HEALTH CARE MARKETS AND MANAGED CARE

Release Date:  June 22, 1999

RFA:  HS-00-001

Agency for Health Care Policy and Research

Letter of Intent Receipt Date:  September 2, 1999
Application Receipt Date:  November 10, 1999

PURPOSE

The Agency for Health Care Policy and Research (AHCPR) invites applications for
research program project grants to support, conduct, and disseminate health
services research about the roles that managed care and other market forces play
in the organization, financing, and delivery of health care.  Research results
are intended to provide rigorous evidence critical to the formulation of public
policy affecting health care costs, utilization, access, and quality.

Each research program project grant will support a broad, integrated,
interdisciplinary, multi-project health services research program --a center of
excellence-- that will bring together strong teams of experienced and new
researchers to share essential facilities, services, knowledge, and other
resources in purchasing and developing data sources, developing new
methodologies, and generating analytic measures appropriate across supported
projects.

Central research questions to be addressed by applicants concern:  (1) the
nature, extent, and effects of competition among and within increasingly complex
organizations in health care markets, including the effects of competition-driven
consolidation among physicians into networks, and the effects of recent mergers
in many markets among and across health plans,  hospitals, and other health care
organizations; (2) the increased and varied role that managed care plays in
health care markets and in the proliferation of new organizational types --many
of which are based not on ownership but on purely contractual relationships; (3)
the role and consequences of the behavior of employers and other purchasers in
health care markets, including their role in incorporating quality considerations
into their health coverage buying decisions, i.e., value-based purchasing; and
(4) the effects of all of these factors and other recent changes in health care
markets on health care delivery, utilization, access, outcomes, quality, and
costs --which recent evidence suggests will start to rise again.

In addition to projects focused on the central issues above, applicants are
strongly encouraged to incorporate related cross-cutting research projects that
provide policy-relevant evidence (1) about the role of market forces and managed
care in rural settings; and (2) about the effects of changing markets and
organizations on access to health care for minorities.

HEALTHY PEOPLE 2000

The Public Health Service (PHS) is committed to achieving the health promotion
and disease prevention objectives of "Healthy People 2000," a PHS-led national
activity for setting health improvement priorities for the United States.  AHCPR
encourages applicants to submit grant applications with relevance to the specific
objectives of this initiative.  Potential applicants may obtain a copy of
"Healthy People 2000" (Full Report:  Stock No.017-001-00474-0) or "Healthy People
2000" (Summary Report:  Stock No. 017-001-00473-1) through the Superintendent of
Documents, Government Printing Office, Washington, DC 20402-9325 (telephone
202-512-1800).

ELIGIBILITY REQUIREMENTS

Applications may be submitted by domestic or foreign, public or private nonprofit
organizations, including universities, clinics, units of State and local
governments, and eligible agencies of the Federal government.  AHCPR, by statute,
can make grants only to non-profit organizations; however, for-profit
organizations may participate in grant projects as members of consortia or as
subcontractors.

Organizations described in section 501(c)4 of the Internal Revenue Code that
engage in lobbying are not eligible.

AHCPR encourages investigators who are women, members of minority groups and
persons with disabilities to apply as principal investigators.

MECHANISM OF SUPPORT

Projects supported under this initiative will use the Research Program Project
Grant (P01) mechanism.  Responsibility for the planning, direction, and execution
of the proposed Research Program Project Grant (henceforth, P01) will be solely
that of the applicant.  The total project period for an application submitted in
response to this RFA may not exceed 5 years.  The earliest possible award date
is May 1, 2000.

AHCPR's Guidelines for the Research Program Project Grant are available on
AHCPR's Website at http://www.ahcpr.gov (under Funding Opportunities) and from
Ms. Dawn French at the address listed below under Letter of Intent.

The P01 mechanism is designed to support multiple, interacting discrete projects
focused on a central theme, involving a number of independent investigators who
share knowledge, data, and common resources.  Under this initiative, each P01
application must have a minimum of four discrete projects Ć¾and a maximum of six--
and are strongly encouraged to include cores.  A core is a separately budgeted
component of a P01 that provides essential facilities or services to two or more
of the proposed research projects.  For example, in addition to an administrative
core, a P01 may include a technical core to facilitate across-institution and
across-project sharing of resources in purchasing, developing and using data
sources.  A core may not count as one of the four discrete research projects. 
A P01 may support projects that are performed at multiple sites but coordinated
by a single principal investigator (PI) at the grantee institution.  The PI will
be responsible for the planning, direction and execution of the proposed project. 
An award will be made only to the PI's institution.  Applicants are encouraged
to coordinate most activities at other institutions through an administrative
core located at the PI's institution.

