report to that Conference, titled "The Senior Citizen and Optometry," is also appended to this statement. The report's Forward contains a statement by Dr. Ralph E. Wick of Rapid City, South Dakota, then Chairman of AOA's Committee on Vision Care of the Aging. He said: "Today, we realize that reduced visual efficiency is nothing to be ashamed of. It occurs in both old and young alike. In the aging person, it is a natural physiological change that takes place. When properly corrected, vision offers the senior citizen the facilities to indulge in all his regular activities with interest, vigor, and visual efficiency. "A greatly increased life span (from 20 to 30 years of age during the Roman Empire, to 40 years of age by 1850, to 50 years of age at the turn of the century, to almost 70 years of age today, and even more tomorrow) has created many problems for the human being. Much the same, it has created new areas of research for the ophthalmic professions. Increased longevity has changed our pattern of life, and our modern environment makes more and more demands on vision that optometry must cope with and conquer. "From a clinical viewpoint in optometry, a demarkation had to be made to indicate where youth ends and aging begins. Through studies, the age of 40 was found to be the place in life where presbyopia (a clinical classification for 'old age' vision deficiencies) begins. The actual age depends on the individual, but by the age of 50 to 55, the process has taken place in nearly all persons, and some type of visual correction is necessary. "Since presbyopia appears around the age of 40....(long before most companies even consider retiring their employees.... at least 30 years prior to the end of today's life expectancy), it become apparent that vision is no longer a problem of the aged, but rather the aging. "Optometry gives special attention to the vision problems of our senior generation. Recognizing the physiological and psychological changes that accompany normal aging, optometry is concerned with visual acuity, refraction, accommodation, and the visual neuromuscular system. Optical aids and clinical techniques used offer every American a more productive, comfortable, self-sufficient life, even in the late years, through good vision care." On page 12 of this White House Conference Report you will find three general headings relating to delivery systems for opometric care which were in effect then and which continue. Dr. Wick stated concerning these systems: "Because opometry's interest is so keen and its function so important in alleviating problems of the senior citizen, it is only natural that many community projects are spear-headed by local and state optometric societies." The three systems that have proven successful are: 1. COMMUNITY CLINICS FOR THE PARTIALLY SIGHTED Community vision screenings are conducted at cost to the patients. This is a valuable community project because it enables aged individuals who have reduced or limited incomes, because of their physical limitations, to obtain good vision care. Should S. 513, the Adult Health Protection Act, introduced this year by Senator Harrison A. Williams pass this Congress, our Association envisions that more of these individuals will receive care at a cost they can afford. Many of the clinics just described have been conducted in cooperation with the public health departments, service clubs, and other organizations within local communities. Vision clinic programs can be arranged in most communities upon request. 2. SENIOR CITIZEN PLAN FOR THE INDIGENT AGED This is another type of community project in which citizen's groups and local optometrists cooperate for the welfare of the community's indigent aged. The citizen's groups contribute ophthalmic material, while the optometrists contribute their time. This is a very valuable combination that can benefit a large number of otherwise neglected senior citizens. As you are well aware, the provision of vision care and ophthalmic materials is optional with the various states under Title XIX of the Social Security Act. Only sixteen states provide reimbursement or payment to vendors for optometric care and then, most states do not pay the total cost. Title XVIII of the Social Security Act excludes "eye examinations for the purpose of fitting, prescribing or supplying eyeglasses." Consequently, most older Americans find it necessary to pay out-of-pocket for vision care when they must have it. For those people unable to pay for needed optometric services, optometry is developing philanthropic centers where individuals receive care without obligating themselves for a current claim or later payment. At present, optometric centers are located in: New York City; Denver; Atlanta; Miami Beach; Oakland, California, Harrisburg, Penna.; and East Lansing, Michigan. More are being organized. Two of these optometric centers, Denver and Oakland, have received partial funding from the Office of Economic Opportunity. Additionally, in New Jersey and Pennsylvania, visiting mobil vision care units, partially financed by state trucking associations and Lions Clubs, travel to convenient locations where the elderly have their homes and provide care. 3. EYE CARE PROGRAMS FOR HOMES FOR THE AGED As the title suggests, this program is designed specifically to benefit aged individuals in nursing homes and shut-ins. This care is particularly valuable in smaller communities and smaller nursing homes which do not retain regular staff optometrists. Where this program operates, local optometric societies provide panels of local optometrists, who provide visual screening services for the homes. They also offer consultation on methods for improving lighting conditions, general environment, types of printed reading material to be provided, and other services helpful to comfort and aid of the partially sighted or blind aged patient. In presenting figures on prevalence of defective vision ("Eye Care," a term generally used to indicate surgical or medical care of eye disease and/or injury, is not included), the effect of age must be recognized as one of the most variable factors, yet one which