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May I again thank you for the privilege of allowing me to present these remarks, and at this time, with your permission, I would like to call upon Dr. Shapiro, if he has any comment to make particularly in regard to migratory labor.

Senator RANDOLPH. Do you want questions, Mr. Chairman, that would refer to the testimony of Dr. Todd?

Senator WILLIAMS. I think we would. I think we ought to, if you have questions, I think we ought to address them to Dr. Todd before his associate speaks.

Senator RANDOLPH. Thank you very much, Mr. Chairman. You speak of the deviant doctor in California or elsewhere.

Now, I am wondering if you, for the record, would say that this is a very small percentage of the medical profession in California, or say, otherwise, and say what steps are being taken that you have indicated to keep this a small segment.

Dr. TODD. Thank you. I am glad to have this opportunity.

In the earlier presentation that was made, a question was asked as to how many doctors participate in our California Medi-Cal program, to begin with. As I stated earlier, we have some 24,000 members of the California Medical Association, and I am happy to say that with the program that is now in operation we have over 18,000 of those doctors participating in the Medi-Cal program-much in contrast to previous testimony that was given.

I have the documented figures in front of me. I said 18,250 out of 24,000. Now we recognize that there are some of these individuals who are deviant practitioners. We, as a medical profession association, feel that we have an obligation to protect the public and public funds. And deviant physicians are those who we simply will not tolerate.

Through our peer review committee activities we are able to pick up a number of these men whose practices are far from the usual. These are turned over to the bureau

Senator WILLIAMS. What do you call that bureau ?

Dr. TODD. The office of health care services.
Senator WILLIAMS. No, no. Who reviews it?

Dr. TODD. Who reviews it? The deviant doctors?
Senator WILLIAMS. The peer-what?

Dr. TODD. These are made-oh, the peer review?

PROTECTION AGAINST DEVIANT PHYSICIANS

These are made first by California Blue Shield-that is, the carrier. These in turn then are turned over to the peer review committees of the county medical societies. If they find that claims are unjustifiedthat there are excessive practices-that there is overutilization of services themselves, the physician is called in and talked to in this regard by his own peers.

After this is done, a warning is given. If he does not heed the warning and does not follow the suggestions, he then is notified that he has― his name has been presented before the Office of Health Care Services of the State administration.

And they in turn then have the obligation of submitting his to the attorney general.

Senator RANDOLPH. Doctor, I wish to pursue what the chairman has said. You say this is the procedure, and I commend you.

Now, how many persons, to your knowledge, have been called before those peers and had discussions of their malpractice? This is important to the committee.

Dr. TODD. Yes, it is. It is a function that varies entirely with each one of the county medical societies. In Los Angeles County itself, our largest county, and of course the largest county medical association in the country, has been very active in this activity, and a number of physicians a proportionate number of physicians have been called in and had this discussion with them.

I can tell you, specifically, that of the physicians alone, some nine or 10 physicians have been reported to the office of health care services, and in turn, turned over for review by the attorney general's office.

Senator RANDOLPH. Thank you, Dr. Todd. I think that the record should indicate that not only would the medical profession, as you have indicated, be very desirous of checking these practices, which are not consonant with good medical ethics, but I think here also I would like to speak from personal knowledge.

I think that the voluntary health insurance programs have helped to ferret out some of these people. I think the Blue Shield needs a word here today for their efforts; would you agree?

Dr. TODD. I certainly would. I think they have had a tremendous task. I wonder if you gentlemen can envision the receipt of 100,000 claims per day? This is a tremendous task that they are faced with. The computers-they have six computers during this operation here for this alone--this is a tremendous job, and there obviously have been some errors in the State.

But I think we are making progress in this activity, because I want to sincerely say to you that the majority of doctors practicing medicine are interested in making this program work.

Senator RANDOLPH. May I pursue one or two other questions, Mr. Chairman?

You have spoken, doctor, of ignorance and psychological reasons why perhaps programs have not been as effective as they might have

been.

Now, where does education come in, and how can education be used, and perhaps in what way can the Congress, without laying down a straitjacketed guideline, are there criteria the Congress itself, through agency administration, can bring into being to aid this effort?

