THE FUTURE OF HEALTH CARE IN AMERICA TUESDAY, JUNE 14, 1988 CONGRESS OF THE UNITED States, OF THE JOINT ECONOMIC COMMITTEE, Washington, DC. The subcommittee met, pursuant to notice, at 9:30 a.m., in room 2359, Rayburn House Office Building, Hon. James H. Scheuer (chairman of the subcommittee) presiding. Present: Representatives Scheuer and Fish; and Senator Wilson. Also present: Judith Davison, executive director; Robert Tosterud, minority assistant director; and David Podoff and Dayna Hutchings, professional staff members. OPENING STATEMENT OF REPRESENTATIVE SCHEUER, CHAIRMAN Representative SCHEUER. Good morning. The hearings on "The Future of Health Care in America" resume today as we turn our attention in the 6th day of this series to: "The Health Care Needs of the Elderly." Of course, it is a truism that the importance of this topic cannot be overestimated. You see this question referred to on the front page of the papers almost every day. Congress itself is now grappling with the enormous challenge of how to meet the health care needs of a population that is growing exponentially in its aging ranks. The elderly constitute about 11 percent of our population. By the middle of the next century this percentage will go up to about 22 percent-doubling by the year 2050. Per capita personal health care expenditures for persons over 65 are four times the health care expenditures for persons under 65. So we are faced with major problems, and I hope-I am confident-that the witnesses will shed light on how we can come to grips both with the mission of supplying quality health care for the elderly as well as getting a handle on our per capita health-care costs. As percentage of GNP they are 50 percent more than the average for the other OECD countries in Europe, Japan, Australia, New Zealand, and Canada; with absolutely no indication that we are getting anything more for the fact that we are spending 11⁄2 times what they are spending. If our health-care costs continue to go up at the rate that they are now going up, including costs of providing health care to senior citizens, we will hit 15 percent of GNP by the end of the century. About one-fifth of the per capita cost of health care for the elderly is nursing home care. (1) So we have to figure out how we can finance it. What part of the health costs for the elderly do we leave for the individual to finance, how much to society to finance? We must increase the efficiency of our health-care delivery system, which was the subject of our first day of hearings. Joe Califano testified that we could save about $125 billion a year in unnecessary duplicative, overlapping, and ill-coordinated programs without affecting quality at all. One area in which we are hopeful to make advances, both in quality of care and in costs of care is empowering health-care consumers, including the elderly, with far more knowledge about the health-care providers who are available to them. This will enable consumers to make better choices as between doctors and as between hospitals, so that they can avoid the ones that might jeopardize their health, based on the proven record, and select ones, which would include the overwhelming majority of health-care providers, who provide responsible quality health care. Another area where we have begun to make inroads on health care problems is the Medicare Catastrophic Coverage Act of 1988, recently passed overwhelmingly by both Houses of Congress. The bill will make health care more affordable for senior citizens, and it is expected that the President will receive this legislation sometime this week and sign it in the latter part of the week. Last week I held a hearing in New York, before the House Subcommittee on Natural Resources, Agriculture Research and Environment, which I chair, of the House Committee on Science, Space, and Technology. The hearing was held in conjunction with a report issued by the Office of Technology Assessment entitled "The Quality of Medical Care: Information for Consumers." In effect, the OTA told us, yes, consumers can make the health-care delivery system more efficient, more cost effective and ensure a better quality of care for themselves if health-care consumers have knowledge-knowledge-knowledge. There