Brief 7. You can get some idea of the unnecessary cost of health insurance carried by private companies from the figures on the relation between premiums and benefits collected and paid by private insurance companies. The figures given in the Statistical Abstract of the U.S. for 1974 on P. 464 show that the benefits paid out by private insurance companies were around 75% of the premiums taken in. For Blue Cross and Blue Shield, however, where the competitive acquisition costs do not exist so that they are in this respect similar to government health insurance, the benefits paid out were 93% of the premium income. Government health insurance is needed; it would reduce the total social cost of illness and non-industrial accidents; it would cover practically all the medical and hospital costs of ill health, which private insurance companies don't do; and it would distribute the cost of health care in a more equitable way. Brief Critique of Other Bills Corman There are a number of other bills on health insurance before Congress. They are not satisfactory to those who favor full health care for all through the Kennedy-Griffith Bill for two main reasons. First, they do not fully cover health costs. For the costs that they do cover, they have co-insurance of 20 or 25% to be paid by the sick person plus deductibles which must be paid in full first by those getting health care before they get benefits. Good health care is a right, and should be so treated. There is therefore no more reason to require those who need medical or hospital care to pay part of the cost when they need it than there is to require those who have children in school to pay directly part of the cost of their children's education. In both cases, the cost should be covered by taxes. In the case of the Long-Ribicoff Bill for catastrophic health insurance, the deductible amount is very high for most persons so that Brief poor persons would not benefit. 8. The other bills also use private insurance companies wholly or in part to provide the insurance. This increases the cost by profits for some companies and by competitive acquisition costs above what is necessary to cover the cost of claims for the reasons already explained. TESTIMONY OF JOSE L. GARCIA OLLER, M.D. PRESIDENT, AMERICAN COUNCIL OF MEDICAL STAFFS BEFORE THE SUBCOMMITTEE ON HEALTH OF THE COMMITTEE ON WAYS AND MEANS CONCLUSIONS A NATIONAL HEALTH POLICY 1. Personal, individualized care of high quality, with dignity and privacy, at a cost to the citizen on the basis of a patient-physician agreement is the hallmark of the American system of Private Medicine. Its continued and expanded availability under free enterprise is the proper goal of our National policy on Medical Care. 2. The citizen's right to choose his private doctor, to receive medical care in accordance with his physician's best judgment, and the physician's right to administer it, must not be limited. 3. These decisions are inherent in the practice of medicine: the care, diagnosis and treatment and the admission and discharge of patients from hospitals and facilities. They are to remain the prerogative of the patient's attending physician, not of government or insurance companies. 4. There shall not be Federal intervention in the private practice of medicine such as: control of admissions by government committees; treatment of the sick dictated thru government approved manuals (PSRO); length of stays in a hospital imposed by computerized averages; and denials of "necessity of hospitalization" determined by government carriers who have never examined the patient. The concept of "Health Crisis" was based on fallacious assumptions, upon which "Crisis Health Legislation" was enacted in the '60's. Such government intervention has led to additional inflation of costs, and the rationing of medical services in Medicare and Medicaid. Proposed increased intervention in medical care will lead to additional inflation of costs and increased rationing of services, and will aggravate, not reduce, problems of access to doctors, and maldistribution of hospital beds or of physicians. Evaluation of proposals for medical care should always include significant input from practicing doctors. 5. The right of the attending physician to prescribe the medication which he deems best for the individual patient, considering the uniqueness of both patients and disease, is essential for quality medical care. Compulsory limitation of choice in prescribing, or compulsory substitution of other drugs, should be prohibited. 6. Existing tax-supported federal programs including HMO's and "Foundations" should be regularly evaluated by independent audits of performance, costs and efficiency and actual delivery of services. Proposed programs should first be tested in prototype, again with independent audits of performance, before expensive national programs are implemented at the taxpayers' expense. Programs that fail in performance should be eliminated from public subsidy, and the legislation repealed. 7. We recognize the problems in the care of the indigent, the disabled and the unemployed. Should the government make available private health insurance for the indigent, it must safeguard free choice of physician and hospital. To maintain the loyalty of the doctor to his patients, the option of payment to the patient must be preserved ("direct billing"). Continuation of insurance coverage during disability and unemployment should be provided by the addition of appropriate clauses to current voluntary insurance programs. (108) 8. A nationwide educational program shall inform the public and employers that the addition of "catastrophic coverage" to their present health policies is available and inexpensive. The public should be thus encouraged to buy this additional protection. There is no need for compulsory "catastrophic" in surance. 9. All Federal programs shall respect that the communication between physicians and patients must remain confidential, recognizing that the free exchange of information is essential to proper treatment. Legislation should assure that only information necessary to establish claims from illness, but not information about patients' personal lives shall be subject to review by the government or insurance carriers. 10. The government shall refrain from compulsory universal national health insurance: because it is not needed, because government should not pay for that which a citizen can afford, because it would impose a tremendous tax burden certain to bankrupt the country. Politicalized medical care must ration medical care to that which the government can afford, not that which the patient needs. 11. The excesses of the Bureaucracy, through the device of the FEDERAL REGISTER and use of "Internal Manuals", have thwarted the intent of Congress and created the true Medical Crisis: the crisis of overregulation in the Bureaucracy. Congressional oversight committees should assure that the Law and Regulations are controlling, not internal Bureau manuals. ii RECOMMENDATIONS 1. A "National Health Policy" to set goals and principles is offered to 2. 3. 4. 5. 6. 7. Congress. The American quality system of individuality, dignity and privacy in medical care is based on the private patient-physician contract. This contract must be preserved inviolable. This can be accomplished only by the establishment of direct-billing of the patient in all federal health pro grams. Rationing of medical care, the federal rulebook for the treatment of all diseases and the invasion of privacy should be rejected: the radical PSRO law should be repealed. Imposition of PSRO by Utilization Review procedures should be eliminated. Interference by the Bureaucracy in patient care must be prohibited as evidenced in the recent ruling by the Bureau of Health Insurance to deny payment for general anesthesia and for the use of surgical assistant during cataract surgery. This ruling effectively denies to the patient the benefits of advancements in medical care. There is no Health Crisis. There are "gaps" in care which reflect the unsolved social problem of "poverty" in all civilizations. The increasing cost of hospitalization, over that due to the decreasing value of the dollar, is due to the federal and private insurance financing's "blank check" which makes hospital services appear "free" to the patient. We urge that deductibles, co-insurance and co-payments be maintained for all programs. These control mechanisms provided by laws passed by Congress are made ineffective by the offering of insurance policies to cover deductibles and co-insurance. Eliminate first dollar coverage in all programs. The high cost of claims review will double the cost of small claims, such as prescription iii |