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limited choice of physician, and the third was a plan allowing for free choice of physicians in their offices.

After 2 years of experience the closed panel group and the neighborhood health plan have enrolled approximately one-third of their projected number of patients; in several large industrial groups where premiums were not paid in full by the employer, less than 5 percent of those eligible enrolled in any of the three programs.

These three programs have proved to be very expensive. Actuarial figures show costs of approximately $100 per month per family. The majority of those who enrolled in those plans did so only when their insurance costs were paid by their employers, and the vast majority enrolled in the program offering care in physicians' offices.

The only plan that has not been heavily subsidized at present is finding it essentially impossible to enroll patients at the required $100 a month figure. The other two plans have continued to operate through subsidization amounting to at least $30 a month per family, and in addition one of these plans receives facility fees for many of the patients it sees.

I think three conclusions can be drawn from this experience: First, the vast majority of patients prefer to receive health care from their own physicians in their offices.

Two, this comprehensive coverage is so expensive that few are willing to pay for it individually, but prefer it and will subscribe when a third party pays the premiums.

Three, there is no evidence that group practice has reduced the cost of medical care.

The insurance coverage that the patients prefer is shown by other examples. This would also appear to be directly related to the cost. Originally Blue Cross and Blue Shield had a basic plan covering semiprivate hospital rooms, surgical fees in full, and limited maternity coverage. Almost the entire area of population subscribed with physicians agreeing to cost control.

Över the years at the insistence of patients, physicians, insurance regulations, et cetera, the coverage has been increased greatly. The premiums increased to an extent that many cannot now afford the coverage or still purchase only the most basic coverage.

It would appear that patients want full coverage, but can only afford a certain percentage of his income for health care. The need for subsidization for the balance of comprehensive insurance premiums is evident.

The need for catastrophic coverage is obvious to all, but again what is catastrophic financially to one family is not to another, although the medical condition may be the same.

Psychiatric illness can be catastrophic just as a stroke and should be covered equally as well.

Further examples we see in private practice relate to how insurance is administered. Locally, our Blue Cross-Blue Shield plan covers about 85 percent of the population. It operates very efficiently with minimal reports and forms and with an administrative cost of less than 10 percent.

Other private carriers also function efficiently and I assume at a profit and pay taxes. They also stabilize premiums by using reserves rather than increasing premiums frequently.

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When compared to the administrative costs of 53 percent for medicaid with its multitude of rules, regulations, forms, inefficiencies, and computer problems, the difference between a governmental and private insurance carrier is obvious.

Cost controls must begin with administrative expenses. It is a tragedy when more than half of the costs of a health program are not available for health care and thus don't benefit the people for whom the program was designed.

Federal financing must be used for part of a national health insurance coverage, but I believe it is obvious that the administrative saving and efficiency of the private carriers should be continued and utilized to the fullest extent.

Federal administration should emulate the private carrier standards.

The last attitude of patients to consider is their dignity. The information required in the complex forms needed for medicaid qualification followed by required forms in offices and hospitals demeans patients and embarrasses their providers. It should not be continued.

The quality of health care is of highest importance to both physicians and patients. Statistics from our area show that 95 to 97 percent of physicians properly give quality care and contain costs. The 3 to 5 percent who do not are common to all programs in our area. Peer review, hospital utilization, and PSRO in the future will continue to identify this group and keep it to an irreducible minimum.

In summary, I believe that the type of national health insurance most beneficial to patients and all of us must, first, preserve the right of the patient to make a choice between all providers.

Two, that payments should be equal, fees should be equal regardless of the source of care.

Third, we should maintain the efficiency and cost controls of administration.

The efficiency of the private carriers should be utilized, the administration of Federal insurance or subsidies should be comparable.

Four, we should provide as much basic coverage as the Nation can afford and full catastrophic coverage. Both should be subsidized on a sliding scale based upon the patient's ability to pay.

Last, we should assure the quality of care on an individual basis through peer review and elimination of administrative redtape which does not consider the patient's dignity.

