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the duplication of having so many different carriers, so many different intermediaries.

It could also provide a psychological lift to the beneficiaries, who are now confused by the complexities of medicare; and maybe also to some of the providers. Some providers would oppose it, of course. I think probably many physicians would oppose it.

There would be other benefits. It might facilitate the use of general revenues, which are already dominant in part B, so you have precedent there. If the two parts were merged, it would make it quite logical to have a certain proportion coming from general revenues. I would hate to see this proportion ever exceed 50 percent. Something like a third might be appropriate, not the 75 percent you have now with part B or the 5 percent-or whatever it isunder part A. Perhaps a third for the combined program would help to ease the immediate deficit problem.

Finally, a merger of part A and B, while it does not make medicare into one big HMO, does have some of the characteristics in that the physicians would be a little more tied in with the institutions, instead of totally separate as they are now. Even tbe DRG system, although it indirectly impacts on physicians as the quote from Dr. Slobodien shows, does not touch them directly.

And it seems to me a little inconsistent for the same administration which is pushing the HMO-not just this administration, but administrations for the past 10 or 15 years-or the idea of tying hospital and physician reimbursement more closely together to continue to sanction and encourage a total separation of the two as the present separation into parts A and B tends to do.

Mr. SMITH. Thank you. Mr. Chairman, I would like to just read into the record for those members of the committee who will read this record, the Advisory Council on Social Security's statement regarding the combination, and it goes like this.

“Combining part A and B would potentially contribute to improved beneficiary understanding, simplify the more effective administration and improve monitoring of the utilization of health care services. Potential problems to be evaluated would include financing considerations for combining benefits with distinct funding sources and complexities of merging different reimbursement systems under part A and B."

It is kind of a summation of what you just said, so I do appreciate your comments.

Finally, I just want to thank you, Mrs. Somers, for again reminding the committee, as you did in your testimony, of the intent of medicare. You know sometimes you have to get back to the basics. And as you said, in reforming medicare, we must be very sure that we do not destroy, but rather protect and strengthen its original goal of providing medical care to the elderly and disabled. So I want to thank you all for your testimony.

Mr. RINALDO. Thank you, Mr. Smith. Do any members of the panel have any suggestion about encouraging assignment among doctors? We have heard quite a bit about that this morning, and I was wondering if anyone had any ideas they would like to put forth at this time in that regard.

Mrs. SOMERS. Nothing definitive, but one of the problems with these surveys that were referred to earlier is that apparently what was asked is: “Do you or do you not accept assignment?” Now since the figures cited-50 or 53 percent-do not refer to individual doctors, but refer to claims, a doctor can claim that he takes assignment and yet perhaps have only 1 percent of his claims on assignment.

I am all in favor of publicizing. It seems to me that that is the least the program owes the public. If doctors are permitted not to take assignment, medicare certainly owes it to the public to say which ones do and which don't. But some sort of arbitrary, but reasonable, formula would have to be devised to define a doctor who accepts assignment. Perhaps it should be at least 75 or 80 percent of the time. Something of that sort would certainly be more meaningful in terms of public information.

Mr. RINALDO. I think that is a good suggestion and I want to comment on this entire area. I feel so strongly about assignment that just a few days ago I wrote to Mrs. Heckler, the new Secretary of the Department of Health and Human Services, asking her to improve this information available to medicare beneficiaries about physicians in their communities who accept assignment. I think it should be the policy of Health and Human Services and I am going to continue to push for that policy to be implemented in the proper fashion.

You also mentioned, Mrs. Somers, quite a bit in your testimony about increased life expectancy. Are you advocating in any manner, shape or form, raising the age of eligibility for medicare to correspond with increasing life expectancy? Or do you feel, for example, that there should be a two-tiered age of eligibility, one for preventive care, one for acute care? Because you mentioned all of those things in an interrelated fashion, and I would like to have your position cleared up in my mind.

Mrs. SOMERS. No, I do not advocate raising the age of eligibility for medicare. I would like to see it dropped, if possible. I know that is not realistic, now, but eventually I would like to.

What I did support quite strongly, was raising the age of eligibility for social security. I think these are two very different things. And yet they are related in that the longer we keep on working and the more inducements we have to keep on working, the more we continue paying taxes.

I am well over 65. I am still working. I am still paying taxes. But I am very glad that I have my medicare, and so, I am sure, is my employer! I fear there may be some change now in employer attitudes toward older workers with the new shift in who has the primary responsibility. That is very unfortunate. Because some older people may lose jobs for no other reason except that their employer does not want to be the payer of first responsibility, rather than medicare.

Now, I will say, as we phase in new services, such as preventive services, or long-term care, as a temporary easement of the cost problem, I think it is justifiable to start with, say those over 75, or over 70, or over 80, whatever. These are actuarial computations that would have to be figured out. Obviously the people who need nursing home care most, the people who are being reduced to penury in order to get on medicaid-in those States where they can-are the very old. It certainly seems to me justifiable to start with them.

