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the Southwest Health Care Corp. The Bernalillo Medical Clinic is staffed by a salaried physician and receives Medicare reimbursement. The Hope Medical Center is staffed by a family nurse practitioner, a type of midlevel medical practitioner, and is not presently eligible for reimbursement under Medicare, part B.

The Hope Medical Center operates as follows: The center is staffed by a family nurse practitioner, who functions under the standing orders and supervision of a panel of physicians in private practice in Albuquerque, 60 miles away. Mrs. Martha Schwebach, the family nurse practitioner at the Hope Medical Center, was the first family nurse practitioner in the United States.

The model was developed by Edward A. Mortimer, Jr., M.D., and others at the University of New Mexico Medical School in 1969 under HSMHA contract No. 110-69-241, "A New Manpower Model of Rural-Urban Linkage for Improved Health Services."

I am certain you have heard of the project. An exhaustive report covering the results of the $750,000 5-year project established the fact that high-quality medical care is provided by such a carefully supervised nurse practitioner. The report went on to analyze many demographic, economic, and epidemiological aspects of the impact of delivery in this new model.


In October 1972, Cooperative Health Services, a joint venture of Presbyterian Hospital Center and St. Joseph Hospital in Albuquerque, assumed management of the Hope Medical Center and placed the nurse practitioner under supervision of a panel of private physicians in Albuquerque. The model has worked well indeed. Not only does it provide high-quality primary care to rural areas, but the model is economically viable in sparsely populated areas which cannot support or attract a physician. We are pleased with our experience at Estancia, and we plan to open two new family nurse practitioner clinics in July


As I mentioned, we are at financial risk for the success of the clinics we manage. We are reimbursed for the nurse practitioner services by Medicaid and by New Mexico Blue Shield, as well as by commercial insurance companies.

The one stumbling block which has prevented us from breaking even and reaching older persons effectively has been the legal prohibition by Medicare for reimbursement of services when a physician is not onsite.

Since Medicare will not reimburse Hope Medical Center, most patients with Medicare pay out-of-pocket, and then must meet their deductible all over again when they are referred to one of our backup physicians or other Albuquerque specialists. Many retired persons are located in the area served by Hope Medical Center, but we have to tell them that Medicare will not reimburse us. It is all very confusing and inequitable, to say the least, leaving the elderly without accessibility to Hope Medical Center and to some degree, damaging the center's reputation and its prospects for breaking even.

Just this week, a woman came into the Hope Medical Center, and when the staff told her that Medicare would not pay for services provided at Hope, she decided that she would travel to Albuquerque to see a physician. She had already met her deductible for the year out of part B and naturally was reluctant to incur additional out-of-pocket expenses.

By refusing to reimburse for services provided by the family nurse practitioner, Medicare is in effect telling Medicare beneficiaries that the insurance they have paid for is not valid at the only source of medical care available to them within 60 miles. The irony is even greater when it is realized that the cost of care is significantly less at the center than it is in Albuquerque-thus Medicare is seen to be driving up its own costs by not reimbursing nurse practitioners.

Torrance County, like other rural counties in New Mexico, has a large number of older persons. These older persons have stayed in their home towns while their children have moved to the cities. Yet we see Medicare denying coverage to these senior citizens where the care is most readily available.

Another irony about this situation must be mentioned. On one hand we have the Federal Government encouraging the development of new types of physician extender manpower and funding the training of such personnel-I've already mentioned the $750.000 University of New Mexico Medical School grant-but then, on the other hand, we have the Federal Government refusing to reimburse for their services.


Providing health care in a rural area is a risky financial venture because of the sparse population density. There is not enough money in rural areas to support a physician at the salary level which they demand. Our experience has been that the total cost of a family nurse practitioner clinic is about $35,000 per year, and we feel that a clinic with this modest budget can become self-sufficient in a rural area without Federal subsidy. However, such clinics cannot hope to break even without receiving reimbursement which would go to other providers for similar services.

Both the clinic as well as the older residents of rural areas are being starved out of existence. Seventy percent of the patients pay the fees out-of-pocket and have no health insurance for outpatient care.

It is incumbent on Congress to move strongly in the direction of amending the Medicare laws so that physician extenders of all categories can be reimbursed. As an interim step, it is our understanding that the Social Security Amendments of 1972, section 222, title II, provided for a demonstration program of reimbursement under Medicare for services provided by nurse practitioners and physician assistants. This section has yet to be implemented, although we have heard that steps are now being taken to bring it about. We would like to participate in such a program of experimental reimbursement and, in fact, have been seeking such a solution for several years.

Senator DOMENICI. Would you say physicians assume the full responsibility?

Mr. JENSEN. Yes, they assume the legal and ethical responsibility; so she is totally backed up.

I believe that our organizational design meets both requirements stated in section 222, title II, of the Social Security Amendments of 1972, which are:

(1) The family nurse practitioner is legally authorized to perform in New Mexico.

(2) Physicians assume full legal and ethical responsibility for the necessity, propriety, and quality of care rendered by the nurse practitioner at the clinic.

Any assistance which this committee could provide would be greatly appreciated and should be directed to: Office of Research and Statistics, Social Security Administration, Washington, D.C. 20009.

I am enclosing a packet of materials for your files about our Hope medical project: 1

(1) Copy of the AMA publication, PRISM, article of October 1973, describes the operations and organization of the Hope Medical Center.

(2) Copy of the Albuquerque Tribune article of March 6, 1974. (3) Copy of a physician contract to supervise the family nurse practitioner and to assume professional liability for her activities.

(4) Copy of a letter from the group insurer of professional liability in New Mexico regarding physician involvement at Hope.

(5) Copy of Hope Medical Center stationery, which shows the professional organization of the center."

