HPSA designation to apply for federal funds

National Health Service

Corps

Awards scholarships

and provides loan

repayment for service

in a HPSA. 3 $126,720,000

Medicare Incentive

Payments program

Provides 10-percent

bonus payment on all

Medicare billings in

geographic HPSA. 1 98,332,938

Community Scholarship

Program

Awards grants to HPSA

communities for health

professions

scholarships. 1 478,000

Programs requiring MUA designation to apply for federal funds

Community Health Center

program

Awards grants for

operation of community

health centers. 1 663,000,000

Federally qualified health

center “look-alike”

Provides cost-based

reimbursement for

Medicare and

Medicaid services

provided by a federally

qualified health center. 1 a

Programs requiring HPSA, MUA, or some other designation as a medically

underserved community

Title VII/VIII Health

Professions Education and

Training Grant Programs

Training programs may

provide preference or

priority to schools

placing graduates in

underserved

communities. 24 151,834,000

Rural Health Clinic

program

Provides direct

cost-based

reimbursement for

Medicare and

Medicaid services

provided by nurse

practitioners, certified

nurse-midwives, and

physician assistants. 1 77,010,536

Indian Health Professions

Scholarship Grant Program

Scholarships for

service in HPSA or

other locale with large

Indian population. 1 7,702,000

(continued)

Page 20 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

Basic program Benefit provided

Number of

individual

programs

Fiscal year 1994

funding

Title III Mental Health

Clinical Traineeship

Trainees perform

obligated service in

HPSA or other site with

specific need for

psychiatric services. 1 5,943,000

Title X Family Planning

Services Training Program

Gives priority for grants

to institutions that place

providers in HPSAs. 2 4,500,000

Total 36 $1,135,520,474

aSources at the Health Care Financing Administration told us that funding for federally qualified

health center “look-alikes” could not be broken out from funding for all federally qualified health

centers.

Designating and

Updating HPSAs and

MUAs

Any person, agency, or community group may request designation of an

area, population group, or facility as a HPSA. Copies of each new request

are received and reviewed by the Bureau of Primary Health Care’s Division

of Shortage Designation (DSD). State representatives from the health

department, medical society, and the governor’s office are also asked to

review and comment within 30 days. DSD staff then check the application

data against national and state sources. They also resolve conflicts among

applicants, commenters, and data sources to the extent possible.

HHS must by law review annually each designated HPSA to decide if it is still

experiencing a shortage of health care providers. DSD does this by giving a

list of HPSAs to each state and asking the state to update the information. In

addition, Bureau policy requires HPSAs to provide data to DSD every 3 years

to support their continued need for the designation. HPSAs not providing

these updates are to be proposed for dedesignation in the Federal

Register.

MUAs are designated on a much different basis. The Department of Health,

Education, and Welfare6

 designated the original lists in 1975 and 1976 by

applying the four criteria (population-to-physician ratio, infant mortality

rate, poverty rate, and percentage of population that is elderly) to all U.S.

counties, minor civil divisions, and census tracts. All areas that ranked

below the county median combined score for the four criteria were

designated as MUAs. MUA designations have been added since then on the

basis of newer data and the same cutoff score. Since 1986, HHS has also

6

The Department of Health, Education, and Welfare is the predecessor agency to HHS.

Page 21 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 1 

Introduction

been able to designate new MUAs under an exception process if requested

to do so by a state’s governor on the basis of unusual local conditions.

MUAs also differ from HPSAs in that there is no requirement to update the

designations regularly. HHS officials managing the MUA and HPSA systems

told us that DSD no longer reviews the list of MUAs to decide whether any

should be dedesignated.

HHS Plans to

Combine and Revise

the Two Systems

HHS has an effort under way to combine and revise the HPSA and MUA

systems. According to HHS officials, this action is being taken to reduce

redundancies and differences in the application and administrative

processes of the two systems. While HHS officials told us that no changes

would be made before 1996, a draft working document says that HHS’ goal

is to replace the existing systems with one that

• is consistent for all primary care programs,

• has simpler data-gathering requirements,

• uses relevant indicators of need, and

• will not disrupt services in existing areas.

Objectives, Scope,

and Methodology

We reviewed the HPSA system as part of the broad federal effort to improve

access to care, and as a follow-up to a congressionally mandated review of

the role of federal health education and training programs in achieving this

purpose.7

While separate HPSA systems identify and track provider shortages for

primary care, dental care, and mental health care, our review of the HPSA

system focused on primary care HPSAs. We chose this focus because the

HPSA primary care system is by far the most heavily used for identifying

areas eligible for federal funds. We included the MUA system in our review

because of current HHS efforts to combine it with the HPSA system.

To review the extent to which the HPSA and MUA systems identify areas

with primary care shortages, we

• reviewed past evaluations of the criteria and methodology for designating

primary care HPSAs and MUAs and discussed the results with responsible

HHS officials,

7

Health Professions Education: Role of Title VII/VIII Programs in Improving Access to Care Is Unclear

(GAO/HEHS-94-164, July 8, 1994).

Page 22 GAO/HEHS-95-200 Health Care Shortage Areas
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Introduction

• identified the number of primary care providers in HPSAs and compared it

to the number reported by the HPSA system,

• selected a random sample of primary care HPSA applications and reviewed

whether designations were appropriate and accurately reflected in the

HPSA database, and

• compared how often the HPSA and MUA data were updated with

requirements in the law and HHS policy.

To determine the extent that the HPSA and MUA systems provide

information needed to target federal funding appropriate to meet the

needs of underserved populations, we analyzed the types of designations

requested by communities for their underserved populations and

determined the extent to which the designations identify who is

underserved in each HPSA and the reasons for underservice.

To determine whether proposed changes to the HPSA and MUA systems

would improve them, we discussed the purpose of the proposed changes

with HHS representatives operating the HPSA and MUA systems. We also

asked federal, state, and program participants how much the proposed

changes would help them identify underserved populations and provide

assistance appropriate to meet their needs.

Further details of our scope and methodology are presented in appendix I.

We did our work from November 1994 through June 1995 in accordance

with generally accepted government auditing standards.

We requested written comments on a draft of this report from HHS, but we

did not receive them in time for publication. We did discuss an earlier

draft of the report with HHS management officials responsible for the HPSA

and MUA systems. They made observations about our analysis and findings,

and we incorporated their comments in the report where appropriate.

Page 23 GAO/HEHS-95-200 Health Care Shortage Areas
Chapter 2 

Systems Do Not Reliably Measure the

Extent of Primary Care Shortages

Neither the HPSA nor the MUA system reliably measures the extent of

shortages in primary health care, providing little assistance to federal

programs in directing the $1 billion spent each year for alleviating

underservice. We identified two main reasons for the lack of reliability.

First, both systems have methodological problems, such as omitting

important categories of primary care providers from the calculations. In

the HPSA system, for example, these omissions may be overstating the need

for additional physicians in shortage areas by 50 percent or more. Second,

both systems rely on data that are often inaccurate or outdated. On the

basis of these data problems alone, we estimate that about 20 percent of

HPSA designations are in error or lack adequate supporting documentation.

Although we did not develop such an estimate for MUAs, many MUA

designations are very old and may be invalid. For example, about half of

the U.S. counties designated as MUAs would no longer qualify for

designation if updated using 1990 data.

Systems Do Not

Consider All Primary

Care Resources in

Making Shortage

Determinations

Both systems rely on a population-to-physician ratio in establishing the

need for additional primary care providers. The HPSA system bases its

shortage determinations on a population-to-primary care physician ratio of

3,500 to 1,8

 which identified a need for 5,134 physicians in shortage areas

in 1994. The MUA system, which uses a population-to-primary care

physician ratio as one of four factors in its underservice score, is less

dependent on the ratio. However, in making their calculations, both

systems exclude two categories of primary care physicians already

providing services in the shortage areas:

• NHSC and federal physicians. The systems exclude federally salaried NHSC

providers and privately salaried providers who are fulfilling an NHSC

service obligation in exchange for health professions scholarships or loan

repayment. There were 1,147 such physicians in 1994—the equivalent of

about 22 percent of the shortage identified in HPSAs. Other providers

employed by federal entities such as the Indian Health Service and the

Bureau of Prisons are also excluded. There is no centralized accounting

for the total number of federally salaried physicians.

• U.S.-trained foreign physicians with J-1 visa waivers. Such waivers allow

noncitizens who complete their residency training in the United States to

8

This ratio can be dropped to 3,000 to 1 in areas where high need is indicated, such as areas with high

poverty or high infant mortality rates.

