of New York and related agencies. Other sources of enrollment are health and welfare funds of trade unions and management in non-government industries and the employees of State and Federal agencies. About 115,000 of HIP's members are enrolled through Medicaid or are Medicare Part B beneficiaries. The composition of this group on August 31, 1967, follows: Medicaid enrollment_ Under 65 years of age- 65 years of age or older, living at home (almost all on Medicare) ____ Patients in nursing homes (mostly persons over 65 years of age and on Medicare). Medicare enrollment_- 68, 132 47, 129 17, 341 3,662 46, 827 There are two points of special interest to this committee about the Medicaid and Medicare enrollees. First, they are eligible for the same range of basic benefits as all other enrollees in the Plan and the medical groups make no distinction between them and the other subscribers in rendering services; the sole consideration is the need for preventive and therapeutic medical care. Second, consistent with the general policy of HIP to provide benefits without financial barriers on a service basis rather than on an indemnity or fee-for-service basis, there are no deductibles or coinsurance out-of-pocket payments to be met by the HIP members. Costs are met through capitation payments by governmental agencies for the Medicaid enrollees. In the case of Medicare beneficiaries not receiving Medicaid, a capitation payment is made by the Social Security Administration which meets the cost of covered services less the average value of the deductible and 20 per cent coinsurance under Part B. Costs for uncovered services, which include important immunizations, eye refractions, and general physical examinations, and for the deductible and coinsurance are met through the payment of an additional premium of $1.50 per month.' This additional payment is made directly by the beneficiary or by a health and welfare fund on his behalf. By payment of an additional monthly premium of $1.94, the Medicare HIP member is also entitled to supplementary coverage under the most common Blue Cross contract. This then is a brief description of the membership and scope of benefits of HIP. I now want to deal in somewhat greater detail with several aspects of the program which are relevant to this hearing. The decision in the early 1940's to organize HIP on a group practice basis with fully prepaid basic benefits was reached after careful deliberation. It was predicated on the principle, visionary at the time, that medical knowledge and technology would soon become so complex that the ability to provide highquality care at a reasonable cost would be greatly enhanced by having physicians practice as a team in well-equipped facilities. What does the record show? Increasingly leaders in industry, medicine, and government have reached the same conclusion as the originators of HIP. In his recent volume, "The Doctor Shortage," Rashi Fein of the Brookings Institution examined approaches to increase output of medical care services, to improve the quality of care, and to control costs. His conclusion was that the advantages in favor of group practice were so compelling that its development should be fostered on a broad scale. Experience in HIP provides strong support for this assessment. Most of the examples do not relate specifically to the aging population. However, any measure that has an impact on the economics or quality of medical care in general is, of course, important for those in the more advanced age groups. No "RUNAWAY" ON PHYSICIAN SERVICES Contrary to the forecasts of runaway utilization when costs are fully prepaid, the use of physician services in HIP has been at about the same rate (approximately 5 physician visits per person per year) as is reported for the general population. It is clear that removing the economic deterrent to receiving medical 1 This supplemental premium is applicable for Medicare beneficiaries who were previously enrolled in HIP under a group contract; the premium is $3 per month for beneficiaries joining HIP as individuals after age 65. care has not resulted in abnormal use of services. In fact, hospital utilization is substantially lower in HIP than in the fee-for-service medical insurance in this area. This finding was reported earlier based on experience during the late 1950's. The largest and most comprehensive of the studies conducted on the issue compared City employees and their dependents enrolled in HIP-Blue Cross with other large employment groups of persons covered by Blue Shield-Blue Cross. The hospital admission rate in the study year (1955) for HIP subscribers was 81.1 per 1,000 and for those covered by Blue Shield was 93.0 per 1,000. (These rates are adjusted for differences in age-sex composition.) More recent data for City employees and their dependents enrolled in HIP indicate that there has been almost no change in the hospital admission rate since 1955; in 1962 it was 78.1 per 1,000 and in 1964 it was 84.0. On the other hand, hospital rates in the general community have slowly increased over the ten years, 1955-1964. Lower hospital utilization is not unique to HIP. In the Federal Employee Health Benefits Program, wherever prepaid group practice exists, members of the group practice plan have far lower hospital utilization than Federal employees and their dependents in other plans. The margin varies from about 35 per cent to 45 per cent. In our opinion, the savings in costly hospital days result principally from the availability of medical group centers with diagnostic facilities, capitation reimbursement of the medical group in contrast to the