sponsored by the Midwest Council for Social Research in Aging and its host institution, Institute for Community Studies in Kansas City, Missouri (see Attachment A for a statement about the Midwest Council) and financially supported by U.S. Public Health Service Grant Number CD 00244.

DESCRIPTION OF THE RESEARCH PROJECT

With Medicare as its central focus, this research project, entitled "Changing Community Patterns-Health Care for Aging," is being conducted in two phases. The first is an interview survey of people aged sixty or over in a random sample of 2622 households in five midwestern communities. The second is an analysis of the ways in which these same five communities organize their health and medical care services for care of the aged. To measure the changes which take place, each of the phases is to be conducted twice; once when Medicare started and again in 1968.

The five communities were selected as "types" of cities varying by size and availability of health care resources. The metropolitan area chosen is Kansas City, Missouri which, like all large cities, has the full range of community health resources. Two cities of about 100,000 population which are alike in their essential characteristics, but differ in amount of health resources were selected These are Cedar Rapids, Iowa and Springfield, Missouri. Finally, two smaller cities of about 25,000 population which represent non-urban, medical trade centers were also chosen. These were Great Bend, Kansas and Waupaca, Wisconsin.

The household interview phase is designed to collect information concerning (1) attitudes of the older population toward the Medicare program, physicians, hospitals and nursing homes; (2) perception and understanding of the meaning of disease symptoms common among older people; (3) experiences with the Medicare program in terms of utilization of health resources and the costs of services received. The community analysis phase is designed to collect information about the ways in which organizations and groups in the selected communities organize themselves and coordinate their efforts to provide health and medical care services for the aged. The main targets for study in these communities are (1) service facilities such as hospitals, nursing homes and similar institutions; (2) service organizations, both public and private, such as welfare departments, Senior Citizens clubs, etc., but especially physicians in the local medical societies; and (3) coordinating organizations such as health and welfare councils or similar voluntary agencies. At the present time, the first household survey has been completed. The community analysis phase is not yet completed and no data are now available.

PRELIMINARY RESULTS OF THE HOUSEHOLD SURVEY

The first household survey was a very successful operation which yielded a large amount of data. I will attempt to summarize some results selected because I believe them to be most relevant to the purposes of this committee. A further elaboration of some of these results may be found in the attachments submitted with this statement (see Attachments B, C and D). The tentative findings presented here relate to (1) attitudes toward Medicare as a program; (2) attitudes toward medical care resources; (3) utilization of these resources before and after July 1, 1966; and (4) the costs of care received.

Attitudes toward medicare as a program

The responses to a question tapping general attitude toward Medicare as a program were overwhelmingly positive. The proportion of respondents in the different communities favoring Medicare ranged from two-thirds to nearly threefourths. Actually, what is more impressive is the small proportion who did not approve of Medicare. These percentages ranged from 7% to 10%. The balance of the respondents, mostly those under age 65, were unable to clearly state their attitude.

The major source of this positive attitude lies in two, related opinions. More than 80% of all respondents agreed that "Medicare will improve the health care given to older people" and "most older people need Medicare." These respondents were much less certain that Medicare should be extended to people under age sixty-five (about 40% agreement) or that Medicare would lead to "socialized medicine" (about 30% agreement).

Attitudes toward health care resources

A series of questions were asked about three types of health resources; physicians, hospitals and nursing homes. In general, it may be said that most of these respondents hold positive attitudes toward physicians although respondents in the smaller communities are more favorable toward physicians than respondents in the larger communities. For the most part, they view physicians as being competent and exerting his best efforts regardless of their ability to pay for his services.

These respondents hold equally strong, positive attitudes toward hospitals at least in terms of quality of care. That is, respondents tended to agree that the hospital was the appropriate place for medical treatment and that a high quality of care could be obtained there. However, less than half the respondents agreed that hospital costs were appropriate for the care received and more than one-third flatly disagreed that hospital costs were fair.

Attitudes toward nursing homes were much less positive and, in fact, suggest that these respondents are quite suspicious about the quality of care received and about the cost of care rendered. The only consistently favorable response to nursing homes was that it was chosen over the home of a relative for incapacitated older people. Since these respondents have had considerable contact with physicians and hospitals, but virtually none with nursing homes. It is apparent that their expressed attitudes are based on experiences with the former two, but on a generally poor national reputation for the latter.

