trial people, and so on, but if it is to be done on a massive scale I think it needs governmental assistance.

Dr. JAMES. Mr. Oriol, there is an important principle here that I think is worth mentioning. When the Government gets involved in medicare and medicaid, it tends to accent quantity of service of a uniform quality instead of putting the premium on quality.

The net effect is that a physician will make more money if he sees more patients. Another effect is that with the deductible features of medicare and medicaid, people are told to get good and sick before they see the doctor, sick enough to spend $40 or $50 of your own money and then we will pick up what is left.

Mr. ORIOL. Let me interrupt. I have a statement from a doctor at Sinai Hospital.10 And he comments on that point. He says it seems inconceivable that one could approach the problem of elderly people who have much greater than normal health service needs and considerably less than average incomes.

Then he cites barriers to their receipt of care. I refer of course to the deductibles under part A and part B. Is that true?

Dr. JAMES. That is quite true. The general principle is that would it not be nice if the Federal Government could so administer its medical program so that the premium is put on high quality so that if a group would organize a group practice with home care programs, complete continuous care, family care, care for all stages of disease, it could get a higher reimbursement rate.

Actually if a group is going to do this, its costs will rise and it loses money, so the premium is put on getting the cheapest form of care and seeing the most patients in the shortest period of time. This is the way you can get the greatest reimbursement. If the Federal Government would only make it profitable to give high quality comprehensive care, this would lead groups to organize group practices. When they develop those kinds of programs they will get better reimbursement.

This is the general plan behind the regional medical programs. If an area wishes to develop a better program with higher quality care, they can get more money.

This principle is also back of the National Institutes of Health research program. You can get premiums put on excellence, on quality. Medicare and medicaid is just the opposite. Here the emphasis is put on quantity.

THREE-DAY REQUIREMENT QUESTIONED

Mr. ORIOL. I wanted to ask two questions of both of you on that point. We had some discussion here yesterday on the requirements under medicare that a person spend 3 days at a hospital before that person can be assigned to an extended care facility.

The question came up about whether the physician seeing a patient, knowing that that patient really needed let's say a month or two in an extended care facility and did not really need that 3 days in the hospital, that even though there it violates the principle that medicare is really a health insurance program, couldn't that physician sign a certificate in here saying that in his estimate that person should go to the extended care?

1 See p. 278, app. 2. Letter from Dr. Frank F. Furstenberg, Medical Director.

83-481 0-67-pt. 1-7

What is your reaction? Do you think that poses grave difficulties for medicare?

Dr. JAMES. I would be heartily in favor of such a principle. However, there is a point here that is worth mentioning. Many of the regulations of that nature are aimed at preventing financial abuse of the system because if an individual can be admitted directly to an extended care facility, without first being seen in a hospital for a couple of days, the implication is that perhaps he really is not sick enough to require this expensive care.

I think what this means is we must have better supervision of the medical care program.

Mr. ORIOL. Suppose a person were sent to the hospital for a comprehensive medical examination and then if that comprehensive examination so showed that person could then go to the extended care facility.

Dr. JAMES. I would be in favor of sound methods of evaluating the medical care of the patient rather than the counting up of the number of days he has been in the hospital for eligibility.

Mr. ORIOL. I think it was said by Dr. Roemer that most of our hospitals are under 65 beds?

Dr. ROEMER. Under 100 beds.

Mr. ORIOL. Are these hospitals capable of giving the swift comprehensive check up we were just discussing?

Dr. ROEMER. I agree with Dr. James that this may be a difficult way to get a diagnostic workup of the patient before he is admitted to the extended care facility.

It is kind of an admission of the inadequacy of our out-of-hospital services that the law requires in-patient admission for 3 days, which can be a very wasteful matter.

