Joan D Krizack.

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the self-reporting of the companies involved.

The FDA's stringent regulatory requirements are frequently a source
of controversy, as is the alleged failure of the agency to enforce them. A
decision about the safety of silicon breast implants, a food additive such as
saccharin, or grapes from Chile can keep the agency in the news for
weeks. Because both personal and financial risks are involved with every
decision, the volume of records generated by these FDA decisions is
substantial. A single new drug application submitted by a pharmaceutical


company seeking FDA approval may contain from 10,000 to over one
million pages. '^ Because of the size of the applications, the FDA has been
one of the federal agencies pioneering the use of digital optical storage
media for the management of records.

A second, less overt form of regulation and policy formulation has
emerged as a product of the federal government's role as the primary
source of reimbursement for patient care expenditures, especially through
the Medicare and Medicaid programs. Medicare is a nationwide health
insurance program designed to help pay for hospital costs, nursing home
care, physician services, and prescription drugs for the elderly, individuals
receiving social security disability payments, and people with end-stage
renal disease. Medicaid is a federally aided, state-operated program that
provides medical benefits for certain low-income people of all ages in need
of medical care. Both programs were enacted in 1965, by Titles 18 and 19
of the Social Security Act. These two programs now account for most
federal health care expenditures — $175.9 billion in 1990.^^

Both Medicare and Medicaid are modeled on private insurance pro-
grams; benefits and services are bought from private vendors, with the
government itself providing few benefits. Medicare and Medicaid are
primarily transfer programs. The regulations they issue are necessary for
them to carry out their primary mission — supervising the administration
of private or state-run health programs that are funded in part with
federal dollars. As a purchaser of patient care, the government sets
standards that providers must meet before public funds will be paid to
them.^' Hence the state-run programs must set payment guidelines and
standards of performance for hospitals and other patient care providers,
establishing to a large degree the nature and extent of medical care given
in this country — in other words, formulating health care policy. For
example, beginning in 1972 the federal government authorized and
financed 182 professional standards review organizations (PSROs). Be-
fore federal funds could be received for hospital services, the PSROs had to
review hospital records to see if hospitals were providing more care than
was necessary. The PSROs were later revised into a smaller number of
professional review organizations (PROs) and given the task of reviewing
hospital services with the emphasis on minimizing inaccurate diagnostic
data and unnecessary admissions. ^"^ "The requirements for review of
hospital stays by PSROs and PROs," as one analyst has recently noted,
"have subjected physicians to far more scrutiny of their practice than was
previously the case. These requirements . . . have obliged physicians and
hospital personnel to be more diligent and detailed in making entries in
medical records and to document the reasons for medical decisions more
extensively than before." '^ The result in hospitals and physicians' offices


has been a massive increase in the volume of official patient records. ^^
Much of the structure of the modern hospital, the activities which it
performs, and the documentation generated in the performance of these
activities have been shaped by the payment policies issued by the Health
Care Financing Administration (the agency that administers most federal
programs for the reimbursement of patient care). Usually, if Medicare or
Medicaid refuses to pay for a certain procedure, an extended hospital stay,
or an experimental drug, these options are not offered to the patient. As
containment of spiraling health care costs becomes an ever-greater prior-
ity, it is likely that the Health Care Financing Administration will play a
greater role in indirectly regulating the U.S. health care system.


Although most education of health care personnel in the United States
takes place in nonfederal institutions, federal agencies do play a small but
important role. The government maintains its own medical school, the
Uniformed Services University of the Health Sciences. At the NIH, CDC,
EPA, and other research institutions, the government manages a series of
pre- and postdoctoral and other postprofessional research and training
programs. These institutions also develop many specialized educational
tools as part of the continuing education of health service professionals.
The federal government has also funded students during times of per-
ceived shortages of health professionals. During World War II the Cadet
Nurse Corps was established within the Public Health Service to pay for
the education of nurses in approved schools of nursing; over 169,000
students were admitted to the program during its five-year existence. ''' In
the 1960s and 1970s fear of an anticipated shortage of physicians led to a
direct capitation program whereby medical schools were given subsidies
in proportion to the number of students enrolled in their programs. ^^
Although governmental support of general medical education in universi-
ties has decreased greatly, the government remains an important source
of financial support for medical education at institutions outside of the
federal structure.


