THE INDUSTRIAL COMMISSION OF OHIO, Hon. FRANK J. LAUSCHE, DEAR SENATOR LAUSCHE: As chairman of the Ohio Industrial Commission and on behalf of both the commission and the administrator of the bureau of workmen's compensation, I feel that we, as representatives of injured workers, employers, and the general public, should bring to your attention a matter of grave importance. H.R. 6675, now before the Senate Finance Committee, contains section 303, which we strongly urge must be deleted from the bill. This provision would permit an individual to receive Federal disability benefits even if he was suffering a temporary disability and if he was unable to engage in substantial, gainful employment for 6 months or more. This liberal definition of total disability multiplies the already existing serious problem permitting duplication of benefit payments under the Federal social security system and the Ohio workmen's compensation program. The ever-increasing attempts by the Federal Government through the social security system to invade what has been, since 1913, a State program has produced almost unbelievable results. Double payments not only discourage rehabilitation of injured workers but also increase costs to both the employer and the employee. As an example, the result of duplicate payments of permanent total benefits to a worker with a wife and two children under 18 who is injured in the course of employment would be as follows under existing Ohio law and the proposed medicare-social security bill. 6, 292 Total annual spendable income---Obviously a person who has almost $1,000 more to spend for not working has no incentive to return to work; and without a promise of financial gain, rehabilitation would, in most cases, be of no use. The recognition of this serious problem was made by the House Committee on Ways and Means when it recommended a study to determine the exact nature and extent of the problem concerning the duplication of benefits. It would appear that the study should be made before the problem is magnified. In summary, I am opposed to the present system of duplicating benefit payments, and certainly any enlargement of such as proposed by section 303 of H.R. 6675, because such a system: 1. Violates the basic concept that occupationally related disabilities are solely the cost of production to be paid through workmen's compensation, not social security; 2. Would bring efforts to limit workmen's compensation benefits to 6 months and thereby throw the burden of extended disability cases upon social security, resulting in a crippling of our State workmen's compensation system; 3. Will greatly increase the number of individuals receiving duplicate benefits totaling more than their net earnings before injury; 4. Will hamper efforts to rehabilitate injured employees; 5. Eliminates incentive, by way of premium rate modification, for employers to practice "safety" as in workmen's compensation because under social security all employers pay the same rate; 6. Will inevitably raise social security costs and bring demands that employers bear more than 50 percent of contributions; and 7. Would require employers, no longer bearing the entire expense of work injuries, to again be liable to common lawsuits. Sincerely yours, M. HOLLAND KRISE, Chairman. STATEMENT OF MELVIN A. GLASSER, DIRECTOR, SOCIAL SECURITY DEPARTMENT, INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, AFL-CIO My name is Melvin A. Glasser and I am director of the Social Security Department of the International Union, United Automobile, Aerospace & Agricultural Implement Workers of America, AFL-CIO. My office is located in the headquarters of the UAW, Solidarity House, 8000 East Jefferson Avenue, Detroit, Mich. The UAW, on whose behalf I speak, is deeply appreciative of this opportunity to express our support of H.R. 6675. For a long time now, the almost 5 million UAW members and their dependents have added their voices and given their support to those who would seek to improve and strengthen the public programs and services to be made available to our retired citizens and to various other categories of persons whose basic needs are either not recognized at all or are still inadequately met through our current social insurance and public assistance systems. The enactment of H.R. 6675 would not only strengthen and extend our timetested social security system, it would also serve as a meaningful expression of the Nation's determination to recognize that economic security, access to means of preserving health, and a substantial measure of human dignity can be provided, under our system of government, to all Americans. It is the conviction of the membership of the UAW and, we believe, the views of millions more, that America must remove the fear and financial burden arising from illness and must provide a system of basic income maintenance which in scope and adequacy is related to the current costs of maintaining a modest but a decent standard of living, and provides, as well, special assistance to those who face the problems of poverty, unemployment, widowhood, disability, and old age. H.R. 6675 is a vitally important effort to achieve this goal. Through the collective bargaining activities of labor unions, a significant measure of economic security and independence has been achieved for some of the Nation's workers and their families. But for many active and retired workers, health care, pensions, and other benefits are either nonexistent or extremely limited. Thus, the UAW has long supported efforts to strengthen the public social security system. In presenting our views and suggestions for modifications in this measure, I would first emphasize that we strongly support the bill's objectives but believe they can better be achieved if certain changes were made along the lines I shall indicate. I wish first, however, to stress the appropriateness and desirability of the application of social insurance to the provision of a number of basic health benefits for the aged. This is recognition not only of the feasibility of social insurance financing in the field of health care, but also of the fact that because a majority of the aged cannot now afford the level of premiums being charged by private health insurance plans for reasonably comprehensive coverage, and indeed those who need protection most cannot now afford to buy any, they require the assistance and protection of a public insurance program. It is axiomatic that the soundest insurance program provides for prepayment over as broad a group as possible so that risks are spread and costs made equitable. The prepayment of hospital and certain other health care costs of the aged by social security contributions from the general population in their working years will mark a milestone in the history of social justice in this Nation. We are gratified as well that H.R. 6675 also recognizes that an adequate health insurance program must extend beyond institutional services. An important way of keeping people out of expensive