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We wish to mention that we appreciated the suggestion made to us by the staff counsel, Mr. Jay Constantine, some weeks ago, to the effect that it would be helpful to the staff, and certainly everyone concerned if representatives of our Association and of the American Society of Anesthesiologists got together with the staff to discuss various issues in a very informal and frank way. We could see the value of such an exchange and were warmly receptive to it. Thus, we offered to host a dinner for representatives of the two associations along with the staff of the Committee. We were keenly disappointed when the anesthesiologists refused the invitation to participate, giving for an excuse that their legal counsel had advised against it. Their reason, frankly, appeared to us as being without foundation and we wonder at their unwillingness to make statements to the staff of the Committee in our presence so that there might be an opportunity for some thoughtful discussion of them. Thus, as you know, we had a discussion with the Committee staff but without the anesthesiologists being present.

In regard to your invitation to submit for the record any comments on the statements made by Dr. Ament we offer the following:

I. In response to a question regarding the role of the nurse anesthetist, Dr. Ament made the point that the nurse anesthetist must practice under the direct supervision of a physician and he referred, in particular, to the State of Georgia in this respect. There is no question as to the relationship of a nurse anesthetist to the physician, and we have always stated that this fact is recognized under the law.

However, Dr. Ament failed to mention very importantly that "this physician" need not be an anesthesiologist. State laws do not require the presence of an anesthesiologist, and, as we have stated in our testimony, in many, many instances no anesthesiologist is present or available. In such situations the nurse anesthetist is always working under the supervision of a physician but it is the surgeon. And, as we have also pointed out in testimony, very often in such cases the surgeon does not presume to be authoritative with respect to the anesthetic administered but relies on the experience, training, and proficiency of the nurse anesthetist.

In this respect we would also like to comment upon the role of supervision where the anesthesiologist is expected to be and can be present. We believe one of the significant improvements which could be brought about by the amendments which we have recommended in recognition of nurse anesthetists is a clarification of the term "supervision." There are instances where this term has very real meaning and where a Board Certified anesthesiologist works with nurse anesthetists in a helpful and collaborative role. However, there are far too many examples where the term "supervision" is meaningless and is simply used by the anesthesiologist as a basis for financial gain. In discussions with staff of the Bureau of Health Insurance of H.E. W., they have indicated to us that defining the term "supervision" is very difficult and, as a result, they are aware of substantial economic waste and abuse.

II. A question was asked with respect to a clarification of terminology, and the particular question was whether Dr. Ament considered the nurse anesthetist as "an equivalent colleague." Nurse anesthetists are not physicians and we have always made this quite clear.

In terms of the qualifications of nurse anesthetists we wish to point out that they provide the anesthetic for patients undergoing the most highly specialized surgery such as heart surgery, transplants, etc., and, in such instances, of course, the nurse anesthetist is working in the large medical teaching centers. Just as there is no specific evidence or measures as to the quality of the anesthesia provided by physicians, there is none either with respect to the quality of services provided by nurse anesthetists. We can only refer you to the situation in which nurse anesthetists function and specifically perhaps to the Armed Services where we are sure you will find that nurse anesthetists are well recognized in terms of their ability and the quality of their work.

There have not been any substantial and extensive studies on the quality of anesthesia. In our testimony we stressed our belief in the need for such a national study and recommended, in fact, that the Committee and the Congress instruct H.E.W. specifically to see that such a study be undertaken without further delay. Such a study would be helpful to the field of anesthesia and certainly would be in the best interest of patient care. The study should be performed by an independent research team.

We are disappointed that Dr. Ament did not support our recommendations to the Committee that a study of quality of anesthesia be undertaken. We are particularly concerned that the bill (S. 1470) contains language (which Mr. Constantine said was supplied by the anesthesiologists' leadership) which would not support good quality anesthesia practice and in this regard, we made several recommendations to the present language which we believe to be essential.

