The Historical Context for the Alabama State Health Planning and Development Agency has been posted from the Records Disposition Authority (RDA) approved by the State Records Commission on April 19, 2023. The RDA establishes disposition requirements by designating records as either temporary records which may be destroyed after a specified retention period, or permanent records, which must be preserved in perpetuity. The complete RDAs for close to 175 agencies can be found on the Alabama Department of Archives and History website.
In 1946, the United States Congress passed the Hospital Survey and Construction Act, the nation’s first major health planning legislation. Lister Hill, a long-serving U.S. Senator from Alabama, co-wrote this law, more commonly known as the Hill-Burton Act. Lister Hill served in Congress for over 45 years and, as chair of the Labor and Public Welfare Committee, supported economically progressive legislation. Influenced partly by his physician father, Senator Hill co-sponsored this landmark, healthcare funding act.[1]
The Hill-Burton Act provided healthcare access and infrastructure to underserved communities across the country. The law brought an influx of federal funding to build hospitals, nursing homes, and clinics where there was great need. For states to receive federal funding, they had to first inventory existing healthcare facilities and survey the need for new facilities.[2] Because federal funding was tied to a “need-based allocation formula,” the economically frail Southern states benefitted greatly from the legislation.[3] While facilities that received funding were required to admit all patients, the Hill-Burton Act codified “separate but equal” care in health facilities. While the Act’s significance is less known than other federal healthcare laws, by 1975, nearly a third of United States hospitals were built because of funds made available through the Hill-Burton Act.[4]
At the same time that Washington passed legislation intended to analyze community needs and create new healthcare facilities, state lawmakers also considered new healthcare policies. At the start of the 1947 legislative session, in his final State of the State address, Governor Chauncey Sparks praised the recent passage of a constitutional amendment which allowed public funds to be spent on medical facilities, the creation of new hospitals in Birmingham, and the allocation of funds for a new medical school, stating that these initiatives were “one of the largest contributions to the welfare and happiness of our people.”[5] Alabama Act 1945-210 amended the Constitution by “authorizing the State to acquire, build, establish, own, operate, and maintain hospitals, health centers, sanatoria and other health facilities, and authorizing the legislature for such purposes to appropriate public funds.” Alongside the constitutional amendment, additional legislation empowered the State Board of Health to construct, maintain, and operate hospitals and healthcare facilities and “to authorize the State Board of Health to set up a master plan of hospitals.” These legislative actions constitute Alabama’s earliest health planning efforts at the state government level.[6]
Further federal legislation strengthened the incentives and requirements for states to participate in healthcare planning. In 1966, Congress enacted the Comprehensive Health Planning and Public Health Services Amendments. This legislation required states to meet specific federal requirements to receive federal healthcare grants. For instance, states had to establish a healthcare planning council, create healthcare spending policies and procedures, and submit reports for comprehensive state health planning to the federal government.[7] In coordination with federal legislation, Alabama passed Act 1966-446, which tasked the State Board of Health with creating a comprehensive State Health Plan. As required, the State Board of Health created a Comprehensive State Health Planning Advisory Commission, “which was the forerunner of the Statewide Health Coordinating Council (SHCC).”[8]
In 1972, Congress passed the Social Security Amendments of 1972, which stipulated that federal funding may “not be used to support unnecessary capital expenditures made by or on behalf of heath care facilities.”[9] Section 1122 of this legislation gave states the option to review and approve any Medicaid or Medicare reimbursements for capital.[10] This section empowered the State Board of Health in its role as Alabama’s designated health planning agency to deny federal funds to healthcare facilities that could not justify their necessity in the communities they intended to serve. The State Board of Health’s role in determining eligibility for federal funds during this period was a precursor of the later Certificate of Need process.
Only two years later, Congress enacted the National Health Planning and Resource Development Act of 1974.[11] The legislation sought to provide additional infrastructure and resources for health development and planning, especially to reach medically underserved populations better and to regulate a healthcare marketplace that is often expensive and ineffective. As with previous federal legislation, states had to meet certain requirements to be eligible for federal funding to help achieve these goals. To qualify, states had to designate a health planning and development agency and establish health service areas. The legislation also called for states to administer a Certificate of Need programs, which decreed that “only those services, facilities, and organizations found to be needed shall be offered or developed in the state.”[12]
In Alabama, the State Health Planning and Development Act of 1975 sought to bring the state into compliance with the recently passed federal legislation. The Act named the State Board of Health as the designated state health planning and development agency. Furthermore, legislators authorized the Board of Health to create health planning rules and regulations and to develop the State Health Plan. It also created a Statewide Health Coordinating Council (SHCC) and empowered the State Board of Health to divide the state into regions called Health Service Areas for planning.[13]
Three more acts passed during the late 1970s brought additional clarity to the state’s health planning and development process. First, Alabama Act 1977-82 designated the State Board of Health as the Certificates of Need Program administrator. The new law aimed “to prevent the construction of unnecessary and inappropriate health care facilities through a system of mandatory reviews of new institutional health services.”[14] Before constructing or expanding facilities or purchasing new equipment, healthcare facilities were required first to demonstrate a community need for the new healthcare services they intended to provide and to receive an approved Certificate of Need from the State Board of Health. Certificates of Need can be conceptualized as a means of cost-control in the healthcare marketplace.[15] The other two pieces of legislation, Alabama Acts 1978-777 and 1979-577, revised existing state law to bring Alabama into greater compliance with the federal requirements and to further define the health planning and Certificate of Need process.
