You go ahead now.

Dr. NOLEN. All right.

I was asked about the response to my article.

Some doctors felt I had overstated the case, but no one argued that the basic premise was untrue.

Some of them felt that I should have emphasized the patient's role a little more. They felt that patients were putting a lot of pressure on the doctors for medical services that weren't warranted, particularly for unnecessary hospitalization, and that doctors were simply giving in to these pressures; that we weren't necessarily motivated by an opportunity to increase our income but simply couldn't be bothered arguing with patients who wanted what the Government said they had coming.

The letters from physicians, subsequently published in Medical Economics, supported my point of view. I will quote one of them which I think expresses the feelings of many doctors.

"The overriding fact is that the Government volunteered to get into the medical services act, muscling in on the physician-patient relationship and saying: 'Here, let me pay for it, cost is no object.' The latter half of that statement is, of course, pure hogwash. Our fantastically wasteful Government can, and will eventually, go broke. And as the deficits pile up, the first costs to be cut will be doctors' fees. In the past it was possible to control medical extravagances because there was a price tag that discouraged overdemanding patients from pampering themselves. But now that rich Uncle is paying, there's no limit. How this can be blamed on the doctor is beyond me." The attitude of another respondent seemed to be "Why get so steamed up? This is the way things have always been, and always will be."

As an example, he quoted a patient who comes in and has hospital insurance. You keep him in maybe an extra day or two because the insurance company will pay for it. This has been more or less common practice, where if a man has no insurance he gets out of there a little bit more quickly.

WHAT IS OPTIMUM CARE

Now, again, what is optimum care? Here it is pretty difficult to define. If you give him 2 extra days, is this bad medical care, is that a lowering of your standards? It is difficult to define it. I think the medical profession generally, if the money is not coming out of the patient's pocket, tends to give a little more hospitalization, a little more medicine, a little more everything else.

Senator SMATHERS. Do you have any suggestions for improving the situation or at least exploring the ethical questions you mentioned?

Dr. NOLEN. I am not optimistic about improving the situation. The ethical questions I mentioned all have to do with our attitude toward Government money-not our attitude toward the patient.

I don't believe there are many doctors who are not most sincerely dedicated to providing optimum care for their patient, be he a private patient, a welfare patient, or a medicare patient. None of the patients I have mentioned-Bellevue, welfare, medicare, or private-suffered in the least because of the different approaches used in treating them. The end result for all was and is high quality care, but the private patient received it economically.

I admit the practice of doing procedures that don't need to be done and inflating fees just to get more money from the Government is ethically bad. But the philosophy that seems to prevail everywhere is that if you can get extra money from the Government go ahead and do it. Our practices relative to medicare are not unlike the approach we use when we pay our income taxes. Try for all the deductions, justified or not. If the Government disallows them you are not out anything; and if you can get away with them so much the better. The ethics of those practices theoretically leave something to be desired-but it doesn't bother our consciences.

So I don't think a simple appeal to doctors to please keep their medicare fees low will be efficacious, unless they can be convinced that it is to their own self-interest to do so, which was another point I tried to make in my article. I would suggest that if doctors can be assured by the Government that strict regulation of fees and medical practice will not be forthcoming as long as the medical profession follows reasonable policies in setting fees, then perhaps doctors will police and regulate themselves effectively. Exactly how this can be accomplished, I don't know. Most doctors are convinced the eventual aim of Government policies is more or less completely socialized medicine.

I do think it might help if the administration of the medicare program were, at least to a significant extent, put under the control of doctors who were acquainted with the attitude of private practitioners of medicine and had some good rapport with them. I won't expand on that now.

Senator SMATHERS. You started out to answer our question as to the reaction to your article among your brethren of the medical profession and as I understand it they all sort of admitted you are right but they didn't want to do much about it.

Have you had an opportunity to discuss this, for example, with the Minnesota State Medical Society?

Dr. NOLEN. No, I have not.

Senator SMATHERS. Have you had an opportunity to discuss it with your local county medical society?

Dr. NOLEN. No; not formally.

Senator SMATHERS. Have you had an opportunity to discuss it formally with any of the medical organizations or medical media? Dr. NOLEN. No, sir.

Senator SMATHERS. To what extent would you think that the doctors throughout the Nation have read your article?

Dr. NOLEN. Well, I can give you the readership figure on Medical Economics if you want. Seventy percent is the figure that they quote, it is one of the most widely read magazines that is circulated of this type.

Senator SMATHERS. Has the magazine subsequently printed any letters on your article?

Dr. NOLEN. Yes. I quoted one letter quite extensively in here, and there were two or three other letters. I think it also precipitated the writing of subsequent articles.