situation outside of group practice where the physician's fee is directly linked to the service rendered, and the use of highly qualified specialists. Two other studies will be cited. In 1951, four to five years after the start of service, HIP became part of a comprehensive study which compared morbidity levels, disability due to illness, and medical care practices in HIP and in the city at large. It was found that a larger proportion of the HIP membership saw a physician during the year; they were more likely to receive preventive health services; more of them had family doctors, pediatric care for their children, and dental attention, than did the general population. Also, HIP members appeared to have a lower threshold for recognizing acute illnesses and they tended to seek medical care earlier in the course of illness than was the case in New York City as a whole. In September 1962, the Department of Welfare enrolled about 13,000 recipients of public assistance in seven of the medical groups affiliated with HIP in the largest of its experimental efforts to bring Welfare clients into the mainstream of medical care rather than to isolate them in special programs and clinics designed to serve only the poor. Twelve thousand of the new enrollees were receiving Old Age Assistance (OAA) and living in their own homes. They represented about 38 per cent of the OAA caseload in the city at the time. The other new enrollees were patients in proprietary nursing homes and made up about 30 per cent of the Welfare clients in such homes. Comparisons were made of the medical and hospital care experience of a sample of Old Age Assistance recipients in HIP and those not so enrolled; similarly for nursing home patients (Exhibit). Physician visit rates were almost identical among those in HIP and the non-HIP group; hospital utilization rates were consistent with the differences found before the demonstration program started. However, the proportion of those in HIP who received no ambulatory care went down whereas the corresponding proportion in the non-HIP group remained unchanged. There was a major change in where the HIP patient saw the physician, the shift being from high dependence on home visits to the receipt of most out-patient care in the medical group center. This change was partly due to special measures taken to increase the possibility that the OAA's, like all other members, would obtain their medical care at the group centers where laboratory tests, X-rays, and immunizations could be carried out. Another observation was that the kind of patients who tended to be lower utilizers were likely to get more service when they were enrolled in HIP than they did otherwise. For instance, Puerto Ricans, a relatively low utilizing group, saw doctors more often if they were enrolled in HIP than if they were not. Finally, during the study year, the death rates among the OAA recipients in HIP and those not in HIP were about the same; in the next year and a half mortality aming the HIP group was lower than among the others: 11.7 per 100 as compared with 13.3 per 100-a difference of 13.7 per cent. 1 The rate for 1964 includes the experience among persons who died during the year; earlier data do not. Inclusion of deaths accounts for the difference between the 1962 and 1964 rates. NURSING HOME PATIENTS With regard to nursing home patients, the rates of physician and hospital use were very similar for HIP and non-HIP patients. Hidden in this similarity of rates were significant changes in type of care received. Welfare officials visiting nursing homes indicated that the shift to HIP resulted in substantial improvements in the quality of medical attention. This was reflected in part by the greatly expanded use made of laboratory services. Welfare officials also pointed out that a more rational use was being made of drugs. In the nursing homes under HIP care, the cost for drugs averaged $17.80 per patient in the study year; the corresponding figure for other nursing home patients was $23.18. We are no longer engaged in a demonstration program. Medicaid is here and all of those enrolled can select as their source of medical care physicians in the community at large willing to accept them as patients, out-patient clinics in hospitals, or HIP. Medicaid members of HIP are covered for both out-of-hospital and in-hospital medical care from the Plan's physicians. In the demonstration program, Welfare regulations required that hospital admissions of Welfare clients be made to general service ward accommodations and HIP physicians could not continue to assume responsibility for the Welfare patient's care when he went into the hospital. Medicaid has changed this, thereby eliminating the critical break in continuity of care that previously existed. HIP continues to be intensely interested in determining the impact that its system has on utilization, mortality, and disability rates of both Medicaid and Medicare enrollees. When more time has elapsed, ways will be found to examine this issue further. The public normally thinks of medical care in terms of physicians and hospitals ready to provide services when illness strikes and by and large this is the content of medical care in the community at large. Prepaid group practice, typically, is concerned with a program of care that enlarges on this concept. It is concerned with the totality of health care-not just the treatment of illness. For example, HIP emphasizes preventive health services. As an aid to the physician, it distributes a quarterly bulletin to subscribers and assists the medical groups in organizing and programming health education meetings