Seattle University School of Law Digital Commons Faculty Scholarship 1-1-1982 The Community Service Obligation of Hill-Burton Health Facilities Ken Wing Follow this and additional works at: https://digitalcommons.law.seattleu.edu/faculty Part of the Health Law and Policy Commons, and the Law and Society Commons Recommended Citation Ken Wing, The Community Service Obligation of Hill-Burton Health Facilities, 23 B.C. L. REV. 577 (1982). https://digitalcommons.law.seattleu.edu/faculty/463 This Article is brought to you for free and open access by Seattle University School of Law Digital Commons. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Seattle University School of Law Digital Commons. For more information, please contact [email protected]. THE COMMUNITY SERVICE OBLIGATION OF HILL-BURTON HEALTH FACILITIES" KENNETH R. WING* Financial barriers to adequate medical care are no longer a problem faced by only low income Americans. Today, hospital bills sometimes amount to tens of thousands of dollars.' Indeed, annual per capita spending on medical care now exceeds $1,000.2 Even for those who can afford it, a typical medical in- surance policy provides only limited coverage that ill-fits society's needs. 3 As for the welfare recipient, the unemployed, or the working poor - people for whom access to medical care has always been difficult - adequate medical care is literally becoming financially inaccessible. The problem of access to medical care in the United States, however, is only partially defined in financial terms. People who can afford to pay for medical treatment may find that other barriers to adequate health care exist. Many hospitals require patients to have a personal physician on the hospital's staff. Others demand pre-admission deposits before even emergency services are performed. The consumer with a Medicaid or Medicare card will find that for a variety of economic and non-economic reasons, many institutions are reluctant to provide government-sponsored care and some simply refuse altogether. In additi6n, discrimination against minorities, the handi- capped, welfare recipients, and other "undesirables," continues disguised but unabated in medical care institutions as in other aspects of American life.4 Those who are denied medical care for financial reasons, or because of other institutional barriers, nevertheless may be guaranteed access to medical facilities which have received federal funds for construction or modernization. Legislation originally enacted by Congress in 19465 initiated a federal spending program which provided funds for the capital development of a significant por- tion of the nation's hospitals and other health facilities. 6 This program, com- I Copyright @ 1982 by Boston College Law School. * Assistant Professor, School of Law and School of Public Health, University of North Carolina, Chapel Hill; J.D., Harvard Law School, 1971; M.P.H., Harvard School of Public Health, 1972. The author would like to express his thanks for the research assistance of third year law student Robert Strand. I See generally Freeland, Colat, & Schlender, Projections of National Health Expenditures, 1980, 1985, 1990, 1 HEALTH CARE FINANCING REv. 1 (1980). 2 Id. at 12. 3 For an excellent discussion of the nature and extent of private health insurance coverage, see A. SCHNEIDER, AN ADVOCATE'S GUIDE TO HEALTH CARE FINANCING 138-83 (1980). 4 See generally Institute of Medicine, National Academy of Sciences, HEALTH CARE IN A CONTEXT OF CmiL RIGHTS (1981). 5 The Hospital Survey and Construction Act, Pub. L. No. 79-725, 60 Stat. 1040 (1946). This Act was the initial authorization for what has popularly been known as the Hill- Burton program. See text at notes 40-55 infra for a discussion of later amendments. 6 As a financing program, Hill-Burton was remarkably successful. By 1974, over five HeinOnline -- 23 B.C. L. Rev. 577 1981-1982 BOSTON COLLEGE LAW REVIEW [Vol. 23:577 monly known as the Hill-Burton program, was not intended only to provide funding for the construction and modernization of medical institutions. As the language of the authorizing legislation, its legislative history, and the overall structure of the program demonstrate, Congress also intended that medical serv- ices be provided in areas where they were especially needed and under condi- tions designed to carry out specified congressional objectives.7 Both in its original form and as it was amended in the following three decades, the Hill-Burton program was intended to achieve a number of changes in the allocation and availability of health facility services by condi- tioning receipt of federal funds on compliance with a variety of legislative con- ditions. 8 Among the conditions explicitly included in the authorizing statute for the program was a provision imposing specific obligations on both the state agency administering the program and the recipient facility requiring the facilities to provide: (a) a reasonable volume of uncompensated services and (b) ''community service," i.e., service to those who may be denied access to health care for reasons other than lack of financial resources. 