Utilization of health facilities

Three measures were used to estimate the utilization rates of hospitals, nursing homes and physicians. The measures were number of hospital admissions per 100 respondents per month; number of days of hospital care per respondent per month; and number of physician contacts per 100 patients per month. These measures were taken for the periods January 1 to June 30, 1966 and July 1 to October 31, 1966. Because less than 2% of the respondents had been in a nursing home, these data were not analyzed.

The tentative conclusions which may be drawn from comparison of these measures of utilization before and after July 1, 1966 when Medicare began are: (1) no significant increase in number of hospital admissions,

(2) a generally small increase in the number of days of hospital care received,

(3) a significant increase in the number of physician contacts.

It seems doubtful, at this point, however, that much of the observed increase in utilization can be directly attributed to Medicare primarily because the percentage increase was as great for respondents under age 65 as for those over age sixty-five. Moreover, the total volume of utilization on these measures roughly approximates "normal" utilization as measured by other surveys, principally the National Health Survey. Since the volume remains relatively low, it is not surprising that most facilities, especially hospitals, do not report increases as large as expected prior to the start of Medicare.

Costs of services received

As in the case of utilization, respondents were asked a series of questions about their costs of medical care before and after Medicare. The questions related to whether they had had any medical bills not covered by some form of insurance, how much these were, who paid them and, as a result, did they put off any other purchases because of uninsured costs of medical care.

The tentative findings here indicate that one-half or more of the respondents in each community had had uninsured medical care costs during the period January 1 to June 30, 1966 and a sizable proportion had them after July 1. In every case, however, there was a decline in the percentage of respondents who said they had uninsured expenses after Medicare started. The decline was greater in the large cities (about 6%) than in the smaller ones (about 3%).

Despite the fact that the magnitude of the decline in uninsured costs was very small, it apparently benefitted most those respondents with the largest unpaid bills. The percentage of respondents owing $150 or more for uninsured bills showed the greatest decrease after July 1, 1966 while those owing $30 or less were not benefitted at all.

The source of payment for these uninsured bills was overwhelmingly the individual. Nine of every ten respondents, both before and after Medicare started, paid these costs out of their own pockets. The remainder was paid from other sources such as relatives, welfare agencies, etc., or it was not paid at all.

These out-of-pocket costs apparently had little influence on other spending habits. In the vast majority of cases, these respondents did not put off buying anything because of the costs of medical care. The percentage who did put off other purchases (including other medical treatments) declined slightly after July 1, 1966.

It is, of course, too early to make any generalizations about these data, but it would appear that the trends are in the direction of a successful program even if the magnitude of change is rather small.

PROVISION OF HEALTH SERVICES IN THE COMMUNITY

Since no data are yet available on the community analysis phase of this research project, the most I can do at this point is to describe what we hope to gain from such an analysis. Basically, this will be a study of (1) provision of various health services by community resources both before and after Medicare (mostly from records), (2) decision-making process in planning and coordinating the delivery of these services, including an evaluation of the role played by influential groups such as the local medical society, hospital associations, and voluntary agencies; and (3) the subsequent reorganization of health care services for the aged. Again the primary reference point will be Medicare although other programs presently operating and planned such as Medicaid will have to be considered also.

We have hypothesized that over the next few years the demand for health services by the aged will gradually and steadily increase although a "leveling off" should occur within roughly ten years. In response to this increasing demand, community resources will likely expand their facilities, both in terms of physical plants and scope of services. Expansion, however, takes time, money and personnel; thus, we predict that the initial response to increased demand will probably be a reallocation of present resources to meet immediate demands and at the expense of other presently offered services. For example, small, rural hospitals can provide essentially custodial services for elderly patients, but only at the cost of reduced provision of acute care services. Similarly, physicians who see an increasing number of older patients, necessarily will have to see fewer younger

ones.

Because of the inability to readily expand their services now and because of the general shortage of trained medical personnel at all levels, we are hypothesizing that communities will be more or less compelled to engage in a coordinative effort to allocate their resources. In so doing, we expect (eventually) that there will likely be a substantial change in the organization of a community's health services.

