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With regard to nursing home patients, the rates of physician and hospital use were very similar for HIP and non-HIP patients. Hidden in this similarity of rates were significant changes in type of care received. Welfare officials visiting nursing homes indicated that the shift to HIP resulted in substantial improve ments in the quality of medical attention. This was reflected in part by the greatly expanded use made of laboratory services. Welfare officials also pointed out that a more rational use was being made of drugs. In the nursing homes under HIP care, the cost for drugs averaged $17.80 per patient in the study year; the corresponding figure for other nursing home patients was $23.18.

We are no longer engaged in a demonstration program. Medicaid is here and all of those enrolled can select as their source of medical care physicians in the community at large willing to accept them as patients, out-patient clinics in hospitals, or HIP. Medicaid members of HIP are covered for both out-of-hospital and in-hospital medical care from the Plan's physicians. In the demonstration program, Welfare regulations required that hospital admissions of Welfare clients be made to general service ward accommodations and HIP physicians could not continue to assume responsibility for the Welfare patient's care when he went into the hospital. Medicaid has changed this, thereby eliminating the critical break in continuity of care that previously existed.

HIP continues to be intensely interested in determining the impact that its system has on utilization, mortality, and disability rates of both Medicaid and Medicare enrollees. When more time has elapsed, ways will be found to examine this issue further.

The public normally thinks of medical care in terms of physicians and hospitals ready to provide services when illness strikes and by and large this is the content of medical care in the community at large. Prepaid group practice, typically, is concerned with a program of care that enlarges on this concept. It is concerned with the totality of health care—not just the treatment of illness. For example, HIP emphasizes preventive health services. As an aid to the physician, it distributes a quarterly bulletin to subscribers and assists the medical groups in organizing and programming health education meetings for the members. When the Welfare demonstration project was started, and later under Medicaid, special brochures were prepared by the Plan and distributed to the new members to familiarize them with the benefits and how to obtain them. Long before Medicare, the program included educational meetings in the medical group centers on physical and emotional problems of the aging. These have been intensified (Exhibit).

In addition to health education, the Plan through a highly qualified staff of social workers provides consultation services to physicians and administrative personnel of the groups in dealing with patient problems requiring community resources. A nutritionist staff is also available for consultation and aids the physicians in regulating diets for diabetics, hypertensives, the obese, and many other groups of patients requiring a special diet regimen.

Opportunities for testing the practicality or value of innovations in medical practice and benefits exist in group practice in a way that cannot readily be duplicated in fee-for-service solo practice. HIP and other group practice plans are exploiting these opportunities in a number of critical areas with great potential benefit to the aging. Glaucoma detection is an important preventive health measure but its incorporation into medical practice has been difficult principally because of the shortage of ophthalmologists. Several years ago HIP initiated a program through which well-trained nonmedical personnel could be used to perform tonometry and thereby locate patients for whom more definitive tests should be performed by the ophthalmologist (Exhibit). A significant aspect of this effort is the training and use of nonphysicians to perform tasks usually carried out by physicians. There is almost universal agreement that an expansion of this approach on a selective basis to other branches of medicine is essential to conserve physician manpower.


HIP is currently engaged in a highly complex research project which has as its end goal determining whether periodic screening for breast cancer by means of clinical examination of the breast and mammography (a relatively new soft tissue x-ray procedure) will result in a reduction in mortality from breast cancer.

About 6 per cent of the women during their lifetime develop breast cancer and half die within five years of cancer detection. The tragedy of this condition is that despite the attention given to it, there has been no reduction in the rate of mortality from breast cancer in over thirty years. The hope is that early detection through screening will change this picture. HIP was selected by the National Cancer Institute for the project because of the Plan's long record of successful research, its access to patients, and the ability to provide follow-up medical care at no additional cost to the patient. Preliminary findings are encouraging; between 65 and 70 per cent of the breast cancers in the screened group of women are detected in a localized stage as compared with 47 per cent in a comparable group not screened.

