Dr. LARSON. May I say that we thank you for your courtesy extended, and may I add just one short statement of philosophy? The CHAIRMAN. You may. Dr. LARSON. I would like to reemphasize the fact that the American Medical Association believes that every person in this country, regardless of age, should receive medical care when he needs it, without regard to his ability to pay. If any member of this committee, or anyone else, knows now, or receives information in the future about any instance in which anyone has failed to receive adequate medical care because he can't pay for it, we want to know about it. One final word, Mr. Chairman: The American people have been called upon to sacrifice to build up the strength of the Nation so that we can meet the rising peril of communism. But we don't believe that America can be strengthened by sacrificing the best system of medical care in the world. We don't believe America can be strengthened by copying medical systems under which one foreign country after another has lost leadership in the science and arts of medicine. We don't believe the strength of this Nation lies in the direction of substituting medical failure for medical success. The CHAIRMAN. Again we thank you gentlemen for bringing to us this discussion today. Thank you very much. Mr. KING. Mr. Chairman, during the course of these hearings representatives of the American Medical Association have indicated that they are not aware of the disciplinary pressure being brought against physicians who depart from the policies established by the American Medical Association. I am including in the record at this point a statement along with documentation of such disciplinary pressure. EXAMPLES OF ACTIONS TAKEN BY ORGANIZED MEDICINE TO SECURE COMPLIANCE ON THE PART OF INDIVIDUAL PHYSICIANS WITH POLICIES OF THE AMERICAN MEDICAL ASSOCIATION Organized medicine, in its attempt to keep the Nation's physicians from deviating from the policies established by the American Medical Association, exercises various kinds of sanctions. These are applied primarily at the level of the county medical society, and with such effectiveness that an atmosphere of intimidation has been firmly established. The two types of sanctions used most successfully over the years have been denial of membership in the county medical society, and denial of hospital privileges. These are powerful weapons. Entrance into the county society is a requisite to admission to membership in the State and National associations. To the practitioner such membership has come to be a necessity, for without it he is faced with social and professional ostracism, loss of hospital connections, difficulty in obtaining specialist certification, increased cost of malpractice insurance, loss of patients, and other handicaps that damage his reputation and injure his professional future. Exclusion from the staffs of the hospitals serving the community in which he practices can frequently make it impossible for a doctor to practice at all. These sanctions are supplemented by others which are more subtle and less susceptible to documentation, such as the cutting off of referrals to specialists and the blocking of promotions within hospital staffs. Although the American Medical Association has frequently asserted that it does not initiate the application of measures aimed at the intimidation of physicians, there is no evidence that it has ever moved to discourage such action on the part of its constituent societies, or that it has attempted to take disciplinary action to prevent such occurrences. Following are a number of documented illustrations, covering the years 192961, of intimidation and punitive measures taken against physicians whose professional activities have deviated from those approved by organized medicine. (In many cases these actions were later reversed, most frequently as a result of court action.) 1961: Full-time physicians on the staff of the Russellton (Pa.) Clinic, with one exception, are completely barred from the staffs of all hospitals in the area. For several years, physicians newly joining the staff of the Bellaire (Ohio) Clinic have not been admitted to the local (Belmont County) medical society. The medical groups of both the Russellton and Bellaire Clinics provide prepaid care to the residents of their respective local communities, which include a substantial number of beneficiaries of the United Mine Workers Welfare Fund. (Personal communication from Leslie Falk, M.D., area medical director, United Mine Workers of America Welfare and Retirement Fund, Pittsburgh, Pa.) 1960: Physicians in Stark County (Ohio) who were listed by the United Mine Workers Welfare Fund as participants in treating fund beneficiaries received letters from the society asking them to resign their connection with the fund. The letter concluded with the statement. "Your failure to comply will result in disciplinary action being taken by your society." (Personal communication from Leslie Falk, M.D., area medical director, United Mine Workers of America Welfare and Retirement Fund, Pittsburgh, Pa. Copy of county society letter is available.) 