(Subsequent to the hearing Senator Smathers wrote to Dr. Silver for additional views. The reply follows:) DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Washington, D.C. DEAR SENATOR SMATHERS: The questions raised in your letter of June 30, 1967, have been carefully reviewed. The conference summary, and a few significant papers presented there are attached. In reply to question #2, although specific plans for the operation of the Center are not yet fully developed, the National Center for Health Services Research and Development will be concerned with the whole spectrum of health services to all patient population groups. As such, the Center will necessarily devote substantial attention to the specific health needs of the aged and to patterns of health services necessary to meet those needs. It is well known that the health needs of the aged are essentially the same as those of the general population. But specific social and psychological circumstances associated with aging mean that the delivery of services to the aged must take special forms. The Center will explore possibilities in the development of specialized health personnel-as well as sufficient personnel of traditional types-the organization of services, and rearrangement of institutional settings for the aged. In reply to question #3, Under Secretary Cohen's testimony on H.R. 6418 is attached. In response to question #4 in your letter of June 30, 1967, I should point out that my statement of June 22, 1967, to the Subcommittee on Health of the Elderly did not explicitly discuss the effect of the 1966 rise in physicians' fees upon total medical expenditures. Instead, I addressed my comments to the question of the impact of the recent rise in physicians' fees upon the elderly. With respect to that, I stated as follows: "The recent acceleration of the rate of increase in physicians' fees has not significantly affected the elderly. The coinsurance provisions of Medicare have blunted the impact of these price rises. "However, this conclusion relates to physicians' customary charges-the fees the physician charges to most of his patients for his services. As of July 1, the average fees of physicians, and their incomes, have increased because of the payments of customary charges under Medicare. Many elderly persons previously were paying charges lower than the customary charges of physicians. "Therefore, many aged persons, although the exact number is not known, will now find that they are being charged more for a given service, since their physician is now charging them the same fee he charges to the majority of his patients. This anticipated development will primarily affect those elderly persons who spend less than $50 on the medical and other health services covered by Part B of Medicare." The 6.6% rise in physicians' fees in 1966 will have a significant effect on total medical expenditures. Since consumer expenditures on physician services account for nearly 30% of total consumer expenditures on health care, the rise in physicians' fees in 1966 has resulted in about a 2% rise in total medical expenditures. Further, I would like to take this opportunity to comment on several of the points raised by Dr. Nolen of Minnesota in his testimony before the Subcommittee on Health of the Elderly. Dr. Nolen believes that Medicare will result in some unnecessary utilization of medical services, as well as significant fee increases by physicians since the Government is paying the bill. These problems exist with private insurance plans and there is no reason to believe that they will be more severe under Medicare. When a patient has already paid for a substantial proportion of his potential medical bills via the private insurance mechanism, this reduces the financial disincentives associated with utilizing services which are needed. However, one of the major functions of both private insurance plans and Medicare is to insure that the cost of health services will not impinge upon the patient's decision to utilize necessary medical services. Moreover, under both private insurance and Medicare, since the physician and his patient will not be very concerned about the immediate impact of a rise in fee 3 See p. 193, appendix. levels, there will be a tendency upon the part of some physicians to raise their fees. As Dr. Nolen points out, however, the Medicare carriers have the responsibility for reviewing the services of physicians to Medicare patients to insure that the fees of individual physicians do not substantially deviate from their usual and customary charges to non-Medicare patients. In summary, I believe that Medicare is fulfilling its major objectives. It has removed the financial barrier which prevented many elderly persons from seeking necessary medical services and it has resulted in an upgrading of the quality of medical services received by the elderly. Although some Medicare patients may seek unnecessary medical services and a few physicians may charge unreasonable fees, we must be careful not to impugn the ethical standards of the whole profession. Now as to question #5, on physician assistants, even before the advent of Medicare the rapid growth of population, increasing affluence and rising expectations increased demands for medical care. The Department of Health, Education and Welfare is convinced that beside an increase in traditional professional health workers, there is a need for significant increase in the number and kinds of health workers who can assist physicians and other health professionals in providing health care. A variety of proposals have been made and a number of informal and some formal methods have been used to produce a group of health workers who are able to carry out functions which were formerly performed only by physicians. The training of health workers has been done in a variety of settings: physicians' offices, clinics, group practices, hospitals and other health agencies. Methods of training auxiliary medical workers have ranged from preparing them to carry out technical procedures to preparing such persons to carry out the more general functions of the physician including the medical interview and a screening physical examination. At one level is the consideration of specialized