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Some interesting conclusions can be drawn from the unique language used by Congress to establish RMP. First, the program was described as a “partnership" implying an equal role in the decision making process by the partners involved. The only mechanism provided in the act for exercising this role was the advisory group which must advise on and approve the actions of the region. Later, Congress used the term "oversee.”

Secondly, the term "medical center official" was used in place of a "representative of medical centers." An official is one with the authority to commit his organization or institution to a given course of action.

Thirdly, it spoke specifically of "hospital administrators,” not representatives of hospitals. This again implied a specific level of authority and function within the hospital world. If further implies that this person or persons would have the authority to speak for others in his category.

Fourthly, the act specifies both “practicing physicians” and representatives of "appropriate medical societies.” The modifier "practicing" would simply differentiate this physician from those who might be in administrative or other capacities. But the modifier "appropriate" would seem to have more specific connotations. From the legislative history we must assume that this was to be a person with the authority to speak for organized medicine in the region. Even without the benefit of the legislative history, "appropriate" logically would refer to the organization that historically has had the greatest policy impact on medical practice, the most significant legal impact, and geographically covers the a rea concerned. In the vast majority of the cases, "appropriate" could only mean the state medical society. There are situations when in multi-state regions more than one state society must be represented and there is at least one instance in which the state society may be described as slightly bifurcated but there can be little doubt as to the general appropriateness of state societies.

Fifthly, the same modifier, “appropriate,” is used to describe voluntary health agency representatives, as members of the legal advisory group. Again, the structure, function, and coverage of each voluntary health agency would determine the appropriateness—that is, whether it should be the statewide organization that is involved, or some other level.

But, from a practical point of view, it would seem that RMP would want to associate itself with the voluntary health agencies at the point in the agency's structure where the major policy decisions are made. This point differs to some extent among the voluntary agencies from state to state. It is evident that to take full advantage of the relationship with the voluntary agency, RMP has to be plugged in at the decision making point, the point at which new programs are designed, objectives set, data accumulated and stored, financial determinations made and general organizational policy established and executed.

In most cases, this appears to be the state-wide organization. Not to involve the voluntary associations at the policy making point will result in much duplicative effort and the lack of ability to fully utilize all of their existing resources on a coordinated basis. More important, perhaps, is the difficulty in obtaining a definite commitment for support of RMP objectives if this relationship does not exist at the policy making and management level. Agreement on issues without the authority to commit support, funds or resources is as worthless as pursuing the vote of citizens of Washington, D.C. for a Virginia election.

Even though representatives may be chosen from the "appropriate" bodythat is, chosen from the level within organized medicine, the hospital associa. tion and the voluntary health agencies where the vital decisions are made and the policy is set-there is more that must be done if progress is to be made. It amounts to giving the partners a sense of confidence that their role in the program will not be subverted. This is especially difficult because the relationships that have existed in the past between these partners have been extremely limited and even then, some were viewed with suspicion.

Some times those of us who live with the programs tend to forget that a massive amount of planning activity has been thrust upon the health leadership. This activity seldom is based on long established, firm relationships; thus, there is bound to be some uncertainty. This uncertainty requires a profuse amount of reassurance and reconciliation to keep the new partnership intact. Let us recognize that this partnership is voluntary, something even less secure than a commonlaw marriage, and until there are abundant children in the form of successful operational projects, it may be hard to keep the faith.

ROLE OF REGIONAL COORDINATOR Because of this, I believe it is the Regional Coordinator's role to know intimately the decision making mechanisms of the health power groups primarily involved in his region. Not only must he understand the mechanics of their decision process, but he has to have a fairly good knowledge of the people involved and what causes them to take the positions that they do. He has to have some assurances that the representatives of the various power groups have the authority to speak for the decision making apparatus within their own organization. He has to have some assurance that the power group's organizational framework will back up their representative in controversial matters. If the representative's authority is limited, as it is almost certain to be, the Coordinator should know these limits and compensate for them.

The Coordinator is further obligated to back up the representative with his own group by personally providing information and assurances to the decision making bodies within the representative's group on matters of controversy. In most cases, this will mean routine appearances before the executive councils of the state hospital association, the state medical society, the various voluntary health organizations and medical center groups. It means, above all, that he has to be prepared to negotiate differences in as amicable an environment as passion will allow.