Note that the scope of this initiative and the capacity-building aspects of the
P01 allow new investigators and institutions to be drawn together to work
collaboratively with a team of experienced researchers.  AHCPR particularly
encourages collaboration with researchers from Historically Black Colleges and
Universities, Hispanic Serving Institutions, and other minority and minority
serving institutions.

This RFA is a one-time solicitation.  AHCPR has not determined whether or how
this solicitation will be continued beyond this present initiative.

FUNDS AVAILABLE

AHCPR expects to award up to $2.205 million in total costs (i.e., including
indirect costs) in fiscal year 2000 to support the first year of two or three
P01s selected under this RFA.  Thus, each selected P01 can expect to be awarded
about $750,000 to $1 million in the first year.  At the time of this
solicitation, the anticipated level of continuation funding across the several
awarded P01s for second, third, fourth, and fifth years is at an equivalent level
(i.e., about $2 million per year for total costs for the entire initiative).

The actual number of applications funded is dependent on the number of high
quality applications and their individual budget requirements.  It is not the
intent of AHCPR that the awards be equal in size.  Although the financial plans
of AHCPR provides for this program, awards pursuant to this RFA are contingent
upon the availability of funds for this purpose.

Funding beyond the initial budget period will depend upon annual progress reviews
by AHCPR and the availability of funds.

RESEARCH OBJECTIVES

Background

AHCPR has always focused on public policy issues dealing with the role of markets
in organizational behavior and in the cost and financing of health care
(Eisenberg, 1998).  In recent years, particularly through RFA HS-95-005 (Market
Forces in a Changing Health Care System, 1995), AHCPR has looked at both cost and
financing issues in health care reform and the effects of managed care on market
behavior.  However, over the past few years, the organizational behavior in all
health care markets has become increasingly complex.  Salient characteristics of
health care markets now include:

(1) Horizontal integration and consolidation occurring at record rates in certain
parts of the health care sector.  For example, the number of Health Maintenance
Organization (HMO) mergers and acquisitions more than doubled between 1995 and
1996 (see Gaynor and Haas-Wilson, 1999).  This horizontal integration has
resulted in complex multi-product, multi-market health plans and diversified
provider networks.

(2) A proliferation of new organizational types.  Very recently, the vertical
integration of the early 1990's has appeared to unravel, resulting in vertical
"dis-integration:" a shift from ownership to contractual relationships between
providers and plans (Robinson, 1999).  The regulatory and legislative environment
--notably the Employment and Retirement Income Security Act of 1974-- often blur
distinctions among previously discrete functions of insurance, hospital care,
ambulatory care, supply of pharmaceuticals, administrative services, and employer
purchasing of healthcare.  Conversions of not-for-profit health care institutions
continue, adding to the increased presence of for-profit ownership in all
markets.

(3) Increasingly widespread penetration of many new types of managed care.  In
fact, the proportion of individuals with employer-provided health insurance who
were in some form of managed care increased from 51 percent in 1993 to 73 percent
in 1995 (Jensen et al., 1997).

(4) Increased purchaser power.  Much of this organizational change in healthcare
markets has been fueled by the increased power of purchasers under the rise of
managed care.  Since managed care is often marketed directly to employers, this
increased managed care penetration has resulted in buyer-driven price competition
in all health care markets.  Moreover, a few large employers have also engaged
in 'value-based' purchasing:  buying health care on the basis of quality as well
as cost (Meyer, 1998).

(5) Fragmentation, diminished access, and disparities.  Despite undeniable
consolidation among some health care organizations, other parts of the health
care sector now antithetically exhibit a much greater degree of fragmentation
than ever before.  For example, many HMOs have recently withdrawn from the
Medicaid and Medicare programs.  In addition, rural health care markets still
remain isolated from managed care competition.  Racial and ethnic minorities
still face limited access; less than half of all Hispanics and blacks had private
health insurance, compared to three-fourths of whites in 1996.  Racial and ethnic
disparities in health outcomes still persist.  For example, blacks are 40 percent
more likely to die of heart disease than whites.  Cancer death rates among blacks
are 35 percent higher (DHHS, 1999).

(6) A resurgence in health care costs.  Despite all the organizational
restructuring in markets, national health care spending is projected to double
between 1996 and 2007, growing from 13.6 percent of Gross Domestic Product  (GDP)
in 1996 to 16.6 percent of GDP  by 2007 (Smith et al., 1998).

Objectives and Scope

This strategic environment provides both new demands and opportunities for
policy-relevant research on the role of market forces.  Participants in the
formulation of public policy -- and decision makers at all levels and in all
parts of the health care sector as well -- require new rigorous evidence about
the extent and nature of recent health care market and organizational changes and
about the consequences of such changes for health care delivery, utilization,
access, outcomes, quality, and costs.  The goal of  projects supported under this
RFA is the generation of knowledge that policy makers can use to address the
myriad of issues that emerge from the increased organizational complexity of the
U.S. health care markets, as well as renewed cost pressures and potential threats
to access for poor and minority populations.

