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ORGANIZATION OF HEALTH SERVICES

While it is important that prepayment agencies continue to pursue these objectives and to enlarge their role, other areas must also be taken into consideration. There remain some problems outside the scope of what I have discussed thus far that need the attention of our health statesmen and our legislative bodies. Too many health care facilities dealing with chronic illness are anachronistic and geographically remote. There is a significant need to update the capacities of nursing homes, certain chronic disease hospitals and rehabilitation institutes, and to relate them more effectively to the general hospital and the balance of the health community. Whereas the purchasing power of private prepayment and government programs is reaching out in these directions, special appropriations are needed to stimulate the proper capital growth of the structures required. The total result is important on a community-wide basis. If we are to achieve the proper relationship of private practice to hospitals, to health departments, to post-acute care, etc., there must be in each State an overall planning mechanism concerned with program and facilities. Thus the sensitive implementation of PL 89-749, with proper roles and representation for community health services and organizations, becomes important.

A major need is for prepayment agencies among others to evaluate various organizational forms of rendering health services. At the present time, there exists a wide band of practices in the provision of personal health services. For example, one finds physicians practicing in a solo capacity; others in solo practice but sharing joint office facilities; still others sharing income as well as office facilities; some groups constituting a hospital staff such as at Henry Ford Hospital in Detroit; and others in groups some of which are related and others not directly related to a hospital.

Further, one finds a wide range of payment mechanisms employed in paying for physicians' services. Some of the various patterns mentioned above receive payments on a traditional fee for service basis. Some are paid through a prepayment mechanism tied directly to the group of physicians and their services such as HIP in New York, and some represent combinations or variations of each.

There are those who feel that a comprehensive prepaid group practice pattern is highly productive and effective. Others feel that more informal organization and more traditional methods of financing are desirable. In all probability, some practitioners will always prefer one type of practice to another. Some may be better suited to one type of organization than to another. However, in a decade when the need for productivity is so compelling, it is extremely desirable to weigh the advantages and disadvantages of various prototypes. What are, in fact, the use, cost and professional strengths and weaknesses of various organizational patterns of medical practice? If there are quantitative or qualitative advantages to any given form, the public has a right to know about it. I have called previously for objective studies of the situation by leading associations such as the American Medical Association and the American Hospital Association. I call for them again. Further, I think any laws which artificially prohibit associated practice on the part of physicians, wherever it may be along the scale, should be struck down unless they can be directly related to either moral or ethical considerations inimicable to the best interests of the public.

At the moment, we are in a position where the whole topic of associated action by physicians is overcharged emotionally. This bears in turn upon a lack of definitive information. With costs and delivery of health services now a matter of major public policy, such information is essential if we are to avoid precipitous actions or pursuit of avenues which could lead to underfinancing or under

care.

PROGRAMS FOR THE ELDERLY

Specifically in regard to the elderly, I feel that Medicare is performing a great service. Title XIX programs, as they develop, stand to add considerably more assistance. With complementary coverage in the private sector for those with adequate purchasing power, the capacity of Titles XVIII and XIX, properly administered and implemented, can solve most of the major financing problems of older persons. We must change Public Law 89-97 on the basis of experience. I have testified elsewhere regarding the need to simplify the benefit structure under Title XVIII and various administrative considerations under Title XIX, and I feel these changes will take place if not this year, next. Many carriers

are offering highly useful benefits on a complementary basis and the enrollment has been impressive. For example, under Blue Cross, we have already enrolled almost 90% of the number of senior citizens that were enrolled before Medicare began. However, we see again some grandiose claims made by a minority of carriers regarding benefits which are not as substantive at the time of illness as one may have believed.

Finally, I think that we find the elderly in a better situation than before July 1, 1966. In fact, encouragingly so. We need, however, to push forward along the lines I described if we are to avoid losing the gains made for them as well as for the rest of the population.

Mr. MILLER. I have one question of Dr. Roemer related to this question of group practice and the need for Federal subsidy through grants for the establishment of group practices.

Is there any evidence of serious inability of physicians who desire to enter together in a group practice to obtain loans and financing?

Dr. ROEMER. There is evidence of an extremely slow growth of multispecialty group practice. I have seen data from the American Medical Association which give the latest counts on group practices organized throughout the country, since the last previous national survey which was in 1959.

The trend of the last 8 years has been one in which a great many partnership groups of doctors in the same specialty have been formed-for example, three or four radiologists coming together or two or three obstetricians coming together. This has occurred at an impressive rate.

