MCoPntRraRcetfNeorse.nc:e5N0o0s-.9:4-8010915,1,8530009-95-0032 s , C,?-07-)3 Baltimore,m 212I EVALUATIONOFTHEGRANTPROGRAMFOR RURALHEALTHCARETRANSITION 1996ANNUALPROGRESSREPORT March11,1996 Authors: JeanetteBergeron CharlesNagatoshi MonaShah Submittedto: Submittedby: HealthCareFinancingAdministration MathematicaPolicyResearch,Inc. MailStop3-C-15-06 P.O.Box2393 7500SecurityBoulevard Princeton,NJ 08543-2393 Baltimore,MD21244-1850 (609)799-3535 ProjectOfficer: ProjectDirectors: SiddharthaMazumdar ValerieCheh CraigThornton DeputyProjectDirectors: JeanetteBergeron CharlesNagatoshi ACKNOWLEDGMENTS Thisreportcouldnothavebeenwrittenwithoutthehelpofmanypeople. Staffofthehospitals intheRuralHealthCareTransitiongrantsprogramcompletedourdetailedformsthoroughlyand participatedintelephoneinterviewscandidly. Withouttheirhelp,ourunderstandingoftheirgrant projects,environments,andoperationswouldbeminimal. ThestaffofNationalBiosystemsand HCFAalsoprovideduswithinformationabouttheapplicantsandgranteesthatwewouldnothave beenabletocollectourselves. Finally,severalstaffatMPRprovidedtheinformationandguidance to makethisreport useful, readable, and interesting. LaraineSchwartzprovided technical assistancetothegranteesincompletingthemonitoringformsandcodedtheformsforourdatasets CraigThorntonprovidedcontinualguidanceandinsight. JudithWooldridgereviewedthereport, whichhasbenefitedfromherextensiveexperienceinruralhealthissues. LauraBerensonedited thereport,andMarjorieMitchell, MonicaCapizzi,CindyCastro,andJillMillerproducedit. iii iv CONTENTS Chapter Page EXECUTIVESUMMARY xv I INTRODUCTION 1 A. LEGISLATIVEHISTORYANDPURPOSEOFTHEGRANT PROGRAM 1 B. THENUMBERANDDISTRIBUTIONOFGRANTEES 4 n SELF-REPORTEDPROGRESSOF1993GRANTEES 7 A. STATUSOF1993GRANTEES 7 B. CHARACTERISTICSOFGRANTEEPROJECTS 7 1. GranteeObjectives 7 2. ReportedChangesinObjectives 10 C. PROGRESSOF1993GRANTEES 11 D. GRANTEXPENDITURES 14 III SELF-REPORTEDPROGRESSOF1994GRANTEES 19 A. STATUSOF1994GRANTEES 19 B. CHARACTERISTICSOFGRANTEEPROJECTS 19 1. GranteeObjectives 19 2. ReportedChangesinObjectives 23 C. PROGRESSOF1994GRANTEES 24 D. GRANTEXPENDITURES 27 v CONTENTS(continued) Chapter Page IV 1995GRANTSOLICITATIONPROCESSAND APPLICANTCHARACTERISTICS 31 A. SOLICITINGANDSCORINGTHEAPPLICATIONSAND SELECTINGGRANTEES 31 B GEOGRAPHICDISTRIBUTIONOFTHEAPPLICANTS 33 C. FEDERALANDEXTERNALFUNDING 38 1. FederalFunding 3g 2. ExternalFunding 39 D. COMPARISONOFAPPLICANTSFROM1989THROUGH1995 . 41 E COMPARISONOFGRANTEESFROM1989THROUGH1995 42 V HOWDOGRANTEESDEALWITHMANAGEDCARE? 