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remain and practice if they are needed in underserved areas.9 While the

total number of such physicians practicing in underserved areas is

unknown, their numbers are substantial. For example, the Appalachian

Regional Commission and the Department of Agriculture approved at least

538 J-1 visa waivers for foreign physicians willing to practice in shortage

areas in 1993 and 1994 alone.10 This is equivalent to about 10 percent of the

reported shortage of providers in HPSAs.

Both systems also exclude several other categories of providers that

deliver primary care services:

• Nonphysician providers. These include nurse practitioners, physician

assistants, and nurse-midwives. Comprehensive data on the number of

such providers in HPSAs and MUAs are not available. However, NHSC

reported having 485 physician assistants, nurse practitioners, and

nurse-midwives of its own practicing in HPSAs in 1994. Data provided by

health professional associations in 1993 showed at least 369 nonfederal

physician assistants and nurse-midwives practicing in HPSAs.11 In total,

these two groups may be the equivalent of between 8 and 17 percent of the

shortage reported by the HPSA system.12

• Specialist physicians who provide primary care. Other research shows that

specialists such as general surgeons may provide a substantial amount of

primary care in areas where the population base is insufficient to support

a full-time specialty practice. Further, a 1991 study illustrated that the

availability of a full range of specialists to rural communities almost

doubles the number of people needed to support a family physician

practice from 2,000 to 3,990.13 In urban areas, the oversupply of physicians

9

Under a J-1 visa, foreign medical graduates can enter the United States for residency training if they

return to their own country to practice medicine for at least 2 years after their training is completed. In

effect, the waiver cancels the requirement to return to their own country, allowing them to practice in

the United States for up to 6 years under a renewable visa until permanent resident status is achieved.

10The Appalachian Regional Commission and the Department of Agriculture requested the largest

number of J-1 visa waivers, according to officials of the United States Information Agency (USIA)

administering the waiver process. While the agencies’ records showed that 538 waivers had been

approved, data from USIA showed an additional 181 physicians that had not yet been entered by the

Department of Agriculture in its database. See appendix I for further discussion.

11Data from the American Academy of Physician Assistants and the American College of Nurse

Midwives showed that at least 4,203 physician assistants and certified nurse-midwives were practicing

in counties with HPSAs in 1993. However, our analysis includes only those practicing in single-county

HPSAs because the number providing care to underserved populations in other types of HPSAs is

unknown.

12Opinions differ on the physician full-time-equivalency that should be attributed to nonphysician

providers. Counting these providers as a 0.5 full-time-equivalent in comparison to a full-time physician

would result in a range of 8 to 17 percent.

13L.L. Hicks and J.K. Glenn, “Rural Populations and Rural Physicians: Estimates of Critical Mass Ratios,

by Specialty,” Journal of Rural Health, Vol. 7, No. 4, Supplemental (1991).

Page 25 GAO/HEHS-95-200 Health Care Shortage Areas
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in various specialties is reportedly causing them to provide an increasing

amount of primary care services.14 Current data on the extent to which

specialist physicians are providing primary care in HPSAs and MUAs are not

available. However, our review of a sample of 23 single-county HPSAs

showed that most had specialist physicians in addition to primary care

physicians providing patient care, averaging 1 physician for every 1,968

people.15

HHS has various reasons for excluding these categories of health care

providers. These reasons were published in the Federal Register in 1980

and 1983 to explain or clarify the HPSA criteria and were confirmed by

more recent discussions with HHS officials. HHS’ rationale for excluding

NHSC and federal providers is that they probably would not serve in the

HPSA without the service obligation or federal employment, and counting

them could cause a community to lose its HPSA status. For similar reasons,

HHS regulations exclude foreign physicians unless they are permanent

residents. Although HHS originally planned to count nonphysician

providers as 0.5 of a physician full-time-equivalent in the HPSA

population-to-provider ratio, it excluded them from the final methodology

because their scope of practice varies by state, and communities using

them for care may be penalized in trying to establish a rural health clinic.16

HHS does not count specialist physicians because HHS believes the law

allows it to count only primary care physicians.

While we understand HHS’ rationale for excluding these providers from the

designation calculations, we do not agree with it for several reasons.

Omitting these providers has such a substantial cumulative effect that the

true extent of primary care available in underserved areas cannot be

determined if they are excluded. If the 1,147 NHSC physicians, 538 J-1 visa

waiver physicians, and 854 physician assistants and nurse-midwives

mentioned earlier were included in the HPSA calculations, the reported

14See conference proceedings for the Health Resources and Services Administration National

Conference at the Washington-Dulles Airport Renaissance Hotel, Virginia, on March 27-28, 1995,

Estimating Medical Speciality Supply and Requirements in a Changing Health Care Environment: The

Technical Challenge (Rockville, MD: Health Resources and Services Administration). See also B.

Starfield, Primary Care: Concept, Evaluation, and Policy (Oxford University Press, 1992).

15Fifteen of the 23 HPSAs in our sample had specialist physicians in addition to primary care

physicians with total population-to-physician ratios ranging from 300 to 1 to 3,298 to 1.

16Rural health clinics may only be established in HPSAs, MUAs, or state-designated underserved areas.

If counting nonphysician providers precludes designation, nonphysician providers would not be

eligible to establish a rural health clinic and receive direct cost-based reimbursement from Medicare

and Medicaid. Dedesignation does not affect rural health clinics once they are established.

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need for additional providers would be reduced by up to 50 percent.17 If

more complete data were available for all provider categories, this

percentage could be substantially higher.

Excluding primary care providers from the system also makes it difficult

for federal and state agencies to coordinate their efforts in addressing

underservice. For example, in 1994, NHSC had 19 providers in West Virginia

in response to the HPSA system’s reported shortage of 54 primary care

physicians there. However, this need for 54 physicians did not reflect the

presence of the NHSC providers or that other federal agencies had also

assisted in placing 97 foreign physicians in the state’s HPSAs in 1993 and

1994 alone.

Finally, understating the number of primary care providers severely limits

the usefulness of the system as a screen to identify which communities

should be eligible for additional program benefits. For example, NHSC

records show that 15 percent of the 576 providers placed in HPSAs in 1994

were in excess of the number needed for dedesignation, while other HPSA

vacancies went unfilled. The excess numbers of NHSC providers placed in

these HPSAs ranged from one to six.18

System Methodologies

Are Also Flawed in

Other Ways

Both systems have other problems with their methodologies that make it

difficult to identify and measure underservice. For the HPSA system, an

ongoing concern is that it does not assess the extent that existing primary

care resources in the community are being used. For the MUA system,

although a number of methodological weaknesses were reported in the

past, the methodology has not been revised.

HPSA Methodology Does

Not Consider the Extent

That Available Resources

Are Being Used

The HPSA methodology has no mechanism for measuring the extent that

existing primary care resources are insufficient to meet the demand for

care. HHS officials said that data for this purpose are unavailable using

current sources and would exclude the health needs of people who cannot

afford to seek care from a provider. However, past studies of the HPSA

criteria and methodology have pointed out that such a mechanism is

17As discussed in appendix I, this estimate was derived by subtracting the total number of providers

practicing in HPSAs from the total number reported as needed by the HPSA system. The range is

estimated at about 40 percent to 50 percent if physician assistants, nurse practitioners, and

nurse-midwives are counted as 0.5 to 1.0 full-time-physician-equivalent.

18Many NHSC placements were in areas needing less than 1 full-time physician to dedesignate the

HPSA. In these instances, we rounded the needed full-time-equivalent to 1 before comparing the

number of physicians needed in a community with the number NHSC placed there.

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needed because many factors influence the extent that communities use

primary care resources at a rate above or below the 3,500-to-1 ratio.19 For

example, one county in our sample was designated as needing 1 additional

physician even though the HPSA application showed that 42 of the 80

physicians surveyed within that HPSA were willing to take new patients.20

Of those willing to accept new patients, over half reported no patient

waiting time for appointments—another indication of additional capacity.

Assessing the extent that existing primary care services are insufficient to

meet the demand for care would also provide a better indication of

whether a provider shortage exists in these areas or whether there are

other barriers in accessing existing primary care resources. In the previous

example, only 15 of the 42 physicians with additional capacity would

accept all new patients; the remainder would only accept patients with

certain types of health insurance. In HPSAs such as this that appear to have

barriers to accessing underutilized capacity, it may be more appropriate to

give incentives for expansion of services rather than adding more

providers. For example, states are increasingly placing Medicaid patients

in managed care in an effort to make these underserved populations more

attractive to the existing physician workforce.

