1 4 i i i z'II 'i@@ i I i Of PI LFA I EDI I 0 D IC HE ALTI SERV 14EN -@AD?4 olli Til SERVICEO",,AND@ TAL !IFAL th@'M t -we-nty@ seven ee Ing of the DICAL PR -",14ATIONAL-ADVISORY COUNCIL Oil.REGIONAL-ME OGRAYIS@ Rockville, Ma-ryland 1972 Monday, .5 Jline ACE -FEDERAL REPORTERS,- INC. Official Reporters 415 Second Street, N.E. Telephone, Washington D. C. 20002 (Code 202) 547-6222 NATION-WIDE COVERAGE V6 CR 6499 DENNIS/rs I DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE 2 PUBLIC HEALTH SERVICE 3 HEALTH SERVICES AND MENTAL HEALTH ADMINISTRATION 4 5 - - - 6 7 Twenty-Seventh Meeting 8 of the 9 NATIONAL ADVISORY COUNCIL ON REGIONAL MEDICAL PROGRAMS 10 I I 12 1 3 14 15 Parklawn Building Conference Room "M" 16 Rockville, Maryland 17 Monday, 5 June 1972 18 19 20 21 22 23 24 @ce -Federal Reporters, Inc. 25 2 CR 6499 1 C 0 N T E N T S 2 AGENDA PAGE 3 Call to Order and Opening Remarks 3 4 Announcements 5 5 Consideration of Minutes of the February 8-9, 1972 Meeting 8 6 Introduction of Guests and New RMPS 7 Professional Staff 8 8 Confirmation of Future Meeting Dates 10 9 Report by Dr. Margulies 11 10 Report on Inpatient Beds for Seattle Cancer Center 125 Consideration of Special Applications 134 12 Discussion on the Northeast Ohio Application 224 13 Discussion on the Ohio Application 231 14 1 5 1 6 17 18 1 9 20 21 22 23 24 kce -Federal Reporters, Inc. 25 3 Dennis CR-6-499 I P R 0 C E E D I N G S ilb-1 2 DR. MARGULIES: If we can all have our seats, the 3 meeting will come to order. 4 I would like to call your attention to the agenda 5 book which is the basic text that we will follow during the 6 course of the next two days and particularly ask you to note 7 the statements on confidentiality of meetings and the Conflict 8 of interest statement which are in there so that these instruc- 9 tions will be preserved during the course of the meeting and 101thereafter, 11 Before beginning the main part of the discussion for 12 the day, there are some peonle I would like to introduce if you 13 have not Already Piet them because we do have some new members 14 of the National Advisory Council and I will list them hot in 15 'ordpi7 of imp ,ortance but in alphabetical order. 16 First, Susan Curry on my right. She is a second 17 year medical student at the University of Florida in Gainesville. 18 @ir. Edwin C. Hirito from Los Angeles who is to her right witl-i 19 one chair inbe-tween. 20 Dr. Gerhard @4eyer on my left over 1-iere who is a 21 Practicing Ph sician and associate clinical professor in San y 22 Antonio. And llrq. @llariel S. Horgan from Albequerque. 23 I also should announce to you that Ilarold Ilines has 24 resigned because he found that the pressure of business didn't Ace-Federal Reporters, Inc. 25 allow him,, to be here to regular -- on a regular basis and so 4 nb-2 he has resigned which means that we will have a new -- I would particularly like to welcome the four new 2 3 members to this council. ordinarily we would have had a 4 period of orientation for you but as you know the time involved 5 is too limited. lie do have some new members of the National Review 6 7 Committee also who we will talk about in a few minutes. @ghat 8 we will do is set up a period of orientation as soon as we can 9 so You can get accustomed to the usual procedures of the National 10 Advisory Council. 11 I think it is fair to tell you, however, that no 12 member of the council has felt constrained by his newness. This 13 council is in many ways the most effective -- well, I think 14 probably the most effective of the National Advisory Councils. It has never acted in an inhibited fashion. It is made up of 15 16 people who are willing to say what they think. It has been flexible and has changed with the times. It has continued 17 to change. I think that you need feel no hesitation in enter- 18 ing in at @rfy point that you think you should, say what you 1 9 think, and donl@t be surprised if you disagree or agree with 20 half, less, or all of the rest of the members of the council. 21 It is that kind of a group. 22 1 would also like to recognize the fact that 23 Dr. Chase is here regresentin- Dr. Z,,Iusser for the Veterans 24 Ace-Federal Reporters, Inc. Administration. You all know John Chase. Dr. Ogden will not 25 5 be here at all for the meeting. I understand that neither nb-3 2 Dr. DeBakey nor Dr. Roth can be here tomorrow so we will cover 3 as much ground today as we possibly can. 4 Dr. @lilson will address the meeting tomorrow morning 5 rather than today and we had thought that Jerry Riso would be 6 here but lie will not be. 7 There are just a few details involving the meeting 8 this meeting of the council, an bxplanation of why we are in 9 this room and some things which you need to know about the cour;e 10 of the activities in general. 11 I would ask Ken Baum to acquaint you with them. Ken 12 I think you remember, is the person who makes the council function, prenares aqenda books, gets people where they need to 13 14 get and does most of our thinking for us. Ken? 1 5 l@,IR. BAUII: Let me take a half minute here with a 16 couple of announcements. I think Parkinsons Third Law says 17 the amount of discussion is inversely proportional to tl-ie 18 subject. 1 9 First, about coffee breaks. @le are going to have 20 the usual coffee breaks at about 10:15 and 2:15 in the 21 22 afternoon. On the other hand, because this room is small, it is the only one we could get this time because we moved the 23 meeting up a month, coffee is going to be served in what is 24 ,ce- Federal Reporters, Inc. called the Charcoal izoom,of the cafeteria. 25 6 nb-4 I think we have provided everybody with a little map in your books. If not, we have more on the back that 2 3 shows you how to get to the Charcoal Room. At coffee break 4 time just go out the door, turn right, walk to the end of the 5 hall, the cafeteria is on the left. And if you walk all the 6 way through the cafeteria, it is the last bay on the left and 7 will be set up with pots of coffee and so forth. It is the 8 usual dime for coffee and 15 cents for doughnuts and things like that. 9 Could we please have a show of hands on how many 101 li@ people are going to require transportation to the Washingtonian 12 for the dinner this evening, council members? (Show of hands.) 1 3 If the people who need transportation would please 14 see @Irs. I.Iandal at the back of the room sometime during the 1 5 meeting we will get whatever arrangements have to be made. 1 6 Ihcidently, Mrs. Handal was the one that sees to it 17 that things work smoothly not me really. 18 (Laughter.) 19 For the dinner arrangements this evening, the happy 20 hour will begin around 6:00. Anybody who doesn't know how 2 1 to get to the Washingtonian, we prepared a route map so you 22 can all get lost. Just don't take the wrong turn which gets 23 you back to Washington. Anything else, ask Mrs. Handal and 24 @ce-Federat Reporters, Inc' me and we will try to help you. 25 7 The dinner tonight is;qoing to be through the Washin(f- 1 nb-5 tonian's buffet line. Ile have a private room. There will be 2 3 a private room for happy hour, but everybody will go through 4 the buffet line for dinner. I thought I would explain that 5 first. 6 Dr. Wilson and Dr. Stone, as far as we know, are 7 planning to attend the dinner tonight, too. 8 Because this room is so small, anybody who is going 9 to be leaving the meeting permanently, that is particularly 10 the quests around the room, if you are going -- if your part 11 Of the meeting that you are interested in is finished and you 12 are leaving, if you would please advise l@irs. Handal or the secretary at the door, we can use your seat for some of our 1 3 14 own staff. Ile have had to be very careful to control attendance-. 15 at the meeting because there isn't enough room for everybody 16 who would like to be here. 17 Ile will have a few seats that we are going to be 18 rotating people through and we hope it causes as little inconvenience as possible. 1 9 When we get to certain places one group will shift 20 21 in and another group will shift out so there will be a little 22 bit of shuffling back and forth. The only other thing is that there are a couple of 23 unfamiliar looking folders perhaps on the desk. In Addition 24 kce -Federal Reporters, Inc. to the council agend, books which are black and the binders 25 8 nb-6 I with the rings in them which are all colors of the rainbow, 2 you have an additional two books. one is this blue folder 3 which contains some information about the review of emergency 4 medical services applications and there is this brown cover 5 folder with information about the review processes for manpower 6 programs. 7 When we get to the @IP application review, there is 8 an additional folder which we will be passing out to you in 9 a black envelope with management information system tabulations 10 but we didn't want to overload the (lesl,,. I thought we would 11 mention what you have in front of you. I think that is all. 12 Thank you. 13 DR. I.IARGULIES: You had mailed to you the minutes 14 for the February 8th and 9th meeting. If there are any 15 additions, corrections, or comments to be made on them, I would A preciate hearing them at this time. 1 6 17 DR. DE BAII"EY: I move they be approved. MRS. IARS,, Second. 18 19 DR. !TAR(:,ULIES: All in favor? 20 (Chorus of ayes.) 21 DR. L,LARGULIES: Opposed? 22 (into response.) 23 DR. @4ARGULIES: There are some guests here, some 24 of whom are going to participate actively in the council and Ace-Federal Reporters, Inc. agenda during the course of the day and I would like to 25 9 1 introduce them to you. nb-7 2 I don't think Fred Stone is here yet but he will be. 3 Dr. van iloake is on my left over here. He is the new director of the National Center for Health Services Research and 4 Development and we are going to ask him to talk to us during tli@ 5 6 course of the morning about some of the tighter relationships 7 which we are looking forward to having here. 8 Dr. Gordon MakLeod is over here on the left. lie is 9 the director of the Health Maintenance organization Service 10 and will be involved with our review of the III,10 applications. 11 Dr. Margaret Edwards from the National Cancer 12 Ins,-".4d..ti-ite is here, I think. Here she is right over on i.,Iy 13 right. 14 Dr. McFinleave from the National Heart and 15 Lung Institute, next to her over here on the right, Arthur 16 Brourg from the National Library of Medicine. They cluster 17 together rather effectively. Mr. John Corn, Smoking and Ifealtli,Proqraml way over 18 19 on the left. '@ilir. 1',lmer olexa of IIE@Q audit agency, We have to be careful of him. 20 21 There are some special consultants who are here. 22 I don't believe that Scherlis is here yet. He will be later on in the morning. Warren Perry a member of the IU4PS review 23 committee is here. Ile was chairman of the review committee 24 @ce-Federal Reporters, Inc. for supplementary grants which we considered about ten days 25 10 I a little over, whatever the time was, about eight days ago and nb-8 2 he will be presenting the review of those supplementary 3 grant applications. There are some new members of the staff also whom 4 5 you will have an immediate reason to know and work with. One 6 is Dr. Larry l@ose of the Professional Technical Development 7 staff who is right here on my right. Ile is in charge of the 8 emergency medical activities here. Bob Walkington chief of the evaluation branch over 9 there on your right in the office of Program Planning and 1 0 11 Evaluation. 12 One other bit of business to get out of the way to 13 get confirmation therefore, is the consideration of future 14 meeting dates which are scheduled now on the new three a year 15 on October 16 and 17, February 7 and 8, and June 5 and The last two dates in 1973. 