The Reagan administration, pushing to get the federal government out of the health planning business by the end of the fiscal year, plans to scrap a controversial regulation that was a prominent part of the Carter administration's effort to get a handle on runaway health costs.
In a recent Federal Register notice, the Health and Human Services Department proposed to abolish a four-year-old government standard for controlling the supply and distribution of computed tomographic (CT) scanners, a highly touted but expensive X-ray machine that allows doctors to take a look at a cross section inside the body. The restriction has long been vigorously opposed by many medical organizations and the manufacturers who make the equipment.
When the regulation was published in 1978, federal health officials held the CT scanner up as an example of the need for careful health planning to avoid the uncontrolled expansion of costly and perhaps unnecessary medical technology.
The scanners can cost as much as $1 million apiece, and patient costs per procedure can run several hundred dollars. The rule that HHS wants to abolish establishes guidelines for state and local planning agencies that new scanners should not be purchased unless all of the machines in a given area are operating at a certain use level.
HHS says the deregulatory action will not have a "major" impact on costs, but some critics warn that it could further contribute to the problem of rising health care expenditures. Health care costs continue to increase at a rate more than double that of all other consumer goods and services.
Calling the standard "rigid and inflexible," the HHS announcement said that getting rid of it "will give states and local communities the fullest possible discretion and flexibility in health systems planning." The department will instead distribute "non-regulatory" technical guidance to health planners, offering a new formula for calculating the need for new machines.
At the same time, the department is also pushing its own budget proposal to eliminate federal funding for the state and local health planning network as of Sept. 30. Congressional action on this issue is uncertain, as some legislators seek to keep a federal presence in the health planning field.
The Reagan administration argues that restricting the availability of CT scanners may actually increase costs "due to the substitution of more costly and invasive procedures," while removing such restrictions would help "foster a competitive market in health care."
Many local planning agencies, particularly those in the West, agree, complaining that patients in rural areas have suffered from strict interpretation of the requirements.
However, critics of the change warn that elimination of the CT scanner regulation could contribute to further health cost escalation and overpurchasing of the X-ray equipment.
"Based on our experience and the experience of other health planning agencies, we expect that revision of the CT scanning standards will lead to increased medical costs, the opposite of what the department says it intends," said Dean Montgomery, executive director of the Health Systems Agency of Northern Virginia.
Terence Carroll, who directs the Comprehensive Health Planning Council of Southeastern Michigan, added that abolition of the federal guidelines could "lead to a proliferation of these services far beyond the population's needs, with the federal government practically writing a blank check for the payment of the services ordered."
The May 20 Federal Register announcement maintained that the government's plan to abolish the CT scanning regulation was not a "major rule"--one having an annual impact on the economy of $100 million or more--and thus did not require a regulatory impact analysis.
In doing so, HHS cited estimates from the Office of Technology Assessment showing that CT scanner sales are now running at about 200 per year, bringing the national total as of May, 1980, to nearly 1,500 scanners.
But Dr. David Banta, OTA's assistant director, disputed the HHS analysis, saying it was "superficial in the extreme and could be attacked very easily." He saw the change as a response to ongoing pressures from the industry and the radiologists, "in accordance with the plans to abolish the health planning program altogether."
Others, concerned about the generally bleak future for federal health planning, felt that as a practical matter it was pointless to fight against abolition of the CT scanning regulation now. But they saw the action as one of symbolic importance.
"It sends a message that the government is abandoning its role and adopting a laissez faire attitude toward health care," said Dr. Philip Caper, a Harvard University researcher and President Carter appointee to the chairmanship of the government's National Council on Health Planning and Development.
Dr. Harry Cain, executive director of the American Health Planning Association, was less concerned about the impact, saying that the CT scanner regulation was initiated for one set of political reasons and being taken off the books for another. "The CT scanner was chosen as the symbol of exploding health care technologies. It has turned out to be a very valuable, impressive piece of equipment."
Lyman Van Nostrand, of the HHS Health Resources Administration, said that comments on the CT scanning proposal will be accepted until July 6, with a final action unlikely before late fall. By then, if the administration has its way and the federal program is phased out, it could be a moot point.
Asked why the government had chosen to put the proposal out now, Van Nostrand said that a revised standard had been in the works for two years because the "old standard was out of date, technologically obsolete. But it did not make sense to put out a new standard at the same time we're going to close the program down."