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Dr. BRESLOW. We use grapes for a lot of things in California. I recall one time studying the problem of quackery in the treatment of cancer. We found that grapes were being offered as a cure for cancer, and action had to be taken against the individual who was advocating and offering that particular form of treatment.

I am sorry that my voice is hoarse.

Senator WILLIAMS. No, I was only kidding you about that. It hurt me when grapes were being served on the plane coming out, and they looked so good. But they were the forbidden fruit, because of the current boycott.

I wish we could get that all straightened out—but that's another matter entirely-bringing order, harmony, and agreement in the farm labor situation.

Dr. BRESLOW. The progress that you and others in the Senate and the Congress have made with respect to health services for farm workers, migratory workers, has been quite important in bringing to the attention of the whole body politic the situation of farmworkers in California and elsewhere.

I think it is generally true that health services, as supported by government in such situations as the migratory labor camps are more widely accepted than some other approaches to the problem.

I hope that you will continue to pursue your interest in that matter of assuring that at least minimum health services are brought to people in that situation.

Senator WILLIAMS. Well, that isn't germane to our discussion, but I am glad you made the statement.

The last time we were out here talking about migratory workers we had Senator Bob Kennedy with us, and he certainly made an impact upon the farm community.

Senator RANDOLPH. Mr. Chairman, at that point I do want to mention, and I do want the record to indicate that as you had this colloquy with the doctor, that President Johnson yesterday signed the Medical Services Act of 1968, and as you well know, there is a provision in that act for medical care for the migrants of this Nation. That is a part of the complex, overall program, which has been enacted into law.

I don't want to be pollyanaish at this point, but I want the record to reflect that the Congress of the United States has perhaps made errors and committed mistakes, but that the recent Congresses have been most energetic and effective in moving forward the programs of health in the United States of America.

I don't want to attempt to be partisan whatsoever, but I do think that the record is one which is very clear, very understandable, to those who will study what we have been doing.

We may have retraced our steps, at times, for reasons, but just this one act alone, doctor, and Mr. Chairman, passed by this Congress and signed into law yesterday, it is a notable, a significant advance in program for the persons who need the medical care.

I compliment our chairman and this committee who have done so very much in our Subcommittee on Migratory Labor, and the Labor and Public Welfare Committee.

But you know, I think it is necessary these days to sometimes speak in praise of something—and not constantly to be negative. There are mistakes made and errors committed, and programs that are shortchanged, but I for one want to keep in balance the good with what I called the bad. [Applause.]

Senator WILLIAMS. I wish that the reporter would record that there was applause at that point.

Dr. BRESLOW. Senator, I would like, if we have just a minute, to go back to a question that was raised with respect to testimony that an earlier speaker gave on the Medi-Cal program.

MEDI-CAL BUDGET CONTROVERSY

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I am not sure that I fully and directly answered the question concerning the estimates of cost of the Medi-Cal program. During its first year in office the Reagan administration publicized such wild estimates of the cost of Medi-Cal that it seems the distortion of statistics could have only been either malicious or based upon gross ignorance.

The allegations that Medi-Cal would bankrupt the State apparently were designed to frighten taxpayers. Such allegations certainly had the effect of seriously disrupting the program by forcing cutbacks under the threat of runaway costs.

In fact, the original estimates of Medi-Cal costs and budgeted for the March 1966 to June 1967 period were very close to actual expenditures for that period. In the subsequent year—the one just ended in June 1968—expenditures were way under the conservative budget that was prepared under the fanfare of headlines about runaway costs.

Senator WILLIAMS. Very good. Thank you very much.
Dr. BRESLOW. Thank you,

Senator. (Subsequent to the hearing, Senator Williams asked the following questions in a letter to Dr. Breslow:)

1. Your prepared statement said that many individuals in California and elsewhere have endeavored to link up Medi-Cal with the quality standards of Medicare. May we have a summary of the suggestions most often made?

2. How would you implement your recommendation to "incorporate into all Federal medical care programs a legislative framework for establishing standards of quality.” What programs would be thus affected? Would any be of special importance to the elderly?

