care coverage, many of our older persons are not getting, are not collecting, their reimbursment costs, largely because they don't understand how to go about it; there is so much redtape.

Others lose out because the information which they receive on statements for medical services under Part B does not explain why they will not receive what they expect under the law. And this misunderstanding arises in part because the information contained on such statements is that part of the bill is not covered by Medicare.

The fact is the Medicare law allows the carrier, which is Blue Cross in Rhode Island, to pay 80 percent of the reasonable charge. Now, if a physician charges an amount beyond what is determined reasonable, the carrier is required by the Social Security Administration to cut the total amount back to what has been determined under the provision of the law to be a reasonable amount. Now, if the physician does charge an amount beyond the reasonable, he should explain that to the older person. However, neither the Social Security Administration nor the doctors nor the carrier-in Rhode Island it is Blue Cross-explain in their notice to the beneficiaries about reasonableness of the charge.

The Social Security Administration should require the carriers to notify the beneficiaries in clear, precise, and unmistakable terms the reason for the reduction in the amount that is reimbursable. Old persons should be instructed thoroughly on all phases of applying for reimbursement under Part B. They should also be aware that it is not always a case of reimbursement; in other words, older persons are not required to pay their medical fees before they receive Part B Medicare coverage. They may present the physician's statement to the Part B carrier, namely Blue Cross, and receive payment due.

Still another problem arises because part B statements are submitted on Blue Cross letterheads. Because of this many people in Rhode Island over 65 assume that they are enrolled in Blue Cross. Again, this fuzziness about the whole program should be eliminated. Training in senior citizens advocacy is in order so that they will learn all of the benefits under Medicare and all methods of collecting their health care costs, meager though they be.

SUPPORT NATIONAL HEALTH SECURITY BILL

We feel, in view of the shortcomings of coverage and payment of costs, that the most direct, the most immediate way to correct the shortcomings will be to get behind the national health security bill now pending in Congress. I want to congratulate you, Senator Pell, for your having introduced a bill of health insurance for all people, including the elderly. You have also cosponsored the national health security bill, S. 3 in the Senate, H.R. 22 in the House. This is the bill which the National Council of Senior Citizens is backing, and I know that many of the provisions of your bill are the same as those in the Kennedy-Griffiths bill-S. 3 and H.R. 22.

Medical care today is a crazy quilt paid for with private and Government funds. Medical bills are paid in part by private citizens' health insurance, in part by health payments, in part by public welfare funds, and in part by Medicaid for the elderly. Now, this particular bill would be financed by taxes on employers, employees, the self

employed, and on unearned individual income and by Federal general revenue. The work share will be 1 percent of wages and unearned income up to $15,000 a year.

It is not a new tax. Workers are now paying almost that amount for the Medicaid program. S. 3 and H.R. 22 would reduce out of pocket nonreimbursed medical expenses while it will provide a better and more comprehensive health service. The employers' contributions would be just about what many employers now pay for inadequate private health insurance for their workers.

Under this legislation, the Federal General Revenue would pay for approximately half of the total cost of the program, so there would not be a new outlay since Medicare for those aged 65 and over and Medicaid, the Federal-State program for health care for the needy, and other Federal health care expenditures, represent a large and growing portion of the Federal budget. National Health Care Insurance proposed under S. 3 and H.R. 22 will absorb these present heavy outlays. S. 3 and H.R. 22 incorporate built-in financial, professional, and other standards and incentives to encourage preventative medical care, which is not in the present Medicare bill, and early diagnosis as well as better treatment of disease and disability once it has occurred. Now, this bill, of course, is for all people, all Americans, including the elderly. But for the elderly, it would cover, all the elderly. Eligibility for hospitalization in the program would not depend on past employment status. In other words, they would not have to have been enrolled or be eligible for cash benefits under Social Security or have met the requirement for eligibility for Medicaid. There would be no monthly premium to pay. Included would be prescription drugs, no limitation on hospitalization or home care services.

Incidentally, there would be 120 days of nursing home care, whereas now there are only 20 under Medicaid and there are many restrictions as to nursing home eligibility. There would be no outlay by anybody except that their income would be taxed at 1 percent to cover it.

