people are victims of poor nutrition because they are caught up by food fads or by poor lifetime food habits-some may suffer because they lack interest in eating, perhaps because they have to eat alone. Accidents, many of which are preventable, take a high toll among older people. They have almost twice as many home accidents as the average adult.

A good deal of the fault for these conditions has to be borne by physicians, communities, States, and the Federal Goverment. We have been slow in starting health programs for the aged. But recently enacted legislation should go a long way toward meeting many of these problems.

Medicare will modify dramatically the existing patterns of utilization of health services by older people and perhaps the entire population. I would like to present some important measurements of utilization of health services by older people as we move into the Medicare age.

Receipt of medical care in this country is obviously dependent on the social, economic and demographic characteristics of the population. If a person is aware of his illness and recognizes the need for treatment, if he lives in an area where medical care facilities are accessible, and if resources are available to pay for his care, then he is more likely to receive medical treatment than if he were living in less favorable circumstances.

HOSPITAL UTILIZATION

During the period July 1963-June 1965, the National Health Survey shows that hospitalization increased with advancing age, from 115 per one thousand people under 45 years to 186 per one thousand people 65 years and older. The length of hospital stays increased although the proportion of patients with surgical treatment decreased with the increasing age of the patients.

Among people 65 years and older the rate of hospitalization was higher among men than among women and rates of hospitalization in the Southern region and among non-farm residents living outside of metropolitan areas was higher than in other regions. During the survey period, the annual number of hospitalizations for the total population was 24,012,000. People 65 years and older accounted for 3,196,000 or 13.3 percent of these discharges; they account for only 9.4 percent of the total population. During the past 5 years the rate of hospitalization among persons 65 years and older has increased 28 percent.

Information on the relation between hospital utilization by older people in the various income brackets is equally significant. Among people 65 years and over, the highest rate of hospitalization was among those with family incomes of $3,000 to $4,000 and among those in the income group $10,000 and over. However, the length of hospital stay was considerably longer for the latter group (14.0 days) than for the former (11.0 days). Income of older people, then, has had a significant effect on hospital utilization in the pre-medicare age.

We also have information on hospital utilization related to the living arrangements of older people. Approximately one-half of the aged population is married and living with relatives (mostly married couples); one-fourth live with relatives but are not married (widows primarily); and the remaining one-fourth either live alone or with non-relatives. Among those 65 years and older, the rate of hospital discharges was highest (232.0 per 1,000 persons) and the hospital stay longest (19.7 days) among those living with non-relatives. This is so because this group tends to be older and there is need of more medical care.

Differences in the amount of hospital care for older people result not only from differences in age, sex, family structure, and income; they are affected also by characteristics of medical practice and the over-all supply of hospital beds, which in turn may reflect whether the area is rural or metropolitan. If hospital beds in a community are in short supply, the acutely ill with have first call on the available beds and hospital stays will be on the average shorter than if beds are plentiful. While we have known for years that much of the hospital stay for older people is unnecessary, that appropriate home care services are not only as effective as, if not more effective than, hospital services, and certainly more desirable from the patient's standpoint, home care has not flourished in this country. Now, with the introduction of Medicare, we are seeing a rapid multiplication of home health services. This will undoubtedly have an important and useful influence on hospital utilization by older people. And for the rest of the population as well.

83-481 0-67-pt. 1-15

Utilization of nursing homes and related facilities

There is much less information about the extent of utilization of nursing homes and similar types of medical facilities by aged persons than there is of hospitalization. Most population surveys relate primarily, if not exclusively, to people who are not living in institutions. Over 600,000 persons aged 65 and older were in some type of institution at the time of the 1960 census. From subsequent data it has been estimated that some 23,000 non-hospital facilities with a resident capacity for 592,800 persons are providing or supporting services to chronically ill and aging persons.

Skilled nursing homes which provide skilled nursing care as a primary and predominant function total close to 10,000 with approximately 338,700 patients. There are about 11,000 other homes providing primarily domiciliary or personal care with 207,000 residents-but which may also provide some skilled nursing care. And there were some 2,200 residential care homes wtih 47,000 residents providing primarily sheltering functions but which also may provide some skilled nursing care.