Mr. ROSTENKOWSKI. Thank you, Dr. Hamilton.
Dr. Lymberis.

Thank you.

STATEMENT OF MARVIN LYMBERIS, M.D. Dr. LYMBERIS. Mr. Chairman, honorable Members and guests, I am Marvin Lymberis, M.D., a private practitioner specializing in ophthalmology in Charlotte, N.C. I appreciate the opportunity to appear before you and discuss various aspects of NHI from the viewpoint of a private practitioner who has devoted many years to community problems in health planning and the socioeconomic aspects of medicine. Unfortunately, the more one studies planning, experiences planning actions and debates the issues with colleagues and adversaries, the more he becomes convinced that there is no single panacea

for the problems we face in formulating a policy for an area as large and diverse as the United States.

Our problem is multifaceted. Two goals appear to be common to all participants: One, that every citizen shall have access to primary care; and, two, no citizen or family shall be bankrupted by catastrophic illness.

I intend to point out some of the complexities of this problem and to urge caution before attempting a broad and comprehensive national program which could be irreversible and might well do more harm than good.

Every practitioner, officeholder, and citizen views health care from a different perspective and often with different definitions. Diverse sections of our great and large country, with its varied topography, ethnic populations and climatic conditions have different health problems and, consequently, want different solutions. The officeholder, the self-employed, the employee, the employer all differ in their problems and offer varied solutions. Indeed, it is a herculean task to formulate a single policy that would satisfy so many groups.

Access to health care has improved markedly during the past 10 years. The next 5 to 10 years will see even more improvement as the greater number of doctors now “in the mill” will be entering practice and will significantly increase the supply of primary physicians. This should alleviate the current problem of access.

The long leadtime to increase the output of physicians makes it impossible to accelerate this process with a crash program. The sad fact is that some of these crash programs have made more difficult for some citizens to have access to primary care. As an example, the advent of medicaid closed a number of premedicaid clinics and the many difficulties with the medicaid program continue to prevent many of these former "clinic" patients from obtaining primary care.

One of the major fears of a very comprehensive NHI is that it could well overload the system. Since the end of World War II more technology has evolved in the health care field than in all previous history. The tremendous increase in the number of first-class training institutions and the greatly expanded corps of well-trained health care personnel of all categories have made this technology more rapidly adopted and more widely disseminated than would have been possible in pre-World War II days.

During this same period the public has become more informed regarding health care and more demanding for the medical miracles” so well pubicized by the media. Probably the only thing that has increased more than our technology is the public's expectations. Compounding the problem of delivery and financing, the Federal Government has taken on an ever-increasing responsibility for the provision and financing of health care.

To date little or no effort has been made by either provider or thirdparty payor to determine the feasibility of providing all the available technology to all the people. With inflation there has been an increasing concern over the financing of this technology.

Recently a Defense Department spokesman stated, “We cannot afford all the technology we have available.” It is past time that the provider, the public, and the payor give some consideration for cost effectiveness. It is easier to raise money for a new sophisticated tech

nology to cure a rare disease than to obtain funds to treat a common ailment by proven therapy.

For example, a liver transplant is dramatic-treating intestinal parasites is not. The former is rare and offers a very poor prognosis, the latter is common with almost 100 percent certainty of cure.

A major point of distress to the practitioner is the laudable attempts by legislation and private foundations to tackle recognizable problems by either anatomic or disease entities, thus fragmenting the patient. Each of these programs has different authorizations, regulations, and forms to complete.

Some are concerned only with the method of financing, others with the disease entity-cancer, diabetes, the blind, the deaf, heart disease, et cetera. There is medicare, medicaid, Commission for the Blind, Commission for the Deaf, Diabetic Association, multiple sclerosis, et cetera. Just keeping up with the constant bulletins, retractions, addendums, exceptions and changes from each of these divisions has become an impossible task for the practitioner and hospital, as well as a great expense.

