Chapter 2
Priority Setting and Resource Allocation  TOP

Introduction

CARE Act resources are limited and need is severe. This heightens the responsibility of Title II to use sound information and a rational decision-making process when deciding which services and other program categories are priorities (priority setting) and how much to fund them (resource allocation).

Priority setting and resource allocation (PSRA) is linked to other planning tasks because it draws upon information compiled from those efforts. For example, which needs are higher priorities depends on data compiled through the needs assessment. However, decisions must often be made with incomplete information, such as limited data on the unmet need for services or outcomes evaluation data on the effectiveness of current services. A thorough PSRA process can help address these information gaps when making decisions about what services to fund.

Legislative Background and HAB/DSS Expectations  TOP

States are responsible for setting Title II service priorities, determining how best to meet those priorities, and allocating resources to them. Needs assessment and comprehensive planning should be linked to priority setting so that this information can be used to make sound decisions.

Priority Setting

Section 2617(b)(4)(A) calls for States to “establish priorities for the allocation of funds within the State based on
“(i) size and demographics of the population of individuals with HIV disease" and “the needs of such population…;
(ii) availability of other governmental and non-governmental resources, including the State medicaid plan under title XIX of the Social Security Act and the State Children’s Health Insurance Program under title XXI of such Act to cover health care costs of eligible individuals and families with HIV disease;
(iii) capacity development needs resulting from disparities in the availability of HIV-related services in historically underserved communities and rural communities; and
(iv) the efficiency of the administrative mechanism of the State for rapidly allocating funds to the areas of greatest need within the State;”

Resource Allocation

PSRA requires allocating resources across service categories, whether by absolute dollar amounts or as percents of total funds. This requires deciding the amount or proportion of Title II program funds to be allocated to each of the service priorities that is established.

Resource allocation does not mean procurement. In determining how best to meet stated priorities, the priority setting process may stipulate what provider characteristics should be sought in the request for proposals (RFP) process. However, selection of providers is conducted through separate contracting processes.

Priority Setting and Services to Women, Infants, Children,
and Youth with HIV Disease

The CARE Act requires that a certain proportion of Title II funds be used for care and support services to women, infants, children, and youth with HIV disease. The percent of the State’s total Title II service funds that go to services for women, infants, children, and youth must not be less than their percent of the total population with AIDS in the State. This provision does not require States to create a special priority for services to these populations. A waiver to this provision can be granted when States can demonstrate that the needs of each population or combination of these populations is being met through other programs such as Medicaid, State Children’s Health Insurance Program (SCHIP), or other CARE Act titles.

A Model for Priority Setting and Resource Allocation  TOP

Overview

The following decision-making model is intended to help plan and implement decision-making processes to set CARE Act priorities and allocate resources among service categories and other program-related activities. It suggests steps that use documented needs in making decisions. Examples are provided. The model is designed to meet legislative requirements and address HAB/DSS expectations. Also provided are guidelines and additional considerations for those with more experience, information, and/or resources. The model recognizes that the process used locally may vary, based upon these factors.

Assumptions

This model includes the following assumptions:

• There is no one ‘right” way to set priorities and allocate resources. This model provides a flexible approach that meets CARE Act requirements and HAB/DSS expectations and reflects actual planning body experience. Case study examples illustrate the process. For purposes of this document, one approach is carried through all the required steps. However, alternative approaches are suggested.
• Priority setting must be guided by CARE Act requirements for planning and priority setting, particularly the emphasis on determining the unmet need for services and eliminating disparities in access and services.
• Emphasis must be on sound practice, not just legislative requirements.
• Priorities should be reviewed annually, though decisions may be continuation of existing services.
• The decision-making process should consider many different perspectives. It should be responsive to identified consumer needs and preferences across diverse populations and address the needs of those not in care and of historically underserved populations, not merely current CARE Act clients.
• CARE Act planning bodies are official decision-making entities. Their priority-setting and resource-allocation decisions are subject to public scrutiny and to grievance procedures. The process used to reach these decisions must therefore be public and fully documented in writing. Conflict of interest requirements must be fully addressed.
• While priority setting is the responsibility of the State, this may be delegated to a planning body. If a committee of a planning body is given lead responsibility, the entire planning body should make decisions about priorities and the allocation of resources among service categories.