1957-60: The three hospitals on Staten Island, N.Y., refused to grant hospital staff privileges to any new doctor affiliated with the health insurance plan of Greater New York. There was never any question about the professional qualifications of these physicians to become hospital staff members. They were told they could get hospital privileges by resigning their association with HIP. The past president of the county medical society testified that "this [denial of hospital privileges] is a personal and social matter, not a medical one. I have no question about the medical competency of these [HIP] doctors." (Public hearing of the New York State Joint Legislative Committee on Health Insurance Plans, held at the New York County Lawyers' Association Building, 14 Vesey Street, New York City, July 11, 1960.) 1957: Frederick P. Zuspan, M.D., was denied membership in the Floyd County (Ky.) Medical Society. In his appeal before the Council of the Kentucky State Medical Association he states that exclusion was "solely because I am a saaried member of the staff of a hospital which is supported by the UMW (United Mine Workers Welfare and Retirement) Fund, whose policies the society does not like." (Before the Council of the Kentucky State Medical Association, matter of Frederick P. Zuspan, M.D., McDowell, Ky., statement on appeal on December 12, 1957, from denial of membership by Floyd County Medical Society.) Dr. Zuspan subsequently left the area and severed his connections with the fund. 1956: Pia Chu Tan, M.D., and three other local physicians declined to administer free polio shots to Princeton, N.J., schoolchildren after having been informed by the Mercer County Medical Society that the New Jersey Medical Society was opposed to cooperating with free medical clinics for any but indigent patients. Dr. Tan stated: "I do not know for sure what this [statement by the county medical society] meant, but I have just become a member of the society and I cannot work in the hospital if I do not keep my membership. I was very willing to serve the community. But if the society had called me and asked me why I did this, I could have been in great trouble." (New York Post, Feb. 28, 1956.) 1955-57: William D. Broxon, M.D., a general physician some of whose patients were beneficiaries of the United Mine Workers Welfare Fund was refused membership in the Las Animas County (Colo.) Medical Society. He was admitted after intercession from the State medical society, but 2 years later the State society declared that: "Any Colorado physician who knowingly and willingly participates in, or aids and abets the operations of, a medical plan which denies its beneficiaries the right of free choice of physician as defined and interpreted in this opinion shall, upon conviction thereof by the appropriate medical tribunal, be found guilty of unethical and unprofessional conduct and subject to discipline by the society." The county society immediately ordered Dr. Broxon to terminate his relations with the fund. (Findings and conclusions of the Board of Councilors of the Colorado State Medical Society, May 1, 1957, Rocky Mountain Medical Journal, May 1957, and summary of argument for appellant before the Judicial Council of the American Medical Association, matter of William D. Broxon, Trinidad, Colo.) Dr. Broxon left the area and severed his connection with the fund soon thereafter. 1952-54: Lloyd H. Mousel, M.D., accepted a salaried position as director of anesthesia and oxygen therapy at Swedish Hospital, Seattle, in 1950. Salaried arrangements between hospitals and anesthesiologists have long been under fire by organized medicine. Dr. Mousel's applications for membership in the King County Medical Society were rejected in 1952, 1953, and 1954. In late 1952, Dr. Mousel was dropped from membership in the American Society of Anesthesiologists. In 1953, the American Board of Anesthesiology commenced proceeding for revocation of his certificate because he was not a member of his county medical society or the American Society of Anesthetists. A speaker at a meeting of anesthetists in Philadelphia described the sanctions against Dr. Mousel: "The anesthetists boycotted him and would have nothing to do with him socially or professionally. Furthermore, they enlisted the aid of their wives to do the same to his wife." (The Modern Hospital, vol. 83, No. 1, July 1954.) 1946: Doctors rendering care through Group Health Cooperative of Puget Sound were refused staff privileges and emergency surgical facilities by hospitals throughout the area. (Group Health Cooperative of Puget Sound v. King County Medical Society, 39 Wash. 2d 586, 617-625, 237 P. 2d (1951), pp. 754–758; Brief for Appellants, pp. 23-25.) The King County Medical Society withheld or withdrew membership from several GHC physicians who consequently lost certification by specialty boards requiring society membership. (Group Health Cooperative of Puget Sound v. King County Medical Society, 39 Wash. 2d 586, 627-632, 237 P. 2d 737, 759-762 (1951).) 1937: Doctors employed by Group Health Association, a cooperative prepaid medical care plan founded by employees of the Federal Government in Washington, D.C., were expelled by the District Medical Society. (American Medical Association v. United States, 130 F. 2d 233 (D.C. Cir. 1942), aff'd. 317 U.S. 519 (1943, p. 599).1 Other physicians resigned from the GHA staff after threats of expulsion from the society. United States v. American Medical Association, 110 F. 2d 703 at 707 (D.C. Cir.), cert. denied, 310 U.S. 644, 1940.) Nearly all hospitals in the District of Columbia denied GHA physicians staff privileges and bed space for their patients. (A.M.A. v. U.S. supra at 784-785.)1 1934: Donald E. Ross, M.D., and H. Clifford Loos, M.D., were expelled from the Los Angeles County Medical Society for founding the Ross-Loos Clinic, which provided comprehensive medical care on a prepaid basis. (Hearings before House Committee on Interstate and Foreign Commerce, 83d Cong., 2d sess., p. 1454.) 