To achieve a full analysis of these types of public policy issues, each P01 grant
will consist of at least 4 and no more than 6 inter-related individual projects
that all revolve around one general program theme conceived by the principal
investigator (e.g., provider networks, or effects of recent changes in health
care markets on health care outcomes, or measuring and assessing effects of
competition in complex health care markets, or the role of quality in health care
markets).  Within the main program theme, the individual discrete projects will
address specific topics chosen from the following four areas.  The distribution
of projects across the topic are given below in "Special Requirements."

(1) Provider and Health Plan Behavior.  Providers may be any organized provider
(or network of providers) of medical care, such as hospitals, medical groups,
HMOs, integrated delivery systems, nursing homes, home health care companies,
subacute care and rehabilitation facilities, disease management programs, carve-
outs, and pharmaceutical suppliers.  Health plans refer to any organization that
provides health insurance, such as HMOs, Preferred Provider Organizations (PPOs),
and fee-for-service carriers.  A study of behavior may involve (a) a description
of the structural and behavioral complexity within provider organizations and
within health plans, and/or (b) an analysis of the public policy implications of
the strategic behavior between providers and health plans.  For example:  What
are the market and community-level impacts of organizational change and market
complexity on consumer prices, consumer quality, cost efficiency, risk bearing,
competition, market structure, and patient care?  How should competition and
managed care penetration in these complex markets be defined?  How has regulation
affected market dynamics and patient care?  AHCPR is also interested in how
market complexity affects consumer quality and consumer health outcomes.  For
example:  Which types of market changes are associated with improved health
outcomes?  Does organizational complexity lead to greater variation in health
outcomes?  In particular, AHCPR is interested in analysis that provides
information to public policymakers concerned about reducing disparity of outcomes
for minorities in any of the six outcome areas formulated in the Department of
Health and Human Services' Initiative on Race (also referenced below in topic 3).

(2) Purchaser Behavior.  Purchasers refer to any organized buyer of health care
and insurance, such as employers, coalitions, and public purchasers (Medicare,
Medicaid, S-CHIP).  A study of behavior may involve (a) a description of the
structural complexity among purchasers, and/or (b) an analysis of the public
policy implications of the strategic behavior among purchasers, providers, and
health plans.  For example:  How has purchaser behavior and coalition formation
influenced the changes observed in the market?  How has the level of market
complexity affected the employer's benefit package and selection of plans?  Under
what market conditions do buyers engage in value-based purchasing?  Value-base
purchasing is selection of coverage options for employees by large employers,
coalitions and government purchasers incorporating information on the quality of
health care, plan/provider processes,  population and patient outcomes, as well
as information on price.  In order to provide employers with tools to enhance
their ability to buy value and to encourage the adoption of best practices by
large employers, employer coalitions and government purchasers, AHCPR seeks to
better understand the potential and the limitations of various value-based
purchasing strategies to improve quality.

(3) Minority Access.  Ethnic and racial minorities are of particular interest as
subjects for study under this RFA.  A description of the Department of Health and
Human Services' Initiative to Eliminate Racial and Ethnic Disparities in Health
can be found at http://raceandhealth.hhs.gov/over-txt.htm.  In this RFA, AHCPR
is particularly interested in the link between market forces and the public
policy issues reflected in the Departmental initiative.  For example, what
financial and geographical barriers to health insurance and to particular sets
of providers are minorities more likely to face than non-minorities? 
Understanding whether and how features of delivery systems differentially affect
minority access to health care and the quality of care they receive is an
essential first step to redressing these disparities.  Research proposed under
this RFA, however, should go beyond merely documenting the existence of
disparities, and identify the market-level and organizational causes of
disparities and suggest strategies that will lead to better health care access
and quality for minorities.

(4) Rural Markets.  AHCPR has an interest in research relevant to increasing
consumer access to health care and health insurance in rural areas.  For example,
how can the implementation of managed care be improved in rural areas?  Do rural
employers use different purchasing strategies than urban employers?  Many of the
recent important antitrust cases in exclusive contracting have occurred in rural
areas.  Is there evidence that particular strategies in urban markets may be
anti-
competitive (i.e., not motivated by greater efficiency) but that, in contrast,
such behavior may be quite efficient in rural areas?  For example, are
exclusionary provider networks cost-efficient in rural markets?

Methods

Individual projects may use a combination of rigorous qualitative and
quantitative methods among the P01's individual projects.

Qualitative methods may be especially useful in studying rapidly changing
environments and can be used on their own to deepen understanding of the
transformation of health care delivery systems or to complement quantitative
methods and thereby strengthen the research design.  For example, rigorous
qualitative research may detail the exact characteristics of the organizations
and markets under study (and not merely a classification or typology of the
organizations).

