ketedly from other state reimbursment programs. In ugh several other states (e.g., Maryland and Georgia) ce reimbursement systems which use DRGs for making ments, New Jersey is the only state to have applied a system to all acute care general hospitals and classes With this in mind, the evaluation effort focused on d questions. First, from a political standpoint, how ather sweeping policy innovation come about? And s there something truly unique about New Jersey that or the development of such a system, or can we expect to ystem diffuse to other states? rder to answer these questions, the evaluation team's scientists gleaned data from newspaper clippings, posiers, government documents, and, most importantly, conducnsive interviews with all of the key participants. [3] ir research emerged both a detailed chronology of events as a careful examination of the actors and institutions -ped them. Like some of the other, more quantitative, portions of the ion, it is difficult to adequately capture the answers to questions posed above in the limited scope of this survey However, in response to the question regarding the on of the system, the analysis points to a confluence of s which acted to create the conditions required for the of the system. Among the more salient elements responfor the system's introduction were: (1) pressure from Blue 20 0-83--5 ross, whose premiums are regulated by the state, to control imbursement rates to hospitals, (2) the publication of a report arging that the hospital industry in New Jersey was, in effect, gulating itself, (3) the election of a new Governor and his bsequent appointment of a Commissioner of Health who was deterned to bring rate regulation within the state's purview and to structure the incentives that hospitals faced, (4) the availility of a federal grant for developing an experimental reimrsement program, and (5) the poor financial ate's urban hospitals. positions of the In addressing the question of whether or not the New Jersey stem could potentially be transferred to other states, the thors of this part of the evaluation noted in their conclusion at: "New Jersey was unique. What happened there will not While much remains to be learned from the New Jersey exerience with the DRG system, in short, it is our view that the stem has led, and will continue to lead, to the adoption of gement practices on the part of hospitals, increased on between physicians and hospital administrators, te data, and a heightened awareness of the costs e hospital costs and hence expenditures on the part of of hospital care. effort to develop an allocation statistic which is more to the amount of nursing resources actually consumed, Jersey Department of Health has recently completed an of the number of nursing minutes required by patients in r diagnostic category. The use of the new statistic in program is currently under consideration by the State's re Administration Board. members of the evaluation team were drawn from Coopers and, the National Health Care Management Center of the y of Pennsylvania, Agnew Peckham and Associates, Inc., University's Center for Health Studies. am, A.B. and Morone, J.A. "A Political History of DRG alation in New Jersey". In DRG Evaluation Volume IV : 1 Evolution and Organizational Impact. Princeton, N.J.: th Research and Educational Trust of New Jersey, 1983. J. (ed.) Diagnosis Related Groups. Topics in Health nancing, Vol. 8, No. 4. 1982). sey Hospital Reimbursement Under S-446 : Elements and s 1981. Princeton, N.J.: New Jersey Hospital Association, ctives on Diagnosis Related Groups. Cleveland, OH: The r Cleveland Hospital Association, November 7, 1980. man, J. DRG Evaluation Volume I: Introduction and Overview. The Health Research and Educational Trust of New on, N.J.: Mr. RINALDO. Mrs. Abrams. STATEMENT OF ESTHER ABRAMS Mrs. ABRAMS. I have been a resident of Princeton for 38 years, and I have also traveled to Trenton for many activities, so I am ery happy to see both our Congressmen on the Select Committee -n Aging. I am proud and appreciative of the opportunity to testify here oday as a representative of the Older Women's League. Ours is the irst national organization to focus exclusively on the concerns of lder women. Our members are working for changes in public policy that will reduce the inequities older women face today. By far, one of the greatest problems older women share is obtainng access to affordable health care. On the whole, women in the United States experience aging very differently than men do. The nost important of these differences are found in longevity, marital tatus, and income. Women make up 60 percent of the population age 65 and over, and by the age of 75 there are twice as many women as men. Thus, because of the age differences in longevity, women outnumber men I to 1 in the older age categories, where health care costs and use re highest. Then, too, there are very large differences in the proportions of nen and of women over age 65 who are living with a spouse. Forty percent of women age 65 to 74 are widowed, while this is true of nly 8 percent of men in that age group. For those age 75 and over, 70 percent of the men, but only 22 percent of the women are still married. This is partly due to lonrevity, but also due to the fact that men generally marry younger women. In 1981, of the approximately 7.5 million elderly living alone, 6 million or 80 percent were women. Of the elderly poor, 75 percent re women. At any adult age, there are very large differences beween the incomes of men and women, but for those age 65 and ver, the differences become dramatic and appalling. For men over the age of 65, the median total money income in 981 was $8,173; for women $4,757. In that same year the official poverty level for a person living alone was only about $300 less han the median income for all women over the age of 65. Although women are 60 percent of the elderly, they comprise 75 ercent of the officially poor of these elderly. There are some differences in the types of health problems men and women face in their later years. Older men have higher rates of fatal diseases, such as heart disease and cancer. Older women end to suffer more from long-term chronic diseases, such as arthriis, diabetes, visual impairment, and osteoporosis. Thus men 65 and ver have more surgery and more days of hospital care, women ave a longer average length of stay reflecting the differing marial status. A larger portion of older women than men are transerred from hospitals to other facilities for continued care. And, fially, women comprise 70 percent of the residents in nursing homes. All three related, no doubt, to the large percentage of older women who live alone. Thus, since things like to pay for t to pay part the fact th e women are so likely to end up living alone and often erty, and since they must from an early age stretch a ome over a longer life span, their great concern about to afford health care during a time of ever-increasing · understandable. ugh the elderly are happy to have medicare, this by no s for all their health care. Thus, lack of coverage and t-of-pocket expenditures are a major problem for the the majority of whom are women. dicare requires that beneficiaries share cost through dend copayments. Second, patients must make up the difen physicians charge more than what the Government sonable charges. And, finally, many health needs are not I medicare, and most significantly by women. These are e at home prescriptions, hearing aids, dental and eye ong-term custodial care. omen, on average, now spend one-third of their median come on health care. n of medical costs has greatly exceeded general inflation past 10 years. Combined with budget cuts during the past ears, the result has been a heavier financial burden for sons, and rising prices and increased cost sharing for re. als in the administration's fiscal year 1984 budget, many by Congress last year, would further increase the cost of are services for most older persons. The changes will hit older women particularly, since they have a higher incichronic diseases than men, but also less income than men r the care they need. Iministration has proposed cuts of over $1.8 billion in medifiscal year 1984. Almost all of these cuts will mean incosts to medicare patients. Under the guise of catastrophic e, the administration proposes requiring medicare patients art of the cost of hospital stays from the 2d to the 60th day in addition to the existing 1st day deductible of $350. nt copayments now required after 60 days in the hospital e dropped. It may seem like a good idea to insure older perainst financial devastation from a long hospital stay, but posal is actually a gift horse for the elderly. The average of stay in the hospital is only 11 days. Even for women age over, the average length of stay in 1978 was only 12 days. bout 2 percent of medicare beneficiaries would benefit from oposal. administration's rationale for this proposal is to discourage ciaries from overutilization of services. Not only is there no ce of this abuse by the elderly, but conveniently ignored is ct that doctors, not patients, order hospitalization. Reagan administration has also included in the budget sevther proposals which would result in increased cost sharing, ed eligibility, all of which will make less accessible adequate care for older women. health care system, including medicare, is based on an acute cal model with cure rather than care as its central focus. To |