Steps in Priority Setting and Resource Allocation

The following 15 steps outline how to conduct priority setting and resource allocation and should be carried out over a period of several months, probably by committees and the full planning body.

For purposes of this document, priority setting and resource allocation are described as separate steps, carried out in sequence by a special committee and the full planning body. Two different committees might also be used, or the two processes might be combined. Each planning body should view the steps provided as one example of a sound process and should feel free to adopt or adapt it as appropriate, given their unique circumstances.

1. Agree on the priority-setting and resource-allocation process and its desired outcome.  TOP

First, agree on the specific tasks to be carried out and the expected outcomes. Usually the tasks will be decision making to set priorities and allocate resources to those priorities and provide guidance on how best to meet each priority. Priorities may include Direct Services and Program Support (e.g., capacity development, outcomes evaluation).

In setting the tasks and desired outcomes, agree on a format and level of detail for the completed priorities and resource allocations. In doing so, look back to the previous year and identify any changes or improvements needed in the service categories to be considered or the level of detail to be specified. For example, the following specific outcomes might be selected:

• A prioritized list of service categories, including a description of populations that will be served, geographic areas in which services are delivered, or service models that will be used to provide these services
• A chart showing the percent or dollars to be allocated to each service category or subcategory (see step 10), and
• A fully documented description of the steps and decision-making processes used, which can be shared with the community and used to support decisions.

Each step in the planning and decision-making process should be documented. Use the following outline as a starting point. Such documentation will make it clear at the end of the process how decisions were made.

2. Agree on responsibilities for carrying out the decision-making process.  TOP

Next, decide who will be responsible for carrying out various steps. While final decisions should be made by the State or its designee (e.g., a full planning body), preliminary work can be delegated to a special committee If a committee approach is chosen, ensure that the committee:

• Is large and diverse enough to reflect the various population groups and types of technical skills and experience needed for an inclusive and sound process (a committee of 11-15 people is typical)
• Documents its work and brings process decisions such as proposed procedures and criteria for decision making to the full planning body for review and approval (see below), and
• Returns to the entire planning body for review of its preliminary work and receives participation from the entire planning body in determining priorities and/or resource allocations.

A useful activity is to identify the "stakeholders" who should be involved in priority setting and resource allocation, such as:

• A broad spectrum of the HIV-infected population, including specific groups (consider how to involve not only planning body members and current CARE Act clients but also the broader community of PLWH)
• HIV-affected community
• Providers
• CEO (chief elected official) and legislative representatives
• Health department or similar agency
• Affected subpopulations and historically underserved populations, reflecting the epidemiology of HIV/AIDS in the area
• People from specific geographic areas within the service area, and
• Other interested groups and individuals.

If a committee is used to coordinate decision making, consider including representatives of these stakeholders as members. It may be useful and is entirely appropriate to involve in committee work individuals who are not members of the overall planning body. Where funds or volunteer services are available, consider using the services of a professional facilitator for this committee.

3. Review relevant legislative requirements and guidances.  TOP

The group responsible for coordinating the priority setting and resource allocations process should review legislative requirements and HAB/DSS guidances to ensure that the decision-making process is compatible with them. For example, the process needs to:

• Base priorities on the size and demographics of the population of individuals living with HIV disease, needs of individuals who are not in care, disparities in access and services, the priorities of communities with HIV disease, and coordination with HIV prevention and substance abuse prevention and treatment programs
• Comply with HAB/DSS guidance regarding funding of non-service priorities, and
• Adhere to conflict of interest policies (State, local and Federal CARE Act requirements).

Because CARE Act policies may change over time, planning bodies should consult the most recent application guidances from HAB/DSS to identify other legislative factors and HAB/DSS expectations. Information obtained should be summarized in writing and used in deciding on a decision-making process and criteria.

4. Determine and obtain available information "inputs," including comprehensive plans and needs assessments.  TOP

Ideally, most or all of the information listed in the table below will be available as “inputs” to decision making. This information will help in making decisions about service priorities and resource allocations. HAB/DSS does not expect all of these data components to be used, but many States have found that using a combination of data provides the best results.