This is convenient for the doctor, but it makes little advantage for the patient. The multispecialty groups have hardly grown at all, as a rate, over the last 8 years and this would suggest that some assistance might accelerate the growth of multispecialty groups.

Mr. MILLER. My question, however, is directed to the need for such assistance taking the form of loans or grants to the physicians. It would appear to me that a group of physicians would be regarded by most lending institutions and other private sources of money as a preferred risk.

Dr. ROEMER. Yes; I think that is true. I did not say the loans or grants should go to the physicians. I said they should go to assist in the organization of group practice and prepayment.

Mr. MILLER. The combination?

Dr. ROEMER. The combination, I think, is most important, but even perhaps group practice alone could be facilitated by the availability of an administrative person to help in working out the very thorny details of bringing together a group of specialists under one roof. There are problems of professional relationships, of real estate, equipment, and so on. This has become almost a technical specialty, the task of administering and organizing a group practice organization. Mr. MILLER. With relation to the prepayment aspect I would gather your point might be a little different from that of Mr. McNerney in view of Mr. McNerney's role for the Blue Cross and Blue Shield type of prepayment approach.

Dr. ROEMER. I have not seen the statement but I believe the combination of prepayment with group practice provides still greater advantages than group practice alone.

Dr. JAMES. Actually, these groups work in some areas, with Blue Cross, the health plan in New York. Kaiser, of course, has its own hospital program.

You see, prepayment is extremely important for many things I have tried to say because it permits people to come for care before they have serious symptoms. It is a treatment program for the total individual at all times and encourages his coming for the so-called preventive type services.

Mr. MILLER. Would it not then perhaps be more proper to voice the recommendations as a recommendation for subsidized loans or grants to group practice prepayment plans?

Dr. JAMES. It would be a higher priority. Perhaps group practice without prepayment might be an interesting evolutionary step along the way.

Mr. ORIOL. We now have about seven cities or eight cities that again have group practice, isn't that then about the total?

Dr. JAMES. Very few.

Dr. ROEMER. I recall a situation in a county of West Virginia some 20 years ago where a group of physicians attempted to organize a private group practice. This was not with prepayment, simply a group practice.

The difficulties were tremendous. There was objection by the other physicians in the community. There were difficulties in acquiring a building. There were difficulties in recruiting physicians, and so on. The mere tasks of organizing this group practice, which, after some years, did take shape, could have been aided by the services of a person who could work on these problems. Physicians are busy. They don't have the time and they don't know many of the details of business management. It is this kind of service that I think can be of

assistance.

Mr. MILLER. What was the focal point of the organization of this particular group?

Dr. ROEMER. A surgeon and a pediatrician and a few others who wanted to get together to organize a clinic. I recall a similar development in my hometown in New Jersey.

PUBLIC INTEREST IN GROUP PRACTICE

There are simply technical problems along the way. If we regard the rendering of medical care as something with great public interest, something that affects the welfare of people, I think it quite reasonable to invest public money in improving quality through group practice, just as we invest in improving medical education or improving the quality of hospitals.

Mr. MILLER. The inability to get a building and similar technical difficulties, however, does not relate to their inability to have obtained money, if the other problems are resolved. This, I think, is essential to the question I am directing.

Dr. ROEMER. You may be right. It is not just a question of money; it is a question of technical expertise. I would not want to imply, however, that the nonprepaid group practice is as important as the prepaid type.

It seems to me that prepaid group practice has numerous additional advantages, and that certainly requires organizational assistance. Mr. ORIOL. With two such knowledgeable witnesses it is tempting to keep up the questioning. I am looking at the clock. We now have an hour and a half before we must cut short this hearing.

I would like to note for the record that several written questions will be submitted to the two witnesses. For example, Dr. James, you mentioned the growing numbers of older people in the central city area.

Father Cervantes has in his testimony a reference to the central city burden. The question that we will put to both of you is, how can we get the kind of special attention that such areas require?

Another question, perhaps I can get a word of comment from Dr. Roemer now, you refer to a vast jungle of medical care plans and agencies. Now this was when you were talking about the kind of organization you see for the future.

I take it that you don't mean that we scrap existing private agencies. I am impressed with the Project Well-Being in Detroit and how a private agency with Federal help and assistance from all over the community organized an effort.12

Dr. ROEMER. Yes, I think it is a task of articulation among the agencies. We have roughly 100,000 voluntary health agencies in the United States, according to Dr. Hamlin's study a few years ago from the Harvard School of Public Health. There is great duplication among them; there is extravagant use of administrative funds, and

so on.