MUA Methodology Is

Limited in Ability to

Identify Underserved

Areas

The MUA methodology has a number of flaws that limit its ability to

accurately identify geographic areas and populations that have the

greatest shortages of health care services. The methodology—an index of

medical underservice—was developed within a short time frame using a

process that involved limited empirical testing. Because the developers

could not agree on a definition of “medical underservice,” a mathematical

model was developed to predict experts’ assessments of service shortages.

Subsequent evaluations of the model, however, found little significant

difference in the availability of health services between areas that were

designated as MUAs and areas that were not. These evaluations, which

pointed out other methodological limitations as well, are summarized in

appendix II.

The MUA designation methodology has remained virtually unchanged since

its development, despite improvements in U.S. health status and

resources. The methodology uses the same four criteria to determine the

19Evaluation of Health Manpower Shortage Area Criteria, Mathematica Policy Research, Inc., HRA

contract #232-78-0156 (1980), and M.L. Berk, A.B. Bernstein, and A.K. Taylor, “The Use and Availability

of Medical Care in Health Manpower Shortage Areas,” Inquiry, Vol. 20, Winter 1983, pp. 369-80.

20The methodology counts the full-time-equivalent each physician currently spends in patient care.

This may understate physician resources in areas where physicians are willing to work full time, yet do

not have enough patients to do so.

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MUA index score, and the cutoff score for MUA status (set at or below the

median score for all U.S. counties in 1975) remains the same. The only

changes to the methodology were made in 1981, when the weights for the

infant mortality rate and the population-to-physician ratio were adjusted

slightly. In 1986, the law was amended to allow the Secretary of HHS to

designate MUAs that score above the cutoff, if the state’s governor

recommends designation based on “unusual local conditions which are a

barrier to access or availability of personal health services.” Since 1986,

about 100 new medically underserved areas and populations have been

designated on the basis of this exception process.

System Data Are

Neither Accurate Nor

Timely

Numerous problems exist with the accuracy and timeliness of the data

used to obtain and maintain HPSA and MUA designations. Many HPSA

applications do not contain the data necessary to support the designation,

and data in the HPSA application often differ from those in the HPSA

database. The reliability of the HPSA system is also compromised by data

that have not been updated as required by law and HHS policy. For the MUA

system, because it has no requirements for periodic review and updating,

little has been done to keep the system’s information current.

Data for HPSA Designation

Often Incomplete or

Inaccurate

We estimate that about 380 of the 1,952 geographic HPSA designations were

made in error or without adequate supporting documentation.21 HPSAs

qualify for designation on the basis of three main factors: a

population-to-primary care physician ratio that equals or exceeds 3,500 to

1, an insufficient number of providers in adjacent areas to provide care,

and evidence of being a rational service area. Our review of a random

sample of 46 geographic HPSA applications found 17 instances in which

data in the file did not support one or more of these three factors.

Examples follow:

• Substantial differences existed in the number of physicians reported by

some communities and the number obtained by HHS’s Division of Shortage

Designation (DSD) from other sources. DSD verifies the number of

physicians reported by applicants against data available from the

professional associations. Any discrepancies and their subsequent

resolution are required to be documented in the HPSA file. However,

unresolved physician counts in some HPSA applications varied by as much

as 50 percent. These differences were enough to preclude HPSA designation

21This is the median error using a 95-percent confidence interval. The range of error lies between 131

and 633 of the 1,952 geographic HPSAs.

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in each case. For example, one HPSA needing fewer than 8.7 physicians to

qualify for designation reported having 7 physicians, while the American

Medical Association directory showed 14 physicians practicing in the area.

• Some HPSA applications did not include data supporting that the number of

providers in nearby communities was insufficient to provide care. DSD uses

a population-to-physician ratio of 2,000 to 1 in contiguous areas within 30

minutes of travel time from the HPSA population center for this purpose.

However, some HPSA files did not show that resources in all contiguous

areas were considered. For example, one applicant reported the number

of physicians in a town over 30 minutes away, but did not report the

number of physicians practicing in a town within 30 minutes travel time.

• In some HPSA applications, there was no documentation to support the

presence of rational service areas for primary care delivery. For example,

one single-county HPSA was so large that distances between its population

centers exceeded the 30-minute criteria for travel time to care. In another

example, two separate service areas asked to be combined and enlarged to

maintain the designation for one service area that no longer met the HPSA

criteria.

DSD was able to provide additional information to support 8 of the 17

designations GAO questioned. DSD officials said it was unclear why five of

the remaining nine HPSAs had been designated, and said that they would

follow up to resolve the discrepancies and propose dedesignations as

necessary. In the other four cases, they provided additional information

that we considered but still found to be insufficient to support the

designation. We attempted to project the financial impact of federal

funding provided to these areas, but because of program data limitations

were unable to do so with an acceptable degree of statistical confidence.

Another problem is that once the HPSA application data are verified, there

is still no assurance that they will be entered or accurately reflected in the

HPSA database. Of the 46 HPSA applications in our sample, 14 had

discrepancies between the verified data and the data existing in the

database for population, physicians, poverty rates, or differences in travel

distances or times to the nearest source of care. Although these

differences did not seem great enough to cause any of the 14 to lose their

designation as a HPSA, some may be great enough to affect eligibility for

placement of NHSC scholars or loan repayors.22 We were unable to

determine the effect these data entry errors or omissions had on the NHSC

22Each HPSA is scored using four factors: population-to-primary care physician ratio, poverty rate,

rates for infant mortality or low birth weight, and distance to care outside the HPSA. HHS establishes

cutoff scores each year to determine which HPSAs are eligible for placement of NHSC scholars and

loan repayors.

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program because, as explained in the next section, HHS sometimes uses

data other than those in the HPSA database to prioritize HPSAs for placement

of NHSC providers.

HPSA System Data Are Not

Updated on a Timely Basis

HPSAs are not being reviewed on a timely basis to determine if they still

qualify for federal assistance or should instead be dropped from

designation. Federal law requires HPSA designations to be reviewed

annually, a task that DSD has delegated to the states. However, DSD

annually obtains data from the Bureau of the Census and the National

Center for Health Statistics for many of the HPSA fields. DSD uses these

current data instead of the older system data to identify which HPSAs have

the greatest need for NHSC providers, but it does not use the current data to

update its database. DSD officials said they did not use the data to update

the database because doing so may cause some HPSAs to become

dedesignated. DSD considers it inappropriate to dedesignate a HPSA until it

can conduct a complete review of all data submitted by each HPSA during

the formal update cycle.

DSD’s policy calls for each HPSA to submit an update application to them

every 3 years for DSD review and verification that the HPSA designation is

still valid. However, DSD is conducting these reviews, at best, every 5 years.

Currently, about one-third of the HPSAs have not been updated in more

than 3 years and should be updated or deleted, according to DSD policy

(see fig. 2.1).

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Figure 2.1: Years Since Last Update of

Individual HPSAs, as of August 1994

68% • 3 Years or Less

•19%

4-5 Years

•12%

Over 5 Years

Not in Compliance With HHS Policy

In Compliance With HHS Policy

Note: Percentages do not add to 100 because of rounding.

Source: GAO analysis of data from HHS’ HPSA database.

DSD officials said they have extended the update period from 3 to 5 years

because they have not been able to keep up with the backlog of HPSA

applications. However, even the 205 HPSAs that did not reapply for HPSA

designation within the past 5 years have not been dropped from the

system.23

Delaying the update process means that HPSA designation is continued for

communities no longer requesting it. Communities generally do not

request dedesignation when federal assistance is no longer necessary;

instead, they simply do not reapply for designation during the update

cycle. However, when the designation for these outdated HPSAs is still on

23As we were concluding our review, DSD officials told us they were in the process of proposing

withdrawal of these designations.

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the books, federal programs may continue to provide them with resources,

perhaps to the detriment of those HPSAs with current designations. The

following examples illustrate this problem:

• NHSC policy is to place providers in HPSAs updated in the last 5 years.

However, in 1994, 9 percent of the NHSC providers were placed in HPSAs

that had not been updated for 5 years or more. Twenty-three percent were

placed in HPSAs that had not been updated in the past 3 years.