There are three major parts to health care planning: access, quality, and costs. Since great amounts of public moneys are being spent, it is natural that concern for cost and quality, as well as access, be monitored and audited. Unfortunately, these have not been coordinated. One agency is concerned with access or availability; another with quality control only; and still another with cost control and cost containment and still another with only quality.

The provider is caught in the middle while costs have escalated to undreamed proportions and are still rising. Defensive medicine has further added to these escalating costs.

I submit that it will take the wisdom of Solomon to adjudicate the conflict between cost and quality, but is it not time that some attention be given to cost effectiveness? Must we take a thousand X-rays of bones with a history of trauma to make certain that we do not miss 10 with possible hairline fractures? Shall we continue to expend costly resources for the terminal patient in the name of quality?

No one has given a clear-cut moral, ethical, or legal answer to these important questions. New and sophisticated technologies are expensive. Should we not analyze the advantages over older technologies with cost effectiveness as one of the criteria ?

The greatest problem of prepaid systems is control of input into the system. I submit that a deductible and co-insurance policy is the only practical way to effectively control the input.

Most of our citizens have some form of private insurance. For those not able to pay for private insurance, society should be responsible. However, there must be some obligation on the part of the consumer to prevent overloading and wasting of valuable resources.

Two years ago I requested from the North Carolina Blue Cross-Blue Shield a survey of claims. It was found that almost 80 percent of claims were for amounts under $50. At the same time the average of all claims was in excess of $400. These figures are higher now. Some patient responsibility would reduce much administrative costs for both payor and provider, as well as preventing the overloading of the system, resulting in better care being available.

The real burden of health care financing falls into the catastrophic category. Those citizens not medically indigent can and should budget for reasonable amounts, depending on family income, for their basic health care. It is when an individual's or family's medical needs pass this reasonable amount that costs become burdensome and sometimes catastrophic.

Representatives of the insurance industry tell me that it is not difficult to provide catastrophic coverage with rates based on sound experience at low costs. My own basic policy for myself and wife costs $38. a month. A $250,000 catastrophic policy costs only $7 a month. The basic first dollar coverage has increased yearly and the company has had to adjust rates yearly, and in many years report a loss. The same company tells me that they can make money on the catastrophic policy, which certainly covers the major need without so much added expense.

It is my hope that the next step toward a national policy of health care will be in the form of catastrophic coverage. The definition and financial limitations or corridors before this coverage commences could be sliding, depending on income or basic policy. For the medically indigent, society-meaning Government and provider—should jointly provide. I would like to add to my prepared remarks that the medical profession would like to go back to providing charity care and take some responsibility for this.

With experience, with increasing number of primary physicians, as well as medical personnel, addendums or modifications could be made and modified as warranted. This action would solve our most pressing problem without overburdening the system or the resources available.

In summary, gentlemen, I believe that a basic catastrophic policy with coinsurance adjusted to income and administered by our private insurance industry should be the initial step. The greatest danger would be to pass an omnibus bill, which might well bankrupt the Government and leave our present health care system in shambles.

Two. Studies and recommendations on cost effectiveness. Payors, public, providers, legal and religious input into some definité recommendations.

Three. Utilize the present system to the fullest extent. This system has provided the best health care to the greatest number of people in all history. Despite some weaknesses and appearance of fragmentation, it has done an outstanding job of treating the sick and preventing disease. Most of the great breakthroughs have occurred in the private sector. Philanthropy has contributed greatly to payment for health care, education, and hospitals. We know that extensive legislation and regulation increases costs and stifles initiative to the detriment of all.

Four. The doctor's skill and the hospitals' facilities have advanced so rapidly they have had difficulty in meeting the new demands. The public must be reeducated to more reasonable expectations and made aware that the basis of good health is in the way they live and that they themselves can do the most to improve their health.

Five. Social costs should be separated from health care costs. Much of the expense now charged to health care is, in reality, social costs.

I hope that in our discussion and questions we may cover more completely the many facets of this problem. Again I thank you for the privilege of being with you and will attempt to answer questions put to me.

Mr. ROSTENKOWSKI. Thank you, Dr. Lymberis.
Dr. McGill.

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