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I agree with you, it is tough, but this is where we have a responsibility here in Congress and the executive branch of the Government not to make that necessary. This is where we are at fault.

I am sorry that these administrators didn't stay here to hear this because these are the kinds of things that should be changed. The statute says that you have to be 3 days in the hospital before you can be eligible for extended care benefits under medicare, and because that is the law, as you say, you have the problem of putting him there first, so you can take him out and put him in the extended care facility.

Šo our laws are sometimes unrealistic. What can we do? We put the doctor in this case in a situation where he has to decide, "Well, I have to help the patient even though he really does not have to go to the hospital for 3 days.”

That is what you are saying, is it not?
Dr. Nolan. That is right. He does not need to.

Senator SMATHERS. He has to go to the hospital to qualify for extended care.

Dr. NOLAN. That is right.

Senator SMATHERS. Somewhere in there we have to turn back to the doctor a little more discretion. I think there are a number of illustrations of areas where we must trust the doctor's discretion.

What I am interested in as an individual Senator is how do we get the doctors and the executive branch of the Government to get together and eliminate these kinds of little silly rules and regulations which unnecessarily put the doctor on the spot, cost the Government more money, and encourage a doctor to do noneconomic things?

Dr. NOLEN. I could not agree more with that.

Senator SMATHERS. The 3-day requirement in the statute-why did we put that in the statute? That does not make a lot of sense. The doctor ought to decide that.

Isn't that right!
Dr. NOLEN. I certainly agree; yes.
Senator SMATHERS. Why don't we get something to change that?

Mr. ORIOL. Doctor, would you care to see something which would enable the doctor to certify that this patient should receive nursing home care rather than going through the 3-day process?

How would you like to see it done? Do you have a suggestion for the ultimate process?

Dr. NoLex. Well, I am inherently against a lot of regulations but I certainly think this would save a lot of money and it would take a lot of strain off of the problem of ethics that the doctors face.

I mean, I don't know, myself, how I would react to a situation like that. This is one of the points I am making, we react to medicare patients in a different way than we act to the private paying patient.

Mr. ORIOL. Take it back to the hospital care that he does not really need but it can be justified if he has to

Dr. NOLEN. I would forgo this. Mr. ORIOL. Send him to the nursing home at the great additional cost. Doctor, if the law were changed, could we rely on the doctor's sense of ethics and his knowledge of medicine to give him the ability to sign a certificate saying that this person should go to a nursing home?

Dr. NOLEN. Certainly. There is no advantage to the doctor putting him in the hospital first. Yes; I certainly agree.

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Mr. ORIOL. What is your idea! ?

Dr. Chinn. As I remember it, if this provision did not exist there would be a great many people in nursing homes in whom there was inadequately documented medical data.

If I understand it properly, this is one of the reasons that this was put in there. Now, how you can resolve this, I of course, don't know at this point, what mechanisms one might design to resolve this.

Senator SMATHERS. Mr. Frantz reminds me this was an issue during 1965 in the conference on the social security-medicare bill that year. I was in the conference which acted on the House and the Senate versions of that bill, and I recall that Congressman Mills was concerned about the possibility you have discussed, and he held the view that if the medicare beneficiary went to the hospital it would prove that he was sick enough to justify his receiving extended care benefits under medicare.

Now we come back to the reverse : by putting medicare beneficiaries in the hospital sometimes we are giving them a treatment that they don't need when in fact all they ever needed was to go to extended care facilities.

This is a situation we will try to resolve, because obviously, eliminating this requirement would save the Government a great deal of money and at the same time take the doctors off the spot. It seems to me we've got to trust the doctors somewhere. We're encouraging the doctor to do an unethical thing by the present rule. We are encouraging the doctor to send him to the hospital when he does not need to go to the hospital.

Is that right?
Dr. NoLEN. Yes, that is right.

Dr. Chinn. Do you feel, Dr. Nolen, that, generally speaking, economic considerations are as great as you are portraying here today? Do you feel that, indeed, both from the point of view of the physician and from the point of view of the patient that this overall dominance of money is dictated for medical care to the degree that you imply? Dr. NOLEN. Not at all. I am sorry I am implying this.