1 6 Any problems with those, any reasons of ma3or imnor- 17 18 tance why we can't schedule them then? All right. @le will go on, If there is anything 1 9 End @l 20 we have overlooked, I would appreciate hearing about it. 2 1 22 23 24 4,ce - Federal Reporters, Inc. 25 CR6499 L.L #2-ter-1 I I would like to spend a few minutes with you now 2 considering some of the major issues which includes policy ques-, 3 tions which I am sure you are going to be interested in. I 4 consider this an opportunity to discuss some of the subjects 5 which we are going to bring up. The first of these has to do with budgett and just 0 7 by way of review, I think you do recall that we had last year -- 8 some money which was held back, some $44.5 million, which was 9 available for release during the current fiscal year. Also, 10 a reminder that our appropriations now, one year appropriations 11 and this makes a considerable difference in reviewing. 12 As a consequence, '69 funds held over from the past 13 year and the new appropriations, when there was a release of 14 funds we were restored to active level of about $145 million 15 for the total RMPS program. The amount which was available 16 for grants and contracts was actually $135 million, and there 17 were certain funds earmarked which you will hear more about 18 during the course of our discussion, some 16.2 million, maximum 19 for health maintenance organization activities. 20 These will require only a part of the RMPS funds so 21 that we will have a remnant of the 16.2 million, which will 22 probably be in the range of $7 million, which will be available 23 for regular RMP activities. It was $8 million which was ear- 24 marked for emergency medical systems. I will describe that a kce -Federal Reporters, Inc. little more fully in a moment. 25 ter-2 12 1 That was set aside for a contract activity conducted 2 out of the office of the Administrator which is now at the 3 point of completion of review of the contract. There was $7.5 4 million set aside for area health education centers. That 5 has not been. released. 6 It is not certain whether it will, and if released, 7 what the character of the restrictions, if any, will be, and we 8 will talk about that in a moment. 9 I think you recall that there was $5 million set 10 aside for a Cancer Center to be constructed in the Northwestern 11 part of the United States, and we will have an updating of that 12 reqqest. 13 That left -- and that is the basis upon which we have 14 been functioning. Ninety-eight point three million dollars for 15 the regualar RMP grant activities. If the -- if we have a out 16 $7 million left from the HMO activies, and if the 7.5 million 17 is released from OMB that will mean that our level of funds available for regular grant activities would -- and that is the 18 19 key figure -- is a 112.0 million. of that, all but 7.5 million 20 is definite, but the 112 million is the maxim= we would have 21 available between now and July 1, for use in RMP supported 22 activities. 23 we a ,pr ad to utilize,@that full amou @.with no 24 difficulty be4ause,of the variety of activities which we have kce -Federal Reporters, Inc. developed. 25 ter-3 13 1 Now, there is, of course, the next fiscal year to 2 consider, beginning July 1. This year Congress has moved quite 3 rapidly. There has been early action in the House, early attior 4 in the Senate, and they are now at the point of reviewing the 5 individual House and Senate recommendations and subsequently 6 reaching some kind of a conclusion. 7 The figures which are under consideration range widely 8 and I think it would be impossible to predict at this.time 9 what the final outcome will be. I think that it is of great 10 importance that the total request to Congress by the Adminis- 11 tration was one hundred and -- was over $131 million this year, 12 which is in contrast with the request of a year ago, which was 13 about 52.5, recognizing a rising interest in what the regional 14 medical programs@do6s. ..Coi4gress accepts the administrations 15 c 16 request, and adds to it. Whether it will this year, and whether 17 that will actually survive the appropriations process is specu- 18 lative, and I am not very interested in speculating with you. 19 There have been a series of suggested amendments. One for a life@ p am di I released transplant for kidneys. 20 21 There has been a very large suggested amendment which would deal 22 with categorical diseases among other things so that the 23 figures range all the way from 1.11 mi,l],JLon to,229 million; 24 meaning that my reasons for not speculating are fairly obvious. kce-Federal Reporters, Inc. The House and Senate Committees are scheduled to 25 ter-4 14 1 consider the appropriations bill this week and it is possible 2 that they will complete their action. It would not be surprising 3 if they did this tinte, because there are other things which are 4 on their minds during the course of the summer and early fall 5 which will probably encourage them to complete their activities. Is there any question about this? I know@it is a 0 7 quick runthrough but most of you are fairly familiar with it. DR. ROTH.- -I would like to ask some specific questions about the earmarked HMO funds. Is this the right time? DR. MARGULIES: Good a time as any. DR. ROTH: Well, as this council probably knows, most of you know, some of us have been disturbed about the 13 fact that money appropriated for the RMP has been diverted from 14 our program, from RMP, into the promoting of the Health 15 Maintenance Organizations, the HMOs.. for 4hich there is 16 no existing legislation. There has been no HMO legislation passed and no 17 18 money per se has been authorized for the development of HMOG. 19 Now, if I am correct, during 1971, the initial grants for HMO, 20 the money was, shall we say, pirated from the CHP funds, the 21 314E funds in respect to 38 grants--iqhich were a 22 $3.3 million, and there were 15 grants which were funded under 23 the provisions of Section 1110 of the SRS activities; and then 24 there were, in other words, 14 contracts, amounting to about Ace-Federal Reporters, Inc. 2.2 million that@came under.Section 304 of the Public Health 25 ter-5 1 Service Act; but since that time, there have been additional 2@ grants up to a total of 110, for planning and development of 3 HMOs, and it has been made abundantly clear that this is 4 planning and development only, that there is a specific restric- Niel limit III DI 5 tion against operation of any of these. 6 I think, thus far, I am on sound grounds of state- 7 ment of fact, is this approximately correct? 8 Now, there have been a number of concerns around 9 this town about the way this money was achieved in the House 10 Appropriations Committee Hearings. Some sharp questions were 11 asked of the Secretary, and others as to where in the world, 12 they got the authorization for this money. I believe I am 13 correct in saying that there is still a specific investigation 14 going on in respect to $900 thousand of the one million, ten, 15 that was diverted from Section 110 -- 1110 of the SRS funds. 16 The question being raised as to whether this was -- 17 I do not know whether the right word in this context is 18 "illegally," but diverted in a fashion that should not have eer 19 permitted. Now, we get, in our distributional material this tine, 20 some very interesting opinions from Assistant General Counsel 21 for Public Health. Now, one with relation t 22 Education Centers, which makes it relatively clear that in the 23 absence of specific legislation, there is very, very little 24 R" money that could possible be devoted to the support of the kce- Federal Reporters, Inc. 25 16 ter-6 I That is not important except to view in a comparative 2 fashion with regard to what has happened with the use of our 3 RMP money for the support of HMO grants. I would like to quote 4 to you -- I think you all have this in your black book before 5 you -- I do not know -- it is under the Tab HMO, Grant Proce- 6 dures, and it is the item there, if you will -- it is Office 7 of General Counsel, under the date of May 3rd. 8 If you look down to the middle paragraph, "'This 9 office has previously advised in the context of proposals for 10 HMO Planning and Development, that this is the important thing 11 to the extent that proposed HMO activities fall within the 12 purposes of Section 910(c), funds would be available"; and 13 below this, below the blank line, Section 910(c) is quoted as 14 saying, "The Secretary is authorized to support research, 15 studies, investigations, training, and demonstrations designed 16 to maximize the utilization of manpower in the delivery of End #2 17 health services. 18 1 9 20 21 22 23 24 'kee - Federat Repofters, Inc. 25 3 17 I I don't know how many of these HMO grants you have 2 looked at closely and seen what they were requested for and 3 how they were being used, but my question is are any of them 4 by any stretch of the imagination being used for any of these 5 purposes in 19(c)? My opinion, maturely achieved, is no, 6 they are not. HMOs, we are told by the Administration, already 7 exist, to the extent that they service some 7.5 million 8 people of these United States. There are 30 organizations 9 that they call HMOs. Of these 30, I believe none were 10@ subsidized in their organization by federal funds. They 11 operate without federal funds; there is no reserve. 12 "Studies" is a very vague word. I don't know. 13 This would be the weak point in my position, I suppose. 14 Any time you are doing planning, I suppose you are involving 15 some kind of study, but I think in the context of maximizing 16 the utilization of manpower, which is what all these studies 17 and reserves are supposed to be doing, that HMO planning is 18 far from the mark. 19 Such evidence as exists in respect to HMOs is that 20 manpower productivity is a little lower in this kind of 21 organization in terms of patient hours per physicians or number 22 of patients per week or per month, and so on. Obviously, the 23 planning is not being done in this area. The planning is being 24 done in the financing, the setting up of capitation mechanisms tkce-Federal Reporteis, Inc. and it is my position that this has robbed us of a number of 25 18 mil-2 millions of dollars and we on this council sit here session 2 after session approving grant applications, only to learn later 3 on that they have been approved, but unfunded because we 4 haven't got enough money to fund them. Now, dammit, Titl@ n 19 moni rn nn in x7 i n can be some of the most valuap MP, because you to a reqion. We could be doing more witn 7 ergency medical service field,just to pick 8 9 one place, than we could do with our specific grant money. 10 I would like to raise the question, and I think there are several ways to do it, but I think the easy way, hopefully, is in an unemotional, out on the board administra- 12 13 tive fashion, to find out if it is not possible to 14 r ding of our treasury. 15 You have talked about 16.5 millions coming in with 16 an HMO earmark on it, and we might salvage seven of it. I 17@ might be disposed to see what we could do to have 16.5 million 18 of it. I assume it would be impossible to get back any of the millions that have already been diverted. I have no particular appetite for a useless procedure for starting a congressional 21 investigation or getting some senators and congressmen raising 22 the devil with the Office of the Comptroller, but can't we do 23 something about it in our own group? That is my question. 24 DR. MARGULIES: Let me make a partial response to 4@e aporters, Inc. you, Russ, and Gordon MAkLeod is here and can certainly add to 25 19 mil-3 I it. I don't do it on the basis of administrative decisions 2 and the fact that the funds would not really be available 3 to us if we didn't use them for this purpose. Let's set that 4 aside for the moment and raise the question of the appropriate- 14(l@) for the health maintenance organization activity. 