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coronary care units, and diagnostic technicians in screening clinics. All of these people function in a setting which can support technical specialization of rather high degree and where physicians are available to supervise their functions at all times. The Public Health Service has been specifically involved in the development of training and teaching materials for the nurses working in intensive and coronary units. A contract was recently let to a medical school for the development of training programs and for 10 teaching ilms for such health workers. Three of these films have been completed and reviewed.

Education for other types of assistants in the medical care field is also in the planning stage or underway. Negotiations are currently being conducted by the Division of Medical Care Administration jointly with the American Association of Junior Colleges to consider the feasibility of developing a pilot project for 2-year curriculum in the junior college in order to develop nursing home administrators.

In other areas, added efforts are underway: Through a cooperative program with the Office of Economic Opportunity, the Department of Health, Education, and Welfare is supporting the Development of Home Health Aides, an occupational group within the health field which can provide valuable assistance in meeting many of the health needs of the elderly. This program is funded by the OEO, however, several States have begun training Home Health Aides through the State's own employment and educational resources.

The Office of Education, through its Vocational Education Bureau, is also supporting programs which are aimed at development and most efficient use of several levels of health workers so that the most effective use is made of the level of skill of the person rendering care to a patient.

Under current program analyses now being conducted in the Department of Health, Education and Welfare, consideration is being given to the important role which physicians' assistants could play in extending the hand of the physician. The questions raised in the development of medical auxiliaries are complex, and it is of the utmost importance that any such training programs provide every safeguard for the well-being of patients. To this end, many of the major hospitals which are involved in the training of medical auxiliaries are doing their own studies of effectiveness. However, the only explicit studies of effec tiveness of medical auxiliaries have been done by persons in the field of dentistry and nursing. Such an example is the Louisville study in which a careful job analysis has been done for dentists, dental hygienists, dental technicians, and dental auxiliaries. Evaluation is made of the productivity of each group and the quality of work performed. This evaluation study is a PHS intramural program done in connection with the PHS Dental Center in Louisville. The University of Louisville is serving in a consultant basis.

The Bureau of Health Manpower of the Public Health Service plans to explore this whole field in connection with the Allied Health Professions Educational Assistance Act. Again the Department is hopeful that similar thorough evaluation studies will be developed for other medical auxiliaries. A recent publication of the Bureau of Health Services of the PHS on "Training the Auxiliary Health Worker" is attached for your information." If I can be of any further assistance, please do not hesitate to ask. Sincerely,

Deputy Assistant Secretary for

Health and Scientific Affairs. Dr. SILVER. Now, I would like to introduce Mr. Alvin M. David, Assistant Commissioner for Social Security.

Senator SMATHERS. Mr. David, you may proceed.

STATEMENT BY MR. ALVIN M. DAVID Mr. DAVID. Mr. Chairman, Senator Moss, I am very pleased to have the opportunity to be here to report on the progress of the medicare program under Social Security.

* Retained in committee files.

In the first 1112 months of medicare the program has accomplished a great deal of good.

More older persons have received more health services and they have received improved services. The fear of large or unmanageable hospital bills has been erased from the minds of nearly all of our citizens over 65.

Because of medicare, more older persons have been able to seek hospital care with the dignity that goes with ability to pay. For the first time, many of them have been able to choose private care in the best hospital in their community. The transition from the status of the charity patient to that of a patient who is in effect paying his own way has changed both the level of care that many of the elderly could expect and the level of care that they actually receive.

In the past 1142 months there have been nearly 5 million admissions to hospitals under the medicare program. This represents about 4 million people.

The amount paid to the hospitals in that 1192-month period has been about $2 billion.

Medicare has also made available insured alternatives to hospital care. These include: Hospital outpatient service where that is appropriate for diagnosis or treatment; and post hospital extended care and home-health care where further stay in a hospital is not the most appropriate level of care.

Also included is the coverage of physician's services for home and office visits.

These alternatives have produced the following results:


About 220,000 patients have been cared for through home health agencies under plans that were prepared for them by physicians. Up until mid-June of this year—from January when the extended care facilities coverage went into effect more than 180,000 admissions had been reported for care in these facilities. And, also, by mid-June more than 23 million bills, mostly physicians' bills, had been submitted for payment under the medical insurance part of medicare and payment for services under this part, we call it part B, has exceeded $600 million.

Medicare also has helped to upgrade the quality of health care in terms of facilities, personnel, and patient-care policy. To participate in medicare, institutions have been required to meet standards set forth in the law and in the regulations.

I might add, Mr. Chairman, that one factor that seems to be involved in the increased cost of hospital care in 1966 has been the upgrading that did occur in many hospitals and particularly in extended-care facilities, which upgrading they had to do in order to meet the requirements for participation in the medicare program.

The requirements for quality care have applied to 6,800 hospitals, about 4,000 extended-care facilities, nearly 1,800 home-health agencies, and 2,175 independent laboratories.

In addition to meeting standards on quality of care, the participating medical institutions are required to conform to title VI of the Civil Rights Act, and therefore members of minority groups for the first time in many communities have access to high-quality care. Moreover staffing and service patterns have changed in such a way as to improve the service to all patients.


PROGRESS ON MEDICAL Older Americans who are medically indigent are also benefiting from medicare. In 29 of 54 States and other jurisdictions a medicaid program, as we call it, under title XIX of the Social Security Act is in operation. In 15 jurisdictions plans to install medicaid programs are underway and only 10 have no medicaid plans. All but 13 of the 54 jurisdictions are paying supplementary medical insurance premiums for the public assistance recipients on their rolls or are paying higher cash amounts to those recipients who have enrolled in the part B of medicare. This is the part where they pay the $3-per-month premium.