• Under the Medicare Incentive Payment program, Medicare pays bonuses

to physicians in all designated HPSAs regardless of when the HPSA was last

updated. Although we were not able to determine how much bonus money

was paid in HPSAs that had not been updated in the past 3 years, more than

$98 million was paid to physicians in HPSAs in 1994, and one-third of all

HPSAs were more than 3 years old.

MUA Designations Have

Not Been Reviewed Since

1981

There is no required schedule for periodically reviewing and updating MUA

data and designations, and even less has been done to keep this system

current than for the HPSA system. According to DSD officials, no systematic

attempt to update the MUA designations has been made since 1981, when

existing designations were reviewed against newer data. They told us that

at that time, areas that no longer qualified as MUAs with the newer data

were not always dedesignated, however, to avoid disrupting existing

community health center services. Community health centers are required

to serve MUAs or medically underserved populations to receive federal

grant support. Essentially, once an area or population has been

designated, it remains designated until the state’s governor requests

dedesignation. Since 1990, this has happened only once, when three

counties in North Dakota were proposed for dedesignation in 1994.

To show what might happen if designations were updated, we compared

an application of the MUA methodology to 1990 data for all U.S. counties

with DSD’s 1995 list of MUA-designated counties. We found that about 740

counties would qualify as MUAs on the basis of 1990 data, compared to

about 1,380 counties that DSD now has designated.24 Although according to

an HHS official there may be other reasons—such as continued eligibility

for community health center funding—not to delete some old

designations, maintaining the system with such obviously outdated

24The total 1,380 DSD-designated MUA counties cited here differs from the 1,455 MUA counties

mentioned earlier because of variations in how counties were defined in the two data sets we

compared. To make the comparison, we excluded variations in Alaska and Virginia. See appendix I for

details.

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information provides further evidence of the system’s unreliability in

identifying medically underserved areas.

Conclusions The HPSA system does not accurately measure the existing capacity of

communities to provide primary care services to its populations or the

additional number of providers needed for this purpose. Shortages in

many communities are overstated because the HPSA criteria do not

recognize differences in the types of health care providers used to obtain

care, or consider the extent that federal resources are already provided.

The system’s reliability is also questionable because HHS has difficulty

verifying and updating the HPSA data in a timely manner. Continued

reliance on the inaccurate and outdated MUA system likewise has resulted

in designations that are not valid indicators of primary health service

shortages, or where federal program funding is most needed.

The next chapter discusses other aspects of the HPSA and MUA systems that

hinder effective targeting of federal resources to the underserved.

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Designation Systems Do Not Provide

Information Necessary to Target Funding to

the Underserved

Even when the HPSA and MUA designations identify needy areas, they

generally do not provide the type of information needed by federal

programs to target assistance best suited to meet a location’s particular

needs. Because most HPSAs are defined as general geographic areas, the

designation does not identify the specific part of the population that has

difficulty accessing a primary care provider or the underlying reason for

this access problem. Similarly, although the MUA system can be used to

designate specific underserved populations, most designations encompass

everyone within a broad geographic area. As a result, federal programs

relying on the designations to identify the type and scope of assistance

needed may not provide assistance to those actually underserved in these

areas. A case in point is the Medicare Incentive Payment program, which

spent over $98 million in 1994 without any assurance that funds were used

to improve access for Medicare beneficiaries in geographic HPSAs.

Designations Often

Do Not Identify

Demographics of the

Underserved

Most HPSA designations do not provide information about the HPSA

community beyond defining that a shortage of providers exists somewhere

within the geographic area. Over three-fourths of all HPSAs in 1994 were

geographically designated. Such a designation assumes that everyone

within the general geographic area is underserved because the

population-to-primary physician ratio exceeds a standard of 3,500 to 1.

Only one-fourth of HPSAs were designated for specific types of underserved

populations or the facilities that treat them. Unlike geographic

designations, these designations provide some indication of the types of

access problems that exist in the community. For example, there are seven

categories of population-based HPSAs, primarily designated for specific

poverty populations such as the homeless or Medicaid-eligible, but which

also include designations related to cultural or language barriers

experienced by migrant farmworkers or immigrants. Facility HPSAs are

primarily used to designate shortages for prison populations but may also

include public or nonprofit medical facilities.

While designation as a geographic HPSA implies that federal assistance is

needed to address access problems for all residents of the HPSA, HHS and

state officials agree that specific subpopulations within the area may be

those actually at risk. While HHS and state officials believe that

underservice may affect entire populations living in areas with no

physicians or in remote rural areas, only 12 percent of the underserved

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the Underserved

populations live in such areas.25 The remaining underserved populations

live in urban areas or rural areas nearby. Access in these areas may more

likely be a problem for specific subpopulations, such as the poor.

The MUA system has similar problems. By combining the weights for four

factors into a single MUA score, the system produces scores that are

difficult to interpret and tend to obscure an area’s specific needs. While

communities may request designations for specific populations with

shortages of health care services, DSD officials told us this medically

underserved population (MUP) designation was not used much until the

1980s. Following program amendments in 1986 that permitted state

governors to request designations, about half of those new designations

have been for underserved populations.

Existing Disincentives for

Identifying Underserved

Populations

While the HPSA system allows designation for various types of underserved

populations, there are several disincentives to request them instead of the

geographic designation. First, communities with geographic designations

can participate in all federal programs, while the programs available to

population HPSAs are more limited. For example, the 10-percent bonus on

Medicare billings is available to all physicians in a geographic HPSA, but not

to those providing care in HPSAs designated on the basis of a poverty

population. Second, the application process for population designations

takes longer and is more difficult. Population designations require the

applicant to conduct a physician survey to determine the proportion of

services available to the underserved population and to explain why

access to care is a problem. These requirements do not exist for

geographic designations, which must only provide a

population-to-physician ratio.26 Finally, individual program requirements

for geographic HPSAs are more flexible. For example, in HPSAs designated

for poverty populations, 80 percent of the patients treated by an NHSC

provider must live below the poverty level, but in a geographic HPSA, NHSC

providers can treat anyone living within the defined geographic area.

To ensure access to the broadest range of federal assistance, HHS officials

encourage communities to use the geographic designations if possible,

even when a specific underserved population can be identified. As a result,

25This percentage includes HPSAs the system identifies as having no physician full-time-equivalents

and rural HPSAs that are not identified as being located near an urbanized area as defined by the

Department of Agriculture’s urban-rural continuum codes.

26Communities applying for geographic designation are required to conduct a physician survey if the

number of physicians exceeds the minimum standard. In such cases, the community must demonstrate

that it falls below the standard because some physicians are working only part time.

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the Underserved

population HPSAs appear to be designated only as a last resort for

communities not meeting the criteria for geographic designation. Our

review of HPSA withdrawals and designations made in 1993 also showed

that population designations are often used to maintain HPSA designation

for areas no longer qualifying on the basis of geography. For example, of

the 66 HPSAs that lost their geographic designation in 1993, about a third

were redesignated on the same day as population HPSAs.

Designations Have Not

Changed to Reflect the

Needs of Programs Using

Them

The general nature of most designations does not reflect the need of many

federal programs to target assistance to specific populations or

circumstances. Over the years, a variety of federal assistance programs

have been created to address underservice identified by the HPSA and MUA

systems. Initially, these programs served a broad purpose, requiring only

that the HPSA and MUA systems designate the geographic areas that required

additional providers or services. The NHSC program, for example, placed

providers in all types of urban and rural shortage areas, regardless of who

was underserved or whether underservice was caused by an undesirable

geographic location, an inability to support a physician practice because of

sparse or poor populations, or cultural or language differences of migrant

farmworkers or immigrants.

As new programs were added, they became more specific about the types

of populations they served and the scope of assistance they provided. An

example is the Medicare Incentive Payment program, which was expected

to assist Medicare patients having difficulty obtaining access to a

physician because of the low reimbursement rates for primary care

services. Another example is the Rural Health Clinic program. Recognizing

that many isolated rural communities are unable to support a physician

practice, this program provides cost-based Medicare and Medicaid

reimbursement to nonphysician providers such as nurse practitioners and

physician assistants providing care in these areas without direct physician

supervision. However, the HPSA designation system has not been changed

to serve the narrowed scope of these programs. This has raised concerns

that programs using the geographic designations to determine the type and

scope of assistance needed in communities, instead of identifying the

specific needs of underserved population within them, may result in

misdirecting hundreds of millions of dollars in program resources.