5 ness of It really is a matter of judgment about what an HMO'notice) 6 7 can be. 8 From our point of view, we have felt comfortable 9 with the use of the funds for this purpose because the HMO io can offer to us the only system that is useful for some of the 11 things which we need to do and learn to do, which is a close 12 enough universe between the provider at one end and the 13 subscriber at the other end, so that you have an understanding 14 of what you want to achieve and a system in which you can do 15 it. 16 One of our great problems in achieving some of the 17 progress in RMP is we deal with a system which is not bound together in such a way that you can say that these are the 18 19 providers and they act in such and such a way, and these are 20 the users of those services, et.cetera. 21 I believe, and many of us on the staff do, that if 22 the HMO can be put together so that you have an understanding 23 about a contract for services to be performed, it will 24 provide the kind of laboratory for improved uses of health Ace - Federal Reporters, Inc. manpower for improved monitoring of the quality of medical 25 2 0 mil-4 I care, for a better understanding of what we mean by health 2 maintenance and an opportunity to test these ideas when the 3 opportunity is not nearly as well-defined or as controllable 4 as it is in the HMO. I think I would have to agree with you 5 that the beginnings of the HMO primarily have to do with the 6 development of a reimbursement system, with actuarial data and 7 with putting together the system itself. But thereafter, once 8 it has occurred, we, for example, in looking at the ways in 9 which we want to achieve a better provider management of 10 the quality being delivered, have found the HMO gives us 11 opportunities for better learning and for better application, 12 which the rest of the system does not, because it is too widely 13 scattered. 14 But perhaps Gordon, you would like to -- do you want 15 to come up here and comment oh this? 16 This is Gordon MakLeod, whom I introduced a few 17 minutes ago. 10 DR. MAK LEOD: When I walked in the room, I asked 19 if Dr. Wilson was here, no; Mr. Riso here, no. I asked should 20 I be here, and he said sure. What I thought I would do now 21 is respond to some of the queries, but try to address the 22 issue at the level where I think I sit as the program director 23 and that this has in fact had high administration. There has 24 been departmental administration and concern for the different Ace-Federal Reporters, Inc. 25 system. They have looked at three important aspects and one, 21 mil-5 I of course the first and perhaps the foremost one is manpowex 2 and cost and quality. I am not sure how the balancing 3 works, but the three certainly do interrelate very closely 4 and in order to address these three problems as they have 5 been spelled out for the -- all of you innumerable times, 6 the HMO strategy was devised -- the HMO strategy really was 7 built upon the development of the last 20 or 30 or 40 years, 8 as Dr. Roth has said in terms of prepaid practice group and 9 in the last 15 or 20 the medical care foundation movement has 10 moved into this area. 11 This kind of activity has had authorities passed 12 by Congress to do certain things with respect to the health 13 care de"ipvery system in the country. I have heard the 14 secretary explain before these congressional committees that 15 Dr. Roth has referred to that there is existing authorities 16 for the activities that we are involved with, perhaps as a 17@ defense on his part, perhaps as an awareness in addition to 18 the opinion from legal counsel which is in your booklets, 19 there is another one which isn't published here, which we can 20 get where there is an approval from the office of General 21 Counsel for the utilization of RMP money if the activity 22 is maintained to the planning and developmental phases. 11 win, 23 It is with these guidelines that we have proceeded 24 over the past several months in addressing the planning and ce -Federal Reporters, Inc. 25 developmental grant activity and also in the areas of contract 22 mil-6 I activity for supporting HMO activity at this early planning 2 phases. 3 I think the -- from a substantive point of view, I 4 would be happy to respond to questions you might wish to raise 5 at the programmatic level. I do think it is perhaps more 6 appropriate to address some of the decisions with respect 7 to the issues Dr. Roth has raised at the higher administrative 8 levels and I might say one other thing just as I conclude these very imprompt@ remarks, and that is that one of the 9 L- 10 issues that has been discussed over and over again in a program 11 getting started such as HMOs is using existing authorities 12 in order to bring to the attention of the Congress the 13 experimental activity that we have been inVo ve in and the 14 resu ts of that experimental activity, so that Congress, in fact, can react, "How do you do this? What sort of funds do you use to get this kind of activity underway? And what has happened in the past?" And this may also have happened for 17 18 RMP actually, is to have used funds from programs which are 19 interested in the same objectives to a certain extent, in 20 order to get them underway at a preliminary phase and at the same time be going through the congressional process in order 21 to @t the support for these activities. DR. DE BAKEY: May I ask a question in this regard? 23 24 Aside from the judgments that have been made concerning the Ace-Federal Reporters, Inc. legality of the diversion of funds for these various purposes 25 23 mil-7 1 may I ask to what extent is the role of the council in the 2 @funding that is approved by Congress for the regional medical 3 programs -- to what extent is the council involved in its 4 advisory role and -- as to the dispensation of these funds? 5 I realize there is a legal basis for the advisory 6 role, but I am particularly concerned about what responsibility 7 the council has? In other words, these funds have been 8 diverted,to my knowledge -- I don't recall the council 9 approving the use of funds for the specific purposes. 10 DR. MARGULIES: Dr. DeBAkey has asked about the 11 authority that the council has in determining utilization 12 of funds. In actuality, the grant -- the use of grant funds 13 from RMP sources for HMOs has not as yet occurred and there will 14 be on the agenda for this Afternoon, a consideration of that 15 kind of use of grant funds. There can be no use of grant funds 16 tor any-purpose in R hout prior approval by the National 17 Advisory Council. 18 The council has two roles, which I think you know 19 more clearly than I do: One of them is to approve the 20 award of grant funds for any activity or anywhere else 21 in the program. It also has the responsibility for advising 22 on policy and, of course, in that case we have, with no 23 exception I can recall, accepted the advice of the council and 24 followed it. Ace - Federal Reporters, Inc. That, however, is obviously not binding on the 25 24 mil-8 1 secretary because it is advisory. He can always set it aside. 2 The other part of the machinery, however, which is 3 a little less obvious, is the decision which the Administration 4 any administration, may take, saying we would like these 5 funds used for this purpose. Now, that cannot be done. 6 Supposing that an administrative decision should come along 7 saying we should put X amount of money into an activity we have 8 not heard of. What would usually happen is that the funds 9 would be available for that purpose only, with an agreement ioi between the Executive Branch, HEW, and the OMB. If the council 11 chose to support that activity, the funds would be used for tha-- 12 purpose. If it chose not to, then the funds in all likelihood ac 13 would not be released for RMP at all. So that t nistra- tive decision cannot give warranty that the f ds will be uusseeld, 14 15 It can give warranty that they will be used if they are going to be used only for that purpose. DR. DE BAKEY: The reason I asked this question, not 18 because I didn't know the answer, but rather to bring to the 19 -- for discussion, a matter that I think is extremely important @ 0 in the role of every individual who is a member of the council IC 21 and that is the responsibility involved here in relation to v 0 22 the program, programming. That, I think, is the most important l@ 23 responsibility of the council. 24 In an appropriation of funds released by Congress, Ace -Federal Reporters, Inc. the council -- one of the councils primary roles is to determine 25 25 mil-9 1 priority of the funding. This is done in determining the 2 awarding of grants, but it is also done in terms of awarding 3 certain funds for specific areas, specific programs. 4 Now if you introduce into the order of priority 5 for the use of these funds, a matter such as HMOs consideration, 6 then it seems to me that the council must determine whether 7 within the limitations of the funds available, this particular 8 program has the proper authority to refund them. This is 9 why I really raise the question because I think it is quite 10 important for the council to make decisions and indeed it is the responsibility of the council to make its decisions. This is its advisory role. 12 That is why I consider this a rather important 13 14 decision and not one that the Administration determines without 15 having the advice of council, because it does involve a 16 utilization of funds appropriated by Congress for a specific purpose, regional medical programs activities. The diversion 17 of those funds for another purpose may or may not be legal. 18 19 This is not really an important question because really it is a matter of judgment in interpreting whether or not it falls 20 into that program. My interpretation may be different from 21 22 yours. 23 But it is the responsibility of the council not 24 in that sense to make judgments, but rather to make its Ace-Federal Reporters, Inc. determination within the priorities of its decision-making 25 2 6 mil-10 process, whether or not this really falls within a high enough priority within the limitation of funds to even be funded. 3 Therefore, it belongs within the consideration of End 3 4 the council. 5 6 7 8 9 1 0 1 1 12 1 3 14 15 16@ 1 7 18 1 9 20 21 0 22 23 24 @kce -Federal Reporters, Inc. 25 27 4 arl 1 DR. MARGULIES: I certainly subscribe to that 2 view. I would like to pose the administration's problems, 3 and I don't mean this administration's, any administration's 4 problems, however, in a consideration of what the council does. 5 One of the inherent strictures in effective policy 6 deliberations and one which we have all objected to accepting 7 when it applies to us is the separate status of interrelated 8 programs. 9 We recognize, for example, the relations between F 4-P 10 HMO, National Center for Health Services, @ , Migrant 11 Programs, and so on, and it's in the nature of the political 12 process and one t be preserved that many of t ese 13 activities have a constituency of their own, have a method 14 of gaining support, and are as a consequence very sharply 15 focused on a final purpose which is to achieve what the 16 people who backed it wanted to achieve. 17 Now the problem of an administrator, whether 18 it is a secretary or the administrator of Health Services 19 and Mental Health Administration, or anyone elsei is to 20 take that variety of activities, and many of them over- 21 lapping so you can sometimes identify anywhere from five 22 to 45 authorities which apply to an activity, look at the 23 funds available, the resources available, and try to 24 integrate in that process what is on hand to develop a kce -Federal Reporters, Inc. program which is coherent and which serves a total purpose. 25 28 ar2 I In order to do that, the issue is not RMP 2 policy alone, but also RMP plus all of the other policies 3 which are interdependent. 4 Now setting aside whatever one may think about 5 HMO as a new policy, if I remember the early days of 6 RMP, one of the severe problems under which it operated iii -VA 7 was the_a jjjiii availability of 8 f ero. 9 As a consequence, it took a long period of time 10 o from ground zero to something better. In t a cLy the council felt uncomfortable, but felt they had to get I 1 12 the show moving and use funds. In attempting to build another activity which 13 14 becomes an administrative priority like HMO, that kind of 15 slow start and fumbling around can be diverted only if you 16 get something moving. 