1762 tween 65 and 70 percent of the hospital cost dollars. In a recent staff report of Colorado's Public Welfare Department it was pointed out that the public today expects and demands more and better health care than it ever has in the past. The patient expects to be hospitalized whenever his condition reasonably warrants it. Similarly, authorities say families no longer seem to feel the same responsibility about providing for chronic illness in the home, and look to hospitals and nursing homes to provide care whenever illness inconveniences normal family living. It is interesting to note that the rate of utilization in OAP hospitalization in Colorado is 424 per 1,000 as against a nationwide hospitalization rate of 130 per 1,000. The rate of utilization for all members holding Blue Cross hospital insurance (640,321) for 1959 was 163 per 1,000. However, the average hospitalization stay of 11.8 days sheds a different light on the seeming overutilization of the plan. Some of the hospital overutilization of course is due to the fact that Colorado geographically is a mountainous State with few medical centers which can provide specialized types of medical care. The net result is that frequently it becomes necessary to transfer patients from their home locality to these centers for care that cannot The fact still remains that the cost be obtained in their local areas. for medical care per pensioner remains at about a cost of $17 per month which is not excessively large when we recognize that according to some recent statistics from the social security people there are 18 States spending more per pensioner per month than is Colorado. The financial crisis of the medical care plan has made it necessary to put some limitations on the care that pensioners can receive at State expense. On April 1 of this year, pensioner's hospital care was limited to "emergency cases" only. This term was redefined by the welfare department recently to mean "serious" and "critical" cases. Payment for elective surgery from the medical care fund requires prior approval of the hospital admission and discharge committee. These committees have existed in many Colorado hospitals for years and were recommended by the Colorado State Medical Society in the fall of 1960 as a means for studying hospital utilization by all segments of the public. These committees are now mandatory for hospitals participating in the old-age-pension medical-care program. Hospitalization is limited to 15 days with authority vested in the admission and discharge committees to grant extensions of time in units of not more than 7 days. The welfare board has felt that the measures described above are necessary to keep utilization of the program within the limits of its $10 million yearly budget. The physicians in Colorado have accepted these measures, and I must admit that in some cases it has been with some reluctance. There is a deep concern among the State's physicians that the quality of medical care to the pensioners will suffer under the limitations put on the program. We believe that implementation of Public Law 86-778 in Colorado will provide a partial answer to our problems. Presently our State receives $4.2 million per year as a result of the Kerr-Mills law. Unfortunately the constitutional amendment which established our old-age-pension medical-care program seems to effectively limit the The money we are amount that can be spent to $10 million per year. receiving as a result of Kerr-Mills is replacing State money in the fund rather than supplementing it as we feel was the intention of Congress. We are working diligently to overcome this situation as is the National Annuity League, Colorado's largest organization of oldsters, and the welfare department itself. With implementation of the Kerr-Mills law and our past experience as a guide we believe that our program can be put on an actuarial basis and can be kept within certain financial limitations. PRIVATE INSURANCE COVERAGE As mentioned previously, there are 158,196 individuals in our State in the 65-and-over age group. Of these, 47,496 are participants in Colorado's old-age-pension medical-care program. Our Blue Cross and Blue Shield plans have approximately 40,000 members who are 65 years of age or over. The precise figures are not available because there is no reduction in benefit, cancellation of membership, or increase in premium when a subscriber reaches the age of 65. For this reason no statistical effort has proven practicable to categorize members on an age basis. The Blue Cross-Blue Shield organizations have also created a new senior citizen contract for individuals who apply for membership after reaching the age of 65 and have enrolled 4,300 members in this plan. The membership is growing at the rate of about 100 persons per month. What then is the value in our experience in the care of the aged that we may transmit to you that will help you in your deliberations? There are, we believe several factors that are of proven worth and distinct value which you should weigh carefully. (1) It is evident that a given amount of money cannot be appropriated to take care of the needs of the aged with the idea of expecting that given sum of money to remain a constant figure. In our experience, because of ever-increasing costs, because of increased utilization of the services, it is evident that the total cost of provision of the care has risen each year since the program has been in effect. The social security department actuaries have already discovered this problem and have raised their estimates of the cost of the KingAnderson program by 10 percent. We submit that this is just the beginning. (2) We have learned that certain basic limiting factors must be placed upon those who are to receive the benefits of the program in order to keep it within some reasonable bounds. Certainly there is no one who wishes to deny care