[p1056] III. ADMINISTRATIVE FAILURES IN TITLE VI ENFORCEMENT & THE RETREAT FROM FACILITIES PLANNING

      The federal government has reserved a powerful administrative role for itself in Title VI enforcement and as the overseer of state facilities planning in the distribution of hospital resources, more generally.  Despite this reservation of power, the federal government undermined its purported commitment to Title VI enforcement in two key ways.  First, through a series of actions that ranged from “deliberate sabotage” to “shameful neglect,” the government rendered the OCR ineffective in civil rights enforcement. Moreover, the federal government not only delegated its facilities planning power almost completely to local entities, it made a conscious decision to further shift from a model of active regulatory control of hospital distribution (the facilities planning model) to one that would allow free market competition to essentially determine the distribution of hospital resources. Both decisions had predictable adverse effects on minorities' access to care.

A. The Impotence of the OCR

       In its three decades of operation, an agency that had originally defined its role as an advocate and prosecutor had been transformed largely into a passive arbiter of disputes that avoided taking sides.  In the process, it was transformed from a central, driving force into an increasingly isolated, decaying part of the federal bureaucracy. As mentioned in the previous Part, the federal government initially was aggressive in using the threat of exclusion from Medicare to eliminate the overt segregation and exclusion of minorities from hospitals receiving public funds.  The federal agency responsible for overseeing the administration of health care financing was originally the Department of Health, Education, and Welfare (DHEW), which has been reorganized and is now the Department of Health and Human Services (HHS).  Pursuant to the authority granted under Title VI, DHEW promulgated regulations that expressly prohibited the use of criteria, methods, or choice of site location that would [p1057] disproportionately affect racial minorities. Title VI enforcement was vested in the Office of Civil Rights, which was charged with the processing of all complaints of discriminatory practices. Through DHEW and the OCR, the federal government appeared to have a powerful administrative arm through which to police public and private hospital restructuring. This power was never fully actualized, however. Despite the obligation to investigate complaints of discrimination prohibited by the regulations, the federal agencies charged with this responsibility were not equipped to adequately respond to complaints. Minority communities falling victim to private and public closures were forced to seek help from the courts, and once again, a court order was required to force the government to fulfill its legal obligations.

      In NAACP v. Wilmington, a Title VI challenge was brought against the Wilmington Medical Corporation (WMC) to prevent a plan involving a closure of two hospitals in an urban community that was predominantly minority and the relocation of key services exclusively to a new location in a predominantly white, affluent area.   Plaintiffs challenged the restructuring plan on the grounds that it would have a disproportionately harsh effect on racial and ethnic minorities.   Upon receiving a copy of the lawsuit filed by plaintiffs, however, the U.S. Secretary of DHEW failed to investigate or initiate any proceedings to halt the relocation.   In fact, DHEW had expressly approved of the relocation through a process created under the Social Security Act and unrelated to the specific question of Title VI compliance.    [p1058] Ultimately, the court had to force the OCR to investigate and collect information necessary to assess the effects of the plan. At the conclusion of the investigation, the court issued a temporary injunction preventing closure. As discussed further in the next Part, the relocation was eventually allowed to proceed based on assurances provided by the defendant designed to minimize the effects of closure.

      Despite the courts' initial policing of the OCR, its record of Title VI enforcement is still shameful.   As recently as 1999, a report by the United States Commission on Civil Rights (the Commission) not only confirmed many of the longstanding complaints lodged by patients' advocates, it also issued a scathing indictment that concluded that the structure and operations of HHS/OCR have actually exacerbated racial disparities in health care.   The Commission concluded that “the timid and ineffectual enforcement efforts of [OCR] have fostered, rather than combated, the discrimination that continues to infect the Nation's health care system.” The Commission found a number of faults with OCR's operations: the failure to develop Title VI guidelines and adequate policy directions; lack of a thorough pre-award review process to ensure that prospective recipients of federal financial assistance were in compliance with the law; infrequent post award audits or onsite compliance reviews; growing complaint backlog; and lack of an effective and comprehensive system for monitoring corrective action commitment. Despite regulations giving DHEW the power to prohibit acts that had discriminatory effects, no strategy or tools were implemented to enable the OCR to proactively police hospital restructuring or monitor the discriminatory effects that might occur.

      The most compelling part of this report, however, was the conclusion about the cause of these flaws in OCR operations: the underfunding and understaffing of the agency and inherent structural [p1059] defects in OCR's relationships to the agencies that controlled the administration of public funds. In short, OCR's flaws were really an indictment of Congress' policy choices. Congress has never provided adequate funding or staff for effective civil rights enforcement. As Wilmington demonstrated, the OCR suffered from a lack of personnel with the relevant expertise to be able to gather and assess data properly in order to determine any harmful effects that would occur.

