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Remedial measures will be formulated and presented to the responsible bodies for their implementation within developing programs. Undoubtedly the findings of this committee will be of great value to us in the dental society.

On behalf of the Massachusetts Dental Society, I thank you for the opportunity of appearing before you.

Senator SMITH. Thank you very much, Dr. Booth. I should like to say at the outset that it is encouraging to hear of these steps that are being taken, and the Massachusetts Dental Society is certainly to be congratulated on its participation. I was glad to hear you bring out the relationship of dental health to nutrition which we all recognize as one of the most important points in the health and welfare of these elderly citizens. I am sure that in your work with the State health department's study commission that you can make a great contribution.

Dr. Booth, would the dental society favor any requirement for a dental consultant to the nursing home in the same way that many States require a medical consultant?

Dr. Booth. I think that the personnel of nursing homes could be greatly helped and so would the patients, which is after all your primary concern; the patients. The patients could be greatly assisted if perhaps a dentist on a consulting basis were affiliated with nursing homes. I am sure that there are many problems in nursing homes at the present time which could be checked as a minor problem before they become acute and which undoubtedly add to the discomforts and the troubles of the unfortunate residents of the nursing home. I think that something could be done in that line, Senator.

Senator SMITH. Thank you. I had occasion last week in the hearings in Hartford to visit the Hebrew Home for the Aged in Hartford. They have a very fine dental setup there, and I assume that the Hebrew home that is now under construction here in this area will have the same facilities. Of course this is a larger scale facility certainly, and I recognize the problem of the small units.

Thank you very much, Dr. Booth. Your testimony will certainly be a great contribution to the study of this committee.

Senator SMITH. Our next witness this morning will be Mr. Theodore Fabisak, director, Hospital Costs and Finances, Commission on Administration and Finance, Commonwealth of Massachusetts.

Mr. Fabisak.

STATEMENT OF THEODORE FABISAK, DIRECTOR OF THE DIVISION

OF HOSPITAL COSTS AND FINANCES, COMMISSION ON ADMINISTRATION AND FINANCE, COMMONWEALTH OF MASSACHUSETTS

Mr. FABISAK. Mr. Chairman and members of the committee, I am very pleased to have been invited to speak before this body this morning in connection with your continuing study of the problems of the aged. You have asked that I limit my remarks to 6 or 8 minutes of oral testimony, and I think I will be able to contain all of my comments within 5 minutes of your time.

Let me say at the beginning that the division of hospital costs and finances, of which I am the director, is concerned with only a very small facet of the overall problem dealing with nursing homes. The limited area in which I am concerned deals with the rate-setting mechanism for payment of these nursing homes by various agencies of the government of Massachusetts.

Prior to the establishment of the authority under the law under which we operate, there appears to have been at least three different rates established by the department of public welfare which range from $5 per diem for ambulatory patients to a different amount for a bedridden patient, and still another rate for extracare patients. This old procedure was changed by the passage of a law in 1958 which placed within the authority of our division the rate-setting mechanism which I have just mentioned.

Briefly, let me say in order to establish any kind of rates for nursing homes it was necessary for our division to establish as simple an audit procedure as possible whereby auditors from our division would visit on as frequent a basis as possible more than 700 nursing homes scattered throughout the Commonwealth of Massachusetts. It will interest the committee to know that back in 1956 we were then dealing with about 575 nursing homes. Today we are dealing with over 700 nursing homes. This represents an increase in the number of nursing homes of about 29 percent during the past 4 years.

I am sure your committee is not interested in the mechanism of our audit. Time does not permit me to detail this information. Therefore, I shall simply say that our staff audits various financial reports sent to our division in compliance with the rules for such reporting. We have not encountered any difficulty in dealing with nursing homes in this regard. They have been more than cooperative in making available to our State agency their financial data and information which they know forms the basis for the payment of public funds on behalf of public-aided patients.

It is, of course, well understood by all that nursing homes are not heavily endowed groups which contain the most up-to-date electronic accounting equipment. Nursing homes are run more as private institutions and the State respects this status and does not intend in any way to dictate the actual operation of the nursing homes. This is left to the initiative and genius of our private citizens who dedicate themselves to such service. It is therefore not unusual to find the proprietor of the home acting as business manager, bookkeeper, purchasing agent, and actually rendering some nursing care to the patients themselves.