1929: Michael Shadid, M.D., founder of a prepaid rural cooperative medical plan in Elk City, Okla., was expelled from his local Beckham County Medical Society by the device of dissolving the society and reforming it thereafter without him. (Plaintiff's Petition Civil No. 11211 District Court, Beckham County, Okla.) 1 [From the Los Angeles Times, Aug. 1, 1961] FEAR OF REPRISAL SEEN IN MEDICAL CARE STAND PHYSICIAN THINKS MANY DOCTORS FAVOR PLAN TO COVER ELDERLY UNDER SOCIAL SECURITY (By Harry Nelson, Times medical editor) Fear of reprisal from organized medical groups is responsible for the failure of many doctors to publicly declare themselves in favor of legislation which would place medical care for the aged under the social security system, a local physician said Monday. The physician said he is not so sure that such reprisals would actually be forthcoming, but the possibility that they would occur is a factor in the hesitancy by many doctors to oppose organized medicine's stand against such legislation, he said. PLEDGE SUPPORT The physician was contacted during a telephone survey of doctors who have pledged their support to the Southern California Committee for Health Care for the Aged Through Social Security. Membership includes a number of prominent UCLA and USC Medical School faculty members, as well as some private practitioners. Headquarters for the committee, which endorses the King-Anderson Health Insurance Benefits Act, proposed legislation which would place medical care of the elderly under social security, is 10578 Pico Boulevard. 1 Cited in Yale Law Journal, vol. 63, No. 7, May 1954. HEARING TESTIMONY The House Ways and Means Committee is currently hearing testimony in Washington for and against the bill. The American Medical Association, California Medical Association, and Los Angeles County Medical Association are opposed to the King bill. "Many doctors feel as I do but don't want to get into a battle with organized medicine because we depend upon membership to them for our livelihood," the Los Angeles physician said. "It's hard to imagine that a doctor would be ostracized because of public statements in favor of the King bill, but it is a possibility." Local physicians who have joined the pro-King bill committee are Drs. Forrest Adams, Nicholas Assali, Victor Hall, and Henry Olson, of the UCLA Medical School faculty; Dr. Peter Lee, professor of medicine and pharmacology at the USC School of Medicine, and the following private practitioners: Drs. Arthur Brody, Arthur Carstens, Charles Kleeman, Daniel Mishell, Isidore Ruskin and Frederick Wahl. All of the physicians questioned said they favored the King bill because they see it as a means to meet the medical needs of persons over 65 adequately and with respect for individual dignity. "That there is a need is apparent to anyone who doesn't close his eyes to the facts of life. One purpose of the committee is to let the public know that all doctors are not in agreement with the AMA position," one of the signees, Dr. Lee, said. Dr. Ruskin, a psychiatrist who is also a consultant at the Los Angeles Jewish Home for the Aged, said that no other problem is as important to elderly people as their health. Fear of breakdown of health and fear of becoming objects of charity are their greatest concern, he said. WORTH MEASURED "The true worth of any society is measured by its attitude toward those members who are poor, helpless, infirm, and aged, and by these standards, considering the affluency of our society, our treatment of the aged is not a shining example and does not reflect well on our society," Dr. Ruskin said. Dr. Lee said he does not believe that most doctors who adhere to the AMA stand against the King bill are motivated by economic factors. The typical doctor in private practice is a real rugged individualist who has a sincere belief that socialism-which is the way that he views the King bill— will interfere with his ability to do a good job, he said. Dr. Lee is the brother of Dr. Phillip Lee, director of the Palo Alto Clinic and a chief organizer in the movement in California by physicians to take a stand on the King bill contrary to that of the AMA. (The following material was received by the committee:) DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Hon. CECIL R. KING, OFFICE OF THE SECRETARY, DEAR MR. KING: In conjunction with the material being prepared at your request, Mr. Robert J. Myers, the chief actuary, has been asked to prepare comments on that section of the statement of the American Medical Association on H.R. 4222 which deals with the costs of financing the provisions of that bill. I thought you would like to see his memorandum and might like to put it in the record of the hearings. Sincerely yours, MEMORANDUM WILBUR J. COHEN, AUGUST 3, 1961. Subject: Comments on cost estimates section of statement of American Medical Association on H.R. 4222. This memorandum will present certain factual comments on section VI, "Cost Estimates for H.R. 4222," in the statement of the American Medical Association before the House Ways and Means Committee on H.R. 4222 on August 2. 