is a luncheon going on at the Library of Congress today on the subject that "Knowledge is Power." I think they are talking about international economics, but it could as well be the subject of a colloquium on health care for elderly people. The OTA did say there were a number of indicators that could be used legitimately if we spent some time and some research money developing ways of making the data more accessible and more intelligible to the average health consumer. Such indicators include the mortality tables that HCFA, the Health Care Financing Administration is currently putting together, information on repeated episodes of malpractice judgments, on censuring of doctors, on delicensing of doctors on a State basis, on hospitals with two or three times the normal rate of nosocomial infections, that is, open wound infections or other infections you pick up at the hospitals. Information on hospitals that have a far higher rate of iatrogenicity, which is a fancy way of saying physician error. All of these things could be made available to health consumers in a form that would be fair to the providers, informative to the consumers and would help produce those market forces we hear all about, informed market forces that would streamline the healthcare system. Well, today we resume the hearings of the subcommittee and will continue to emphasize the challenge of trying to get a handle on increasing health care costs while we strive to maintain and even improve quality. Because of scheduling difficulties, Senator D'Amato will be unable to attend the hearing today. He has requested that his opening statement be placed in the record, which I will do at this point, without objection. [The written opening statement of Senator D'Amato follows:] WRITTEN OPENING STATEMENT OF SENATOR D'AMATO MR. CHAIRMAN, I AM PLEASED TO JOIN YOU THIS MORNING AS THIS SUBCOMMITTEE EXAMINES TWO VITAL ISSUES: THE HEALTH STATUS AND LONG-TERM CARE NEEDS OF OUR NATION'S ELDERLY. WHILE THIS BILL THE RECENT PASSAGE IN BOTH THE HOUSE AND THE SENATE OF H. R. 2470, THE "MEDICARE CATASTROPHIC COVERAGE ACT OF 1988," HAS HELPED TO FOCUS THE NATION'S ATTENTION ON THE RAPIDLY GROWING HEALTH CARE NEEDS OF THE ELDERLY. WAS DESIGNED PRIMARILY TO ADDRESS THE "CATASTROPHIC" COSTS OF LENGTHY HOSPITALIZATIONS, IT ALSO STIMULATED A GREAT DEAL OF DEBATE ON HOW BEST TO DEAL WITH THE OTHER CATASTROPHIC EXPENSE FACING THE ELDERLY: LONG-TERM CARE FOR THOSE WITH CHRONIC ILLNESSES. AS THE TESTIMONY OF OUR FIRST PANEL INDICATES, THE PROVISION OF SUCH CARE WILL BECOME INCREASINGLY NECESSARY AS OUR POPULATION AGES. ALREADY, PERSONS OVER 65 MAKE UP ABOUT 11 PERCENT OF THE U.S. POPULATION. BY THE YEAR 2030, THIS FIGURE IS EXPECTED TO RISE TO ABOUT 21 PERCENT. EVEN MORE SIGNIFICANTLY, BETWEEN NOW AND THE YEAR 2030 THE PERCENTAGE OF AMERICANS AGE 85 AND OLDER WILL NEARLY TRIPLE, FROM 1 TO ALMOST 3 PERCENT OF THE POPULATION. THE GROWTH OF THE OVER-85 POPULATION, ESPECIALLY, IS EXPECTED TO PLACE INCREASING DEMANDS ON OUR NATION'S HEALTH CARE SYSTEM. ACCORDING TO DR. BRODY'S TESTIMONY, THE NUMBER OF NURSING HOME RESIDENTS IN THIS COUNTRY WILL RISE FROM ABOUT 1.4 MILLION CURRENTLY TO APPROXIMATELY 4 MILLION IN THE YEAR 2030. HOW IS OUR HEALTH CARE SYSTEM GOING TO MEET THE INEVITABLE DEMAND FOR MORE LONG-TERM CARE SERVICES? CLEARLY, AS MEMBERS OF OUR FIRST PANEL SUGGEST, WE NEED TO DEVELOP EFFECTIVE STRATEGIES TO PREVENT SUCH COMMON, BUT DEBILITATING, CHRONIC ILLNESSES AS ARTHRITIS, OSTEOPOROSIS, AND DEMENTIA. IN ADDITION, WE MUST IDENTIFY WAYS TO HELP THE ELDERLY TO REMAIN INDEPENDENT FOR AS LONG AS POSSIBLE, THUS DELAYING OR ELIMINATING THE NEED FOR COSTLY LONG-TERM CARE. ULTIMATELY, HOWEVER, IT WILL BE NECESSARY TO ENSURE THAT A STRUCTURE IS IN PLACE EARLY TO MEET THE DEMANDS OF THE MILLIONS OF ELDERLY AMERICANS WHO WILL REQUIRE LONG-TERM CARE IN THE NEXT CENTURY. I LOOK FORWARD, THEREFORE, TO THE COMMENTS OF OUR SECOND GROUP OF WITNESSES, WHO WILL ADDRESS VARIOUS METHODS FOR FINANCING THIS CARE. MR. CHAIRMAN, I COMMEND YOU FOR CONVENING THIS HEARING ON THE HEALTH OF OUR NATION'S ELDERLY, AND I HOPE THAT THE TESTIMONY OF THIS MORNING'S WITNESSES WILL PROVIDE US WITH NEW INSIGHTS INTO HOW WE CAN BEST MEET THEIR LONG-TERM CARE NEEDS. THANK YOU, MR. CHAIRMAN. |