this hearing and heard the evidence that was given earlier. We will ask you not only to give us the benefit of your statement but if you have comments on any of the testimony that was given this morning we would appreciate them as well.

Would you identify the gentleman with you.
Mr. RODMAN. Yes, Senator, I will.

STATEMENT OF MALCOLM RODMAN, EXECUTIVE DIRECTOR, HEALTH FACILITIES ASSOCIATION OF MARYLAND, BALTIMORE, MD., ACCOMPANIED BY MARK ROSENBERG, MEMBER, BOARD OF DIRECTORS, HEALTH FACILITIES ASSOCIATION OF MARYLAND, AND ADMINISTRATOR OF A BALTIMORE NURSING HOME

Mr. RODMAN. My name is Malcolm Rodman and I serve as executive director of the Health Facilities Association of Maryland which for many years was known as the Maryland Nursing Home

Association.

With me today is Mr. Mark Rosenberg who is a member of our board of directors and is also the administrator of a Baltimore City nursing home to help me with any technical questioning.

We have a very brief prepared statement written obviously before this hearing, and I have made some notes. With your permission, Senator Moss, I feel that perhaps there were some questions that were posed this morning that were not completely answered about which I would like to share some observations. I think I share your frustrations: All the facts have yet to come to light in this very tragic Baltimore situation.

Senator Moss. Thank you very much.

Mr. RODMAN. During the past few weeks, as the events of the tragic salmonella situation unfolded in a Baltimore nursing home, many theories have been offered, many public statements made, many newspaper banner lines unfolded. All of this has thrown the harsh light of publicity upon nursing homes in Baltimore and in Maryland.

Speaking for these nursing homes, we welcome the hearing today, and the opportunity to participate, as a rational attempt to separate fact from fiction and to erase some of the reckless charges which have appeared in the public print-I am, incidentally, not authorized to speak for the Gould Convalesarium, which has never been a member of our State association and I have no personal knowledge of this institution, as I do many of the others in the State of Maryland.

Our basic contention is this, and one we had hoped would be solved at this hearing but has not yet: As of today's hearings, no State or Federal health official, or laboratory, has produced solid evidence which would indict the nursing home regulations in the State of Maryland, nor the way they are being enforced, nor the manner in which Maryland nursing homes are complying with these regulations. As nursing home personnel concerned with patient care, we are certainly disturbed and deeply saddened by the deaths at the Baltimore nursing home. Each home, not only in Baltimore but throughout the State, has doubled its individual efforts to prevent a similar situation, and each has cooperated with the teams of health inspectors which investigated all Baltimore homes thoroughly during the days following the crisis at the Gould home, the so-called epidemic.

The Baltimore situation was a rare occurrence, indeed. Despite the risks incurred daily of such an outbreak, most nursing home administrators are unable to recall a similar fatal situation during professional careers which span years and, in some cases, decades.

Thus, we respectfully request only simple justice from this committee. If someone can produce solid evidence of how the situation under study can be avoided in the future, we are here to learn and to take back this news to the nursing homes of Maryland. Also, if someone can prove a deficiency in State regulations and inspection procedures, we have already told Dr. Solomon and his staff we will cooperate with any future changes decided upon by health authorities. Likewise, if the Gould situation turns out to be a single, isolated problem-no matter how tragic-we hope your report will show it as such and help remove the cloud of suspicion which hangs over Maryland nursing homes today and so many other homes.

Now with regard to some questions that were raised and some observations I would like to make in the interest of helping your committee, Senator, in its future pursuit of the facts. You have certainly not exhausted your avenues of approach in getting to the bottom of this situation. Somebody was asked in a line of inquiry this morning about where the eggs in question came from, and if invoices showed where they were purchased. Certainly the undercurrent implication is perhaps this home in question was using cracked or substandard or otherwise unmarketable eggs.

The facts have yet to be proven and it is certainly not our job to prove the case or defend it. We simply would like to suggest the answer given to whomever posed this question, I think perhaps Congressman Pryor. The answer I think was not complete because the Gould home, like so many in Maryland, participates in both title 18 and title 19 programs. In both programs this home, like the others, is subject to audited costs and every financial record is an open record and available to officials of the State government.