In this week's issue there is one, as I mentioned, and then there is another article that came out approximately a month after mine, or 2 months after mine, on the same subject, entitled "Are Medicare Scandals Brewing?"

So it is, I would guess, quite widely read.

Senator SMATHERS. All right, sir. I would like to have your views on actions that can be taken to provide high quality health services to elderly persons who do not now have such services.

Dr. NOLEN. Frankly, I am not aware that elderly persons do not already have high quality health services. I suppose this depends to a large extent on how one defines the term "high quality health service." In my opinion the doctors in our area are providing high quality medical care to everyone, including the elderly, whom we serve. And we serve everyone in our county and its immediate environs.

If we choose to define "high quality medical care" as that care which can only be administered in university centers or hospitals of over 1,000 beds, as some people now try to define it, then of course the elderly, along with most of the general populace, don't have immediate

access to such care.

SERVICES IN SMALLER HOSPITALS

I contend that an 80-bed hospital, of the type we have in Litchfield, can provide excellent medical care for 95 percent of the population 95 percent of the time. The other 5 percent who, 5 percent of the time, need the elaborate facilities available only at a huge center, can be referred there for such care as the need arises. This is what our practitioners of medicine have done, are doing, and will continue to do for the elderly as well as for anyone else who needs it.

I had better emphasize that when I say the elderly are now receiving optimum medical care, I base my statement only on my own personal experience. What is true in Meeker County, Minn., obviously may not be true elsewhere.

I have already elaborated on why I think Government programs are inevitably wasteful and expensive. I could expand on this subject further, citing examples from my experiences as a physician in city, State, and Army hospitals, but I am not certain that this is a field you want to explore at this time. If it is, just say so.

I hope this statement deals with the aspects of health care of the aged that you wanted me to consider. I will be most willing to give you whatever assistance I can be commenting on them.

Thank you again for giving me the opportunity to testify.
Senator SMATHERS. Doctor, thank you very much.

Do we have any questions?

Mr. Oriol, do you have any questions?

Mr. ORIOL. No.

Senator SMATHERS. Dr. Chinn, do you have questions?

Dr. CHINN. The only question I would like to ask Dr. Nolen is whether he feels preventive measures outside of the hospital might be more economically pursued or whether they should be toward prevention of illness and disability from disease as a means of economic safety. Whether, in your community for instance, this would be a practical approach rather than the utilization expense of the hospital? Dr. NOLAN. I don't know if I can answer that question specifically because I don't know exactly what type of service you are suggesting. We instituted some of the things that have gone along with these new medical programs that are associated with Project Headstart and

that sort of thing. I am not sure that the statistics will bear out that the things that are found through these programs are numerous enough to warrant whatever the expenses incurred are going to be. I, of course, am in favor of preventive medicine and if it takes some sort of a plan to institute it then I agree that it might cut down expenses of the further, more intricate care that is demanded later on.

Senator SMATHERS. Let me ask you one question that has been suggested to me. Doctors are urging that direct billing be permitted under title XIX rather than vendor payments. Now, what is your feeling

about that?

Dr. NOLEN. They were recommending direct billing rather than vendor payment?

Senator SMATHERS. Yes. You will recall earlier this morning when we had the Government witnesses here it was their feeling that doctors would oppose getting the billing, technical word vendor, coming through the Government to the hospitals for their payments, those doctors who wanted to get it directly were creating some additional cost and some difficulty. What is your comment about this?

Dr. NOLEN. I would say that we would all-I cannot say that. I would say in our community the doctors unanimously would prefer to bill the patient directly. We want to avoid as much redtape as we can, but from the practical point of view we don't bill them all directly. We pick and choose. We bill as many directly as we can and then take assignments on those where it is more practical and realistic to do so. But we would prefer to bill directly.

I would think this would be the general consensus in the medical profession. But from the practical point of view it does not work out. Senator SMATHERS. All right, sir.

Dr. Nolen, thank you very much.

Without objection we will put Dr. Nolen's article in the record at this point.

Dr. NOLEN. Thank

you.

Senator SMATHERS. Thank you very much.

(The article follows:)

ARE DOCTORS PROFITEERING ON MEDICARE?

(By William A. Nolen, M.D.)

No health-care program has ever strained the ethics of the medical profession as Medicare is doing. The temptation to chisel is enormous. Are doctors succumbing?