III. The matter of basic education and preparation of nurse anesthetists was also raised by Dr. Ament in the questioning. Dr. Ament in his answer to the question appeared to suggest that the American Society of Anesthesiologists had great concerns about the education of nurse anesthetists. Our national association has a very strong program directed towards the quality of the education process of students undertaking graduate training in anesthesia. We wish to state very clearly that we see no reason to apologize for the education received by nurse anesthetists. In general, their education, knowledge, and ability with respect to the basic sciences learned first as graduate nurses is certainly valid.

We have worked very closely with the United States Office of Education, Department of Health, Education, and Welfare, and the approval of the program of accreditation for schools of nurse anesthesia is given by this department of the United States Government. Just recently the accreditation program was reviewed by the Office of Education and once again the representative of the anesthesiologists appeared before the review committee and raised numerous questions about the quality of the education, all of which were considered thoroughly by the review committee appointed by the Office of Education and rejected. We now feel impelled to conclude that this continued effort on the part of the anesthesiologists to denigrate the quality of education of nurse anesthe tists has little to do with any documented concern for their education or for protecting the public. Rather, it is directed by a strong desire to control and dominate nurse anesthetists by being in a position to control their education. We state very strongly our belief that such control is not in the public's interest, and we do not intend to submit to it.

IV. Dr. Ament stated that the Council on Post secondary Accreditation (COPA) had recently denied AANA's request for accreditation. This simply is not true. COPA is a national non-profit organization whose purpose is to support, coordinate and improve all non-governmental accrediting activities conducted at the post secondary educational level in the United States. It is the first organization that was created to serve as the national voice on behalf of all institutions and associations concerned with non-governmental accreditation. On October 24, 1976 the AANA Council on Accreditation submitted an application for recognition by the Council on Post secondary Accreditation. Action on this application has been delayed pending receipt of additional evidence of compliance with certain COPA provisions for recognition. A revised petition will be submitted to the COPA Board on, or before September 1, 1977 and representatives of the AANA Council on Accreditation will make an oral presentation before members of the COPA Board on October 12, 1977. For Dr. Ament to state that the AANA Council on Accreditation was denied recognition by COPA is simply a misstatement of fact. In addition, Dr. Ament seemed to suggest that the Council on Accreditation was under the control of the Association and that this somehow was an insidious relationship. The autonomous nature of the Council on Accreditation was insisted upon by the U.S. Office of Education, and we have thus moved toward strengthening its independence. We might point out that several representatives of the American Society of Anesthesiologists participate as members of this accreditation council.

We are sure you will agree with us that it is a little odd for a physician to appear overly critical of a national association instigating various processes to improve a given field of practice. Without doubt one of the great contributions of the American Medical Association to the whole field of health care resulted from its taking the initiative in past years to see that a variety of efforts were made to establish standards and quality measures for various fields of practice. We take great pride in the fact that our national association, which in fact initiated and subscribes to the whole process of accreditation, has developed the accreditation council to the point where it can and does function as an autonomous body. It is worth pointing out also that as a result of this effort, a basic twoyear program of graduate education is strongly encouraged and new programs will not be recognized unless they have a two-year course of study.

V. A reference was made by Dr. Ament to the physician extender in anesthesia. This reference was made to substantiate his criticism of our recommendation that S. 1470 be amended so that the "qualified individual" mentioned in the legislation would have to be a nurse anesthetist. Inasmuch as the nurse anesthetist is the only qualified individual by training, other than the anesthesiologist, whose services are available nationwide, we stand by our recommendation.

There are several shortcomings related to the physician extender which we wish to point out. We believe it is misguided to think that physician extenders will for long accept only a salaried basis of reimbursement. Thus, we believe it is a mistake to think that physician extenders will work in situations where the anesthesiologist receives fee for service and the physician extender will be denied fee for service and will be content with a salary arrangement.