So if you are indeed interested in a line of inquiry over exactly where this merchandise was purchased, I am here to suggest that the specific invoice, including unit price and everything else, is public knowledge, and available to the State. There is no reason why this matter can't be resolved and not remain an open question mark. My only function is to point that out to you.

The next point that was raised this morning concerned a wire service, United Press International dispatch. We have a clip of it. here from the New York Times in one of the Washington papers. At one point about a week ago three homes were suspect in Baltimore and a Baltimore newspaper-and we have the clipping for the committee reported erroneously that all three homes used the same caterer, singular.

This was an absolute mistake in fact which was picked up by the wire service and reported nationwide. I think you ought to just put that to rest. These homes had no caterer and, as has been explained by Dr. Solomon, all of them use the regular institutional and wholesale producers, venders, egg producers which, in a metropolitan area such as Baltimore, are numerous. Obviously, it would be a hot clue if there was one source of supply but there is not. I think you should not be mislead by an error which appeared in print.

The next point is one with which we can only help you with partially. The question of Mr. Gould's experience came up, and as I have explained, he is not a member of our organization, although I have met the gentleman. He is quoted in one of the early news releases, and I have this file for you, as saying, "I have been in business for 18 years and have never had anything like this happen." So it should be noted, this man is an experienced administrator of a nursing home. I have nothing further to contribute on that point.

Next, Senator Saxbe asked: Are nursing homes profitable? The Senator certainly realizes that this is a complicated question. In the State of Maryland nursing homes are participating in the so-called welfare or medical assistance title 19 program, of which Maryland was a pioneer and has one of the better programs in the country.

There are some which are extended-care facilities or ECF's participating in title 18, under another reimbursement formula. And, of course, all of them are free to accept private patients at whatever rates they feel they have to charge and the public can afford. So the answer is that a pure welfare operation, of which there are some in Maryland, is forced to operate on what, this past fiscal year, was audited as cost plus a fair return of 10 percent, to a maximum of $13.50 a day.

That ceiling as of the first of July-this new fiscal year-has been raised to $16 a day. But this is still audited cost, so that it was not an automatic increase. All we can say about this reimbursement rate for title 19 in Maryland is that it is substantially lower than title 18 reimbursement and it is far lower than what a home has to get for private paying patients, many of whom we feel are subsidizing the Medicaid title 19 patient. However, the answer obviously is not to cut corners, although obviously there is the suspicion that such practices could be documented. As an association, our approach has been to try to work with our Governor, our legislature, to help them understand that adequate standards can only come with adequate reimbursement. When I started working with nursing homes in 1961, the rate was $3.14 a day. It was raised to $7, and then to $12, and then to $13.50 over the years, but all other costs have skyrocketed. If there have been substandard nursing homes giving substandard care, it is because the State government, with Federal participation, has perpetuated this type of substandard care by not creating incentives of reimbursement to drive the substandard homes from the

scene.

So the welfare homes, the homes taking title 19 in Baltimore today, are doing a remarkable job with the resources they have. They face desperately escalating labor costs as hospitals in the Baltimore area become unionized. At least 20-some nursing homes are in the various stages of negotiation with labor unions and the rest of them are trying to adjust their wage scales to meet the competition. We have docmentary proof of skyrocketing labor costs because this is the subject of a factfinding commission appointed by our Governor.

The next thing, Senator Mathias alluded to press reference about the lack of traces of chlorine in the drinking water. This unfortunately was another untrue statement that appeared in the press. We can't indict the press or the health officials, but in the crisis atmosphere that was created in the week when this finally hit the papers, obviously the eyes of the city of Baltimore and the country were on

this nursing home. Health officials were desperately trying to come up with facts in a very elusive situation, as Dr. Solomon has explained. Unfortunately, many speculations, many trial balloons, many avenues of investigation which you would expect an investigator to pursue were avidly picked up with each edition of the papers. We saw coming under suspicion in a matter of 4 or 5 days things like the city water supply, which was later proven to be false. Two other nursing homes were implicated because they were scared into reporting suspected cases which later turned out not to be salmonella. But, early reports hit the papers in glaring headlines, and all of a sudden, we had an "epidemic" in three Baltimore nursing homes. The impression was corrected, but not until some days later, unfortunately.

In one case there was even an inaccurate laboratory report not made public, but somehow leaked implicating one of the two other nursing homes. By the time the error was discovered and apologies made this home was implicated in the newspapers.

