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Kern, Father Clement, Most Holy Trinity Rectory, Detroit, Mich. : Letter
to Hon. George A. Smathers, chairman, Subcommittee on Health of the
Elderly, dated June 17, 1967.

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158

Slattery, Rev. Robert P., director, the Cardinal Ritter Institute, St. Louis,
Mo.: Letter to Alfonso J. Cervantes, mayor---

135

Zibit, Samuel, executive director, Jewish Center for Aged, St. Louis, Mo. :
Letter to Mayor Alfonso J. Cervantes---

134

114

"The Rising Cost of Medical Care," by Marquis Childs, from the Wash-
ington Post, June 23, 1967---

83

"U.S. Health Care Termed Chaotic-Doctor Warns the House of Mono-
lithic Service Peril," by Harold M. Schmeck, Jr., from the New York
Times, June 23, 1967.

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COSTS AND DELIVERY OF HEALTH SERVICES

TO OLDER AMERICANS

THURSDAY, JUNE 22, 1967

U.S. SENATE,

SUBCOMMITTEE ON HEALTH OF THE ELDERLY

OF THE SPECIAL COMMITTEE ON AGING,

Washington, D.C.

The subcommittee met at 8:45 a.m., pursuant to call, in room 1318, Senate Office Building, Senator George A. Smathers (chairman), presiding.

Present: Senators Smathers and Moss.

Committee staff members present: William E. Oriol, staff director; John Guy Miller, minority staff director; J. William Norman, professional staff member; Dr. Austin B. Chinn, consultant; and Patricia G. Slinkard, chief clerk.

OPENING STATEMENT BY SENATOR GEORGE A. SMATHERS, CHAIRMAN, SUBCOMMITTEE ON HEALTH OF THE ELDERLY

Senator SMATHERS. The meeting will come to order at this bright and early hour. Of course, Senator Moss and I have been working for an hour or two already today.

As we begin today's testimony-the first to be taken at several hearings on the subject of costs and delivery of health services to older Americans I would like to say that even with medicare paying a major part of their bills, many older Americans find that health services are still too costly, or too remote, or too forbidding for them to

use.

The elderly are the major victims of the gap that exists between the kind of health care American medicine can provide and that which is available. The prevalence among the elderly of a high chronic disease incidence, drastically reduced income, frequent lack of transportation to services, and a fatalism that equates each passing year with worsening health, is clear evidence that a callousness exists in our society in regard to health problems of the elderly.

I think, too, that there is a great gap between what we say we want in the way of health services for all Americans and what we actually have. Perhaps this gap is due to selfishness or unawareness. I prefer to think it is the latter though I might be wrong in light of the statement made by the new president of the American Medical Association at its annual convention on Monday. He seemed to oppose any Government health program on the grounds that such programs are socialistic. I think every responsible citizen-if he chooses to be discerning can make finer distinctions than that. We all recall when social security itself was called socialistic.

1

The subcommittee will investigate our progress, or lack of it, toward several of President Johnson's health goals outlined in his January address on older Americans; and we will also ask many questions.

I am quite pleased that we are beginning our questioning only a week before the first of the National Conferences on Medical Costs. Our deliberations should help assure that the problems of the elderly receive adequate attention at the conference. More than that, I believe that the subcommittee and the conferees will benefit from exchanges of opinion and information.

In this introductory hearing, we can hope to sound only a few themes and gather only a small part of the information we need. But we are happy to say we have received wholehearted cooperation from the Department of Health, Education, and Welfare and from distinguished witnesses with much to tell us.

I would also like to say that, as former chairman of the Committee on Aging, I am pleased indeed to be able now to continue one part of the work of that committee, as the new chairman of our Subcommittee on Health of the Elderly. The new chairman, Senator Harrison Williams, has been both energetic and encouraging in showing his interest in the work of this subcommittee, and I appreciate his cordial leadership.

I particularly appreciate the presence of the distinguished junior Senator from Utah, Senator Ted Moss, who has long demonstrated his interest in the problems of the elderly.

Senator Williams.

STATEMENT OF SENATOR HARRISON A. WILLIAMS, JR., CHAIRMAN, SPECIAL COMMITTEE ON AGING

Senator WILLIAMS. Mr. Chairman, I want to take just a minute or two to comment on the timeliness and importance of the study you are initiating today.

It it quite apparent, I think, that in the wake of medicare we in this Nation are finally willing to reexamine our health resources and to determine whether widespread reorganization of health services is required.

And I might add that medicare's first birthday, now almost upon us, is as good a time as any to admit that health services for many older Americans today are minimal, marginal, and miles away.

Congress and the public can feel proud about the good done by medicare, but if anything medicare's record should make us wonder how we got along without it for so long.

Latest statistics show that 4 million persons had inpatient hospital services under medicare during its first year, and hospitals received $2.4 billion for those services.

Home health services went into action and served more than 200,000 people.

And, under medicaid, 25 million bills have been paid.

We can take comfort from that record, but a nagging question persists: How many individuals thus helped by medicare would have gone without hospital treatment if such programs had not existed? And further, what services are still unavailable or too costly because we have not yet really mobilized medicine to help many of our elderly and others who need it the most?