      The Commission also attributed much of the OCR's impotence to the decision to lump all civil rights enforcement under one body and segregate civil rights enforcement based on Title VI from the administrative bodies that had the actual power to grant and revoke federal funding.   Lumping all civil rights enforcement under one body meant that health care got short shrift in lieu of the more visible and contentious issues surrounding school desegregation.   More importantly, though, establishing OCR as a separate agency from those administering federal funds essentially ensured that OCR would have no real enforcement power since the power of Title VI enforcement lies in its threat to withhold significant public funding.  This choice has been characterized as “a deliberate attempt on the part of some members of Congress to eviscerate civil rights enforcement efforts.”

      Indeed, it is the adversarial relationship between OCR and other agencies administering funds which has not only impeded civil rights enforcement, but which sends a strong message that the government never intended to take its commitment to remedy disparate effects [p1060] seriously. At each point that the OCR has tried to take a more aggressive role in the monitoring of racial disparities, it was hindered. For example, early on, OCR officials called for the collection of race data as a critical tool for Title VI oversight, but HCFA resisted. In fact, the federal Health Resources Administration, which actively worked to reduce excess hospital bed capacity through hospital closings, was unwilling to press for the analysis of racial segregation in patterns of local use of hospitals to try to understand the effects of its policies and whether these decisions served their purported goals of ensuring equal access. The OCR also fought for a prominent role in policing Title VI through the aggressive enforcement of Hill-Burton's free care requirement. Although it was able to influence standards ultimately promulgated, it was never given the power necessary to really enforce them.

B. Government Shift from Facilities Planning to Market Competition

      Throughout the 1960s and 70s, the link between racial equality and aggressive facilities planning became clear.  In fact, on March 14, 1980, Alan Sager, Ph.D. and Assistant Professor of Urban and Health Planning, gave a statement to U.S. House of Representatives, Health [p1061] Sub-committee of the Ways and Means Committee, entitled “Urban Hospital Closings in the Face of Racial Change.” Sager made certain recommendations for dealing with the hospital closure problem based on his study of hospital closures. He advised them of his findings: Hospital closures were a problem for minority communities and the poor, in particular. Inadequate funding of health services for the poor, coupled with economic pressures of hospitals to focus on profit, encouraged closures of some facilities and expansion of others. These closures not only had the effect of decreasing minority access to care, but probably increased the financial burdens to Medicare and Medicaid, further stressing our public fisc, and thus, the scarce resources used as a safety net. As a result of these findings, Sager concluded that greater economic controls and active facilities planning were essential to achieving a more equitable distribution of hospital resources.

      Indeed, through its spending power, the federal government has the ability to oversee state planning to ensure that resources are equitably distributed.  This power extends beyond just oversight of Title VI compliance.  For example, the statute creating Hill-Burton funding for hospitals required states to submit a plan for approval as a condition of receiving such funds that would assure an adequate distribution of resources by the state:

       The Surgeon General, with the approval of the Federal Hospital Council and the Secretary of Health, Education, and Welfare, shall by general regulations prescribe . . .. that the State plan shall provide for adequate hospitals, and other facilities for which aid under this part is available, for all persons residing in the State, and adequate hospitals (and such other facilities) to furnish needed services for persons unable to pay therefore. Despite the reservation of administrative power by the federal government to ensure Title VI compliance in the distribution of hospital resources, it neglected this power and made policy decisions that have exacerbated the problem of hospital flight and revealed a conscious neglect of the devastating effects such closures have on minority communities.  For example, during the 1980s, the federal government retreated from a facilities planning model, shifting to a model of free market competition that could only exacerbate problems [p1062] of racial disparities. Moreover, during this time President Regan cut Medicaid and other federal spending significantly, while the economy suffered from a recession, accompanied by high unemployment. This resulted in more people becoming uninsured or relying on public insurance, at a time when the public funding was being reduced, putting greater strain on hospitals that served disproportionate numbers of the uninsured and Medicaid beneficiaries. As already noted, in a competitive market, hospitals are forced to search out richer markets and consider corporate strategies that will maximize profits. This profit maximizing goal in the face of the increasing economic strain resulting from constant cuts in Medicare and Medicaid, and further cuts in resources allocated to the public safety net, encouraged hospital flight from urban and predominantly minority communities. In the face of increasing public and private hospital closures and the federal government's abdication of its facilities planning responsibility, minority communities and civil right advocates turned to the courts for help.