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that are specifically organized and designed to break down utilization barriers, to increase the level of health awareness, to provide for early detection of disease, and to promote more meaningful doctor-patient relationships on a continuing basis.

Some doctors, of course, may view such experimentation as a threat to solo practice arrangements, but it is too late to placate those who fear the competition of group practice arrangements. Group practice is every bit as professional as solo practice, and we know that quality can be good or bad in both. We are not out to destroy solo practice. Our goal is to provide a full range of alternatives available to group purchasers and to individual consumers, including alternatives that reach the individual who is clearly riable for any number of reasons to use the existing system effectively.

To those who still fear the Council's motives, we invite them to help iis build into everything we do quality standards that are beyond reproach and beyond anything in operation today in the mainstream of health care.

In concluding, some of you may be wondering—why hospitals? Why should they be singled out to give special attention to the organization and provision of out-patient services? There is really no answer, except that hospitals traditionally have been the focus of medical care as it is practiced in this country. Doctors are brought together through hospitals at the most esteemed level of medical practice. Operating through their hospital committees, doctors have set high standards of performance for themselves while they are practicing in hospitals-standards which have no counterpart in their solo out-patient practice of medicine.

lf hospitals can bring the best out of doctors when they are practicing in their institutions, then it is logical that hospitals should try to help bring the best out of them when they are providing health services outside the hospital, especially since the quality, scope and organization of out-patient services are vital factors affecting hospital admissions.

In any event, it appears to us that hospitals are slowly evolving into health centers, which we believe they should have been all along. It remains to be seen who will rise to the challenge and who will sit back; who will help to build a healthier state and nation, and who will try to hold onto those delivery systems and organizational concepts that are rapidly losing their viability and validity for increasing numbers in our society. We both have our work cut out for us.



October 15, 1968. DEAR SENATOR WILLIAMS: Your Subcommittee has already received extensive testimony relative to the problems our elderly population encounters in obtaining health care. The hearings in California undoubtedly will reinforce testimony already received, but probably will produce no problems which have not already been brought out. Before dealing with specifics in regard to Regional Medical Programs, I would like to discuss briefly the major areas already brought before your Subcommittee.

HEALTH MANPOWER The severe present and predicted future shortages of health professionals, particularly physicians, nurses, and dentists have created problems in obtaining medical care for all age groups. In fact, it is possible that the incentive fee structures of Medicare and Medicaid have increased the provision of services for the elderly in some communities to the point that good medical care, and particularly preventive medical services, for the younger age groups has diminished in availability. It is obvious that expanded or new governmental programs to pay for services rendered will not increase the capacity of the schools of medicine, nursing and dentistry. In fact, conversely, they may make it more rewarding for able instructors to stay out of teaching. Hence, it is imperative as coverage or benefits expand in governmental or insurance third party payment programs that equal emphasis be given to creation of additional educational facilities and incentives which will lead competent professionals to enter the teaching fields.


There has been wide discussion in the health field of developing new "subprofessional” or “allied health" personnel, or expanding the legitimate functions of lower level professionals in order to lessen the work load on physicians, nurses and others who are in short supply. In California recent joint agreements between the medical, nursing and hospital organizations as well as changes in the state law have expanded the legitimate functions of RNs and LVNs. While such actions are undoubtedly helpful in some instances, they do nothing to add to the absolute numbers of health care personnel available—they merely push some of the work down the line and create acute manpower problems at lower levels,

The only solution to the manpower problem is more training for more persons at all levels. Every resource should be utilized : teacher incentives, subsidized facilities, scholarships, loans, and outright subsidy of trainees. The health professions must be made available to qualified and interested applicants from all levels of our society, not merely to those qualified applicants who can afford the hight cost of such training.


Much testimony has been presented to your subcommittee regarding the methods of payment for services, particularly through Medicare and Medicaid. The use of the fee-for-service approach, especially the physician profile, has been seriously attacked as provided for unbridled escalation of fees and incentives for over-utilization. It has also been described as deleterious to the development of group practice. Without doubt, the unscrupulous provider can profit unfairly under this—but he will find a way to do so under any system. He can gradually increase his fees and he can have patients return again and again for unnecessary visits.