Quantitative methods should be rigorous and use state-of-the-art methodologies. 
Projects using  such methods should be grounded in appropriate theoretical
frameworks.  Hypotheses-testing projects should present competing hypotheses
clearly.  Applied and new quantitative methods are expected to address
endogeneity, selection bias, and other statistical problems often associated with
the use of secondary data sources to conduct research on the topics describe
within this initiative.

Technical Cores

Within this initiative, each P01 is expected to have one or more technical cores. 
For example, a technical core may be a separately budgeted facility that
processes and analyzes data for several projects within the P01, allowing
projects to link data sets and share variables.

Development of large new surveys is not encouraged.  It is expected that research
supported under this initiative will use existing data for good reasons:  (1)
Such data are usually quite appropriate for such research, given that they are
is often connected to reimbursement and thus track market transactions; (2) Use
of such data is efficient and expedient, since they do not require collection and
are relatively available; (3) Given rapid changes in health care markets and
commensurate changes in the legislative and regulatory environments, both the
research questions and the policy context for research on health care markets
make relatively high demands for timeliness in conducting such research and on
the reporting of results, thus making existing data sources attractive; (4)
Application of rigorous statistical techniques can be used to address certain
inherent weaknesses in the use of existing data.

Thus, investigators are expected to acquire, process, and use existing data from
multiple sources to capture complex interactions between organizations and within
markets.  For example, a quantitative analysis of HMO and hospital costs may
control for demand-side changes in the market (e.g., purchaser behavior) by
linking to purchaser data from a P01's individual project on employer behavior. 
Development of a state level data set detailing states' regulatory structure for
providers, health plans, and purchasers (e.g., PPO regulation) may provide
another focus for a P01's technical core, potentially useful across a number of
the inter-related P01 projects.

Also, AHCPR encourages research using data from the Medical Expenditure Panel
Survey (MEPS), developed by AHCPR with collaboration by the National Center for
Health Statistics, and other AHCPR-supported data bases such as the Healthcare
Cost and Utilization Project (HCUP).  For assistance with AHCPR data sets, see
the Inquiry section below.

Policy Relevance and Dissemination

Studies under this RFA are expected not only to contribute to our basic
understanding of recent changes in health care markets and organizations but also
to build capacity --tools, talent, and teams-- to answer associated questions of
policy relevance and to produce information in formats useful to participants in
the formulation of public policy.  Applicants should be concrete in describing
(1) the public policy and other audiences most interested in the supported
research and (2) how applicants anticipate their results being used for public
policy purposes.  Dissemination strategies should not be limited to publication
in peer-reviewed journals but may encompass a variety of approaches, such as
translating results into nontechnical monographs and distributing them through
associations of private and public officials; educating legislators, public
administrators, health plan executives, employers, and others in seminars; and
outreach to the mass media.

Consistent with the purpose of this initiative to provide rigorous evidence
critical to the formulation of public policy affecting health care costs,
utilization, access, and quality, applicants should plan to attend an annual
conference of awardees supported under this RFA in order to (1) make visible the
research capacity developed under the grant to a public policy audience, (2)
discuss public policy issues relevant to supported projects, and (3) share
results when available with public policy audiences, with researchers supported
under other P01s funded under this initiative, and with AHCPR program staff. 
AHCPR program staff will bear the responsibility for coordination and timing of
such conferences.

SPECIAL REQUIREMENTS

Special Terms of Award indicated below are in addition to and not in lieu of
otherwise applicable OMB administrative guidelines, HHS grants administration
regulations, 45 CFR Parts 74 and 92, and other HHS and PHS grants administrative
policies.  Applicants should be familiar with the Agency's grant regulation, 42
CFR Part 67 Subpart A, and particularly 76.18-67.22.

Consistent with AHCPR's Guidelines for the Research Program Project Grant,
supported projects will most likely require assembly of inter-disciplinary teams
to include investigators from more than one institution.  "Letters of intent to
collaborate with the applicant organization" signed by the appropriate
institutional official from each participating organization must be included in
the application.  Submission of formal collaborative documents can be delayed
until time of award.

Each P01 must have a minimum of four individual projects, with a maximum of six
individual projects.  At least two of the individual projects in a P01 must
respond to topic area 1 -- Provider and Health Plan Behavior.  At least one of
the individual projects in a P01 must respond to topic area 2 -- Purchaser
Behavior.  At least one individual project must cover either topic area 3 or
topic area 4.  Individual projects may address multiple topic areas.  Rural and
minority issues, for example, may be addressed across all projects.  Applicants
should be extremely clear --project-by-project-- about which topic areas are
addressed.  Individual projects within the P01 must all be inter-related and
pertain to one general, overall program theme selected, titled, and presented as
such in the application by the principal investigator.