In 1979, the State Board of Health faced resistance to its managerial role in state health planning and the Certificate of Need program. The Board of Health ran the program under conditional approval from the U.S. Department of Health, Education, and Welfare (HEW) for three years. Consumers and others lodged complaints against the Board of Health throughout that period, and, in June 1979, HEW declined to grant a full designation to the State Board of Health’s program, putting the state at risk of losing millions of federal dollars in healthcare spending if the state did not come into compliance.[16] Complainants reported that the thirteen Board of Health members were all white men, twelve of whom were physicians and not representative of the broader healthcare field, healthcare consumers, or the state as a whole. HEW officials stated, “It is a conflict of interest for physicians to be the sole decision makers as to whether hospitals or other health institutions can add services or facilities which they as physicians will use.”[17] In fact, HEW cited at least five rulings by the Board in favor of approving new services that did not comply with federal guidelines and went against the recommendations made by the local Health Service Areas. Additionally, HEW found that the Board was holding meetings with very little advance notice or room for public attendance.
This decision to withhold approval of Alabama’s health planning and development agency and the potential loss of millions of dollars in healthcare funding meant Alabama needed to act quickly. On June 26, 1979, Governor Fob James removed the responsibilities of health planning and development from the State Board of Health, moved the state health planning and development agency into the Office of the Governor, and created a new governing board comprising of three consumer representatives, three healthcare provider representatives, one governor designee, and two cabinet-level state agency heads.[18]
Alabama Act 1982-770 bolstered the transition of the health planning authority from the State Board of Health to the State Health Planning and Development Agency. However, two years later, in early 1984, Governor George Wallace issued two executive orders, which rescinded Governor James’ executive order. These orders also created the Certificate of Needs Review Board (CONRB) and outlined how the State Committee of Public Health would nominate board members. The first executive order shifted the designated health planning and development agency into the Department of Public Health under the supervision of the State Health Officer, while the second order created the Health Planning Agency, which fell under the supervision of the CONRB.[19]
In 1987, Governor Guy Hunt used executive orders again to change the parties responsible for state health planning and development. He first amended Governor Wallace’s executive order to modify the CONRB nomination process, returning appointment power to the Governor.[20] Then, because of Title XV of the Public Health Service Act’s repeal, the Governor issued Executive Order 370 to update the nomination process for the Statewide Health Coordinating Council. The Governor now appointed the members, with at least half of the sixteen-member Council representing healthcare consumers.
The next decade saw the continued shuffling of healthcare responsibilities among different state agencies. In 1991, Governor Guy Hunt signed Executive Order 392, which created the Alabama Council on Rural Health Care. The Council, a collaboration between multiple state agencies, focused on “the improvement of the rural health care delivery system in Alabama by coordinating inter-agency efforts in the public sector together with the efforts of various entities in the private sector.”[21] The Executive Order also created the Alabama Office of Rural Health Care within SHPDA. However, in 1994, Governor Jim Folsom signed Executive Order 433, moving the Office of Rural Health under the auspices of the Department of Public Health. Additionally, Governor Folsom signed Executive Order 414, which transferred state health statistical responsibilities from SHPDA to the Department of Public Health.[22]
The 1990s were a turbulent time for SHPDA and CONRB, as both legislators and governors pushed back against decisions made in the State Health Plan and Certificates of Need issuances. The Legislature passed multiple bills exempting various types of healthcare entities from the Certificate of Need process and even proposed legislation to dissolve SHPDA.[23] On May 25, 1993, Governor Folsom placed a 90-day moratorium on implementing the State Health Plan and created a task force to study the Plan’s effectiveness.[24] In 1993, Governor Folsom also appointed eight new CONRB members of a nine-member board.[25]