I feel a note is indicated here to attempt once again to put to rest the misinformation that was widely publicized about the California Medi-Cal program, that 1200 physicians averaged over $70,000 each during the first year. The figure of 1200 represented that number of "vendor codes," most of these. in turn, representing physician groups. In one instance it was a group of 123 physicians. Investigation of those few solo practitioners who received large amounts of money revealed, in most instances, that the payments were justified. These were high volume doctors who worked long hours six and seven days a week in ghetto areas and who represented virtually the only medical services available to the residents.

While the fee-for-service system undoubtedly has its drawbacks and opportunities for abuse, one must consider the alternatives and their potential disadvantages. It is obvious from the testimony presented to the subcommittee that a clinic type approach with salaried physicians would not be very popular with anyone. Both professionals and elderly individuals testified about the long waiting periods and excessive travel requirements involved in clinic medicine. Yet there was some indication that a few preferred clinics and in some areas these were the only places care could be obtained.

The other alternative is the “capitation" method of payment. This means just what it says, a payment "per head" on a flat monthly or annual basis for providing all necessary professional services for a predetermined group of people. It provides a guaranteed income for the doctor regardless of how many or how few services he must provide. This method is not as foreign to American medicine or the American people as one might think. For years it has been a common method of providing well-child care in the private practice of pediatrics for the first two or three years of life. It is of course, the basis of the HIP, Kaiser and Ross Loos program as well as a number of other smaller family group practice plans. It is being developed on a private basis in some places through such organizations as American Medical Services in Los Angeles.

If properly used, the capitation method is a stimulus to the practice of preventive care it is of obvious financial advantage to keep the patient well, and to discover disease in its early and less costly stages, than to wait until the patient is seriously ill. Conversely, there is a danger of under-utilization, a possible tendency to not see the patient often enough. Regrettably, the only conclusion one can read from this is that any method will require either external or internal review until the system adjusts to the new demands.

The other disadvantage, if it is such, of the capitation method is the possible violation of the principle of “free choice" of provider, which was written into the 1967 amendments to Title XIX. Obviously, the method gives a competi

tive advantage to group practice, as more comprehensive services, it is argued, can be offered at presumably lower rates per person. Perhaps some objective conclusions in the organization of medical services, which are not in evidence now, should be a goal of government programs of health care for the aging. The overall patterns of care will not change rapidly but at least the change that is encouraged should be based on fact since no single type of organization fits all situations. The dilemma is to be able to encourage new approaches without isolating the individuals concerned from high quality care or making care so difficult to obtain that for all practicable purposes it does not exist.


The availability of medical care both for the elderly and the young in our population varies widely according to economic, cultural and ethnic characteristics of the patient population. Your subcommittee has heard much testimony on the diminishing numbers of physicians, dentists and others in the ghetto areas of our cities, taking place simultaneously with increases in the population and crowding of these areas. One attack on this problem is the dispersal of population through low-cost housing and urban development programs, and through long range changes in social acceptance of these groups outside the ghetto. These important, and in fact imperative, changes will be a long time in realization. In the meantime steps must be taken to bring services to these areas.

No amount of increase in total health manpower will help if some trained professionals do not locate in the areas of need. Every possible known and innovative method should be explored and tested in an effort to increase available services in these areas. Obviously, in spite of the widely publicized “opportunities to get rich" through Medicare and Medicaid, the financial incentives of these programs have not proved sufficient to reverse the trend of professionals to move out. Perhaps these programs have encouraged outward movement as a physician or dentist can now meet his income expectations in better neighborhoods without working as hard. We are watching the West Oakland experiment under l'.S.P.H.S. auspices with great interest as it represents one way of attempting to solve this problem.