As indicated, applicants should plan to attend an annual conference of awardees
supported under this RFA for dissemination purposes.  For budgetary purposes,
applicants for each P01 may plan for two representatives to travel to the
Washington, DC, area for conference presentations that will be timed with annual
submission of applications for continued funding.  To this end, applicants should
present a relevant plan, to include involved personnel, budget justifications,
and timetables appropriate to participating in such conferences.

Data Privacy

Pursuant to section 903(c) of the Public Health Service Act (42 USC 299a-1(c)),
information obtained in the course of any AHCPR-study that identifies an
individual or entity must be treated as confidential in accordance with any
promises made or implied regarding the use and purposes of the data collection. 
Applicants must describe in the Human Subjects section of the application
procedures for ensuring the confidentiality of such identifying information.  The
description of the procedures should include a discussion of who will be
permitted access to the information, both raw data and machine readable files,
and how personal identifiers and other identifying or identifiable data will be
safeguarded.

The grantee should ensure that computer systems containing confidential data have
a level and scope of security that equals or exceeds those established by the
Offices of Management and Budget (OMB) in OMB circular No. A-130, Appendix III -
 Security of Federal Automated Information Systems.  The National Institute of
Standard and Technology (NIST) has published several implementation guides for
this circular.  They are:  An Introduction to Computer Security: The NIST
handbook; Generally Accepted Principle and Practices for Securing Information
Technology Systems; and Guide for Developing Security Plans for Information
Technology Systems.  The circular and guides are available on the web at
http://www.whitehouse.gov/OMB/circulars/a130/a130.html;
http://csrc.nist.gov/publications/nistpubs/800-12/handbook.pdf;
http://csrc.nist.gov/publications/nistbul/csl96-10.txt;
http://csrc.nist.gov/publications/nistbul/itl99-04.txt, respectively.

Rights in Data

AHCPR grantees may copyright or seek patents, as appropriate, for final and
interim products and materials including, but not limited to, methodological
tools, measures, software with documentation, literature searches, and analyses,
which are developed in whole or in part with AHCPR funds.  Such copyrights and
patents are subject to a Federal government license to use and permit others to
use these products and materials for AHCPR purposes.  In accordance with its
legislative dissemination mandate, AHCPR purposes may include, subject to
statutory confidentiality protections, making research materials, data bases, and
algorithms available for verification or replication by other researchers; and
subject to AHCPR budget constraints, final products maybe made available to the
health care community and the public by AHCPR, or its agents, if such
distribution would significantly increase access to a product and thereby produce
public health benefits.  Ordinarily, to accomplish distribution, AHCPR publicizes
research findings but relies on grantees to publish in peer-reviewed journals and
to market grant-supported products.

Important legal rights and requirements applicable to AHCPR grantees are set out
or referenced in the AHCPR's grants regulation at 42 CFR Part 67, Subpart A.

INCLUSION OF WOMEN, MINORITIES, AND CHILDREN IN RESEARCH STUDY POPULATIONS

It is the policy of AHCPR that women and members of minority groups be included
in all AHCPR-supported research projects involving human subjects, unless a clear
and compelling rationale and justification are provided that inclusion is
inappropriate with respect to the health of the subjects or the purpose of the
research.

All investigators proposing research involving human subjects should read the
"NIH Guidelines on the Inclusion of Women and Minorities as Subjects in Clinical
Research," which have been published in the Federal Register of March 28, 1994
and in the NIH Guide for Grants and Contracts of March 18, 1994.  To the extent
possible, AHCPR requires adherence to these NIH Guidelines.

Investigators may obtain copies from the above sources or from the AHCPR
contractor, listed under INQUIRIES, or from the NIH Guide Website
http://www.nih.gov/grants/guide/index.html.

AHCPR also encourages investigators to consider including children in study
populations, as appropriate.  AHCPR announced in the NIH Guide of May 9, 1997,
that it is developing a policy and implementation plan on the inclusion of
children in health services research.  This Notice is available through the AHCPR
Website http://www.ahcpr.gov (Funding Opportunities) and InstantFAX (see
instructions under INQUIRIES).

LETTER OF INTENT

Prospective applicants are asked to submit, by September 2, 1999, a letter of
intent that includes a descriptive title of the proposed research, the name,
address, and telephone number of the principal investigator, the identities of
other key personnel and participating institutions, and the number and title of
the RFA in response to which the application may be submitted.  Although a letter
of intent is not required, is not binding, and does not enter into the review of
a subsequent application, the information that it contains allows AHCPR staff to
estimate the potential review workload and avoid conflict of interest in the
review.  AHCPR will not provide responses to letters of intent.

