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To incorporate into all federal medical care programs a legislative framework for establishing

standards of quality, I would suggest following the pattern of the Medicare (Part A) pattern. You will recall that the Medicare Law (Title XVIII) specifies in considerable detail the standards which must be met by hospitals and other providers of care, and extends a framework for state participation in determining compliance with the standards as well as an opportunity for states to establish higher standards than those in the nation as a whole. I believe that every federal program for health care should establish the same kind of legislative framework as that now embodied in Medicare (Title XVIII). This would affect primarily the Medicaid program which provides services to the elderly as well as the other services, and all other major federal health programs.

In exploring health data systems for federally supported health programs I would suggest attention to the following questions: 1) Will the data meet the needs of program administration, and the Congress for information on the costs and utilization of the various types of health services provided to the population groups that are to be served? 2) Does the data provide information concerning the quality of care provided ? 3) Is the data system linked to administrative action? For example, if the data disclose providers of care who are deviating so extremely from the norm that investigation is needed, is there a system for investigation of these deviant providers under appropriate professional direction, and is necessary action taken, including when appropriate, recovery of money that has been paid and suspension from the program. 4) Should national minimum standards and reporting be established for the data, as in the case births and deaths, and certain diseases such as tuberculosis and cancer? 5) What would be the cost of such a system incorporated into present administrative providers, and would it contribute to cost control of the program?

I believe that your investigation would disclose answers to the above questions that would strongly support the establishment of a health data system such as I have proposed. Sincerely yours,


Professor of Health Services Administration. Senator WILLIAMS. Dr. Malcolm Todd, president of the California Medical Association.



Dr. Todd. Mr. Chairman, members of the Senate Special Committee on Aging, I am Dr. Malcolm C. Todd, president of the California Medical Association, representing 24,000 physicians in this State.

As a surgeon engaged in the private practice of medicine in Long Beach, Calif., I take care of people when they get sick, I operate on plumbers for ruptured stomach ulcers, I remove breast cancers on professors' wives, and I operate strangulated ruptures on little children.

I also remove diseased gall bladders on preachers, take out colons for cancer on machinists, and I do hysterectomies for tumors on secretaries.

For years I have operated at the county hospital and have taught at the University of California without remuneration. In other words, I receive no pay, whatsoever, for my skill and time, but there is one great satisfaction, and that is to know that I have helped restore many injured and sick indigent patients to good health.

Accompanying me today is Dr. Marvin J. Shapiro, who is a member of our association's council, or the board of trustees. Dr. Shapiro is a radiologist in private practice in Encino, Calif.

I wish to sincerely thank you and the committee for the opportunity to appear here today.

In the question sheet accompanying your letter of invitation, Mr. Chairman, several excellent questions were raised for possible discussion in my statement. I shall address myself to these inquiries.

But before I enumerate current activities of organized medicine on the subject of utilization and peer review, I would like to point out that these were ongoing activities of organized medicine prior to the passage of Federal legislation. The importance of this pioneering activity has been adapted to Federal-State funded medical care programs to the benefit of both the taxpayer and the beneficiary under these government-financed medical care programs.

The important result of these pioneering efforts has been a dramatic adoption of these activities by the county medical societies. This reaction by county medical societies is not to be minimized.

GUIDELINES FOR UTILIZATION REVIEW As the committee knows, utilization review procedure was part of the medicare law and our association has encouraged this activity as a regular function of the hospital staff. Our manual, “Guidelines for Utilization Review,” is used as a guide in California and in many other States.

The California Medical Association program of medical staff surveys in hospitals were developed, and we recognized the importance of utilization review as an educational hospital staff activity and so incorporated it as one of the six basic staff review activities. We were cognizant that utilization review is primarily a function of the medical profession and it requires determinations not only of medical necessity, but also whether the most efficient use of available facilities and health services is being made.

