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The Council is directed to:

1. review programs, policies, and priorities of the Institute and centers established under section 1213;

2. examine and coordinate health care delivery efforts in federal agencies to avoid duplication of efforts; and

3. assure that the findings of the Institute are being disseminated and evaluate the impact of such findings.

Directs the Council to submit a progress report on the Institute and its centers (as an appendix to the report required under section 1210).


(New Section 1210) Requires the Director of the Institute to submit an annual report to the Secretary of Health, Education, and Welfare to be transmitted to the President and the Congress. Such report must include:

1. an appraisal of the Institute's activities;

2. annotated bibliographies and summaries of research projects performed or supported by the Institute; and

3. recommendations concerning factors that inhibit the implementation of the Institute's findings or factors which inhibit innovation in health care.


(New Section 1211) Creates within the National Institute of Health Care Delivery an Office of Health Care Delivery Information Services. The office would provide:

1. for the provision of indexing, abstracting, translating, and other services leading to a more effective dissemination of information on research and development in health care delivery, to public and private agencies, institutions, and individuals engaged in the improvement of health care delivery and the general public; and

2. for the undertaking of programs to develop new or improved methods for making this information available.


(New Section 1212) There are authorized to be appropriated to carry out the provisions of new title XII (excluding new section 1213):

$80 million for fiscal year 1974;
$125 million for fiscal year 1975; and
$150 million for fiscal year 1976.


(New Section 1213) Authorizes the Director of the Institute to enter into cooperative arrangements with public or nonprofit private agencies or institutions to pay all or part of the costs to plan, establish, and provide basic support for:

1. a maximum of eight regional centers specifically designed to carry out multidisciplinary research and development in health care deliv

ery; and

2. two national special emphasis centers (one to be designated as the Health Care Technology Center and the other to be designated as the Health Care Management Center).

Authorizes Federal payments (under this section) to be used for:

1. construction (as deemed necessary by the National Advisory Council on Health Care Delivery);

2. staffing and basic operating costs;
3. research and development;
4. training; and
5. demonstration purposes.

Excluding construction, support under this section must not exceed $2 million per year per center (excluding the Health Care Technology Center). Such support may be funded for a maximum of three years. However, upon additional recommendations of the Council, the Director may extend a center's support for an additional three years.

Requires the Commission to determine the location of regional centers (with a view towards the broad geographical distribution of such centers). Requires the Administrative Officer of each regional and national center to submit an annual report.

There are authorized to be appropriated to carry out the provisions of this section:

$20 million for fiscal year 1974;
$25 million for fiscal year 1975; and
$30 million for fiscal year 1976.

SUPPLEMENTAL INCENTIVE GRANTS (New Section 1214) Authorizes the Director to provide funds to be used to supplement the Federal contribution to research and development projects (under Federal grant-in-aid programs) over and above the originally authorized Federal contribution. Such funds are to provide the incentive assistance to encourage individuals, institutions, and health facilities to participate in research and development projects that might not otherwise be carried out.

Provides that the Federal contribution (as supplemented under this section) cannot exceed 80 percent of the costs. Defines the term "Federal grant-in-aid programs.” Provides that not to exceed 10 percent of the funds authorized by title XII shall be available to carry out this section.

Appendix 2


12, 1974


Today I am introducing the Comprehensive Medicare Reform Act of 1974. This legislation is the culmination of two decades of efforts to provide full health insurance protection for older Americans.

In 1961, following a Cecade of debate on health insurance for the aged, the new Kennedy Administration took an active leadership role in bringing the Medicare debate to legislative reality. As Secretary of Health, Education and Welfare, I headed a task force to draft a Medicare bill. thile Congress rejected it in the early 1960s, Medicare became law in 1965. As a Senator and a member of the Senate Finance Committee which shapes such legislation I was proud to play a role in developing and supporting bledicare.

liedicare was a major breakthrough in assuring a measure of health protection for one segment of the population. Because it was a new concept, however, Congress limited its coverage. It was, in fact, a financial program to help meet some of the costs of short-term and acute medical care.

Since its enactment in 1965 we have found that the program should be improved and expanded. I have suggested expanding its coverage in a number of ways. Since 1965 we have expanded Medicare to cover all disabled persons, those who have chronic kidney conditions and many more Its services have likewise been expanded to cover a wider range of non-hospital items.

At the same time we have found a need to curb costs and abuses under Medicare. Ilajor oversight hearings which we held in 1969 led to improvements in the administration and cost control mechanisms of Medicare.

Since Medicare's inception in 1965, I have watched its progress and participated in its development at every step of the way.

It is time to change the Medicare from a limited financial program to the program which we originally envisioned--comprehensive national health insurance for all older Americans.

The liedicare program I envision is one which provides a range of care from preventative and diagnostic physician's services to the most acute hospital care. Nursing home, home health care, dental care, eye care, hearing care, prescription drug coverage are just a few of the areas which should be covered. In ort, Medicare should be a balanced program which encourages the best kind of care with the greatest possible freedom of choice for the patient. And it should be a program that provides reasonably for all the providers in the system--hospitals, doctors and others and at the same time is efficiently administered at the smallest possible cost to the government.

The American Association of Retired Persons/National Retired Teachers Association has played a leading role in the development of this legislation. The legislation, which has been developed over the past two years, reflects their tireless efforts. The proposal also reflects the recommendations of the 1971 White House Conference on Aging and recommendations made in recent years by one of America's leaders on issues affecting older Americans, Nelson Cruikshank.


In dealing with programs to provide comprehensive health coverage for all Americans at a cost which the taxpayers can afford, priorities must be established as to who should be covered.