Very few of even the best skilled nursing facilities provide restorative and rehabilitative services; although there is some evidence that physical rehabilitation for chronically ill bedfast patients over 65 might restore many to ambulation and partial self care, and some of those so restored would not require continued institutional care.

There is a rather grim picture in view of the fact that all of the patients requiring institutional care of this kind are not in institutions, and that a significant number of the beds that are available are not in institutions of sufficient safety or quality.

More skilled nursing home beds are becoming available and government help is increasing. Acceptable nursing home beds have doubled in the past 10 years. The Public Health Service will spend $70 million in 1966, almost double the previous annual expenditures, under the Hill-Harris amendments to the HillBurton program. In the past 20 years, Hill-Burton funds have helped build 2,000 clinics and health and rehabilitation centers, and 350,000 hospital and nursing home beds.

Other Federal agencies are providing funds for the construction and expansion of extended care facilities. The Small Business Administration lends money to privately owned establishments. The Federal Housing Administration mortgage insurance programs covered 38,000 new beds in 1965 compared to only 200 covered just 5 years earlier.

The Area Redevelopment Agency also can make loans for private nursing homes in redevelopment areas.

It is hardly news to this audience to say that the very elderly predominate among the nursing home population. According to a survey some 10 years ago, of the 38,000 patients in nursing homes in some 13 States the average age was 80 years. More recent studies in Michigan (1957) and Pennsylvania (1959) reported the average age to be 76 and 80 years respectively. Data from a 1962 North Carolina study indicate that 66 percent of the patients were over 75-23 percent were over 85. A country-wide survey in 1963 gave an average age of 77.6 for persons in nursing homes.

Physician visits

Estimates derived from the data collected during the National Health Survey show that the rate of physician visits was 4.1 visits per person per year for people under 45 years, 5 for those 45-64 years of age, and 6.7 visits for those 65 years and older.

The proportion of total physician visits in the home has been decreasing with a compensating increase in the proportion of visits to the physician's office or to hospital clinics. This change in the pattern of utilization is true for people of all ages.

Among persons under 45 years the rate of physician visits increases with the amount of family income; however, for persons 45 years and over the pattern of physician's services is not so closely related to income, but the higher rate of hospitalization noted for persons 65 years and older in the income groups $3,000 to $4,000 and $10,000 and over is reflected in the comparatively higher rate of physician visits in these groups.

The impact of medicare on patterns of utilization

Probably no other piece of social legislation in the history of our country will have a greater impact on the patterns of utilization of health facilities by the

elderly than Medical, including Title XIX, the new medical assistance program. Expenditures for health care in this country both public and private are increasing at the rate of about $3 billion a year. In 1965, the American people spent a total of $40 billion on health care, nearly 6 percent of the gross national product. Before 1970 this total will probably exceed $50 billion annually.

The combination of Medicare (Title XVIII) and the new medical assistance program (Title XIX) will help to bring about vast improvements in health facilities and their use in this country. Title XIX authorized increased Federal grants to the States to provide medical care to all people receiving public assistance and to others who are medically indigent. Title XIX requires that the States provide for the payment of many services that have not been provided by the States before. To receive Federal funds for the program, the State must provide comprehensive care and service to substantially all of its needy people.

This will include payments for hospital care, nursing home care, and physician services for those needy aged whose benefits under Title XVIII have run out. At no time, therefore, must the older person, sick and impoverished, fear deprivation of medical care because of financial need. Fifteen States and one territory have already obtained approval of their Title XIX plans and arranged by matching Federal funds. California can be proud of the dynamic leadership that made it among the first to participate in this noble social welfare and health program.

California's program of medical assistance is an exciting innovation in many ways. First of all, it attempts to remove the stigma of poverty in medical care from its program. A Californian eligible for medical assistance receives a green card, for all practical purposes a credit card, entitling him to the same services, the same doctor, the same hospital, the same nursing home as any other paying patient. His doctor, or hospital, bills the State and is reimbursed according to going rates even as the non-indigent patient pays the doctor or hospital the customary fees or charges. Two and a half million Californians are eligible for California's medical assistance program and already over a million doctors' bills have been paid. This is one quality medical care for all, equally, without regard to ability to pay. It is a landmark in American medical history.