The letter of intent is to be sent to:

Dawn French
Center for Organization and Delivery Studies
Agency for Health Care Policy and Research
2101 East Jefferson Street, Suite 605
Rockville, MD 20852-4908
Telephone (301) 594-6768
FAX:  (301) 594-2314
Email:  dfrench@ahcpr.gov

APPLICATION PROCEDURES

The research grant application form PHS 398 (rev. 4/98) is to be used in applying
for these grants.  State and local government applicants may use PHS 5161-1,
Application for Federal Assistance (5/96), and follow those requirements for copy
submission.

Applications kits are available at most institutional offices of sponsored
research.  They may also be obtained from the Division of Extramural Outreach and
Information Resources, National Institutes of Health, 6701 Rockledge Drive, MSC
7910, Bethesda, MD 20892-7910, telephone (301) 435-0714, Email:
GrantsInfo@nih.gov.

AHCPR applicants may also obtain application materials from the AHCPR contractor
(see INQUIRIES).

In addition to the above, application procedures should conform to AHCPR's
Guidelines for the Research Program Project Grant.  Applications for a P01 must
include (1) an overall organizational plan; (2) an overarching research plan; and
(3) detailed plans for the research projects.  For purposes of the page
limitations of section 1 through 4 of the PHS 398 form, the P01 organizational
plan (including the administrative, technical, and other cores) and the
overarching research plan should be considered as one component with a 25 page
limit.  A maximum of 5 additional pages may be used to describe each discrete
research project that the P01 will undertake.

The P01 mechanism under the RFA involves at least four and no more than six
inter-related individual projects bundled together under one program theme.  The
characteristics of the P01 are expected to facilitate data sharing, variable
sharing, and data processing among researchers, and across projects and
institutions.

Each P01 has three main types of leadership:  the principal investigator, project
leaders, and core directors.  The principal investigator is in charge of the
entire P01 and sets the general over-arching theme of all the projects in the
P01.  Each individual project in the P01 is directed by a project leader.  In
addition, individual projects in the P01 may share one or more 'cores.' Led by
a core director, a core is a separately budgeted component of the P01 that
provides essential facilities, administrative staff, or services for two or more
of the P01's individual projects.  The cores are to create synergies among the
various projects, researchers, and institutions in the program.  For a detailed
description of the design of the P01, please see AHCPR's Guidelines for the
Research Program Project Grant.

The RFA label available in the PHS 398 (4/98) must be affixed to the bottom of
the face page of the application.  Failure to use this label could result in
delayed processing of the application such that it may not reach the review
committee in time for review.  The sample RFA label available at
http://www.nih.gov/grants/funding/phs398/label-bk.pdf has been modified to allow
for this change.  Please note this is in pdf format.  In addition, the RFA title
and number must be typed on line 2 of the face page of the application form and
the YES box must be marked.

The PHS 398 type size requirements (p. 6) will be enforced rigorously, and non-
compliant applications returned.  Applicants are encouraged to review current
instructions prior to preparing their application.

Submit a signed, typewritten original of the application, including the
Checklist, and three signed, photocopies, in one package to:

CENTER FOR SCIENTIFIC REVIEW
NATIONAL INSTITUTES OF HEALTH
6701 ROCKLEDGE DRIVE, ROOM 1040 - MSC 7710
BETHESDA, MD  20892-7710
BETHESDA, MD  20817 (for express/courier service)

At the time of submission, two additional copies of the application, labeled
"Advanced Copy(s)" must also be sent to:

Dawn French
Center for Organization and Delivery Studies
Agency for Health Care Policy and Research
2101 East Jefferson Street, Suite 605
Rockville, MD 20852-4908
Telephone (301) 594-6768
FAX:  (301) 594-2314
Email:  dfrench@ahcpr.gov

Applications must be received by November 10, 1999.  If an application is
received after that date, it will be returned to the applicant without review.

Application Preparation (including use of HCFA Data)

For applications that propose to use Medicare or Medicaid data that are
individually identifiable, applicants should state explicitly in the Research
Design and Methods section of the Research Plan (form PHS 398) the specific
files, time periods, and cohorts proposed for the research.  In consultation with
the Health Care Financing Administration (HCFA), AHCPR will use this information
to develop a cost estimate for obtaining the data.  This estimate will be
included in the estimated total cost of the grant at the time funding decisions
are made.

Applicants should be aware that for individually identifiable Medicare and
Medicaid data, principal investigators and their grantee institutions will be
required to enter into a Data Use Agreement (DUA) with HCFA to protect the
confidentiality of data in accordance with standards set out in OMB Circular A-
130, Appendix IIIĆ¾Security of Federal Automated Information Systems.  The use of
the data is restricted to the purposes and time period specified in the DUA.  At
the end of this time period, the grantee is required to return the data to HCFA
or certify that the data have been destroyed.

