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So it is, I would guess, quite widely read.

Senator SMATHERS. All right, sir. I would like to have your views on actions that can be taken to provide high quality health services to elderly persons who do not now have such services. · Dr. NOLEN. Frankly, I am not aware that elderly persons do not already have high quality health services. I suppose this depends to a large extent on how one defines the term “high quality health service."

In my opinion the doctors in our area are providing high quality medical care to everyone, including the elderly, whom we serve. And we serve everyone in our county and its immediate environs.

If we choose to define “high quality medical care” as that care which can only be administered in university centers or hospitals of over 1,000 beds, as some people now try to define it, then of course the elderly, along with most of the general populace, don't have immediate access to such care.

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SERVICES IN SMALLER HOSPITALS

I contend that an 80-bed hospital, of the type we have in Litchfield, can provide excellent medical care for 95 percent of the population 95 percent of the time. The other 5 percent who, 5 percent of the time, need the elaborate facilities available only at a huge center, can be referred there for such care as the need arises. This is what our practitioners of medicine have done, are doing, and will continue to do for the elderly as well as for anyone else who needs it.

I had better emphasize that when I say the elderly are now receiving optimum medical care, I base my statement only on my own personal experience. What is true in Meeker County, Minn., obviously may not be true elsewhere.

I have already elaborated on why I think Government programs are inevitably wasteful and expensive. I could expand on this subject further, citing examples from my experiences as a physician in city, State, and Army hospitals, but I am not certain that this is a field you want to explore at this time. If it is, just say so.

I hope this statement deals with the aspects of health care of the aged that you wanted me to consider. I will be most willing to give you whatever assistance I can be commenting on them.

Thank you again for giving me the opportunity to testify.
Senator SMATHERS. Doctor, thank you very much.

, Do we have any questions? Mr. Oriol, do you have any questions? Mr. ORIOL. No. Senator SMATHERS. Dr. Chinn, do you have questions? Dr. Chinn. The only question I would like to ask Dr. Nolen is whether he feels preventive measures outside of the hospital might be more economically pursued or whether they should be toward prevention of illness and disability from disease as a means of economic safety. Whether, in your community for instance, this would be a practical approach rather than the utilization expense of the hospital?

Dr. NOLAN. I don't know if I can answer that question specifically because I don't know exactly what type of service you are suggesting. We instituted some of the things that have gone along with these new medical programs that are associated with Project Headstart and that sort of thing. I am not sure that the statistics will bear out that the things that are found through these programs are numerous enough to warrant whatever the expenses incurred are going to be. I, of course, am in favor of preventive medicine and if it takes some sort of a plan to institute it then I agree that it might cut down expenses of the further, more intricate care that is demanded later on.

Senator SMATHERS. Let me ask you one question that has been suggested to me. Doctors are urging that direct billing be permitted under title XIX rather than vendor payments. Now, what is your feeling about that?

Dr. Nolan. They were recommending direct billing rather than vendor payment?

Senator SMATHERS. Yes. You will recall earlier this morning when we had the Government witnesses here it was their feeling that doctors would oppose getting the billing, technical word vendor, coming through the Government to the hospitals for their payments, those doctors who wanted to get it directly were creating some additional cost and some difficulty. What is your comment about this?

Dr. Nolen. I would say that we would all—I cannot say that. I would say in our community the doctors unanimously would prefer to bill the patient directly. We want to avoid as much redtape as we can, but from the practical point of view we don't bill them all directly. We pick and choose. We bill as many directly as we can and then take assignments on those where it is more practical and realistic to do so. But we would prefer to bill directly.

I would think this would be the general consensus in the medical profession. But from the practical point of view it does not work out.

Senator SMATHERS. All right, sir.
Dr. Nolen, thank you very much.

Without objection we will put Dr. Nolen's article in the record at this point.

Dr. NOLEN. Thank you.
Senator SMATHERS. Thank you very much.
(The article follows :)

ARE DOCTORS PROFITEERING ON MEDICARE?

(By William A. Nolen, M.D.) No health-care program has ever strained the ethics of the medical profession as Medicare is doing. The temptation to chisel is enormous. Are doctors succumbing?

I can't speak for the medical profession as a whole, of course, but I'll admit that I try to take as much Medicare money from Uncle Sam as I possibly can. From what I've seen and heard, a lot of other doctors are doing the same. Maybe what we're doing is ethical, and maybe it's not. It depends on your point of view.

Let's consider the matter of fees. Before Medicare, I individualized the fee on every case. The old-timer who needed a colon resection might be charged anything from a token charge to $400, depending on his ability to pay. Four hundred was my “usual fee"—that is, I never went over it, even for the most wealthy. But if a patient was financially strapped, I'd cut my charges to the bone.