Many of the smaller hospitals can do a proper workup, yes. I could not give an exact percentage. Many of them could not give as good a workup as an outpatient service in a larger hospital or as a good grouppractice clinic. I think the important consideration in medicare is to require a diagnostic workup of the patient, with perhaps specified standards being written in as a condition for nursing home admission. Mr. ORIOL. You think this would save a lot of money and serve the individual better?

Dr. ROEMER. It would serve the individual better and probably then it would save money in the long run, yes. Some of the 3-day-hospital admissions now are essentially abuses; the management of the patient did not really require hospital admission.

Mr. ORIOL. Dr. James

Mr. MILLER. Mr. Oriol, before you leave this point I would like to direct a question or two to Dr. Roemer on this matter.

Do you have any lack of confidence in the ability of the individual physician to certify a person for extended care? Is your position, as might be inferred from your statement about the complicated workup, suggesting that the individual physician is not competent to certify a patient?

Dr. ROEMER. No, I think many individual physicians would be able to do a proper diagnostic workup in a private office.

Mr. MILLER. You say many physicians. Does this imply that the bulk of them are not able to?

Dr. ROEMER. I would not give a percentage figure. There are many individual physicians who simply don't have the resources, the equipment, the technicians, the X-ray machinery, et cetera, in a private

office to do this but

Mr. MILLER. Excuse me. Do these men have the capacity to recommend hospital care for a patient? Do they?

Dr. ROEMER. Yes.

Mr. MILLER. But they do not have the capacity and professional ability to make such decisions with reference to long-term care? A nonhospital institution?

Dr. ROEMER. I said they lacked the resources, the equipment, the technical staff to do a proper diagnostic workup in a private office. Mr. MILLER. Then you would say

Dr. ROEMER. Some of them, that is.

Mr. MILLER. What percentage of the physicians are incapable of making a proper diagnosis of the patient, because this is the crux of the point you are making it seems to me.

Dr. JAMES. I think the problem is not quite that way. When a patient is admitted to a hospital, there are a lot of pressures to get him out of the hospital.

First of all, costs are tremendous; second, there is pressure from other physicians to get their patients in the hospital, so that the tendency is to keep patients from overstaying their need in a hospital. This is not quite true about the extended care.

Mr. MILLER. Thinking about the competence of the physician

Dr. JAMES. Once you are admitted to an extended care facility, you can spend the rest of your life there, and the pressures are not as great to get out of there. This problem may, therefore, be purely a matter of fiscal controls to keep extra money from being spent and not a problem relating to the competence of the doctor.

Mr. MILLER. That relates to another question as to whether this is the purpose. My understanding of HEW's interpretation of what extended care means is an extension of hospital care presumably involving some degree of acute problem or serious medical situation that initially requires hospital care. As the Medicare Act is set up the purpose of the extended care, as being interpreted in many quarters, is to provide additional care. This is a possible argument for prior hospitalization if this is what it is.

But I have been a little disturbed about the question of the competence of the individual physician to determine the need of that patient for long-term care.

Dr. ROEMER. I won't argue with HEW's interpretation but it seems more reasonable to think of extended care as something that does not necessarily stem from a hospital but from the need for extended care service to the patient.

Now the initial illness may have occurred while the patient is at home, and if a proper diagnosis and decision on therapy can be made while he is living at his own home and is served by a private physician, I believe he should be permitted to enter directly into an extended care facility.

The resources of private physicians for that proper workup varies. I cannot give a percentage figure. I have visited many private physician's offices where I would say a proper workup could not be done.

There are others where probably a very good job could be done. In general, we have seen this great development of hospital outpatient departments, with all the technicians and equipment and auxiliary personnel and so on, simply because the complexities of science are such that it is beyond the financial capacity and the organizational capacity of single individual physicians to provide for these resources.

In general I believe a better workup can be done in any case through a group practice clinic or

Mr. ORIOL. Simply because of the amount of equipment and number of specialists on hand, is that it?

Dr. ROEMER. Yes.