ATTITUDES TOWARD GOVERNMENT FUNDS Probably I am because I am trying to emphasize a point. The point that I am trying to make is this: that actually we think less about money with the medicare patient, we think more about money with a private patient. We are not so conscious of what the medicare patient has to spend, what his medical care costs him as we are with the private patient.

We are careless with the funds of the Government. We are not out to make a fortune on the Government. We are afraid for our own livelihood, we are afraid for what is going to happen to us in the future.

I say, “we.” I am using this rhetorically. I think that it is not that we are dominated by the money; I don't think this is the point that I am trying to make at all. I am just saying that we are kind of careless about the Government's money. We are not as thoughtful about it.

If a man has to reach into his pocket and pull out $10 and hand it to your secretary for a chest X-ray, you think a little longer about it

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and you are apt to discuss the situation with him some more than if the $10 is going to come from this nonentity, this Government-not nonentity.

I am sure that is a very poor choice of terms, but it is an impersonal thing. You don't worry about it. This is what I am afraid of. We have got to convince doctors that they have to give just as much thought to the charges to a medicare patient as they do to a private patient and it is a very difficult thing to do.

These are the examples that I am giving you. I have been exposed to it before in my practice in the city hospitals, in the State hospitals, and in the Army and you just do not think about money. You are careless with it because it is the Government's money and you don't have to worry about it. Let us just get away from the doctors' ethics and the profit motive.

I brought in this because I am not sure but what it might be a factor. It is hard to say about some of these things; it is very difficult to say why you ordered the X-ray. You are going to make $6. Let us assume you are going to make $6 and you order the X-ray.

If the man says, “You ordered this because you wanted to make $6," and you say, “No, I ordered it because the patient might need it,” now he is not going to believe you and subconsciously I don't know myself sometimes why we do these things.

I can justify it, though, in any court. I can say he needed this but with the private patient I would wait a while.

If we could only convince doctors that they would have to think about medicare patients the same way they think about private patients, then I don't think this problem would exist.

I am very cynical about the probabilities of convincing them along those lines because we are skeptical about the Government.

Shall I go on?

Senator SMATHERS. But you have got to keep making that speech of yours to the Medical Society and hope they will continue to invite you to make it.

Dr. NOLEN. I hope they do.

Senator SMATHERS. Because what they fear the most is likely to happen just as a result of what you are talking about here, a feeling subconsciously that it is nobody's money. I think that is a very apt illustration.

Dr. Chinn. Regardless of whether the money comes from professional judges or whether or not quality medical care calls for this X-ray is indeed true regardless of where the money comes from.

This is an issue that the medical profession must face, what is quality medical care regardless of where the money is coming from, whether it is out of the pocket of the individual or the Government Treasury, it seems to me, not as to whether that person needs that X-ray in order for the doctor to deliver quality service. This is idealistic. I am quite aware, I agree it is a very delicate sub

a ject but still basic to the whole problem which we

Dr. NOLEN. I agree this is the decision but what I am saying is that subconsciously your term of “quality medicare” is modified by economic circumstances. Senator SMATHERS. All right, sir.

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You go ahead now.
Dr. NOLEN. All right.
I was asked about the response to my article.

Some doctors felt I had overstated the case, but no one argued that the basic premise was untrue.

Some of them felt that I should have emphasized the patient's role a little more. They felt that patients were putting a lot of pressure on the doctors for medical services that weren't warranted, particularly for unnecessary hospitalization, and that doctors were simply giving in to these pressures; that we weren't necessarily motivated by an opportunity to increase our income but simply couldn't be bothered arguing with patients who wanted what the Government said they had coming

The letters from physicians, subsequently published in Medical Economics, supported my point of view. I will quote one of them which I think expresses the feelings of many doctors.