A month after taking office in 1995, Governor Fob James issued an executive order halting the issuing of new Certificates of Need, which lasted for six months.[26] Governor James then replaced all twenty-eight new SHCC members appointed in Governor Folsom’s last months in office and appointed thirty new members.[27] Governor Don Siegelman repeated this pattern at the start of his term in 1999. Executive Order 493 placed a temporary moratorium on issuing new Certificates of Need, and he subsequently replaced eight of the nine CONRB members with his own appointees.[28]
The last decade of the twentieth century was also marked by debates about the increasing need for nursing-home beds in Alabama and about the cash-strapped Medicaid program that provided the majority of funding for nursing-home patients.[29] Alabama Act 1994-209 included a “10 percent rule,” which allowed a nursing home to “add 10 beds or up to 10 percent of its existing capacity” without requiring a Certificate of Need.[30] However, in 1995, Governor Fob James placed a year-and-a-half long moratorium on new nursing home beds that fell outside of the “10 percent rule,” explaining that “health care and Medicaid costs and budgets can be adversely impacted by increased numbers of new nursing home beds.”[31]
Alabama lawmakers continued to use executive orders and legislation to impact SHPDA and try to control the cost of healthcare. Most recently, Governor Bob Riley issued two executive orders to place a moratorium on new skilled nursing beds and inpatient hospice facilities.[32] Alabama Act 2003-331 adjusted the types of major medical equipment that did not require a Certificate of Need and required the Statewide Health Coordinating Council to meet at least once a year. Act 2009-492 put hospice services under the purview of SHPDA and explicitly ended Governor Riley’s moratorium on licensing hospice services.
Recently, lawmakers and the public have become increasingly concerned about data protection in the healthcare sector. As a result, Act 2015-471 created the Health Care Information and Data Council, which guides SHPDA in decisions on data collection, protection, and sharing of healthcare information collected by the agency. The Act also helped mandate data collection from healthcare entities by allowing SHPDA to impose fines for non-compliance. This data is critical for the formation of the State Health Plan.
In 2023, the State Health Planning and Development Agency produces the State Health Plan and issues Certificates of Need to ensure that the healthcare marketplace is cost-effective and consistent with demand. Despite significant changes to health planning in the state over the past seven decades, SHPDA continues analyzing the state’s healthcare needs and assessing the necessity for new healthcare infrastructure creation.
[1] Virginia Van der Veer Hamilton, “Lister Hill,” Encyclopedia of Alabama, January 17, 2020, http://encyclopediaofalabama.org/article/h-1103.
[2] Hospital Survey and Construction Act, Pub. L. 79-725.
[3] Karen Kruse Thomas, “Hill-Burton Act,” Encyclopedia of Alabama, August 2, 2021, http://encyclopediaofalabama.org/article/h-1439.
[4] John Henning Schumann, “A Bygone Era: When Bipartisanship Led To Health Care Transformation,” National Public Radio, October 2, 2016, accessed December 10, 2022, https://www.npr.org/sections/health-shots/2016/10/02/495775518/a-bygone-era-when-bipartisanship-led-to-health-care-transformation.
[5] Message of Governor Chauncey Sparks,” General Laws (and Joint Resolutions) of the Legislature of Alabama, 1947.
[6] Alabama Act 1945-211.
[7] Comprehensive Health Planning and Public Health Services Amendments of 1966, Pub. L. 89-749.
[8] “History,” SHPDA, accessed October 4, 2022, http://shpda.alabama.gov/shpda/history.aspx?sm=a_d.
[9] Social Security Amendments of 1972 § 1122, Pub. L. 92-336.
[10] James B. Simpson, “State Certificate-of-Need Programs: The Current Status,” American Journal of Public Health, Volume 75 Number 10.
[11] National Health Planning and Resource Development Act of 1974.
[12] National Health Planning and Resource Development Act of 1974, Section 1523.
[13] Alabama Act 1975-1197.
[14] Alabama Act 1977-82.
[15] James B. Simpson, “State Certificate-of-Need Programs: The Current Status,” American Journal of Public Health, Volume 75 Number 10.
[16] Ted Bryant, “Health leaders get U.S. funds warning,” Birmingham Post-Herald, June 8, 1979, accessed December 16, 2022 via Newspapers.com.
[17] Ibid.
[18] Alabama Executive Order 246.
[19] Alabama Executive Orders 324 and 325.
[20] Amendment 1 to Alabama Executive Order 325.
[21] Alabama Executive Order 392.
[22] Alabama Executive Order 414.
[23] Alabama Acts 1991-722, 1993-93, 1993-315, 1993-326; Betsy Butgereit, “Legislative bill proposes removing many health-care regulations,” Birmingham Post-Herald, March 9, 1996, accessed December 23, 2022 via Newspapers.com.
[24] Alabama Executive Order 414.