Those days are gone forever. Now, with Medicare patients, we doctors charge our “usual fee" for everything. And the consultations, catheterizations, cutdowns, and other procedures things we often used to throw in for free--get tagged onto the bill. If the Government people will pay it, fine. If they won't, we can always discount it later. All this is technically ethical, of course. But it does show the way we're thinking.

What bothers me more than our new charging practices, however, is the way in which almost guaranteed payment-in-full is apt to color our medical judgment. For example, I know a 73-year-old woman who has been in and out of the office of every doctor in town for the last 10 years. She always has some complaint, most of the time purely functional. Till last July she was on welfare, and whoever happened to be taking care of her would, for next to no fee, give her the time and treatment she needed. But that wasn't much. She knew she wasn't really sick, and so did the doctor.

Now that she's on Medicare, how things have changed ! She spends half her time in the hospital getting expensive diagnostic studies and thorough work-ups by a host of physicians and consultants. Is she really any sicker than she was? Of course not. It's just that now the doctor gets paid for his proctoscopy, fluoroscopy, or his consultations. And who knows? Maybe somebody will find something wrong with her. So the studies can, in the loosest sense, be medically justified. But the main reason she now gets more attention than she used to is that it's all practically free for her—and more lucrative for both the doctor and the hospital. Is it ethical? You tell me.

That woman doesn't happen to be one of the patients I've cashed in on, but I'll admit there have been some. I'm not at all certain, for example, that I'd have taken off one old gentleman's sebaceous cyst if he'd had to pay for it himself. I'd have probably told him not to worry about it, that the cyst would never hurt him. But since he's on Medicare, I wasn't at all reluctant to do the job when he asked me to. I didn't talk him into it, but I sure didn't discourage him.

I've noticed, too, that a lot of other men are doing more elective procedures on the oldsters since Medicare came in. Warts are getting burned, moles are being removed, and a few veins strippings of minimally dilated varices are getting onto the schedule. Some of these may help the patients substantially, but many of them aren't strictly necessary. If it weren't for Medicare, they probably wouldn't be done.

The fault, of course, is not completely ours. Now that the oldsters are on Medicare, they can demand that things be done for them-and they do. After all, haven't they got a right to Government-financed medical care? Didn't Uncle Sam say they could have their warts burned, their cysts removed, their veins stripped--and he'd pick up most of the tab? Then who are we doctors to deny them what the Great Society has bestowed on them? When you consider these pressures, it's not difficult to understand why some physicians give in and take the easy--and remunerative way out.

Hemoglobin determinations, urinalyses, blood sugars, and the like are all increasing in frequency. It's possible to argue that more such tests should have been done in the past than were done, and I won't disagree. Still, I'm as certain as I can be that a lot of unnecessary checks are being run. I've seen them, and, very possibly, I've ordered some myself.

I say “very possibly" because this whole area is a nebulous one. It would take a utilization committee full of Clarence Darrows to prove that a hemoglobin, a urinalysis, a .proctoscopy, or even an exploratory lap was com ely unjustified. In medicine things just aren't that black and white. It's difficult for even the most conscientious doctor who orders a procedure to be certain that somewhere, deep down in his subconscious, his judgment isn't being influenced by the money he's going to make maybe just a little.

Lest you think I'm being picayune, let me remind you that the degree of our cheating-if that's indeed what it is—has little bearing here. Those of us who order unnecessary hemoglobins because Uncle Sam is paying are not in a good position to criticize the few who perform unnecessary hysterectomies on Medicare patients. Remember the story attributed to George Bernard Shaw about the woman who agreed that she'd sell her favors for $100,000? When asked if she'd do it for $2, she answered, “What do you think I am ?" His reply was: “Madam, we have already established that. We are now only quibbling over price."

We're all intelligent enough to know that Medicare isn't free. One of the main reasons we fought it so strenuously is that we know Government programs are inevitably wasteful and expensive. Eventually, through our taxes, we'll pay through the nose for this one. But an immediate result of Medicare is that it enables us to increase our incomes. When we're greedy and shortsighted, and succumb to the practices I've mentioned, we tempt fate. Injudicious behavior on our part may not only bring rigid Government control down on our necks but, more lamentably, may also destroy the ethical standards of medical practice we've fought so long and hard to maintain.

Senator SMATHERS. Mr. John W. Edelman and Mr. William R. Hutton, president and executive director, National Council of Senior Citizens, and Mr. Frank Wallick.

We are delighted to have you gentlemen here, as is always the case. You may proceed as you like.