As I understand it, Mr. Chairman, your subcommittee has already heard from many medical experts and others who believe that older Americans are major victims of present deficiencies in our health services.

Medicare after all, merely helps pay for hospitalization. It has little to do with the fundamental organization of health services. And it is because of deficiencies in organization that costs continue to increase.

Isn't it wasteful, for example, to require individuals to cross entire cities by bus in order to get an X-ray or some kind of laboratory test, when neighborhood health centers could provide one-stop service more efficiently?

And who suffers most from shortages of physicians or other health professionals? Those with limited income, and we should know by now that the income of most persons past 65 is just about half of what they earned before they had to retire.

I am sure that the subcommittee has many other questions to ask, and I will not delay your deliberations any longer. Senator Smathers, you have begun a challenging and very worthy inquiry. I wish you well.

Senator SMATHERS. Thank you, Senator Williams.

Before we have our first witnesses, I would like to say that we are pleased and honored to have with us as a consultant to the committee, Dr. Austin Chinn, previously the dean of the medical school at Cleveland, and who has a distinguished career in the Public Health Service. He is now a consultant for this committee.

We are delighted to have him and we want all you doctors to know that we Senators have somebody up here telling us what really is the truth, too. So be careful.

Our first witnesses will be a panel representing Secretary Gardner and the Department of Health, Education, and Welfare. Gentlemen, we are delighted to have you here this morning so early and looking so bright, intelligent, and alert. You may proceed.

STATEMENTS OF ALVIN M. DAVID, ASSISTANT COMMISSIONER FOR PROGRAM EVALUATION AND PLANNING, SOCIAL SECURITY ADMINISTRATION; CARRUTH J. WAGNER, ASSISTANT SURGEON GENERAL; AND GEORGE A. SILVER, M.D., DEPUTY ASSISTANT SECRETARY FOR HEALTH AND SCIENTIFIC AFFAIRS, ACCOMPANIED BY JEFFREY H. WEISS, OPERATIONS RESEARCH ANALYST, OFFICE OF THE ASSISTANT SECRETARY FOR PROGRAM COORDINATION, AND JOHN GRUPENHOF, LEGISLATIVE UNIT, OFFICE OF THE SECRETARY

Dr. SILVER. We appreciate the opportunity to appear before you to discuss some of the aspects of costs of delivery of health services to older Americans.

Mr. David, the assistant commissioner, will discuss the progress of the medicare program and Dr. Wagner, director of the Bureau of Health Services, will comment on the role of the Public Health Service in improving the delivery of health services for the aging.

Dr. Jeffrey Weiss, operations research analyst, who was actively engaged in preparing the report to the President on medical care prices, is also available.

Mr. Chairman, the President in his message on older Americans in January of this year, stated, "One of the tests of a great civilization is the compassion and respect shown to its elders." One of the ways that we can demonstrate this compassion and respect is by providing comprehensive, continuous, and personal health care to older Ameri

cans.

Prior to the enactment of medicare, millions of our older Americans were unable to obtain needed medical care. Now much of this care is being provided, but at the same time medicare has pointed up some of the very grave problems of cost and the delivery of health services which we were not, as a nation, so fully aware of before. The report to the President on medical care prices showed the serious problem we are facing in this matter.

As to delivery of services, a major thrust of the most important administration health bill this year is health services research-"how to bring a greater degree of coordination and efficiency and productivity into the whole health area" as Under Secretary Wilbur J. Cohen put it when he testified in the House Interstate and Foreign Commerce Committee on the partnership for health bill. He made the statement that though we are spending $43 billion annually for health and medical care, our system of providing health services is not operating as efficiently and effectively as it should, and though the public has an enormous stake in good health services the Government-wide total investment in health services research amounts to less than one-tenth of 1 percent of our total investment in health care.1

Mr. Chairman, you and your subcommittee, through these introductory hearings and those which will be held throughout the Nation, are performing a public service, alerting all of us to the potential dangers to the health of the whole public, not only to the aged, from rising costs and inefficient delivery of health services.

Now, Mr. Chairman, I would like to highlight for you the major point contained in a document before you updating the report on medical care prices.

In recent years medical care prices have been rising faster than consumer prices generally. However, the 1966 increases in medical prices were the largest in many years. In 1966 the index of medical prices increased 6.6 percent as compared to an average increase of 2.5 percent in the period 1960-65. Hospital daily charges which have been rising about 6 percent per year between 1960 and 1965 went up 16.5 percent in 1966. Physicians' fees which had been increasing about 3 percent per year in the period 1960-65 rose 7.8 percent in 1966. Drug prices have not been a major factor in rising medical prices.

In the first quarter of 1967 the rate of increase in medical care prices continued at about the same pace as in the last quarter of 1966. They rose 2 percent in the first quarter of 1967.

While physicians' fees continued to rise at about the same rate as in 1966, hospital daily room rates have continued to rise at a rapid rate, up 6.1 percent in the first quarter of 1967.

INCREASES IN PHYSICIANS' FEES

The available evidence suggests that medicare has not had a significant effect upon the recent acceleration of the increase in physicians'

1 Statement by Under Secretary Wilbur J. Cohen on p. 193.

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