It is too early to say how much increase in the use of health services by older persons has taken place since July of last year, when medicare went into effect, or how this use compares with the use of such services by those under 65.

In general, it is clear enough that there has been no overwhelming rush to the hospitals and no swamping of doctors' offices, as some had predicted was going to happen.


Shortly after medicare was enacted the Social Security Administration contracted with the National Opinion Research Center and the Columbia School of Public Health for a national sample survey of health service expenses of older persons before and after medicare. The survey will provide data on changes in the use of, charges for, and costs of, medical services covered under both parts of medicare as well as those not covered under that program. A national sample of 6,000 aged persons was interviewed in April 1966, on their use of hospital and medical services during the preceding 12 months. A similar sample will be interviewed in October of this year. We will have preliminary results of the April 1966 survey fairly soon; although we will not be able to complete the measurements of change from April to October until sometime next year.

Although there is a reporting lag, statistics derived from the operation of the medicare program itself; that is, apart from these surveys, are beginning to give us some idea of what is taking place. The data relate to claims that are paid-actually paid—and thus they depend upon the flow of bills and the claims from hospitals to the fiscal intermediaries that are set up under the medicare program and the flow of bills from doctors to patients, from the patients to the intermediaries, and then from the intermediaries to the Social Security Administration.

The intermediaries that I refer to are the organizations that are called for in the law to serve as agents for the Social Security Administration in making the payments for hospital and other provider services. The requirement, under the law, that payment for physicans' services which are a part of hospital services; that is, the services of hospital-based physicians, that the payment for these be separated from the payment for hospital services as such has forced many hospitals to work out new payment procedures with physicians who run and man their laboratories, X-ray rooms, and anesthesiology departments, some of the biggest administrative problems associated with this requirement would be eliminated with the enactment of President Johnson's recommended social security amendments that are now pending in the House.

These amendments include a provision that would eliminate the need for a breakdown of the two components of the hospital services performed by these hospital-based physicians. In other words, it would no longer be necessary to separate out for billing the services of the doctors themselves and the services of their staffs and other services provided by the laboratories.

Senator SMATHERS. Doctors are very much opposed to that, aren't they?

Mr. DAVID. Well, there is some opposition to what we call part C in the medicare bill, although the principle of the simplification that would result from moving the out-patient services out of part A and having them all under part B and the various other changes that would be made that would eliminate the need for separating out for billing purposes the services of the doctors from the services of their technicians and others and the need to separate out the services for diagnostic work as against therapeutic work would, as a general thing, not be objected to. Senator SMATHERS. Do you know

doctor groups

that are for it?
Mr. David. For part C, yes.
Senator SMATHERS. No, for having their bills paid by the hospitals.
Mr. DAVID. As far as I know there are some who have no objection.
Senator SMATHERS. Are those individuals or are those groups?

Dr. SILVER. If I may interrupt, I would say as groups, Senator, the physicians are opposed to that change, particularly those that would be affected by that change.

Senator SMATHERS. I asked that because I recall last year on the Finance Committee when we had this actual legislation before us there, one of the things the doctors objected to most was having to go to the hospital to get paid because they don't want to become, in effect, payees for the paymaster at the hospital. They think this puts them under additional control.

Dr. SILVER. Of course, Senator, the point is that before medicare the majority of the hospitals did have such arrangements with the doctors and while they grumbled about it they accepted it. It has now become national policy with the opposition.

Senator SMATHERS. That is the record as I remember.
Go ahead, Mr. David.

Mr. DAVID. I might say that the precise method that is proposed in H.R. 5710 for dealing with the need for simplification of billing for and paying for outpatient services and the services of hospital-based physicians may not necessarily be the only way to get at it. There is a need for simplification and I believe that in the end it will be possible to work out a way to get that simplification without any real serious basis for objection on anyone's part.

While the Social Security Administration as early as last August, authorized intermediaries, that is, the fiscal intermediaries I just mentioned, to make advances to hospitals to cover expected claims, and hospitals have been receiving their money under this procedure, bills have been slowed by the working out in some cases of the need to develop new hospital-physician agreements and billing arrangements.


Senator SMATHERS. What are you doing to correct that? This is one of the criticisms that I hear wherever I go. Hospitals that actually enter the program, like the program, but they don't get paid. Redtape is almost impossible and there is no rationalizing away that hospitals think they are going to be able to get their money, they are bogged down in redtape.

What are you doing to stop that?

Mr. David. The first thing I would say, Mr. Chairman, is that, although there may be still some isolated complaints of that nature, hospitals are receiving payments very promptly now, and the record has been one of very rapid improvement.

Senator SMATHERS. You added the word "now.” In other words, when you say "now," you would admit as all have to admit that in the institution of a new program of this size there must be some delays and some slowdowns in order to find out just how you are finally going to do it most efficiently. But when you say "now", do you distinguish between the former state of affairs when they were not getting their money promptly and now when you have begun to resolve the problem?

Mr. David. I am distinguishing on the basis that the situation has very greatly improved, and I am also distinguishing between the payments under part A to the hospitals and other providers under part A and, on the other hand, the payments under part B, which are essentially payments to the doctors. Now, part B is much more complicated to operate, especially because of the coinsurance and the requirement that the patient must have paid $50 before any of the bills can be reimbursed and the necessity for separating out these things that I mentioned--that is, the services of the doctor from the services of the laboratory technicians, and so forth, and various other separations that need to be made. These complicate the operations under part B. But in part A, for the most part, except for problems in the area of outpatient services and billing for X-ray and laboratory work—the hospital-based physicians which has been a cause of a great deal of administrative complexity thereby and large even with these problems, the situation in part A now is quite satisfactory.

Senator SMATHERS. All right, sir.

When you say it is quite satisfactory, you think at this point most hospitals and most doctors' associations agree with you?

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