I have to add that I reviewed the file on our project that is maintained at the local HSA office on October 3, 1978 prior to the Review Committee meeting. The purpose of my visit was to be sure that I had copies of all correspondences from all interested parties. Somehow, the letter to Jessie Smallwood dated September 21 was not in our file and not made available to me prior to the meeting. I would like to say Congressman Livingston that several of the "staff" have indicated to me that the local HSA is now an independent Agency and no longer answers to the SHPDA and it is my opinon that their actions under the direction of Jessie Smallwood are not only dangerous, but they are not operating in the overall interest of good health planning. We were asked to answer eight questions because the project had changed. I submit that Jessie Smallwood answers to no one, and the rural areas will continue to suffer bed shortages because in her opinon and I quote "The Spirit of the HSP would be best met by adding no beds." We are operating a 30 bed hospital in Chalmette presently and we have been trying to get a replacement facility built since January, 1974. We were on our way after spending over a quarter of a million dollars. The recent actions by the local HSA have made it presently impossible to proceed, and expect to be reimbursed by medicare & medicade. These actions by this local HSA and a few of its staff are a disgrace to our City, the State and to democracy. Any comment that you may have or suggestions for improving the current system would be deeply appreciated. I would be more than happy to meet to discuss this matter at your convience if you so desire. Respectfully, Excite C. Bertuce, ng Emile A. Bertucci III ing EAB/ch [Additional material submitted by Mr. Bertucci may be found in the subcommittee files.] Mr. LELAND. Thank you very much for your very fine testimony. Are there any questions? Mr. DANNEMEYER. I would like to know how much time did they finally give you when you got to talk? Mr. LIVINGSTON. Three minutes. Mr. LELAND. Are there any further questions? Mr. PREYER. I just want to thank Mr. Livingston. You have discussed how the HSA's are answerable to no one and are sort of a runaway autonomous unit. I pray we will be hearing a lot of testimony later today that the trouble is nobody pays any attention to them. I think it is good to get another point of view on that. Mr. LIVINGSTON. Mr. Preyer, I think the proof is in the pudding. If nobody listens to them, it is perhaps because of what they are saying. Mr. PREYER. I realize you have a real problem down there with that hospital. Mr. LIVINGSTON. I think we have worked it out. In fairness, Mr. Chairman and members of the committee, let me say that the board reviewed the entire hospital problem, as I will point out in my addendums which I file in the record, and that notwithstanding the problems that I experienced, predominantly with the staff, that the board did vote my way. I am very pleased about that, and perhaps that means that the system works. I think that the key is that the staff should be held accountable to somebody, and I really do not think that that accountability exists today. Mr. LELAND. Mr. Madigan. Mr. MADIGAN. Mr. Livingston, that HSA had to be certified by HEW, did it not? Mr. LIVINGSTON. As I understand it, Mr. Madigan, yes. Mr. MADIGAN. Somebody had to initiate a formation of that agency so that it could apply for certification. Where did that come from? Is this a university group or a medical group or a consumer group? Mr. LIVINGSTON. It is an accumulation. I do not know how it was originally formulated. It has been in existence for a little over 2 years, but the board comprised a cross-section of the community. there are doctors. There are medical technicians and there are consumers of all backgrounds. I am not so much concerned with the board, although I believe that if the board were appointed as a majority by public officials that those public officials would at least make the board hold the staff accountable. I am really concerned that the staff acts autonomously and independently of any other organization, despite the fact that they control some $650,000 to $1 million in Federal funds. Mr. MADIGAN. In your situation how did that staff come into being? Did not the board hire that staff? Mr. LIVINGSTON. That is correct. I suppose that is true. They presently answer to the board. Mr. MADIGAN. Should I not make a reasonable assumption that that staff should be accountable to that board? Mr. LIVINGSTON. I suppose, Mr. Madigan, you can assume anything that you would like within the context of the present law. I cannot explain the formation of the board or the staff. I only can appear before you to complain about the effects of what I have seen down there. Mr. MADIGAN. What I do not understand, and I am not trying to embarass you, I am only trying to understand this, is, parenthetically, you inserted a complimentary remark about the board and suggested very distinctly that your criticism was of the staff. If the staff is out of control, it seems to me that that criticism lies at the feet of the board who hired the staff and should be responsible for their direction. Mr. LIVINGSTON. I think that that certainly follows, and I am not going to argue with you. But my compliment was aimed at the members of the board who sat in on the two public hearings dealing with the Hebert Hospital. Despite the various kinds of presentation by the staff, the board decided to react contrary to the staff's wishes. I was very unhappy with the way the staff had presented their case. Mr. MADIGAN. Thank you very much for coming. Mr. PREYER [presiding]. Thank you, Mr. Livingston. We next have a panel on health planning accomplishments and problems. I hope we can get all of the panel here at the table. We may have to add a few chairs. The Reverend Gary Beale of the West Virginia Health Systems Agency; Jerry Kolander of the Panhandle Health Systems Agency; George Loudder, Panhandle Health Systems Agency; Robert G. Winfree, Duke University Medical