Grantees must also comply with the confidentiality requirements of Section 903(c)
of the PHS Act.  See the Data Privacy Section for details on these requirement
as well as references for Circular A-130 and its implementation guides from the
National Institute of Standards and Technology.

In developing research plans, applicants should allow time for refining,
providing, and processing their data requests.  Requests may take 6 months from
the time they are submitted to completion.  Applications proposing to contact
beneficiaries or their providers require the approval of the HCFA Administrator
and may require meeting with HCFA staff.

HCFA data are provided on IBM mainframe tapes using the record and data formats
commonly employed on these computers.  Applicants should either have the
capability to process these tapes and formats or plan to make arrangements to
securely convert them to other media and formats.

Questions regarding HCFA should be directed to the AHCPR program official listed
under INQUIRIES.

REVIEW CONSIDERATIONS

Upon receipt, applications will be reviewed for completeness and responsiveness. 
Incomplete applications will be returned to the applicant without further
consideration.  Applications that are complete and responsive to the RFA will be
evaluated for scientific and technical merit by an appropriate peer review group
convened by AHCPR in accordance with the review criteria stated below.

As part of the merit review, all applications will receive a written critique,
and also may undergo a process in which only those applications deemed to have
the highest scientific merit will be discussed and assigned a priority score.

General Review Criteria

The goals of AHCPR-supported research are to enhance the quality,
appropriateness, and effectiveness of health care services, and access to such
services.  The reviewers will be asked to discuss the following aspects of the
application in their written critiques in order to judge the likelihood that the
proposed research will have a substantial impact on the pursuit of these goals. 
Each of these criteria will be addressed and considered by the reviewers in
assigning the overall score, weighting them as appropriate for each application. 
Note that the application does not need to be strong in all categories to be
judged likely to have a major scientific impact and thus deserve a high priority
score.  For example, an investigator may propose to carry out important work that
by its nature is not innovative but is essential to move a field forward.

1.  Significance.  Does this study address an important problem?  If the aims of
the application are achieved, how will scientific knowledge be advanced?  What
will be the effect of these studies on the concepts or methods that drive this
field?

2.  Approach.  Are the conceptual framework, design, methods, and analyses
adequately developed, well-integrated, and appropriate to the aims of the
project?  Are the proposed data sources appropriate and adequate?  Does the
applicant acknowledge potential problem areas and consider alternative tactics?

3.  Innovation.  Does the project employ novel concepts, approaches or method? 
Are the aims original and innovative?  Does the project challenge existing
paradigms or develop new methodologies or technologies?

4.  Investigator.  Is the investigator appropriately trained and well suited to
carry out this work?  Is the work proposed appropriate to the experience level
of the principal investigator and other researchers (if any)?  Is the project (or
work plan) well organized?

5.  Environment.  Does the scientific environment in which the work will be done
contribute to the probability of success?  Do the proposed experiments take
advantage of unique features of the scientific environment or employ useful
collaborative arrangements?  Is there evidence of institutional support?

6.  Policy Relevance.  Is the project designed to be applicable to future
decision-making by public and private policy makers?  Will the project provide
Federal and State policymakers, and others participating in the formulation of
such policy, with the evidence-based information they need to improve quality and
outcomes, control costs, and assure access to needed services?

The initial review group will also examine:  the appropriateness of proposed
project budget and duration; the adequacy of plans to include both genders,
children, and minorities and their subgroups as appropriate for the scientific
goals of the research and plans for the recruitment and retention of subjects;
the provisions for the protection of human and animal subjects; and the safety
of the research environment.

Special Review Criteria

Special P01 review criteria will also be used in the review of these
applications.  Peer review of the overall scientific and technical merit
emphasizes a synthesis of two major aspects:  1) review of the P01 as an
integrated effort focused on a central theme and 2) review of the merit of
individual research projects and core components in the context of the proposed
P01.  Applicants are encouraged to study the evaluation criteria cited in the
AHCPR's Guidelines for the Research Program Project Grant before preparing their
applications.  The following sections from the Guidelines will apply to the
review of this RFA:  review criteria for the overall P01, review criteria for the
program as an integrated effort; review criteria for projects, and review
criteria for cores.

AWARD CRITERIA

Applications will compete for available funds with all other P01 applications
under this RFA.  The following will be considered in making funding decisions: 
1) quality of the proposed P01 as determined by peer review; 2) availability of
funds; 3) responsiveness to the goals and objectives of the RFA; 4) relevance to
the formulation of public policy; and 5) portfolio balance.

