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tion; for civic leaders, for those in charge of service clubs or women's organizations; and, of greatest importance, a training program for the seniors themselves.

FUNDED BY OLDER AMERICANS ACT

This example is one of the 44 Older Americans Act programs administered and funded by the California Commission on Aging.

The Older Americans Act programs in California are providing protective services, information and referral services; there are multipurpose centers, Foster Grandparents type programs, reachout programs, shutin programs, counseling services, visitation programs, education classes, casework and group work programs, volunteer services, parttime employment services, training of professional and volunteers and the Older Americans Act in California helps provide complete coordination of services.

With these programs and through the efforts of the 58 counties and the 401 cities in our State, we believe that we can successfully meet the needs for delivery of health services to the people of our State through good sound planning and the development of new and creative ideas.

Full cooperation must be given by the family, community, and society in helping the senior Californian realize an adequate health program. It is our desire and the Governor's desire-in California—to provide every senior Californian a retirement that is productive, creative, and meaningful.

Some of the health service needs are being met through the funding of the Older Americans Act, and as additional funds from this act and others are provided, more services can be made available. We are aware of many of the needs and will continue to work, as a powerful force composed of government, business, industry, and concerned individual Californians, toward meeting the health needs of all our citizens.

We shall be here throughout the day, gentlemen. We shall be very glad—the three of us—to answer any questions that you might have concerning our program here in California.

Senator WILLIAMs. Very good. Your statement indicates a most enlightened program here in California, which is what I would also describe as a retirement State.

So your percentage of people who are in retirement here probably equals Florida, Arizona, and places where

Mrs. RUSSELL. Our percentage is a rather normal percentage, because California attracts the young as well as the old. It is under the national average-percentagewise.

Mr. WILLIAMS. You are moving across the board to meet the needs of the older people.

You are moving across the board to meet the needs of the older people.

Mrs. Russell. We are certainly trying to.

Senator WILLIAMS. How do you I hate to talk money--but as a budgetary matter, how do you budget the programs, and how much do you put into the programs you discuss ?

Mrs. Russell. Of course the amount varies as to the kind of program and the size of the community. The regional educational programs

Thank you.

that we are establishing--the center programs—have been funded by the commission at around between $32,000 and $35,000.

Of course the community adds a great deal to this, too, in matching funds. They are required in the first year to only match up to 25 percent. But I think in the two places that we have programs established at the moment, they are matching to a much greater extent than that.

Senator WILLIAMS. The two places are San Jose and-
Mrs. RUSSELL. San Jose and right here in Los Angeles.

Senator WILLIAMS. Yes. And you have many more communities to reach.

Mrs. RUSSELL. Yes. These are regional programs, and we intend to reach into five areas of California, and hope that these centers, on an educational basis, will serve the entire region.

Senator WILLIAMS. Is there any great resistance from the taxpayers?

Mrs. RUSSELL. There seems to be a readiness, certainly, to provide programs in California for older persons. We do have 44 programs funded under the Older Americans Act. And a good many of these are entering their third year of funding and hopefully, some of them, will receive funding by the local community or by private agencies, in the fourth year.

We had perhaps hoped that some of them would have a fourth year of funding allowed.

Senator WILLIAMS. I presume, to make the conclusion, that you unequivocally approve of continuing the Older Americans Act, and you speak for the Governor of the State of California ?

Mrs. RUSSELL. Yes. Thank you.
Senator WILLIAMS. Yes. Very good.
Senator RANDOLPH. Mrs. Russell
Mrs. RUSSELL. Oh, I am sorry.
Senator RANDOLPH. That's all right. I shall not keep you very long,

I wanted you to tell us what percentage, if you have it as a fact, of the persons over 65 in California who reside with a son or daughter, rather than live in a house or in an apartment which is maintained by that older person.

Mrs. RUSSELL. I don't have that figure, Senator, I think probably along the lines of the national figures—which are rather high in this category.

