Redefining Underserved: Close-up on New Shortage Reg
Summary of the 9/29/98 Forum

September 1998

The federal government’s new proposal for measuring the shortage of health care services got some early and close rural scrutiny September 29, 1998 at the fall Capital Area Rural Health Roundtable.

Almost a hundred association representatives, medical professionals, policy analysts, legislative aids and executive branch members met on Capitol Hill to hear, among others, New Mexico rural health planner Harvey Licht and University of North Carolina rural health researcher Tom Rickets offer their state and national impact analyses.

Organized by the George Mason University Center for Health Policy and Ethics, the Roundtable is a 300 member, open forum of organizations, agencies, and institutions interested in rural health and rural development.

Preliminary federal estimates using the new formulas show eight million fewer people lacking adequate access to health care than under the old formulas.  Still, 64 million people remain in need, testimony to what the National Council on Graduate Medical Education calls "the central paradox of the American health care system:  shortage amid surplus."1

Among counties, 11 percent of rural counties could lose their designations (whole counties), while 12 percent of urban counties could be de-designated, according to federal analysis.  Another 2 percent of rural (and 2 percent urban) counties could gain designations.

However, about 60 percent of  the federal government’s shortage designations are for rural areas, and state officials who depend on the federal designations for managing state and federal aid programs were quick to respond with more draconian forecasts. 

Federal officials also participated in the September Roundtable forum, which gave the new rule its first major public airing during the official comment period.  Federal analyst Bonnie Lefkowitz, whose agency -- the Health Resources and Services Administration – administers the shortage designation program, took pains to explain to forum attendees the many balancing factors that federal architects of the new rule had woven into its many formulas.2

Office of Shortage Designation spokesman Dick Lee also cautioned rural advocates to go beyond scorekeeping on potential de-designations:  "We need to know why that would happen," he said, "[and] if the fall-out is due to a change in the methodology or in the underlying conditions of the area."

Geography Matters

A strong concern among the forum’s guest speakers is the fact that Health Professional Shortage Areas, known as HPSA’s will no longer be a separate designation, but a subset of another category, known as Medically Underserved Areas  or Populations (MUPs) – a designation driven more by factors of poverty or financial and cultural access to available services than by geography and the unavailability of physicians.

Heretofore, the HPSA designation simply required a very low physician-to-population ratio of 1:3,500.  Under the new rule, an area must also qualify as an MUP in order to be designated as a HPSA and be eligible for HPSA-related programs.  (The new HPSA, on the other hand, lowers the physician-to-population ratio to 1:3,000).

Federal officials make the case that over the years the distinction between the two categories has been obscured by a state prerogative to make some designations and by an increasing number of small-area requests.  The proposed rule also follows instructions from Congress to identify HPSAs with the greatest need.  According to the Federal Register announcement, the nature of the unmet need has shifted somewhat "to populations with certain characteristics" that include Hispanic or linguistically isolated communities.

Rural advocates, nevertheless, remain alarmed.  Outside the Border states, and the Southeastern coastal states, it is not typical for many rural states to have high numbers of Hispanics, racial minorities, or linguistically isolated residents, said forum participant Bill Finerfrock, executive director of the National Association of Rural Health Clinics.  Streamlining designations by subsuming the stand-alone HPSAs is a clear disadvantage to rural communities, he said.  "In my opinion, geography, here, has been significantly diminished as a factor for designating underservice."

The sense that geography is a uniquely defining factor in health care was also expressed by Senator Tom Harkin (D-Iowa), who opened the Roundtable forum by recalling his years of "struggle against the urban bias" among legislators and policymakers.  "For many rural residents, whether or not they get a designation is the difference between whether or not they get health care," said the co-chair and founding member of the Senate Rural Health Caucus.

Simulations and Rural Health Clinics

Ricketts' simulations for whole-county rural HPSAs under the new criteria yielded a dramatic range of outcomes.  Depending on the data set, a practitioner count can vary by as much as 20 percent, he said.  Using nationally available data from the American Medical Association master files and linguistic and poverty data from census records, Ricketts' team of researchers projected a 40 percent reduction (402) across the nation in the number of whole-county rural HPSAs.

But the same analysis using surveys of on-site practitioners from the federal Office of Shortage Designation files reduced the number of existing HPSAs by only 156 counties.  Another 149 new counties would meet the criteria for designation, so the net loss would be low, said Ricketts.  But the impact of a de-designation and the withdrawal of outside resources is difficult to anticipate, since many medical resources are interdependent.

While rural supporters appeared ready to account for the contribution of non-physician providers under the new formula -- physician assistants, nurse practitioners and nurse midwives -- they are wary of the fact that such a count could knock out the first line of defense for rural communities that have managed to establish a small clinic for local emergency and primary care.  Ricketts'  impact simulation for Rural Health Clinics in North Carolina, therefore, drew strong interest.