The physician extender cannot prictice individually and, legally, he can only perform when he is working with the anesthesiologist. In other words, we believe the anesthesiologist will have to be present. In a large number of small hospitals no anesthesiologist is available today nor are they likely to be available in the future. Therefore, a physician extender is not in a position to function at these hospitals.

From an economic standpoint we would point out that there is no evidence that the use of physician extenders has resulted in any decrease in the costs of health care. In fact physician extenders may have increased the cost of health care.

We would stress that we do not consider nurse anesthetists as physician extenders, and we do not wish to be so classified. Nurse anesthetists, in many situations, function exactly as the anethesiologist would function. In other words, only a physician may be substituted for those services provided by a nurse anesthetist.

The economics of the field anesthesia and the income of anesthesiologists were also discussed by Dr. Ament. In our letter to you of August 21, 1975, Mr. Chairman, we pointed out that, from the income figures which were available, it appeared that the incomes of anesthesiologists “will approximate five times those of the nurse anesthetists for delivering anesthesia services." We believe, from information received and not on the basis of any studies which we have made, that Dr. Ament's statement about the income of non-salaried, free lance anesthesiologists was quite understated. In the conference called by former President Ford on the impact of inflation in health in 1974, a background paper developed by H.E.W. contained the following statement: "The greatest increase in net income in the five-year period (1968-1973) was for the specialities, with the highest incomes with anesthesiology registering the largest gain-44 percent." Recently we sought to obtain statements from nurse anesthetists with respect to specific situations, and we attach herewith one such statement which we have received and which indicates an income for anesthesiologists in the area of $150,000. From the knowledge of nurse anesthetists, as they have told us, such an income level is not at all unusual.

Dr. Ament also suggested that anesthesiologists were confronted with all of the increased costs of practice faced by practicing physicians generally. From our knowledge of the field this is not at all the situation. In fact, anesthesiologists traditionally do not have an office and generally do not employ nurses or other staff. In most instances the services, staff and facilities required by anesthesiologists are furnished to them by the hospitals in which they practice. We see no basis for attempting to justify increases in the cost of services rendered by anesthesiologists because of the greater costs encountered by physicians in general and in private practice in particular. Specifically, for each dollar charged by anesthesiologists the likely net income is substantially greater than that of most practicing physicians.

Several of the matters commented upon in this letter were not a part of our testimony, but, as they were brought up as part of the testimony of Dr. Ament and are thus a part of the printed testimony of the hearings, it is essential that we respond to the opportunity for comment which you suggested to us in order that the record be as factual and complete as possible.

If you wish ut to submit any additional information on any of the matters covered either in this letter or in the testimony which we presented, please let us know.




Warsaw, Ind., May 5, 1977.


111 E. Wacker Drive,

Chicago, Ill.

Attn: Ms. Nancy Fevold, Deputy Executive Director.

DEAR MS. FEVOLD: In answer to your letter of April 20th concerning exploitation of nurse anesthetists by M.D. anesthesiologists, I feel I can reflect on the situation in Kalamazoo, Michigan. The two major hospitals in Kalamazoo are Bronson with twelve operating rooms and Borgess with eight operating rooms. The anesthesia coverage consists of a group of eleven M.D.'s and eighteen nurse anesthetists. The nurse anesthetists do 90% of the anesthesia and at any given time three of the M.D.'s are on vacation, leaving three M.D.'s per hospital for so-called supervision.

În January of 1976 the anesthesiologists dropped their liability malpractice coverage because they felt that since the C.R.N.A.'s were doing 90% of the anesthesia, the C.R.N.A.'s coverage would be adequate. Starting salaries for C.R.N.A.'s was approximately $16,500.00 to $21,000.00 maximum. The total income of Kalamazoo Anesthesiology was in excess of $2,000,000.00, but the total paid to C.R.N.A.'s was about $360,000.00, leaving approximately $150,000.00 per man for the anesthesiologists who did little anesthesia and had no liability coverage. Any inquiry for anesthesia practice at Bronson or Borgess is referred to Kalamazoo Anesthesiology P.C., and the hospital medical by-laws require M.D. supervision. Also there is no free lance C.R.N.A. anesthesia allowed in town. We feel that this is a prime example of exploitation of one profession by another and that our proposals on April 4th making the C.R.N.A. an independent anesthesia practitioner would confront the problems directly. I have first hand knowledge of this information as I was one of the C.R.N.A.'s in question for a period of five


I hope this example will help Mr. Williamson project the true situation of M.D. ghost billing and the exploitation of C.R.N.A.'s.

