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diagnostic services, is an important step toward stimulating fiscal responsibility among doctors and hospital managers alike while providing a framework for providing care under socially acceptable circumstances. The requirement for utilization review is also intended to discourage inappropriate utilization of costly resources without interfering with the physician's prerogative to provide the kind and quantity of care which in his best professional judgment is required by the patient.

These positive aspects should be transferred in toto into any government sponsored health insurance plan which may evolve in the future. Weaknesses

Deductibles and co-insurance features in health insurance plans are unacceptable and regressive because they require the insured to pay twice: When he pays his premium and when he receives service. Those who support these provisions argue that they discourage inappropriate utilization and therefore control costs. I submit that this argument is specious in that these features are more likely to discourage appropriate utilization of services by persons who need care but cannot pay the deductibles. These persons are likely to require more care at a greater cost in the long run and thereby become a heavier financial burden to the community.

The prohibition of routine physical examinations is particularly shortsighted in a program for this age group since this is the population at greatest risk from serious disabling diseases which are often susceptible to early detection and treatment and which are often "silent" in their early stages. To address ourselves to this population only after symptoms appear is contrary to good public health and preventive practice. A similar statement can be made about the absence of podiatry since some of the most disabling conditions in an aging population are podiatric in nature and, though sometimes not related to systemic disease, often reduce or prevent ambulation and therefore create dependency. Current proposals for the inclusion of podiatry are inadequate since they proscribe "routine" foot care. "Routine" foot care in patients with diabetes or peripheral vascular disease can be crucial to the health and well-being of the patient.

The exclusion of self-administered drugs is another serious deficiency in the Medicare program. Many persons over 65 suffer from one or more chronic diseases which require one or more items of medication for their adequate control. Such drug expenditures can be a serious financial burden to persons living on small pensions and can make the difference between independence and the need for public assistance.

Dental care is perhaps a less acute problem among the aging even though I am sure there are many who could benefit from such care but, given the high cost of dentistry, younger populations to serve, and our finite resources, this is perhaps a pardonable exclusion.

To our dismay we find that Medicare has, in some instances, increased the cost of care to the elderly. In New York City, patients who previously paid $1.00 or $2.00 for a clinic visit, are now required to pay 20% of a $20 per visit clinic fee or $4.00 and 20% of the doctor's fee of $8.00 when, previously, the same doctor provided his services in the clinic without compensation. A $1.00 or $2.00 preMedicare visit is therefore costing the patient $5.60.

Physicians in private practice have taken the position that because Medicare is available they can now charge their full fee to the elderly patient since he is only required to pay 20% of the fee. The fact is, however, that in some cases 20% of the doctor's prevailing fee is more than he charged an over-65 patient of limited resources before Medicare. Furthermore, Medicare provides the patient no protection against the physician who refuses to accept an assignment and who can therefore charge whatever he pleases, although the patients' reimbursement from government will be based on what the fiscal intermediary considers to be the doctor's prevailing fee.

The law, furthermore, starts out by promising not to interfere with present patterns of practice but, then, immediately proceeds to exclude hospital-employed physicians' services from Part A thereby interfering with what has been a traditional relationship between hospitals and their radiologists, pathologists and other specialists.

Part B is a further problem because it is inimical to the proper organizations of resources. There is no incentive to organization and economy in a plan which sanctifies the solo practice fee-for-service approach to the delivery of health There are, of course, those who defend some of these weaknesses by pointing out that Public Law 89-97 provides that Title XIX may be used as a supplement to Medicare to pay the deductibles and coinsurance and to provide the uncovered services, but this is not the best solution since Title XIX has its own weaknesses.


TITLE XIX Strengths:

This is not to say that there are no positives in Title XIX, but the negatives may well outweigh them. Title XIX, because its implementation is dependent upon State enactments within very broad Federal guidelines, is very permissive. This is at once a weakness and a strength because it permits liberal, progressive States to enact and implement programs of broad scope both in terms of services provided and population served, but at the same time permits less progressive States to provide less. As a result, the geographic mobility of the needy population is diminished by the need to live in States which provide liberal programs, and their constitutionally granted right to freedom of movement is therefore meaningfully curtailed. Residents of the poorest States may also suffer a serious disadvantage since even the 17% matching which these States must provide may be beyond their means although the will to participate exists. But this very permissiveness has some advantages. Health services result from a combination of three determinants :

1. method of financing;
2. organization of services; and

3. patterns of practice. These three determine the health services system of a community. There has been in the past, an assumption that if the method of financing changes, the other two variables will change and the system will, therefore, also change. This assumption has not been borne out by the British experience where, although the method of financing was changed in 1948, there has been little or no change in either the organization of services or the pattern of practice.