physicians assistants: pediatric, obstetric, orthopedic, and so on. Several programs to train assistants to physicians have been planned or undertaken by the Department. The following are examples of such programs: The Public Health Service is supporting, through its Bureau of Health Manpower, a program for the development of an orthopedic technician. The Presbyterian Medical Hospital and Center at San Francisco has received approximately $106,000 for a 2-year period to develop this physicians' assistant. Six trainees per year, for this 2-year period, are being trained to assist orthopedic surgeons in surgery, on the ward, in the plaster room, and in the physician's private practice. These trainees are all ex-medical corpsmen. They will be taught the mechanics and the uses of orthopedic tables, to set suspension equipment for physical therapy work, to assist in applying and removing plaster casts, etc. This is the first of at least two or more planned variations to evolve an approved and standard curriculum for replication and the training of orthopedic technicians in educational institutions. A second example is the 2-year program being conducted at the University of Florida for the training of a psychology assistant. The estimated cost of this program is $115,000. These students, who are college graduates, are provided with work experience and study in inpatient and outpatient pediatric service, community psychology, neurology, and obstetric and gynecology. Areas of student activities which are being studied include general and administrative activities; conducting, scoring and some interpreting of charts and graphs; assistance with library research and manuscript presentation; etc. Thirdly, the Bureau of Health Manpower is developing with Johns Hopkins University, a 1-year project to develop a master's degree program in public health with a specialization in nurse-midwifery. Many physicians feel that more of the care of the uncomplicated maternity patients could and should be delegated to the nurse-midwife. Consideration is being given to the development of an anesthesiologist assistant at the master's degree level. This person would work under the direct supervision of the M.D. anesthesiologist. Discussions are currently underway with Emory University, the University of Florida, and the Medical College of Georgia, regarding a cooperative arrangement for the possible development of this program. In addition, there is a wide variety of technicians who have emerged, particularly in the hospital and clinical setting in highly specialized and specific fields. Such programs have trained auxiliaries for clearly defined specialized technical duties in institutional settings which have been successful in extending the range of the physician. This has been true of such groups as inhalation therapists and technicians, orthopedic technicians and assistants, nurses in intensive and coronary care units, and diagnostic technicians in screening clinics. All of these people function in a setting which can support technical specialization of rather high degree and where physicians are available to supervise their functions at all times. The Public Health Service has been specifically involved in the development of training and teaching materials for the nurses working in intensive and coronary units. A contract was recently let to a medical school for the development of training programs and for 10 teaching films for such health workers. Three of these films have been completed and reviewed. Education for other types of assistants in the medical care field is also in the planning stage or underway. Negotiations are currently being conducted by the Division of Medical Care Administration jointly with the American Association of Junior Colleges to consider the feasibility of developing a pilot project for 2-year curriculum in the junior college in order to develop nursing home administrators. In other areas, added efforts are underway: Through a cooperative program with the Office of Economic Opportunity, the Department of Health, Education, and Welfare is supporting the Development of Home Health Aides, an occupational group within the health field which can provide valuable assistance in meeting many of the health needs of the elderly. This program is funded by the OEO, however, several States have begun training Home Health Aides through the State's own employment and educational resources. The Office of Education, through its Vocational Education Bureau, is also supporting programs which are aimed at development and most efficient use of several levels of health workers so that the most effective use is made of the level of skill of the person rendering care to a patient. Under current program analyses now being conducted in the Department of Health, Education and Welfare, consideration is being given to the important role which physicians' assistants could play in extending the hand of the physician. The questions raised in the development of medical auxiliaries are complex, and it is of the utmost importance that any such training programs provide every safeguard for the well-being of patients. To this end, many of the major hospitals which are involved in the training of medical auxiliaries are doing their own studies of effectiveness. However, the only explicit studies of effectiveness of medical auxiliaries have been done by persons in the field of dentistry and nursing. Such an example is the Louisville study in which a careful job analysis has been done for dentists, dental hygienists, dental technicians, and dental auxiliaries. Evaluation is made of the productivity of each group and the quality of work performed. This evaluation study is a PHS intramural program done in connection with the PHS Dental Center in Louisville. The University of Louisville is serving in a consultant basis. The Bureau of Health Manpower of the Public Health Service plans to explore this whole field in connection with the Allied Health Professions Educational Assistance Act. Again the Department is hopeful that similar thorough evaluation studies will be developed for other medical auxiliaries. A recent publication of the Bureau of Health Services of the PHS on "Training the Auxiliary Health Worker" is attached for your information.