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POSITION OF LABOR UNIONS

California labor unions, by now experienced in the inflationary phase of the State medicare program, are not accepting the recommendation by the California Medical Association and the Blue Shield that the 60 percentile basis for charges for medical procedures be raised to the 90 percentile level.

This proposed change would tend to bring all the medical costs up to the 90 percentile, and would bring about an automatic escalation. If there is any remaining money in the Medi-Cal program, once this change is instituted, the surplus would be wiped out and the increased costs will have to be made up by going again to the legislature for more money

We were told this was necessary to keep more doctors interested in handling medicare patients. Incidentally, it was said that there were 18,000 doctors in California involved in the Medi-Cal practice. What wasn't stated was how many of those doctors charge fees over and above what is provided under the medicare and the Medi-Cal programs.

We in the Council object to this proposal made by the California Medical Association. For what use your committee could make of our testimony, and to all parties concerned in this State, I would like to submit our thinking on this matter as a matter of record to your committee.

You may ask what costs of medical and medicare have to do with the medical costs and delivery of health care of all others. Our experience in trade union prepaid medical expense plans, convinces us that it is all a part of the same ball of wax. It cannot be separated.

Every movement, every development in the medical care field has a relation to the other.

When medicare became operational, for instance, millions of aged people, who before could not afford medical services, saw hope and took their illness to the same establishment that serves all the others, including trade union members who were covered by prepaid medical plans, and all others in the community deriving health care services from the same establishment.

Something is bound to happen. You start paying more for the same or even paying more for less. Sometimes you get services you don't need, and you pay more for them. We don't think this will stop unless something is done, until we regulate by consumer pressures the price rates of medical care or until we find alternative ways—some new systems of delivering medical care not only for the aged but for all the people.

It is like the old jar of jam. Unless there is some control over it, an awful lot of well-intentioned people find themselves all covered with the stuff. This will keep going on as long as this jar continues to be refilled and no controls put over it.

I don't say this as a pointed charge against any segment of the medical establishment. We have, as has been earlier indicated, some cooperation from the California Medical Association, and much to the credit of our committee, I think we are doing what you are doing with

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these committee hearings; starting to have a dialog with the medical establishment.

We are, for the first time, talking with the people who deliver the medical care services to our people.

Talking with intermediaries I think is a waste of time. While we appreciate the insurance companies and other intermediaries—they have got their little playpens. They have taken a lot of health plan negotiators out to lunches, but we just don't think we have had any success with them.

We don't think they can effectively change the method of delivery of medical care services or in any way control the price. We think they are really a part of the entire system, and no changes are likely to come from them at all.

The economic forces being what they are, I don't think the equation will ever change unless there are consumer pressures. What we need is more and more competition in this field of medical care.

I am a member of the hospital advisory board, and I am appalled at the gross inefficiencies that go into our hospitals

. Even the purchasing of the necessary paraphernalia for hospitals indicates that there must be some kind of a fungus growing which allows costs to rise without any checks or controls.

One example, for instance, we have an employer under contract with our union who makes bicycles. But in addition to making bicycles, he makes wheelchairs.

Now, the same kinds of skills—making bicycles-go into making wheelchairs. About the same kind of material goes into a wheelchair as goes into a bicycle, and yet the hospital pays about 10 times as much for a wheelchair as a consumer pays for a well-made bicycle.

Actually, the amount of material and labor that go into making bicycles and a wheelchair are almost identical.

It seems that no one seems to care about the cost that goes into hospitals. No one apparently cares about such items of cost so long as someone else is paying the bills. In the health care business there are not the kinds of pressures we find in the rest of the marketplace.

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"PIECEMEAL” HEALTH PROGRAMS

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We ought to look at the health of the whole community. We may be exceedingly wasteful by just fashioning our system to serve a particular segment.

What we are doing at present is having medicine for the rich, medicine for the poor, for the old, for the young, for the black, for the white, for the rural community, for the urban center. I think we must start thinking about medicine as something to be delivered on a communitywide basis, so that we don't have the segregation problems—we don't have rich people involved in one kind of medical care and the poor in another kind—the black in one, the white in another.

It is understandable why this occurs. Many times Government programs come about in a piecemeal fashion, and we all hope that once such programs are started, they will serve as a foot in the door for the rest of the community.

We have been doing this, in part, for years, one foot at a time in the door-and I suggest that this is more than just a two-legged problem.

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It is really more even than a centipede. Maybe we should start getting all of the feet at one time.

For instance, what we do for the infant and the children in health care will have a lot to do with what they will require as aging citizens or the kind of care they received during their working years.

The kinds of health care that we are able to provide people in the middle span of their lives likewise will affect the health of the older citizen.

We see today a tragic paradox in the problem of the unemployed. While there are shortages of certain technicians, nurses, and other health service personnel, it seems that in the area of human needs, these human services, there is an unwillingness by the private sector to spend a buck.

The public sector is of course afraid of the cost pressure of taxes. So we are left here with people who are able and willing to provide human services, and because there is no proper organization in this area the abilities of these people are not being utilized.

My observation is that we are, for instance, willing to spend more money and more time in training the seeing eye dog to lead a blind person around than we are willing to spend on some individual who could take the hand of an older person and provide him the kind of human services required.

TEAMSTERS MULTIPHASIC SCREENING PROGRAM In the California Health Plan Alternatives Council, we are very much impressed with the successful program of multiphasic screening used by the Teamsters and the other unions in the food processing industry. About 20,000 workers are pressed every year through a mobile system of well-equipped vans.

