Y 4. In 8*:95-31 HOSPITAL COST CONTAINMENT ACT OF 1977 HEARING BEFORE THE SUBCOMMITTEE ON HEALTH AND THE ENVIRONMENT OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE NINETY-FIFTH CONGRESS FIRST SESSION ON H.R. 8121 and H.R. 6575 BILLS TO ESTABLISH A TRANSITIONAL SYSTEM OF HOSPI- 95-756 O JULY 18, 1977 Serial No. 95 FORD Printed for the use of the Committee on Interstate and Foreign Commerce U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1977 UNIV ERSITY 1977 OCUMENT EPARTMEN COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE HARLEY O. STAGGERS, West Virginia, Chairman JOHN E. MOSS, California LIONEL VAN DEERLIN, California RICHARDSON PREYER, North Carolina PHILIP R. SHARP, Indiana JAMES J. FLORIO, New Jersey ANTHONY TOBY MOFFETT, Connecticut JIM SANTINI, Nevada ANDREW MAGUIRE, New Jersey MARTY RUSSO, Illinois EDWARD J. MARKEY, Massachusetts THOMAS A. LUKEN, Ohio DOUG WALGREN, Pennsylvania BOB GAMMAGE, Texas ALBERT GORE, JR., Tennessee BARBARA A. MIKULSKI, Maryland SAMUEL L. DEVINE, Ohio JAMES T. BROYHILL, North Carolina SUBCOMMITTEE ON HEALTH AND THE ENVIRONMENT CONTENTS Davis, Karen, Ph. D., Deputy Assistant Secretary for Health Plan- Klar, Ronald M., M.D., Acting Director, Office of Policy Develop- ment and Planning, Office of the Assistant Secretary for Health, Department of Health, Education, and Welfare___ Kopit, William G., counsel, American Association for Comprehensive McMahon, John Alexander, president, American Hospital Association 160, 171 O'Connor, Robert P., Acting Assistant Administrator, Health Care Financing Administration, Department of Health, Education, and Peterson, Harry N., director, Department of Legislation, American Pettengill, Daniel W., on behalf of the Health Insurance Association Spaeth, Grant, Deputy Assistant Secretary for Legislation (Health), Department of Health, Education, and Welfare__. Storm, Mary E., chairperson, Legislative Committee, American Asso- American Association for Comprehensive Health Planning, letter dated July 22, 1977, from Mary E. Storm and William G. Kopit re rec- ommendations regarding a moratorium in lieu of title II of H.R. 8121/H.R. 6575; further information on decertification; and pro- Number of hospitals eligible for an incentive payment.. Payroll, nonpayroll, and total expense per inpatient day for com- munity hospitals in 1975, and percentage increase over 1974__ National Association of Counties, attachment to Mr. Gemmell's pre- pared statement, resolution on HEW proposal to contain increasing HOSPITAL COST CONTAINMENT ACT OF 1977 MONDAY, JULY 18, 1977 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HEALTH AND THE ENVIRONMENT, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The subcomittee met, pursuant to notice, at 9:00 a.m., in Room 2123, Rayburn House Office Building, Hon. Paul G. Rogers (chairman of the subcommittee) presiding. Mr. ROGERS. The subcommittee will come to order, please. The hearing this morning is to receive testimony on three new proposals which were introduced by me in H.R. 8121 on June 30. I offered these proposals to stimulate debate and further consideration of two very important issues which I belive must be addressed by any hospital cost containment program. First, hospitals must be encouraged by a cost containment program to perform efficiently and responsibly. With proper incentives, I can foresee our hospital system providing high quality care to all our citizens with the latest available technology, but I see it free of surplus beds and equipment and free of overlapping and duplicative services. Second, our health planning system must be enabled to more effectively limit the introduction of new facilities and equipment. Many of these new services are not adding to our ability to care for the ill, but are only duplicating existing services at high cost. I believe that the three new proposals in H.R. 8121, as well as all others which seek to contain recent increases in hospital costs, must be subjected to the closest scrutiny. The issues involved are many and complex. I believe Dr. Carter has a statement he would like to present. Dr. Carter? Mr. CARTER. Mr. Chairman, proposals to contain the dramatic increases in hospital costs have been a topic of much discussion in the Congress in recent months. As a physician and as ranking minority member of the House Subcommittee on Health and the Environment, I too have become increasingly concerned about this problem. I have listened carefully to the methods proposed to solve it, including the legislation advanced by the administration, H.R. 6575. Although I share the administration's desire for timely action to remedy the problem of escalating hospital costs, I feel that the (1) |