I feel the effectiveness of utilization review in the newly established and not-so-well-understood extended care facility needs some improvement. With others, we are experimenting with regional utilization review practices by increasing emphasis on this responsibility, and in some cases, our county societies are currently providing utilization review for extended care facilities.

We have published a booklet entitled "The Physician and the LongTerm Care Facility” to assist component medical societies in developing a structure for close liaison between the medical community and facilities providing supportive care for chronically ill patients.

Concurrent with this effort, we have attempted to define and determine guidelines for the level of care to be supplied Medi-Cal patients in extended care facilities as distinct and separate from custodial, that is, room and board care. I know these guidelines have assisted physicians in designating the type of facility required by patients.

Another example of activity in the field of utilization review is the California Hospital Association-California Medical Association "Procedure for Review of Effective Utilization of Hospital Services."

This plan was adopted by the State Office of Health Care Services, on June 12, 1968, for the title 19 Medi-Cal program.

I will be pleased to submit this full procedure as an appendix to my statement but I can briefly state our aim is to provide Medi-Cal with a system of safeguards in the utilization of hospital services and to assist hospitals to maintain and strengthen standards of care.

We recognize that as providers of health services, we have a responsibility for assuring that the public interest is being served in the delivery of hospital care. We also believe that quality is the most important component to effective hospital service. Therefore, in cooperation with the carriers for the Medi-Cal program, we have agreed that standards of quality can best be judged by professional peers, functioning expressly to review patterns of hospital practice.

The methods are: first, screening for irregularity; second, detecting irregularity; third, referring for peer review by a panel of practicing physicians and hospital administrators. We also make provisions in this plan for evaluation of these procedures on the basis of their effectiveness.

To discuss peer review is a broad assignment. It can mean the grievance or mediation committee of a county inedical society which attempts to fairly adjudicate a patient's complaint based on the considered judgment of a panel of involved physician's peers. Or it can mean a tissue committee in a hospital which reports on the attestable need for the surgical procedure performed.

It can mean an ethics committee of physicians charged with the interpretation of ethics involved in the professional conduct of a colleague. Or it might mean a claims review committee in a county society advising an insurance company, a consumer or his designated representative on the propriety of the medical procedure and the reasonableness of the charge.

Certainly a utilization committee is an example of peer review. Our medical review committees help evaluate and advise on variant medicare claims in cooperation with the carrier. Both carriers for title 18, part B, and Medi-Cal have instituted a very sophisticated system-a medical adviser system composed of about 150 practicing physicians over the State who have served on claims review committees

These doctors work in liaison with the county societies in behalf of the carrier to assure the highest quality of care at the most reasonable cost.

There is inquiry as to the results of peer review. Gentlemen, I can say with the deepest sincerity that we know we get results. I have served on various peer review committees in my own county societyCalifornia physicians give freely of their time, which adds up to thousands of hours annually, to serve on these committees.

Yes, gentlemen, I repeat-these reviews have been carried out at no cost to the government and none to our patients. It is truly a voluntary effort on the part of physicians performing these services and performing them at their own expense in behalf of making the program work.

Our county societies have recommended suspended participation in Medi-Cal for deviant doctors and they also adjust claims in a forthright manner, according to a program regulation and medical

1 See app. 1. p. 717.

appropriateness. We pledge continued effort to further strengthen all aspects of peer review.

Now, we as a profession testified and warned government social planners, back in 1962 and 1964, for example, that hospitals would be crowded, that costs would rise, and the program would be inflationary. And frankly, we have not been wrong in this prediction.

AVAILABILITY OF HEALTH SERVICES Now, a second question is asked if there is a significant number of elderly persons in California who encounter difficulty in securing health services because of unavailability or increasing costs of such services.

In all candor, I believe there are yet a number of people of all ages, young and old alike, who do not receive adequate medical care for some reasons. Accessibility is sometimes a reason, but, I must add two other reasons for this difficulty; they are ignorance and psychological barriers such as fear, mist rust, and apprehension.