There are other problems within the health power structure that face the more complex region. Although they may not directly affect each of us, at least to the same degree, they nevertheless may have a very profound effect upon the reaction that Congress has to the program. To date, Congress has indicated an unusually favorable reaction, but this reaction could reverse itself if these problems are not dealt with propertly and soon. In my own self defense, I have not mentioned California, and I do not intend to, but let me quote from an article written by a man for whom I have the greatest respect, George James, M.D., Dean of Mt. Sinai School of Medicine, New York. It appeared in “New York Medicine,” April 1968. I quote without his permission :


"What problems are associated with Regional Medical Programs and how is New York City going about resolving them? New York City has a particularly difficult problem. Those of you have been associated with the review process of the heart, stroke and cancer program in Washington have noticed that it is very easy for a state with a single state medical school, a single state health department, and relatively few really vital agencies to organize for a regional program. This is true for some of our Midwestern states where the entire process is very simple with a single state governor, a single state legislature, a single state health department, a single state university with most of the doctors in the state being alumni of the state university. All of this makes for a very simple arrangement.

"In New York City we bave seven medical schools; we have a large number of additional sophisticated agencies and institutions. This makes for quite a bit of trouble. It creates major problems for intercommunication among groups which have not been notable for their ability to communicate before. Now. in addition to this, New York City has very great needs, and they are very visible needs. If there are any of you who feel incapable of adequately recognizing these needs, there are at least three dozen agencies in the state that will be very happy to point them out. There is great citizen demand for services."

Dr. James stated the problem of the complex community clearly and briefly. It is not as easy to isolate, understand describe the decision making process in the areas where the most people are, where the most voters are, where the most Congressmen come from. This poses a far greater problem than most of us realize if you stop to think where the mass of our health problems exist and who votes the dollars in support of the program.

As Coordinators and as individuals interested in the health of this nation, we face our greatest challenge during the next two years. We are faced with mar. shalling the health resources of the metropolitan areas which contain our most complex problems in terms of relationships. We have to seek a greater understanding on the part of all the health power structure that this program, which all of the leadership seems to prefer, may be significantly modified it momentum is not gained in the highly complex urban areas.

At this point in the program if a speaker raises problems, he ought to have some pat solutions to them. Frankly, I do not, except to say that we should proceed as we have been, with more of our energies focused on the urban problems. We should not lose sight of the fact that alti ugh there have been problems of relationships, they have been relatively minor compared to other programs of this magnitude and especially programs as unique in approach as this one.

It does seem to me that in facing these problems the main challenge to the Coordinators over the next few months will be to maintain the integrity of the program. If the partnership concept is lost--that is, if it becomes predominately a medical society program or a hospital program or a medical center program in place of a balanced program between the partners—then its lustre and innovativeness will be lost. We can develop models and pilot projects until we are inundated with the reports involved, but they won't mean a thing unless they are accepted by the total health manpower through their involvement from the ground up. Obviously, there is a price to be paid for involvement, enlarged staffs for the schools, easier access to continued learning for the professional person, and improved service facilities for the institutions. The test will be the amount of dividends that are paid to the people in terms of better health care.

California II

FUNDED OPERATIONAL PROJECTS Coronary care training-Area I (San Francisco)

Objectives. Will develop and establish a confederation of Coronary Care Units throughout northwestern California. Training will be provided for nurses and physicians in patient care and for nurse educators and nurse administrators. Supportive programs will be coronary care conferences; a reference information center and newsletter; and consultation on unit design, management, and specitic care problems. Roseville pilot program

Objectircs.--Will be a living laboratory for development of programs in continuing physician education, inservice training for paramedical personnel, multiphasic screening, community information and education, tumor board consulta. tion, and cerebrovascular disease and ONS malignancy diagnosis and evaluation. Applicable to entire area. A training program for physicians in coronary care-Area IV (Cedars-Sinai)

Objectives.To provide training programs for physicians who will occupy positions as directors or associate directors of Coronary Care Units in community hospitals and who will ultimately provide leadership in cardiology at the community level. A basic training course will be given, followed by continuing education and consultative services, and seminars and workshops for continuing liaison between the medical center and community hospitals. Watts-Willowbrook postgraduate education

Objectives.--Joint proposal of University of California at Los Angeles and V'ni. versity of Southern California Medical Schools, the County of Los Angeles, the Charles Drew Medical Society, and the Community of Watts-Willowbrook. A combination planning-operational proposal. This project will coordinate the establishment of a Watts-Willowbrook district Regional Medical Program with the development of a postgraduate medical school. RJIP medical TV networkA center for the continuing education of health

care professionals using television and other audiovisual materials Objectives.-Based on the ULCA campus: the project will support medical programs via the Medical Television Network (MTN). Partially funded by a PHS contract (expires June 30, 1968) MTX began as a pilot program. Seventy participating institutions in 6 counties and 6 producing institutions. A community enterprise; all programs are officially approved for credit by American Academy of General Practice.