This change over time is of less concern with regard to MUA designations,

because fewer new programs use them. Moreover, the Community Health

Center program, which is the chief user of the MUA system, relies on MUA

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designations only as a screen for eligibility to apply for funding, according

to the program’s Director. Grant funds to support existing and new

community health centers are allocated on the basis of reported

performance and detailed need criteria within the community. Outdated

MUA designations still may be used, however, to certify rural health clinics

in areas that no longer have serious health service shortages.

Program Interventions

May Be Misdirected

When the access problems of specific underserved populations are not

identified, it is difficult to determine what kind of federal intervention

would be effective—and conversely, to avoid funding “solutions” that do

not address the real need. In regard to the MUA system, for example, a

study published shortly after its implementation expressed concerns that

the methodology did not adequately capture variations in ability to obtain

physician services between rural and urban areas, and among populations

of different racial and cultural compositions. Consequently, the study

concluded that programs using the MUA system could misallocate

resources away from those most in need of federal assistance.27

According to HHS officials operating the HPSA system, they are responsible

only for determining whether primary care physician shortages exist. The

specific programs using the HPSA system should determine who is

underserved in geographic HPSAs and whether their programs are

appropriate to address the access problems that exist there. However, to

date the programs have relied on the HPSA designations for this purpose

and have not developed mechanisms to determine whether their strategies

are appropriate for the underserved population in each HPSA. They have

not targeted or tailored their programs for individual HPSA needs. Some

examples follow.

• The NHSC program requires that providers placed in HPSAs serve 80 percent

of the HPSA population. While designations for the Medicaid or migrant

populations require that these specific populations be treated, there is no

mechanism to ensure that these same populations would be identified and

treated by an NHSC provider in a geographic HPSA.

28

• The Medicare Incentive Payment program pays all physicians in

geographic HPSAs a 10-percent bonus on Medicare billings even if Medicare

27John E. Kushman, “The Index of Medical Underservice as a Predictor of Ability to Obtain Physicians’

Services,” American Journal of Agricultural Economics (Feb. 1977), pp. 192-7).

28While NHSC providers in a geographic HPSA must agree to see anyone requesting care, they are not

required to seek them out as patients. Therefore, their location or hours of practice may be a barrier to

access for some underserved populations, such as migrant farmworkers.

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patients are not those actually underserved in the HPSA, and even if low

Medicare reimbursement rates are not the cause of underservice.

• The Rural Health Clinic program provides cost-based reimbursement for

Medicare and Medicaid services provided in any rural HPSA or MUA, even if

the rural health clinic will not accept the entire HPSA population as

patients. According to program managers at the Health Care Financing

Administration, there is no requirement to distribute rural health clinic

services throughout the underserved area or for rural health clinics to

accept patients regardless of ability to pay for services.

We did not directly audit these programs to determine the extent that

program controls were adequate to prevent misdirection of resources for

underserved populations in HPSAs and MUAs. However, we did find

evidence that such problems exist—especially in the case of the Medicare

Incentive Payment program.

Misapplication of the

Medicare Incentive

Payment Program

At present, there is no evidence that the Medicare Incentive Payment

program is targeted to improve access to care for Medicare beneficiaries,

even though over $98 million was paid to physicians in 1994 for this

purpose. Neither the HPSA system nor the program identifies the extent

that Medicare beneficiaries are underserved in geographic HPSAs or that

low reimbursement rates cause access problems for them.

The Medicare Incentive Payment program was established in 1987

subsequent to concerns expressed by the Physician Payment Review

Commission29 that low Medicare reimbursement rates for primary care

services may cause access problems for Medicare beneficiaries in rural

HPSAs. Under the program, all physicians providing services to Medicare

beneficiaries in a rural or urban geographic HPSA are eligible for a

10-percent bonus on Medicare billings.

The premise on which this program was created may no longer be valid in

that the basis for Medicare reimbursement has changed since 1987.30 In its

1995 report to the Congress, the Physician Payment Review Commission

found no evidence that provider shortages or low Medicare

reimbursement rates cause health care access problems for beneficiaries

29The Physician Payment Review Commission was established in 1986 to advise the Congress on

reforms in physician payment under the Medicare program.

30The Health Care Financing Administration has been implementing changes to the physician fee

schedule since physician payment reform measures were passed in the Omnibus Reconciliation Act of

1989. These changes generally increased reimbursement rates for primary care services and for

services in rural areas.

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in rural areas.31 Close to half of the $98 million spent under the program in

1994 was paid to about 82,000 rural physicians. While the Commission

found some evidence of a link between living in urban HPSAs and

access-to-care problems, beneficiaries cited the cost of services not

covered by Medicare and a lack of transportation as the primary causes of

access difficulties. These problems are unlikely to be solved by providing a

bonus on Medicare billings. The remaining half of the $98 million spent

under the program in 1994 was provided to about 96,000 physicians in

urban areas.

Further, the HHS Inspector General has questioned the appropriateness of

applying the program in HPSAs because it provides bonuses to specialist

physicians as well as primary care physicians, while the HPSA system only

identifies areas with primary care physician shortages. The Inspector

General reported that 45 percent ($31 million) of the Medicare incentive

payments made in fiscal year 1992 went to specialist physicians who

provided little or no primary care.32 Among primary care physicians, the

Inspector General concluded that Medicare incentive payments rarely

have a significant effect on their decisions to practice in underserved

areas.

Bureau of Primary Health Care officials agreed that the HPSA system is not

structured to effectively identify areas where the Medicare Incentive

Payment program should be implemented. However, they do not believe

they should modify the HPSA system for this purpose. Rather than add a

designation for underserved Medicare populations, they suggested that the

Health Care Financing Administration devise another system. While

recognizing that the HPSA system is inappropriate, officials at the Health

Care Financing Administration said that use of the HPSA system is

mandated by law and that they do not have an alternative system that

would effectively allocate funding under this program.

Conclusions While designating HPSAs on a strictly geographic basis may be appropriate

for areas with no providers or rural areas remote from other sources of

31The Physician Payment Review Commission found that Medicare beneficiaries, as a group, do not

appear to have particular problems securing access to care. The Commission analyzed the results of

the Health Care Financing Administration’s 1993 Medicare Current Beneficiary Survey and reported

that 97 percent of Medicare beneficiaries surveyed said they had no trouble with access to care during

the previous year. The Commission did not address the continued need for the Medicare Incentive

Payment program. However, it did support retaining and expanding the program in its 1994 report to

the Congress.

32Medicare Incentive Payments in Health Professional Shortage Areas: Do They Promote Access to

Care? HHS Office of Inspector General, Report No. OEI-01-93-00050 (June 1994).

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care, such a designation provides limited benefit in targeting assistance in

areas where specific subpopulations are at risk. In addition, although the

HPSA and MUA systems have criteria that allow communities to specifically

designate the types of populations that are underserved in the area, these

criteria do not identify the types of populations or access problems that

some federal programs are trying to address. HHS encourages communities

to maintain broad geographic designations because the designation

process is easier and federal programs will provide more benefits to them.

However, these broad designations may result in programs misdirecting

federal assistance away from those most likely to benefit from it. A prime

example is the Medicare Incentive Payment program, which currently has

no method to identify situations in which this federal intervention is likely

to improve access to care for underserved Medicare beneficiaries.

These problems, in conjunction with the methodological and

administrative problems discussed in chapter 2, raise questions about the

benefits of using the HPSA and MUA systems to identify areas where federal

program intervention is needed. Accordingly, the next chapter discusses

an alternative to replace the systems with individual program

requirements structured to match each program’s strategy to the various

needs of underserved communities.

While our primary focus in this work was reviewing the HPSA and MUA

systems rather than the programs that use them, we believe our findings

call for a reexamination of the utility of the Medicare Incentive Payment

program.

Recommendation to

the Congress

To prevent misdirection of federal program funds, we recommend that the

Congress direct the Secretary of HHS to suspend funding for the Medicare

Incentive Payment program until HHS can ensure that funding is

specifically targeted to Medicare beneficiaries having difficulty accessing a

physician because of low Medicare reimbursement rates for primary care

services.

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As currently implemented, the HPSA and MUA systems provide limited

benefit to federal programs in identifying those underserved populations

that require federal assistance to improve access to primary care. HHS

acknowledges that the HPSA and MUA systems have problems and is

proposing changes to address some of them. However, the most significant

problems will remain. Fixing the systems is not the only option—and

perhaps not the best one. The needed improvements may be difficult and

costly, and all but one federal program already have their own screening

processes in place that may be more easily modified to better match

federal resources with the needs of underserved communities.

