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                                                              April 1969


                             LENGTII OF EX'EEI@STON AIND LEVELS OF AUTIIORIZATION


                  The lei-igth of the legislative extension and particularly the new
             authorization levels will be major factors ii-i the determining the future
             of Regional Medical Pro-raips.  In writing the legislative proposal., the
             Division has the option of requesting a specific time extension (e.g.,
             three years, five years) or may leave the time period open-ended.
             Similarly, the authorization levels requested may be --,et at specific in-
             creiaeiital amounts or Ridy be stated indefiiiately as itsuch amounts as

             Congress may wish to authorize."
                  K',iP is iio-%q at a critical- sta-,e. Fi.fty-five P\.egions have been orgai-lized
             and over thirty have become operational-, albeit most of these quite recently.
             CoDipetent, professional staff have been employed by the Regional Pi:o-rauis
             and they are working with the medical schools and providers of health care
             to develop meaningful operational- projects.  Unless these persons and
             groups can expect extension of the progr@-iui for a reasonable length of time
             (3 or more years) arid funding at levels that will. permit orderly arid
             adequate growth, they uiay find it difficult to continue their commitmei-it.
             Potential project sponsors arid participants need to know whether RLVT will be
             a continuing vi.-abl-c force in their community and whether projects now under
             discussion stand reasonable chances of being funded.  Without reassurance of

             programs stability a-,id growth, they iray turn to other endeavors or sources

             of support.
                  Funding reclui.rciicnts risiii,, to $500 Trillion by 1973 had beei-i projected










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              some 18 months ago.   These estimates of "aggregate effective demand" for
              operational grants were  based  on  initial  experience  with  operational  grant
              requests, extended to all Regions and projected to 1973.  DRIMP staff is
              now involved in updating and refining these projections and a more firm
              projection will be available this suriii-nor.  Preliminary  data  indicates  that
              the original estimate of $500 million within  3--5  years  is  not  excessive  or
              unrealistic.  For example, operating experience to date has shown that
              those Regions that encompass the major Pictropolitan areas of the country
              have moved ahead much more slowly than have the other Regions.       It is
              anticipated that when the large, complex metropolitan Recioi-is beoiii to
              reach a program level reflective of the needs of thc.-@r major population

              centers the demand for funds will be sharply increased.

                   While staff is workilio on the technical aspects these budget projection-,

              and the authorization levels necessary to support them, it will be necessary

              to work out an overall strate-S!y for their presentation to Congress.  A

              number of issues i,7ill. have to be met, including the fact that @fP has re-
              ceived appropriations less than the amount authorized and until this year
              has obligated less than the amounts appropriated.  It must be explained why
              program development,  particularly  in  complex  metropolitan  areas,  was  some-
              times slow and v7,iy this is not likely Lo continua, .  P\Mil has a high ratio
              of expenditure for core activity to             activity.   It will be necessary
              to justify lio@, this core activity di.ffcrs fro-,II routine pro@re@iii aciniini.strati-o,,t

              ,'air] how it contributes in its o,,qn ri,-ht to the improvement of health  care.
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