Dr. TODD. Yes. Dr. Shapiro would like to answer that, if you would. He is the chairman of our Community Health Commission of the State Medical Association.

STATEMENT OF MARVIN J. SHAPIRO, COUNCIL MEMBER,

CALIFORNIA MEDICAL ASSOCIATION

Dr. SHAPIRO. Senator, I think that reference was made earlier to this cannery workers multiphasic screening program. I think what we have learned from that illustrates this particular problem very well.

The cannery workers program last year surveyed several thousand people. When they got quantitative results, they found that 48 percent of these people had no doctor to whom the results could be sent, which

of course raises another problem in the area of multiphasic screening— being different from that of the Kaiser program, where they already have a doctor.

California Medical Association was brought into it by the trust in an attempt to see to it that the patients on whom abnormal findings were detected were referred to doctors who would follow up and see that they were properly taken care of.

We worked very actively with the trust on this.

One of the big problems, however, has been that no matter how vigorously the recommendations are made to the people, on whom abnormal findings are detected, we can't get them to go to the doctor. And it doesn't do much good to get the abnormal findings if we can't get the followup.

I think this is the sort of thing that the doctor is alluding to, and certainly that we must educate the people of the necessity of followup. It has to be a constructive program.

Senator RANDOLPH. Thank you, Mr. Chairman. That's all the questions that I have.

Senator WILLIAMS. Thank you very much.

Did you have any other

Dr. SHAPIRO. Nothing that need take the time of the committee, I am

sure.

Senator RANDOLPH. Your testimony was very informative and helpful, I am sure, to our committee.

Dr. TODD. Thank you. It is a pleasure to be here.

Senator WILLIAMS. I was very encouraged by your statement, Dr. Todd. I have had a feeling that the medical association was very slow in coming to these positions-the particular programs of medicare and Medi-Cal, but evidently the acceptance is there.

Dr. TODD. We are trying to work with it, and you will find that doctors are participating with the program.

Senator WILLIAMS. Thank you. Very good, thank you very much.

Is Mr. Carbray here? The chairman of the senior citizens activity committee of this county-and I think you know something about the AFL-CIO; don't you?

Mr. CARBRAY. I have a feeling that I do, Mr. Chairman.

Senator WILLIAMS. You have Mr. Davidson and Mr. Hartley with you?

Mr. CARBRAY. That is correct. Rob and Louie; would you come up here?

STATEMENT OF JAMES CARBRAY, CHAIRMAN, SENIOR CITIZENS ACTIVITIES COMMITTEE

Mr. CARBRAY. If I may, Mr. Chairman, may I express the appreciation of the Los Angeles County Federation of Labor and also the appreciation of the National Council of Senior Citizens, on my own behalf, for this invitation.

However, as you will note from the agenda, I am speaking today for the Federation of Labor of Los Angeles County. Immediately following my rather brief testimony, I would respectfully suggest that you hear a very brief statement from Mr. Davidson and Mr. Hartley.

And now, taking the lead from Senator Randolph to say something objective once in a while about the things that come to our attention,

24-798-69-pt. 3- 4

I would like to extend our thanks to you, Senator Williams, for the presentation of S. 4115, recently in the U.S. Senate, which calls for the establishment of an Institute for Retirement Income.

I think that this is long overdue, considering the fact that we live in a rather youth-oriented society, and that poverty, where it lies, hurts the seniors to a greater degree, because of his inability to work, than it does the junior. And this I am most appreciative for.

Now, I want to preface this with a comment regarding the general statement of Dr. Todd. I don't want to construe that what I am about to say in the form of testimony is derogatory or a reflection on all the people within the medical profession or all the people who are responsible for administering hospitals. I think Dr. Todd touched on the fact that there are some scoundrels probably in both areas.

But those of us in the federation of labor, and those of us in the senior citizens organizations are aware that by and large a major portion of our doctors and our hospitals are dedicated and sincere.