The situation has now receded down to where only one nursing home is involved, with a very tragic situation which you have every right to explore. To call this an epidemic would suggest that it was rampant throughout the city of Baltimore. The facts have not yet come forward to substantiate that conclusion.

So much for my comments and some of the impressions that I think you would like to have in pursuing your inquiry. We would certainly have hoped that more solid facts woud have come forward in this inquiry. I am sure you have to be frustrated because it is your mission to get the facts. However, we are more than interested bystanders. We have offered our cooperation to Dr. Neil Solomon and our State department of health. We certainly concur with his statements and especially share the alarm of our State government with the implications of H.R. 17550.

If section 225 is allowed to remain, title 19 programs in Maryland and many other States are going to be in jeopardy.

Where you espouse tighter controls and more enforcement, as you have every right to insist on, Congress and the States are going to have to come up with fiscal responsibility to fund this type of program. The spirit of section 225 is absolutely to the contrary. It would lead to a cutback which would threaten many State title 19 programs. So we certainly concur with Dr. Solomon's statement and are heartened, Senator Moss, that both you and Senator Mathias from our own State have indicated your awareness of the problems contained in the bill pending before your full committee.

I have no other comments, unless the committee has any questions. Senator Moss. Well, we do thank you, Mr. Rodman, for your statements and comments on some of the other testimony that came before us.

How many members are there of the association of which you are executive director?

Mr. RODMAN. We have about 120 institutions in the association, representing about 7,000 licensed beds, which is the majority of the beds in the State. We represent proprietary as well as nonprofit homes. We have homes for the aged that have infirmaries. We even have as members two hospitals which have ECF wings. This is one of the reasons we changed our name to Health Facilities Association.

"Nursing home" is no longer a very descriptive term as the field is growing, as you are certainly aware.

Senator Moss. Your position is full time with that size of an operation then?

Mr. RODMAN. Not really. I am full time in association work. I have to serve a number of clients in the health care field but I am a full-time association executive and have served this group since 1961. They are not large enough to afford a full-time staff.

Senator Moss. I see. Did you work as a nursing home administrator before you took on this executive-type work?

Mr. RODMAN. No; my background has been in journalism and association management. However, I have represented the nursing homes at the Maryland Legislature since 1962. I have participated in the birth of title 18 and title 19 and in our State negotiations over the years on reimbursement. We have just gone through the whole issue of administration licensure. So I am qualified to speak on the overall climate of regulation, the economic realities, the labor situation. I am not an administrator of a specific institution, and that is why I asked Mr. Rosenberg to accompany me, in case you wanted to direct questions to an administrator of a nursing home.

Senator Moss. There is a State statute requiring an administrator of a nursing home to be licensed?

Mr. RODMAN. Yes; our State passed the law in compliance with Federal regulations at our legislature's 1970 session, and the Governor recently signed the law. However, the State board was not appointed until, oh, perhaps a month ago and has held two or three preliminary meetings. It has just come out with some of its interim rules. We still are working with our State university on basic education for administrators. So as you realize, this program, as in many States, is just getting off the ground.

Senator Moss. You indicated Mr. Gould was not a member of your association. How many nursing homes or beds are there that are not members of the association?

Mr. RODMAN. I think it is on the order of maybe 2,500 to 3,000 beds in the State not in our association. I am taking as a rough estimate we have about 10,000 licensed beds, it may be more, of which about 7,000 belong to our association. As with most State nursing home groups, we have many smaller homes that choose not to belong. We have many church institutions that feel they should not affiliate for one reason or another. We have in our State's bed total our chronic disease hospitals, State facilities, which are not eligible to join a private association.

Senator Moss. Mr. Gould has a sizable nursing home? He hasn't chosen to join your group?

Mr. RODMAN. Yes; the only way I can answer is this: the bylaws of our organization state that any licensed facility in the State of Maryland is eligible to join. But, being a voluntary organization, we cannot make anybody join. For reasons known only to himself, Mr. Gould has over the years chosen not to be part of the organization. Senator Moss. Do you provide services for the members of your association other than representations, say, before the legislature? Mr. RODMAN. Yes, we do. We are very deeply involved in education. Noting questions addressed previously to the gentleman from the Public Health Service, we have had education programs. Perhaps