An example of breaking new ground in providing services is found in a demonstration program HIP is conducting to determine costs, personnel, and organization needed to provide mental health services. Fears about high costs have delayed the inclusion of psychiatric treatment as a benefit in health insurance plans. When such services are covered, they are usually accompanied by large deductibles or coinsurance. HIP's demonstration project, supported by a grant from the New York Foundation and the Public Health Service, has as its objective establishing a mental health service which is fully prepaid. Currently the psychiatric benefit in HIP is limited to consultation. For demonstration purposes this benefit was expanded in the largest of the Plan's medical groups to include treatment from phychiatrists, psychiatric social workers, and clinical psychologists. Information from the project is now being used to plan three regional mental health centers where psychotherapy will be available for HIP members as a prepaid benefit. It is expected that the broadened program will start in mid-1968 with about 200,000 persons, including those on Medicare and Medicaid, enrolled for this benefit.

Under active consideration in HIP is an automated multiphasic screening program. The pioneering experience at Kaiser-Permanente, the largest prepaid group practice plan in the country, has encouraged us to consider ways in which multiphasic screening can be incorporated in our Plan. There seems to be little question about the ability to detect disease early through this type of screening program at far less unit cost than is ordinarily the case. We are impressed by the need to establish a close link between the screening center and the physicians responsible for follow-up care. It is often worse than useless to uncover a condition is such a link does not exist. Automated multiphasic screening in prepaid group practice is an integral part of a single system of medical care, and problems of follow-up are far less serious in this system than outside. It is also clear that the maximum value of screening lies in reaching the population long before they are old enough to receive Medicare benefits. The objective of early detection is either to reverse the disease or place it under control soon enough to delay serious consequences. While disabling illness cannot be postponed indefinitely, it is hoped that early detection of disease will permit the individual to lead a more productive life over many more years than at present. In summary, group practice in HIP has led to:

(1) Changes in the pattern of using medical services, with greater emphasis on care early in illness.

(2) A broadened concept of the responsibilities in the field of prepaid medical care to include health education, social services, and nutritionist consultation.

(3) Moderate levels of utilization of services accompanied by demonstrated savings in costs for hospital care.

(4) Innovations in health benefit coverage; the latest benefit to be offered shortly is comprehensive mental health services.

(5) Demonstration of the use of nonphysician personnel as in glaucoma screening and research in the value of new screening procedures as in breast cancer screening which utilizes mammography (soft tissue x-ray).

(6) Availability of high-quality, comprehensive medical care from medical groups on a fully prepaid basis to all segments of society including Medicare

beneficiaries and Medicaid enrollees. The emphasis in this presentation has been on HIP experience. However, to a considerable extent this is paralleled by the performance of other prepaid group practice plans. There seems to be little question but that a major part of the solution to the shortage of medical manpower, control of utilization and costs, and the problem of rapidly implementing new advances in medical knowledge depends

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on the spread of group practice. This will, however, be a slow process unless the Federal government acts to assist and stimulate the growth of group practice prepayment plans. Direct loans and grants are needed to meet developmental and start-up costs for new programs and to construct and improve facilities in existing programs.

(The chairman addressed the following questions to Mr. Brindle in a letter written after the hearings :)

1. Mr. Haughton, Deputy Administrator of the New York City Health Services Administration, has informed the Subcommittee that many OAA recipients served by H.I.P. expressed some reluctance to leave the municipal clinics, which were so familiar to them. Did this attitude in any way cause serious problems?

2. You mentioned that Medicaid recipients now served by H.I.P. do not pay deductibles or coinsurance because a municipal agency pays such charges. May we have additional details and comments on the desirability of such arrangements?

3. Your comment about H.I.P.'s quarterly bulletin, and your emphasis on preventive health services reminds me of an amendment I have proposed for this year's Social Security legislation. It would instruct Secretary Gardner to conduct a study of the desirability of making health screening a Medicare benefit. May I have your reaction to this proposal.