76123-61-pt. 3-14 In the fifth full paragraph on page 43, there is the criticism that, as late as July, we were still developing the cost estimates for each of the separate four types of benefits even though the total cost estimate had long ago been established. There is the implication that we decided in advance what the cost would be and then tried to figure out how to arrive at this figure by adjusting the cost estimates for each of the components. This is not the case. In actual fact, there was no change in the original estimate for the hospitalization benefits that was developed in early 1961. The only question was the early-year costs for the three minor benefits. Because of the limited facilities initially available to provide these minor benefits and therefore the resulting low earlyyear costs, it was certain that any revisions of estimates therefor would have little effect on the total estimate. Thus, as shown on page 16 in Actuarial Study No. 52, the three minor benefits amount to less than 5 percent of the total firstyear cost-as was also the case in the original estimates, although the distribution by type of benefit was considerably different. In the last paragraph on page 44, it is pointed out that in the estimates of the first-year costs, the proportion of the total expenditures for the nursinghome benefit is relatively small, being only $25 million, or less than 2% percent of total disbursements-all this being despite the argument that these nursinghome benefits are provided to promote the economical use of hospital facilities. The statement does not take into account the long-range cost estimates, under which the nursing-home benefits account for 12 percent of the total cost (since in these estimates it is assumed that there will be increasing availability of such nursing-home facilities). In the third full paragraph on page 45, it is stated that we have estimated the cost of nursing-home benefits for the first year of operation as somewhere between $25 and $255 million. The source from which these figures were taken (namely, the Wall Street Journal article) did not adequately understand the significance of the upper figure, which, in essence, was developed under high-cost assumptions for what the situation would be currently if the program had been in effect for many years and if adequate acceptable facilities had been developed. As indicated previously, the higher potential costs that may result from the development of adequate facilities are recognized in the long-range cost estimates. In the last paragraph on page 45, there are given figures (which are considerably higher than those quoted above) for general-nursing-home benefits. It should be clearly recognized that the latter figures are for general custodial care and do not relate to the skilled-nursing-home-care benefits provided under the bill for persons transferred from a hospital for continued treatment of the condition for which the individuals were hospitalized. In the last paragraph on page 46, it is stated that our cost estimates allow for nursing-home benefits to be less than 3 percent of the total benefit cost. As I indicated previously, this is only for the first year of operation, and a much higher proportion of the cost is represented by the nursing-home benefits over the long run. In the third full paragraph on page 47, there is presented an often-used argument that the actual cost of the British National Health Service in the first year of operation was nearly three times what it had been estimated to cost. The facts of the situation are as follows. The original estimate for the net cost to the Government was made in 1942 (£110 million). The actual experience for the first full fiscal year of operation (April 1949 to March 1950) was £305 million. The latter figure, however, is not comparable with the original estimate for a number of reasons-changes in the size of the population protected; changes in the price level; and the inclusion of certain features in the final plan that were not contemplated initially (such as dental and ophthalmic services and the provision of a staff retirement plan). Also, it may be noted that although the cost of the National Health Service in terms of pounds rose by almost 70 percent in the first decade of operation, the real increase-after account is taken of rises in the price level and in the population-was only about 5 to 10 percent. Furthermore, if the costs are expressed in terms of gross national product, they have been stable over the entire decade (at a little less than 4 percent). In the third paragraph on page 48, it is pointed out that the cost of the health benefits will rise over the years as the beneficiary roll grows. For one thing. partially offsetting this trend is the estimated growth in the covered population paying contributions to support the system. More important, however, is the fact that the financing arrangements of the bill recognize this trend in the number of beneficiaries, since the proposal is financed on a level basis that is considerably |