The factors which will likely contribute to this "reorganization" are many and varied and, for the most part, are extensions of the processes which characterized the development of the 20th century medicine. Increased population size, rising standard of living, new drugs and medical techniques, new discoveries, etc., will promote increased longevity, emphasize management of chronic diseases, and further the specialization of the medical and paramedical professions. These, in turn, should subsequently require more personnel, increased "team effort" to provide for an extended concept of truly comprehensive care. If, in fact, these things do occur, we would anticipate an increasing rate of growth of group practices, perhaps a further decline in the percentage of physicians in strictly private practice, the emergence of specially trained groups whose main task is to coordinate all these services.

These anticipated changes obviously involve some threat to present principles guiding health care delivery systems. Thus, initially we would anticipate some resistance to these changes. Potentially, physicians offer the most serious threat to successful development of the program not because they might refuse to cooperate or to treat patients whose care is subsidized. Rather the danger lies in physicians' attitudes toward aging as a process and related beliefs about medical management of long-term illnesses. The Medical Care Research Center is presently conducting a national survey on this topic. Results from the pilot study show clearly the relationship between the perception of aging as a "process of irreversible biological deterioration" and a tendency to recommend palliative or custodial care for the elderly. Thus, physicians may be reluctant to participate because they see no medical purpose to be served by extended health services.

Another source of resistance is, of course, the facilities themselves. In most communities there is still a spirit of competition for staff, for patients and

for community support. As a result, there is a very great reluctance on the part of these organizations to submit to the coordinative efforts of voluntary groups (even when they each have representation in that group).

Finally, but certainly not exhaustively, the patients themselves may not make full use of the facilities offered. For example, we have already noted a rather unfavorable attitude toward nursing homes-to be used only as a last resort. Reports from other studies clearly show that a host of socio-cultural, psychological and economic factors strongly influence a person's decision to use or not use some health resource. It seems evident that these changes will be slow in coming about, but, we feel, they must eventually occur.

RELATED ISSUES TO BE EXPLORED

As indicated in the preceding paragraphs, the major thrust of this research is on utilization and provision of community health resources. In the process, an opportunity arises to confront several related and important issues. In closing, I would like to make brief mention of only two of these. First is the effect of Medicare on the quality of medical care services for the elderly. This problem is viewed not in the sense of quality of technical services by a particular physician, but rather in the context of type of care rendered and increased scope of care. It seems reasonable that Medicare could lead a patient to seek a physician's care almost exclusively. That is, older people with health problems which they typically treat themselves, or consult with a spiritual healer or a chiropractor, may now consult with a physician who is eligible to receive payments for services rendered.

The rising demand for management of chronic problems may eventually lead to a reorientation of the medical profession in which chronic care is given equal status with acute care. If so, there should be a subsequent shift from a custodial orientation to a treatment orientation in dealing with patients with chronic disease problems.

It is also possible that increased contacts with physicians and more frequent treatment may actually improve the health status of the aged. Under these conditions, it is feasible that preventive medicine, especially preventive maintenance services for the aged will assume new importance—an importance at least equal to preventive services for communicable diseases.

Finally, the quality of care is affected also by the scope of service provided. We would expect there to be an extension of services under the concept of "comprehensive care." The management of chronic diseases calls for the specialized, technical competencies of several persons and in a variety of settings and as the need arises, it is likely that these services will be developed and expanded. The second, related issue is more difficult to assess and it has to do with the basic philosophy or ideology underlying the provision of health services and modes for paying for them. Basically, we suppose that in the long run, the positive attributes of Medicare will outweigh its shortcomings and this should go a long way toward undermining the customary arguments about subsidized programs particularly those related to mode of payment. It does not seem too far-fetched to expect that ultimately all age groups will be fully covered by some form of insurance. Medicare (and Medicaid) represent initial steps in this direction.

Senator SMATHERS. Doctor, do you want to say something?

The American Medical Association has had Dr. Anderson here today as an observer and they were going to testify but they are otherwise occupied at the moment, and have offered to give their testimony at a later date.

Blue Cross Association, Mr. James Ensign, vice president, and Mr. Walter J. McNerney, president, have indicated that they will probably testify tomorrow.

If there is no other business to come before the subcommittee at this time, we stand in recess until tomorrow morning at 8:30 a.m. (Whereupon, at 11:50 a.m., the subcommittee recessed, to reconvene at 8:30 a.m., Friday, June 23, 1967.)