Proposed Changes Do

Not Address Most

Significant Problems

As chapters 2 and 3 have described, the major problems leading to the

deficiencies in the HPSA and MUA systems are two-fold. First, the systems

contain outdated, inaccurate, and incomplete information. Second, they

are based on flawed methodologies that have not been effective at

specifically identifying which parts of the population are underserved and

why. The Bureau of Primary Health Care is proposing changes to

consolidate and streamline the administrative processes of the two

systems. But these proposals do little to improve the existing

methodologies’ ability to accurately identify areas that need additional

health care providers or services.

Under the proposed changes, communities would fill out one application

form instead of two for both HPSA and MUA designation, and states would

take on an increasing role in the designation and update processes. HHS is

also considering modifying some of the criteria, which is expected to

increase the overall number of designations. For example, HHS may expand

the definition of a poverty population from people whose incomes are

below 100 percent of the federal poverty level to those whose incomes are

below 200 percent, and may add race and ethnicity factors to obtain more

designations for disadvantaged populations.

These changes to the existing criteria will not significantly affect the

underlying methodologies’ tendency to overstate primary care provider

shortages or mask underserved populations living within broad geographic

designations. For example, the following three aspects of the systems’

operations will not change:

• HHS plans to continue measuring available primary care capacity with a

population-to-primary care physician ratio, without expanding the

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definition of providers counted or considering differences among

communities in utilizing primary care resources.

• HHS is also maintaining broad geographic designations that do not indicate

who in the area is underserved or why designation was requested.

• The system will continue to overstate primary care physician shortages in

areas where federal, state, or regional organizations have been successful

in promoting sustainable alternative delivery methods, such as rural health

clinics staffed by nurse practitioners and physician assistants.

Improvements

Needed May Be

Difficult and Costly

DSD officials acknowledge that their proposed changes will not address

many of the problems we identified. They said that many of the

improvements in data and methodology would require more time and

resources than are currently available at the federal, state, and local levels.

We agree that cost is an important consideration—and probably a

limitation—in making improvements. Solutions to many of the problems

we identified may be time consuming or difficult. For example, the

geographic area defined in many applications may be different from the

geographic area for which data are available at the national level. Census

data, health statistics, and provider information may be readily available

for a county, but not for specific areas or populations within the county. In

such cases, assessment of primary care needs may require surveys of

health providers or populations living in the area. These surveys could

prove expensive for the communities to perform and the results difficult

for HHS to verify.

Existing Alternatives

to Revising the

Systems

While some way of screening applicants for federal assistance is

necessary, most federal programs already have their own screening

processes in place. All but one of the federal programs discussed here

have their own criteria and conditions of participation that may be more

easily modified to target resources to the underserved. Program officials

continue to use the HPSA and MUA systems, in part because they are

required by law to do so, but in practice they could rely on their own

application processes to match community needs with program resources.

The Community Health Center program, for example, requires applicants

to demonstrate their target populations’ need for services by providing

data on geographic, demographic, and economic factors; available health

resources; and population health status.

Incorporating similar types of controls in each program could preclude the

need for a HPSA or MUA system, and result in better matching of program

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strategies to individual community needs than currently exists. Here are

several examples:

• The NHSC program uses the HPSA system as an initial screen to identify

which areas are eligible to apply for the program. However, facilities or

practices within HPSA communities wishing to apply for NHSC providers

must fill out additional applications to determine whether they meet the

program’s criteria and conditions of participation. These applications do

not currently require the applicants to show that they have unsuccessfully

tried to recruit a provider to treat a specific underserved population;

however, the program requirements could be modified to include this

information.

• The Rural Health Clinic program also relies on the HPSA and MUA systems

only as a screen for basic eligibility. The program has its own application

process and conditions of participation that must be met after designation

is obtained. Program applications currently do not require evidence

showing that cost-based reimbursement from Medicare and Medicaid is

needed to sustain a clinic, nor do they require the applicant to accept all

underserved people as patients. However, these requirements could be

modified to do so.

• The health professions education and training programs use the HPSA and

MUA systems as only two of several criteria in assessing whether some

applicants should receive preference or priority for federal grants or

scholarships over others. These program applications could be modified, if

necessary, to include evidence on the extent to which the applicants have

been successful in addressing underservice.

The Medicare Incentive Payment program is the only program that uses

the HPSA designation as the sole criterion for obtaining federal benefits.

However, as discussed in chapter 3, we question whether using the HPSA

system is appropriate for this program. The HPSA system does not have a

designation category for underserved Medicare beneficiaries, nor does it

identify them within broad geographic designations.

DSD and program managers acknowledge that the systems provide only

limited benefit to federal programs and are not really needed for them.

However, they believe that maintaining a national system is needed for

developing planning documents and monitoring primary care access.

While we agree, HHS already has another effort under way that may serve

this purpose. Using statewide primary care cooperative agreements, HHS

provides funding to all 50 states, the District of Columbia, and Puerto Rico

for the development and coordination of comprehensive primary health

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care services in areas lacking adequate numbers of health care

professionals or services.33 Under these agreements, state representatives

are responsible for (1) participating in the development of statewide

efforts to coordinate and implement primary care delivery systems,

(2) identifying special underserved populations and the types of programs

appropriate to incorporate these populations into the primary health care

system, and (3) integrating federal assistance and health care delivery

programs with existing local and state resources. Primary care access

plans developed by each state have the potential to provide a more

comprehensive and less duplicative way of gathering needed information

about the type and scope of programs needed in each community.

Aggregating this information at the national level may help in allocating

increasingly scarce resources to those programs that are most needed in

underserved communities.

Conclusions HHS is proposing changes in the HPSA and MUA systems, but these changes

will not result in improving the methodologies’ ability to reliably identify

shortages of primary care providers and services. In our view, the costs to

make the types of improvements needed in the designation systems are

not worth the time and benefit of doing so. For program purposes, it

would be easier to incorporate the appropriate screening requirements

into the existing conditions of participation for each program. For other

purposes, HHS could explore using information collected under the primary

care cooperative agreements to prevent duplication of effort in

establishing a national primary care monitoring system.

Recommendation to

the Congress

To assist underserved populations in accessing federal program resources

most appropriate for their needs, and to enable HHS in targeting its

resources more specifically to them, we recommend that the Congress

remove legislative requirements for HPSA or MUA designation as a condition

of participation in federal programs. Instead, the Congress should direct

the Secretary of HHS to incorporate the necessary screening requirements

into the conditions of participation of each program that will best match

the type of program strategy with the type of access barrier existing for

specific underserved populations.

33Primary care cooperative agreements are authorized under section 333(d) of the Public Health

Service Act as a technical assistance component of the NHSC program. These cooperative agreements,

together with the state/regional primary care associations authorized under sections 329(f)(1) and

330(f)(1) of the Public Health Service Act to provide technical assistance to Community and Migrant

Health Centers, are HHS’ main mechanism to support state-based planning to improve primary care

access to the underserved. HHS provided over $11 million of NHSC and Community Health Center

program funding to the states for the cooperative agreements in fiscal year 1994.

Page 45 GAO/HEHS-95-200 Health Care Shortage Areas
Appendix I 

Scope and Methodology

Our scope of work included all MUAs and primary care HPSAs. Although HHS

has separate HPSA systems to measure shortages of dental and mental

health care professionals, we did not review them.34 We chose to review

the primary care HPSA system because most federal funding allocated by

HPSA for underserved populations in fiscal year 1994 was based on the

primary care HPSA designations. We reviewed MUAs designated through

February 1995 and HPSAs designated through August 1994.

Determining the

Extent the HPSA and

MUA Systems Identify

Areas With Primary

Care Shortages

To address our first objective, we first reviewed the criteria and

methodologies of the systems, and past evaluations of them, and then

assessed whether the data in the two systems were accurate and timely.

Criteria and Methodologies

HPSA System We compared the number of primary care providers that would be

counted in HPSAs using the HPSA methodology with the number actually

practicing there. Noting that the methodology excluded several categories

of primary care providers, we attempted to quantify the impact this

exclusion had in overstating the need for additional providers in HPSAs.

However, we experienced some limitations in doing so. First, we could not

fully identify the total number of health professionals providing primary

care in each HPSA because no centralized data exist on primary care

providers’ practice locations, and because no comprehensive listing of

providers is required or included in the HPSA applications. Second,

although we could obtain data on certain categories of providers

practicing in HPSAs, we were again limited in that the data were available

only at the county, state, or national levels. Specifics follow:

• Our review of federal providers in HPSAs was limited to those salaried by

NHSC. We obtained these numbers from NHSC’s reports on its national field

strength prepared at fiscal year-end 1994. This report also provided the

number of NHSC providers employed by private entities but serving in a

HPSA under a service obligation for educational scholarship or loan

repayment.