I hope that I have not imposed on your time, but I want to thank you for the opportunity of giving testimony. [Applause.]

Senator PELL. Your full statement will be put in the record. Thanks very much to this panel on Medicare and Medicaid for being with us. I think they have brought out the fact that present laws are insufficient, because, for example, Medicare does not now cover out-of-hospital prescription drugs, glasses, or dentures. The need for additional help in these and other areas is very real and very vital. I think one of the subjects we are discussing, H.R. 1, goes in the wrong direction because it would increase the amount of the deductible under Part B and it would also make the elderly subject to a $7.50 daily copayment charge for each day in the hospital from the 31st to the 60th day. So I think these are areas where we should go counter to the proposals in H.R. 1. I thank this panel very much.

Now, the next panel, Panel on Health Care Providers, consists of Dr. Richard J. Kraemer, chairman of the Committee on Aging of the Rhode Island Medical Society; Mr. Wade Johnson, executive director of the Hospital Association of Rhode Island; Mr. Gustin L. Buo

naiuto, president of the Rhode Island Nursing Home Association; Mr. Albert V. Lees, president of the Rhode Island Association of Facilities for Aged; and Miss Shirley Whitcomb, member of the Association of Home Health Agencies.

ELDERLY HIT HARD BY INFLATION

I think also as we see the problems of the aged and hear from the older people themselves, we realize how acutely they are hit by inflation. We also realize the extent to which they must go in order to maintain a normal level of diet. Sometimes you will find dog food and cat foot advertised as luxury products on television being used by older people as a staple for food. I think the degree of illness, degree of poverty, degree of misery, is often not available to the general public because misery and poverty and illness cannot move around, it has to be still. And people who are aware of it are not the public as a whole, who don't realize what exists. But those of us who go into these areas

are aware.

I think the social workers are aware of these problems, each of them have their load of individuals that they try to help; the clergymen who go around, who are interested in their soul; I guess the politicians who are interested in their votes. But I guess these three categories of people, the social workers, clergymen, and politicians, are probably more aware of the extent of misery and poverty in our community than any other group of citizens.

Now, I thank the Panel on Providers for being with us. I don't want to cut off anybody at all, but I do have questions, so if any of you have rather long statements, I assure you it will be put in the record in full if it is not read. We have representatives of all the different providers of health care services for the elderly. I am very glad to say our first witness is the chairman of the Committee on Aging of the Rhode Island Medical Society, Dr. Richard Kraemer.

STATEMENT OF DR. RICHARD J. KRAEMER,* CHAIRMAN, COMMITTEE ON AGING, RHODE ISLAND MEDICAL SOCIETY

Dr. KRAEMER. Good morning, Senator. The stated charge to the November 1971 White House Conference is to propose a plan of national action, and the doctors believe it is incumbent upon organized medicine to insure that proper emphasis is placed on improving and maintaining the health of the aged.

Medicine has adopted a series of 10 concepts which, if implemented, would help meet the stated charges of the conference. No. 1, there are no known diseases specifically attributable to the passage of time, but the diseases and health problems which frequently develop in the elderly render the health care status of the aged not as favorable as that of the younger group. No. 2, since the vast majority of older citizens are not sick, any program on behalf of older citizens should place emphasis on keeping them well. It was stated recently from information taken in Washington that only 7 percent of the aged are hospital

*See appendix 1, p. 303

ized or institutionalized. The remaining 93 percent are out in the world just as you and I, 63 percent with their families and 30 percent alone or with nonfamily groups.

ENCOURAGE ELDERLY TO REMAIN ACTIVE

No. 3, encouraging older persons to assume functions, valuable roles in the family and community will reduce their emotional problems and improve their general health. No. 4, the health of all people, including those in the older age group, can be significantly improved by adoption of a positive health program, including: (1) periodic health appraisals, planned regular visits to physicians, exercises, planned activities to challenge their thinking, diet planning to avoid obesity and malnutrition, modification of habits that might be detrimental to health such as the overuse of alcohol, drugs, and tobacco, and participation in preventive medical programs.