DELUGE OF COMPLAINTS ABOUT COSTS

Since the advent of medicare and Medi-Cal, union officials and officers of senior citizens organizations have been deluged by complaints of increased hospital costs and doctors' fees. These increases were reflected in a social security bulletin, as I recall, dated July 1, 1967, which is after 1 year of medicare experience, and as I recall, this report showed an increase of approximately 22 percent in daily hospital charges and just over 5 percent in doctors' fees on a national average basis.

Several studies by responsible researchers have been conducted since 1966, one such study having been made by University of California at Los Angeles, which involved some 75 or more-it seems to me the correct figure is 77-hospitals in the Los Angeles area.

The study showed an average daily hospital charge of $74 during the first quarter of 1967, according to hospital officials; but the hospitals who replied to the study questionnaires showed an average daily charge of in excess of $86.50 for the first 6 months of 1967.

Let's compare this with the Blue Cross daily average of $75 for the last half of 1966. You show a daily increase of $11.50.

During the time of this study, which was the study quoted, during 1966-67, discussions were held with health plan administrators, government officials and insurance company representatives specifically regarding doctors' fees which indicated some increases in fees of 50 percent, and considerable gouging in routine office visit fees for medicare patients.

The UCLA study discloses that information provided by representatives of Blue Cross, Occidental Life, and California Physicians Service to the Benefit Plan Administrators formed the basis for the following statements made to the UCLA representative.

(a) Thousands of medicare and Medi-Cal claims submitted are being held up and investigated because of suspected excessive charges on overutilization. The same applies in some respect to prescription drugs.

(b) A few individual doctors may be receiving, from the services alone, in excess of $100,000 a year.

(c) On the basis of claims submitted, one doctor apparently was seeing over 200 patients a day-an average of one every 2 minutes.

(d) Some claims are being paid on the basis of $9 to $12 a visit on the California Medical Association relative value study. Such claims were unusual prior to medicare and $5.50 to $6.50 per unit generally considered the reasonable customary charge in Los Angeles County.

Claims reviewed-this is all during these studies-disclosed the following:

(1) One doctor charged each of his medicare repeat patients after July 1, 1966, for his first visit on the basis of a complete history and physical even though it was just another routine visit. This provides for an allowance of 12 to 21/2 times what he should have been allowed. This doctor was therefore paid from $20 to $35 for a routine visit. One doctor raised his routine visit charge, treating the same patient for the same condition from $5 to $6 per unit to $8 or $10 per unit. Routine office visit charges for medicare patients of $15 to $20 were paid to one doctor.

One doctor, using an automated laboratory for blood work, was paid $140 for tests which probably were billed to him at less than $5.

COST OF PRESCRIPTION DRUGS

Directly related to the health care costs of the elderly is the cost of drugs, and in particular prescription drugs. The concern of the elderly is reflected in the complaints received both by labor organizations and senior citizens' organizations and it is quite significant that where drugs can be purchased under the generic name the savings are substantial, which accounts for the demands of responsible senior citizens' organizations that prescription drugs be covered by medicare, thereby allowing the Federal Government to purchase drugs under their generic name through the means of competitive bids. Senator WILLIAMS. Did you hear Dr. Todd's testimony? Mr. CARBRAY. Yes, I did.

Senator WILLIAMS. It seems to me that he said there was a surveillance system in the medical profession

Mr. CARBRAY. That's right.

Senator WILLIAMS (continuing). That brings these scalpers or gougers to heel.

Mr. CARBRAY. That is right, Senator, and that is why I prefaced my testimony with the statement that I did, because I do have respect for Dr. Todd, not only for his qualifications, but for his reputation as a real humanitarian in the field of medicine."

Senator WILLIAMS. Thank you.

Mr. CARBRAY. This sampling reveals the need for a comprehensive study in detail of both hospital costs and charges, should some hospitals refuse to cooperate, appropriate steps should be taken to assure disclosure of all records, even if by legislation if necessary, for we must bear in mind that many hospitals are operating under the banner of nonprofit ventures.

Senator WILLIAMS. Well, we have a double nexus with the Federal Government and hospitals. Not many of them have benefited under

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