* If I can be of any further assistance, please do not hesitate to ask. GEORGE A. SILVER, M.D., Dr. SILVER. Now, I would like to introduce Mr. Alvin M. David, Assistant Commissioner for Social Security. Senator SMATHERS. Mr. David, you may proceed. STATEMENT BY MR. ALVIN M. DAVID Mr. DAVID. Mr. Chairman, Senator Moss, I am very pleased to have the opportunity to be here to report on the progress of the medicare program under Social Security. 4 Retained in committee files. In the first 112 months of medicare the program has accomplished a great deal of good. More older persons have received more health services and they have received improved services. The fear of large or unmanageable hospital bills has been erased from the minds of nearly all of our citizens over 65. Because of medicare, more older persons have been able to seek hospital care with the dignity that goes with ability to pay. For the first time, many of them have been able to choose private care in the best hospital in their community. The transition from the status of the charity patient to that of a patient who is in effect paying his own way has changed both the level of care that many of the elderly could expect and the level of care that they actually receive. In the past 112 months there have been nearly 5 million admissions to hospitals under the medicare program. This represents about 4 million people. The amount paid to the hospitals in that 1112-month period has been about $2 billion. Medicare has also made available insured alternatives to hospital care. These include: Hospital outpatient service where that is appropriate for diagnosis or treatment; and posthospital extended care and home-health care where further stay in a hospital is not the most appropriate level of care. Also included is the coverage of physician's services for home and office visits. These alternatives have produced the following results: HOME HEALTH AGENCY SERVICE About 220,000 patients have been cared for through home health agencies under plans that were prepared for them by physicians. Up until mid-June of this year-from January when the extended care facilities coverage went into effect-more than 180,000 admissions had been reported for care in these facilities. And, also, by mid-June more than 23 million bills, mostly physicians' bills, had been submitted for payment under the medical insurance part of medicare and payment for services under this part, we call it part B, has exceeded $600 million. Medicare also has helped to upgrade the quality of health care in terms of facilities, personnel, and patient-care policy. To participate in medicare, institutions have been required to meet standards set forth in the law and in the regulations. I might add, Mr. Chairman, that one factor that seems to be involved in the increased cost of hospital care in 1966 has been the upgrading that did occur in many hospitals and particularly in extended-care facilities, which upgrading they had to do in order to meet the requirements for participation in the medicare program. The requirements for quality care have applied to 6,800 hospitals, about 4,000 extended-care facilities, nearly 1,800 home-health agencies, and 2,175 independent laboratories. In addition to meeting standards on quality of care, the participating medical institutions are required to conform to title VI of the Civil Rights Act, and therefore members of minority groups for the first time in many communities have access to high-quality care. Moreover staffing and service patterns have changed in such a way as to improve the service to all patients. PROGRESS ON MEDICAID Older Americans who are medically indigent are also benefiting from medicare. In 29 of 54 States and other jurisdictions a medicaid program, as we call it, under title XIX of the Social Security Act is in operation. In 15 jurisdictions plans to install medicaid programs are underway and only 10 have no medicaid plans. All but 13 of the 54 jurisdictions are paying supplementary medical insurance premiums for the public assistance recipients on their rolls or are paying higher cash amounts to those recipients who have enrolled in the part B of medicare. This is the part where they pay the $3-per-month premium. It is too early to say how much increase in the use of health services by older persons has taken place since July of last year, when medicare went into effect, or how this use compares with the use of such services by those under 65. In general, it is clear enough that there has been no overwhelming rush to the hospitals and no swamping of doctors' offices, as some had predicted was going to happen. SURVEY ON HEALTH COSTS OF ELDERLY Shortly after medicare was enacted the Social Security Administration contracted with the National Opinion Research Center and the Columbia School of Public Health for a national sample survey of health service expenses of older persons before and after medicare. The survey will provide data on changes in the use of, charges for, and costs of, medical services covered under both parts of medicare as well as those not covered under that program. A national sample of 6,000 aged persons was interviewed in April 1966, on their use of hospital and medical services during the preceding 12 months. A similar sample will be interviewed in October of this year. We will have preliminary results of the April 1966 survey fairly soon; although we will not be able to complete the measurements of change from April to October until sometime next year. Although there is a reporting lag, statistics derived from the operation of the medicare program itself; that is, apart from these surveys, are beginning to give us some idea of what is taking place. The data relate to claims that are paid-actually paid-and thus they depend upon the flow of bills and the claims from hospitals to the fiscal intermediaries that are set up under the medicare program and the flow of bills from doctors to patients, from the patients to the intermediaries, and then from the intermediaries to the Social Security Administration. The intermediaries that I refer to are the organizations that are called for in the law to serve as agents for the Social Security Admin |