I think that this is somewhat misleading, because the VNA's, and the other home health agencies that I have worked with over the years have not limited their services.

They have not carved out a small amount of business. I was trying to point out in my statement that here in one area, at least, through a collaborative endeavor, a tremendous effort has been made to expand, not only the number of patients served, but the quality of service programs, and indeed the scope of services that are provided, so I think that statement might be misleading, and I would appreciate a comment from others who administer voluntary agencies.

MS. TIGAR. Today we have been speaking about the medicaid patient and the medicare patient. In reality, home health services are available, and should be available to the entire population. In fact, they have been for the last 100 years. One of the dangers in the home health industry is that we get pushed into little boxes, we are taking care of the old, or we are taking care of the poor, when, in fact, we are taking care of all of the people.

We have heard it inappropriately said that home health care should be an alternative to institutional care. We do not believe this. We think it should be a choice. The home is an appropriate place to take care of patients. It must not be viewed only as an alternative to institutional care.

MUCH CAN BE LEARNED

An additional point: I think the public and the voluntary sector can learn a great deal from the proprietary agencies, particularly in terms of their business expertise.

For years, staffs of existing agencies have been giving a service, and that is where their expertise lies, in delivering services. They have performed ineffectively in the business area. They certainly have almost no marketing capabilities, which is one of the real problems we face.

I think, as time goes on, we will see a real improvement in the public and the voluntary sector in terms of what they are doing with their business procedures and practices.

Mr. STERN. I would like to ask one more question directed to Dr. Winston.

Dr. WINSTON. I wanted to make a comment on the point raised here. I think sometimes we get so concerned about the auspices of services, or of a particular group, that we ought to always come back to a fundamental point, regardless of whether we are talking about rich or poor people, who can pay, people who cannot pay-the sources our basic concern is that there be quality of services, that everybody has a right to a given standard of service. People should not be subjected to substandard care under any situation, and that in order to have good standard of care, we have to have national standards that are very carefully monitored. We cannot leave the monitoring to this agency or that agency without, overall, a national direction.

It comes back really to basic rights, and we should not get away from that point, while we are so concerned about the mechanism for payment, of who happens to provide the care.

Mr. STERN. My question actually is related to that. There was an interesting point made by the representative of Upjohn, about thẹ need for training, and I have seen this need manifest without regard of what level of certification a person has, in all areas of geriatric

care.

He referred to a training program. Do you have some means of evaluating such training programs, and specifically the program referred to by Homemakers Upjohn's representative? If you do, do you know what these programs are, and whether they are adequate?

EVALUATING THE TRAINING PROGRAM

Dr. WINSTON. Let me speak to the homemaker-how they feel. For a number of years we have had standards with regard to training-which we have now been operating for several years-certification programs. One of the major aspects of that certification, developed around the training program, in terms of hours of training and in terms of the subjects, which are covered in terms of the qualifications of instructors, et cetera-we are not really novices in the training situation, either the basic introductory training or the ongoing inservice training. I assure you that all of the other people on this panel could speak to that same point.

We know a great deal more about training; we have more experience in training, and there are good agencies.

Mr. STERN. In your opinion, is the kind of training that—well, have you seen the Upjohn training?

Dr. WINSTON. I am not familiar with it.

MS. TIGAR. CHHA/CHS staff has had an opportunity to review the Upjohn training manual and comment.

However, we have had no experience with its implementation.
Mr. STERN. Thank you.

MS. STARR. I was going to say the same thing. I have seen the training manual. It is similar to the training manual of the National Council of Homemaker-Home Health Aide Services and the training manual of the New York State Department of Health. I have never known of a community in New York State in which that training has been given.

Mr. HALAMANDARIS. I thank all of you for being here today, and for your excellent testimony. We appreciate it very much.

Our next panel of witnesses is made up of Hadley D. Hall, executive director, San Francisco Home Health Services; Herb Semmel, Center for Law and Social Policy, Washington, D.C., accompanied by Rudolph Danstedt, assistant to the president, National Council of Senior Citizens, Washington, D.C.

Also we would appreciate if John Byrne, MHA, president, National Association of Home Health Agencies, and executive director, Visiting Nursing Association of St. Louis, Mo., would come up please.

I have been looking forward to your testimony for some time. This work is extremely important. We are trying to build a record. I do not want you to cut corners. I want you to make a full presentation, and then we may have some questions.

Mr. Hall, you may proceed.