4. I also believe it might be a good idea to have appropriate agencies authorize preparation of a health care manual that could be distributed to Medicare recipients at an appropriate time. Would such a publication be helpful, if care fully prepared, possibly with the help of leaders from the communication media? (Your experience in health education programs at HIP certainly should give us helpful insights.)

5. Your demonstration program relative to mental health services is of great interest to the Subcommittee. I hope you will keep us informed of your progress.

6. Your statement strongly suggests that Medicaid patients could be served effectively through group health practice on a per capita fee basis. I would like some additional comments on services provided through HIP, as compared to services provided to others eligible in New York City for Medicaid, but not served by HIP. I would also like your views on whether similar programs could be established elsewhere. As I understand it, there are relatively few group practice plans in the nation. Can we expect growth of such plans at a rate that will have significance for Medicaid recipients, even with the kind of Federal help you suggested in your testimony?

7. Mr. Oriol has informed me that you participated in the proceedings of the final day of the National Conference on Group Practice at the University of Chicago on October 20 and 21. Perhaps that conference has suggested additional points that you may wish to make to this Subcommittee. If so we would be happy to receive them,

(The following reply was received :)

(1) I believe Dr. Haughton was referring primarily to OAA recipients who were receiving medical care from highly specialized out-patient clinics in municipal and voluntary hospitals. Arrangements were made for these recipients, on request, to remain with the clinics rather than transfer to FIP. The number involved was quite small, about 100 out of the 12,000 ambulatory OAA's in the program. With regard to the others, there was evidence that confusion existed initially among the OAA's about their HIP benefits and where they were to receive medical care. Special efforts were made by HIP and the medical groups to clarify the situation. These included, in addition to health education material and invitations to visit the groups for evening meetings, a home visit to many new enrollees to explain the HIP system and urge that an ap intment be made for a medical examination. We think these measures have paid off, but we recognize that the change from past, poor medical practices to a desirable pattern requires sustained effort.

(2) In this question, I assume you are referring to Medicaid recipients also eligible for Medicare, Part B. The arrangement being made with Social Security Administration is for HIP to he reimbursed by this agency for the per canita cost of services covered under Medicare, less the average value of the dedurtible and 20 per cent coinsurance. The Social Services Department of New York City

has agreed to pay HIP on a capitation basis for the uncovered services, deductible, and coinsurance. Accordingly, between these two agencies, the total cost of medical care made available or arranged for by HIP is being met. We have welcomed this arrangement, since it is consistent with our policy to serve the broadest possible range of social and economic groups in the New York area.

As indicated in my written statement at your Subcommittee's hearings in New York City on October 19, 1967, the non-indigent Medicare beneficiaries in HIP pay a small supplemental premium as payment for the Medicare-excluded services, the deductible, and coinsurance. The removal of deductibles and coinsurance for specific services has not resulted in unusual utilization either by the aged covered under Medicaid or by the non-indigent aged enrolled in HIP.

(3) I agree with your proposal to make general physical examinations a Medicare benefit. It is strange that Part B excludes not only such examinations and eye refractions but immunizations, which can be life-saving, as for example in an influenza epidemic. The concern about unnecessary utilization that may have prompted such exclusions should be dealt with through controls rather than by eliminating payment for these medically important services. It must also be recognized that “health screening," to be of maximum value, should be initiated before a person becomes aged and should be conducted under conditions that assure continuity between findings and followup by the patient's personal physician. I hope that Federal legislation on health examinations will not stop with Medicare, Part B, but will deal with these broader requirements.

(4) The type of publication mentioned would be very useful and we, at HIP, would be happy to cooperate in its preparation. There are many difficulties in developing suitable educational material for the Medicare beneficiaries and the activity would have to provide for a careful statement of what the desired goals of the manual are, field studies to test material, and evaluation of its effectiveness.

(5) We will be glad to keep you informed about our progress in the field of mental health services.