34HHS also has four other HPSA systems for vision, podiatric, pharmacy, and veterinary services.

However, these systems are not currently used by HHS.

Page 46 GAO/HEHS-95-200 Health Care Shortage Areas
Appendix I 

Scope and Methodology

• We determined the extent that physician assistants and certified

nurse-midwives provide care in single-county HPSAs by comparing the zip

codes of their practice locations with those for HPSA locations. We

obtained the practice locations’ zip codes from the American Academy of

Physician Assistants and the American College of Nurse Midwives. We

matched zip codes with HPSA county codes by using a U.S. Department of

Agriculture conversion program.

• Our review of foreign physicians in HPSAs was limited to those practicing

under J-1 visa waivers requested by the Appalachian Regional Commission

and the Department of Agriculture in 1993 and 1994. We reviewed the

number of foreign physicians practicing under J-1 visa waivers because

they must practice in underserved areas as a condition of the waiver. We

chose the Appalachian Regional Commission and Department of

Agriculture because HHS and USIA35 identified them as sponsoring the

largest number of requests for J-1 visa waivers in the last 2 years. These

agencies provided us with the number of physicians they placed in each

state from January 1993 through January 1995.

MUA System We identified a number of independent evaluations that addressed the

methodology, criteria, and validity of the MUA system. These evaluations

are discussed in detail in appendix II.

Data Accuracy and

Timeliness

HPSA System We selected a random sample of 56 primary care HPSA applications. The

sample consisted of 46 geographic HPSAs, 5 population HPSAs, and 5 facility

HPSAs. We chose a greater number of geographic HPSA applications because

they make up 75 percent of all HPSA designations.

We decided whether the designations for our sample were valid by

comparing the data in each HPSA application with the criteria in legislation

and HHS regulations. We also independently verified that the file data were

current and correct using methods such as calling providers in the

community and measuring distances to care on highway maps. We

provided our results to HHS for its review and comment and then projected

the error rate to all geographic HPSAs.

35The USIA administers the J-1 Exchange Visitor program and is responsible for processing the J-1 visa

waivers.

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Appendix I 

Scope and Methodology

We also reviewed whether the data in the HPSA file were accurately entered

into the HPSA database. When the data in the HPSA application and database

were different, we analyzed whether these differences would affect the

HPSA’s designation status. We also tried to analyze the effect of differences

on the HPSAs’ eligibility for placement of NHSC scholars. However, we were

unable to do so because in some cases, DSD uses data and rules other than

those in the HPSA database for this purpose.

We determined whether the HPSA data were current by comparing the date

of the last update for each HPSA record with requirements in legislation and

HHS policy. We identified the number of HPSAs updated within the last year,

the last 3 years, and those that had not been updated in 5 years or more.

We then identified the amount of NHSC resources placed in outdated HPSAs

in 1994. We did this by matching the HPSA identification number of the

outdated HPSAs with those on NHSC’s 1994 Health Professional Placement

Opportunity Listing. We did not identify the amount of Medicare Incentive

Payment bonuses provided to physicians in these HPSAs because this

information is not available at the Health Care Financing Administration.36

MUA System We obtained a data file from DSD listing designated MUA areas and

populations that was current as of March 7, 1995. The file contained the

names and codes of counties, census tracts, and minor civil divisions that

were designated, usually with an MUA score, and sometimes with an

indication of specific target populations such as low-income or

Medicaid-eligible individuals. We compared DSD’s current list of

whole-county MUA designations with MUA scores calculated with 1990 data

for all U.S. counties from HHS’ Area Resource File.37

36Physician bonuses are not paid using HPSA identification numbers. According to Health Care

Financing Administration officials, matching bonuses with HPSA locations would require obtaining

physician addresses from the 46 Medicare carriers and converting them to a specific HPSA

identification code.

37We used a U.S. county data set developed by researchers at the Cecil G. Sheps Center for Health

Services Research, University of North Carolina at Chapel Hill. This data set included MUA scores for

all U.S. counties, calculated by the University of North Carolina researchers using DSD’s MUA formula

and weights and 1990 data from the researchers’ data set, which was based on HHS’ Area Resource

File. We used the District of Columbia and all states except Alaska and Virginia, which we excluded

because of differences in how the University of North Carolina file and the DSD file defined counties.

Page 48 GAO/HEHS-95-200 Health Care Shortage Areas
Appendix I 

Scope and Methodology

Reviewing the

Systems’ Usefulness

in Targeting Federal

Resources

HPSA System We looked at how well the purpose of the HPSA designations matched the

purposes of the various programs that use the HPSA system to allocate

resources. We first reviewed the types of designations available in the HPSA

system and analyzed whether the designations of geographic, population,

or facility HPSAs identified the demographics of the underserved

population and the reasons underservice exists. We then interviewed

federal and state program managers to learn whether the system provided

the information they needed to target resources to the underserved, and

the extent to which they relied on the HPSA system for this. We also

reviewed the conditions of participation for programs using the HPSA

designation to determine whether they provided incentives or

disincentives to obtain more general or specific types of HPSA designations.

MUA System DSD’s list of current MUA designations did not include data necessary to

determine how many MUAs were geographic areas only (usually whole

counties or groups of census tracts) and how many specified target

populations within geographic areas. We interviewed the Director of the

Community Health Center program to learn the extent that the program

relies on the MUA system for funding decisions.

Reviewing Proposed

Changes to the HPSA

and MUA Systems

To accomplish our third objective, we first read drafts of HHS’ proposed

changes to the systems in fall 1994 and spring 1995. We obtained these

drafts while participating in a 2-day expert advisory panel meeting

convened by the Bureau of Primary Health Care to discuss its proposal.

We also discussed the types of problems these changes were intended to

address. Specifically, we concentrated on whether the changes are likely

to address the methodological problems we found and that were

previously identified in HHS-contracted studies. We discussed possible

changes to the criteria and methodologies with state and federal

representatives from HHS’ Bureau of Primary Health Care, Agency for

Health Care Policy and Research, National Center for Health Statistics,

and the Health Care Financing Administration.

Page 49 GAO/HEHS-95-200 Health Care Shortage Areas
Appendix II 

Evaluations of the MUA Designation

Methodology

As part of our work to determine whether the MUA system accurately

identifies areas and populations needing federal assistance, we analyzed

published research on the MUA designation methodology. We identified

evaluations of the MUA designation system published since the system went

into effect in 1975, determined which were most relevant to the scope of

our work, and summarized their findings.

In summary, these studies support a common theme—that the MUA

designation system is neither accurate nor effective in identifying

underserved areas. The methodology (using the Index of Medical

Underservice, or IMU) is questionable because it was not based on a clearly

defined concept of medical underservice. Moreover, the methodology

(including four factors, formula, weights, and cutoff point) was developed

by consensus of expert judgment, with limited empirical testing. Scores

produced by the index are difficult to interpret, and by combining weights

for four factors into a single MUA score, they may obscure an area’s specific

problems.

Further, the MUA methodology has been tested empirically in at least three

studies, which all concluded that the index has limited value in designating

underserved areas. These studies found that the index did not discriminate

effectively among levels of need for health services and was not an

accurate predictor of ability to obtain physician services. Because the MUA

methodology does not help determine whether additional resources would

produce greater benefits at MUA sites than at non-MUA sites, the studies

concluded that the MUA methodology should be used with caution in

funding allocations, and should not be used for other health planning

purposes.

We have summarized the findings of the relevant evaluations here.

Health Services Research Group, Center for Health Systems Research and

Analysis, University of Wisconsin, “Development of the Index of Medical

Underservice,” Health Services Research, Summer 1975, pp. 168-80. The

group reported on how it developed the IMU for use by the Bureau of

Community Health Services in designating medically underserved areas

for the federal Health Maintenance Organization program. There was a

short time frame: 3 months to report criteria and 12 months to report the

first list of underserved areas to the Congress. Health experts were unable

to agree on a definition of “medical underservice.” Therefore, a

mathematical model was developed to predict experts’ relative

assessments of scarcity of personal health services. The result was a

Page 50 GAO/HEHS-95-200 Health Care Shortage Areas
Appendix II 

Evaluations of the MUA Designation

Methodology

“self-explicated multiattribute utility model,” based on empirical work in

three states, delphi procedures, and consensus conferences. The group

cited the limitations of their approach as follows: (1) sites and experts to

validate the model were not randomly selected, (2) expert consensus was

less strong in some large metropolitan areas (Detroit), and (3) it was

impossible to evaluate whether additional personal health services

produced more benefits at MUA sites than at non-MUA sites.

