from another agency, and in many areas no alternative agency may be providing home health services. The key to an effective enforcement program is the utilization of appropriate sanctions short of decertification which will remove the profit incentive for noncompliance with standards. Such a program would also result in savings to the state and federal government, for they no longer would be paying the full rate to providers who are not delivering the full scope and quality of service required by law and by the provider agreement. The principle behind such an inspection program is simple: when the inspecting agency learns, through its inspection process or otherwise, that a provider is not in compliance with the standards, the state should withhold from the payment to the agency an amount which reflects the value of the omitted service for so long as the deficiency has existed and continues to exist. In other words, payment should be made only for value received. By accepting Medicaid patients, the agency has obligated itself to provide the scope and quality of services and facilities required by law. The payment rate established under the Medicaid program is compensation for services so provided. If the agency fails to deliver as promised, the compensation to it should be reduced accordingly. The regulations should require each state to establish a deficiency-rating system under which the state would establish a schedule of reductions in payments based on the type and scope of deficiencies found in an agency. Because it will be difficult to precisely value the cost of each deficiency, some sort of point system will probably be necessary. However, the regulations should not at this stage mandate any particular system, but rather should permit the states to experiment. Once in operation, the system should automatically lower Medicaid payments to providers according to a prescribed schedule in the event of findings of non-compliance with laws and regulations. The reduced payment will continue unless and until the provider demonstrates full compliance with regulations. To provide another source of experimentation with new methods of enforcement, the states should be authorized to substitute an alternative system so long as it meets the objective, namely, to provide an alternative method of regulation to decertification and to remove the cost saving-profit incentive arising from non-compliance with the standards. An effective program for inspection and enforcement of standards of care is essential for home health agencies. The problems of enforcement of standards in the home health agencies are even greater than are present in nursing homes because the services are performed in thousands of private residences rather than in one central location. The need for effective inspection and sanctions becomes even more critical if these regulations permit the proprietary agencies to operate on a widespread basis in providing home health care. The Proposed Regulations Provide No Mechanism for Enforcement of the Obligation of the States to Provide Home Health Services Under the Medicaid Program. The Social Security Act and the regulations require that home health services be made available to all categorically needy individuals 21 years of age or over and to medically needy groups and others for whom skilled nursing facility services are provided. It is apparent that the states have failed to carry out this obligation. In fiscal 1972, the latest year for which complete figures appear to be available, Medicaid expenditures totalled $6 billion. Of this amount, only $25 million was used to provide home health services. In contrast, $1.5 billion went to provide for services in nursing homes. In fiscal 1974, seven states reported fewer than 100 Medicaid recipients received home health services. In three states, fewer than ten received such services. The regulations should contain a baseline minimum number of recipients receiving home health care services and a minimum total number of visits. States which do not meet this standard should be presumptively in non-compliance and should be required to present a full program which will bring the state up to the minimum level within a specified period of time not to exceed six months, except in special circumstances approved by HEW. The requirement of providing home health aid should be enforced by a system of reductions in payments to the states that fail to meet the requirements of the regulations as suggested. Mr. ROSTENKOWSKI. The committee will stand in recess for 10 minutes. [Recess.] ding Mr. COTTER [presiding]. Doctor, you may proceed. STATEMENT OF JOHN H. SADLER, M.D., PRESIDENT, RENAL PHYSICIANS ASSOCIATION Dr. SADLER. Thank you very much for allowing me to speak at this time. It seems that today's weather has been typical of other arrangements this week, and thus I have been very inefficient in bringing my testimony to you. I wish to address the medicare renal disease program, to try to emphasize only those points that I think are most important. I believe that the key to trying to maintain cost-effectiveness in this program is the fact that people cost more than things, and, that the program would create an overwhelming bureaucracy for those providing the care and those in the Government who have been manning this. We do not believe this is necessary, for a number of reasons, Mechanisms in the country already exist. Secondly, careful steps have been made to establish a data acquisition program which will provide data on all operations of all programs under the NSRD program, with information on each patient, so that norms can be constructed as to means of operation, as to the outcome which is really the critical phenomenon as to the cost of the program. This data system should be able to provide so much information that the complex systems of review that are proposed would not be really necessary. These are time-consuming, and the people involved in them are people who are in short supply and expensive. The maximum use of the data system and the minimum use of the people involved is recommended by the Renal Physicians Association. We also feel that when a genuine exception arises, and careful personal onsite investigation is required, that this must not be accomplished within the region of the individual facility, but would requre outside visitors no matter what. Beyond this, we would like to say that there are two questions of principal importance. One is that the program is not yet as effective as it should be. The cost is not yet