can be weighed with a reasonable degree of accuracy. The Life Extension Institute has compiled figures on a study of 10,924 male and 11,694 female subscribers. In making these tests, the criterion upon which the person was declared "defective" was his inability to read normal Snellen or Jaeger test letters with either eye. We believe this study is particularly significant because it provides a year by year percentage showing the attrition of age, as well as a comparative value for the factor of sex. There were two approaches: Studies by the U.S. Department of Health, Education and Welfare indicate that per capita costs of personal health services for those age 65 and over total approximately 21⁄2 times more than costs for the rest of the population. As would be expected because most of the aged do not have earnings from employ ment, income levels in the aged population are relatively low, and as has been indicated, this age group is the one requiring vision services most. Developing sound, effective means for providing optometric care to our aging citizens is one of the most important and urgent matters of unfinished business before our nation. More attention to the problem is urgently needed due to the critical shortage of optometric manpower and the lack of philanthropic funds which limit our optometric societies' capacity to provide all the vision care needed to protect the independence and dignity of our elderly people. Our Association is delighted that Congress has given the Public Health Service Surgeon General the funds needed to provide grants for developing and researching new systems of health services, and renovating old systems. It is our hope that full advantage will be taken of the opportunity to assist in providing more and higher quality vision care for our senior citizens. Optometry is primarily concerned with adding "life to years." We look forward to learing that the result of these hearings by your Committee may assist us to fulfill this mission. Your kind attention to this statement is greatly appreciated. I respectfully request that it be entered into the transcript of your hearings together with the two attachments I have discussed. If you have any questions, I will be happy to attempt answers to them. Mr. GUY JUSTUS, [Enclosures] THE COLORADO OPTOMETRIC ASSOCIATION, Director, Colorado Department of the Public Welfare, State Capital Annex, Denver, Colo. DEAR MR. JUSTUS: Your request for data and suggestions on the inclusion of vision care in the projected health care program for Colorado old age pension recipients has been carefully considered by the Board of Directors of Colorado Vision Services, Inc., and its parent organization, The Colorado Optometric Association, Inc. For your consideration we are submitting a study completed by our Group Health Consultant, Donald A. Seastone, Professor of Economics, University of Denver. His observations, suggestions, and series of recommendations give full consideration to the best experience available in the field of prepaid vision care. You will note that no single, definite proposal is recommended in this study. This is in line, I believe, with discussions among you and members of your staff and representatives of Colorado Vision Services and the Colorado Optometric Association, including Dr. H. J. Kendrick, Association president, William B. O'Rourke, field representative for Colorado Vision Services and myself. In addition, the possible alternatives outlined should make it possible for you to develop a vision care program for inclusion in your overall program for oldage pension recipients which can be expanded as your health program fund builds. Representatives of our profession are ready to discuss the specific details of this program whenever you are ready. In addition, if there are any phases of the study which are not clear to members of your staff or need additional explanation, we will be pleased to furnish whatever additional information you need. In the case of each suggested program outlined in the attached study, you will note that a provision is made for the cost of developing a small reserve and for the payment of administrative expense. This figure is based on a 7 percent surcharge of the dollar volume of each of the suggested programs. This amount is intended to cover the program's proportionate share of office overhead, the processing of claims and services, the enforcement of professional standards and the handling of grievances, the preparation of reports which your Department may require and the conduct of an education program for the profession and the beneficiaries, in addition to the above-mentioned reserve or contingency. Colorado Vision Services, Inc., the non-profit corporation which would execute any contract with the State Department of Public Welfare in the field which this study encompasses, is most anxious to work directly with you and your state board on any program which is developed to provide vision care. We believe C.V.S. is the most logical vehicle available for the execution of such a program since it is operated by members of the profession and can provide an effective means of insuring high standards of care for the recipients of any program that is adopted. In addition, by working through Colorado Vision Services, Inc. it should be possible for the State Department of Public Welfare to simplify the problems involved in operating such a program and to hold administrative costs to a minimum. Please do not hesitate to call on us for any help we may be able to provide. Sincerely yours, RICHARD L. HANEY, O.D., President, Colorado Vision Services Inc. UNIVERSITY OF DENVER (COLORADO SEMINARY) DENVER 10, COLORADO, ESTIMATES OF COST OF VISION CARE FOR AGED PENSIONERS UNDER VARIOUS ASSUMPTIONS There are some 54,000 pensioners in Colorado who might be entitled to vision care under a master contract. Depending on the type of contract and its utilization experience, the cost of vision care protection will vary significantly. Any estimate made in advance of an actual experiment with some form of contract will be subject to wide margins of error. No adequate statistical