California's efforts in this Title XIX program mark also the fulfillment of a philosophic dream-a true partnership of public and private interests for the benefit of all citizens. President Johnson said last year,

Only through a creative and cooperative partnership of all private interests and all levels of government-a creative Federalism-can our economic and social objectives be attained. This partnership has written the story of American success and a new vitalization of this partnership and a new confidence in its effectiveness have produced the extraordinary economic and social gains of recent years.

And never has this been so clearly evident as in this partnership to improve the nation's health.

California's State government, its doctors, its hospitals, its health and welfare departments have written a bright page in our history. Title XIX has been the less well known section of the Medicare Act, P.L. 89-97. Through these efforts it may become even more significant.

But Title XVIII, the more familiar section, has also had an exciting impact. Since July 1, when the Law became operative, over 1,000,000 patients over 65 have been hospitalized, at a cost to the government of about $500 per patient. Half of these patients had no insurance previously. The experience of the aged under Medicare will be observed carefully. Ninety-seven percent of the short term general hospitals are participating, and only the handful that failed to meet civil rights requirements are not participating. Over 19 million people are eligible. The disastrous predictions of "mammoth traffic jams" never took place. America went from pre-Medicare to the new era in a quiet and orderly fashion. There was no more demand than in other years-only the quiet security of the aged who need no longer dread the economic impact of illness.

We will want to measure the results of these improved circumstances and the effects and by-products of Medicare.

We have heard a great deal about the shortages of doctors, dentists, nurses, medical technicians, professional aides, hospital beds and nursing homes. These shortages are real. But Medicare is not the cause of the shortages. The shortages already existed. The Medicare program only adds urgency to the need for both public and private action to relieve some of these critical shortages. In Califor

nia, and in the country as a whole, legislation of the past 3 years, and pending legislation in the Congress, aim to provide us with more hospital beds, more doctors, more health service workers of all kinds. We have a generation of missed opportunity to catch up with, and we are on the way.

Other significant effects of the Medicare Law on the medical care for older people are inherent in the standards in the Law itself.

The utilization review committees provided for under Medicare will undoubtedly be a useful instrument in making more efficient the use of hospital services for older people, in fact, for the whole population.

Another of the important side effects of Medicare will be to highlight the need for area-wide community planning of all its health and medical care facilities and manpower. Communities must plan for adequate numbers of facilities with a full range of needed services. They must also design the facilities so they are flexible enough to get the most utilization from them as needs change. A comprehensive pattern of services must be integrated into the facilities. Cooperative arrangements must be developed to assure that community resources are used to promote quality care with the most efficiency and economy.

More widespread use of home health services will alter the picture of hospital and other institutional use dramatically. Medical care costs will change. Even as they are rising now, the more efficient use of hospitals and more appropriate use of facilities of all kinds may reverse this trend.

Specialized practice in geriatrics should become more remunerative under Medicare and this, in turn, should encourage more doctors to go into this type of practice. Undoubtedly, Medicare can be expected to accelerate the growing interest in the field of geriatrics. It will be easy now for physicians to carry out more fully their professional responsibilities for older people and older people will be less constrained in obtaining the care they need. By removing the financial barriers to high quality care the program will help to remove financial considerations from the patient's and physician's decision about what kind of treatment is necessary and what medical facilities should be used. Up to now, such considerations have in many cases prevented older people from seeking and obtaining the medical care they needed.

There will also be a stepped-up interest in the whole field of gerontology. As we gain more knowledge of the process of aging and the over-all health of the aged, we can relate this information to other aspects of living, improve the quality of care, and the quality of life for older people.

This needs to be accompanied by more emphasis on educational programs on aging. Colleges and universities are already adding courses on gerontology and directing more research to the process of aging. The Older Americans Act of 1965 provided, among other things, for a grant program to support training programs in aging. More can be done to encourage research and demonstration projects. Short in-service training programs and vocational training programs for auxiliary personnel who can care for the aged, such as home aides, should be encouraged. We will need more trained career personnel at all levels and from all disciplines to carry out programs designed for the aged.