for the members. When the Welfare demonstration project was started, and later under Medicaid, special brochures were prepared by the Plan and distributed to the new members to familiarize them with the benefits and how to obtain them. Long before Medicare, the program included educational meetings in the medical group centers on physical and emotional problems of the aging. These have been intensified (Exhibit). In addition to health education, the Plan through a highly qualified staff of social workers provides consultation services to physicians and administrative personnel of the groups in dealing with patient problems requiring community resources. A nutritionist staff is also available for consultation and aids the physicians in regulating diets for diabetics, hypertensives, the obese, and many other groups of patients requiring a special diet regimen. Opportunities for testing the practicality or value of innovations in medical practice and benefits exist in group practice in a way that cannot readily be duplicated in fee-for-service solo practice. HIP and other group practice plans are exploiting these opportunities in a number of critical areas with great potential benefit to the aging. Glaucoma detection is an important preventive health measure but its incorporation into medical practice has been difficult principally because of the shortage of ophthalmologists. Several years ago HIP initiated a program through which well-trained nonmedical personnel could be used to perform tonometry and thereby locate patients for whom more definitive tests should be performed by the ophthalmologist (Exhibit). A significant aspect of this effort is the training and use of nonphysicians to perform tasks usually carried out by physicians. There is almost universal agreement that an expansion of this approach on a selective basis to other branches of medicine is essential to conserve physician manpower. SCREENING RESEARCH UNDERWAY HIP is currently engaged in a highly complex research project which has as its end goal determining whether periodic screening for breast cancer by means of clinical examination of the breast and mammography (a relatively new soft tissue x-ray procedure) will result in a reduction in mortality from breast cancer. About 6 per cent of the women during their lifetime develop breast cancer and half die within five years of cancer detection. The tragedy of this condition is that despite the attention given to it, there has been no reduction in the rate of mortality from breast cancer in over thirty years. The hope is that early detection through screening will change this picture. HIP was selected by the National Cancer Institute for the project because of the Plan's long record of successful research, its access to patients, and the ability to provide follow-up medical care at no additional cost to the patient. Preliminary findings are encouraging; between 65 and 70 per cent of the breast cancers in the screened group of women are detected in a localized stage as compared with 47 per cent in a comparable group not screened. An example of breaking new ground in providing services is found in a demonstration program HIP is conducting to determine costs, personnel, and organization needed to provide mental health services. Fears about high costs have delayed the inclusion of psychiatric treatment as a benefit in health insurance plans. When such services are covered, they are usually accompanied by large deductibles or coinsurance. HIP's demonstration project, supported by a grant from the New York Foundation and the Public Health Service, has as its objective establishing a mental health service which is fully prepaid. Currently the psychiatric benefit in HIP is limited to consultation. For demonstration purposes this benefit was expanded in the largest of the Plan's medical groups to include treatment from phychiatrists, psychiatric social workers, and clinical psychologists. Information from the project is now being used to plan three regional mental health centers where psychotherapy will be available for HIP members as a prepaid benefit. It is expected that the broadened program will start in mid-1968 with about 200,000 persons, including those on Medicare and Medicaid, enrolled for this benefit. Under active consideration in HIP is an automated multiphasic screening program. The pioneering experience at Kaiser-Permanente, the largest prepaid group practice plan in the country, has encouraged us to consider ways in which multiphasic screening can be incorporated in our Plan. There seems to be little question about the ability to detect disease early through this type of screening program at far less unit cost than is ordinarily the case. We are impressed by the need to establish a close link between the screening center and the physicians responsible for follow-up care. It is often worse than useless to uncover a condition if such a link does not exist. Automated multiphasic screening in prepaid group practice is an integral part of a single system of medical care, and problems of follow-up are far less serious in this system than outside. It is also clear that the maximum value of screening lies in reaching the population long before they are old enough to receive Medicare benefits. The objective of early detection is either to reverse the disease or place it under control soon enough to delay serious consequences. While disabling illness cannot be postponed indefinitely, it is hoped that early detection of disease will permit the individual to lead a more productive life over many more years than at present. In summary, group practice in