to those who really need it. However, to assume it is the responsibility of Government to provide this care for all members of a class of its citizenry whether they need it or not seems to us to be financially unsound. We believe that if you consider financing through the social security system and in terms of providing care for everyone beyond the age of 65 years with no restriction, as far as need is concerned, that ultimately the solvency of the social security system with all of its benefits will be jeopardized. (3) With all of the statements that have been made about the amorality of a means test it has not appeared as an issue in the Colorado program. The pensioners themselves still consider the eligibility requirements relatively generous and believe they are applied impersonally and objectively. Further the climate of the State is such that old-age pensioners are not regarded as paupers or low-grade 4 citizens. This woolly thinking concerning a means test that is being promulgated by the American Public Welfare Association, the AFLCIO, and other groups is, in our estimation, sham and delusion. Our experience proves this point and we still insist that the average American citizen is willing to pay his way when he is able to do so. We feel that it is in the best interests of the community and of the people themselves, for the Federal Government not to wantonly spend tax moneys where there is not a need for it. (4) We believe that strong local control of health care programs for the aged needy are the best solution to the problem. We recognize the situation is variable from State to State and we would be the last to suggest that the program as worked out in Colorado be applied in blanket form to every State in the Union. Their problems are different than ours, as ours are peculiar to our own geographical region. But we feel that we are best able to recognize and solve our own problem. We are convinced that administration of these problems from this great seat of Government (through the Department of Health, Education, and Welfare) will do nothing more than to aid in destroying what we have worked so many years to build and yet at the same time produce an inferior solution to a problem which we all recognize. (5) We have learned that a medical care plan can be devised that provides free choice of physician and free choice of hospital for the pensioner. We believe the pensioner recognizes as do the physicians who are actively engaged in the program that this principle provides for him the optimal medical care. It also removed any question concerning the quality of care he receives. With these things in mind we may turn our attention now to the proposed King-Anderson legislation, H.R. 4222. (1) We believe that this legislation does not provide care for the aged group who really need it. It is much more limited in scope than a medical care plan which utilized the Kerr-Mills approach. (2) The expense of this health care program is staggering. It is estimated conservatively as costing a billion or more dollars its first year. There are, however, actuarial figures which would show that the cost for the initial year would far exceed this figure. We need only to translate, our own experience in the State of Colorado to tell you that even if the estimate of $1 billion is accurate, that each succeeding year will find the cost rising and hence of necessity the rate of taxation to carry on the proposed plan. (3) The provisions in the bill stipulate that the Secretary of Health, Education, and Welfare will enter into contractual arrangements with hospitals which will agree to abide by the rules and regulations he sets down. We believe this is a big step toward Federal control. THE SOLUTION TO THE PROBLEM In our opinion the existing legislation known as Public Law 86-778, which was recommended after such long and ardous study by you gentlemen last year, is the solution to the problem. I need not recite the benefits of this legislation to you. I believe that you are to be congratulated for having initiated this type of legislation. It covers the areas where the need is shown to be necessary. It is a flexible type of legislation which gives the State the opportunity to apply the money as it sees fit and best. From the point of view of those of us in Colorado who have been close to our own program for these many years, it gives us a solution to the care of the segment of our population who to date have not been actively incorporated into our own program. I am confident that our legislature, when it convenes at its next session will consider the utilization of these available moneys in this light. They can do no less. This is the historic American way of solving the needs and wants of our friends and neighbors. In conclusion, gentlemen, let me thank you for the opportunity to appear before this committee to express the views of the Colorado State Medical Society. (The material referred to is as follows:) PLATE II.-Hospital admissions by number of days hospitalized, 1959 1 to 10... 11 to 20. 21 to 30. 31 to 40.. 41 to 50. Number of days hospitalized 51 and over.. Total.. 1 Expenditures before audit adjustment. 100% 2 Totals do not add up precisely because of rounding. Source: Table III, "Progress Report on Colorado's Old-Age Pension, Health, and Medical Care Program," January through December 1959. Colorado State Department of Welfare. The CHAIRMAN. Doctor, we thank you, sir, for your patience in staying with us so long to deliver this statement to us. We know you have had some unusual experiences in the State of Colorado, that is, unusual in that all States have not had the same experiences with the use of Blue Cross and Blue Shield. To the extent that you have interest in some of the welfare programs that have been in existence for a long time, is it planned, or is the State now utilizing this same arrangement through Blue Cross |