The Regional Medical Program, as you are aware, is not designed to increase the total amount of health services available. It must work with existing resources and without disturbing existing patterns of delivery of health care. RMP can (and to date largely has been designed to) increase the level of health care through increasing the availability of specialized medical services. However, in a limited manpower market, such efforts must necessarily be at the expense of basic health services. It was the quite obvious intent of Congress that RMP should not endeavor to create a whole new system of health care. In fact, perhaps the restrictions placed upon facilities and basic health care education make it virtually impossible for RMP to contribute materially to overall quantity of health care available.

From the standpoint of quality, RMP certainly is designed to effect improvements in the care of those persons afflicted with one of the categorical diseases or in imminent danger of becoming so afflicted. As indicated above, however, since we are "robbing Peter to pay Paul” we could end up reducing the quality of general health care available for the population as a whole. A cadre of highly trained physicians and nurses staffing a coronary care unit on a ratio of three professionals to one patient can well mean a shortage of personnel in the medical and surgical services of the same hospital.

RMP needs to be tied more closely to other programs, not just in health but in general socio-economic developments. Our relationships with Comprehensive Health Planning are loose at best and nonexistent in many areas, yet the two programs which share so many common goals should be moving in close coordination. I fear there is fault on both sides of this problem. RMP has drifted too much into control by medical schools or medical center officials and CHP too much into the hands of facilities-oriented planners. Both seem to function under the same basic philosophy, i.e., if they do their job well (increased and improved teaching or increased and improved buildings and equipment) more and better patient services will infallibly result. This is not necessarily true. Most patient care is still given by physicians in their private offices who are too busy to spend much time on postgraduate education. A few RMP projects, such as the Roseville Pilot Program in California, are attempting to get at this problem, but the bulk of the programs are still specialized training for specialists and are hospital or medical school based.

Perhaps RMP's greatest contribution eventually will come through the stimulation and support of preventive medical services. It is here that the greatest hope

lies for a healthier, happier population, future economies, and a partial solution to the manpower problem. The developers of the objectives for RMP in California have put great stress on multiphasic screening. Since it is a practical impossibility for every citizen to receive an annual physical examination by a physician, multiphasic screening must be extended in coverage and expanded in comprehensiveness for the discovery of early disease or, eren better, precursor signs or symptoms. To date, in California, RMP has not financed multiphasic programs of significant comprehensiveness. One small project of limited scope is a part of the Roseville program. However, it is my feeling that multiphasic screening, broad in scope and coverage, along with other preventive medical programs has great promise and should be a prime RMP objective.

Finally, there has come to my attention the enclosed clipping from the San Francisco Chronicle describing the Hunters Point-Bayview Community Health Service. It brings to mind another subject which has received little attention until recently, that is the inability to understand, and therefore to effectively utilize. existing systems of medical care on the part of the elderly and culturally deprived citizens of our nation. Under the “mainstream" and "free choice" concepts of the public medical care programs of Medicare and Medicaid, government employees have been strickly prohibited from directing, or advising beneficiaries, to seek appropriate sources of care for their problems. These programs have been billpaying mechanisms only. The result has been hapless shopping around, referral and counter referral, outright solicitation on the part of some questionable providers, some provision of unnecessary services, significant waste of valuable professional time, and often deleterious fragmentation of care for many persons. This San Francisco experiment is an attempt to provide what has just recently appeared in the jargon of health as a “patient advocate" or "health ombudsman."

Plans for the Northeast Medcial Center in San Francisco's Chinatown are being developed very much along the lines of the Hunters Point project, but are in a far more embryonic stage. A decision has not yet been made, for example, whether funding should be sought through DHEW or OEO channels. The main intent of the center, once in operation, will be to find and encourage individuals of all ages who are not now properly cared for in the basically Chinese and Italian population of the area to see doctors reguarly and, in the fashionable phrase, get them back in “the mainstream of medicine.”