Thanking you I am,

Yours very truly,


Senator TALMADGE. The next witness is John Filer, Chairman, Aetna Life and Casualty Co. on behalf of Insurance Association of Connecticut.


Mr. FILER. Mr. Chairman, my name is John Filer and I am chairman and chief executive officer of Aetna Life and Casualty Co. With me on my right is Mr. Burton, senior vice president and head of our group division of Aetna. We are appearing here today on behalf of the Insurance Association of Connecticut, which is a trade association of Connecticut domiciled insurance companies.

The companies currently write 30 percent of the commercial group health insurance which is sold in the United States. Our member companies, as leading members of the Health Insurance Association of America, support the testimony of the HIAA given earlier this week.

Our comments today will deal primarily with those elements with S. 1470 that are aimed as controlling hospital costs, a subject of direct interest to our companies as insurers and employers, and to our policyholders around the country.

We believe there is a need for immediate legislative action to help control hospital costs. S. 1470 takes a number of steps in the right direction. We believe the establishment of uniform financial reporting, the concept of a classification system for hospitals, comparisons between like hospitals to promote competition and efficiency, and the use of incentives and penalties all are elements which can lead to effective hospital cost control. We also strongly support the payment of funds to promote the closing or conversion of underutilized facilities. Likewise, we support tying reimbursement for capital expenditures to approval by the designated planning agency.

We would, however, offer the following observations and suggestions which we believe are crucial to the success of S. 1470 a a long-term solution to the hospital cost-control crisis.

First, the program should control hospital costs for all patients rather than applying only to medicare and medicaid reimbursement. Although the bill provides that hospitals may not increase the amounts due from others to offset reductions under this program, we believe this section is unenforceable.

Second, by limiting controls to routine operating costs and by excluding controls on ancillary services, the program only addresses 35 percent to 40 percent of hospital costs.

Senator Talmadge has, of course, already announced plans to address these first two points, and we support such changes.

Third, by using average per diem cost for routine services as a measurement of efficiency, the bill may encourage hospitals to lengthen average stay or change patient mix so as to reduce per diem costs. Fourth, our major concern is that the bill does not provide for prospective review of hospital budgets and rates. Uniform financial reporting, classification and comparisons of hospitals, and the use of incentives and penalties, are steps which are consistent with prospective rate review. We believe review of overall budgets and rates is a crucial next step in this regulatory process. We believe prospective budget and rate review, exceptions review and many other elements. of a cost control system can best be operated at the State level, subject to Federal guidelines. We urge you to include strong incentives for the establishment of State prospective reimbursement systems and to grant exemptions from Federal controls to those States which establish such programs.

Our strong endorsement of State prospective reimbursement is based primarily on three things: (1) The need for close coordination between cost control programs and the planning, certificate of need and utilization review activities now being conducted at the local level; (2) the need for adequate input into the cost control process by the parties affected-providers and insurers as well as consumers; and (3) our experience in Connecticut and with Government Research Corp. The Connecticut commission on hospitals and health care was established in 1973 and charged with the administration of the State's certificate of need law, with the review of all operations of institutional services, and with approval of hospital rates and budgets. Connecticut hospital prices had been rising at or above the national average, but in fiscal year 1975 and 1976, the Commission held the rate of increase in Connecticut hospital charges for individual services to 8.3 percent. and 9.6 percent respectively.

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