Just simply say we will only spend for these people the amount of money that we feel they need. But you do have to inject back into this medical system the fact that the patient has the right to go out and shop around, and when he starts to get cost conscious, you will then see your prices come down for medical care. It is absolutely obvious.

Mr. CORMAN. All I can say, sir, is that if it is any comfort to you, the people in California appear to be having precisely the same problems you are, and the only difference I see is that your costs per bed are substantially lower than the costs in California.

Mr. RICHARDSON. I have talked to people from Kaiser up at the Harvard Medical School and Harvard and Tufts and Massachusetts General are sending a crew out to Kaiser almost every 3 or 4 months to study this system, and they do have a 30 percent reduction in cost.

Mr. CORMAN. I was referring to the private extended care facilities. Your price on extended care is considerably lower, but again they tell me that a big chunk of that cost of extended care goes not to nurses and not to medical people, but to accountants.

Mr. RICHARDSON. This is exactly right. Where the big chunk has been added to the overall cost, the patient is benefitting absolutely zero. It is not a patient-oriented cost, and this is critical.

Mr. BURKE. Thank you very much.

There being no further questions, this concludes our hearing for the day, and the committee stands adjourned, to meet at 10 a.m. tomorrow. Mr. RICHARDSON. I thank you very much.

(Whereupon, at 4:15 p.m., the committee adjourned, to reconvene at 10 a.m., Friday, Nov. 7, 1969.)