17 I know this is a dilemma for administration, 18 and it is troublesome for other people, but if one can 19 assume -- and I think it is a reasonable assumption that 20 HMO legislation will be passed -- it is a lot better to be prepared for it by having already developed some understand- 21 ing, developed the pdo@ e available, have things in motion 0 22 23 so that the results achieved will be ahead by two years 24 or more where they otherwise would have been. kce -Federal Reporters, Inc. That obviously comes into conflict with isolate 25 go r#4 29 ar3 I policy decisions and I think at least that's part of what 2 are discussing today. 3 DR. ROTH: Harold, may I also say that I N A suspect most members of the council must recognize that in 5 this we have gotten ourselves unhappily precipitated into 6 the middle of an almost partisan political issue that has 7 nothing to do with science or our fundamental job in sitting 8 as an advisory council. The HMO thing came in as a slowing began. It 9 io was espoused by administration, with a big A, and all sorts 11 of interesting things began to happen as soon as this 12 caught on, and the initials began to be popular. Both sides 13 of the aisle have now taken proprietary interest in these 14 initials and nobody really knows what an HMO is going to be 15 until we get some definitive legislation. 16 We have three pieces of legislation in the current 17 Congress, and lord knows whether anything will happen to 18 any of them because of the diversities of sponsorship. Probably, my guess is, that nothing is going to happen in 19 20 the 92nd, and you are going to get new bills in the 93rd 21 Congress, and you may still have more new bills changing t e 22 definitions of HMO. 23 At the present moment, we have the Staggers bill, 4 the Roy Bill, and the new Kennedy bill. They are quite @ce- Federal Reporters, C. dissimilar in their characters. There is a move to really 5 ri4 30 ar4 liberalize the HMO concept to the point where it will I 2@ embrace virtually all the foundation. Under some concepts of HMO, there are six founda- 3 4 tions that are already being funded to move in the HMO 5 direction. Our funds are being used to promote something that has not been legislatively defined and I think this is 6 a far cry from my concept of why we sit around here and why 7 8 we stay home reviewing grant applications to try to work out 9 ways in which the medical profession can extend the io benefits of what we already know how to do for people who 11 need it. We are not interested. We are not funded, and 12 the original Congressional intent, I think Dr. DeBakey 13 would agree, and nobody ought to know it better than he, was 14 not to be a research and development thing. It was to use 15 the knowledge and disseminate the knowledge that we already 16 have in this country and in this world. It was not set up to be a poverty T)roqram., and 17 18 the moment we become one small drop in that poverty bucket as a program or debt -- I think this council has a very 1 9 20 real role in this thing, and although we may be overruled by what is done with the money through manipulations from 2 1 22 above, I think it would be appropriate for the council to say strongly and clearly that we think this is an inappropriate. 23 diversion of funds, and if this isn't where they wanted the 24 kce Federal Repor@rs, Inc. funds to go, they shouldn't have put them in RMP. They 2 5 31 ar5 ) I should have put them some place -- because what our 2 is being equated with now, it is being alleged that 3 has the same purposes as 314-E,for example, and CHB. 4 We have been spending years trying to point out 5 there isn't an identity of interest or conflict, that we 6 aren't on a collision course. We are supposed to be doing 7 different things. 8 I think we have just been caught up in a political 9 issue which is rather distasteful to one who is trying in a 10 nonpartisan way to do the best we can, to use the monies for the purposes that we are all enthusiastic about. 12 DR. MARGULIES: I think that there is some embarrassment even now in the administration over the need 1 3 14 to use funds from other resources for HMOs. It is no secret 15 that the administration had every reason to believe that HMO 16 legislation would have been passed months and months ago 17 so that this would not have occurred. 18 What has culminated is an arrangement in which 19 there has been initiated enough -- pardon me -- enough HMO 20 activity to make it possible to look at what it is and to 21 keep it on a tentative basis until there is further defini- 22 tion. And whether the early offset of activities was -- 23 what the council might have agreed with or not, there is an 24 investment in effort which we at the present time find kce -Federal Reporters, Inc. useful which would be set back, which would indeed be los 25 3 2 ar6 I if these funds were not for that purpose. 2 The Secretary accepted the-id@a in is testimony 3 that RMP funds should not in the future be used for this 4 purpose, and indicated to the appropriations committees 5 1 s is the one and only time it In ac W"ng, 6 7 Rus, a use of RMP funds, and this may sound a little like 8 sophistry, but it really went like this: Funds for RMP were 9 frozen in fiscal '71. There was a need for funds in fiscal 10 172 for HMO. There was an agreement to release those funds 11 that were frozen out of RMP for that purpose. They would be 12 used for that purpose, but not for another one. It was expected that the whole 16.2 million 1 3 14 would be available for HMO, and that was the case. However, 15 with the slowdown of activities which followed the slow- 16 down of legislative performance, not all of those funds were to be used. So whether it is counted as a blessing 17 18 or not, it means we will get $7 million for RMP activities 19 for this fiscal year, which would otherwise not have been 20 available to us. 21 I know that's not responsive to your question, but 22 what the administration tries to do, again, is find the 23 resources available to do something, to put itself in a 24 better operating positions than it otherwise would have been. @ce- Federal Reporters, Inc. 1, for one, would be very regretful if we 25 33 ar7 1 completely handcuffed the administration, which does from 2 time to time have to move into different positions to 3 move things in a new expression. 4 The expression "tin-cupping" has been around 5 the federal government for a very long period of time, and 6 if you don't provide the opportunity to pick a little from 7 here and there to get something done that needs to be done, 8 it restricts the mobility. 9 If we confined every program to a rigid definition 10 of its purposes, we would have even more fragmentation than 11 we now have. 12 You, on the other hand, feel this is overdoing 13 it for a given purpose, and I recognize that difference. 14 DR. ROTH: I am glad you labeled it sophistry. 1 5 (Laughter.) IF# DR. 14ARGULIES: I said it may be. 17 DR. ROTH: Of course, all you have to do is go 18 one more step. This council and RMP are presumably going iLo to have nothing more to do with HMOs after this one fiscal, this one year. If you needed any other testimony to the fact it 22 isn't RMP business,-I guessthis d bq a good piece of 23 testimony. . DE BAKEY: The point that's important here kce- orters, is that the funds used for any purpose that are in a sense 25 3 4 ar8 assigned by Congress to RMP is the business of this council. 2 That's the point I am making. I don't think that it's 3 proper, whether or not the organ which is used or acceptable, 4 is proper to use these funds without having consulting 5 council. I am not arguing with whether or not it should be 6 done this way. My argument is concerned with the role of 7 responsibility of the council. That's the only point I am 8 making. 9 DR. IMRGULIES: They have not been used. 10 DR. DE BAKEY: It may well be that the council 11 would agree to do this. My point is that the council should 12 be consulted. DR. MARGULIES: They will be. That is a -- on 1 3 14 the agenda. There have been no grant funds used. However, 15 you realize that these funds can be converted into contracts 16 in which case the council would not be involved. 17 DR. ROTH: May I ask another question? 18 Out of the 110 extant grants for HMO funding, 19 how many came out of this branch of AEW? 20 DR. MARGULIES: No RMP funds have gone into that. 21 DR. ROTH: No RMP funds? How about contract 22 grants? 23 DR. MARGULIES: No. Nothing in contracts either. The exception to that -- that's correct, isn't it, Gordon? 24 @q -Federal Reporters, Inc. DR. MAK LEOD: Yes. I think perhaps the closest 25 35 ar9 1 thing to RMP involvement in HMO is myself, who was a 2 member of the consultant staff of RMP before I became a 3 member of HMO. 4 DR. MARGULIES: You shouldn't have said that. 5 (Laughter.) 6 DR. MAK LEOD: Our activity to date has been 7 funded within HSMHA through 314 money and outside of HSMHA 8 from the SRS authority, which you alluded to. 9 DR. MARGULIES: The exception to this, Russ, 10 would be any intra-RMP activity in support of HMOs that 11 you know about. 12 DR. ROTH: I know. This has been cropping up in 13 grant applications. That doesn't worry me at all. Maybe this is better preventive medicine than I thought if nothing has been done. Maybe we can prevent something. DR. MILLIKAN: I was going to add that I don't 17 think there is any issue about us handcuffing the administra- 18 tion. This was a phrase that cropped up a few moments ago. 19 I share the feeling that it is the responsibility of the 20 council to make its feelings known about the fashion of 21 the policy level at which the objectives of RMP are molded, 22 and that we sooner or later should be called for a kind 23 of opinion review of a situation like this, albeit contract 24 or grant or whatever. kce- Federal Reporters, Inc. It seems to me if we are going to work as a 25 36 arlo I community of folk in trying to put together over a 2 continuum, the real issues of RMP, we ought to do it in a 3 combined fas hion. 4 I think at a given time there may be differences 5 of opinion among us, but that the administration may hand- 6 cuff us. We aren't going to handcuff them. We are only 7 advisory and we recognize that. 8 DR. MARGULIES: Except you control the funds. 9 DR. DE BAKEY: Could we go off the record for a 10 few moments. 11 (Discussion off the record.) nd 4 12 0 13 14 15 16 17 18 19 20 21 0 22 23 24 kce-Federal Reporters, Inc. 25 3 7 DD #5 ty 1 1 DR. DE BAKEY: We can go back on the record, if 2@ you want. 3 DR. MARGULIES: Tony? 4 DR. KOMAROFF: Last February when our sudden riches 5 were described to us but all of the earmarking was described, WE all, I think, felt richer and somehow more supine and I know 0 7 that the Review Committee has felt the same sense of frustra- 8 tion that we are hearing around the table. 9 Is there any way the specific issue of the HMO 10 funds aside of conveying this kind of sentiment to the 11 Administration because a devitalized advisory group is a 12 significant below to the viability of the organization? 13 Hasthat sentiment been conveyed? We all expressed it, I 14 think, in February. 