(6) The Medicaid program in New York City and the participation of HIP are still comparatively new events. No factual information of a comparative nature is available as yet. However, from past experience, we would expect on the basis of the Welfare Demonstration Project that, over time, our Medicaid enrollees would develop a utilization pattern in which more preventive health services were obtained than elsewhere, a higher proportion of the enrollees saw a physician during the year, very low utilizers of medical service increased their utilization, and greater use was made of highly qualified physicians. We would expect these changes to occur without a burdensome increase in overall physician utilization and at a per unit cost less than in the general community.

Prepaid group practice programs could be established elsewhere, and soon. There is abundant evidence that with the Federal assistance I mentioned in testimony, such programs would grow at an unprecedented rate. Medicaid would be affected, since an underlying principle of prepaid group practice plans is to serve the community, and Medicaid recipients are part of the community.

(7) A National Conference on Group Practice called by the Secretary of Health, Education, and Welfare was held at the University of Chicago on October 20 and 21, 1967. The objective of the conference was to find ways by which the group practice of medicine and prepaid group practice could be encouraged through action at the Federal level. A very broad range of occupations and interests was represented at the meeting. There were top leaders from the field of nonprofit prepayment (Blue Cross, Blue Shield, and the group practice prepay. ment plans) ; there were top executives from insurance companies, leaders of organized medicine, educators, economists, businessmen, and labor leaders. It is anticipated that a number of very specific recommendations will be made by this conference which will be helpful in developing a more modern medical care system under which the rapid escalation of costs can be contained or arrested. Here are some of the recommendations offered at the conference:

(a) Medical schools should be encouraged to develop group practice treatment centers so that the new physicians will get some experience in this type of organization.

(b) Because there is trouble in licensing or chartering group practice and group practice prepayment agencies, there should be Federal legislation for the licensing or chartering of such agencies.

(c) Hill-Burton grants should be denied to hospitals which discriminate against physicians who are in group practice or group practice prepayment plans.

(d) Insurance companies should seek to help develop and invest in group practice plans and enter into joint marketing arrangements for such coverage.

(e) There should be choice of fee-for-service open panel plans and group practice plans under existing health insurance coverages.

(f) Title XVIII and Title XIX money for Medicare and Medicaid should be denied to States which refuse to make suitable arrangements with group practice plans for coverage under these Federal programs.

(g) There should be Federal subsidies for training programs to be de veloped in suitable medical schools and schools of public health and in existing prepayment group practice programs.

(h) Federal monies should be made available for expanding existing group practice and group practice prepayment programs and for developing new programs of this kind. These funds should be in the form of grants, loans, and loan guarantees, especially for the creation of facilities and personnel

and financing for initial planning and starting-up expenses in such programs. Senator SMATHERS. I thank both of you gentlemen for the excellent suggestions to look into this in more detail.

Dr. Gitman, you may proceed.



Dr. GITMAN. In my written testimony which is in the hands of the committee the following are some of the areas of concern which were discussed.

1. Requirements for provision of high-quality hea care services for the elderly in a poverty, urban area, using the community of the Brookdale Hospital Center as a model.

I pointed out that high-quality health care resulted from the application of current knowledge and developing research findings to the safeguarding of the health of the population with minimal timelag. This implies a transmission mechanism originating in the store of existing knowledge and research activity, and ending in the man in the street. This mechanism consists of two segments delivery of health knowledge to the physician and other health professionals, and delivery of health services to the population. Both segments require reorganization and upgrading. We have “disadvantaged” physicians as well as patients.

2. The development, scope, and objectives of the Brookdale multiphasic health screening program. Among the effects we anticipate this program to have on the organization of health services in our area are the following:

(a) The effectiveness and efficiency of the physician should be significantly increased by the data base provided by the computer processed patient summary. In practice, this should be equivalent to increasing the supply of available physicians.

(6) Since referral and followup of patients who have been screened is an integral part of a multiphasic health screening program, delivery of health services will, out of necessity, be strengthened.

(c) The information supplied in the multiphasic health screening patient summary should upgrade the quality of medical care in the community.

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