FCC created the third component of the current Rural Health Care  Program, the pilot program, in September 2006 after acknowledging that  the primary Rural Health Care Program was “greatly underutilized.” FCC  explained that “although there are a number of factors that may explain  the underutilization” of the program, it was “apparent that health care  providers continue to lack access to the broadband facilities needed to  support…advanced telehealth applications.” The pilot program funds   85 percent of the costs of deploying dedicated broadband networks  connecting rural and urban health care providers, including the cost of  designing and installing broadband networks that connect health care  providers in a state or region, as well as the costs of advanced  telecommunications and information services that ride over that network. FCC Has Not Performed the Analysis Necessary to Ensure That the Primary Rural Health Care Program Meets the Needs of Rural Health Care Providers

		Participation in the Program, Although Increasing, Has Not Met FCC Projections and over Half of All Program Funds Are Used in Alaska

Annual disbursements from the primary Rural Health Care Program have  increased from 1998 through 2009, yet they have never approached FCC’s  original projections for participation. Thus, as figure 4 illustrates, total program expenditures in 12  years of disbursements have not yet reached the single year funding cap of  $400 million. No needs assessment has been conducted to show  that the program is, in fact, underutilized. Despite these and other issues, we were also told that many of the current  program participants are dependent on the benefits they receive from the  primary Rural Health Care Program. FCC’s Poor Planning and Communication during the Design and Implementation of the Pilot Program Caused Delays and Difficulties

		FCC’s Limited Collaboration with USAC, Federal Agencies, and Other Knowledgeable Stakeholders Affected Pilot Program Design

FCC missed multiple opportunities to collaborate with USAC, federal  agencies, and other knowledgeable stakeholders when designing the pilot  program. Pilot Participants Have Experienced Delays and Difficulties, in Part, Because FCC Did Not Fully Establish Requirements Prior to Calling for Applications and Did Not Provide Effective Program Guidance

			Pilot Participants Have Experienced Delays and Difficulties for Many Reasons

FCC called for applications to participate in the pilot program before it  fully established pilot program requirements. Most importantly, the entire pilot  program itself has been delayed. In addition, when asked to consider their current understanding of the  costs and administrative requirements of participating in the pilot  program, 52 of 57 respondents reported that the pilot program’s benefits  will outweigh the costs of participating in the program. However, FCC has reversed these two key practices. However, again, without first setting specific performance goals  defining what the programs are specifically intended to accomplish, FCC  cannot be sure that it has adopted the most appropriate performance  measures. FCC has sought public comment on performance goals and measures for  the program on two previous occasions that did not result in effective  performance goals and measures for the program:  In June 2005, FCC issued a NPRM seeking comment on whether specific  performance goals were needed and on ways to establish useful outcome,  output, and efficiency measures for each of the universal service  programs, including the Rural Health Care Program. Furthermore, FCC has proposed two new programs under the Rural  Health Care Program in its 2010 NPRM (the Health Broadband Services  Program and the Health Infrastructure Program), even though the  National Broadband Plan states that FCC does not have the data to make  critical policy decisions on how to better use its funds. However, since the Rural Health Care Program’s inception, FCC has not  provided the program with a solid performance management foundation. FCC has not  conducted a comprehensive needs assessment to determine the needs of  rural health care providers, has no specific goals and measures for the  program to guide its management decisions, and has not evaluated how  well the program is performing. Develop and execute a sound performance evaluation plan for the current  programs, and develop sound evaluation plans as part of the design of any  new programs before implementation begins. In its written comments, FCC did not specifically agree or disagree with  our recommendations but discussed planned and ongoing actions to  address them. (2) How have FCC’s  design and implementation of the pilot program affected participants? and  (3) What are FCC’s performance goals and measures for the Rural Health  Care Program, and how do these goals compare with the key  characteristics of successful performance goals and measures? Interviews to Assess How Well the Primary Rural Health Care Program Addressed Health Care Provider Needs

To assess how well the primary Rural Health Care Program addressed the  needs of rural health care providers, we interviewed FCC and USAC  officials to determine how the program was designed to address rural  health care provider needs.
Why GAO Did This Study

Telemedicine offers a way to improve health care access for patients in rural areas. The Federal Communications Commission's (FCC) Rural Health Care Program, established in 1997, provides discounts on rural health care providers' telecommunications and information services (primary program) and funds broadband infrastructure and services (pilot program). GAO was asked to review (1) how FCC has managed the primary program to meet the needs of rural health care providers, and how well the program has addressed those needs; (2) how FCC's design and implementation of the pilot program affected participants; and (3) FCC's performance goals and measures for both the primary program and the pilot program, and how these goals compare with the key characteristics of successful performance goals and measures. GAO reviewed program documents and data, interviewed program staff and relevant stakeholders, and surveyed all 61 pilot program participants with recent participation in the program.

What GAO Found

FCC has not conducted an assessment of the telecommunications needs of rural health care providers as it has managed the primary Rural Health Care Program, which limits FCC's ability to determine how well the program has addressed those needs. Participation in the primary program has increased, and some rural health care providers report that they are dependent on the support received from the program. For example, a provider in Alaska has used program funds to increase the use of telemedicine, which has reduced patient wait times and travel costs. FCC has been successful in disbursing over 86 percent of all committed funds. However, FCC has disbursed only $327 million in total over the 12 years of the primary program's operation-- less than any single year's $400 million funding cap. FCC has frequently stated that the primary program is underutilized and has made a number of changes to the program, including the creation of the pilot program. Currently, FCC is proposing to replace portions of the primary program with a new broadband services program. However, without a needs assessment, FCC cannot determine how well the current program is targeting those needs--and whether the program is, in fact, underutilized--or ensure that a new program will target needs any better. FCC's poor planning and communication during the design and implementation of the pilot program caused delays and difficulties for pilot program participants. FCC did not consult with the program's administrator, other federal agencies, or relevant stakeholders prior to announcing the program, nor did it request public comment on its design. In addition, FCC called for applications to participate in the pilot program before it fully established pilot program requirements. FCC added additional program requirements after the pilot program began, and survey respondents indicated that program guidance was not provided in an effective manner. Despite these difficulties, most participants were positive about the assistance provided by program officials and reported that the benefits they anticipate receiving from the pilot program outweigh the costs of participating. However, the entire program has been delayed and projects have struggled to meet requirements that were not clearly defined at the beginning of the program. FCC has not developed specific performance goals for the Rural Health Care Program and has developed ineffective performance measures. The performance measures are limited for a number of reasons, the most important of which is that FCC has set no specific performance goals to which to link them. In addition, FCC has not evaluated the performance of the primary Rural Health Care Program and has no evaluation plan for the pilot program. Without reliable performance information, FCC does not have the data that it needs to make critical policy decisions about the overall Rural Health Care Program. If FCC does not correct these deficits in performance management, it may perpetuate the same performance management weaknesses in its stewardship of the new rural health care programs that it has proposed.

What GAO Recommends

GAO recommends that the FCC Chairman assess rural health care providers' needs, consult with knowledgeable stakeholders, develop performance goals and measures, and develop and execute sound performance evaluation plans. In its comments, FCC did not agree or disagree with the recommendations, but discussed planned and ongoing actions to address them.