A good many of our older people continue to live with their children, particularly the very elderly—the people in the over-85 group.

A great number of them live with a son or a daughter.

Senator RANDOLPH. Now the areas in California, as in other parts of the country, where the older people have been grouped together: How are they working out in California ?

Just to use Leisure World as an example

REACTION TO RETIREMENT COMMUNITIES

Mrs. RUSSELL. Well, it is very interesting to discuss that, and I think that perhaps for the most part they haven't been established long enough to really know their impact on the community.

Reports from individuals living in the communities are very favorable. They like it. And very few of them have, really, moved away from them. On the whole, they are a rather young group at the moment, speaking about the older people in the community. They move there in their younger years of their retirement—so that, in years to come, it will be an older group and perhaps will change in complexion to some extent.

Senator RANDOLPH. Thank you, Mrs. Russell.

Senator WILLIAMS. We are grateful to you ladies for your very helpful testimony on questions of vital interest to the whole Nation, and of legislative concern to ourselves.

We will pause for a moment. I understand the speaker of the Assembly of the State of California, Jesse Unruh, is beleaguered by television interviewers with political questions outside the door.

Senator RANDOLPH. Mrs. Russell, how long have you been in the work in which you are engaged?

Mrs. RUSSELL. Thirty-seven years.

Senator RANDOLPH. You know, I sensed this as you spoke. You were very well grounded in the subject matter. I didn't want to pursue it with further questions—I can tell.

Senator WILLIAMS. I did overlook introducing John Guy Miller, who is one of the members on our staff for this discussion for the Committee on Aging, and I forgot to ask you if you wanted to ask any questions, John, but we will catch up with that later.

We are honored, indeed, to have a television personality-all those cameras were out there for you, weren't they, Mr. Speaker?

Mr. UNRUH. Well, they are really out there for the Governor--what I had to say about him.

Senator Williams. The Honorable Jesse M. Unruh, speaker of the Assembly of the State of California.

We want to express our gratitude to you. You came here today to help our discussions on an important matter dealing with older people.

STATEMENT OF JESSE M. UNRUH, SPEAKER OF THE ASSEMBLY OF

THE STATE OF CALIFORNIA

Mr. UNRUH. Mr. Chairman, members of the committee, let me introduce Mike Manley, who is my legislative assistant in Sacramento and is here with me today in case you have any detailed questions beyond what I might, with my somewhat cursory knowledge of the detail in this field, be able to answer.

Let me apologize, first of all, for my having absorbed what I am afraid is far too much attention that should be directed on the activities of this committee. Unfortunately, I had little control over what the Governor said yesterday about the legislature, and that is what attracted the television attention.

The attention should be focused on this hearing, because what you are doing here today is far more important than anything the Governor and I might have to say about each other.

I do express my thanks to you and your staff for asking me here to testify before you on something which I think is of central, present public concern, which is provision of health care to our senior citizens.

As I said, I am not an expert in depth in this field, but I am very concerned over it. It seems to me there are two fairly obvious comments about the problems of costs and delivery of health care services to older Americans. The first is that using health care in its strictest interpretation, the problems of providing health care services for the elderly are much the same as for the rest of the population, the major difference being that the elderly require more services. In the broader use of the term health, there are fairly significant differences in the life styles of the elderly which must be taken into consideration in developing a program of comprehensive health care for them.

HEALTH Cost ESCALATION A SYMPTOM

My second comment is that the recent rapid increase in health-care costs is merely a symptom of much deeper problems of health care. It is for this reason that the actions of both our Governor here and to some extent the Congress have been irresponsible. Because those actions have been aimed at control of the symptoms by reducing expenditures at the governmental level they are trying to protect. These actions have been in the form of either service cuts as here in California or recipient cuts by the Congress. In neither case has there or will there be any meaningful effect upon the total costs of health care; there will merely be a shift of costs to some other governmental levelin California, to the counties.