15 DR. MARGULIES,. Yes. And of course Dr. Wilson will 16 be here tomorrow morning and I think it is perfectly reasona e 17 for these issues to be raised. The point which Dr. D6Bakey 18 just made is certainly a critical one in the RMP. It has been 19 my feeling that in the development of some strong regions and 20 most of them have become much stronger, that we are in a 21 position to do some things with the categorical diseases, 22 sensibly, better position now than we ever have been, that we 23 can carry out categorical control activities which will 24 really affect the whole delivery system rather than serve the Ace - Federal Reportefs, Inc. special interests of a handful of people as many of the early 25 3 8 ty 2 1 activities did. 2 However, the fact that I think so or the staff 3 thinks so doesn't satisfy the questions which Dr. DdBakey 4 raised at all. His points are very well taken. There is 5 also the very interesting question of how comfortable we are, 6 the Council, the Administration, and others with the process of 7 decentralization. This regularly comes up. There is no point 8 in trying to escape it. If you in fact do allow the program to 9 proceed in the direction of local judgments,, local talent, 10 local efforts being applied to local problems and get stronger 11 and stronger peripheral programs, parallelling the movement 12 towards stronger state government activities and so on, 13 do you imperil the achievement of national goals? Are the 14 two necessarily inconsisent and that is something that this 15 Council needs to consider very carefully. It is a subject 16 for real deliberation. 17 I am surprised when we Are told that the problem 18 with the individual RMPs is that they are not responsive enough 19 to national policy when our primary problem is to keep them 20 from all jumping in the same direction the minute that they hear 21 that is the way we are going to go. Within a few minutes the 22 telephone is ringing saying when do we get our application 23 grants in. That has never been an issue but that is not 24 generally appreciated. Ace-Fedefal Repofters, Inc. You will see in the grant reviews for supplementary 25 3 9 ty 3 award that in a period of a matter of ar-ew weeks the idea of emergency medical services and expanded education activities 3 was advanced from an early inquiry to the full development 4 of applications and a number of excellent ones. This took 5 very little time. It wasn't a question of the local determina- tion process being indifferent to national policy but more a 0 7 matter of whether they could be responsible to national policy 0 and have it been meaningful locally. This is part and parcel 0 9 to the whole question. 10 The issues you have raised today are the issues 11 which the coordinators are raising, particularly the one of 12 selecting priorities for funding and so on. I think there is 13 nothing more legitimate than your very careful review of it 14 and transmittal of your concern. This becomes particularly 15 important -- let me just take advantage of the opportunity to bring up the other two issues which take relatively little time. ik In considering new legislation, because there will 18 be new legislation for the regional medical programs this 19 year, our legislation has to be extended by July 1 of 1973. 20 So also does the legislation of the other programs, which you 21 have been discussing today and a number of others. It Would 22 be rather natural for those who review it in Congress and in 23 the" Administration to try to look at these legislative proposals together and get something more comprehensive than 24 Ace-Federal Reporters, Inc. has been available in the past. 25 4 0 ty 4 1 The comment you have been making today, whether 2 positive or negative are pertinent to the development of 3 legislation which produces whatever specificity or whatever 4 flexibility you think should be in our legislation and those 5 that are apposite to it. 6 On the other hand, there are specific requirements 7 which are imposed by Congress which are of an entirely 8 different kind. One example of that wasthe expression by 9 Congress of their insistence that pulmonary pediatric centers 10 be funded at the level of the preceding fiscal year. We are 11 making every effort to make sure that occurs. This was part 12 of the appropriation language and is a specific act by Congress 13 which expresses the will of the people. There is no reason to 14 question it. 15 We will, as a consequence, be looking at some pul- 16 monary pediatric activities, either new or extensions, which 17 will allow us to maintain that level of $1.7 million in total 1 8 for the pulmonary pediatric centers. But this again is a 19 different kind of an issue when it is a Congressional question. 20 What you are really looking for I think is a better way of 21 dealing with the Administration on policy issues and I am 22 obviously not an adequate representative of those policy 23 considerations because I represent RMP policy considerations 24 andam responsive to those decisions which are made elsewhere. Ace-Federal Reporters, Inc. I think it is quite right that these questions be 25 4 1 ty 5 1 raised and that you get the kinds of answers which you are 2 pursuing. This also has something to do with the description 3 of the role of the Council in new legislation. 4 The categorical issue, you are absolutely right, 5 Mike, the -- there are a number of reasons why people have 6 felt that RMP is not appropriate for some of the large 7 increases in funds for categorical activities and probably the 8 most significant of them is the brief final life history o 9 the chronic disease control programs which is the point at 10 which I entered regional medical programs at the first place 11 and was under hot debate at that time. This has made a lot of 12 people feel this is not an appropriate place for those 13 activities to be carried out. 14 1 did meet with the President's Advisory Council 15 for Cardiovascular Disease and expressed to them our willingness, 16 and eagerness to engage in effective categorical disease acti- 17 vities. 18 The one thesis that I presented, which I fee 19 strongly about, which the Council may wish to consider, is 20 that an excellent categorical disease program inserted into a 21 bad delivery system will end up with bad cardiovascular 0 disease delivery and that you cannot carry out a control prograri 22 23 by setting up a few major demonstration centers and depend 24 upon something called education which is really exortation to Ace-Federal Reporters, Inc. 25 get the providers and the consumers to do what they ought to I 42 ty 6 1 do. 2 At this point if RMPs and certainly where they are 3 at their best it is true -- if RMPs play a role they can play 4 a control role which will carry it from knowledge into the 5 delivery system better than they could have in the past. When 6 I first entered this program, it was the scattering of activities 7 with a coronary unit here or there or a training program 8 for emergency medical services with no emergency system'@or 9 registry of some kind which wasn't tied into anything at 10 either end which tended to characterize too much in the program. 11 But if you are going to have a well knit structure 12 out there, and policy here, and you are going to@ decentralize 13 to the best that local judgment can be utilized, it is going 14 to require a high degree of observation and negotiation at the 15 Council level to make sure that the central purposes are 16 carried out effectively in the periphery. 17 I doubt that we have debated that as well as we should 18 have up to the present time. 19 DR. MAK LEOD: May I add something on that? I 20 would like to just add that the -- where the process is today 21 is clearly part of the Administration's approach to handling 0 22 this particular issue and the Administration has proposed to 23 have Council act en bloc following the recommendation of the 24 National Advisory Council some months ago. Ace-Federal Reporters, Inc. 25 As you will find out later on, as Harold has mentione ty 7 43 1 what the process has been to date. 2 The one other point that I think is not directly 3 germane to that particular action but it is the development 4 group of which the RMP, National Services Research and Develop- 5 ment, Comprehensive Health Planning, Hill-Burton and the 6 HMO make up the group is -- was included -- included HMO's 7 at the outset and I was part of the dialogue that went into 8 that. It was considered to be a developmental activity. 9 There was some considerable debate as to whether it should go 10 into the service group, because of the service orientation. 11 But the decision was made to include that as part of the 12 developmental activities and perhaps at some later date on 13 passage of legislation to have its -- convert from this 14 particular level of activity. 15 I would just want to be very responsive to what Dr. 16 DeBakey has said and say that we have as part of this 17 reasoning process, and you will hear the recommendation of the 18 ad hoc group later on, looked at the -- what we consider to be 19 important RMP considerations and they included the coordination 20 of the sources and services and the improved manpower 21 utilization and productivity, effective medical records, 0 22 information systems, approaches to the increased accessibility 23 of medical care. We did it to the extent that we had 24 anticipated and had actually received something on the order of Ace-Federal Reporters, Inc. 25 $8 million in grant requests and we have tailored that down, I ty 8 44 1 prior to the presentation before the ad hoc group, to just a 2 little bit over 4 million trying to bring it into line with the 3 objectives of the regional medical program service as we 4 have seen it, recognizing that they aren't specific to the 5 heart, stroke, and cancer but perhaps in a broader area 6 related to the general disease. 7 We wanted to look at the total approach at this point 8 in time. 9 DR. MARGULIES: I would like to -- we can come bac 10 to the discussion and we certainly will when we go to the 11 bloc review activities. I would like to follow up. As a 12 symptom of the relationships between this Council and the 13 decentralized RMPS, by pointing out to you that you have right 14 from the time over two years ago to the present had a series of 15 regional medical programs in which the coordinator was 16 particularly singled out for his level of ineffectiveness, 0 17 where over a period of time there were frequenty recommendations 1 8 that he be given somebody to help him out in an administrative 19 deputy role. 20 We have at the present time a replacement of somethin@ 21 between 75 and 80 percent of those who I was hearing all about 0 22 at the time that I entered. It can be done, you can have a 23 separation of central direction and local function and still 24 carry out some major alterations. I think you will also, as Ace-Federal Reporters, Inc. 25 you look, and you have been, that the regional advisory group ty 9 45 1 will see some striking changes going on. There will be more 2 of them. So the degree of management is significantly greater 3 than sometimes people think that it may be. I think if you 4 go over in your own minds the list of changes or taking a 5 look at Rochester, North Dakota, Oklahoma, Colorado, 6 Wyoming, Syracuse, and on down the list, with the exception of 7 two or three, those that have been a source of real distress 8 have been relieved significantly and were some very good 9 replacements so that it can happen. 10 Let's move on in the agenda, on the assumption we 11 can get back to this if you like. I would like to call your attention there is a result of the multiphasic health conference with the report 14 in the agenda books. I don't know how much opportunity you 15 have had to look at it but it is there primarily for explanation. 16 If there is any further action you want to take on it, it is 17 subject to your review. 18 The conclusions in it are an affirmation of earlier 19 action taken by this Council. You will recall in general we 20 felt there had to be a much better evaluation of what is going 21 on in these activities than there have been. I asked in 22 turn that this be considered as a ESMHA4--, kind of a responsi- 23 bility because there are similar activities in a number of 24 other programs. The conference supported that view and if you Nce - Federa I Repof ters, Inc. would like, you can take action, if you have had an opportunity 25 ty 10 46 1 to look at it, to accept this report as consistent with the 2 existing views of the Council or put it off until you have a 3 chance to look at it. 4 DR. KOMAROFF: John, those recommendations, that 5 certain of the projects will be changed so that a joint 6 perspective study will be done? Okay. 7 DR. MARGULIES: Russ? 8 DR. ROTH: Harold, this maybe sort of superfluous 9 but this has been such a fascinating thing to me to see 101 some of the readouts and I am just singling out one, the 11 Illinois project, multiphasic screening to detect coronary 12 in persons and individuals with subclinidal.' heart disease. 