3. Your strong recommendation for adequate health data systems in federally supported health programs is of great interest to the Subcommittee. In your suggestion that the Committee "explore this system in detail with a view to incorporating some such data system into all medical care programs supported by federal funds," what do you see as the major questions that should be explored? (The following reply was received :)

UNIVERSITY OF CALIFORNIA, LOS ANGELES,

Los Angeles, Calif., November 26, 1968. DEAR SENATOR WILLIAMS: * * *

The way to link up Medi-Cal (the California version of Medicaid) with Medicare is simply to require that all services paid for by Medi-Cal must conform to the standards established for Medicare. This policy would disallow payment for care under Medi-Cal in hospitals, laboratories, home health agencies or other facilities whenever these facilities had not been certified for participation in Medicare.

For example, this policy would not permit what many regard as dissipation of Medi-Cal funds in individual home services that are not a part of organized home health agency services.

Each state, of course, could establish such requirements for its Medicaid program, but it would be far preferable to have this established nationwide as in Medicare.

To incorporate into all federal medical care programs a legislative framework for establishing standards of quality, I would suggest following the pattern of the Medicare (Part A) pattern. You will recall that the Medicare Law (Title XVIII) specifies in considerable detail the standards which must be met by hospitals and other providers of care, and extends a framework for state participation in determining compliance with the standards as well as an opportunity for states to establish higher standards than those in the nation as a whole. I believe that every federal program for health care should establish the same kind of legislative framework as that now embodied in Medicare (Title XVIII). This would affect primarily the Medicaid program which provides services to the elderly as well as the other services, and all other major federal health programs.

In exploring health data systems for federally supported health programs I would suggest attention to the following questions: 1) Will the data meet the needs of program administration, and the Congress for information on the costs and utilization of the various types of health services provided to the population groups that are to be served? 2) Does the data provide information concerning the quality of care provided? 3) Is the data system linked to administrative action? For example, if the data disclose providers of care who are deviating so extremely from the norm that investigation is needed, is there a system for investigation of these deviant providers under appropriate professional direction, and is necessary action taken, including when appropriate, recovery of money that has been paid and suspension from the program. 4) Should national minimum standards and reporting be established for the data, as in the case births and deaths, and certain diseases such as tuberculosis and cancer? 5) What would be the cost of such a system incorporated into present administrative providers, and would it contribute to cost control of the program?

I believe that your investigation would disclose answers to the above questions that would strongly support the establishment of a health data system such as I have proposed. Sincerely yours,

LESTER BRESLOW, M.D.,

Professor of Health Services Administration. Senator WILLIAMS. Dr. Malcolm Todd, president of the California Medical Association.

STATEMENT OF DR. MALCOLM C. TODD, PRESIDENT, CALIFORNIA

MEDICAL ASSOCIATION

Dr. TODD. Mr. Chairman, members of the Senate Special Committee on Aging, I am Dr. Malcolm C. Todd, president of the California Medical Association, representing. 24,000 physicians in this State.

As a surgeon engaged in the private practice of medicine in Long Beach, Calif., I take care of people when they get sick, I operate on plumbers for ruptured stomach ulcers, I remove breast cancers on professors' wives, and I operate strangulated ruptures on little children.

I also remove diseased gall bladders on preachers, take out colons for cancer on machinists, and I do hysterectomies for tumors on secretaries.

For years I have operated at the county hospital and have taught at the University of California without remuneration. In other words, I receive no pay, whatsoever, for my skill and time, but there is one great satisfaction, and that is to know that I have helped restore many injured and sick indigent patients to good health.

Accompanying me today is Dr. Marvin J. Shapiro, who is a member of our association's council, or the board of trustées. Dr. Shapiro is a radiologist in private practice in Encino, Calif.

I wish to sincerely thank you and the committee for the opportunity to appear here today.

In the question sheet accompanying your letter of invitation, Mr. Chairman, several excellent questions were raised for possible discussion in my statement. I shall address myself to these inquiries.

But before I enumerate current activities of organized medicine on the subject of utilization and peer review, I would like to point out that these were ongoing activities of organized medicine prior to the passage of Federal legislation. The importance of this pioneering activity has been adapted to Federal-State funded medical care programs to the benefit of both the taxpayer and the beneficiary under these government-financed medical care programs.