In the health insurance field there are well over 1,000 separate organizations. If the energies and dedication of these people could be mobilized and coordinated, I think we would get a much better product for our dollar.

Mr. ORIOL. Another question which will be asked is whether medicare and medicaid are encouraging or perhaps putting obstacles in the path of the reorganization you would like to see.

Dr. ROEMER. It seems to me that the design of the medicare legislation is rather effective at this stage in building its program into the existing structure; that is, the existing insurance programs, especially Blue Cross and Blue Shield, have been incorporated into the operation of the system so that their skills have not been lost, but have been mobilized.

The provision of financial support for hospitals and extended care facilities and home health agencies has certainly been a boost to their availability and the improvement of their quality.

Dr. JAMES. I believe very strongly that where Government funds are used to support medical care, the Government has a responsibility to insure that these funds will be used to improve the quality of that

care.

Mr. ORIOL. Again, I would like to thank you.

Dr. Roemer I would like to mention that Senator Williams of New Jersey hoped to be here to say "hello" to an old constituent. He is on his way and will be here shortly.

Thank you again for your testimony.

I would like now to call Father Lucius F. Cervantes, S.J., Ph. D., professor of sociology, St. Louis (Mo.) University, and assistant to the mayor of St. Louis.

I would like to note for the record that we have a letter here from the mayor of St. Louis and it will be put into the record at this point. (The letter follows:)

12 See pp. 135-138 for additional discussion.

83-481 0-67-pt. 1-8

1

Hon. GEORGE A. SMATHERS,

OFFICE OF THE MAYOR,
CITY OF SAINT LOUIS, Mo.,
June 13, 1967.

Chairman, Subcommittee on Health of the Elderly,
U.S. Senate,

Washington, D.C.

DEAR SENATOR SMATHERS: I welcome the opportunity to be of some assistance in obtaining professional testimony for your Subcommittee on Health of the Elderly, Senate Special Committee on Aging. I recognize your eminent endeavor as one of the critical thrusts of the War on Poverty and as one of the firm bases of the Great Society.

The Health Legislation of 1965 established through our democratic processes that the opportunity for quality health services for every citizen of the United States, irrespective of age or race or economic condition, as a matter of right has become a matter of conscious social policy.

As the Mayor of one of our nation's central cities, I was acutely aware that older Americans were not obtaining the type of health service that our country's genius and prosperity should be able to afford. I am likewise very much aware that despite the great advances made in the provision of quality health services through Title XVIII and XIX of the Social Security Act, that our goals in this area are by no means attained. There are persistent problems in obtaining adequate health services for the disadvantaged who are increasingly concentrated in the center cities of our metropolitan areas.

I am happy to have been able to cooperate with the Special Committee on Aging's staff director, Mr. William E. Oriol, in obtaining local resource persons who would be knowledgeable in the field of your investigation. Our common goal of assuring an equal opportunity for all citizens to obtain a high quality of comprehensive health care has been a bridge of mutual interest and cooperation. Sincerely yours,

A. J. CERVANTES, Mayor.

Mr. ORIOL. I also would like to note that Father Cervantes has within just two and a half or fewer weeks given us a comprehensive and very helpful collection of statements from knowledgeable people in St. Louis and that, too, is here today.

Are you going to give excerpts from all of the statements?

STATEMENT OF REV. LUCIUS F. CERVANTES, S.J., PH. D., PROFES-
SOR OF SOCIOLOGY, ST. LOUIS (MO.) UNIVERSITY, AND ASSIST-
ANT TO THE MAYOR OF ST. LOUIS

Reverend CERVANTES. I could, Mr. Oriol. I do have another statement here, too, and it is from Dr. William Danforth, chancellor for medical affairs at Washington University in St. Louis.

Let me say that I will be very brief. I know that your time is limited. Mr. ORIOL. Father, we have an hour and a half and we have one more witness, so perhaps we could parcel out 45 minutes to each witness and not cut it too short. You have a wealth of material to work with.

Reverend CERVANTES. I would summarize immediately a key point. It is the question of the central city overburden. More specifically in all of the literature that I have read on health problems, practically nothing was stated about the selective concentration of the disadvantaged, including the elderly, in the central city and the selected deconcentration of the affluent into the suburbs.

Mr. ORIOL. Father, may I interrupt at that point to tell you, you were not here when Dr. James made this statement and I think it bears on what you are saying here. New York City, with a fairly stable

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