13 I think RMP in this project has shown an extraordinar y 141 important thing and that is that it tells us here that 22,929 15 of these examples have been evaluated and they have notified 16 the people who showed evidence in the opinion of the 17 examiners that they were to be regarded as precoronary or 18 coronary prone or that they actually had subclinical heart 19 disease and the statement comes along that 50 percent of those 20 people went to physicians. 21 This is very different from saying you ought to 22 have an annual physical examination. Here these people, 23 presumably intelligent enough to hold jobs in industry, and 24 with insurance protection, you can bet on that, practically A,ce- Federal Reporters, Inc. 25 100 percent, are told you have something wrong, you have I ty 11 47 1 heart disease, or you are set up for a coronary, and still 50 2@ percent of them don't do anything about it. 3 Gee, if this isn't something we ought to make 4 something of and try to find out the answers on how you get 5 these people to do something about these findings, I am sadly 6 mistaken. This is one of the more exciting things and at the 7 same time depressing to come out of our studies. I just couldn't End #5 8 let it pass without pointing it out. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 O,cf,@- Federal Reporters, Inc. 25 6 48 swl I DR. MARGULIES: The professional and technical devel- 2 @opment staff has felt very strongly about that sort of thing. 3 So far as I am concerned it also underscores the difficulty of 4 carrying out a meaningful control program unless you deal with 5 that particular fact. 6 You can demonstrate as long as you want, but if there 7 is no one out there to respond, it isn't going to matter. 8 DR. ROTH: I don't want to use this for a soap box, 9 but I have long been using the illustration of a hospital admin- 10 istrator whom I.knew well for 50 years who sits in her office 1 1 and allows a carcinoma breast, to get f lungating and metastasized. 12 surrounded by the talent to do something about this early. 13 It wasn't lack of money, lack of education. It was 14 fear, basically fear or mistrust on her case of the people she 15 worked with every day. 16 In the case of the 50 percent of the Illinois union 17 members, you have to do more studies to find out exactly what 18 these bare years are. 19 DR. DE BAKEY: Yes, but I think, Russ, I think one 20 of the important things though is to look at the positive side 21 of this. 0 22 Over 50 percent of them did respond and they picked 23 up this group. Now, I think this is important -,- an important 24 kce -Federal Reporters, Inc. 25 objective of the program. To be sure, there are 50 percent of I 49 sw2 I them that didn't respond, but the fact remains we picked up some 2 people in terms of the control program that needed attention 3 which would not have been picked up without this'. 4 DR. ROTH: I am happy to be happy about the 50 percent 5 DR. DE 4AKEY: I agree with what you are trying to 6 say, but what I am trying to bring out is here is-an example of 7 one of the real objectives of the program. 8 You knowt this is the kind of achievement that I 9 think needs to be emphasized. There are many others. I don't 10 want to get started on it because I would take up too much time 11 with the council. 12 I have given my speeches before in this area, 13 because of the lack of achieving Control. 14 DR. SCHREINER: I think the point Russ is making 15 about studying the bare years, go beyond that. I wouldn'ti accept the fact that 50 percent of the people are going to doc- 16 tors is doing anything about it. 17 18 we ran into this basis. You can report back and get 19 the man to go to his doctor, but the doctor doesn't know what to 20 do about it or there is no concerted program to take it from 21 Point C to point B. 22 DR. ROTH: What did the 50 percent that went to their 23 doctors do? 24 DR. SCHREINER: They may have ended up producing more @ce -Federal Reporters, Inc. cardiac neuros0s. We don't know what happens after they are 25 so sw3 I picked up. 2 DR. MARGULIES: It is precisely that failure 3 with these activities to pursue to see what happened with both 4 50 percents that has made us fell we have to evaluate this 5 thing much more before we set up any more. We don't know what 6 that means. 7 All we are saying in this report to you is that we 8 still feel that that kind of a study needs to be carried out 9 before we put more RMP money into it. 10 If there is no objection to this report, we will ---- ---I - - -- SIR i i i im@i ,"' 11 consider it acceptable to the council at the present time. 12 Let me then remind you on the three cycle review 13 process that we are well established into it, that the regions 14 which had to change their ann rsary dates have all gotten new anniversary dates. 15 16 This has given us a certain@@amount of finding flexi- 17 bility in this interesting budgetary year and at the same time 18 has gotten people on to a three cycle arrangemontquite comfor- 19 tably with actually relatively,,little objection to it. 20 A few minor bookkeeping skirmishes and that is about 21 all. 0 22 What we are doing with the regions is negotiating 23 new levels based upon an extended fiscal year so that a region 24 which was moved, we will say, from July 1 begin date to four kce -Federal Reporters, Inc. months later, has been given funds to carry it through 16 months, 25 51 sw4 I but these have been limited so they can renegotiate new levels. 2 In the process of renegotiating.the new level, it 3 gives us the ability of supplying the funds either in this f*6- 4 cal year or next fiscal year which allows us then to consume 5 a very wide range of potentialities in the money we have 6 between now and June 30. 7 We were not surprised that we would be -- as we were 8 on June 1, uncertain of our total funds available to a total 9 of about $1.5 million with 30 days to decide. 10 In fact, we rather suspect that would be the case 11 and we are well prepared for it. Part of it has been to put the regions on a new kind of a cycle. 12 13 We have, in the process of doing that, been able to 14 achieve two other thin s. One of them is to schedule staff 15 visits to the regions three to four times per year on a regular 16 basis so there is no uncertainty about it in the minds of the 17 regions or the staff with a higher level of priority to the regions which have in the review process shown up rather poorly 18 19 so we canuse our skills where they are most needed. 20 This is going to be on a scheduled basis as the needs 21 are dictated by the status of the program as determined by the 22 review process. 23 We have also been able to cut down the staff paper 24 work. Ace - Federal Reporters, Inc. In fact, we had to do it and it looked like a certaii@ 25 52 SW5 1 accommodation to the exigencies of life and it was. 2 On the other hand, I think it has improved the paper 3 work by making it simpler. However, if you find that the 4 simplified versionsavailable to you are not quite as adequate 5 as they have been in the past, they don't give you as much 6 information as you would like, we can respond,in a limited way 7 to changes which are requested, but if we are going to have a 8 smaller size staff as we have, a larger budget, the possibility 9 of increased demands of the kind Dr. DeBakey is describing, more 10 staff visits, we dan't do the same kind of paper work and we 11 are going to be doing some adjusting between various levels of 12 good so we may have a little more of one good and a little 13 less of the others. 14 I hope you will be tolerant. That is a rather 15 familiar administrative exercise. 16 I would also like to bring to your attention -- and 17 this may become extremely important in the light of the 18 discussion we 3ust had during the first part of this morning -- 19 that there are draft guidelines and regulations which have been 20 prepared by the staff. They are in the agenda book dnder the 21 title 'proposed regulations." 0 22 What will be done with those regulations :if they are 23 left unaltered is they will be put in the Federal Register. 24 You would be well off to review those carefully, because once Ace-Federal Reporters, Inc. in the Federal Register, and once accepted in general, they do 25 53 sw6 I become the regulations under which we operate and the deal with 2the very tough question of the relationships between the, .1 3grantee, regional advisor group, and the coordinator and his 4program staff. 5 That in turn has very heavy implications for what 6this National Advisory Coucnil does, because it has been a 7strong feeling as an expression of the legislation, not a clear 8definition of the legislation, an expression, that we entertain 9grants which come to the regional advisory group which in turn 10 have@been subject to their scrutiny and which represent their 11 policy of determinations. 12 At the same time, a number of the regional medical 13 programs have gone thorugh varying degrees of conflict o 14 regional advisor group and grantee. 15 We still have some instances in which the grantee is 16 convinced that the final decision belongs with it and that if 17 the regional advisor group says we should do B and they don't 18 like it, they can cancel out that request. 19 If that is to be alteredo and we are trying to 20 express what appears to be the Council view, it will have to be 21 altered in the very near future. 22 Those regulations are not going to be ciroOlated to 23 the regional medical programs now because they are not official 24 and if they get altered we will simply have more confusion. Ace - Federal Reporters, Inc. 25 In the meantime, they represent a basic effort which 54 sw7 I has been an extremely hard labor on the part of the staff here. 2 DR. PAHL: I would just like to interrupt for a 3 minute and say in my presentation, when you finish our other 4 point on agenda, I would l@ke to bring the Councilback to this 5 section of yourblack loose-leaf binder as well as an item which 6 Dr. Margulies has been referring to which is actually in your 7 folder. 8 If you want to proceed with that general introduction 9 we will have a few more specifics later. 10 DR. MARGULIES: At the risk of no later taking 11 advantage, but perhaps Bob, you'4ave gotten some sense of the 12 Council in the period of time that you have been here, we are 13 very pleased with the fact Bob Van Hoek has taken over as 14 director. All of us have felt that there is much more that we 15 can do together than we have in the past because@he@'is"ther-e@ 16 and although he has on@ p ,y been director for a brief 6riod of 17 time, I am sure you know that Bob Van Hoek has been a-,v_qry 1 8active part of ASMHA since it was organized or right from the 1 9very beginning, has occupied key roles as deputy administer and 20 deputy director in a variety of circumstances; and I have asked 21 him to come here. 22 If you will Bob, come up and acquaint us with what 23 You are doing and encourage the Coundilto be argumentative. 24 @4R- VAN HOEK: Thank you Harold. Ace -Federal Reportets, Inc. 25 I appreciate the opportunity to visit with the 5 5 f ls SW dw I 1 council. 2 I have only been in the present position two months 3 and I am getting acquainted with many of the details of the 4 center and its programs. 5 Much about what I am going to say in the next few 6 minutes in opening really comes from the perspective of my 7 three years experience in the office of the administrator in 8 which I was involved in evaluation, planning, budget, operation 9 of virtually every program in HSMHA. 