We have evidence of how thousands not only receive annual checkups without cost, and with minimal inconvenience. A number of people, because of this early detection, became well, and in many, many cases had their lives saved.

There are certainly many ways that such a type of an examinationdetection of ailments—can be helpful with the health care of the aging.

This idea should be explored further. Not to be in conflict with what was said at this hearing about preventive medicine, I still have to see any sort of a multiphasic screening or any other type of preventive medicine program in the State of California for the aged. .

It is not enough to say that you ought to have a family doctor. What was learned from the multiphasic screening in the food processing industry is that about 60 percent of those people don't have a family doctor. The family doctor is a yellow page of a telephone directory.

Just telling them they should have a family doctor is not a form of preventive medicine. Certainly everyone should—it is like telling a person, "You ought to be well and not require medical services.”

Observation indicates that the aged are not really, in many cases, receiving medical care but are housed in places that provide little more than custodial care.

Many of these people may be just lonely, and not sick, as Dr. Giorgi indicated. While this is probably prevalent in other age brackets, this

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may be peculiar to the aged. It may require new professions and vocations, schooled to fill some of the kinds of needs that the aged require, other than just medical care.

ELDERLY AS POWER BLOC

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My last word, if you will permit me-I am talking to a group of

-I Senators—with about 10 percent of our population of 65 or over, I feel confident that some solutions will be found not only in the area of cost of medical care, but also in the quality of medical care. The large number of elderly people is a definite power bloc, and in this day and age when we group people into color power blocs, we call it the aging "grey power".

And since 65 comes after 21, I need not remind anybody here of the pressures that this power can exert, or what change of direction it can make in our society-even in our medical establishment.

The California Health Plan Alternatives Committee wants to use its voice to help in this problem, not only because we are in a sort of symbiotic relationship with other groups wanting to improve our system of health, but also because we are also all aging together.

Mr. ORIOL. I would like to thank you very much for that statement.

I know you didn't have time in this statement to give a full description of what the Council on Health Plan Alternatives is, but we will get that in a letter statement.

But basically what this group is doing is making sure that current members of unions—is it limited to union members?

Mr. ALVIN. Yes

Mr. ORIOL (continuing:) Are covered adequately by health plans, and in doing that, you discovered certain things in the delivery of services that you would like to see improved.

So that by the time this present group that you are working for now themselves become elderly, why, by having taken care of themselves at an earlier period of time, in a way they are contributing to the resolving of some of these problems concerned with the elderly.

Mr. ALVIN. Also, in addition to that, many of our plans now include not only coverage for the active employees, but for the employees upon retirement. We are concerned certainly with our aging population and their health needs.

There is another important point on this, and that is that many of our plans provided medical services and health care services to retired people. When medicare care came into being, some of our members were already covered by union negotiated plans. Now who is going to pay the bill? Of course, the employers and unions—just as any other groups—choose to transfer the cost on to the Government, and this has been done in many cases. It has been a saving in many ways to our negotiated plans. Some of these costs to our plans now are borne by medicare.

On the other hand, however, we know that putting 10 percent of our population on medicare has an inflationary pressure on existing plans, so that in one way, we have benefited a little costwise but in another way have found the inflationary cost effects of medicare.

Mr. ORIOL. We want to develop that in questions to be addressed to the committee. You will submit for the record this Memorandum on Health Plan Alternatives? *

Mr. ALVIN. Yes, I will submit it.

Mr. ORIOL. I would like to acknowledge that Congressman Alphonso Bell is in the audience. If he has any time now, and wishes to address the committee

Mr. BELL. Thank you, Mr. Chairman. I have nothing to address to the committee at this time. Thank

you. Mr. ORIOL. And now I would like to call Mr. Donald Gormly, president of the California Association of Nursing Homes, Sanitariums, Rest Homes and Homes for the Aged, Inc.

I see Mr. Burch of the American Nursing Homes Association. Perhaps you would like to accompany Mr. Gormly.

Mr. Gormly, your appearance springs from discussions we had with the ANHA. I am glad to see you here.

Mr. GORMLY. Yes. Additionally I have Mr. Clinton Jones from the California Nursing Homes Association.

We shortened our title. Our official title is-
Mr. ORIOL. Is it longer than this?

Mr. GORMLY. Well, in conversation we call it the California Nursing Homes Association.

STATEMENT OF DONALD GORMLY, PRESIDENT, CALIFORNIA ASSO

CIATION OF NURSING HOMES, SANITARIUMS, REST HOMES, AND HOMES FOR THE AGED, INC.

Mr. GORMLY. Mr. Chairman, members of the special committee, my name is Donald Gormly. I am President of the California Nursing Homes Association. I am also a regional vice president of the American Nursing Home Association-representing region VIII, the Western States—and in that capacity I serve on the executive board of the national body.

On behalf of the California State Association and the American Nursing Home Association we wish to extend our appreciation and thanks to Chairman Williams, Senator Moss, Senator Randolph, and other members of the committee for the leadership you have demonstrated and the concern you have expressed for the elderly, and for your efforts in strengthening the medical care programs for the aged. We wish also to express our appreciation for the cooperation extended by this committee in the past.

We stand ready to continue or cooperation in the effort to achieve our common goal: to make a better life for our senior citizens by providing quality health services to them.

Mr. ORIOL. Mr. Gormly, if I may interrupt. You mentioned Senator Moss--and that is Moss of Utah, and he had hoped to be here today, especially because he is chairman of our Subcommittee on Long Term Care.

You can be sure a copy of your statement will be sent to him.

*See app. 1, p. 734.

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