Given the size of federal expenditures for health care, it is not surprising
that the federal government is directly or indirectly the single largest
purchaser of health care goods and services. The federal government is not
itself, however, a major provider of goods and services. One exception is a
program to provide rare or experimental drugs. In 1981, for example.


pentamidine was distributed only by the federal government. An upsurge
in requests for it was one of the first signs alerting the government to the
presence of a deadly new disease, later identified as HIV infection. ^^


Federal agencies produce a large volume of records as they devise and
implement their programs. The policy for creating, maintaining, and
disposing of federal executive branch agency records is controlled by the
Federal Records Act. The act recognized that most federal records — 95
percent or more, according to the National Archives and Records Admin-
istration — are of little potential historical value. A small percentage, how-
ever, are likely to be of enduring importance because of their primary or
secondary value, in particular their ability to adequately and properly
document "the organization, functions, policies, decisions, procedures,
and essential transactions of the agency. "^'^

Records judged to be of enduring value are deposited in the National
Archives, either in Washington, D.C., or at one of the eleven field
branches. The records of health care agencies are well represented among
the holdings of the archives. Separate record groups (the fundamental
unit of archival organization) have been established for the DHHS (RG
468), for its predecessor agency, the Department of Health, Education,
and Welfare (RG 235), and for many of its subsidiary agencies such as the
Health Resources and Services Administration (RG 512), the CDC (RG
442), the Public Health Service (RG 90), the NIH (RG 443), the FDA (RG
88), the Agency for Health Care Policy and Research (RG 510), and St.
Elizabeths Hospital (RG 418). The Office of the Army's Surgeon General
(RG 112) and the Navy's Bureau of Medicine and Surgery (RG 52) also
have their own record groups, as does the Veterans Administration (RG
15). The National Archives and Records Administration remains the single
best source for historical information about the U.S. health care system.


State health agencies are involved in almost all of the U.S. health care
system's functions; as is the case with the federal agencies, only the
provision of goods and services is an insignificant state function. Although
the activities of the state health agencies may be in the same functional
areas as the federal government, their emphasis is different. Historically,
the responsibility for the general health, safety, and welfare of the popula-


tion rested with the states, not with the federal government. Whereas the
federal government does not provide patient care to the general popula-
tion, state health agencies have themselves either developed programs in
this area or delegated responsibility for such programs to local govern-
ments. In addition, state health agencies have placed a greater emphasis
on health promotion activities. Much medical education is based in state
universities, and the states have played an ever-increasing role in regula-
tion. Biomedical research, a major function of the federal government, is
of secondary importance at the state level except for research at state-
sponsored universities.

Although these broad generalizations about the functions performed
by state health agencies hold true for almost all states, how these functions
are carried out, the specific agency that is assigned the function, and the
relative importance of the functions vary from state to state. Each state has
developed a unique health care system structure reflecting its particular
history, economic conditions, and health problems. Thus, fifty-five organ-
izational schemes for state health functions have evolved (one for each
state, the District of Columbia, and the territories of American Samoa,
Guam, Puerto Rico, and the Virgin Islands). ^^

Despite such diversity, some generalizations about the common func-
tions of state health care agencies can be made. The Association of State
and Territorial Health Officers (ASTHO) defines a generic "State Health
Agency" as "the Agency vested with primary responsibility for public
health within their jurisdictions." This generally means that the state
health agency is responsible for "setting statewide public health priorities,
carrying out national and state mandates, responding to public health
hazards, and assuring access to health services for under-served state
residents. "-^^ In Maryland, for example, the state agency is the Depart-
ment of Health and Mental Hygiene. ASTHO surveys have further defined
six core programmatic activities found in almost every state health
agency: personal health, environmental health, health resources, labora-
tory services, general administration and services, and funding for local
health department activities outside the programmatic areas listed. Ser-
vices in these programmatic areas may be delivered through the state
agency itself, local health departments, or a combination of the two.


Almost all state health agencies provide patient care, which constitutes
the bulk of their expenditures. Of the $9.5 billion spent by state health
agencies in fiscal year 1989 for direct health care expenditures and
in grants to local officials, three fourths went for personal health activi-


ties.^^ Most States support two types of programs: ambulatory care for
public health concerns and institutional care for certain long-term condi-

Ambulatory services are often conducted in conjunction with local
health departments, and the programs frequently target individuals with
low incomes. Maternal and child health care, including prenatal and
postnatal care, family planning, and immunization, are common activi-
ties. Dental health programs, especially preventive measures such as
fluoridation of water supplies, and communicable disease control pro-
grams, including immunization and the control of sexually transmitted
and other infectious diseases, are also features of most state health agen-

Institutional services are directed at long-term, chronic conditions,
the treatment of which is beyond the financial capabilities of private
insurance or individuals. Tuberculosis hospitals, now rare, were a preva-
lent example of state-sponsored institutional support of individuals with
chronic disease.^'* Sixteen state health agencies operate public hospitals,
long-term care facilities, or other types of in-patient care facilities. ^^ Other
states sponsor care for the handicapped, including programs for handi-
capped children, people with speech, physical, or occupational disabilities,
and individuals who can be treated at home.