[25] Gita Smith, “News faces pick up pace of CON board,” Montgomery Advertiser, November 15, 1993, accessed December 23, 2022 via Newspapers.com.
[26] Alabama Executive Order 441.
[27] Phillip Rawls, “Is firing by James legal?” Anniston Star, March 26, 1995, accessed December 23, 2022; Gita Smith, “Health council meets after 27 months,” Montgomery Advertiser, June 17, 1995, accessed December 23, 2022 via Newspapers.com.
[28] Mike Cason, “Medical facilities moratorium to end Aug. 13,” Montgomery Advertiser, July 29, 1999, accessed December 23, 2022 via Newspapers.com.
[29] Pat Lewis, “Possible ban on new nursing home beds would halt plan adding 40 in Calhoun,” Anniston Star, March 19, 1993, accessed December 23, 2022 via Newspapers.com.
[30] Ted Bryant, “Nursing homes not included in freeze,” Birmingham Post-Herald, February 7, 1995, accessed December 23, 2022 via Newspapers.com.
[31] “James lifts moratorium on new nursing home beds,” Montgomery Advertiser, September 21, 1996, accessed December 23, 2022 via Newspapers.com; Alabama Executive Order 442.
[32] Alabama Executive Orders 583 and 595.
- Representatives of the State Health Planning and Development Agency
- Alabama Executive Orders 246, 324, 325, 370, 392, 414, 441, 442, 583, 595
- Alabama Acts 1945-211, 1966-446, 1975-1197, 1977-82, 1978-777, 1979-577, 1980-761, 1981-1140, 1982-770, 1984-281, 1986-688, 1990-468, 1991-722, 1993-93, 1993-315, 1993-326, 1994-209, 1994-369, 1995-148, 1995-565, 1998-339, 1998-341, 1998-384, 1999-586, 2001-495, 2001-899, 2003-331, 2009-492, 2012-294, 2013-192, and 2015-471
- Code of Alabama 1975 § 22-4-1 to § 22-4-42; § 22-21-260 to § 22-21-278
- Alabama Administrative Code Chapters 410-1-1 to 410-2-5
- Hospital Survey and Construction Act, Pub. L. 79-725
- Comprehensive Health Planning and Public Health Services Amendments of 1966, Pub. L. 89-749
- Social Security Amendments of 1972 § 1122, Pub. L. 92-336
- Alabama Government Manual (2018)
- State Health Planning and Development Agency Audit Reports
- State Health Planning and Development Agency Website
- State Health Planning and Development Agency Publications
- State Health Planning and Development Agency Alabama State Health Plan 2020-2023. November 14, 2020.
- “Message of Governor Chauncey Sparks.” General Laws (and Joint Resolutions) of the Legislature of Alabama Passed at the Organizational Session of 1947. Birmingham: Birmingham Printing Company, 1947.
- Bryant, Ted. “Health leaders get U.S. funds warning.” Birmingham Post-Herald. June- 8, 1979.
- Bryant, Ted. “Nursing homes not included in freeze.” Birmingham Post-Herald. February 7, 1995.
- Butgereit, Betsy. “Legislative bill proposes removing many health-care regulations.” Birmingham Post-Herald. March 9, 1996.
- Cason, Mike. “Medical facilities moratorium to end Aug. 13.” Montgomery Advertiser. July 29, 1999.
- Hamilton, Virginia Van der Veer. “Lister Hill.” Encyclopedia of Alabama. January 17, 2020. http://encyclopediaofalabama.org/article/h-1103.
- “James lifts moratorium on new nursing home beds.” Montgomery Advertiser. September 21, 1996.
- Lewis, Pat. “Possible ban on new nursing home beds would halt plan adding 40 in Calhoun.” Anniston Star. March 19, 1993.
- Rawls, Phillip. “Is firing by James legal?” Anniston Star. March 26, 1995.
- Schumann, John Henning. “A Bygone Era: When Bipartisanship Led To Health Care Transformation.” National Public Radio. October 2, 2016, accessed December 10, 2022. https://www.npr.org/sections/health-shots/2016/10/02/495775518/a-bygone-era-when-bipartisanship-led-to-health-care-transformation.
- Simpson, James B. “State Certificate-of-Need Programs: The Current Status.” American Journal of Public Health 75, no. 10 (1985): 1225-1229.
- Smith, Gita. “Health council meets after 27 months.” Montgomery Advertiser. June 17, 1995.
- Smith, Gita. “News faces pick up pace of CON board.” Montgomery Advertiser. November 15, 1993.
- Thomas, Karen Kruse. “Hill-Burton Act.” Encyclopedia of Alabama. August 2, 2021. http://encyclopediaofalabama.org/article/h-1439.
For the Record 