Jere A. Wysong, “Viewpoints: The Index of Medical Underservice:

Problems in Meaning, Measurement, and Use,” Health Services Research,

Summer 1975, pp. 127-35. This analysis outlined fundamental weaknesses

with the IMU, including (1) lack of definition of “medical underservice” and

confusion with other concepts such as availability, accessibility, and

health status; and (2) difficulty interpreting values obtained by the index,

in that any particular index value can be obtained from very different

combinations of values of individual variables, and extreme values for one

or two variables can determine the index value. The author concluded that

the index had limited value in designating medically underserved areas.

The author questioned use of a single cutoff score instead of a range,

recommended considering scores on individual variables, and cautioned

against use of the index for other health planning purposes.

Joel C. Kleinman and Ronald W. Wilson, “Are ’Medically Underserved

Areas’ Medically Underserved?” Health Services Research, Summer 1977,

pp. 147-62. These analysts used data from the 1973 and 1974 Health

Interview Survey of the National Center for Health Statistics to evaluate

MUA designations by comparing respondents living in rural

(nonmetropolitan) MUAs with those living in rural non-MUAs, and then by

comparing each rural group with respondents in metropolitan counties.

The authors looked for differences in health status, access, and utilization

of health services. They found no difference between rural MUAs and

non-MUAs in number of physician visits per person per year, and a slight

difference in proportion of residents with one or more visits per year (not

adjusted for need). MUA residents reported poorer health status, used some

preventive services less, and used nonsurgical hospitalization more than

non-MUA residents. The practical significance of the differences was

unclear. The authors concluded, “In terms of reported problems with

access to medical care, the differences between MUAs and [non-MUAs] were

not large.” Moreover, because the IMU was based on a consensus among

experts that had no explicit basis, it was difficult to know what differences

between MUAs and non-MUAs would be expected. The authors concluded

that for a better methodology to identify underserved populations, the

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Appendix II 

Evaluations of the MUA Designation

Methodology

concept of medical underservice should be closely examined and more

carefully defined. Ideally, appropriate standards of care should be agreed

upon and deviations from those standards defined as underservice. As an

interim measure, they recommended using the Health Interview Survey

data to develop and test indirect indexes of underservice.38

John E. Kushman, “The Index of Medical Underservice as a Predictor of

Ability to Obtain Physicians’ Services,” American Journal of Agricultural

Economics (Feb. 1977), pp. 192-7. This study evaluated the IMU as a

predictor of a population’s ability to obtain physician services, using 1976

claims data from the California Medi-Cal (Medicaid) program. The author

expressed concerns that the IMU did not adequately capture variations in

ability to obtain physician services between rural and urban areas, and

among populations of different racial and cultural compositions. He found

that the IMU explained only about one-fifth of the variation in the number

of claims across counties. When nonwhite and urban population variables

were added to the IMU, it explained nearly half of the variation in claims.

The author concluded that the IMU “is a statistically significant predictor of

ability to obtain physicians’ services under California’s Medi-Cal program,

but it does not predict accurately.” The IMU did not adequately reflect

barriers to physician services faced by nonwhites and persons who live in

rural areas, and thus programs using the IMU may misallocate resources

toward whites and urban areas.

Richard C. Lee, “Designation of Health Manpower Shortage Areas for Use

by Public Health Service Programs,” Public Health Reports, Vol. 94, No. 1

(Jan.-Feb. 1979), pp. 48-59. In addition to citing questions raised by other

researchers about the specific factors included in the IMU and the degree to

which the IMU actually discriminates between underserved and adequately

served areas, this report stated, “A perhaps more significant shortcoming

of the MUA designation procedure is the fact that it does not generally

involve the definition of rational service areas or take into account

conditions in contiguous areas.” Problems also stem from the IMU’s

combination of county data for two factors (population-to-physician ratio

and infant mortality rate) with census tract or civil division data for the

other two factors (poverty and aged indicators) to designate subcounty

MUAs.

Frederick J. Kviz and Jacquelyn H. Flaskerud, “An Evaluation of the Index

of Medical Underservice: Results From a Rural Consumer Survey,”

38For details of survey methods and terms, see National Center for Health Statistics, Current Estimates

From the Health Interview Survey, U.S. 1974, Vital and Health Statistics Publications, Series 10, No.

100 (Sept. 1975).

Page 52 GAO/HEHS-95-200 Health Care Shortage Areas
Appendix II 

Evaluations of the MUA Designation

Methodology

Medical Care, Vol. 22, No. 10 (Oct. 1984), pp. 877-89. The authors evaluated

the validity of the IMU by examining its ability to discriminate among levels

of need for health services reported by rural consumers in response to a

random household mail survey done in 1978 in rural counties in six

midwestern states (HHS Region V; 2,563 completed questionnaires,

cooperation rate was 65.4 percent). IMU was not found to be an effective

discriminator among levels of need for health services as reported by

survey respondents; MUA vs. non-MUA designation based on IMU values was

even less discriminatory. IMU accounted for only a small proportion (less

than 10 percent) of the variance in six criterion measures: (1) usual source

of care, (2) used services outside county of residence, (3) number of

nonemergency outpatient visits, (4) number of serious symptoms,

(5) self-evaluation of health status, and (6) satisfaction with available

health services. The authors concluded: “The findings of this study do not

support the validity of the IMU as an indicator of the relative need for

health services; we seriously question the utility of the IMU in appropriately

determining funding priorities for health services programs. . . . it is

recommended that use and interpretation of the IMU be made with caution

and supplemented by additional data as much as possible.” (This study

was limited to rural areas and predominately white populations.)

Office of Technology Assessment, Health Care in Rural America, OTA-H-434

(Washington, D.C.: U.S. Government Printing Office, Sept. 1990). The

Office of Technology Assessment (OTA) analyzed data on HPSAs and MUAs in

a study of rural health. Using 1981 data, there were 2,440 designated

whole- and partial-county MUAs. Of these, 1,328 whole-county MUAs and 567

partial-county MUAs were in rural areas. OTA reported that these data on

MUAs were outdated and probably inaccurate because initial MUA

designations did not assess whether subcounty areas met the “rational

service area” criterion. Some designated areas may not actually be

underserved.

Donald H. Taylor, Jr., and others, The Measurement of Underservice and

Provider Shortage in the United States: A Policy Analysis, North Carolina

Rural Health Research Program, Cecil G. Sheps Center for Health Services

Research (University of North Carolina at Chapel Hill: Dec. 1994). This

report, which focused on the HPSA system, included an analysis of the MUA

designation system. The authors assessed the change in the number of

whole counties having an IMU score of 62 or less (the cutoff for MUA

designation) from 1980 to 1990, using HHS’ Area Resource File data for all

U.S. counties. In 1980, 1,066 whole counties had IMUs at or below 62, and

2,014 counties scored over 62. In 1990, 784 whole counties had IMUs at or

Page 53 GAO/HEHS-95-200 Health Care Shortage Areas
Appendix II 

Evaluations of the MUA Designation

Methodology

below 62, and 2,296 scored over 62. The authors attributed this change to a

decrease in severity of underservice in whole-county measures from 1980

to 1990, due to changes in the variables that make up the IMU and the lack

of change in the IMU cutoff of 62. The authors noted that since 1980, in

general, in the United States the number of primary care physicians has

grown, infant mortality rates have declined, the proportion of the

population living in poverty may be about the same, and the proportion of

the population over age 65 has increased. The authors concluded that it is

unclear what the IMU measures, and there is evidence that the IMU does not

adequately identify populations with serious access problems or levels of

underservice.

Page 54 GAO/HEHS-95-200 Health Care Shortage Areas
Appendix III 

Major Contributors to This Report

Sarah F. Jaggar, Director, Health Financing and Public Health Issues

Frank Pasquier, Assistant Director, (206) 287-4861

Lacinda Baumgartner, Evaluator-in-Charge

Timothy Clouse, Evaluator

Ellen Smith, Evaluator

Stan Stenersen, Evaluator

Evan Stoll, Computer Specialist

Julie Rachiele, Technical Information Specialist

(108218) Page 55 GAO/HEHS-95-200 Health Care Shortage Areas
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