The permissiveness of the Federal Title XIX legislation will permit us, if State enactments are properly drawn, to experiment with new organizational patterns. For example group practice, while not really new, can be expanded, changed and strengthened. New kinds of hospital-based programs can be attempted and tested, and other organizational patterns not yet conceived can be designed and proven.

Patterns of practice can be changed by local regulation where indicated so that services may be provided by the most appropriate persons and in the most appropriate settings. For example, in New York City, local regulation has already determined who may perform major surgery, who may perform certain x-ray procedures, which laboratory procedures a physician may perform in his office and which hospitals may be reimbursed for certain kinds of services.

These powers, properly exercised, can contribute to the improvement of the quality of health services and to the appropriate allocation and utilization of human and financial resources.

Perhaps the most evident advantage of Title XIX is its potential for removing the financial barriers to health care for a portion of the population, but even this potential is limited by the unwillingness of some States and, now the Congress, to permit the establishment of realistic standards of financial eligibility. Weaknesses

Having already pointed out the ways in which the permissiveness of this portion of Public Law 89-97 can be a disadvantage, I can now deal with the most important weakness in the law. Title XIX is a Public Welfare law, and all of our welfare laws have their roots in the philosophy of the English Poor Law which is that only the worthy poor should be helped. All eligibility, therefore, is based on proven need. This approach is particularly onerous to medically needy persons who are presumably independent where sustenance is concerned. Such persons are militantly proud of their independence and resist any regulations which threaten it. This is especially true of persons over 65 who have been independent all their lives and are especially proud of their continuing independence during their declining years and therefore refuse, as stated by Dr. Alonzo Yerby, to "barter their dignity for their health care".

This refusal to submit to a “needs test" and accept the "Welfare" label has led to the rejection of Title XIX benefits by thousands of presumably eligible New Yorkers.

But there is an even more serious failing in the Title XIX program which penalizes the potential over-65 beneficiary. Because it is a "welfare” law, all Stateenabling legislation will undoubtedly carry regulations with regard to the treatment of liquid assets. Those who have moderate savings will no doubt be required to exhaust at least a portion of them in order to "achieve" eligibility—this at a time in life when it will not be possible for them to replenish these savings. Since many of these persons use their savings to supplement meager pensions and/or Social Security benefits, these regulations merely serve to hasten their pauperization and to make them recipients of Old Age Assistance. Title XIX therefore is not necessarily an acceptable answer to the deductibles, coinsurance and exclusions of Title XVIII.

Having explored the strengths and weaknesses of both programs, what can we recommend for the future? To answer that question we must first determine what is to be the national philosophy regarding health care in the future. Is optimum health care to be a right or is to be a privilege? Much of what has been heard from the Executive branch of government in Washington in recent months suggests a commitment to the philosophy of health care as a right, but nothing in the present law nor in the recent activities of the Legislative branch suggests such commitment. Until this dichotomy in National philosophy is resolved, we must, therefore, assume that for some time to come health care will be financed through a variety of approaches.

This suggests that the next order of business is to improve both Titles XVIII and XIX. In Title XVII the deductibles and coinsurance features must be removed because I believe experience will show that they are not the money-savers they are purported to be. The scope of services must be broadened to provide podiatry care, drugs, preventive care, and at least some acute dental care if not the total scope of reparative and prosthetic care. Apparently the Congress intends to provide Title XIX benefits only to the very lowest financial stratum of the population on the assumption that those above that level are capable of meeting the cost of their own health care. This is, of course, a fallacious assumption and two steps are therefore necessary :

1. The Federal Title XIX law must be strengthened by mandating a broad scope of benefits for those who are eligible, by placing a floor on eligibility standards, and by providing whatever financial assistance is required by poorer States to underwrite these changes in the law.

2. Title XVIII must be broadened to include all those who are not eligible for Title XIX, and the supplementary medical insurance must be mandatory not voluntary.

Those eligible for Title XIX benefits would contribute to the Social Security system only to the extent necessary to provide them with pension and disability insurance benefits. All others, including the self-employed, would make full contributions.

Concomitant with these steps must be an effort to reorganize the delivery of health services so that maximum productivity be achieved. Clearly present patterns of practice and present organization of services are wasteful of both human and financial resources and should not be supported even if the resources were available. Until steps aimed at these goals are taken, no method of financing, no matter how sophisticated, will support the cost of optimal health care for the Nation.

This is the challenge of the next decade and if we, as health professionals and as medical administrators, are not prepared to accept it, and, if we are not prepared to fight the requisite political battles and accept the consequences, now is the time to "get out of the kitchen."


*See testimony by Miss Helen Harris, p. 444.





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