Checklist of Data/Information for Priority Setting and Resource Allocation

Identify missing information before priority setting begins to avoid conflict over any limitations in the process caused by a lack of data. Identifying information gaps will also help to improve the information inputs for next year's decision making.

Often, the information listed will be available but not in an easily usable form. For example, the needs assessment may be quite lengthy. An important task is to determine the kinds of information needed from each of these inputs and prepare summaries in narrative or chart form for use in decision making. For example:

• Needs assessment information might be summarized to provide a prioritized list of service needs as identified by the various needs assessment activities.
• Non-CARE Act funding might be presented in terms of dollars available for each service category, broken down by service model, target group, and/or geographic location where available.

5. Identify a list of service categories for consideration, including definitions, components, and how best to deliver each service.  TOP

HAB/DSS provides a list of HIV-related service categories and definitions that indicate what services may be funded under specific titles of the CARE Act.[1] Prioritized services should be consistent with this list. Those that fall outside these areas (in cases where the State has other service lists and definitions) may be included, provided they are in compliance with existing HAB/DSS policies on allowable services.

Because different terms are sometimes used to describe similar services, and certain activities can be provided in more than one service category, a consistent listing can greatly simplify discussions about needs and priorities. For example, in some service areas, client advocacy is considered a part of case management, while in other locations it is a separate service category or is included in various program areas (e.g., housing services staff provide client advocacy on housing services, while personnel within medical clinics provide client advocacy on health care).

Following are helpful steps in defining the service categories:

• Review the approved list of service categories and definitions provided by HAB/DSS in its annual application guidance.
• Review the list used last year in presenting service priorities.
• Consider components and delivery mechanisms that are important to your continuum of care. They may need to be separately identified for consideration in priority setting and resource allocation. These might include:
  • Types of service interventions (e.g., the category of Food Bank/Home Delivered Meals/Nutrition Services might include home-delivered meals, food banks or food pantries, and food vouchers and nutritional supplements).
  • Specific subpopulations who must be served (e.g., women, gay men of color, homeless, injecting drug users, Latinos, African Americans).
  • Specific geographic areas (e.g., the major cities or counties included in the service area).
  • Types of organizations that might deliver the services. Priority setting might stipulate what provider characteristics should be looked in the RFP that is issued for funding of service providers. However, selection of particular providers/agencies that should deliver a given service must be left to the contracting process.

Remember that the service categories should be listed so they illustrate options for consideration in meeting documented needs. For each HIV health care need identified, choose the service interventions that work best in your area. For example, your needs assessment might indicate that PLWH need to have their care coordinated. This might be accomplished through case management or through some other service intervention. Once a list of service categories and interventions is developed, the committee should provide it to the full planning body for review and approval. The box suggests two ways to approach defining service categories.

6. Agree on principles to be applied in decision making.  TOP

Sound priority setting must be based on principles and criteria for decision making, which must be clearly stated and consistently applied. A first step is to identify—and obtain any needed review and approval of—the principles that will be used in guiding the decision-making process (see examples below.) Often, such principles have been discussed and reflected in the area's comprehensive HIV services plan. In making decisions about priorities, the decision-making body should consider whether proposed priorities are consistent with these principles.

Sometimes documentation may not exist to apply all these principles. For example, cost-effectiveness and outcome-effectiveness data may not be available. Note how the lack of information limits the quality of decision making and specify additional information needed in future years.

7. Determine the criteria to be used in priority setting.  TOP

In addition to principles, agree on the criteria to be used in setting priorities. These criteria should be "weighted" to determine which ones are most important in making decisions. Suggest a limited number of criteria and indicate which are most important. The box below provides sample criteria.

An experienced planning body with extensive information "inputs" may want to add more criteria, based on the principles agreed upon in Step 6. The criteria and their relative weight should be discussed and agreed upon by the full planning body.

Note that these sample criteria do not include financial considerations, such as availability of other funding streams or unmet demand. This priority-setting model assumes that priorities will reflect judgment concerning needed services to provide a continuum of care, regardless of how these services are being funded and the extent of unmet demand for these services. Funding availability and unmet needs associated with these service priorities are considered in Step 12, as part of the resource allocation process.

