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It may well be that its proponents have oversold the HMO and thereby done it an injustice. Under voluntary health insurance a package of benefits that is too broad cannot be marketed. It does not do the HMO any good to have a broad package prescribed for it. It does not do the HMO any good to be subjected to quality controls that apply to nobody else. There is no known way today to standardize HMO and other populations with respect to medical care premiums. Laws requiring certificates of need may be in conflict with the unique local requirements of the HMO. The principal point here is that the problems of the HMO are sufficiently specialized to warrant separate attention. For the purposes of a national health insurance plan, it suffices to offer the HMO option without favor and without prejudice.

SUMMARY

Let me summarize. I have essayed to draw on our record of experience under prepayment, and this record reflects many accomplishments as well as failures. I emphasize conserving the financial mechanism for those purposes that it is best designed to serve. I avoid taking a strong stand on issues on which sound evidence is lacking. Accordingly, at this time, I propose the following five criteria for assessing a national health insurance plan: (1) universal enrollment; (2) a uniform package of benefits, both broad and deep, for all; (3) furtherance of the goal of a single system of medical care for all (or at least not promoting any incentives toward the opposite direction); (4) effective provision for provider reimbursement, with a responsible and responsive exercise of regulatory authority rooted in a free flow of information; and (5) ease of compliance by consumers, with attention to the validation of their expectations from the insurance plan. I believe that this modest list of criteria is both moderate and attainable.

[Whereupon, at 3:20 p.m., the subcommittee adjourned, to reconvene at the call of the Chair.]

NATIONAL HEALTH INSURANCE

FRIDAY, SEPTEMBER 12, 1975
U.S. HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON HEALTH,
COMMITTEE ON WAYS AND MEANS,

Washington, D.C. The subcommittee met at 9 a.m., pursuant to notice, in the committee hearing room, Longworth House Office Building, Hon. Dan Rostenkowski (chairman of the subcommittee) presiding.

Mr. ROSTENKOWSKI. Good morning. Would our witnesses for this first panel discussion please take the appropriate places here at the witness table: Dr. Gammon, Mr. Lejeune, Dr. Murley, Dr. Lofstead, and Dr. Stephenson.

I would like to welcome you on behalf of the Subcommittee on Health of the Ways and Means Committee. Today we are hearing from two panels of expert witnesses selected this morning by the minority members of the Health Subcommittee.

I would for the purpose of luncheon schedules, like to announce that it is the committee's intention to start this morning and, if necessary, work right through lunch. We will conclude the exchange of ideas between this panel and the membership on the committee and then go immediately into the second panel.

Our format here is that we allow whatever time is necessary for your presentation individually. Then we will have a comment and exchange of ideas between the panel. Finally, we will open it to questions and colloquy between members of the subcommittee and the panel.

If you would be kind enough to, beginning with Dr. Gammon, introduce yourself, and go immediately then into your statements. I would like at this time to yield to my good friend, Mr. Duncan, the ranking minority member of the Subcommittee on Health.

Mr. DUNCAN. Thank you, Mr. Chairman.

Mr. Chairman, I want to express my thanks to you and your staff for cooperating and assisting in setting up this hearing.

Since 1971, the full committee and now the subcommittee have held three sets of hearings on national health insurance. In this set, we have heard testimony from panels of experts, and later in the fall we will begin receiving the views of public witnesses. All of the testimony presented has been valuable, and I believe this overview presented by the panelists who testified earlier has given us a solid basis for focusing on the more specific issues in national health insurance.

It is our belief that a necessary part of this overview should include the thoughts of some of those who, in the event of enactment of a national health insurance program, will be responsible for providing

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the care. We think the testimony from those who are now and will continue to be on the firing line of medical care is critical. For that reason, we have asked several practicing physicians to come here today to share with us their thoughts on national health insurance. We hope they will be able to provide us with some insight on the issues involved based on their own professional experiences.

As the subcommittee is aware, there has been considerable comment in all the discussions of national health insurance about some of the foreign national health programs and their relevance to our own situation. If we are truly interested in profiting from the experiences of others—both good and bad—we must be aware of them. As a result, we have asked some individuals, who have knowledge about and experience with the English, Canadian, and Swedish programs, to testify. Again, we believe they will provide us with a sound overview of these programs. Should we determine there is need for further explanation or inquiry in this connection, the subcommittee can pursue other means of obtaining it.