series offering a sound basis for prediction appears to be available. For the purposes of this memorandum, certain assumptions are used as the basis for calculating costs. Almost every person over 60 uses glasses whether part time or full time. Moreover, in later years, vision is subject to more deterioration than in middle years. Ostensibly, therefore, every person over 60 ought to have a vision examination at least once a year, and some will be tempted to seek service more often. Let us assume, first, that a screening examination, and referral if needed, will cost $5.00; that a refraction and related service will cost $15.00, instead of the $5.00 charge for the screening examination alone; that lenses for single vision will average $5.50 per pair; that lenses for bi-focals will average $12.00 per pair; and that frames will be provided up to $5.00, but at an average cost of $4.00, which will buy a good pair-choices of frames costing more would not be charged against the program. Finally, it is assumed that the program could be administered with a *7 per cent surcharge. The highest cost estimate would arise from the premise that no charge would be made to the pensioner, except for frames costing more than $5.00, for the portion above $5.00. It can be assumed that if there were no limit upon the program, every pensioner would use the service every year, resulting in 100% utilization. Of the 54,000 pensioners, it can be further assumed that not more than twothirds would require refractions and new lenses annually, and that not more than one-third would require new frames in any given year. The following costs would result: 18,000 screening only, at $5.00. 36,000 refractions and service, at $15.00.... 18,000 frames, at $4.00__ $90,000 540, 000 71,500 276, 000 72, 000 Under these assumptions, the high cost of this program, if utilization lived up to these estimates, would come to $1,049,500 for service and materials, plus $73,500 surcharge, or $1,123,000 in all. If by any chance, utilization showed any tendency to go above this cost and this seemed to be the upper limit to be supported, the program could place a limit covering one full service a year per client. Assuming that the program would be initiated under a provision that the client would pay the first $5 of the cost of service, this would provide both a co-insurance feature, and place some inhibition upon utilization. The effect might well be to restrict the utilization significantly below the levels set forth under the estimate above, so that only 50% of the aged had refractions, lenses, and fittings, and only 25% had new frames each year. Then there would be no charge to the fund for those taking the screening examination. The $5.00 charged for the visit *See explanatory note in letter of transmittal. would reduce the charge against the fund for refractions and service to $10.00. The cost estimates that would result are: 27,000 refractions and service, at $10.00- Total____ $270,000 52, 250 210, 000 54, 000 586, 250 Given these assumptions, the service cost would total $586,250 plus 7% sur charge of $41,000 to make the total cost $627,250. The cost through insurance funds could be reduced further by raising the co-insurance cost to the pensioner so that he pays the first $10.00 per year for service rendered. It may be expected that this charge to the pensioner would further reduce the demand for service so that costs might be as follows: 23,000 refractions and service, at $5.00 (Net charge to the fund $15 less $10)---- 8,000 single lenses, at $5.5015,000 bifocals, at $12.00. 11,500 frames, at $4.00--‒‒‒ $115,000 44, 000 180, 000 46,000 Given these assumptions, the service cost would total $385,000, which together with $27,000 surcharge would total $412,000. Another way of limiting cost would be to have the client pay one half of the first $30.00 of the cost, with the fund to pay all of the balance of the service needed. Assuming that this would restrict demand for service to a figure somewhat below that shown for the first estimate, utilization might result in these costs: The apparent cost of service under these assumptions would total $429,500 but there would be several thousand cases among this group which would have a combination of costs that would total more than $30.00, and the cost based upon this assumed utilization might be nearer $440,000, plus $31,000 surcharge, making a total of $471,000. This approach is more costly than that arising out of charging the client the first $10.00 as shown above, because it involves having the fund pay a portion of every service rendered. One final approach to cost estimation would combine both an initial charge of $5 to the client, and then require him to pay half of the next $20 of the service cost, bringing his participation to a maximum of $15 for a full service, except as he might wish frames more costly than $5. The exact impact of such a system cannot be judged any more accurately than in the other estimates shown here. The cost might be something like this: Screening service-no charge to the fund 25,000 refractions and service, at $7.50_ $187, 500 9,000 single lenses (the fund paying half of the first $5.00, and all the balance) estimated average $3.25.. 16,000 bifocals, estimated average cost to the fund: $9.50. 12,500 frames, at $4.00__. 29, 250 152, 000 50,000 418, 750 Given these assumptions, the service cost would total.. which, together with surcharge of $30,000 would total $438,750. These differences in utilization are predicated upon the economic concept of price elasticity of demand, even for vision care. Until more experience has been gained, it is difficult to know whether the differences in impact assumed under alternative payment relationships are reasonable. One can only make an educated guess, and make preliminary judgments thereon. Experience will be the definitive test. Even then, unless experiments are run with different types of arrangements, the impact of co-insurance features, or of deterrent first charges, can only be guessed at. These estimates offer some preliminary estimates that may prove helpful in analyzing alternatives. |