in the frightening range, and the projections propose that it will remain as it is, that no innovations altering the character of the program will occur. Because of this, we have recommended it to many officials within the Department of IIEW, and to Congressman Vanik's committee, that provisions to develop and evaluate innovations which would improve the operation of this program and reduce the need for this program be an ongoing part of any establishment that has to do with it. We need to expand the effectiveness in two principal means. One is to make dialysis facilities reasonably available to all people, and the second is to make transplantation more readily available through the increased availability of cadaver organs. I am afraid no individual group has been adequately able to make the American population aware that it is a straight forward, generous, and effective thing to donate one's organs upon death and unless this can be widely recognized and approved, there will never be a satisfactory supply of organs to do kidney transplants, and to do them properly. I believe if there were more kidneys available for transplantation, we would do transplants under more optimum circumstances, with higher success rates, and with greater convenience to the patient. As a corollary of this, I really believe it is inappropriate to consider reducing the number of transplantation facilities. There is a widely held concept among administrators that a select few institutions performing large numbers of transplants would be more effective in terms of economy and would provide greater practice in the skills required, so that the success rate would rise. A survey of the data available does not support this opinion. There is nothing published in the medical or lay literature that I can find supporting that, and there are two recent publications in the medical literature that refute it. The other aspect of reduction in the number of transplant centers is simply that the greatest attention to obtain transplanting organs in a facility where transplants are done, and in the area of that facility. I think it goes without saying that five institutions doing 25 transplants a year will harvest more kidneys than one institution doing 125, and what we need right now is available organs. I think it is irrational to make choices that would lead to the exclusion of some facilities from providing a service that we are providing in adequate quantities once the supply and service is sufficient to the need. We can then see the optimum form for those services. So we most urgently request that no restrictive regulations that cast very rigid faces on the future of this program be adopted, that no new bureaucracy be constituted, and that some consideration be given to the economies that existed prior to the establishment of the medicare NSRD program, and that these mechanisms be given some weight in planning for the future. It is not as if this program were constituted in a vacuum and started when there was no experience, and yet despite the public evidence of consultations, there is no substantive evidence that consultations provided in the community giving this service have influenced the design of the program's future. I have a written statement which can be entered into the record. Dr. SADLER. It should not be done in every hospital. The numbers have been more or less selected from thin air, and no effort to determine what the effect of the actual numbers are. We have no concept that a hospital should do one transplant a year. We do object to saying that a hospital should do 25 as opposed to 18, and we are concerned with the severe shortage of transplantable organs, and I think only more widespread interest will allow us to get them. There is no argument of the concept of regionalization of special services, but regions need not be so large as to be unmanageable. I think there seems to be generally throughout the country an aware ness that moving controls back to a more localized area gives more effective control and better communication. To develop enormous networks produces nothing but hostility, confusion, and poor communication. [The prepared statement follows:] STATEMENT OF JOHN H. SADLER, M.D., PRESIDENT, RENAL PHYSICIANS ASSOCIATION Mr. Chairman, I am here to discuss the operations of the Medicare End-Stage Renal Disease Program with regard to its present status and possible improvement in its effectiveness and economy for the future. I speak for the Renal Physicians Association, a national organization of nephrologists, transplant surgeons, pediatricians and urologists directly active in providing end-stage renal disease care. Before any projections for the future and for future economies can be made, some grasp of the state of the art is necessary. We are presently able with the use of maintenance dialysis (either hemodialysis or peritoneal dialysis) and by kidney transplantation, to provide a substitute for the loss of kidney function for people with end-stage disease of the kidneys. These treatments are expensive, they are often frought with complications and they are not sufficiently available to all Americans. The Medicare ESRD program has provided sponsorship for most people and has thus improved availability. Both dialysis therapy and transplant therapy are still undergoing active development. They have progessed from research status by several years, but all of us who use these therapies are confident that new directions and new techniques will provide higher quality and more efficient treatment. A machine as big as a dishwasher which requires individual attachment to a patient's blood stream two or three times a week for several hours is not cure-but palliation. The placement of an organ from another individual which requires drugs with troublesome and dangerous side effects is not cure, but palliation. These therapies are amenable to direct improvement with research. We are not addressing basic research in physical and biological sciences, but the "R&D" type of progress that every field must maintain in order to improve its future operations. It is critically important that no plan for the future of this program fail to take into account the necessity of providing means for this ongoing research and development. Innovations in treatment techniques, devices and patterns of therapy may improve efficiency and increase rehabilitation without awaiting a major scientific breakthrough. Cost effectiveness of a program is of little importance if the program is not itself effective. We are