hospital beds is to provide medical services to them when they are at home and when they are ambulatory. On close review of the health insurance title of H.R. 6675, however, we find a number of major limitations which dilute the basic protection to be afforded the covered beneficiaries and which introduce undesirable and unnecessary limitations and restrictions. First let me deal with certain elements of the proposed basic hospital insurance program. A. BASIC HOSPITAL INSURANCE PROGRAM 1. The use of a deductible feature in relation to both inpatient and outpatient hospital service The introduction of a $40 deductible on inpatient services and a $20 deductible on outpatient diagnostic services is discriminatory, will have no influence as a deterrent to unnecessary hospitalization, and ought to be removed. In support of this position I would point out the following: (a) There is no evidence under either public or private insurance that an inpatient deductible either deters unnecessary hospitalization or reduces length of stay. (b) The proposed inpatient deductible discriminates against the patient who requires hospital admission for a diagnostic workup and makes no distinction between patients with different lengths of stay. (c) These deterrents are aimed at the very group in the population with high illness rates, and with lower economic resources to meet such charges. (d) The proposed outpatient deductible could discourage the use of outpatient diagnostic facilities and redirect the provision of such services in a manner which will inflate the costs of providing this benefit. In summary, we believe that reliance should be placed on hospital and medical review and control of the use of covered services and not on so-called economic deterrents which tend to be discriminatory, and imply that the patient's econ omic circumstances, rather than his health needs, may control his use of needed services. 2. The exclusion of in-hospital medical services in pathology, radiology, anesthesiology and physiatry These services should be restored under the basic hospital plan. As pointed out by Senator Douglas, Senator Graening, the American Hospital Association, the American Public Health Association and our own AFL-CIO, the exclusion of these services as covered hospital expenses is a wholly unjustified interference by the Federal Government with traditional hospital specialists relationships; will most seriously inflate costs; will confuse the public through a multibilling approach; and from an administrative point of view, will introduce arbitrary and completely impracticable costing procedures to the detriment of the hospitals and the patients. 3. Restriction on benefits in posthospital extended care facilities (a) The requirement that admission to an extended care facility must be preceded by a period of hospitalization of at least 3 days is unfortunate. We believe it should be dropped, for it may well inflate hospital costs by having a great many people who do not require hospital care go in for 3 days in order to become eligible for the nursing home benefits. We recognize that this was an attempt to provide control on utilization of extended care facilities. Such control, however, must rest upon well defined relationships between the institutions and the physicians involved, on proper medical supervision of such facilities, and on implementation of well-known techniques of medical screening and review of patients. (b) In view of the extreme importance of making the most economical and effective use of our health care facilities, the proposed maximum of 100 days of care in a nursing home, per spell of illness, should be increased to 180 days, and the minimum to 60 days. With unused hospital days substituted for nursing care days on a one for two basis, and the elimination of the 3 day prior hospital stay requirement, patients would be entitled to an annual maximum of 180 days in such facilities. This would constitute more realistic recognition of the needs of the elderly chronically ill and provide coverage more appropriate to their needs. 4. Use of private organizations to facilitate payment to providers of service Notwithstanding the safeguards on the use of private organizations in the administration of the basic hospital plan, as enumerated in section 1816, we do not consider it appropriate nor in the public interest to delegate, under any public program, administrative authority to a private nongovernmental agency. Moreover, section 1816 would establish a serious conflict of interest within such a private organization, since it would be acting both as an agent of the Federal Government and at the same time representing the providers of service under the program. Private agencies could, of course, receive payments from the Federal Government and disburse such payments to providers of service, in accordance with and under rules and procedures established by the Federal Government. But such financial functions, particularly in the field of health services, must be closely integrated with other vital administrative functions directed to the promulgation of high standards of care and services and to the application of safeguards against unnecessary utilization of services. H.R. 6675 clearly recognizes the advantages of combining the administration of financial and other management policies in a single agency. We strongly agree with this "single agency" concept. But such an agency, in our view, must not in any sense represent the providers of service, and must be in some direct relationship to Government and thus responsive to direct public control and public needs. We therefore believe that it would be in the public interest, in that it would assure more effective responsiveness to public needs, and greater likelihood of development of quality care with sound utilization controls, for the Secretary to be required to utilize the official State Departments of Health as the administrative agents, in those States where: (a) The State health department meets criteria and standards developed in advance by the Secretary-including representative public advisory boards. (b) The State health department can demonstrate its willingness and capacity to carry out these administrative functions. In the event the Secretary of Health, Education, and Welfare determines a State health department is not able or willing to be the administrative agent for this program, we believe the Secretary should be required to arrange for direct Federal operation of the program in that State through augmentation of the existing HEW organization in that area. B. VOLUNTARY SUPPLEMENTARY PLAN We also have several major concerns about the voluntary supplementary plan. The implementation of this plan, primarily related to physician services, is a vitally important extension of the basic plan. We do believe, however, that some changes are required if the program is to provide easy access to prompt, highquality, and continuous ambulatory care, to discourage abuse and the rapid inflation of medical care costs. 