School, accompanied by George Stockbridge of the Capital Health Systems Agency in Durham, N.C.; Mrs. Flora Cohen, the Southeastern Wisconsin Health Systems Agency; Robert J. Juster, the Birmingham Health Systems Agency; John Rau, Orange County Health Systems Agency. This is a very impressive cross-section of health systems agencies across the country. I would like to get a lot of enlightenment from them. Do each of you have a written statement? At this time, without objection, we will order admitted into the record the entire statement of each of the panelists and we will then proceed in whatever way you wish. If you would rather summarize your statement or make a few comments about it or read it, however you wish to proceed? Going in order, Reverend Beale is the first man on our list here today. STATEMENTS OF JOHN M. RAU, PRESIDENT, MEMBER, BOARD Mr. BEALE. Thank you very much. I would like to let Mr. Rau lead off the panel today. Mr. RAU. Thank you, sir. Mr. Chairman and members of the committee, my name is John M. Rau, and I am president of David Industries, a manufacturing engineer company which is headquartered in Costa Mesa, Calif. We have plants there and in Bakersfield, Calif. I have served for 5 years as director of a national bank and am on the board of directors of some 6 other corporations, including my own obviously, and some 13 community organizations, and several of which I hold office, including that of national vice president of the Navy League. That may be pertinent in view of the previous testimony. As far as the HSA in Orange County I am a member of the delegate assembly, the facilities review committee, the technical advisory group on financial analysis, and the board of directors of the Orange County Health Planning Council, which is our local health systems agency. I have served continuously in this agency and its two predecessor organizations for over 10 years, essentially since the beginning of comprehensive health planning. With me today to help me when I do not have the numbers is Stanley Matek, who has been the executive director of our agency for about 6 years. To set the stage I would like to say to you that I am here as a business from industry. I am here as a volunteer from health planning. I am here as a consumer of health care services. And I am here as a citizen without any financial interest in any part of the health care industry. My written testimony has been submitted [see p. 422], and in my oral remarks I would like to just hit a few of the highlights. First of all, I believe very strongly in the free enterprise system, and I have a great deal of confidence in the self-regulation of the free market. However, the health care industry for a variety of reasons is not a free market. A customer, or the consumer of health care, does not select his vendor. The consumer of health care has no sound basis for making price, quality or performance comparisons. A consumer of health care normally pays little or none of the costs of the health care provided, at least directly, and of course the cost reimbursement world in which the U. S. health industry finds itself, in which it operates, is really just plain topsyturvy. It is a reversal of most of the economic incentives of the free marketplace. Given these problems, and particularly the cost reimbursement paradox, there is a tremendous need in my opinion for health planning or its equivalent. I believe that the only proper mechanism is one which is local and volunteer. The differences around our country and in fact even throughout the State of California are so great as to make any blanket or uniform solutions absurd. And I believe that a professional bureaucracy administering this kind of a program would soon be more concerned with questions of turf and self-perpetuation than with the quality and cost of health care. Finally, I am and have for 10 years been involved in the Orange County Health Planning Council because we in business and industry provide, financially anyway, as much health care as anyone, even government. In my own small business our costs are up over threefold in just the past decade. I am sure that is a story that you are all very familiar with. I also believe that good health care habits are best established in the workplace, which is after all where most of the heads of most of the families in the country spend most of their active hours. I have told you why I am here, why I am involved, and why I am concerned. My written testimony gives you examples of why I believe that the Orange County Health Planning Council has been doing a good job. I think we have given you a number of specific examples of innovative approaches that we have made. We have also been doing our job in the mandated areas of review. We have developed our health systems plan, done that kind of work. I would particularly commend to you the approach that we have just taken recently in analysis of hospital costs, including some rather innovative or creative methods of presenting data, even though sometimes the data is hard to get. I think this has been most useful and one of the good things that we have done in our agency. The fundamental reason why I am here before you today is to ask you to maintain, to renew, to strengthen, and to fund our health systems agencies across the Nation. We are beginning to get the job done, and these Federal dollars are synergistically leveraged with thousands of volunteer hours, including mine. And as I said last night, I do not really work this hard for money; I only work this hard for free. The hundreds of hours that I put into the HSA I do not think you could get if you paid me, and the same is true of many, many of our volunteers. So that represents a very synergistic leverage of the dollars which you provide. I believe that the alternative to this kind of local volunteer effort, whether those alternatives are anarchy in the system or a massive bureaucracy are much too costly to contemplate. Thank you very much for your attention. [Testimony resumes on p. 438.] [Mr. Rau's prepared statement and attachment follow:] |