CONCLUSION

With Medicare now part of our daily life, the organization and delivery of medical services to the aged will be changed dramatically in the years ahead, and with them the patterns of utilization will change.

As President Johnson said in signing the Social Secuirty Amendments of 1965:

"No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years. No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents."

It will indeed be interesting to attend such a conference as this a few years from now, to talk again about the patterns of utilization of health services for older people in this country. I'm sure that the story will be quite different-and far better.

Early in this address, Dr. Silver makes some good observations on the tendency of the elderly to stay away from doctors and medical services unless and until

they have a condition which has become serious. Inferentially, there is a plug for preventive health services.

Beginning on p. 221, there are some interesting statistics concerning hospital utilization. Utilization of nursing homes and related facilities is discussed beginning on p. 222. Statistics on physicians' visits are on p. 222.

The remander of the address discusses the impact of Medicare upon health services to the elderly. Since the address was delivered soon after eligibility for Medicare began, he could not say much about the effect of Medicare to that date, but he was very optimistic about prospective effects of Medicare upon health services to the elderly. Besides removing the financial barrier to utilization of health services, Dr. Silver thinks Medicare will have several important side effects:

1. The utilization review requirement will result in more efficient use of hospital services for the elderly;

2. Medicare will highlight the need for area-wide community planning of all health and medical care facilities and manpower, and will probably stimulate more and better planning of this type;

3. More widespread use of home health services will be stimulated;

4. Specialized practice in geriatrics should become more remunerative under Medicare and this, in turn, should encourage more doctors to go into Geriatrics. 5. There will be a stepped-up interest in the whole field of gerontology, resulting in advances and improvements in non-medical aspects of aging.

ITEM 2: EXHIBITS RELATED TO MR. WILLIAM R. HUTTON'S

TESTIMONY*

NATIONAL COUNCIL OF SENIOR CITIZENS, INC.,
Washington, D.C., July 7, 1967.

Hon. GEORGE A. SMATHERS,

Chairman, Subcommittee on Health of the Elderly,

Special Committee on Aging,

U.S. Senate,

Washington, D.C.

DEAR SENATOR SMATHERS: During the course of my testimony before your Subcommittee on June 22, 1967, I was asked to submit data substantiating my assertion that U.S. prices for drugs are the highest in the world.

The examples cited below are taken from the 1961 report of the Senate Antitrust and Monopoly Subcommittee (Administered Prices-Drugs, Report No. 448, 87th Cong., 1st Sess.). As you undoubtedly know, this Subcommittee under the Chairmanship of Senator Estes Kefauver made an exhaustive examination of drug prices which culminated in the passage of the Kefauver-Harris Act of 1962. Data on foreign prices were secured through the State Department from American Consulates abroad.

The Kefauver report shows substantially higher prices for drugs in the United States as compared with other industrialized countries of the world. The following examples are typical:

1. Chlorpromazine, a potent tranquilizer used widely in American mental hospitals throughout the country. This product, marketed exclusively in the U.S. under the trade name of Thorazine by Smith, Kline & French, was priced at $3.03 to druggists (25 mgm, tablets in bottles of 50's). Rhone Poulenc, the French firm which originated this compound, sold the drug in equivalent amounts at $.51. The price in England was $.77; in Germany, $.97; in Belgium, $1.37. 2. Prochlorperaxine, another potent tranquilizer used widely in mental hospitals. This product, also developed in France and marketed exclusively by Smith, Kline & French in the U.S., was priced to druggists at $3.93 (10 mgm. tablets, 50's). The price in France was $.80; in England, $2.24; in Germany, $.80.

3. Tolbutamide, oral anti-diabetic compound. This product, sold exclusively in the United States by Upjohn under the trade name of Orinase, was priced to druggists at $4.17 (.5 gram tablets, 50's). Hoechst, the German firm which originated the compound, sold equivalent amounts in Germany for $1.85. The price in England was $1.87; in France, $2.04; in Belgium, $2.45.

4. Reserpine, a drug used widely in the treatment of hypertension and heart disorders. For this compound the Kefauver report compares the world prices *See statement, p. 53.