In establishing service priorities, consideration of the availability of other funding and the extent of unmet service needs is required. Review suggested procedures and charts in Step 12 before deciding on the criteria to be used in priority setting.

8. Determine the decision-making process to be used.  TOP

Once all the prior steps have been completed, principles and criteria for decision making will have been adopted, and arrangements will have been made to obtain summaries of available information "inputs" for review during the decision-making process.

The recommended decision making-process should be reviewed and revised as needed. There is no one decision-making process or method for priority setting. However, the considerations described below, reflecting the experience of several planning bodies, can help develop a practical method.

As noted earlier, some planning bodies may want to combine the priority setting and resource allocation processes. However, if a committee is doing the preliminary work, it is generally better for the entire planning body to review and approve the service priorities before the committee begins to allocate resources to them. This ensures careful planning body attention to both responsibilities and prevents the committee from having to redo the allocations process if the planning body makes significant changes to the service priorities.

Issues to Consider in Defining the Priority-Setting Process

Consider the following issues in defining a decision-making process:

• Openness of Process. All decisions should be made in an open forum, whether by a committee or full planning body. The public might not be asked to participate in the decision making but should be free to observe it. Therefore, a calendar of meetings should be agreed upon and publicized within the community, and all decision-making meetings should be held in large and accessible locations and at scheduled times designed to encourage community attendance. A planning body serving a large geographic area might hold meetings in several different locations.
• Information Base for Decision Making. Documented information in the form of summaries of the needs assessment and other information inputs should be made available to everyone through a single "point person," such as a committee member or staff member. All members should have access to the same information and be able to request full copies of documents if desired. Training or other assistance should be provided to members less familiar with the CARE Act so they will feel comfortable using the information.
• Quorum Requirements. Explicit quorum requirements should exist for the committee and the full planning body.
• Minimizing Conflict of Interest. The decision-making process may create temptations for members to advocate narrowly for service categories or for interventions for populations and/or geographic areas served by a member's agency (public or private). The committee and full planning body should define conflict of interest and establish mechanisms to minimize it. This is particularly important because many planning bodies have a high proportion of members who are service providers. Mechanisms might include:
• Full disclosure of relationships with HIV/AIDS service providers and the types of services they provide
• Allow members with potential conflicts to participate in discussions but not vote
• Limit participation in discussion to service categories where there is no potential conflict of interest.
• Exclude providers with potential conflicts of interest from serving on the Priority-setting Committee or ensure that individuals with a potential conflict constitute a minority on the committee.
• Begin each meeting by reminding members of the mission of the planning body and the purpose and importance of priority-setting.
• The challenge is to manage conflict of interest without excluding from the discussion those with needed service knowledge and experience.
• Voting Procedures. Voting procedures should be agreed upon in advance and approved by the full planning body.
• Decision-making Method. The procedure to be used in making decisions should be specified "up front." Examples include a consensus method, a nominal group process, or some other procedure. Several of these methods are described below.[2]

• Leadership. The planning body should decide who will lead the decision-making process. Co-chairs might provide leadership to ensure that everyone is heard, the agreed-upon process is followed, and time limits are placed on discussion.
• Decision-making Responsibility. Responsibilities of the committee and the full planning body should be defined. The committee might begin by reviewing its definition of the task and planned outcomes, as decided in Step 1 of this process, and the agreed-upon responsibilities of the committee and full planning body, as decided in Step 2.
  • Committee Responsibilities. The committee might be charged with developing an initial list of recommended priorities. Its responsibility might include presentation of summary information documenting needs, discussion of identified needs and service interventions to best meet these needs, and time-limited discussion of recommended priorities. The committee might also discuss and recommend planning body support and program support activities that require funding (such as needs assessment, comprehensive planning, outcomes evaluation, and/or development of clinical protocols).
  • Full Planning Body Responsibilities. If delegated by the State, the full planning body is responsible for approving priorities. If preliminary work is done by a committee, the planning body should review their recommendations and adjust them to reflect the consensus of the full body, resolving any areas of disagreement.
• Meeting Schedule. Meetings necessary to carry out the process should be scheduled in advance and publicized.
  • The first committee meeting might be held after the planning body has approved a decision-making process, to review the process, criteria, and information "inputs" and train participants on the decision-making method.
  • The committee might then hold a second meeting, or more as needed, at which it will implement the priority-setting process and be prepared to recommend service priorities to the full planning body.
  • The last meeting might include the entire planning body. The committee would recommend and the planning body review and revise suggested priorities, and agree on a final list of service priorities.