The population over 65 is in most need of protection. For the most part their income is limited and the costs of illness for them is higher than for the population as a whole.

At the turn of the century there were only three million older persor. every 25th American. Since that time, the older population has grown faster than the rest of the population. Today there are over 20 million senior citizens--every 10th American. By the year 2000, every ninth American will be over the age 65. It is not a static population. Every day, 4,000 Americans reach age 65.


Unfortunately, however, the median income of older families and individuals is less than half that of their younger counterparts. While the Social Security benefit increases of recent years have had a dramatic impact in reducing poverty for older Americans, over 2 million older Americans were living below the poverty threshhold in 1973.

ilost older Americans depend on Social Security. But Social Securit benefit increases are too often negated by the tide of inflation. Thus, while the Department of Labor estimates that a minimum low budget for a retired couple is $3,442 a year, social security benefits are $110 a year under that bare bones minimum budget.

There are also an estimated additional 2 million aged persons who, while not classified as poor because they live in families with incomes above the poverty line, are in fact poor. In sum, while the aged make up 108 of the population, they make up 20% of the poor. If you are old, you are twice as likely to be poor.

As might be expected, older people, because they have half as much income as younger people, are forced to spend half as much. They must stretch their food, clothing, rent and medical dollars much farther than the non-poor. Proportionately, older consumers spend more of their income on these items than do those under 65.

The problems of income are complicated by problems of health. older Americans have less money but more health problems. Eighty-five percent of those who are over 65 and have at least one chronic condition Eighty percent have some degree of arthritis. Dental problems, hearing and eye problems and the need for prescription Crugs all increase with old age.

Drug costs for older Americans, for example, run three times higher than for the younger population. Charges for prescriptions range up to 67¢ higher per prescription for older people, mainly because they often need expensive maintenance drugs.

The major chronic diseases among older persons-heart disease, cance: strokes, arthritis, diabetes - are costly to older Americans not only in terms of invalidism and pain but also in financial terms.

At the same time that older Americans need more health care, real growth in health care utilization for the elderly has not kept pace with other age groups in recent years. The elderly in America are not utilizing the full range of health services they need because they can't afford to. They are economically forced to wait until they need acute inpatient hospital care. The economically disadvantaged aged population is further discouraged from obtaining health care because they are concentrated in urban centers and rural areas often Geographically distant from health service areas.


Until 1965 older Americans had to depend almost exclusively on their own resources for health care. Since the enactment of Medicare, the federal government has assumed a portion of the medical costs of older Americans.

During fiscal year 1973, the Nation spert $94.1 billion for personal health care. Persons aged 65 and over accounted for 28% of this cost, although they make up only 10% of the population.

The average personal health care outlay for the total population was $441.00 in fiscal 1973. For the senior citizen it was $1,000.00.

Despite increases in government and other third party sources such as ledicare, average out of pocket payment by aged persons was $276 in fiscal 1972, three times the amount paid out of pocket by non-senior citizens. This $276 out of pocket cost is higher than the amount paid for health care by older Americans at the start of 1966 ($234) before liedicare was enacted. As costs have risen then, Hedicare is picking up an ever smaller amount of the older Americans' health costs. In 1969, biedicare paid 46% of their health bill. Today it pays 428.

The decline in Medicare's share of the health bill of the aging is related not only to inflationary factors but to basic problems in the Medicare structure.

building on

The time has come to re-shape the Medicare program its strengths and eliminating its weaknesses.



The legislation I am proposing today would re-structure the Medical program to provide health care benefits to all older Americans as a matter of entitlement, The bill would broaden the Medicare benefit package to meet the full range of medical services needed by older Americans and extend the duration of those benefits which are limited under the present program. It would reduce the out of pocket personal health care expenditures of those eligible for iledicare coverage, establish a program of income-related catastrophic health insurance protection for senior citizens. And it would improve the administratio of medicare while it attempts to control increases in health care costs



The bill establishes a single integrated program of comprehensive health insurance for the aged and disabled financed out of general

Parts A and B of the Medicare program are combined into a single, expanded benefit structure with a single trust fund.

Requirements for premium payments and deductibled are eliminated. minimal co-insurance provisions are designed so that while persons who can afford to pay will co so up to a predetermined maximum level, cost will not be a deterrent to quality health care.

The Act also provides coverage for all care and services for the aged presently covered by the liedicaid program.


The te izricare program is expanded to all persons 65 years of age or cara ardless of insured status under the Social Security or Railroad eti'erent cash benefit program. The only requirement is that :

Do be a citizen or national of the United States or a legal re: J... 112n. This means that for the first time all public employees, 61:luding teachers, policemen and fireren will be automat-' ical y eligible for Medicare.

The Medicare program also provides eligibility to all those who are now eligible for Medicare because of special circumstances such as disability.


The liedicare Reform Act provides a comprehensive range of benefits:

Unlimited inpatient hospital coverage:
-- includes pathology and radiology services;
-- includes 150 days of care during a benefit period

for a psychiatric inpatient undergoing active
diagnosis or treatment of an emotional or mental

Unlimited outpatient hospital coverage.
Unlimited skilled nursing facility services with no
requirement for prior hospitalization.
Unlimited intermediate care facility services, effective
July 1, 1978.
Unlimited home health services with no requirements for
prior hospitalization.
certain services offered by public or non-profit private
rehabilitation agencies or centers and public or non-profit
private health agencies.
Unlimited physicians' services, including major surgery by
a qualified specialist and certain psychiatric services.
Unlimited dental services.
Outpatient prescription drugs including biologicals such
as blood, immunizing agents, etc. subject to certain
limitations to insure quality control.

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