I don't want to interrupt your question, but I just want you to know that a statistician may not be the best person to answer these questions from the Centers for Disease Control and we will have hearings where we will have other experts that may be better able to answer.

Mr. MADIGAN. All right, I stand properly rebuked since the red light is on anyway. But I do think, as I said in the earlier exchanges, Mr. Chairman, that if we want to deal seriously with this and I know we all want to do that-then we clearly have to do a much better job of public education about how this virus is being spread. I think there is a lot of confusion about that in the public mind today, as there is in my mind, and I have been on this subcommittee since this issue started.

You may recall I was instrumental in helping you get the very first increase in funds for AIDS research back some 4 years ago. I continue to be interested in it and continue to be confused about it, and acknowledge that my time is expired.

Mr. WAXMAN. While your time is expired and we are going to have to break to respond to a vote on the House floor, let me say we will schedule soon a hearing on that subject. Mr. Dannemeyer has introduced legislation recently in that area, and others continue to ask questions. We will hold another hearing and bring the experts in and review what we know, what the theories are, so that we can educate ourselves and continue to educate the American people.

We are going to break now just so long as it will take to respond to the vote on the House floor and then we will come back and Mr. Dannemeyer will be recognized at that time.

Mr. SCHEUER. Mr. Chairman, just to emphasize the remark that our ranking minority member made as to the degree of confusion here, we heard two professionals in the preceding panel absolutely contradicting each other as to whether it was appropriate for a dentist with AIDS to treat patients. You can't imagine a more dramatic example of the medical profession that hasn't gotten its act together on what it would advise 120 million American people out there.

Mr. WAXMAN. Those weren't experts to tell us about the spread of the disease. Those were hospital administrators to tell us how much it costs a hospital to treat the patients that are in the hospital when they are treated for AIDS or related illnesses.

Mr. DANNEMEYER. Mr. Chairman they are human beings concerned about a fair

Mr. WAXMAN. Of course.

[Brief recess.]

Mr. WAXMAN. The meeting of the subcommittee will come to order.

Mr. Dannemeyer, do you wish to question this witness?

Mr. DANNEMEYER. Is it true that the ELISA is used as part of the CDC case definition for AIDS?

Dr. HARDY. For certain diseases, yes. We have just changed the case definition recently to include certain diseases if the person has a positive HTLY-III test.

Mr. DANNEMEYER. Is it used for AIDS?

Dr. HARDY. Positive HTLV-III does not indicate whether or not you have AIDS, it just indicates whether-—

Mr. DANNEMEYER. The question is, is it true that the ELISA test is used as part of the CDC case definition for AIDS?

Dr. HARDY. We have recently changed our case definition to include some additional opportunistic diseases that we consider to be indicative of AIDS if the person also has a positive HTLV-III test, so you have to have both. You have to have one of those diseases and a positive antibody test.

Mr. DANNEMEYER. Is the CDC recommending that the ELISA test be used to detect the presence of AIDS?

Dr. HARDY. The test cannot tell whether you have AIDS. It can only tell whether you have been exposed to the virus that causes AIDS.

Mr. DANNEMEYER. Isn't ELISA the only diagnostic medical tool for determining the presence of the virus?

Dr. HARDY. I am sorry, I didn't hear. The only what?

Mr. DANNEMEYER. Isn't ELIZA the only diagnostic medical tool for determining the presence of the virus?

Dr. HARDY. There is also virus isolation or culture for the presence of the virus itself, which is more of a research tool, but which can also be used to detect the presence of the virus. The ELISA test does not detect the presence of the virus. It detects presence of antibodies which the body makes in response to the virus. It does not tell you whether the virus is still present.

Mr. DANNEMEYER. Would you not conclude that a positive ELISA test is pertinent medical information for determining the presence of the AIDS virus?

Mr. WAXMAN. If the gentleman will yield, this is a statistician from the Centers for Disease Control. I don't know whether she has it within her competence to answer those questions. She is here to tell us about the number of AIDS cases, the cost of care, the predictions as to how the costs may go up or down depending on the various modalities and circumstances.

Mr. DANNEMEYER. Mr. Chairman, if the witness doesn't know, I think she can say she doesn't know.