10 And during that time one of the things that 11 concerned Dr. Wilson and the staff of the agency was the diffi- 12 culty of getting plans and programs developed in a cooperative 13 fashion among the various programs. 14 It appeared to us that in general the programs 15 and some of it, of course, based on the history of the 16 programs themselves and the agencies' formation functioned 17 quite independently and developed their programs with certain 18 priorities and objectives in mind which were related to the 19 objectives and programs of other activities in the agency. 20 So there would be times when looking at a particular 21 area of activity, it appeared at least that many of the program; 22 were doing the same kind of things, supporting the same kinds 23 of activities, with very little interrelationship. 24 It was interesting,to'8it here this morning and Ace - Federa I Repotters, Inc. hear some of the discussion about multiphasic screening and 25 dw 2 56 1 other activities and this can be -- we can take similar 2 areas of development in the area of manpower development 3 and the utilization of manpower and the development of 4 ambulatory care clinics, or developments for the poor, some 5 of which have been jointly planned and some of which have not. From the standpoint of the center, I see the 6 7 center's role one of participating in as well as carrying 8 out through its programs studies on how health services are 9 delivered, the components of the related services activities, 10 and the effectiveness of those activities and also to ::-.- 11 identify problems and to develop answers to those problems. 12 Let me take off, since the multiphasic activity was discussed, let me take off there as an example. 1 3 14 For instance, one of the basic questions I am contin- 15 ually asked wherever we deal with preventive care, disease control programs, multiphasic screening programs, and so 16 forth, is what is the level of patient acceptance, patient 17 fbllowup, and response to whatever professional guidance may 18 ---------- -- 1 9 be given. 20 It is amazing at least from the standpoint of 21 the national center how few studies are actually being 22 conducted in that area, probably one of the most important 23 areas in the health field,, simply, once the individual or 24 patient or consumer is in the system, and there is followup and Ace - Federa I Reporters, Inc. the patient has direct contact with the health services 2 5 5 7 dw 3 1 system, what is the professional response to that -- the 2 identification of that problem. 3 In other words, what is the quality of care and the 4 quality of services rendered and in what manner is it 5 presented? 6 Is the fact that the patient!s acceptance or 7 consummer's acceptance is low, is that partially due to the 8 lack of education from the standpoint of the professional to 9 the consumer or the types of knowledge that are available to 10 the professional in providing that service. That, again, is an area in which there are a 12 number of projects in which the Center has done relatively 13 little. 14 As far as I can tell, from my own experience, 15 very little in the agency as a whole has been done. 16 I would say at the moment from the standpoint of 17 the Center, I see those as two of the highest priority 18 areas. 19 This is not to say that these are programs which 20 will be done independently with the Center, but in conjunction 2 1 with the 314 (a) programs in both designing the studies as 22 well as carrying them out. 23 I might point out that the budget of the Center is 24 on the order of some 64 to 65 million dollars which represents \ce -Federal Reporters, Inc. only three percent of the HSMHA budget and one tenth of one 25 dw 4 58 1 percent of the total dollars in health care expended in this 2 country. 3 Therefore, it is important for us to use that fund, 4 invest that money in conjunction with other developments in 5 the -- trying to improve helath services. Another area that I feel the Center should 0 7 place great emphasis on and which will require the participa- tion of any HSMHA programs as well as non-Federal programs, is 8 in the area of resource utilization and productivity. 9 10 By this I mean a combination of studies on man- 11 power, studies on technology -- the application of technology 12 to hd-a:lth"deli-very and the utilization bf'facilities wf@h--Ehe maj'6r'-'e"mphasis on ambulatory care. 13 14 And rather than the Center supporting the train- 15 ing of new kinds of manpower or the construction of experi- 16 mental facilities and so forth, the major emphasis will be placed on actual studies of productivity, using industrial 171 engineering and systems engineering approaches, economics 18' 19 studies, and studies on proficiency of health manpower and 20 development of testing and education -- testing techniques 21 which can measure proficiency productivity which can then be 22 used as a feedback into the educational or training processes and also working with professional organizations to feed back 23 24 into recertification and relicensing as that develops through @ce- Federal Reporters, Inc. the various specialty boards and licensing bodies. 25 5 9 dw 5 1 I think that in in general, those are some of the 2. thoughts that I have and I would be interested in your reaction 3 to that. 4 I hope that in the future we will be -- we will 5 continue to have joint discussions on our program activities. Harold is going to be participating with me in 0 71 a meeting of our advisory council later this month in the 8 same way. 9 Thank you, Harold. 10 DR. MARGULIES: Thank you. 11 Are there some -- 12 MRS. WYCKOFF: How do you relate to the community 13 base manpower programs that we are working on now? Does your 14 agency relate to those? 15 \Ik@ @ At the moment, and I am speaking 16 from a little information, I don't believe we have had any 17 direct involvement in those community based programs. This 18 is an area where I think it is extremely important that we 19 develop a mechanism for joint planning and joint program 20 development and. implementation. 21 One of the areas I found a major problem in, again 22 from my experience of several years in the agency, is that we 23 have a tendency to start programs with certain assumptions or 24 initiate new programs with certain objectives which could kce- Federal Reporters, Inc. be stated in quantitative terms or output terms, and then we 25 dw 6 60 i could measure what we have achieved at some point subsequently. 2 The tendency to take many of the things as an 3 acknowledged fact or impression, a fact unsubstantiated by 4 some very limited information or studies seems to me that what 5 we need to do in health services,research and health services 6 deliveryis model some of our programs on the clinical 7 research collaborative models that have been carried out and 8 that is to develop some uniform protocols for large scale 9 programs, either for demonstration or developmental activity 10 which then a number of groups in the country can participate 11 in with you with very well defined objectives, well defined 12 procedures and stages for evaluation so that at some point, three years or five years from then, we can determine what we 1 3 14 felt was a way to go,in fact, proved to be the case. 15 There are many examples of this that I could 16 cite in programs, concepts such as Outreach in ambulatory 17 care programs. 18 If you look at what we support in Outreach 19 activities, they range all the way across the board in the 20 characteristics of the Outreach, what kind of services it 21 provided, and there is no way of comparing the different 22 programs other than by very intuitive subjective judgment. 23 DR. MARGULIES: We have felt when Bob and I have 24 talked that there is a continuum between RMP and RMD which \ce - Federal Reporters, Inc. has not been adequately developed. 25 dw 7 61 1 This is emphasized by the kinds of discussions we 2 have had today but also by the fact that we do not regard 3 RMP as a source of innovative new reserach into delivery 4 systems but rather as a mechanism for making sure what is 5 worthwhile becomes a part of the system. 6 Too frequently the problem of the transfer of new 7 understanding is not addressed and it really doesn't matter 8 whether you are talking about new scientific knowledge, 9 which was the original focal point for RMP or the transfer 10 of new delivery knowledge. end 6 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Nce -Federal Reporters, Inc. 25 6 2 CR 6499 7 eak 1 1 we have all heard the coordinator complain something 2@ was happening in his backyard he didn't even know it was there. 3 I doubt -- if there aren't more questions, the room 4 is getting very hot and it is time for coffee. 5 Fifteen minutes, please. (Recess.) 7 DR. MARGULIES: Could we reassemble, please? 8 I think if we get started again on the council 9 agenda we can move along. There are several people who have 10 to leave early and we want to get as much business out of the 11 way as possible before we go. I am going to shorten some of 12 the things which I had planned to tell you because they are going 13 to come up again in relationship with the review processes and so 14 we will skip over them. We will be talking about the 15 emergency medical system applications and the distinction between 16 what we are reviewing and the contract activities. We can do 17 that when we get to those reviews so you are clear about it. 18 I can at that time also let you know who the subcommittee 19 members were for the various special supplementary grant review 20 processes which were carried out. 21 I would only like to make one special point about 22 the educational activities which are going to be under review 23 for supplementary award. We are not empowered to support some- 24 thing called an area health education center but that is around A,ce- Federal Reporters, Inc. 25 a very clear cut definition of what the area health center is eak 2 63 1 and that definition is tied closely to the original Carnegie 2 Commission record which describes the AHEC as the satellite, 3 of the university health science center with the understanding 4 that the recipient is the health science center which develops 5 a collateral activity in a community and has the general 6 managership of it on the training of undergraduate medical 7 students, residents, and other graduate physicians in primary 8 medical care. 9 We have invited as a consequence, applications 10 Iwhich are really carried under no particular title and believe 11 me we are better off without a title for a number of reasons 12 but which are community based, which are an extension of RMP 13 activities of the past several years and which deal with 14 certain educational goals that are appropriate to RMP. 15 We will get to them in the very near future. These 16 primarily came out of the St. Louis conference and -- with 17 the coordinators and the number of discussions we have had. 18 There is, however, one action which the council 19 is being asked to take. The last time which the council met it 20 agreed to -- I would like to have you look at tab No. 8 on this 21 one. Congress agreed to delegate to the director of RMPS the 22 authority to provide funds for the planning of area health 23 education centers with certain limitations, $50,000 for each 24 one, a maximum of five such activities in any one regional @ce -Federal Reporters, Inc. medical program. 25 eak 3 64 1 MR. BAUM: It is community based education criteria. 2 DR. MARGULIES: Sorry. I was thrown a curve. 3 Community based education activities which is not their title. 4 That is just a way of locating them. 5 DR. PAHL: The document being referred to is behind 0 the tab delegation of authority which is about half way through 7 the black binder. 8 DR. MARGULIES: At the time you met, you did 9 delegate the authority to provide for some planning activities 10 for what were called area health education centers and since 11 we Are not doing them, we are asking you to change that 12 delegation to one which refers to community based education 13 activities for the same purpose. It is really a matter of 14 new language and conforming to our new position. 