Program for training physicians and nurses in coronary care techniques

Objectives.—The pogram will begin with a central training center at the Los Angeles County Hospital and two cooperating hospitals (Good Samitarian and St. Vincent's). This central program will provide a base to initiate training for the entire region and will be expanded to include 6 additional hospitals in the second year. Training of physicians in intensive care for small hospitals (pilot program,

Pacific Medical Center) Objectives.-A pilot project (one year only) designed to train physicians in skills, as applicable in a small general hospital, in order to provide intensive care to patients with acute myocardial infarction. (Designed for hospitals not covered under Project #1). Hypertension-Area I-University of California, San FranciscoNorthwest

California Objectives. Demonstration training program for medical and allied health personnel in ten (10) community hospitals for referral and followup of hypertensive patients. Includes computerized registries. Pediatric pulmonary-Area VIII

Objectives.-Irvine Pediatric Pulmonary Demonstration Center. Center will demonstrate the proper diagnosis and treatment of children with respiratory problems; to investigate the relation of pediatric pulmonary disease to chronic conditions of later life.



1. The American Medical Association News of August 28, 1968, carried a story indicating that the cost of Medi-Cal for the past fiscal year was $208.1 million, about one-third less than originally predicted. Is this a correct statement? May the Subcommittee have a statement on the reasons for this reduction in anticipated cost?

Answer.—The correct figure for the State of California General Fund estimated cost of Medi-Cal for the fiscal year 1967–1968, as approved by the Legislature in May, 1968, was $232.7 million. This was a reduction in the original estimate of the cost, which was $305 million. This estimate ($305 million) was revised in December of 1967 to $274 million. Reasons for the decline in cost were a decline in utilization of certain services, specifically including dentistry, and the effect of more strict utilization controls imposed as a means of trying to reduce the total cost of the program. The medically needy caseload also showed a slower rate of increase during the second year of operation of the program than had been anticipated based on first-year utilization.

2. How many persons past 65 have been served by the Medi-Cal program since it was established? What kind of treatment have they received ? Do you have estimates of average costs for the elderly as compared to other age groups?

Answer.-The total number of persons 65 and over who were eligible for Medi-Cal benefits was 410,900. Based upon an expanded one per cent (1%) sampling of Medi-Cal recipients for the fiscal year 1966–1967, we believe that 337,000, or 82.5 per cent of this number, received some benefits from Medi-Cal during that fiscal year. The categories “Physicians” and “Drugs” constituted the largest type of treatment received. Of this 65 and older group, almost 10 per cent received nursing home services each month. Unfortunately, our average cost per eligible for those people 65 years and older cannot be used to com. pare utilization and costs between other age groups, because our data do not include Medicare services and costs.





DECEMBER 12, 1968. DEAR SENATOR WILLIAMS: Our office reported that minimally eight million dollars is being bilked annually from the Medi-Cal Program by medical practitioners. A copy of the report supporting our findings is attached for inclusion in your transcript.

As we indicated in our report, we believe that such cheating seriously injures both the program and the public. Since the release of our report, we have learned that similar problems are occurring in other states. One official told us that we could remove the cover from our report, replace it with the name of his state, and re-issue it with no other changes.

Our investigation found that Medi-Cal abuses have a particular impact in terms of nursing homes and long-term case facilities. Medicare provides greater reimbursement to nursing homes than Medi-Cal. Therefore, the potential for transferring a nursing home patient from Medi-Cal to Medicare may determine the patient's admittance to a nursing home. Special arrangements between hospitals and nursing homes exist solely for the purpose of maximizing government payments to nursing homes. We also found nursing homes requiring underthe-table payments before admitting patients.

A major problem is the sheer "bigness" of the program. Efforts to manage the program through the Blue Shield office in San Francisco and the Blue Cross offices in Los Angeles and Oakland have obviously created enormous difficulties which are thoroughly discussed in our report. Special consideration should be given to localizing the administration of this program. Smaller regional admin. istrative units might reduce the management of the program to a scale which may be encompassed by the mind of man. At the present time, Blue Shield receives $0,000 claims a day at its main office in San Francisco. This obviously presents a burden which even the most advanced computer cannot handle in terms of both processing the claims and effectively weeding out frauds.

Aside from conquering the immensity of the program through some effort at localization, another broader concept may also be seen in the problems which we have uncovered. A major contributor to these problems was the pressure on the State of California to take advantage of the funds made available by the federal government through Title Nineteen. Better coordination between local governments, the state and the federal government would certainly have resulted in a better program. As we note in our report, peril accompanies prosperity when federal funding rushes the states into adopting hastily conceived programs.

We emphasize in our report that none of our comments are intended to derogate the Medi-Cal Program. We consider it essential. Our sole goal is to improve this program. We hope that this report will aid you in your efforts. We will be happy to supply any further information which you may require. Sincerely,

CHARLES A. O'BRIEN, Chief Deputy Attorney General.

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