9. Implement the process: set service priorities, including how best to meet them.  TOP

Once the planning body has adopted a priority-setting process, including an agreed-upon method to make decisions, implement the priority-setting process, with staff support where available. Following is a detailed case study example of how one planning body carries out the decision-making meetings and follow up, involving both a preliminary priority-setting meeting of a committee and a final priority-setting meeting of the full planning body.

10. Define the scope of the resource-allocation process.  TOP

If the planning body is responsible for resource allocations as well as priority setting, it should now define the scope of this activity. The extent of the effort depends upon the planning body's scope of responsibility. Some planning bodies are responsible for allocating funds from one CARE Act title, while other handle multiple sources, such as Title I, Title II, and HOPWA (Housing Opportunities for People With AIDS) funds.

Step 1 identified typical outcomes for the priority-setting and resource-allocation task. The desired outcome of the resource-allocation process is typically a chart showing the percent or dollars to be allocated to each service category or subcategory. To reach this outcome, the resource-allocation process typically requires the following activities:

• Specify the sources and categories of funds to be allocated.
• Use the results of the priority-setting process to specify the functions to which funds may be allocated (priority service categories, Planning Body Support, and Program Support activities).
• Determine funding gaps for prioritized services by reviewing the sources and amounts
  of funding allocated by other sources to support particular services. This will enable the planning body to determine if there is a funding gap to which it should respond (See Step #12 for methods for determining unmet service needs and funding gaps).
• Project the expected amount of funding (or minimum and maximum funding levels) from each source that must be allocated.
• Allocate a specific number of dollars or a percent of the total available funding from each specified source to the service categories and non-direct-service functions.

Present the results of the resource allocations task in summary form. This might mean preparing a chart indicating service priorities and resource allocations to each of those services—in terms of dollars or percent of funds—with a separate column for each funding stream for which the planning body is responsible. The format for presenting the completed task might be as shown in the sample Priorities and Resource-Allocations Chart at the end of Step 13. Additional columns would be needed for each additional funding source. An additional column might also be used to show the dollars allocated to each service category and subcategory, in addition to the percent of funds.

Generally, resource allocations will need to be completed before final figures are available on funding. Therefore, allocations can be based on various funding assumptions, such as:

• Funding will be unchanged from the prior year
• Funding will be a specified percent - such as 5% or 10% - below the prior year, or
• Funding will be a specified percent - such as 5% or 10% - above the prior year.

Or, allocations can be based on an expected minimum level of funding, with information about how additional funds will be allocated, as in the first scenario described in Step 13.

11. Agree on the principles, criteria, decision-making process, and methods to be used in allocating funds to service categories.  TOP

Factors to use in resource allocation are usually similar to those used for priority setting, with some refinements. The principles and criteria used for priority setting should modified as needed for use in the allocations process. If a committee is delegated responsibility for recommending resource allocations to the full planning body, the committee should recommend, and the planning body should review and approve, these factors.

Regarding principles, the planning body might want to add the following, which reflect CARE Act requirements:

• The CARE Act will be considered the funder of last resort.
• The CARE Act will not be able to meet all identified needs.

Regarding criteria, the planning body might want to add the following:

• Lack of other funds. Resources from other sources are not available to meet this service need.
• Cost-benefit. The service provides a high level of benefit for PLWH relative to its cost.

Regarding the decision-making process, many issues need to be considered. If the planning body uses a committee process to set priorities, it can use the same committee to do the resource allocations, including the same attention to scheduling and publicizing meetings and ensuring open forums. The complexity of the resource-allocation process makes especially important a committee process—supported by staff work and followed by review and decision making at a full planning body meeting.

As with priority setting, the committee should recommend the process to the planning body, and the planning body should review and approve it. Many of the considerations are identical to those identified in Step 8; some additional considerations are described below.