In addition to these data, we prepare monthly financial statementsbalance sheet and earnings statement-which would be available to you upon request. Accounting is done on an accrual basis. Our direct patient expenses average about $2,500 per month. Average patient revenue is $2,200. Obviously we are extremely close to the breakeven point, and with the ability to serve Medicare patients and collect from Medicare, we could operate at better than breakeven.

Again any help that you could give us in having Hope Medical Center and our two new family nurse practitioner clinic sites of Tijeras Canvon and Pecos selected as sites for experimental direct Medicare reimbursement would be of great help.

In summary, if the needs of rural health care are to be effectively met, especially the needs of elderly rural residents, then it is incumbent that Congress continue to support the development of physician extender roles, and that Congress amend the Social Security laws to allow Medicare reimbursement for such extender roles. I might add that some of the present congressional concern with national health insurance should be directed to seeing that physician extender roles are included and reimbursed under the NHI law whenever it is forthcoming and whatever form it takes. Thank you.

Senator DOMENICI. In terms of the operating statement of the Hope Medical Center, would it not be your observation, because of the failure of Medicare to pick up senior citizens expenses, that perhaps the senior citizens would otherwise use that facility who are going somewhere else?

1 See appendix 2, item 4 p. 1140.

Retained in committee files.

Mr. JENSEN. Precisely. The senior citizens are forced to travel to Albuquerque, 60 miles away, and they incur those expenses of travel, but they do get their care there, because we cannot support it at the clinic.

If we could support it at the clinic, the clinic would break even, and health care would be accessible to these elderly people, so we think it would be a distinctly viable health resource.

Senator DOMENICI. Is it not true that in the normal operation of the center many of the services that you are performing in one of your satellite clinics are indeed performed within a more typical institution of medical delivery-the doctor's office, the clinic, or the hospital--and in fact, Medicare pays for a portion of that?

Mr. JENSEN. Right.

Senator DOMENICI. Medicare will not reimburse any services at your clinic?

Mr. JENSEN. That is correct, unless the doctor is onsite, and has actually rendered services to the patient. Medicare will not pay for any physician replacement activities, which is essentially what a nurse practitioner or a physician assistant is doing.


They are doing this midlevel sort of thing that can be done by less than a physician, but still a highly qualified practitioner.

Senator DOMENICI. I would like to know-and perhaps you can review it in your spare time-how you feel about a bill introduced by Senator Church, the chairman of the Special Committee on Aging, that would encourage greater use of nurse practitioners. It is our understanding that it deals only with nursing homes, and certainly. you are not objecting to that; your testimony has to do with the method_differently, completely different in use.

Mr. JENSEN. We would certainly encourage that particular bill, but would like to see people move beyond that bill, and we recognize that midlevel practitioners should be reimbursed, if they are appropriately supervised, and not just in specific instances, but across the board. Senator DOMENICI. We thank you very much.

Mr. JENSEN. Thank you, Mr. Chairman.

Senator DOMENICI. Our next witness is Mr. Lester Rigby, director, Area Agency on Aging, Socorro.

Let me share with you a few thoughts, because it is relevant in much of the testimony.

The White House Conference on Aging, which many of you are aware of, certainly from the standpoint of ideas, indicated that it was desirable for this country to move to alternatives to the present institutions in terms of delivery of health care for senior citizens.

Much of the testimony today goes to that, but it is our observation on that very few objective improvements in changes go toward the kinds of things we have heard about this morning, away from typical institutional approaches. It is nowhere closer to reality today than it was when the 1971 White House Conference on Aging concluded.

Mr. Rigby comes from Socorro, which I assume most of us would call rural New Mexico, in the sense of distinguishing it from a metropolitan area like Albuquerque.

For those who have expressed concern to me privately today that we ought to zero in on rural health problems, I want you to know even if we cannot bring the formal hearing committee process to rural problems this year, I will attempt to have some informal hearings that will zero in on health delivery problems in rural New Mexico.

We will build it into our own itinerary between now and December, so we will have a chance to focus in on a couple of communities for a few hours on differences between metropolitan problems and rural problems. I think Mr. Rigby will speak to that, at least to some extent today, in his capacity as director of the Area Agency on Aging in Socorro.

Will you please proceed, sir.


Mr. RIGBY. Thank you very much, Senator, members of the Senate staff, and the people who are interested in the elderly. I am very glad to be here from the rural area, and it is certainly that. We have 10,900 people in 6,600 square miles, and that would indicate that we are rural residents. I also have two other counties, and one of them is even more rural, and that is Sierra County, and the other is a little more populated, which includes Dona Ana, the center being Las Cruces.

The elderly in the rural areas have the same problems as the elderly in urban areas. However, the rural dwellers problems are compounded by distance, disinterest, and monetary delimitations. They are not discriminated against because of race, creed, or ethnic background, but rather because of geography.

One of the most difficult problems in rural areas stems from the lack of advocacy. The provincial sociology is not only prevalent among the elderly, but it touches all of the rural institutions the municipal and/or political management find money hard to come by, and much harder to get back into circulation, particularly to alleviate human distress. The levels of education, and lack of affluence fail to produce sustained leadership, and the rural elderly are more resistant to social services than those in urban areas. The vigor of the young is prominently missing because they leave the occupations of the soil for more promising opportunities.


The critical need for doctors is prevalent throughout the rural area of this State. In a particular case of which I am aware, a scattered population of 2,800 is in dire need of a doctor. There is not a practicing physician or any medical facility extending from the city of Socorro to Springerville, Ariz.-a distance of 157 miles.

In an attempt to get a physician through the offices of the National Medical Service the hope of these people was thwarted by the failure of the area medical association to give its approval of the application. It is difficult for these people to understand why the decisions of the National Medical Service, in making awards, must depend upon the

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