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if the economic situation were different you could learn in a much more rapid time some of the things that take 5 years to learn.

5 At this point, Senator, I was just expanding on this comment about wasteful ordering of X-rays and laboratory studies that went on at Bellevue. The justification that is presented for this many times in the medical literature and by those in teaching is that we allow interns and residents to do these things to order, probably considerably more than needs to be ordered, because they need to acquire the experience that the older man already has.

My argument is that this could be learned a lot more rapidly and it would be learned a lot more rapidly if the money for every one of those studies was coming out of the patient's pocket.



When I went into private practice, my attitude changed. Every time I ordered a laboratory test or an X-ray, I knew that the patient was going to have to pay for it, if not personally at least through his insurance premiums. Î thought a little longer about what I was going to order and why.

The same philosophy prevailed in areas of medicine where I had some financial incentive. I might make $10 if I did a proctoscopy on a patient, $15 if I read an electrocardiogram, $20 if I burned off some warts. But the money was coming out of the patient's pocket and I made certain he or she needed the procedure before I ordered it.

This was the philosophy that prevailed in dealing with private patients who were going to pay their own bills. Welfare patients, for whom the county picked up the tab, were managed in a different fashion.

With welfare patients it was back to the Bellevue thinking, only more so. Let me make it clear we did not and do not skimp on care of welfare patients. On the contrary, we are more apt to overtreat them than undertreat them.

Here are some specific examples of what I mean.

If a private patient comes into my office with symptoms suggesting a lung infection I might examine him and start his treatment possibly without getting an X-ray, if I didn't feel an X-ray was imperative at the time. I would tell him to call me if he didn't improve or if he got worse, and I would explain to him that it might be necessary later to take a chest film.

With the welfare patient who present the same chest symptoms I would do as I did at Bellevue and order an X-ray immediately. Why worry about the expense. The patient isn't paying for it. It is easier and less time consuming to get the film right away.

Similar thinking might influence the prescription I wrote. For the private paying patient I might order a 5-day supply of medicine and ask him to check with me by phone when it was gone. If he needed more medicine I could prescribe an additional supply at that time. For the welfare patient, who gets his medicine “free,” I might prescribe a 7-day supply immediately.

If there are 2 days of pills left over, well, so what. But with the welfare patients, as opposed to Bellevue patients, another factor came into play-money. I didn't make any money when

I ordered a chest X-ray on a Bellevue patient. I might make money on the X-ray I took on the welfare patient. So, consciously or subconsciously, money might motivate me to order the X-ray on a welfare patient when it was not absolutely necessary.


Let us take another example laboratory studies. On welfare patients, before medicare, the county would pay us only $2 for an office call. Our charge to private patients was $4.

But the county would also pay us $1 for a hemoglobin determination and $1 for å urinalysis. So there was a temptation to order these studies whether they were entirely necessary or not. By ordering them we could at least break even financially, and we could hardly say ourselves whether we were motivated by money or just good, thorough, medical practice, when we ordered them.

Now if this has been the prevailing medical attitude toward financial matters where indigent and welfare patients are concerned, shouldn't it be the prevailing attitude toward medicare patients? In my opinion it is—and in one respect it is worse.

With medicare we live in constant dread that at some point the Government is going to set rigid fee schedules for us. We fight constantly, therefore, to keep our “usual” fee as high as we can. If we are going to have our fees fixed let us have them fixed at what is, temporarily at least, a satisfactory level.

I would guess that this is the reason that in 1966, as was just reported, doctors' fees and hospital fees went up far above the anticipated level.

Senator SMATHERS. Let me ask if I get that straight.

Dr. NOLEN. Just before medicare came in there was a rise in doctors' fees and hospital charges. This was just testified to by the group here. I would guess that much of this was in anticipation of medicare.

We didn't want to get caught with our fees outdated.
Senator SMATHERS. Just too low.
Dr. Noken. That is right.

We wanted to be sure that we were at a decent level in anticipation of the fact that they might be frozen there and we might have to sit around bargaining to increase them.

Senator SMATHERS. You are not old enough to remember at the beginning of World War II when people who had apartments to rent suddenly realized that rents were going to be frozen and thought as 1 matter of good judgment and precaution that they had better raise their rents a little bit at that time, so that they would be frozen at what they figured was a level that would be able to return to them some profit over the course of an indeterminate number of years.

Now I gather what you are saying is that it is your feeling that one of the reasons that the doctors' medical fees have gone up this past year over 7 percent is not necessarily because they are spending more time on the patient or because they are actually doing more, but that it is a natural hedge against the eventuality they fear-and we all fear for that matter; I would not like to see this happen—they fear that their fees may be frozen.

If they are going to be frozen, they want to have them frozen at a good level.

Is that what you are saying?


Dr. NOLEN. That is exactly it, yes.

I would like to talk specifically about surgical fees for a minute, since, as a surgeon, these are of some concern to me.

Before medicare, as I said in my article, I individualized in many cases—in all cases really. The philosophy of the doctors where I practice is to charge only what we think a procedure is worth and not to increase the charge just because the patient is wealthy.

I am sure you are aware of this philosophy, this “Robin Hood” idea that you charge more for the wealthy so that you can treat the charity patients for less. We have never subscribed to that and I have never subscribed to that. Whether a patient makes $7,000 a year or $50,000 a year, I charge

Ι him $150 to take out his appendix. I never raise that fee.

But I would lower it. An old man who couldn't stand to pay $150 just paid what he could and I would write off the rest. But not since medicare. The Government pays, so everyone is charged the maximum.