“The overriding fact is that the Government volunteered to get into the medical services act, muscling in on the physician-patient relationship and saying: 'Here, let me pay for it, cost is no object. The latter half of that statement is, of course, pure hogwash. Our fantastically wasteful Government can, and will eventually, go broke. And as the deficits pile up, the first costs to be cut will be doctors' fees. In the past it was possible to control medical extravagances because there was a price tag that discouraged overdemanding patients from pampering themselves. But now that rich Uncle is paying, there's no limit. How this can be blamed on the doctor is beyond me." The attitude of another respondent seemed to be "Why get so steamed up? This is the way things have always been, and always will be."

Ås an example, he quoted a patient who comes in and has hospital insurance. You keep him in maybe an extra day or two because the insurance company will pay for it. This has been more or less common practice, where if a man has no insurance he gets out of there a little bit more quickly.

WHAT IS OPTIMUM CARE Now, again, what is optimum care? Here it is pretty difficult to define. If you give him 2 extra days, is this bad medical care, is that a lowering of your standards? It is difficult to define it. I think the medical profession generally, if the money is not coming out of the patient's pocket, tends to give a little more hospitalization, a little more medicine, a little more everything else.

Senator SMATHERS. Do you have any suggestions for improving the situation or at least exploring the ethical questions you mentioned?

Dr. NOLEN. I am not optimistic about improving the situation. The ethical questions I mentioned all have to do with our attitude toward Government money-not our attitude toward the patient.

I don't believe there are many doctors who are not most sincerely dedicated to providing optimum care for their patient, be he a private

a patient, a welfare patient, or a medicare patient. None of the patients I have mentioned-Bellevue, welfare, medicare, or private-suffered in the least because of the different approaches used in treating them. The end result for all was and is high quality care, but the private patient received it economically.

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I admit the practice of doing procedures that don't need to be done and inflating fees just to get more money from the Government is ethically bad. But the philosophy that seems to prevail everywhere is that if you can get extra money from the Government go ahead and do it. Our practices relative to medicare are not unlike the approach we use when we pay our income taxes. Try for all the deductions, justified or not. If the Government disallows them you are not out anything; and if you can get away with them so much the better. The ethics of those practices theoretically leave something to be desired-but it doesn't bother our consciences.

So I don't think a simple appeal to doctors to please keep their medicare fees low will be efficacious, unless they can be convinced that it is to their own self-interest to do so, which was another point I tried to make in my article. I would suggest that'if doctors can be assured by the Government that strict regulation of fees and medical practice will not be forthcoming as long as the medical profession follows reasonable policies in setting fees, then perhaps doctors will police and regulate themselves effectively. Exactly how this can be accomplished, I don't know. Most doctors are convinced the eventual aim of Government policies is more or less completely socialized medicine.

I do think it might help if the administration of the medicare program were, at least to a significant extent, put under the control of doctors who were acquainted with the attitude of private practitioners of medicine and had some good rapport with them. I won't expand on that now.

Senator SMATHERS. You started out to answer our question as to the reaction to your article among your brethren of the medical profession and as I understand it they all sort of admitted you are right but they didn't want to do much about it.

Have you had an opportunity to discuss this, for example, with the Minnesota State Medical Society?

Dr. Nolen. No, I have not.

Senator SMATHERS. Have you had an opportunity to discuss it with your local county medical society?

Dr. NOLEN. No; not formally.

Senator SMATHERS. Have you had an opportunity to discuss it formally with any of the medical organizations or medical media?

Dr. NOLEN. No, sir.

Senator SMATHERS. To what extent would you think that the doctors throughout the Nation have read your article?

Dr. NOLEN. Well, I can give you the readership figure on Medical Economics if you want. Seventy percent is the figure that they quote, it is one of the most widely read magazines that is circulated of this type.

Senator SMATHERS. Has the magazine subsequently printed any letters on your article?

Dr. NOLEN. Yes. I quoted one letter quite extensively in here, and there were two or three other letters. I think it also precipitated the writing of subsequent articles.

In this week's issue there is one, as I mentioned, and then there is another article that came out approximately a month after mine, or 2 months after mine, on the same subject, entitled "Are Medicare Scandals Brewing?”

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