Dr. HARDY. Right, I feel I am not the appropriate person to respond to that.

Mr. DANNEMEYER. Is CDC pursuing any means of increasing the reportality of AIDS?

Dr. HARDY. We have been working for several years with State and local health departments to develop ways to establish surveillance systems. Cases are reported to us through local and state health departments.

Mr. DANNEMEYER. If a physician encounters a case of AIDS in his practice in my State of California today, is that physician required to report the existence of the AIDS case to the state department?

Dr. HARDY. It would depend on the state laws. Many of the states have laws regarding AIDS reporting. I am not sure of which specific ones, and I don't know about California.

Mr. DANNEMEYER. Is there any requirement today under CDC that AIDS-related complex [ARC] be reported?

Dr. HARDY. CDC cannot mandate even that AIDS be reported, and the only health district that I am aware of that has made ARC reportable is the city of Philadelphia, but we do not ask that such cases be reported to us.

Mr. DANNEMEYER. As of August of this year, it was the policy of blood banks to mandate that persons in a certain high-risk group, intravenous drug users, who contribute 17 percent of AIDS cases, cannot donate blood. At the same time it was the policy that persons in the group that contributes 73 percent of AIDS cases, who claimed to be monogamous homosexuals should not donate blood. In August of this year it was still the policy that those male homosexuals who claimed to be monogamous, there was no restriction on them donating blood at all.

In September I wrote a letter to HHS requesting a change in policy to put all male homosexuals in the same category as intravenous drug users. On September 8 of this year, CDC, in response to something, wrote a letter changing the policy, whereby all male homosexuals were put in the "should not" category.

That is the status today. We are in the picture today where persons in the group contributing 17 percent of AIDS cases, intravenous drug users, cannot donate blood, but persons contributing 73 percent of the AIDS cases are in the "should not" category. Now, don't you think that paradox should be corrected? Don't you think that persons in the category contributing 73 percent of the AIDS cases should be in the "cannot" donor category?

Dr. HARDY. I think the wording has been changed so that men who have had sex with other men-I don't even think it uses the term "homosexual" because that may be misleading to some people-should not donate blood. I really don't know what the wording was beforehand, and I can't comment on that.

Mr. WAXMAN. The gentleman's time has expired. Mr. Scheuer. Mr. SCHEUER. Yes: I would like to get back to the question of the economics of this disease, and how we can lessen the burden on the taxpayer and perhaps even increase the quality of the care at least from the humanitarian and compassionate point of view.

You were asked by the ranking minority member a few minutes ago why San Francisco seemed to be able to treat AIDS patients less expensively than New York and other cities, and you gave what to me was a little bit, a somewhat ambiguous answer. Could you repeat that answer?

Dr. HARDY. Yes. I think there are several possibilities. I can't give you an exact explanation of why these differences exist. I think there are several possibilities, including the type of opportunistic diseases that the patients have. In San Francisco about a third of them will have Kaposi's sarcoma, while in New York City, since they have a much larger proportion of cases who are IV drug users, they will have a larger proportion with other more serious opportunistic infections, such as pneumocystis pneumonia, and I think this influences length of stay and expenditures while in the hospital.

Also I think there may be differences in patient management practices that will influence this, such as differences in putting or not putting patients in intensive care.

Mr. SCHEUER. Treatment for the same

Dr. HARDY. yes; again, I can't give you specifics but there may be differences in availability of nonhospital care such as home care, hospice care, long-term care, things like that.

Mr. SCHEUER. I think we will all encourage New York City to get on with the business of developing alternatives to intensive treatment in tertiary hospital beds, which is the most expensive form of hospital care, and which apparently is not really needed in many of these cases for much of the time that they are being treated. It seems pretty clear that for much of the time that these AIDS patients are being treated, a hospice environment or a home care environment is adequate, in fact is not only far less expensive but may be preferable.

Can you give us a little bit more of the patient management practices that might differ? Could you give us specific examples of the kind of patient management practices for the same disease, the same strain of the virus that would make treatment more expensive in New York or Hartford, CT, or St. Louis or Philadelphia, and less expensive in San Francisco? In other words, has San Francisco got the germ of an idea that might usefully be applied to the rest of the country?