not providing dialysis to all Americans who need it. Dialysis is not available on a practical basis for many people in rural areas or to many with transportation problems in the cities and suburbs. We must be sure that adequate service exists before seeking means to eliminate services that are not yet optimal. We are providing transplantation at about half the rate needed. This is principally because we are not acquiring transplantable kidneys, from people dying without kidney disease, at a satisfactory rate, Widespread programs to increase public knowledge and professional interest in the donation of cadaver organs will be necessary. The overall success rate for kidney transplants from unrelated individuals is approximately fifty percent. The development of adequate organ procurement capability will not only permit more transplants, but permit them more selectively, earlier in the patient's course and under more ideal conditions. These factors should increase success. We need more kidneys, we need more people willing to donate kidneys, we need more understanding that organ donation is indeed a straightforward and generous thing to do, that it is approved by essentially all religions, and that it is indeed a gift of life to people with kidney disease. HEW pressure to develop fewer, larger transplant programs is based on concepts of fiscal and technical efficiency that are not supported by overall experience and published reports. Organ procurement proceeds best in an area where organ transplants are carried out. Any reduction in transplanting facilities will decrease organ procurement effectiveness. With inadequate numbers of transplants now, we cannot afford reduction in capacity. Review of norms of opera tional practices and above all, review of outcome will provide standards for certification or decertification. Numbers alone are not a standard of the quality of care; dislocation of the patient from his community should be avoided where possible. Efforts to increase the total effectiveness of the program are most needed. Nothing will make this program inexpensive. It is intensive in personnel, requiring knowledgeable specialists to carry it out. The euipment required is expensive and the continuing nature of the treatment means the cost is repetitive. The justification of this therapy is its success. We have chosen that no American should die because of kidney failure simply because he has not the means to pay for his treatment. To retreat from that choice is now impossible. Planning for the long range is necessary to control cost. Among the goals for cost control must be new and effective drug therapy before end stage disease develops, prevention of disease progression and arrest of disease by earlier identification and understanding of its nature. In order to make sure that dialysis and transplantation work for a high percentage of those who embark upon it, however, it is important to recognize that everyone whose kidneys do not work cannot benefit from hemodialysis, peritoneal dialysis or transplantation of a kidney. These therapies treat uremia. They also have their own body of complications. They are not necessarily beneficial for concomitant heart disease, lung disease, liver disease, cerebro-vascular disease or general debility. For the patient whose disability is uremia, treatment prolongs life. For other disabling diseases, it often prolongs dying. While each program must define its specific standards for inclusion of patients in therapy, it is necessary that criteria for selection exists. Many professionals feel prohibited from exercising patient selection standards by federal regulations. The recent GAO report tends to reinforce this. There are things worse than death-including a difficult therapy that does not restore well-being. Recognition of this and endorsement of systems of selection is needed. The alternative is an uncontrolled expansion of the treatment beyond its appropriate beneficial effects. We are further concerned that the necessity for a program of review has been taken to extremes, that the cost of review of medical operations in this program (and by extrapolation in many others) will be highly expensive. The ESRD program has under development a national medical data system which will provide information on all programs participating in the ESRD care, on all patients in the program, and on the character and outcome of care in these programs. We urge that this data system be used as the major source of information for medical review since this will be the only practical and economical means of carrying out surveys. Secondly, we believe that the need for closer inspection of facilities for detailed review will be indicated by tabulated data, will be an unusual occurrence, and will require outside consultants to make site visits. This should be kept to a minimum and optimally utilize the consultants' time and reduce overall costs. A complex system of interlocking bureaucracies composed of federal councils, state agencies, interstate regulating bodies, and professionals from the programs themselves could consume more people in reveiwing regulations that are necessary to provide the treatment in question. People cost more than things. Additional layers of non-medical staff are the greatest threat to economical operation. These therapies had been under active development by numerous programs for more than ten years prior to the introduction of the federal ESRD program. Great expansion of these programs had occurred with considerable increase in effectiveness prior to 1973. Individual systems of providing care with maximum economy had been developed by many dialysis programs. Interrelationships for maximum effectiveness and economy among transplant programs and dialysis programs exist in most areas. These carefully developed economies and these functional relationships were ignored in the demands for a new structure of the system. Networks so large as to be without any practical relationship or effective communication have been defined. State programs which have been in existence for several years and operate with a high level of control and a high level of quality have been ignored. Patterns of referral of patients were given only lip service in the structuring of this program. We have been made subject to someone's theoretical concept of regionalization and the "consultations" that were requested were largely window dressing-there is little evidence of their influence on the constructors of these networks. This type of reaction to existing |