I can't speak for the medical profession as a whole, of course, but I'll admit that I try to take as much Medicare money from Uncle Sam as I possibly can. From what I've seen and heard, a lot of other doctors are doing the same. Maybe what we're doing is ethical, and maybe it's not. It depends on your point of view. Let's consider the matter of fees. Before Medicare, I individualized the fee on every case. The old-timer who needed a colon resection might be charged anything from a token charge to $400, depending on his ability to pay. Four hundred was my "usual fee"-that is, I never went over it, even for the most wealthy. But if a patient was financially strapped, I'd cut my charges to the bone.

Those days are gone forever. Now, with Medicare patients, we doctors charge our "usual fee" for everything. And the consultations, catheterizations, cutdowns, and other procedures things we often used to throw in for free-get tagged onto the bill. If the Government people will pay it, fine. If they won't, we can always discount it later. All this is technically ethical, of course. But it does show the way we're thinking.

What bothers me more than our new charging practices, however, is the way in which almost guaranteed payment-in-full is apt to color our medical judgment. For example, I know a 73-year-old woman who has been in and out of the office of every doctor in town for the last 10 years. She always has some complaint, most of the time purely functional. Till last July she was on welfare, and whoever happened to be taking care of her would, for next to no fee, give her the time and treatment she needed. But that wasn't much. She knew she wasn't really sick, and so did the doctor.

Now that she's on Medicare, how things have changed! She spends half her time in the hospital getting expensive diagnostic studies and thorough work-ups by a host of physicians and consultants. Is she really any sicker than she was? Of course not. It's just that now the doctor gets paid for his proctoscopy, fluoroscopy, or his consultations. And who knows? Maybe somebody will find something wrong with her. So the studies can, in the loosest sense, be medically justified. But the main reason she now gets more attention than she used to is that it's all practically free for her-and more lucrative for both the doctor and the hospital. Is it ethical? You tell me.

That woman doesn't happen to be one of the patients I've cashed in on, but I'll admit there have been some. I'm not at all certain, for example, that I'd have taken off one old gentleman's sebaceous cyst if he'd had to pay for it himself. I'd have probably told him not to worry about it, that the cyst would never hurt him. But since he's on Medicare, I wasn't at all reluctant to do the job when he asked me to. I didn't talk him into it, but I sure didn't discourage him. I've noticed, too, that a lot of other men are doing more elective procedures on the oldsters since Medicare came in. Warts are getting burned, moles are being removed, and a few veins strippings of minimally dilated varices are getting onto the schedule. Some of these may help the patients substantially, but many of them aren't strictly necessary. If it weren't for Medicare, they probably wouldn't be done.

The fault, of course, is not completely ours. Now that the oldsters are on Medicare, they can demand that things be done for them-and they do. After all, haven't they got a right to Government-financed medical care? Didn't Uncle Sam say they could have their warts burned, their cysts removed, their veins stripped-and he'd pick up most of the tab? Then who are we doctors to deny them what the Great Society has bestowed on them? When you consider these pressures, it's not difficult to understand why some physicians give in and take the easy-and remunerative way out.

Hemoglobin determinations, urinalyses, blood sugars, and the like are all increasing in frequency. It's possible to argue that more such tests should have been done in the past than were done, and I won't disagree. Still, I'm as certain as I can be that a lot of unnecessary checks are being run. I've seen them, and, very possibly, I've ordered some myself.

I say "very possibly" because this whole area is a nebulous one. It would take a utilization committee full of Clarence Darrows to prove that a hemoglobin, a urinalysis, a.proctoscopy, or even an exploratory lap was completely unjustified. In medicine things just aren't that black and white. It's difficult for even the most conscientious doctor who orders a procedure to be certain that somewhere, deep down in his subconscious, his judgment isn't being influenced by the money he's going to make-maybe just a little.

Lest you think I'm being picayune, let me remind you that the degree of our cheating-if that's indeed what it is-has little bearing here. Those of us who order unnecessary hemoglobins because Uncle Sam is paying are not in a good position to criticize the few who perform unnecessary hysterectomies on Medicare patients. Remember the story attributed to George Bernard Shaw about the woman who agreed that she'd sell her favors for $100,000? When asked if she'd do it for $2, she answered, "What do you think I am?" His reply was: "Madam, we have already established that. We are now only quibbling over price."

We're all intelligent enough to know that Medicare isn't free. One of the main reasons we fought it so strenuously is that we know Government programs are inevitably wasteful and expensive. Eventually, through our taxes, we'll pay through the nose for this one. But an immediate result of Medicare is that it enables us to increase our incomes. When we're greedy and shortsighted, and succumb to the practices I've mentioned, we tempt fate. Injudicious behavior on our part may not only bring rigid Government control down on our necks but, more lamentably, may also destroy the ethical standards of medical practice we've fought so long and hard to maintain.