Mr. ORIOL. Mr. Miller, if you will yield for a minute, Senator Moss has been invited to pay special attention to some of the questions that might arise at this hearing that relate to long-term care. Mr. Frantz is here representing him. I wonder if you have any questions at this point.

Mr. FRANTZ. Yes, I have a couple of questions.

I would like to refer to a comment in Dr. James' statement describing the Beth Israel program. You say at one point that there will be "linkage for medical supervision with nursing homes."

Do you refer to medical supervision of the nursing home program or the individual patient? In other words, sir, does this bring medical surveillance to the nursing home itself?

HOSPITAL-EXTENDED CARE FACILITIES

Dr. JAMES. The hospitals are being urged to develop extended care of nursing home type facilities. There are also a number of proprietary nursing homes which have been working out agreements with general hospitals so that the medical care in these institutions will be under the supervision of the teaching hospital and the patients will go from the hospital to the nursing home, and if they need rehospitalization they will come back to the hospital.

So, by tying in the ambulatory program, the inhospital program, the nursing home program, and the home care program, you are able to embrace the entire scope of medical care.

Mr. FRANTZ. Would you say that what is being done here represents a model at all as to what should be done with nursing supervision in general?

Dr. JAMES. Very definitely yes. There is a move in many States to get voluntary hospitals to go into the nursing home business and encourage them to do this, because in so doing they can literally extend their medical care program over a wider area.

Where there are now proprietary nursing homes, they are being urged to team up with teaching hospital institutions to provide this service. Much more of this should be done. The individual patient and his needs should be paramount, not the given facility in which he may be located.

Ideally, these should all be tied together-same physicians, same general concern over the patient and his needs instead of having a whole new look every time you send him to a new doctor or a new facility.

Mr. FRANTZ. Well, in the pattern of delivery of health services in the future as you visualize it, or perhaps visualizing it as it should be, what is your view of the future of the free standing proprietary nursing home?

Does it have a role in this pattern?

Dr. JAMES. I would say that in the view of the future the status of a free standing anything is in question. All of these units should be tied in together, focusing around the patient and his needs, and not letting the patient filter his way through a large number of different types of services and facilities to try to select what he thinks he needs.

Demand is not the answer to medical care if we are to meet the problems of disease before disease occurs, the risk factors, the early problems of detection.

We must motivate people to go for medical care as a routine when they feel well and then find out the risk factors they should modify, detect the diseases which are detectable, treat them for clinical diseases that occur and start them on necessary rehabilitation programs through the home, the hospital, and the nursing home.

Mr. FRANTZ. Just one more question.

In view of that do you think that we have a shortage of nursing homes in this country? Every day we hear that we need many more nursing homes and we are urged to have programs to build them, and so on. Do we need more nursing homes?

Dr. JAMES. Let me try to answer your question by approaching it a little differently. We have a tremendous number of people who need extended care facilities.

If many of their conditions had been approached at an earlier stage, they would not now be in the position they are.

If we had imaginative home care programs and excellent ambulatory programs, we would need much less in the way of institutions. With the aged population in New York City growing at an alarming rate, we cannot build institutions fast enough; we have neither the time nor the money to build them to meet this type of problem.

ALTERNATES NEEDED

We have got to come up with alternates, and the alternates are effective. We do need more home care facilities; I would hope they would be closer to the hospital instead of the free standing nursing homes. We also need much more in the other way of services to replace institutional care, better home care programs and better ambulatory

programs.

The old man I described for you would certainly have ended up in a nursing home and his wife in a nursing home and we might spend $20 a day caring for them, where in their own apartment it would cost $2 or $3. Here they get better service, are much healthier, have more dignity, and are far more self sufficient.

It is cheaper, it is better, and it is more socially desired.

Mr. ORIOL. Dr. James, on home health care I was startled by the limited number you described. What are the big obstacles and don't we need more of that for medicare?

Dr. JAMES. Well, this particular man described for you lives in the Queensbridge housing project in New York City, which is a public