STATEMENTS OF JOHN W. EDELMAN, PRESIDENT, AND WILLIAM R. HUTTON, EXECUTIVE DIRECTOR, NATIONAL COUNCIL OF SENIOR CITIZENS; AND FRANK WALLICK, LEGISLATIVE STAFF OF THE INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW

Mr. EDELMAN. Mr. Chairman, in case you have not met them already this is Frank Wallick of the legislative staff of the international union, United Automobile, Aerospace & Agricultural Implement Workers of America, UAW, who is testifying here today on behalf of Mr. Andrew Brown who is in charge of the retirees' section of his organization. On my left is Mr. William R. Hutton, executive director, National Council of Senior Citizens, who will in great measure carry the burden of this testimony. I will make a very brief statement.

I am John W. Edelman, president of the National Council of Senior Citizens, an organization comprising roughly 2 million members dedicated to building a better life for all the elderly in this country:

I mention in passing, sir, that I am also a "victim witness' in this instance. I have had two spells in the hospital as a patient under medicare program.

We of the National Council of Senior Citizens welcome the attention being focused on health needs of the elderly by the distinguished members

of the subcommittee. We appreciate the wealth of knowledge and experience being brought to bear on this problem by the chairman, Senator Smathers.

Senator SMATHERS. Thank you very much.

May I say here that looking at you after you have had those two experiences in the hospital it is evident that you are getting quality medicine.

Mr. EDELMAN. Thank you, sir. I think that is exactly true.

As you must know, our organization was in the forefront of the legislative campaign for medicare and medicaid and our members are profoundly grateful to the Senators and Members of the House of Representatives responsible for enactment of this monumental legislation guaranteeing 19,300,000 who are over 65 hospital care up to 90 days for a spell of illness and 17,600,000 of this group who signed up for optional medicare doctor insurance payment of a major portion of their doctor and medical bills.

This has resulted in a tremendous upgrading of medical care available to the elderly. However, I must in all honesty remind the distinguished subcommittee members great numbers of elderly are being excluded from the benefits of medicare and medicaid. Those being excluded are the ones most in need of adequate health care.

There are no reliable estimates I know of as to the number of elderly thus excluded from medicare and medicaid benefits but the number may run into millions.

WIDESPREAD POVERTY AMONG ELDERLY

Secretary John W. Gardner, of the U.S. Department of Health, Education, and Welfare, told the recent annual convention of the National Council of Senior Citizens in Washington that nearly 10 million, or nearly half those 65 or over, are poor.

They are poor, Mr. Chairman and distinguished members of the subcommittee, largely because they have to depend on inadequate social security benefits for their support.

Now, I ask the subcommittee members, can anyone getting social security averaging $84 a month-that is a meager $1,008 a year-find cash for the $40 payment required for hospital admission, the $50 downpayment required on doctor bills, the obligation to pay a fifth of remaining doctor bills, and the $20 payment required for outpatient diagnostic care under medicare!

We just simply think this is impossible for a great many of the persons eligible for medicare simply on the grounds of inadequate income.

Senator SMATHERS. It is obvious by your statement but I just wanted to connect this up with your previous statement that there is a large number who are not eligible to get the benefits of the medicare and medicaid programs.

Mr. EDELMAN. That is correct, sir.
Senator SMATHERS. Because of the deductible.
Mr. EDELMAN. That is our view.
Senator SMATHERS. Very well.

Mr. EDELMAN. For vast numbers of the elderly, a ride costing 50 cents for a trip downtown is a luxury they can scarcely afford. Where will they find the cash to meet these costly medicare deductibles?

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FOOD OR HEALTH CARE

Undoubtedly, many of the 1,700,000 elderly who refused to buy medicare's $3-a-month doctor insurance did so because they realize they cannot meet these high-priced deductibles. They had a grím choice between having something to eat and getting health care they might need but could not afford.

Just on this point, Mr. Chairman, could I mention that I got a letter the other day from a social security beneficiary in Philadelphia. She was telling me her only means of support is a social security monthly benefit of approximately, I think, $34 a month. And of this money she is now receiving, $3 of course is being deducted, so actually all her income is about $31 a month. She said she has been going to the doctor for some relief for a nervous condition and he has been prescribing to her certain pills, she said, which makes things worse. She writes to me-Mr. Chairman, this is a terrible tragedy-saying, "How can I get out of having to pay this $3 which I was told would benefit me so that I could use this $3 for food which I know would benefit me?"

I felt under obligation to write to her and explain what the law says about this situation. It will take her some little time, I believe this October, before she has an opportunity to withdraw from this program. I pointed out to her I thought it would be disastrous if she would render herself ineligible for these medical benefits.

True, medicaid, the health care program for the medically indigent, supplies cash for medicare deductibles in 28 States if—and that's a big

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