have on thousands of American families. One such catastrophic disease category is chronic kidney disease. I want to call to your attention the gravity of the problem both in terms of the number of patients and estimated annual maintenance and surgical costs. Several Government agencies, including the Department of Health, Education, and Welfare, the National Institute of Arthritis and Metabolic Disease, the Veterans' Administration and a number of physicians in the universities have investigated the incidence of chronic kidney failure, and because of differences in identifying and classifying these patients there are varying estimates of the number of deaths from kidney disease and the number of "suitable" artificial kidney and transplant candidates each year. One of the most recent and reliable estimates-1969-held to be acceptable is that of Dr. David Hathaway of the kidney disease control program. He says 20,000 new patients each year could benefit from dialysis and from transplantation. In 1967, the so-called Burton report of the Department of Health, Education, and Welfare suggested initial treatment annually of 11,000 new patients by transplant and 29,000 new artificial kidney patients. Presently, in the United States there are approximately 5,000 patients on the artificial kidney machine and as of 1970, 3,500 patients had been transplanted over the preceding decadethat is about 1.5 percent of the total need. The inpatient hospital costs of artificial kidney treatments are indeed very, very high. A recent national survey by the regional medical program estimated that the annual cost of a single patient is $31,000. There are several reasons for this astronomical figure. For example, a semiprivate hospital bed is approximately $26,000 per annum and the realistic dialysis costs are an additional $5,000. But the cost is not only that of the general increase in hospital care. It reflects the high degree of professional sophistication and training necessary to accomplish this treatment. In contrast, the costs of home dialysis or out of the center dialysis for artificial kidney treatments is considerably less. A study on the costs of home artificial kidney care made for the Department of Health, Education, and Welfare in 1970 by the Arthur D. Little, Inc. reported: The initial equipment costs in 1969 vary anywhere from $2,300 to $7.000, with training and recurring costs raising the first year total cost from $14,000 to $20,000; yearly costs from home dialysis thereafter tend to vary from about $5,600 to $9,000. However, costs are influenced by a great many factors and are highly variable. Whatever the cost variables are, you can be sure, Mr. Chairman, that the effects of catastrophic illness are devastating to nearly all chronic kidney disease patients. An important point I would like to emphasize is that these do not represent ongoing costs for most patients. The increasing success of transplantation has relieved this critical economic and resource bottleneck. Nevertheless, in spite of the technical capability of providing such support the same Arthur D. Little report said: At the present time, cost alone prevents many patients from receiving treatment. Most persons do not have sufficient savings or income to finance hemodialysis expenses for even short periods of time. A recent study of chronic kidney treatment expenses points out, furthermore, that most persons do not have adequate private health insurance or disability insurance to cover treatment expenses for more than 2 or 3 years. The Finance Committee of the U.S. Senate in 1970 reported to that body: The newly developed methods of treating catastrophic illnesses and injuries involve long periods of hospitalization, often in special intensive care units, and the use of complex and highly expensive machines and devices. The net cost of a catastrophic illness or injury can be and usually is staggering. Hospital and medical expenses of many thousands of dollars can rapidly deplete the resources of nearly any family in America. These families are then faced not only with the devastating effect of the illness itself, but also with the necessity of accepting charity or welfare. Catastrophic illnesses do not strike often, but when they do the effects are disastrous-particularly in the context of soaring health care costs. We as physicians and concerned citizens are well aware of the fact that any medical expense is an unfortunate hardship on millions of American families and we support the proposition that there is a need for a government insurance program, and we support you in your efforts to develop the best possible comprehensive legislative answer. We think in the case of chronic kidney patients the need is pressing and immediate and urge you to consider as a first step toward a national health insurance plan a catastrophic act. We do so under the assumption that it may properly take several sessions of the Congress to develop a truly effective comprehensive National Health Insurance Act. Therefore, we suggest to the committee that any catastrophic plan designed to address itself to these unmet needs, should include the following items: 1. A deductible formula such as contained in the Boggs-Hogan bill, H.R. 817. 2. Coverage to include home or outpatient dialysis as well as inpatient therapy and to include cost of supplies. 3. That all persons under 65 years of age be insured such as is the case in Senator Long's bill, S. 1376. 4. There should be no distinction between "experimental" transplantation and transplantation. 