15 MRS. WYCKOFF: I move we change the language and -- 16 area health education centers to community based indication 17 programs. 18 DR. MARGULIES: Mrs. Wvckoff ha ved that this 19 delegation be altered as indicated in the tab in your book. 20 DR. OCHSNER: Second the motion. 21 DR. MARGULIES: It as been seconded. Any further 22 discussion? 23 MRS. MARS: I don't quite understand the reason for 24 this. Ace-Federal Reporters, Inc. DR. MARGULIES: The reason is to allow us to respond 25 !ak 4 65 1 to early planning activities, Mrs. Mars, during the cycle when 2 the program might be ready to plan something, nine or ten 0 3 months ahead of the time when it would be coming in for its 4 regular review processes and since it is a relatively new activity in some regions, it would be delayed up to a year in 5 what is an early planning or feasibility activity unless 0 7 we can provide them with the funds to do that earlier. Some- 8 times it would also run into conflict with the -- when their 9 award level is at the level of the council approval and they 10@ say you have to wait until it is time for their review to come in which would slow them up too much. 12 MRS. MARS: Thank you. DR. MARGULIES: Any further discussion? All in 13 14 favor say "aye." 15 (Chorus of ayes.) 16 DR. MARGULIES: Opposed? 17 (No answer.) 18 DR. MARGULIES: I would like to recognize the fact Dr. Scherlis has come in. He is on the review committee an 19 20 will be here for the discussion of the applications for 21 supplementary awards for emergency medical care. 22 I wonder if this would not be a good time to as 23 Mr. Chamkqiss to bring you up to date. 24 DR. CHAMPLISS: As a matter of special interest,. A,ce- Federal Reporters, Inc. the council staff felt that the council would like to be 25 66 eak 5 1 apprised of the new review committee memberships. As of June 30th, 2 @there will be four members of the committee retiring, Dr. 3 Michael Spellman, Dr. Gerald Besson, Dr. Philip White and the 4 past chairman of the committee, Dr. William Mayer. 5 All will be leaving the service of the review committee. That 6 will leave four vacancies on the committee and the need for the 7 appointment of a new chairman. That new chairman will be Dr. 8 Max Schmidt who has served with a great amount of distinction 9 already on the review committee. Dr. Max Schmidt. 10 Also there has been one appointment to the committe@ 11 that has been formally accepted. That person is Mrs. Maria 12 Flood from El Paso, Texas. There are two other names that have 13 already been approved but it would be injudicious at the moment 14 to give them until that process has been fully completed. 15 Those two appointment will be made, hopefully, soon. 16 . 'Another matter that it was felt the council would 17 be especially interested in has to do with a question that 18 arose from the Washington-Alaska regional medical program having 19 to do with the use of the proceeds of a grant activity covered 20 by or supported by regional medical programs. They raised 21 a question as to whether that could be granted to them for the 22 benefit of a private company, the Video Record Corporation, 23 which we understand is a subsidiary of RCA. They asked a ques- 24 tion as to whether that corporation could be given a non-exclu- kce -Federal Reporters, inc. 25 sive right to duplicate and then sell the proceeds of some films 6 7 eak 6 1 that were made under a RMPS grant. We felt this was a policy 2 issue and it was submitted to the office of the general council 3 for determination. 4 We took the position in RMPS that whatever was 5 most favorable to the regional medical program,, we would support 6 that position and in our inquiry made to the general council, 7 a decision has come forth which is, in fact, favorable to the 8 RMP. They asked the -- the question was raised and they answerer 9 it with three answers. 10 First, they said that the grantees of RMPS funds ma@ 11 produce and distribute video tapes or the proceeds of those 12 tapes which were -- which were the -- which were funded through 13 RMPS without prior review by RMPS. In other words, they can 14 make a distribution of the proceeds of grants, tapes, films, 15 and so on without our approval. 16 However, they did say that these items were items 17 of property and that the distribution -- the use of property 18 was a matter for the grantee institution to decide and not for 19 RMPS to decide. 20 The second question they raised -- they dealt 21 with, that since the proceeds of video tapes are copyrightable 22 materials, that this -- these copyrights to be subjOct to the 23 right of RMPS to a royalty-free non-exclusive irrevocable 24 license for the use of the video tapes. This means that PMPS @ce -Federal Reporters, Inc. would have a property interest in the tapes and that this 25 6 8 eak 7 1 property interest would come to RMPS royalty-free and at no 2 @ cost . 3 The third point that they dealt.with had to do with 4 royalties or the proceeds, the monies coming from the use of 5these tapes. The general council office finally said that all 6royalties or other fees received by the grantees from the use 7or distribution of video tapes produced with grant funds up to 8the amount they charged to the grant for the production of 9video tape, that is to say there would have to be a recoupment 10 by the RMP of the exact amount of money that was put in it 11 supported by a grant and after that amount was recouped, then 12 that amount would have to be refunded to RMPS but it went 13 on to say that RMP should look favorably upon the use of those 14 funds that were recouped for the continuation of other grant 15 activities. 16 So, here we have a policy determination by the 17 general council office on the use of the proceeds of grant funds 18 in the area of video tapes and films. 19 We think that this is something of an advancement 20 of the RMPS mission because now after the recoupment, the 21 proceeds of activities supported by grants can be used further 22 for the supporting of other grant activities, assuming, of 23 course, this has been cleared by RMPS. 24 Thank you. kce -Federal Reporters, Inc. DR. DE BAKEY: You say that the money can be used, 25 6 9 eak 8 1 the proceeds could be used for the advancement of the RMP pro- 2 gram. Do you mean that once the amount of money that the RMP 3puts into the program has been returned, that total amount, 4then what happens beyond that point? 5 DR. CHAMPLISS: It means that the grantee can use 6that amount, can use the further proceeds to further its 7activities. 8 DR. DE BAKEY: Can or will? 9 DR. CHAMPLISS: Can or should. 10 (Laughter.) 11 MRS. MARS: For the same purpose, in other words, 12 to make further films? 13 DR. CHAMPLISS: Or for whatever purpose -- 14 MRS. MARS: Any purpose? It doesa't necessarily 15 have to go back and make further films? 16 DR. CHAMPLISS: That is right. 17 DR. SCHREINER: What happens to the recouped money? 18 DR. MARGULIES: That becomes RMPS money which you 19 can leave there or bring back in. 20 MRS. MARS: Doesn't have to be used apparently 21 to make further films, for any program activity. 22 DR. MARGULIES: At this point, the amount involved 23 is not going to represent a windfall but the issue is of broader 94 importance when you think of the potentialities in various kce - Federal Reporters, Inc. programs for bringing fundsin, particularly, demonstration 25 70 eak 9 1 activities involved in patient care, for example. 2 DR. DE BAKEY: It seems to me that this sort of 3is not really a very clear policy. 4 DR. CHAMPLISS: I would agree there. We understand 5that further clarification of this policy is already in the 0making. 7 DR. MARGULIES: Mike, it is a legal opinion. 8 DR. DE BAKEY: That is why it is not clear. 9 (Laughter.) 10 MRS4 WYCKOFF: Sounds like we are going into the 11 grocery business. 12 DR. MARGULIES: If there are no further questions on this, I do want to return to that important document and regulations which I think is of very high interest to the council. 16 DR. PAHL: In recognizing that a number of people 17 will not be here tomorrow, I feel it important to take up 18 a number of documents that we have either sent to you or have 19 in your folders and I will try to highlight the aspects for you 20 which I believe we want to call to your attention and leave the 21 rest of it for your more leisurely perusal later on. 22 DR. DE BAKEY: Could we get some clarification 23 before we start on where these proposals stand? None of them 24 have been published? kce- Federal Reporters, Inc. 25 DR. PAHL: No. Let me say for the benefit of you and .1 - eak 10 71 1 particularly the new members of the council, we have a tab in 2 the middle of the black binder called proposed regulations 3 and it is titled first draft regulations and it means just 4 that. These have not been issued. They are in draft form and 5 the thing which I was going to end up on, I will say now we 6 earnestly request that you look at these today, tomorrow, and 7 take this section back with you if you will, look hem over, 8 and sometime within the next two to three we would 9 appreciate any constructive comments, additions, deletions, 10 and so forth in writing from you and the letter can be 11 addressed to Dr. Margulies or to me. 12 We will then take whatever comments you have and 13 begin work with the general council office in developing the 14 final regulations which will then have to be published in the 15 Federal Register subject to, again, a time period for comment 16 to come in from anyone in the country. 17 Again, any modifications made on that basis have 18 to be published. So we are at the stage where these are truly 19 draft and nothing will be done, I would say, until the latter 20 part of June in working again with the general council office. 21 We would like to have your comments. 22 DR. DE BAKEY: One question, that is how do these 23 differ from what has been published so far in the Federal 24 Register> kce -Federal Reporters, Inc. DR. PAHL: This is really an updating of the 25 eak 11 72 1 earlier regulations, taking into account our mission statement 2 which was endorsed by the adminstrator and his council a year 7 3ago and also putting into effect 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 kce- Federal Reporters, Inc. 25 CR6499 73 #8-ter-1 I DR. DE BAKEY: The reason I want to know is I think 2 in evaluating these regulations, we would like to know, you 3 know, what has been published in the Federal Register, or at 4 least, be able to bring it up to date. What are the changes? 5 MRS. MARS: Yes. What are the changes? 6 DR. PAHL: Let us ask Ken. 7 DR. MARGULIES: One point that should be made, how- 8 ever, is that back of this lies the decision to move away from 9 the excessive use of what are called guidelines, to the use of 10 regulations which are published and which allow public access 11 and comment, so much of what we are entertaining here has been 12 carried under guidelines which are not really regulations. 13 DR. DE BAKEY: We went through a lot -- in the 14 early days, went into the Federal Register, and I just wante 15 to be sure we are brought up to date on the relationship of 16 these to what exists now in the Federal Register. 17 MR. BAUM: Let me explain what has been done. 18 The regulations that we have now are the regulations 19 that were originally promulgated from the program and have not 20 been changed since 1965, or whenever they were pushed through. 21 There was a need to do really two things with these regulations 0 22 one was to:bring them up to date so that the requ- 23 lations are consonant with the new law that we are currently 24 operating under. That made a number of changes, broadened some @ce- Federal Reporters, Inc. of the statements of purposes, widened the representation 25 ter-2 74 1 required on regional advisory groups, completely changed ,I to 2 Section