The important result of these pioneering efforts has been a dramatic adoption of these activities by the county medical societies. This reaction by county medical societies is not to be minimized.

GUIDELINES FOR UTILIZATION REVIEW As the committee knows, utilization review procedure was part of the medicare law and our association has encouraged this activity as a regular function of the hospital staff. Our manual, “Guidelines for Utilization Review,” is used as a guide in California and in many other States.

The California Medical Association program of medical staff surveys in hospitals were developed, and we recognized the importance of utilization review as an educational hospital staff activity and so incorporated it as one of the six basic staff review activities. We were cognizant that utilization review is primarily a function of the medical profession and it requires determinations not only of medical necessity, but also whether the most efficient use of available facilities and health services is being made.

I feel the effectiveness of utilization review in the newly established and not-so-well-understood extended care facility needs some improvement. With others, we are experimenting with regional utilization review practices by increasing emphasis on this responsibility, and in some cases, our county societies are currently providing utilization review for extended care facilities.

We have published a booklet entitled “The Physician and the LongTerm Care Facility" to assist component medical societies in developing a structure for close liaison between the medical community and facilities providing supportive care for chronically ill patients.

Concurrent with this effort, we have attempted to define and determine guidelines for the level of care to be supplied Medi-Cal patients in extended care facilities as distinct and separate from custodial, that is, room and board care. I know these guidelines have assisted physicians in designating the type of facility required by patients.

Another example of activity in the field of utilization review is the California Hospital Association-California Medical Association "Procedure for Review of Effective Utilization of Hospital Services.”

This plan was adopted by the State Office of Health Care Services, on June 12, 1968, for the title 19 Medi-Cal program.

I will be pleased to submit this full procedure as an appendix to my statement <but I can briefly state our aim is to provide Medi-Cal with a system of safeguards in the utilization of hospital services and to assist hospitals to maintain and strengthen standards of care.

We recognize that as providers of health services, we have a responsibility for assuring that the public interest is being served in the delivery of hospital care. We also believe that quality is the most important component to effective hospital service. Therefore, in cooperation with the carriers for the Medi-Cal program, we have agreed that standards of quality can best be judged by professional peers, functioning expressly to review patterns of hospital practice.

The methods are: first, screening for irregularity; second, detecting irregularity; third, referring for peer review by a panel of practicing physicians and hospital administrators. We also make provisions in this plan for evaluation of these procedures on the basis of their effectiveness.

To discuss peer review is a broad assignment. It can mean the grievance or mediation committee of a county medical society which attempts to fairly adjudicate a patient's complaint based on the considered judgment of a panel of involved physician's peers. Or it can mean a tissue committee in a hospital which reports on the attestable need for the surgical procedure performed.

It can mean an ethics committee of physicians charged with the interpretation of ethics involved in the professional conduct of a colleague. Or it might mean a claims review committee in a county society advising an insurance company, a consumer or his designated representative on the propriety of the medical procedure and the reasonableness of the charge.

Certainly a utilization committee is an example of peer review. Our medical review committees help evaluate and advise on variant medicare claims in cooperation with the carrier. Both carriers for title 18, part B, and Medi-Cal have instituted a very sophisticated system--a medical adviser system composed of about 150 practicing physicians over the State who have served on claims review committees.

These doctors work in liaison with the county societies in behalf of the carrier to assure the highest quality of care at the most reasonable cost.

There is inquiry as to the results of peer review. Gentlemen, I can say with the deepest sincerity that we know we get results. I have served on various peer review committees in my own county societyCalifornia physicians give freely of their time, which adds up to thousands of hours annually, to serve on these committees.

Yes, gentlemen, I repeat—these reviews have been carried out at no cost to the government and none to our patients. It is truly a voluntary effort on the part of physicians performing these services and performing them at their own expense in behalf of making the pro

gram work.

Our county societies have recommended suspended participation in Medi-Cal for deviant doctors and they also adjust claims in a forthright manner, according to a program regulation and medical

1 See app. 1, p. 7117.

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