5. It should not limit coverage to exclude those fortunate individuals who have related living donors to give them a kidney. 6. We think the best vehicle is social security. Mr. Chairman and members of the committee, thank you for giving Dr. Schreiner and me the opportunity to appear before you today. You are performing a very important service to the country and we want you to know we are grateful, and most importantly, our patients are very grateful, for your efforts. Mr. ULLMAN. Thank you, Dr. Flanigan, for a very excellent statement. I have just one question: You have indicated how costly this would be. Assuming that we did provide the cost, do you think that there would be enough machines to handle it? Dr. FLANIGAN. Yes, sir, I do. I think the need for the hardware could readily be met if the dollars were there. Mr. ULLMAN. Thank you. Are there further questions? If not, again our appreciation for your testimony. Because we have a quorum call, we ask the remaining witnesses to be back at 2 p.m. and the committee will stand in recess until that time. (Whereupon, at 12:20 p.m. the committee was recessed, to reconvene at 2 p.m. the same day.) AFTERNOON SESSION Mr. CORMAN. We will resume our hearings. The next witness is Dr. R. James McKay, past president of the American Academy of Pediatrics and chairman of the Department of Pediatrics at the University of Vermont. I would like to say to all the witnesses we are going to stay here until we hear all of you. If you have lengthy prepared statements that you would like to present for the record, they will appear in full and you can summarize them if you wish. We will be here until each of you have had a chance to testify. STATEMENT OF DR. R. JAMES MCKAY, IMMEDIATE PAST PRESI- SUMMARY The American Academy of Pediatrics believes that America's most valuable resource is its children, and that the country's future is dependent on their health and welfare. Recognizing that socioeconomic factors other than medical care are of great importance in determining the health and welfare of our children, the Academy nevertheless believes that the universal availability of good medical care to them is essential. Since a significant financial barrier to good medical care exists and since children have little or no voice in determining the medical care they receive, the Academy believes that some form of national health insurance is necessary to obtain good medical care for all children. The Academy believes that universally required insurance against medically induced family financial catastrophe is the first priority for a national health insurance program, with government paying the premiums for the poor and near-poor. The Academy believes that the next highest priority is to ensure provision of comprehensive health care coverage for all children and pregnant women. To do this will require compulsory coverage for many, and perhaps all. The federal government will have to provide "first-dollar" coverage for the poor and nearpoor. The keystone of comprehensive health care for children is health supervision, provision for which should be basic in any national health insurance program. Child and maternal health care projects under Title V of the Social Security Act should be expanded and continued until the populations served by these programs can be assured of equal or better health services from other sources. They are now the only health care resource for many mothers and children in urban centers. Copies of "Lengthening Shadows," the Academy's report and recommendations on the delivery of health care to children, of the Academy's statement of 40 principles for any national health insurance program, and of "Guidelines for Child Health Care," The Academy's statement on the content of child health care, are submitted with the written testimony. Dr. McKAY. I am Dr. R. James McKay of Burlington, Vt. Accompanying me, on my left is Dr. R. Don Blim, practicing pediatrician from Kansas City, Mo. On my immediate right is Mr. George K. Degnon, director of the Department of Government Liaison of the American Academy of Pediatrics. On my far right is Dr. Glenn Aus tin, a practicing pediatrician from Los Altos, Calif. It is a distinct pleasure and honor for me to appear before this committee today to discuss national health insurance and make recommendations on behalf of the world's largest organization of certified physicians providing medical care to children. Since its establishment in 1930, the academy and its membership have been committed to working for the welfare of children and to establishing and maintaining the highest possible standards for pediatric practice, education, and research. Mr. Chairman, the American Academy of Pediatrics believes that America's most valuable resource is its children, and that the country's future is dependent on their health and welfare. Recognizing that socioeconomic factors other than medical care are of great importance in determining the health and welfare of our children, the academy nevertheless believes that the universal availability of good medical care to them is essential. Since a significant financial barrier to good medical care exists and since children have little or no voice in determining the medical care they receive, the academy believes that some form of national health insurance is necessary to obtain good medical care for all children. During the past few years, the academy has become more involved with social, economic, and legislative activities because the resolution of problems in the provision of health care to children is more closely interwoven with the