I believe many of these deprived people live in our city slums and in rural areas. Our recommendations-well, let's recognize the social problems along with medical problems. Ignorance has to give way to education; favored home remedies have to give way to desires for scientific medical care--and quackery has to be eliminated.

And we have to overcome our shortage of health care professionals if we are going to be capable of giving medical care to every citizen of this country in the most ideal terms of modern scientific medicine.

What then are we doing? The medical profession is involved in several OEO neighborhood health center medical programs in addition to rural migratory health care programs. We are working with the health insurance industry and Blue Shield to improve voluntary prepaid health insurance. Our association is now compiling the “Essential Components of Adequate Health Care Coverage” as a guideline and standard for the consumer public.

We are also trying to educate the public to the advantages of preventive medicine. Los Angeles County Medical Association supported a public education program on the necessity of "Pap smears' in a portion of Los Angeles called the Watts area. We have sponsored our State's cancer antiquackery law which has saved patients' lives—by preventing futile treatments and wasteful expenditures.

Our delegation to the American Medical Association supported advocacy, in a preliminary report, of the concept of income tax credits to provide financial assistance to that segment of our population unable to afford complete and adequate health insurance coverage--regardless of the age of the needy individual. We hope and urge this concept will receive legislative consideration by Congress during the next session.

Now, we all have a responsibility in programs for the aged. First, to lower the cost of health care. Second, at the same time to maintain quality of health care. I say to you, doctors will accept their responsibility. But we feel that the patient, his relatives, and his family, must also accept theirs, and not demand a stay in the hospital longer than is necessary, and not try to remain in extended care facilities for a longer period of time than is absolutely necessary.

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And that they not ask for unnecessary medical services. I also feel that social workers have a responsibility to try to control health care costs. She should not side with the patient on every request that is submitted, but must carry out just what is provided in the terms of the law itself.

The third injury concerns the impact of medicare and Medi-Cal on the quality of health services provided for the elderly. While some feared that these programs would greatly overtax our present system of providing health care, I do not believe we are in a crisis.

Yes, our hospitals are crowded-and yes, we do need more health care professionals. But I believe the quality of care rendered today reaches a broader segment of the public. I realize this is a generalization, but I am speaking from my experience and that of many of my many colleagues over the State.

The quality of mainstream health care in California is high-yet it is most important that we work together getting all of our citizens into that mainstream of medical care.

QUESTIONS ABOUT PHYSICIANS' FEES Too much attention has been directed toward the physician's fees. Figures can be made to mean anything that they want to. But in an effort to achieve solutions to medical services for the aged, and to cut medical care costs, there are some things that I would like to mention.

It is interesting to note that the Medi-Cal budgeted in 1967–68, $159,500,000 for physicians' services. But they actually paid out only $122,100,000.

I would also like to state that over the overall health care cost dollar in the Medi-Cal program, the physician's fees amount to just 19 to 20 percent of the entire health care cost dollar. But it is that extra day in the acute hospital that we must not allow to be abused, because this is where the cost of this program centers.

Doctors need legal and administrative regulations to enable them to apply sound medical judgment consonant with the economical implementation of the law in regard to extended care facilities. A difference between needed nursing home care and custodial or remedial care must be acknowledged.

Also an attempt should be made to investigate unnecessary and unjustifiable use of ambulances and ancillary services. There must be developed a better planning of hospital beds and facilities and develop new health services; that is, methods of preventive and rehabilitative medicine.

I think, too, that we should see that our voluntary health insurance plans develop provisions for payment of voluntary out-patient services, diagnostic services, and minor surgical procedures themselves.

The final inquiry stems from the possibility of congressional cutbacks in the title 19 program. As you know, the medical profession supports the principle of government providing financial assistance to persons not able to provide for their own health care. Title 19, the medicaid law, is based on this principle.

I therefore strongly oppose proposed cutbacks in the present program as a deterrent to the provision of health care for this needy class of people. I think this response speaks for itself.

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