Dr. HARDY. I think people from San Francisco would probably be better to answer this than I. I don't really have specifics to give you. These are just what I feel are possibilities to explain these differences.

Mr. SCHEUER. Thank you very much.

Mr. WAXMAN. Thank you, Mr. Scheuer. Mr. Luken, any questions?

Thank you very much, Dr. Hardy, for your testimony. We appreciate your contribution to this hearing.

For our next group, we would like to call forward a panel, Ms. Mary Lehnhard, vice president for office of government relations, Blue Cross & Blue Shield Association of America; Dr. Donald Chambers, vice president and medical director, Lincoln National Insurance, on behalf of the Health Insurance Association of America; and Mr. Willis Goldbeck, president, Washington Business Group on Health. We will come back to the remaining panels but we had to make this scheduling change.

We are pleased to welcome the three of you to our hearing. As you know, the ground rules are to summarize your testimonmy in 5 minutes and we will make your full written statement part of the record.

Ms. Lehnhard.

STATEMENTS OF MARY NELL LEHNHARD, VICE PRESIDENT OF GOVERNMENT RELATIONS, BLUE CROSS & BLUE SHIELD ASSOCIATION OF AMERICA; DONALD CHAMBERS, M.D., ON BEHALF OF HEALTH INSURANCE ASSOCIATION OF AMERICA, ACCOMPANIED BY KAREN CLIFFORD, COUNSEL; AND WILLIS B. GOLDBECK, PRESIDENT, WASHINGTON BUSINESS GROUP ON

HEALTH

Ms. LEHNHARD. I am Mary Nell Lehnhard, vice president of government relations for the Blue Cross & Blue Shield Association. I am here representing all the individual Blue Cross & Blue Shield

plans. We appreciate this opportunity to testify and I would be pleased to submit my statement for the record and summarize our comments.

Since you have heard from a number of experts on different aspects of AIDS, I will move right to the perspective of the health insurance industry. It reflects the fact that the ability to continue to provide coverage for all subscribers requires continued financial solvency. That solvency depends in part on the ability to accurately project the cost and utilization of health insurance benefits and to limit or control the impact of catastrophic losses.

The nature of AIDS and its potential for afflicting unknown numbers of persons makes such projections difficult for us. The lack of comprehensive and accurate information on AIDS and the financial uncertainties pose special problems for the health insurance community. One of the questions this committee is interested in is whether because of the very high costs of the medical treatment involved health insurers are using special screens or tests to exclude those diagnosed as having AIDS.

We do not believe that any Blue Cross & Blue Shield plans are treating AIDS victims any differently than anyone else who has our coverage or want to enroll in our coverage. We know of no case where a plan is using a blood test to identify indivduals who have contracted the virus, and know of no case where questions are asked about life style in an attempt to identify a vulnerable individual.

When an individual has AIDS, or really any other disease, it is not a factor in the availability of benefits under Blue Cross & Blue Shield coverage for employee groups of medium to large size. No individual in these groups is treated differently, regardless of any medical condition they have, and there is really no reason for the employer to know what conditions they have.

I might mention that we are aware of one instance in California where an employer insisted on excluding benefits for sexually transmitted diseases including AIDS. The plan involved was concerned about adding such an exclusion to the contract, particularly without the knowledge and consent of the insurance department. When the group threatened to self-insure, thus avoiding any kind of State regulation, the plan applied for approval of this particular exclusion.

After reviewing the application, the insurance department advised the plan that it was not authorized to design benefit contracts which excluded sexually transmitted diseases. However, this particular plan continues to be concerned that this employer and possibly others will turn to self-insurance, as many employers are doing now, to avoid such State regulation.

All Blue Cross & Blue Shield plans also offer coverage to small groups and individuals. These segments of the market represent a much greater risk for us financially, because of the high administrative costs, and very importantly, the potential for adverse selection. Adverse selection occurs when a group of insured individuals has a higher concentration of those who have medical conditions than a competing group.

As soon as the insurer sets a premium adequate to cover those medical expenses, those individuals who are healthier will tend to