Mr. Chairman, this is our purpose in asking for this hearing. We want to work with you toward the common goals in which we are all interested and look forward to the coming hearings on national health insurance.

I also would like to welcome all of you to the panel. I know you have

gone to great effort to come to visit with us, and I know that you will be quite helpful. I have read part of your statements, and I do thank you very much for being here. A PANEL CONSISTING OF MAX GAMMON, M.D., LONDON, ENGLAND;

ANTHONY LEJEUNE, MIDDLESEX, ENGLAND; SIGMUND J. LOFSTEAD, M.D., CHICAGO, ILL. ; REGINALD S. MURLEY, M.D., LONDON, ENGLAND; AND BETTE STEPHENSON, M.D., TORONTO, ONTARIO, CANADA

Mr. ROSTENKOWSKI. Dr. Gammon.

STATEMENT OF MAX GAMMON, M.D. Dr. GAMMON. Mr. Chairman and members of the committee, first of all I would like to thank you for doing me the honor of inviting me to testify before these hearings and thus to take part in what I believe to be an historic debate.

I am the most junior member of the British medical delegation by quite a long way. I qualified in medicine at University College Hospital in London in 1966 and worked for 5 years in British NHS hospitals as a hospital doctor. NHS stands for National Health Service. Four years ago I left the NHS in order to develop a teaching hospital in London independent of the state.

I must point out that I am using the word "state" throughout this paper to denote the supreme civil power and Government vested in a Nation as distinct from the more territorial usage. You have already heard from my senior colleagues something of the nature of the conditions within the British State-run service. It was my personal daily experience of those conditions which convinced me that an independent alternative system must be developed in Great Britain and led me to take my own personally decisive step. That step being

leaving the National Health Service and starting work on the development of an independent teaching hospital.

A few weeks ago in London I was privileged to be invited to speak on the delivery of health care to a delegation of U.S. Congressmen and doctors, many of whom are here today. In that presentation I discussed in some detail the empirical evidence of disorder within our National Health Service, and I have requested that that presentation should be regarded as the first part of my contribution to these hearings.

I would like briefly now to discuss some of the wider general implications for society of a state-run health service with special reference to the British NHS.

I believe that in attempting to assess and draw conclusions from the performance of the NHS since its inception in 1948, it is important to bear in mind that the period under consideration has been one of unparalleled growth in medical science. This growth has transformed medicine through the world irrespective of what system of delivery has been employed. It has at the same time placed unparalleled strains on the financing and organization of the medical services of the world and no system is exempt from the effects of those strains.

In favor of the NHS it can be said that it provides an assurance, in theory, that no one in Britain today will be denied essential medical care by reason of his or her immediate or ultimate inability to pay. However, with 500,000 people on waiting lists, treatment is likely to be delayed.

If "justice delayed is justice denied,” then medicine delayed is most assuredly medicine denied, and denial is final for those who die on the waiting list. In practice those who can afford to do so avoid the waiting lists by paying doctors and nursing homes for private treatment. These people are in effect paying twice for their treatment, once through taxation and then again in private fees.

It is a significant comment on the NHS that despite the erosion of personal disposable incomes by increasing taxation and despite complete lack of official encouragement, the number of subscribers to private medical insurance in Great Britain has shown a continuous steady increase since the early 1950's. The total number of persons insured by U.K. medical provident schemes between 1950 and 1975 shows a 20-fold increase. Even under conditions of extreme financial stringency in 1974 subscription income showed a 25-percent increase over the preceding year.2

However, in order to restrict this means of escape legislation is now proposed to control the total volume of private provision for medical care so that it shall not exceed the present level—about 2 percent of total hospital beds. For the vast majority of the population, doctors and patients, a State monopoly is to be imposed. The ostensible reason is to insure that the private sector does not operate to the detriment of the NHS.

An objective assessment of our nationalized system of health care under conditions of near monopoly during the past 27 years does not provide grounds for confidence in permitting that monopoly to become complete, but, barring a miracle, that is what is going to happen.

1 See Congressional Record, July 17, 1975, p. E3882 et seq.

2 Lee Donaldson Associates-U.K. Private Medical Care --Provident Schemes, Statistics, 1974, p. 8.

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