INQUIRIES

Copies of the RFA are available from the AHCPR contractor:

Equals Three Communication, Inc.
7910 Woodmont Avenue, Suite 400
Bethesda, MD 20814-3015
Telephone (301) 656-3100
FAX (301) 652-5264

This RFA is also available on AHCPR's Web site, http://www.ahcpr.gov, and through
AHCPR InstantFAX at (301) 594-2800.  To use InstantFAX, you must call from a
facsimile (FAX) machine with a telephone handset.  Follow the voice prompt to
obtain a copy of the table of contents, which has the document order number (not
the same as the RFA number).  The RFA will be sent at the end of the ordering
process.  AHCPR InstantFAX operates 24 hours a day, 7 days a week.  For questions
about this service, call AHCPR's Division of Communications at (301) 594-6344.

AHCPR welcomes the opportunity to clarify any issues or questions from potential
applicants who have obtained and read the RFA.  Written and telephone inquiries
concerning this RFA are encouraged.  Inquiries regarding programmatic issues,
including issues related to the inclusion of women, minorities, and children in
study populations, should be addressed to:

Michael Hagan
Center for Organization and Delivery Studies
Agency for Health Care Policy and Research
2101 East Jefferson Street, Suite 605
Rockville, MD 20852-4908
Telephone (301) 594-6768
FAX:  (301) 594-2314
Email:  mhagan@ahcpr.gov

Bill Encinosa, PhD
Center for Organization and Delivery Studies
Agency for Health Care Policy and Research
2101 East Jefferson Street, Suite 605
Rockville, MD 20852-4908
Telephone (301) 594-6768
FAX:  (301) 594-2314
Email:  wencinos@ahcpr.gov

For technical assistance on HCUP, direct inquiries to:

Kelly Carper
Center for Cost and Financing Studies
Agency for Health Care Policy and Research
2101 E. Jefferson St., Suite 502
Rockville, MD  20852
Telephone:  (301) 301-3075
Email:  kcarper@ahcpr.gov

For technical assistance on MEPS, direct inquiries to:

Nancy Krauss
Center for Cost and Financing Studies
Agency for Health Care Policy and Research
2101 East Jefferson Street, Suite 502
Rockville, MD 20852-4908
Telephone:  (301) 594-0846
Email:  nkrauss@ahcpr.gov

Direct inquiries regarding fiscal and eligibility matters to:

George (Skip) Moyer
Grants Management Specialist
Agency for Health Care Policy and Research
2101 East Jefferson Street, Suite 601
Rockville, MD  20852
Telephone:  (301) 594-1842
FAX:  (301) 594-3210
Email:  gmoyer@ahcpr.gov

AUTHORITY AND REGULATIONS

This program is described in the Catalog of Federal Domestic Assistance No.
93.226.  Awards are made under authorization of Title IX of the Public Health
Service Act (42 USC 299-299c-6) and Section 1142 of the Social Security Act (42
USC 1320b-12) as applicable.  Awards are administered under the PHS Grants Policy
Statement and Federal Regulations 42 CFR 67, Subpart A, and 45 CFR Parts 74 and
92.  This program is not subject to the intergovernmental review requirements of
Executive Order 12372 or Health Systems Agency review.

The PHS strongly encourages all grant and contract recipients to provide a smoke-
free workplace and promote the non-use of all tobacco products.  In addition,
Public Law 103-227, the Pro-Children Act of 1994, prohibits smoking in certain
facilities (or in some cases, any portion of a facility) in which regular or
routine education, library, day care, health care or early childhood development
services are provided to children.  This is consistent with the PHS mission to
protect and advance the physical and mental health of the American people.

REFERENCES

Eisenberg, John M., 1998.  "Health Services Research In A Market-Oriented Health
Care System." Health Affairs.  January/February 17:1, pp. 97-108.

Jensen, Gail A., Michael A. Morrisey, Shannon Gaffney, and Derek K. Liston. 1997. 
"The New Dominance of Managed Care:  Insurance Trends in the 1990s." Health
Affairs.  January/February, 16:1, pp. 125-136.

Gaynor, Martin, and Deborah Haas-Wilson.1999.  " Change, Consolidation, and
Competition in Health Care Markets." The Journal of Economic Perspectives. 
Winter, 13:1, pp.141-164

Meyer, Jack A. 1997.  "Theory and Reality of Value-Based Purchasing:  Lessons
From The Pioneers" AHCPR Research Report.  November, Publication No. 98-0004, pp.
1-55.

Robinson, James E. 1999.  "The Future Of Managed Care Organization." Health
Affairs. March/April, 18:2, pp. 7-24.

Smith, Sheila, Mark Freeland, Stephen Heffler, David McKusick, and the Health
Expenditures Projection Team.  1998.  "The Next Ten Years Of Health Spending: 
What Does The Future Hold." Health Affairs.  September/October, 17:5.129-140.

U.S. Department of Health and Human Services, "The Initiative to Eliminate Racial
and Ethnic Disparities in Health," 1999.


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