STATEMENT OF HADLEY D. HALL, EXECUTIVE DIRECTOR, SAN FRANCISCO HOME HEALTH SERVICES

Mr. HALL. I look forward to answering your questions, and will try to present sufficient detail.

I am Hadley Dale Hall, exeuctive director of San Francisco Home Health Service, a United Way agency established 18 years

ago.

The issue of profit taking raises several serious questions. First, is the question of the source of the margin of profit, in profit-taking organizations.

The first example is referred to as the Peter Gottheiner case. His reputation is very well known.

According to his résumé, he was the founder, administrator, and president of the California Coordinator Health Care Services, Inc., which had a medicare provider number-that is, the company was a home health agency. He was also licensed under medicaid, title XIX.

OVERPAYMENTS OF $364,192

Mr. Gottheiner states he dissolved his corporation and voluntarily withdrew from the medicare program-this was in March 1971. However, there were overpayments, through audit exceptions, in the amount of $364,192, for the cost-reporting period ending December

31, 1969.

No cost reports were submitted for 1970 and 1971, although interim medicare payments by Blue Cross, in the amount of $481,309, were made to California Coordinated Health Care Services, Inc., the company Mr. Gottheiner founded and administered.

I understand that Mr. Gottheiner and/or the corporation protested the audit exceptions, but neither he nor the corporation filed an appeal of the exceptions.

No legal action, to my knowledge, has been taken.

Mr. Gottheiner also has direct and/or indirect controlling interests in three other corporations, which are now doing business with Federal funds.

According to the résumé, he is sole owner, sole stockholder, and president of Health Help, Inc., which was awarded a contract for homemaker services in February 1971, just 6 weeks before he voluntarily dissolved California Coordinator Health Care Services, Inc. The corporation, which Mr. Gottheiner was founder of, had unresolved audit exceptions totaling over $846,271.

These were funds from title XVIII of the Social Security Act. I do not know if there were audit exceptions related to title XIX.

He then obtained a contract under title XX, and to my knowledge, these other companies are operating in California and other States, including Utah, Illinois, and Minnesota. The track record does not seem to be very much different.

You heard about the State audit report this morning, so I will not bore you with the details of political contributions and of personal income taxes; but I would like to add, in addition to his reported 12 percent profit, he received a salary far in excess of community standards.

Mr. HALAMANDARIS. And they have new owners.

Mr. HALL. Two partners sold their interest to the other two part

ners.

Mr. HALAMANDARIS. And the new owners are apparently not connected with any of the sort of abuses attributed to the previous owners, or is it too early to make a judgment?

Mr. HALL. The new owners owned 50 percent of the prior partnership.

Mr. HALAMANDARIS. What I am leading up to is if you can give us the names of these individuals-the companies involved-we would like to follow up.

Mr. HALL. It is included. You will have no difficulty in determining from the exhibits incorporated in the book provided.* The name of the company is Homemaking Sojourners.

There is another area I would like to cover, and that is the business of cost. In San Francisco, the above firm and the Upjohn Co., have argued that profit-taking companies are less expensive than community agencies.

These profit-taking companies were not less expensive. I brought a chart ** which can be included in your record. You can use it in any way you would like. What it shows is what the hourly rate was.

Proprietaries were indeed less expensive than the community agencies by the unit. What it also shows is that the community agency was less expensive in total, and that the proprietary agencies did not have a complement of professional staff to work with the patient, or provide the kind of supervision that is needed. There is evidence in other testimony as well as other places that indicates the reason. Total hours were less in the community agencies because of the professional component being available to the patient and the coordination of services by the professional person.

I would like to point out that the president of Homemakers Upjohn stated in his letter:

It would have been no disgrace to report that, it costs not-for-profit home health agencies more to deliver 1 hour of service than it does for a for-profit home health agency to deliver the same service under the same circumstances

MISLEADING CLAIMS

The facts presented above, and other exhibits, give dramatic evidence that the Upjohn Co.'s claim is misleading.

In the first place, Mr. Wilsmann indicated his 200 agencies were ready, willing, and capable of stepping in to fill the breach the second there was the chance.

He said he was ready to step in to fill that breach with his 200 agencies considering his staff, and that only 20 some units are certified under medicare. There is no prohibition against Upjohn or other proprietary organizations having home health agencies certified under medicare. It is the medicaid issue. My question is, why are not the 200 involved in medicare now?

*Retained in subcommittee files.

** See p. 133.