We find that here in Massachusetts most of the nursing homes are located in and about our Greater Boston area. On the average, the size of the nursing home accommodates about 31 beds. In such accommodations, the occupancy approximates about 91 percent. There are approximately 23,000 licensed "beds” with an average of 60 percent occupancy by public-aided patients. Since 1956 over 75 percent of all licensed nursing and convalescent homes have been visited by auditors of our division. The other 25 percent have not as yet been visited because many of them have not accommodated so-called public-aided patients, they deal primarily in private patients.

It is interesting to know that since this rate-setting mechanism was established in 1958, there have been a series of rate increases authorized by this division. The first rate which was established by this division called for a payment of $5.75 per day. In 1959, 1 year later, the rate was increased to $6.50 per day. In 1960, the division, on the basis of available data, maintained the same rate of $6.50. However, in 1961 the rate was increased to $6.60.

All such rate changes are changed only after a public hearing with adequate notice being furnished to all parties concerned. As a matter of fact, on Monday of this week this division conducted a public hearing in order to determine the rate which should be established for the calendar year 1962. That rate, of course, has not as yet been set.

It is our contention, of course, that the Legislature of Massachusetts has taken forward steps by the establishment of such a rate-setting mechanism, the proof of which is borne out by the fact that the rate for 1960 yielded only three appeals; two of these were granted, one was rejected. Last year, that is 1961, 12 appeals were filed; 2 were granted, and 10 were rejected. This certainly points out that the public has every reason to have confidence in the care which is being exercised in the dispensation of public funds for such a worthy and necessary cause.

The liaison which the division of hospital costs and finances maintains with the department of public health is such that upon the licensing of any nursing or convalescent home, such information is immediately forwarded by the department of public health to our office. We are also aware,

of

course, of any action taken to withdraw a license that had already been granted.

In a personal way, Mr. Chairman, may I say that I have enjoyed working with the members of the nursing home profession. I have found them cooperative. I have found them extremely desirous of giving of their best in the help of our citizens who are in need of this type of medical care.

I would say, Mr. Chairman and members of the committee, one of the most important topics to be considered in the matter of nursing homes deals with the standards of care. I, for one, working in this field for quite some time, strongly believe that the standards of care cannot be determined exclusively by the simple device of increasing rates. This is not the answer.

The standards of care may best be determined and thereby increased to their maximum only within the jurisdiction of the licensing authority. This authority should either grant or not grant a license, depending on whether the nursing home meets certain specified and clearly defined standards.

I hope I have been able to contribute some small part in this massive study in which you are engaged. If I may be of assistance, Mr. Chairman, and members of the committee, I shall be happy to be of service.

Senator SMITH. Thank you, Mr. Fabisak. You mentioned a rate. Is this an annual review or revision, certainly a review, every year?

Mr. FABISAK. It is an annual review as required by law, Mr. Chair

Senator SMITH. Has there been developed any set formula or a firm policy on the fair rate of return on investment in these establishments?

Mr. FABISAK. Yes, we do take into account a fair return on invested capital and this is resolved through the mechanism of a formula which we apply and is reflected in the overall per diem as it is set.

man.

Senator SMITH. Does this involve an audit on the figures ? Mr. FABIBAK. Yes, it does, Mr. Chairman. We audit as many homes as it is possible so to do. I might say, believe it or not, that with the responsibility we have of setting rates for over 700 nursing homes that I have at my disposal at the present time one semisenior field accountant to do the job.

Senator SMITH. I see. Thank you very much. We appreciate the excellent work your department is doing and hope you continue with this fine work.

Mr. FABISAK. Thank you, Mr. Chairman.

Senator Smith. Our next witness this morning will be Mr. Edward F. Connelly who is executive director and general counsel of the Massachusetts Federation of Nursing Homes.

Mr. Connelly. STATEMENT OF EDWARD F. CONNELLY, EXECUTIVE DIRECTOR

AND GENERAL COUNSEL, MASSACHUSETTS FEDERATION OF NURSING HOMES

Mr. CONNELLY. Thank you, Senator.

For the record my name is Edward F. Connelly. I speak for the Massachusetts Federation of Nursing Homes, Inc., having a membership of about 300 proprietary nursing homes. We are grateful for this opportunity to appear before this Special Committee on Aging.

I have been asked by the Federation of Licensed Nursing Homes of Rhode Island, Inc., to leave with the committee a short statement on their behalf which I shall do.

