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What order of magnitude of savings might HALT be able to achieve?
For Medicare, Medicaid and other personal health services
Are these reductions in present expenditures?
No. They are containment of increases which will certainly occur without the intervention of the HALT plan. Over several years. HALT's cost containment plan would bring down yearly increases in health costs to the level of increases in the Bureau of Labor Statistics annual cost of living index.
Most states are being hard pressed by the increasing pressures
By participating in HALT they would
Well how does HALT do all this?
No, by applying cost containment procedures which have already
HALT has two phases. Phase I is operative for the first two years. It calls a halt to all hospital price increases except for an allowable increase up to the previous year's increase in the "market basket" hospital costs. The allowable increase takes account of wage increases of non-supervisory hospital employees. Phase II begins in the third year sooner if a state is able to complete its organization work in less time.
What about doctors and other professional providers?
In phase I their allowable increases would be held to the
Would laboratory, x-ray, nursing home and other health
Yes. All major health expenditures would be required to
14. Q. Who would supervise the program?
A. A state designated agency in each jurisdiction, operating
under Federal guidelines.
15. Q. Since hospitals are the major area of health expenditures,
must they all operate under the cost containment formula?
A. No. States which already have official cost containment
programs which are holding down cost increases to the
16. Q. What happens in Phase II?
A. The full HALT plan becomes operative. Hospitals would be required
to have prospective budgets negotiated with a state organized
17. Q. What about HMO's?
A. The state commission would negotiate annual budgets with them.
18. Q. Would HALT be flexible enough to take into account major changes
in population, unusual incidence of disease, and the financial
A. HALT would take these factors into account in annual budgeting
and in retrospective budget adjustments, when appropriate.
coverage, the working poor who have lost Medicaid protection,
A. Unfortunately HALT would not be able to help them. It would
not extend or improve eligibility or benefits. A comprehensive
20. Q. But isn't this a rather drastic proposal, likely to be opposed
by many of the special interest groups?
A. HALT is comprehensive rather than drastic. It's a systematic
rather than piece-meal approach to containing health costs.
PREPARED STATEMENT OF HOWARD D. SLOBODIEN, M.D.
I am Howard D. Slobodien, M.D., President of the Medical Society of New Jersey. I appreciate the opportunity to appear before yoụ and to present the collective opinion of the 9,300 physician members of the Society.
Practicing physicians are concerned with a number of proposals that are being considered by the Administration to curtail the costs of Medicare. While these proposals are well-intentioned, they may not achieve the desired result. If they do have a salutary effect on cost containment, they can have an adverse impact on the quality of care and the health of
our senior citizens.
Diagnosis Related Groups The DRG program is being hailed by the Health Care Financing Administration as the answer to controlling hospital costs. Its effectiveness as a cost containment measure has not been established, and New Jersey is the only state in which it has been tested. That test has not been . completed nor properly evaluated. The reconciliation called for under the Federal Waiver has not been completed and will not be completed
without modification of the original protocol.
As a practicing surgeon, I had great hopes for DRG. After all, I have been reimbursed along DRG lines since entering private practice. My charge to the patient in the vast majority of cases includes the fee for both the operation and the total hospital care, regardless of the
variation of the number of days involved. This method has worked well so I looked forward to the DRG program when it was first proposed.
But now I have great reservations about its applicability in paying hospital costs or harges. I am far from convinced that there has been a saving in cost in New Jersey. I am particularly concerned that the quality of care may be deteriorating, and that patients are being forced out of the hospital setting still hurting, still in trouble, and still in need of acute care, merely because the system rewards those
institutions with rapid turnover of patients.
The DRG program has been criticized adversely in outstanding publications, by extremely well-qualified individuals located in areas
stretching from the Atlantic to the Pacific.
This criticism covers
many areas in the application of the program. It should be noted that among these criticisms is the fact that the medical profession has been invited only minimally or marginally to participate in the program. The only rebuttal to these criticisms, as far as I know, has come from
those responsible for initiating or expanding the DRG concept in New
Yet, these same people who defend this program, have MDs, PhDs,
and MPHs, etc. among their scientific accomplishments, but they continue
to oppose the application of scientific inquiry despite their backgrounds
and despite their avowal at the onset of DRG that it was a pilot program. The Congress of the United States is approving this program for Medicare
purposes despite the lack of proof of its merits.
The medical profession has been given a bum rap
that it is respon
sible for much of the rise in health care costs, despite the fact that
physicians do not receive even one cent of every five spent on health
If for no other reason
and there are many others -- doctors