As with the federal government, the reimbursement for patient care
delivered by private hospitals and physicians is also an important activity
of state health agencies, accounting for the lion's share of the state health
budget. Foremost among the reimbursement programs is Medicaid. Al-
though the federal government defines the range of coverage available
under Medicaid and provides significant funding, Medicaid is adminis-
tered at the state level. States may decide whether or not to participate in
Medicaid (all currently do) and choose which specific programs they will
offer beyond the basic health insurance for individuals receiving public
assistance. ^^ States vary widely in what they will cover under Medicaid,
and any coverage beyond the scope of the federal program becomes the
responsibility of the state. In sum, states have tremendous discretion in
designing their Medicaid programs.


State involvement in pubic health began with attempts to control commu-
nicable diseases and to ensure a safe food and water supply through
sanitation. Such activities remain at the heart of most state health agen-
cies' activities. Among the activities performed by the states in this area


are the following: consumer protection and sanitation, especially in regard
to food, milk, sanitation, and zoonotic disease control (rabies, Lyme
disease, etc.); water quality control, including the provision or testing of
water, sewage disposal, and pollution controls; solid and toxic waste
control and disposal; radiation control; air quality control; and occupa-
tional safety and health. For example, the Department of Health in
Missouri's Public Health Laboratory performs a number of tests on public
and private water supplies: the Chemistry Unit determines the presence of
minerals, nitrates, pesticides, and other chemicals in the water, and the
Environmental Bacteriological Unit tests for the presence of coliform


One of the first activities undertaken by states to understand the nature of
disease in their communities and to promote better health was collecting
and disseminating health and vital statistics. In recent years the role of
state health agencies in analyzing and controlling state health resources
has increased dramatically. The National Health Planning and Resources
Development Act of 1974 requires that each state designate one agency as
the state health planning and development agency; in most cases this is
the state health agency. In addition many states have a state health
coordinating council.

State health agencies may assist with the construction of new health
facilities, coordinate the development of emergency services, and provide
clinical laboratory services. In particular, they may require that a "certifi-
cate of need" be acquired before any new hospital construction takes
place or expensive new equipment is purchased. The certificate attests to
the fact that more hospital capacity or technology (a magnetic resonance
imaging machine, for example) is needed. State health agencies may also
regulate pharmacies, clinical laboratories, blood banks, and ambulance
service. In addition, states license and regulate health professionals and
support personnel, directly influencing the type and level of service
available in each state. All states, for example, set certain minimum
standards of training, and many require participation in a continuing
education program as a prerequisite for continued licensure. Finally, most
states regulate the private health insurance industry, and some regulate
health maintenance organizations. Some mandate that certain minimum
benefits be included in each insurance plan, and many have insurance
commissioners who oversee the activity of insurance companies in the



Many states have established or fund schools for the training physicians,
nurses, dentists, and veterinarians as part of the state higher education
system, and all states have courses at some level in the educational system
(including community colleges) for training health personnel. Over half of
the medical schools in the United States, for example, are part of a state
university system; in addition, many private schools,or students attending
them, receive some state support. In some states, students receive finan-
cial aid for their professional education in exchange for a commitment to
practice for a specified period in underserved communities.


In 1989 state and local governments spent over $1.3 billion on health
research and development.^^ Most of the money came from the states,
and much of it was directed to state universities. All state medical schools
have active programs for biomedical research, although the nature, direc-
tion, and search for funding of individual projects is normally left to the
discretion of the individual investigator. The association of biomedical
research with commercial and technological advancement has led many
states to develop biotechnology and other centers for applied biomedicine.
Although to date state support has primarily been of research infrastruc-
ture, in the future states may play a more direct role in supporting
biomedical research. ^^