Senator Smith. That will be received as part of the testimony. Thank you very much.

(The statement referred to above follows:) PREPARED STATEMENT BY MRS. ANNE THEINERT, PRESIDENT, FEDERATION OF

LICENSED NURSING HOMES OF RHODE ISLAND, INC. Nursing homes were first licensed in the State of Rhode Island in 1929. The bed capacity at the present time, for proprietary homes, is approximately 2,350. The census of nursing home patients shows that approximately 1,500 are welfare cases and 850 are private patients. Of the 1,500 welfare patients, 900 are in nursing homes, 300 in convalescent homes, and 300 in rest homes. At the present time, a home of 48 beds, an entirely new facility, has just been completed and opened in East Providence. Another is under construction in East Providence, with a minimum of 50 beds. Several homes have modernized and enlarged their facilities; also, several new homes are under construction in various parts of the State. It is anticipated by the licensing agency for nursing homes that the overall potential may reach 100 to 150 more beds within a year.

Educational programs, aiming to improve standards and to provide better patient care through education, are now being planned by the department of health, and it is anticipated that before long we will have the cooperation of the University of Rhode Island. These programs will be made available to nursing home administrators and personnel. It is now compulsory in Rhode Island that all new nursing home administrators must take a course in nursing home administration given by the department of social welfare, which is the licensing agency for nursing homes. Courses for nurses' aids are also given periodically by the departments of health and welfare.

Mr. CONNELLY. I have also been asked to leave a report from the New Hampshire Licensed Nursing Homes.

Senator SMITH. That, too, will be made a part of the record.

(The report referred to follows:)

REPORT FROM THE NEW HAMPSHIRE ASSOCIATION OF LICENSED NURSING HOMES

The New Hampshire nursing homes were first licensed in 1948. Licensing was completed in 1949. Today there are 174 licensed nursing homes in New Hampshire.

Out of 3,206 beds available in the State, some 1,282 are occupied by welfare patients. The maximum allowance for these patients from the welfare department is $165 per patient per month.

Our association has worked both with the welfare department and the health department to effect the following changes :

(1) In 1952, we were successful in getting an increase of $0.54 per day per welfare patient.

(2) In 1959, this was again increased to $1.50 per day per welfare patient. As a result of constant meetings with the health department, we succeeded in getting :

(1) A cut in home classifications from 5 to 2 (e.g., nursing homes and rest homes).

(2) The responsibility of fire safety shifted from the health department to the fire commissioner.

(3) A change in the requirements of the charge nurse from licensed practical nurse to graduate registered nurse.

(4) Increased numbers of periodic inspections for all homes which resulted in the closing of unlicensed homes by the health department. The New Hampshire Association of Licensed Nursing Homes maintains a committee throughout the year to work with the health department to effect necessary changes.

Mr. CONNELLY. The last request is to leave a report prepared for this committee by the Maine Association of Nursing Homes which I shall do with the permission of the chairman.

Senator SMITH. Thank you. That will be made a part of the record.

(The report referred to follows:)

REPORT FROM THE MAINE ASSOCIATION OF NURSING HOMES This committee will be making a thorough survey of all facets in nursing home operations. Thus, I wish to limit my remarks to that phase relating to the emphasis upon patient care as opposed to emphasis upon building construction.

The Maine Association of Nursing Homes was organized in 1954 and since its inception has consistently disagreed with State officials who advocate improvement of standards of care by concentrating on the physical plant. In many instances these officials are expressing sentiment which emanates from Washington.

In 1960 an attempt was made in the State of Maine to create an atmosphere of "crisis in nursing home care" through the press. This attempt fell flat when the true facts were presented. At times we cannot help but feel that the Federal Government unduly upsets the everyday living of its citizens by creating an atmosphere of crisis. This approach has long been utilized by the reformers and theorists who are constantly debunking the values of private enterprise and seek to establish greater governmental controls.

Our association recognizes that the standards of care must be improved in many areas but we are convinced that the private administrators with their everyday practical experience can perform the job much more economically than can the Government. We are even more convinced that private enterprise can furnish better bedside care than can any governmental agency, whether the control be direct or through nonprofit ventures.

There is, of course, a relationship between standards of care and monetary rates. However, a high rate is not the hallmark of success in operating a nursing home. The success of nursing home operation can be measured only by the comfort, contentment, and happiness of the patient. Our association has consistently pressed this point with State officials and gradually the merit

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