No. 5, the financing of long-term care continues to present a special problem for elderly people, means to provide protection from catastrophic costs of such care should be explored as well as the development of incentives to communities to make home health services readily available as an alternative to the more costly institutional care. As you heard this morning from Dr. Mulvey, Medicare provides only 45 percent or less of your actual cost, and Medicaid covers an uneven protection which meshes very inefficiently with Medicare.

No. 6, there should be no selective social discrimination against the aged solely on the basis of their age. No. 7, compulsory retirement and artificial barriers to employment based on age can be prime factors in the deterioration of health. Middle age and older workers, therefore, should be afforded equal opportunity with others for gainful employment based on their ability, personal desires, and capabilities.

No. 8, workers who are capable and who personally desire to postpone retirement should be encouraged to do so by implementation of the Work Old Age Insurers Program and by flexible protection policies by both industry and Government. As you know, the middle group is getting proportionately smaller than the young and aged that they support directly or indirectly, and it is certain that the older age group is going to have to be gotten back into the work force and their talents and abilities used in order to take some of this load off the middle-age group.

PENSION PORTABILITY

No. 9, a voluntary pension system transferable among employers should be devised to encourage the expansion and improvement of private pension coverage. Your pension should be transferable and not lost if you transfer from one job to another. That is called vesting.

No. 10, a formula for fulfillment for the aged should be, should include independence and self-esteem, opportunity for work part- or full-time on a paid or voluntary basis, continued meaningful participation in family and community life, adequate housing, ability to enjoy leisure time and participation in recreational activities, continuing self-appraisal and availability of protective services and medical and nursing care should be made.

A recent survey in a large medical journal reported a survey of doctors and their attitudes toward national health care. Their attitude was that with practical politics and the social consensus of opinion in this country, national health insurance was going to come, and it is just a question of how to keep the system within bounds of reasonableness and practicality.

The survey peculiarly shows that the doctors were much more generous in their attitude on benefits, including care for catastrophic cases, dental care, long term psychiatric ills, nursing home care, and prescriptions which are not included under the present Medicare and Medicaid today. It was felt that in order to keep the plan solvent there had to be a very definite deductible and coinsurance factor to keep down what we call induced costs; in other words, when somebody gets something for nothing, they are apt to take more advantage of it and come more often simply because of it being free.

FREE CARE FOR NEEDY AND INDIGENT

Those people who are so-called solvent, who are able to pay their way; should do so in proportion to their ability. Medical men in general, in this survey, were of the opinion that care should be free to the needy or the indigent or those who are nearly so. It is a very tremendous hardship at the present time to have all these deductibles and coinsurance payments out of small pensions. It is an unfair tax upon you with such limited means.

Dr. Mulvey mentioned unreasonable costs which should be explained in detail for you. Actually, that is why many of the doctors do not wish to participate in this thing because of the statistical inadquacy of the method by which the reasonable and usual customer charges are determined.

In finishing, I would like to say just be reassured that the doctors, as always, want to see that everybody has the care they need. As one doctor at the end of his statement in the recent Medical World News geriatrics article said, give the aged full pocketbooks to take care of their every day living and a physician with a warm heart. [Applause.] Senator PELL. Thank you very much, Dr. Kraemer. I know that a point that you made about the vast majority of our older citizens not being sick is one about which the Rhode Island Medical Society and I have been jousting for about 8 years. I think there has been an exchange of articles on that point. There was some disagreement whether three-fourths of all senior citizens have at least one chronic condition and 50 percent have two or more chronic conditions. I think the point at issue is chronic disease, whether it means being sick. In my view it does and in your view it does not. I suspect we will continue jousting on this for many years.

The next witness we have here is Mr. Wade Johnson, executive director of the Hospital Association of Rhode Island, who's been closely associated with me and my office and with whom I have been very close in the past few years.

Mr. JOHNSON. Thank you, Senator Pell.

Senator PELL. I would like to add another thought. I think it would be helpful if all witnesses could limit their statements to a maximum