practice prepayment programs are consistent with the basic principle we have recommended. The HMO provisions of Medicare are not consistent with that principle and Medicaid provisions vary from state to state.

As we indicated in our written presentation to the Committee on April 11, 1975, the HMO Act of 1973 has placed certain requirements upon HMOs which are not placed upon other carriers. We emphasize again that in the interest of equity, those requirements should be eliminated or imposed upon all carriers.

Conclusion

Group practice prepayment programs are a unique American innovation in the field of health care delivery. These programs have grown and prospered with little or no government assistance and despite significant competition and substantial opposition from traditional elements of the health care industry. Five years ago, group practice prepayment programs were rechristened health maintenance organizations, and held out as part of the solution to the health care problems of this country. There is an emerging consensus that HMOs are desirable and should be encouraged by the federal government. It is therefore perplexing to find that most NHI proposals demonstrate little appreciation of the complexities of group practice prepayment programs and do not contain the specific provisions necessary to assure equitable treatment for such

programs.

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This issue is of vital importance to the Kaiser-Permanente Medical Care Program. We would be pleased to work with the Committee and its staff in developing appropriate technical language to attain the objective of permitting organized health care systems, specifically group practice prepayment programs, to participate in a National Health Insurance

program in an effective and viable manner.

Thank you, Mr. Chairman and members of the Committee. We would be pleased to answer questions.

Mr. Chairman and members of the Committee:

I am Charles Womer, Chairman, Council of Teaching Hospitals of the Association of American Medical Colleges and Director of Yale-New Haven Hospital. The Association represents all of the nation's medical schools, sixty-two academic societies and 400 of the nation's major teaching hospitals. Our membership is thus deeply involved in both the provision of high quality medical services and the education and training of future physicians. The Association is not supporting any specific proposal presently before the Subcommittee, nor do we offer specific proposals.

I am submitting a more detailed statement of the Association's views on national health insurance for the Subcommittee's consideration and for inclusion in the record of the hearing.

*Presented by Charles Womer, Director, Yale-New Haven Hospital to the Subcommittee on Health, Committee on Ways and Means, House of Representatives, November 5, 1975.

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This morning I will limit my remarks to a discussion of the

Association's policy positions in the areas of health manpower,

physician and hospital reimbursement, and the role of philanthropy as they relate to national health insurance.

HEALTH MANPOWER

National health insurance is an appropriate mechanism for financing graduate medical education that is, the training of interns and residents as a means of replenishing the health

manpower pool. Public and private insurance programs as well as other patient care revenues are currently the predominate sources of financing graduate medical education and other hospitalbased educational programs and should not be jeopardized. This method of financing graduate medical education has been historically applied both to inpatient and ambulatory or outpatient services. However, this financing has been much more adequate in the case inpatient services than it has been for outpatient services. During the past several years, there has been substantial pressure, and subsequent institutional commitment to provide a greater amount of educational experience in ambulatory settings and to produce more primary care physicians. Generally, these commitments have been made without sufficient attention to longer range financial considerations. For example, under the Manpower

Act of 1971, a large number of family practice residency programs are being supported by federal grant awards. In the absence of

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such awards, I seriously doubt these programs would survive.

The financing of all educational programs in the ambulatory setting is a difficult problem, and one which has not received the attention I believe it deserves. Facing continuing large defecits in the operation of their ambulatory services and diminishing ability to cover these losses from other revenue sources, teaching hospitals cannot significantly expand their ambulatory educational and service programs without adequate reimbursement for them. We would be happy to discuss it further with you when there is more time available than we have this morning.

In its financing of graduate medical education national health insurance may justifiably be used to influence the numbers and kinds of medical generalists and specialists that are trained. The problem of specialty distribution is currently under study by the Coordinating Council on Medical Education and the Institute of Medicine. The findings and recommendations of such studies should be carefully considered in developing methods for achieving a balanced supply of specialists which matches the public's needs for services.

PHYSICIAN AND HOSPITAL REIMBURSEMENT

Any national health insurance system must establish reimbursement policies which allow reasonable payments for services, and which stimulate efficiency and cost constraint consistent with the production of high quality medical services.