State archival agencies predate the formation of the National Archives.
The Alabama Department of Archives and History, the first agency in any
state specifically designated to serve as the official custodian of the state's
records, was established in 1 90 1; the National Archives did not come into
existence until the National Archives Act of 1934. Subsequent develop-
ment of state archives was slow; it was not until the mid-1970s that every
state in the union had established a formal archival program. ^^

Despite the comparatively long existence of some state archives, the
management of state governmental records is often deficient. As the
Report of the Committee on the Records of Government noted:

[M]any state archivists have only a general estimate of the number of
state government records outside of the archival system. In some states,
less than a third of the agencies have been touched by current records
management procedures. Other state archivists acknowledge that weak


agency liaison is the rule rather than the exception in their programs. In
many instances, state agencies simply keep their own records. In
Pennsylvania, for example, the records center reported that of the four
thousand series of records scheduled for transmittal, only twelve
hundred were actually in the records center. Discussing this issue with
the Committee, one state archivist stated unequivocally that most state
records either are not preserved or are preserved by accident. ^°

If the records of a state government agency run the risk of being lost,
as recent surveys have suggested, records from heahh care agencies are
particularly at risk. As noted earlier, much of the work of health care
agencies in the states involves the direct provision of health care service.
Records from these agencies frequently include information of a private
nature concerning patients at mental hospitals, state-run clinics, and other
state-sponsored agencies. Access to the records must be carefully con-
trolled and limited, further limiting their potential use in an archival
repository. In Michigan, for example, the Department of Mental Health
was unwilling, for legal and ethical reasons, to transfer the patient records
of the Ionia State Hospital for the Criminally Insane to the state archives
when the hospital closed. After diligent negotiation with the department
on the mechanisms by which access would be provided to the material,
the state archives was able to reach an agreement with the department.
Since then the records of nine other state mental hospitals have also been
accessioned. The efforts of the Michigan state archives in this instance,
however, appear to be unique; one must conclude that in many other
states similar records would either remain with the parent agency or be
destroyed.^' Recent work on access to medical records indicates that the
problems associated with the confidential nature of state medical records
can be overcome, suggesting that this may in the future be less of an
impediment to the preservation of state records. ^^ It should be noted that
there is no need to save all the patient records of every mental hospital in
the United States. What the Michigan example illustrates, however, is
some of the impediments to efficient retention of state health agency


Defining exactly what a local health department is and how many there
are in the United States is no easy task. C. A. Miller, using the definition of
a local health department as "an administrative and service unit of local or
state government, concerned with health, employing at least one full-time
person and carrying some responsibility for the health of a jurisdiction


smaller than a state," concluded in 1977 that there were between 1,073
and 2,073 local health agencies in the country. ^^ ASTHO, using a similar
definition, concluded in 1981 that there were 3,264 local health depart-
ments in forty-four states and territories, and no substate units in twelve
other states and territories. More recently, the Public Health Foundation
has concluded that there are nearly 3,000 official local health departments
providing direct community health services.'"^

Because of the disparity in definitions and numbers, it is difficult to
describe accurately the universe of local health departments. Neverthe-
less, certain generalizations can be made. Local health activities center on
health promotion, broadly defined. Haven Emerson in 1945 identified the
six basic activities of local public health work, and all fall within our
definition of health promotion: vital statistics collection, communicable
disease control, environmental sanitation, support of public health labora-
tories, maternal and child health promotion, and health education. ^^ In
practice, the local health agency is often responsible for childhood immu-
nizations, restaurant inspections, urban rat control, and rabies control. In
addition, local health departments are usually responsible for providing
patient care to the poor, either in community health centers, clinics, or
general hospitals. For example, the clinics of the Madison, Wisconsin,
Department of Public Health offer to residents of the city services such as
health advice, immunizations, dental care, and testing for sexually trans-
mitted diseases. Of particular importance are the services they provide to
immigrants and participants in the Women, Infants, and Children Pro-
gram. Community-sponsored hospitals can range in size from a few beds
to hundreds of beds. The 926-bed Cook County (Illinois) Hospital is an
example of a large community hospital. The activities of local health
agencies may be carried out independently or performed in partnership
with or as a subagency of the state health department.

Local health agencies are minimally involved with functions of the U.S.
health care system other than health promotion and patient care. At one
time municipal laboratories were important sources of biomedical research.
The most notable example is the former city laboratory that has become the
New York Public Health Research Institute in New York City. Under the
directorship of Hermann Biggs and W. H. Park, the laboratory was an

Online LibraryJoan D KrizackDocumentation planning for the U.S. health care system → online text (page 7 of 26)