9 These "charity care" obligations, as the two requirements have been frequently labeled, were an in- tegral part of the original legislative scheme, as reflected both in the declaration of purposes and throughout other provisions of the original legislation.10 In- deed, the language of the original charity care obligations was specifically amended into the original draft of the Hill-Burton legislation, apparently as part of a political compromise to ensure broad-based congressional support for the legislation, as will be explained in more detail below. 1 Moreover, as the Hill-Burton program expanded to include new funding mechanisms and addi- tional categories of recipients, Congress continued to re-enact these obligations as pre-conditions to funding. 12 Even when Congress terminated the program in billion dollars in grants and loans had been spent on the nation's health facilities, assisting over $14.5 billion worth of construction and modernization projects. Cambridge Research Institute, TRENDS AFFECTING THE U.S. HEALTH CAPE SYSTEM 91-95 (1976) (commissioned by HEW). See also figures cited in S. REP. No. 1285, 93d Cong., 2d Sess. 14-18 (1974), reprintedin 1974 U.S. CODE CONG. & AD. NEWS 7842-49. Over 496,000 hospital and long term care facility beds received financial assistance through the Hill-Burton program, roughly equivalent to 40% of the nation's current acute care hospital bed supply. American Hospital Association, HOsPITAL STATISTICS: 1979 (1980). As a major source of capital funds for hospitals and, to a lesser extent, other facilities, the federal Hill- Burton program played an important role in underwriting the development of the existing health care delivery system during three decades marked by rapid growth and systemic change. See Wing & Craige, Health Care Regulation: Dilemma of a Partially Developed Public Policy, 57 N.C. L. REv. 1165, 1169-72 (1979) [hereinafter cited as Wing & Craige]. 7 See text and notes at notes 34-39 infra. 8 See text and notes at notes 36-50 infra. 9 See text at note 60 infra for the text of the statute. 10 See note 85 infra. 11 See note 75 infra. 12 The same requirements were imposed on recipients of funds under the expanded program established in 1954. See Public Health Service Act 5 653(a), as amended by Pub. L. No. 83-482, § 2, 68 Stat. 461 (1954), later recodified along with preexisting S 633() in 1964. See notes 44-46 infra. For current codification, see 42 U.S.C. 5 291c(e) (1978). The requirements were also HeinOnline -- 23 B.C. L. Rev. 578 1981-1982 May 1982] COMMUNITY SER VICE OBLIGATION 1974 the successor federal program attached virtually identical conditions 13 on receipt of funds. 14 Congress also explicitly mandated additional federal efforts to insure rigorous enforcement of the charity care obligations imposed by the 15 original Hill-Burton program and the new program. attached to the recipients of assistance under the loan funding authorized in 1964, see Public Health Service Act § 610(a), as amended by Pub. L. No. 88-443, § 3, 78 Stat. 457 (1964), now codified at 42 U.S.C. § 291j(b) (1978); and under the loan, loan guarantee and interest subsidy programs established in 1970, see Public Health Service Act § 623(a), as amended by Pub. L. No. 91-296, § 201, 84 Stat. 346 (1970), now codified at 42 U.S.C. § 291j-3(a) (Supp. I 1978). 13 See notes 14 and 163 infra. 14 The National Health Planning and Resources Development Act of 1974 included two provisions that created charity care obligations virtually identical to those included in the original Hill-Burton legislation. Public Health Service Act § 1602(5),.§ 1604(b)(1)(J), as amended by Pub. L. No. 93-641, § 4, 88 Stat. 2259 (1974). There are, however, two differences between the charity care obligations imposed in 1974 and those that existed under Hill-Burton. First, § 1604(b)(1)(J) provides that "an application of any project shall set forth . reasonable assurance that at all times after such application is approved (i) the facility or portion thereof to be constructed, or modernized, or converted will be made available to all persons residing or employed in the area served by the facility . ." (emphasis added). The expression "at all times" is not found in the Hill-Burton statutory language establishing the basis for the communi- ty service or uncompensated service obligations. Whether "at all times" was intended to have significance is not clear from the legislative history of the 1974 statute. The Department of Health, Education and Welfare (HEW), however, had taken the position that this language re- quires both charity care obligations to be imposed under the 1974 program for an unlimited dura- tion, while the uncompensated service obligation of Hill-Burton facilities is limited to twenty years' duration.