activities of Government than ever before. The concerns of the pediatric community for the needs of children can no longer, if indeed they ever could, be neatly dissected from those of society or government. The academy is committed to improving the quality of life for all children, and we are here today as representatives of the medical community most concerned with children. We are here to lend our support to the concept of national health insurance as a means of removing the financial barrier to needed medical care of high quality, particularly to children, and as a means of making our children healthier, more effective and more productive citizens for the future. However, the factors that create inequalities in health services are complex, and will not be automatically solved by providing financial availability alone. Their correction is requiring and will continue to require changes in the current health care delivery and financing systems. We are here to support those changes, but in an orderly, stepwise fashion which will truly bring about the desired result. The academy has recently published a statement listing 40 principles which we believe should be applied to any national health insurance proposal. Copies of this statement have been submitted along with my written testimony. The two periods of life requiring the most health services are the early, formative years and the years beyond age 65. Medicare has attempted to meet the health needs of the elderly and medicaid was welcomed by the pediatric community as the advent of a national health program for indigent and medically indigent children which would assure all youngsters equal access to unfragmented, continuing, preventive and curative health services. Much to our chagrin, medicaid has met neither our expectations, nor yours. Its provisions which give priority to children and to health supervision of children have generally not been implemented. It is our firm exhortation that the health of our children must be identified as the priority in national health insurance, which appears to be the next national effort in the area of health. It is a sad commentary that for its poor children the greatest nation in the world has only a potpourri of fragmented health programs which are generally underfunded, administered by overworked staffs, and constantly under threat of merger or extinction. We say this a sad commentary, for, as pediatricians, we especially recognize that the delivery of quality health care to children is an investment in the future of our country, an investment in what we consider to be our greatest national resource the minds and bodies of today's young and tomorrow's leaders. Consider for a moment the status of Federal funding of health programs for children and youth under 21 years of age. In 1960, one of every two Federal dollars spent for health reached children, whereas in 1970 only one of every nine Federal dollars expended for health benefitted those under 21 years of age. True, the level of expenditure for the health of children has quadrupled during the past decade, but it should likewise be pointed out that the Federal expenditure for health in general has increased seventeenfold. Our intention is not to undo the progress made in this Nation in meeting the health care needs of those over the age of 21, but to call for a renewed emphasis upon the health needs of the 40 percent of the population who have been receiving only 11 percent of the Federal health dollar. To date, S. 2434, Senator Magnuson's Children's Catastrophic Health Care Act of 1971, is the legislative effort which, in our eyes, best places the health care needs of children and young families in proper perspective by making child health a national priority. We believe that there is an absolute necessity for a national health insurance program to contain provisions to cover medically induced financial catastrophe. We define such catastrophe as further medical expenses over and above a maximal annual family total medical expenditure, in proportion to income, beyond which further medical expenditures cannot be met without a major alteration in the family's standard of living. In the pediatric community, we frequently see young families financially crippled to the point of deprivation, desperation and/or divorce, because of expensive medical care needed for their young offspring: the premature infant, the newborn with congenital defects, the youngster with handicapping conditions, or, even more frequently, the child who has to spend an extra, expensive day or two in the hospital because of ordinary illness or the complications of planned surgery. With skyrocketing medical costs, a medically induced financial catastrophe can happen to anyone, and does daily. It is time to face the reality that providing for its prevention is an item of first priority and should be required for all, without exception, under a national health insurance program. Insurance against medically induced family financial catastrophe is of first priority, as I have indicated, but the academy has recently completed a major study and report designed to clarify the present status of the delivery of health care to children in the United States, with recommendations on ways in which the goals we all desire, optimal health care for the children of this Nation, can be attained. One of the 20 major recommendations of the report calls for the development of a national health insurance program that will insure comprehensive health care coverage for all children. The report noted: 70-174 O 72 pt. 10 8 |