This attitude stems, as I mentioned, partly from fear of future rigid Government regulations, but it also stems in part from experiences like some of those I've already had with medicare.

Let me give you one example. I operated on an elderly woman some months ago and I did a hysterectomy for cancer. My usual fee for this operation is $300 but this particular patient had had deep X-ray therapy just prior to operation and the postoperative care was much more time consuming and demanding than is ordinarily the case. So I sent her a bill for $350.

I got a letter back from medicare asking for an explanation of my increased charge. I had to dictate a letter justifying my charge to a layman somewhere who probably didn't know a thing about surgery.

Now I realize that I may be wrong about this, very probably these things are scanned by doctors, but this is the way the letter comes to me and this is the way I react. I would have to take time to get the chart out.

This sort of timewasting incident aggravates me and other surgeons. We resent having to justify to the Government any deviation from our standard fees. Maybe it shouldn't bother us, but it does.


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Before leaving the first topic I would like to say a few things about the attitude of doctors toward hospitalization and how it is affected by the patient's status--private or medicare.

Private patients want to get in and out of the hospital as expeditiously as possible, if for no other reason than a financial one.

Medicare patients, not all, but many of them, have no such desire. They are elderly, many of them come from nursing homes or from the homes of their children, and the break in routine that hospitalization atfords them is a welcome one. The children with whom they live welcome the break, too.

I am not criticizing them for this attitude. It is a perfectly understandable one.

The end result, however, is that pressures are put on the doctors by the elderly patient and his family, to hospitalize the patient when he could be managed at home. And when he is hospitalized more pressure is exerted to keep the patient longer than is necessary. If you would like specific examples I can give them to you.

I am very surprised at the questions that you have asked of the recent panel. This may be true that the statistics won't bear me out, this is a personal impression from my own experience with elderly patients that they want to stay in a few extra days and you let them stay in a few extra days.

Senator SMATHERS. In other words, when I was asking him about the statistics which they say are going to show that they do not stay as long!

Dr. NOLEN. Yes.
Senator SMATHERS. I was surprised about that indication, too.

They are not staying as long as they thought. What you say here seems to my ordinary layman's experience to be the case.

Dr. NOLEN. This, of course, is just based on my opinion. I have been chairman of the utilization committee on the hospital since it started so I have, at least in our hospital, a pretty good picture of what is going on.

The easy out for the doctor is to surrender to the pressure and keep the patient. Not so long that the utilization committee investigates the case; just 2 or 3 extra unnecessary days. But multiply these extra few days by thousands and the total extra expense is quite significant.

We realize this but it is very difficult to repeatedly spend our time arguing and explaining to patient and family that they must go home. Far easier to just give in.


What I hope I have said, probably in a roundabout way, is that where before medicare the elderly might not have been getting enough medical care and the medical profession was not being adequately compensated for the care it did provide, now the pendulum has swung the other way.

The medicare patients are being overhospitalized and overtreated and, correspondingly, the medical profession consequently is being overcompensated for its services. The medicare program is and will be far more expensive than it should be.

Patients, hospital administrators, and doctors, like most other people, function on the premise that Government money is nobody's money and spend it carelessly, holding on to as much of it as they can for themselves.

The second question: "What kind of response did you receive to the article? Do you believe that many other physicians share your views ?”

Senator SMATHERS. Could I interrupt you there?

I don't know what you are going to say later on. You say patients are overhospitalized and overtreated, and that, correspondingly, the

our fee.

medical profession is being overcompensated. I think that is a very important statement.

Do you agree that if the Members of the Congress finally come to this conclusion, as you have stated it, that greater impetus would be given to that which the doctors fear the most, Government regulation of fees and drug costs, et cetera ?

I personally am opposed to such regulation, and I think most Senators are. But if what you say gets to be the general practice, then I don't know what other alternative there is, other than to bring on that which they most fear.

Now does that make sense to you?

Dr. NOLEN. I could not agree more. This was the purpose of the article as I wrote it. To emphasize that if this builds up into a sig. nificant factor then we are going to get just what we don't want.

In other words, when I say we are overcompensated, I am talking about situations where a patient comes in and she is in the hospital, you feel it is time that she can go home.

The family says, "Well, let her stay 3 or 4 more days.” If we give into this, then we get paid for every day she is in the hospital, whatever we charge for a routine hospital call and the Government has to pay for those 3 or 4 extra days of hospitalization and they have to pay

What this medicare program has done is-it throws a tremendous burden on us to get these patients out, it demands more time of us and diplomacy and everything else. We have to sit and argue with the patient that just because the Government says they can have all this time that it is not medically necessary and that they should be going home at this point.

I will give you another example. There is another article just this week in the Medical Economics and the title is "Medical Ethics and Medicare." He raises a question, he referred to the article I wrote. He said this is just bad ethics.

Well, I am not going to argue that point. I discuss it a little further here. But he raised the question of this type. A patient that he has, he is a urologist, has a chronic urinary tract infection.

THREE-DAY REQUIREMENT QUESTIONED This man should be in a nursing home. The nursing home will charge for, we will say, 2 weeks or something like that. At any rate, the total bill for the nursing home would be $1,400.

Now if he admits that patient to the hospital for 3 days or whatever the minimum requirement is, he can then transfer the patient to the nursing home and instead of paying $1,400 the patient pays $400.

In other words, by admitting this patient to the hospital for a workup which is not really necessary but which could be medically justified, he will save the patient $1,000.

Now in a situation like that what do you do? Do you admit the patient for 3 or 4 days of hospitalization so you can save him $1,000 or do you send him directly to the nursing facility?

These are tough questions in medical ethics.
Senator SMATHERS. Let us stop right there.

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