Mr. RINALDO. Many Members of Congress feel very strongly that we ought to modify medicare to cover eyeglasses, prescription drugs and other items of that nature. For instance, New Jersey has its own State program to aid the elderly in prescription drugs. I am just addressing this to the panel generally for whoever would like to comment on it. Do you think, since you mentioned this in some respect, there is any desirability of trying to do this at the Federal level?

Mrs. SOMERS. Yes, absolutely. But I do not think it can be blanket coverage. The reimbursement list will have to be carefully worked out. Also, it is estimated that one-half of the people over 65 are edentulous, that is, no teeth at all. Ten percent have neither dentures nor teeth.

Now, you can imagine what that contributes to gastrointestinal problems, as well as mental health problems. This whole preventive thing is such a penny-wise, pound-foolish approach. I also think we are pursuing a double standard in this respect.

Dr. Davis mentioned this morning that HCFA is going to fund a lot of new studies to see what is cost effective and health effective in the field of preventive services. Why do they not do that in the field of high technology? The same administration, which worries about a $50 pair of eyeglasses or a $25 visit to the podiatrist, opposed continuation of the Center for Health Technology Assessment, the area that accounts for such a large proportion of medicare's multibillion-dollar costs.

I think everything should be assessed, but there have already been studies. The previous Surgeon General, Dr. Julius Richmond, requested of the Institute of Medicine, which is part of the National Academy of Sciences, a report on preventive services which might be included in national health insurance as well as medicare.

I participated in the IOM study. We sent that to the Surgeon General 5 years ago. The only thing that survived from it was the pneumococcal vaccine that was referred to. Everything else was ignored.

Not every preventive service has been studied. It is no more static than is medical technology. The annual physical, 15 or 20 years ago, was considered very good. Now, I was one of the first people who said it was not cost effective or health effective, but there are other periodic schedules that are being followed today.

Mr. RINALDO. What should it be? What in your opinion should it be?

Mrs. SOMERS. It should vary according to age. An infant in the first year of life obviously needs to be seen more than once a year on a preventive basis.

Mr. RINALDO. I am talking about primarily adults and senior citi

Mrs. SOMERS. I think it varies every 5 years for a healthy young adult down to every year for the old. One easy-to-remember schedule calls for two preventive visits for healthy adults in their twenties (that is one every 5 years), three in their thirties; four in their forties; five in their fifties (every 2 years) and every year after 65.


Also the particular procedures should vary. They are not the same for men and women. They are not the same depending on your occupational background. They are not the same depending on your age. All of those things have been carefully studied. We are not starting with a clean slate. One has the impression that there is a little foot-dragging here.

Mr. RINALDO. I want to thank you very much. I think the testimony of this panel has been very constructive. As you know, by way of summary, we in Congress, in my view, are going to have to approve some medicare legislation in the next few years, possibly as early as the next year or two. And we have to do our best to maintain benefits in the face of health care inflation that is pro jected to remain at double digit rates. The Congressional Budget Office puts it at 13.8 percent through 1995.

It is obvious we will need revenues. We may not be able to expand benefits as much as we would like, and we have got to get a handle on health costs. I think that has been dramatically pointed out at this hearing.

I am going to push for more hearings by this committee and I want to state to all of the people who could not testify today that I would appreciate it if they would like to testify at some future hearing, to please write to the Select Committee on Aging and we will do everything possible in an effort to have your name placed on a list for one of our future hearings.

I want to once again thank all of the panelists. I think you have come up with some excellent proposed solutions, and maybe one of these days we will see them put into effect.

The hearing of the Select Committee on Aging is now adjourned. [Whereupon at 12:37 p.m., the hearing was adjourned.]


510 East Front Street Plainfield, New Jersey 07060 March 24, 1983

Congressman Matt Rinaldo
U.S. House of Representatives
Select Committee on Aging
1961 Morris Avenue
Union, New Jersey 07083

Dear Congressman Rinaldo:

On behalf of the residents of Richmond Towers, we would like to thank the House Select Committee on Aging for the opportunity to present testimony to the hearing reviewing the issue of the impending crisis in Medicare financing.

Richmond Towers is a federally subsidized low-income senior citizen apartment complex in Plainfield, New Jersey, housing 265 residents. All the residents live on fixed retirement incomes; the majority of the residents survive economically on social security alone.

As our resident population has become older, there has been a greater dependency on medical care. We have consequently seen a greater share of our fixed incomes being spent to pay medical bills.

The Residents Association of Richmond Towers would like to go on record as having presented our options and opinions to the House Select Committee on Aging. The four alternatives to Medicare financing suggested in your letter of March 15, 1983, were presented to our residents at our monthly meeting of the Residents Association. The Residents Association is an independent incorporated body of the residents living at Richmond Towers. The residents strongly urge the Congress to subsidize the Medicare fund through:

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Enacting additional cost containment reforms that would not cut the
current level of Medicare reimbursement nor limit eligibility for
Medicare for those who have fixed incomes.

It is necessary to the survival of every senior citizen to have adequate medical care available. It is as equally important to be able to afford medical care on a fixed income. We appeal to the House Select Committee on Aging to find viable and ethically moral solutions to the financial crisis.


Frances Gerty, President, Residents Assn.
Eileen Vroom, Former President


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