All of this activity in an attempt to cut costs has tended to belie the official position of HEW that medicare and medicaid have not been a cause of recent spiraling increases in the cost of health care. Two examples from the Medi-Cal program in California should suffice to illustrate what a basically open-ended program will produce.

Prior to Medi-Cal, the public assistance medical care, PAMC, paid for physician services on the basis of a fee schedule using a conversion factor of $4. Two years later, allowing billing on the basis of usual and customary charges, the average conversion factor is $6, an increase of 50 percent. If we had remained on the old fee schedule, our costs would have been $10 million per year less and a 25-percent increase to a conversion factor of $5 would have cost us $20 million a year less than the present system.

The second example involves county hospitals. Part of the financing for Medi-Cal involved a guarantee by the State to county governments that if they chose an optional method of contributing to Medi-Cal, they would not have to spend any more on their county hospitals than they did in 1964–65, except as adjusted for population increases.

Most large counties chose the option method and this year it will cost the State about $50 million more even though there has been no appreciable increase in the number of persons served in county hospitals, and even a decrease in some cases.

This committee has asked for a summary of the conflicting arguments made over the Medi-Cal program late in 1967 and early this year. That comprises, I think, one of the most astonishing episodes of governmental incompetence and medical irresponsibility. It illustrates two very important points. The first is the extent to which the State administration can and did manipulate dollar figures in an attempt to undermine a medical care program for the people of California. The second is the ability of an independent and well-staffed legislative branch to thwart such an attempt by obtaining the facts before acting and then acting on the facts instead of on propaganda.

The story is fairly complex. It involves a great number of varying, and I quote "official," estimates of the program's cost as well as various legal opinions of provisions of the basic law which affected those estimates. It also involves the fact, which is hardly a secret to anyone, that our Governor is out of sympathy with programs like Medi-Cal which attempt to meet the health care needs of the needy citizens of California. Thus, when the Governor was presented with estimates which indicated originally, although those estimates were very sketchy and based on a very short experience span, he jumped at the chance to ask for a major cutback

Senator RANDOLPH. In Medi-Cal?
Mr. UNRUH. In Medi-Cal.

Senator WILLIAMS. Well, now, could we pause? I won't interrupt you again.

Mrs. Russell said that your budget was—what was it?

Mrs. RUSSELL. I am speaking of the older Americans budget at this point. The older Americans emphasis is different.

Mr. Unruh. Well, this is the
Senator WILLIAMS. Say that again?
Mrs. Russell. I am speaking of the older Americans program, .
Senator WILLIAMS. I asked about the budget on Medi-Cal.
Mrs. RUSSELL. I am sorry, I misunderstood you.

Senator WILLIAMS. But it is your position, Mr. Speaker, that it is inadequately budgeted, and without an adequate budget, you certainly aren't going to get the appropriation; is that it?

BACKGROUND OF MEDI-CAL CONTROVERSY

Mr. UNRUH. No. What I am trying to relate now, Senator, is the entire background of the raging controversy over the whole Medi-Cal program in California, which always involves medicare because, in general, in the public mind the programs are relatively indistinguishable.

So when there is an attack launched upon the Medi-Cal provisions, title 19 provisions of this program, it invariably slops over and causes the same kind of resentment that generally takes place in these programs against the medicare portion of the program.

And we had, as you may remember, last year, about a year ago now, a special session of the legislature which was called by the Governor. We were already there on another matter, but the Governor added the Medi-Cal question to that special call.

When he got some preliminary figures which indicated there might be a deficit in the Medi-Cal program, he called a special session. He first of all tried to shift that program, as the money had been appropriated by the legislature. After a court case which indicated he could not make those cuts unilaterally, he then called us into special session to give him the right to make those cuts, so that he could meet what he said was, at that point, an original $210 million deficit in the entire program.

Now, the $210 million deficit—we got varying estimates along the way reducing that, and as a consequence, we eventually after we got all the facts together, we put a bipartisan, two-house committee of the legislature into that, and hired actuaries to check the estimates.

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