1. Deductible and coinsurance features: We must, here as well, urge the elimination of the proposed $50 deductible and 20 percent coinsurance payments. It is known that total health care expenditures for the aged are twice as high, and hospital expenditures nearly three times as high, as they are for persons under 65 years. The Social Security Administration's 1963 survey of the aged also found that about four-fifths of aged beneficiaries are dependent on social security as their major source of income. Thus the imposition of these "dollar barriers" can be expected to represent a real hardship for those aged who have extensive and prolonged requirements for ambulatory care, and can be absolutely prohibitive for aged persons who suffer periods of institutional care. Moreover, such charges will discourage early and continuous care and supervision of the aged ill. They will also require costly and complicated administrative arrangements and controls which can only confuse patients and complicate doctor-patient relationships. We would suggest to the committee that each aspect of this program be viewed against the objective of preserving health rather than paying for care in illness. This is a socially desirable goal and in the long run the most economical way to run such programs. 2. We urge the committee to reconsider the discrimination implicit in the special limitations and restrictions applied to this bill to patients in need of psychiatric care. We refer to the maximum annual benefit of $250 or 50 percent of charges, whichever is less, for out of hospital services, and the 180-day ilfetime maximum on inpatient care. This type of distinction between physical and mental illness is both unscientific and in our judgment, unworthy of a country that is attempting in so many important ways to recognize the rights and meet the needs of the mentally ill. 3. A third comment of a more general nature is the seeming lack of effective means to establish cost controls and encourage quality of care under the voluntary program. We commend the emphasis placed on hospital utilization review plans and the creation of a National Medical Review Committee, but we believe that similar utilization review programs should be established at the State and local levels in respect of nonhospitalized services. We also believe the possible escalation of physicians' fees and the possibleoverservicing and rendering of unnecessary care, can be obviated, in large part, to the extent that this program seeks and obtains the highest level of cooperation and participation by the medical profession in implementing high standards of care and, where necessary, controlling abuses, under self-governing arrangements. 4. We would also urge that the program offer inducements to the group practice of medicine. Direct service group practice plans have clearly demonstrated that they can provide comprehensive high-quality care at lower unit costs, and make highly efficient use of limited resources. The UAW has had extensive and satisfying experience with prepaid group practice programs. We trust the administrative interpretations which will implement this legislation will recognize that the encouragement of this kind of organization of medical care is in the interest both of the recipients of the care and of the Government, which should be encouraging measures with the kind of built-in preventive medicine and cost controls that characterize these programs. 5. Our views on the administrative use of private carriers as fiscal agents under the voluntary program are similar to those expressed in respect to the hospital insurance plan; that is, we believe a State agency (or a regional Federal agency under HEW) must be given the administrative functions referred to in section 1842, assisted by strong State and if necessary local, advisory committees on which are represented both the providers and consumers of medical service. C. PUBLIC ASSISTANCE AMENDMENTS RELATING TO HEALTH CARE We support the proposal to increase Federal grants to the States to provide consolidated and liberalized programs of medical assistance and rehabilitation to the medically needy aged, public assistance recipients, and needy children and adults. This should make possible improvements in the scope and standards of service, particularly for those States which are in a position to provide full matching for increased Federal funds. These measures should also resolve in substantial administrative and program simplification. We continue, however, to have strong reservations about perpetuating and extending a separate system of health services for the needy. All our experience indicates that this is generally inferior health care, no matter how much is spent on it. Many components of such health services are rendered without adequate regard to the quality of care, are often provided through inferior facilities, and are frequently unacceptable to the recipients because of the atmosphere of "welfare medicine." The experience with the Kerr-Mills programs in many States has not been good for there is wide disparity among the States with relation to coverage. program content, eligibility provisions, and so forth-all affected by inadequate State financial support. It is regrettable that in the United States today the ability of a medically indigent elderly person to maintain his health, avoid serious crippling and even save his life, is directly related to the particular State in which he happens to live and the extent to which that State is able and willing to provide authorized care. While there will always be need for special forms of health services for persons with special needs, the objective of the programs should be to integrate rather than to compartmentalize public health programs. As a step in the desired direction we would propose that under the new title XIX the health programs for the medically indigent be organized, operated, and supervised by State health departments which are prepared to administer certain predetermined standards and which are already administering substantial health care programs. At the same time the State health departments could be authorized to delegate to the State welfare agencies the responsibility for determining eligibility for this medical care. We are pleased to note the extent to which this bill attempts to overcome the present unsystematic and disparate eligibility provisions now applied to the various categorical programs of health care. We recommend, however, that States, in order to be eligible to receive these matching funds, agree to provide not only a basic core of medical and health benefits, but also that these basic benefits be uniformly defined as to scope and duration, for all of the States. The needs of a medically indigent person in Utah are not different from those of a similarly afflicted person in Michigan. It is our conviction that if Federal funds are to go into these programs, equal opportunity for obtaining good care |