North Carolina, is seen as a good test bed because it developed the prototype for Rural Health Clinics and their use of mid-level practitioners.  Also, the state has for 20 years maintained a continuous database through its licensures for the location and hours in primary care of physicians, nurse practitioners, physician assistants and certified nurse midwives.

Ricketts' simulation also used state demographers' estimates of population structures with regard to the new MUP criteria.   When the North Carolina data was applied to its 16 whole-county HPSAs, the number of counties that still qualified as HPSAs dropped to three.  The number of part-county HPSAs dropped from 20 to zero.

However, testing those counties under the new MUP criteria Ricketts found that 21 of those 36 counties would remain designated for programs tied to that status.

Avoiding the 'Yo-yo Effect'

In order to avoid undercutting its own investment in underserved areas, the federal government, under the new rule, has created a tier for excluding National Health Service Corps and Community/Migrant Health Center practitioners from its audit of available resources.   The special tier (second-degree shortage area) is designed to prevent communities from gaining and re-losing eligibility from year-to-year due to very small shifts in the number of health care professionals they have.

Rural advocates appeared dismayed and puzzled, however, that practitioners sustained by new programs developed over the last decade for capacity-building in rural areas -- and also tied to the HPSA designation -- will not be similarly exempted in this second tier of federal audits.  Among these are practitioners in Rural Health Clinics, Federally-Qualified Health Centers, and foreign medical graduates serving under visa waivers.  "The  more programs that are involved in this [designation process] the higher the stakes are," said Ricketts, "and not enough attention is being paid to this at some levels in the political process."

Federal spokeswoman Lefkowitz, who directs evaluation, analysis and research for the HRSA Bureau of Primary Health Care, noted at the forum that statutory authority for the HPSA and MUP designations was tied, respectively, to the NHSC and CHC legislation, a fact that Department of Health and Human Services lawyers stayed close to in the drafting of the new rule.

Also constraining the Bureau, however, is the fact that in addition to the lack of update requirements for MUP designations, the current system's failure to consider mid-levels and J-1 doctors has been a major complaint of the GAO, HCFA, and Congress.  Also, the rapid proliferation of Rural Health Clinics in the early 90s was a concern, although it was subsequently addressed in the Balanced Budget Act of 1997.

State Investments

For Harvey Licht, Chief of the New Mexico Primary Care and Rural Health Bureau ("I have the practical problem of deciding where to put money"), there is the prospect of  a spiral reduction in resources to rural communities that lose their HPSA designation due to the interlocking investment of state health programs.  New Mexico, he said, expends dollar for dollar what federal programs invest in the state's underserved population.

Although his preliminary analysis of New Mexico under the proposed HPSA and MUP rule shows no absolute loss of designations, a change from HPSA to MUP status for some communities would mean a loss of  those programs tied to HPSAs:  including the National Health Service Corps, Rural Outreach and Network Grants, and telemedicine subsidies.  "Until now," said Licht, "states have been a major partner in federal programs, but [the new rule] may lead us to de-link our state investment from the federal effort."

An additional concern voiced by Roundtable speaker Ricketts centered around the fact that the new rule asks states to define rational service areas.  Although this is a requirement flexible enough "to drive a truck through," said Ricketts, it is also "a process that will drive people nuts because this [concept] always favors an urban core."

Ricketts and others also recommended more specificity for counting primary care practitioners, especially nonphysicians, to avoid counting those working in health departments, with specialists, in hospice care, or otherwise not delivering primary care.  Some practitioners ride circuit and practice in more than one place.

The new regulation for HPSA and MUP designations should give state and local officials far more discretion, while eliminating the cumbersome burden of working through two separate but overlapping qualifying programs, according to the HRSA Bureau of Primary Health Care.

It may also challenge states to embark on what Ricketts called "an intense data collection at the local level."  Not many states have usable licensure data that indicate practitioner location and details of practice.  Not all practice in the same place every day.   To get precise and contemporary information for service areas,  "you really have to be there and counting every person that day to understand what is on the ground at any given point in time."

 In his own closing remarks, Senator Harkin had comforting words for those assembled.  "It's my hope that updating these regulations will streamline the requirements for communities and make the system more pro-active and flexible in responding to changing demographics and needs," he said, adding by way of caution, that the changes should "not be used as a back door means of cutting of countless rural communities from assistance."  He saluted the forum and encouraged further analysis:   "Don't think that what you do here today and the comments you make and papers you submit will just go by the wayside."

End Notes:
¹ Council on Graduate Medical Education Tenth Report, February 1998.

² Among other changes, the new MUP moves the poverty threshold from 100 percent to 200 percent of poverty.  It also introduces points for low population density.