47 A. TELEPHONEINTERVIEWSWEREUSEDTO COLLECTDATA FROMASAMPLEOFGRANTEES 49 1. SelectedStateswithGranteesandStatewide MedicaidManagedCareReforms 49 2. SelectedGranteesinStateswiththeStrongest ManagedCarePresence 50 B MOSTGRANTEESPARTICIPATEDINMANAGED CARECONTRACTING,MANYCONTRACTS STILL PAIDHOSPITALSFEE-FOR-SERVICE 53 C AMAJORITYOFGRANTEESREPORTINGEFFECTS REPORTEDNEGATIVEEFFECTSFROMMANAGED CARECONTRACTING 56 1. ReductioninReimbursement 58 2. ReductioninUtilization 61 3. AdministrativeBurden 63 vi CONTENTS(continued) Chapter Page V(continued) D GRANTEES REPORTED UNDERTAKING SEVERAL ACTIVmES TOPREPAREFORORRESPONDTO MANAGEDCARECONTRACTS 66 1. ProvidingEducation 68 2. TreatmentProtocols gg 3 SupplementingQualityAssuranceorUtilization ReviewStafforActivities 68 4. AddingServices 69 5. ChangingTransferorReferralPatterns 70 E. MANAGEDCAREEFFORTSANDGRANTPROJECTS AFFECTEDEACHOTHERINAFEWCASES 70 F. SUMMARYANDDISCUSSION 72 VI AREGRANTEESPARTICIPATINGINCONSORTIAOR NETWORKS? 75 A. BACKGROUND 75 1 ConsortiaandNetworks. ABroadSpectrumofCollaboration 75 2. ConsortiaandNetworksOfferPotentialBenefitsandCosts 77 3. DataProvidedbyGrantees 78 B. MANYGRANTEESPARTICIPATEINCONSORTIAAND NETWORKSANDINITIATEDTHEIRFORMATION 79 1. HospitalsDominatedMembershipandNumbersofMembers Varied 79 2. MembershipOftenIncludedCompetitors 81 3. ConsortiaandNetworkGoalsFocusedonStaffIssuesand CoordinatingServicesandReferrals 81 4. MostGranteesAgreedwithTheirConsortiaandNetworkson theImportanceofGoals 84 5. MostGranteesReportedImprovementsinImportantGoals 85 6. GranteesReportedMemberCommitmentasanImportant vii CONTENTS(continued) Chapter Page VI (continued) KeytoProgress 87 7. GranteesReportedTimeCostsandSeveralBenefitsfrom ConsortiumParticipation 87 C. SUMMARYANDCONCLUSIONS 90 REFERENCES 93 APPENDIXA:RURALHEALTHCARETRANSITIONGRANTEES ANDFIRST-YEARAWARDS1995 95 APPENDIXB:SCOREADJUSTMENTPROCESS 99 APPENDIXC:TELEPHONEINTERVIEWPROTOCOL,1993AND1994 GRANTEES 103 APPENDIXD:SUMMARYOFSTATEWIDEMEDICAIDMANAGED CAREINITIATIVES 115 APPENDIXE: SUPPLEMENTALMONITORINGFORMFOR1993 GRANTEES 121 viii IX X TABLES Table Page 1 GRANTEESTATUS xi D.1 1993GRANTEESTATUS g n.2 PROJECTPROGRESSAFTER18MONTHS,BYOBJECTIVE 1993 GRANTEES 9 IE.1 1994GRANTEESTATUS 20 IU.2 PROJECTPROGRESSAFTER3MONTHS,BYOBJECTIVE: 1994 GRANTEES 21 IV.1 RURALHEALTHCARETRANSITIONGRANTSPROGRAM: 1995 ELIGIBLEHOSPITALS,PROPOSALSRECEIVED,ANDAWARDS 34 IV.2 EXTERNALFINANCINGOFFUNDEDANDNONFUNDED1995 APPLICANTS 40 IV.3 DISTRIBUTIONOFGRANTAPPLICATIONS,BYREGION: 1989 THROUGH1995 44 IV4 COMPARISONOFAWARDS,BYREGION: 1989THROUGH1995 GRANTEES 45 V.1 NUMBEROFGRANTEESINSTATESWITHSTATEWIDEMEDICAID MANAGEDCAREREFORMSANDSAMPLEINTERVIEWEDFROM EACHSTATE 51 V.2 GRANTEEPARTICIPATIONINMANAGEDCAREANDINPATIENT PAYMENTMETHODOLOGYOFMANAGEDCARECONTRACTS FORSAMPLEDGRANTEES 54 V.3 PRIMARYRESPONSEOFGRANTEESTHATREPORTED NOEFFECTSOFMANAGEDCARECONTRACTING 57 V4 DETRIMENTALEFFECTSOFMANAGEDCARECONTRACTING REPORTEDBYSAMPLEDGRANTEES 59 xi