RMP is currently developing many programs to provide superlative care for the seriously ill person. However, the first line of defense against serious illness and disability rests on the capability of the system to provide elementary general health services. It is there, when the patient presents himself for relatively less significant problems, that the first elevated blood pressure can be detected, that cigarette smoking habits can be noted and discussed, or that early increased blood or urine sugar levels can be found. Hence, it appears to me that programs such as Hunter's Point in San Francisco have as much implication for RMP as the highly skilled services of a speech therapist working with a man who has had his larynx removed. If a full scale attack is to be mounted on heart disease, cancer and stroke, people must be assisted in utilizing appropriately the first line medical services already available.

This has been a somewhat lengthy reply to your letter. If I had to reduce it to one statement I think I would say that the elderly are only one segment of complex of groups in our population that are medically underprivileged and that a great deal more vision has to be exercised in a total attack on the health care problems of our entire population than that shown to date, progressive and visionary as it has been. Sincerely,

PAUL D. WARD, Executive Director.




[From the San Francisco Chronicle, Oct. 9, 1968)


(By David Perlman, science correspondent) Somewhere out in the Hunters Point-Bayview part of town there's an old man, handicapped by a stroke, who sits in his room alone-more a psychological cripple than a physical one.

There are kids out there with decaying teeth-not because their parents don't care, but because they are too unsophisticated to know where to find dental help.

Infants are being born prematurely to malnourished mothers—not because food is so scarce, but because the pathway to adequate prenatal medical care and diet instruction is an unfamiliar one. The fact that public funds exist to pay the bills may even be unknown. Attack

These are the sorts of problems that will be attacked from now on by a new federally financed program designed to change the basic life-style-and with it the health--of thousands of low-income families.

The program, which begins this month, is called the Hunters Point-Bayview Community Health Service. It is armed with a $705,000 grant from the Public Health Service, and it is projected to continue for the next five years at a total cost of $5 million.

Details of the project were discussed yesterday by Dr. Arthur H. Coleman, its director, at a press conference at the service's new headquarters at 5815 Third street. Impediments

As Dr. Coleman noted, the problem for people in the project area is not that medical care is poor-it's excellent, in fact. But far too many potential patientsparticularly black patients have profound psychological and social impediments to seeking care at all.

So the new community service will not actually provide medical treatment. Rather, it will deploy four health teams of public health nurses, social workers and “social health technicians” to encourage families to use private medical and dental offices in the traditional "free choice" manner of more affluent families. Job

Where patients are eligible for Medi-Cal or Medicare or welfare services, the health teams will show them how to qualify. The health teams also will offer psychological help and nutrition instruction. In many cases the community service will help pay bills that aren't covered by insurance or Medi-Cal.

Of interest to the Public Health Service will be an evaluation of the program year by year. For it actually represents a major departure from other medical projects in low-income areas.

In San Francisco, for example, the Poverty Program is now financing a Mission Neighborhood Health Center, where salaried physicians actually provide comprehensive care in a full-fledged medical facility. Dual

"It is our feeling,” said Dr. Coleman, “that the neighborhood center or clinic is a dual system of medical care-a special center for poor people. We hope to show that we can provide first-class care for our patients through the same kind of private medicine that all other sections of the population receive.”.


ACTIVITIES (By Paul D. Ward, delivered at RMP Coordinators' Conference, Arlington, Va.,

Sept. 30, 1968)

When I accepted this assignment to speak to you on this subject, I did so with some trepidation. To many of my associates in this program the need to acknowledge the existence of “pressure groups," "power blocks." "special interest groups," or whatever you may desire to call them is in itself a deplorable factor. One sometimes gets the feeling that those who do engage in the art of obtaining consensus from various pressure groups for any given goal are indeed practicing some form of Satanism. It is like being the father of Rosemary's baby without ever having known Rosemary. The only solace I take in all of this is to note that when the connotation of evil is applied to any grouping, it is always the other man's organization that is evil. We only belong to good groups to protect ourselves from the advances of those other groups. Anyone who admits seeing some good in the vast majority of the groups, and who tries to mold portions of their efforts together in order to obtain a working consensus in which progress toward a given goal can be made, becomes contaminated with the "other man's" evil. Further, to openly admit that you are a broker in pressure groups is to admit

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