HIP has led to: (1) Changes in the pattern of using medical services, with greater emphasis on care early in illness. (2) A broadened concept of the responsibilities in the field of prepaid medical care to include health education, social services, and nutritionist consultation. (3) Moderate levels of utilization of services accompanied by demonstrated savings in costs for hospital care. (4) Innovations in health benefit coverage; the latest benefit to be offered shortly is comprehensive mental health services. (5) Demonstration of the use of nonphysician personnel as in glaucoma screening and research in the value of new screening procedures as in breast cancer screening which utilizes mammography (soft tissue x-ray). (6) Availability of high-quality, comprehensive medical care from medical groups on a fully prepaid basis to all segments of society including Medicare beneficiaries and Medicaid enrollees. The emphasis in this presentation has been on HIP experience. However, to a considerable extent this is paralleled by the performance of other prepaid group practice plans. There seems to be little question but that a major part of the solution to the shortage of medical manpower, control of utilization and costs, and the problem of rapidly implementing new advances in medical knowledge depends on the spread of group practice. This will, however, be a slow process unless the Federal government acts to assist and stimulate the growth of group practice prepayment plans. Direct loans and grants are needed to meet developmental and start-up costs for new programs and to construct and improve facilities in existing programs. (The chairman addressed the following questions to Mr. Brindle in a letter written after the hearings:) 1. Mr. Haughton, Deputy Administrator of the New York City Health Services Administration, has informed the Subcommittee that many OAA recipients served by H.I.P. expressed some reluctance to leave the municipal clinics, which were so familiar to them. Did this attitude in any way cause serious problems? 2. You mentioned that Medicaid recipients now served by H.I.P. do not pay deductibles or coinsurance because a municipal agency pays such charges. May we have additional details and comments on the desirability of such arrangements? 3. Your comment about H.I.P.'s quarterly bulletin, and your emphasis ou preventive health services reminds me of an amendment I have proposed for this year's Social Security legislation. It would instruct Secretary Gardner to conduct a study of the desirability of making health screening a Medicare benefit. May I have your reaction to this proposal. 4. I also believe it might be a good idea to have appropriate agencies authorize preparation of a health care manual that could be distributed to Medicare recipients at an appropriate time. Would such a publication be helpful, if carefully prepared, possibly with the help of leaders from the communication media? (Your experience in health education programs at HIP certainly should give us helpful insights.) 5. Your demonstration program relative to mental health services is of great interest to the Subcommittee. I hope you will keep us informed of your progress. 6. Your statement strongly suggests that Medicaid patients could be served effectively through group health practice on a per capita fee basis. I would like some additional comments on services provided through HIP, as compared to services provided to others eligible in New York City for Medicaid, but not served by HIP. I would also like your views on whether similar programs could be established elsewhere. As I understand it, there are relatively few group practice plans in the nation. Can we expect growth of such plans at a rate that will have significance for Medicaid recipients, even with the kind of Federal help you suggested in your testimony? 7. Mr. Oriol has informed me that you participated in the proceedings of the final day of the National Conference on Group Practice at the University of Chicago on October 20 and 21. Perhaps that conference has suggested additional points that you may wish to make to this Subcommittee. If so we would be happy to receive them. (The following reply was received :) (1) I believe Dr. Haughton was referring primarily to OAA recipients who were receiving medical care from highly specialized out-patient clinics in municipal and voluntary hospitals. Arrangements were made for these recipients, on request, to remain with the clinics rather than transfer to HIP. The number involved was quite small, about 100 out of the 12,000 ambulatory OAA's in the program. With regard to the others, there was evidence that confusion existed initially among the OAA's about their HIP benefits and where they were to receive medical care. Special efforts were made by HIP and the medical groups to clarify the situation. These included, in addition to health education material and invitations to visit the groups for evening meetings, a home visit to many new enrollees to explain the HIP system and urge that an appointment be made for a medical examination. We think these measures have paid off, but we recognize that the change from past, poor medical practices to a desirable pattern requires sustained effort. (2) In this question. I assume you are referring to Medicaid recipients also eligible for Medicare, Part B. The arrangement being made with Social Security Administration is for HIP to be reimbursed by this agency for the per canita cost of services covered under Medicare, less the average value of the deductible and 20 per cent coinsurance. The Social Services Department of New York City |