Page images
PDF
EPUB

are interested in containing costs. We will continue our efforts to control costs and to assure the maintenance of quality care under

1

whatever reimbursement mechanism Medicare chooses.

I don't know whether DRG is good in whole or in part. But no one else truly does either. It has not passed the test of scientific inquiry. If it is garbage and we continue its expansion, there won't be enough landfills in the country to contain it. Isn't it about time we found out the truth? That is why I urge a thorough and long overdue evaluation of this concept before it becomes the method of reimbursement for hospital costs.

Financing of the Social Security System

[ocr errors]

The Medical Society of New Jersey and the American Medical Association are concerned with protecting the solvency of the Social Security System, particularly the hospital insurance trust fund which finances Part A of the Medicare program. It is imperative that the fiscal solvency of the Medicare program be maintained in order to assure access to high quality care for the nation's elderly. While the Medicare trust funds do not face the immediate difficulties of the retirement fund, pressures are projected to begin near the end of this century. I truly hope that Congress will act to provide both a short-term and a long-term solution to the problems facing Medicare and Social Security. We hope they will avoid modifications which only produce a "band-aid" solution.

Conditions of Participation for Hospitals
Medicare and Medicaid

HCFA has proposed rules to revise the Medicare and Medicaid Conditions of Participation for Hospitals. The AMA has called for withdrawal of those proposals, and we join them in that request. Our concern centers

on the impact, on the quality of patient care in hospitals, of a proposed redefinition of the term "physician" to include chiropractors, optometrists, dentists, and podiatrists in addition to doctors of medicine and osteopathy. We are opposed to the redefinition for the following reasons: It does not reflect the scope and type of services provided in acute care general hospitals. HCFA is failing to recognize that all the professions listed do not provide medical services. Chiropractors and optometrists do not have admitting privileges in acute care hospitals and are not licensed to provide any services requiring inpatient care. Expansion by this definition fails to recognize the vital role and responsibility of MDS and DOS to provide and supervise the full course of medical care for all patients admitted to an acute care hospital. The medical staff must be responsible for insuring the quality of patient Services within hospitals should operate under written guidelines and procedures that are approved by both the medical staff and the governing body.

care.

I have attempted in this discussion to touch upon only the most dramatic issues of the Medicare program. There are many improvements that might be considered, but I must urge you to carefully avoid mistakes occasioned by the desire to foster change.

Thank you for this opportunity and the courtesy you have extended

to me.

PREPARED STATEMENT OF JAMES E. CUNNINGHAM

The American Health Care Association, the nation's largest association of long term health care facilities, and the New Jersey Association of Health Care Facilities, New Jersey's largest association of long term care facilities, are pleased to present our recommendations for cost-effective changes in the financing and coverage of extended care services under Medicare.

The American Health Care Association membership includes nearly 8,000 proprietary and non-proprietary facilities which serve 750,000 convalescent and chronically ill of all ages. Our membership comprises roughly half of the nation's licensed nursing homes and reflects the cross-section of the entire profession. Members are increasingly the providers of a broadening range of institutional and non-institutional long term care services, such as residential care, home health and homemaker services, adult day care, and hospice care.

Every day hundreds of Medicare beneficiaries are confronted
Medicare, provides scant coverage

by a distressing realization:

for nursing home services and other long term care. Medicare is promoted as the health insurance for the elderly and people assume that Medicare coverage is comprehensive

[ocr errors]

if a beneficiary is

sick, Medicare pays the bill. This is the Medicare myth,

a mirage of protection. In reality, Medicare is little more than a traditional "major medical" policy, with most of its payment going for hospitalization and related medical services.

One of the most depressing tasks for nursing home administrators is to explain to the elderly in need of nursing home care, their families, and surprisingly often their physicians, the harsh reality of their Medicare "benefit." On paper, the Medicare nursing home coverage is for up to 100 days in a skilled nursing facility (SNF), the most intensive level of nursing home care. In practice, this small benefit is further diminished by Medicare's "fine print", notably restrictive medical eligibility criteria, a minimum of three days prior hospitalization, and excessive patient cost sharing.

The Medicare coverage is shocking when contrasted with the need for nursing home coverage by the elderly, especially the rapidly increasing over 80 years old segment. The end result is that Medicare pays for less than 2 percent of the nation's nursing home costs. Even after Medicaid and all other sources of financial protection, nursing home patients and their families are still stuck with about 42 percent of the over $20 billion

cost.

Looked at from the elderly's perspective, their # 1

out-of-pocket health cost burden is nursing home care. A rough

indication of the magnitude of this personal financial burden is revealed by the most recently available figures on health expenditures by age groups, presented in the below chart. However, this chart masks the actual out-of-pocket burden on those who utilize nursing homes because it is based on per capita figures and the private expenditure amounts include private insurance payments. But nursing home expenses, unlike physician and other health bills, are incurred by a relatively small number of people and almost none is paid by private insurance. Thus, it should not be surprising that estimates of people suffering catastrophic health costs find half of the cases to be nursing home patients.

[blocks in formation]
« PreviousContinue »