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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 dernité 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.

STATEMENT OF CLINTON S. McGILL, M.D. Dr. McGILL. Mr. Chairman, members of the committee. I am Clinton McGill. I earn my living in the private practice of internal medicine in downtown Portland, Oreg. I have done so for the past 27 years. During this period I have also worked within the strueture of organized medicine. I am a past president of both my county and State medical societies and I am currently a delegate to the American Medical Association. I have also worked as a part-time medical consultant for the Oregon State Public Welfare Commission and I am the medicare consultant for Oregon.

I have had considerable interest in national health insurance and have served on various committees at the State and National levels dealing with this subject. As a long-time member of the AMA Speakers Bureau I have participated in various forums, panel discussions, debates, and various discussions on the issue where widely diverging views on national health insurance were expressed. Over this period I have developed some ideas of my own, and I appreciate this opportunity to present them. In this discussion I will try to confine my remarks to general principles.

Obviously flushing out the benefit package will depend on the structure of the program and also on the political climate and the financial status of the country. So I would stick to the basic principles now..

During this past month I read much of the testimony already heard by this committee. I was encouraged to hear even the most liberalminded advocates of national health insurance advise this committee that a sound program must evolve slowly and should be phased in over a number of years. Experience has taught us that broad-sweeping social programs, once passed by Congress, may be modified, but they are essentially irrevocable. It is of utmost importance that any such program be soundly based and supported by providers and consumers alike.

As has been mentioned, any consideration of national health insurance reveals there are three variables, three dynamies, if you will, involved in the program. These dynamics are cost, quality, and access.

Any national health insurance program must achieve the proper and equitable balance of these three factors. Past experience has taught us that one or two of these factors can conspire against the third. For example, if the system is open for universal access, the product invariably will be an increase in cost or a decrease in quality.

In past years, within the medical fraternity; we have been most interested in quality. Perhaps we should have been more interested in access and cost, since we have belatedly learned these factors are of equal importance. If the quality of health care is to increase, the cost must necessarily increase or the access must be decreased.

In Congress there is a logical concern about cost in any such program and I find this properly so. But I must point out that a singleminded policy of cost control can lead only to decreased access or decreased quality.

Parenthetically, the Federal Government has developed the philosophy that whatever it pays for it must necessarily control. Herein lies the basis for the development of bureaucracy with the centralization of power in Washington. The recent decision of Federal Judge Julius

Hoffman in Chicago controverts this policy and at least should bring a refreshing review of this justification for Federal control. Considerable testimony already heard by this committee has strongly recommended local control and administration of any plan of national health insurance.

Those of us who practice medicine have worked with health insurance programs for a number of years. This experience has taught us certain basic principles. I would like to place before this committee some of these fundamental principles as I see them and why we feel they are important.

First and foremost, freedom. We feel that every individual ought to be free to choose his own doctor, or delivery system, or type of health insurance coverage he feels is most appropriate. In recent years, Congress

has heard testimony on a variety of schemes to reorganize the delivery system in medicine along the HMO lines, prepaid capitation, various kinds of group practice, and the like.

It is my opinion that private practice, fee-for-service medicine as we know it today, will continue for some time to come. This is true simply because both the doctor and the patient find it desirable.

I personally do not look at a great increase in the prepayment, capitation method. This has been around for a great many years. In fact, about 80 percent of the people covered on the prepayment capitation live on the west coast of the United States. Although their growth has been gradual, it has not been spectacular. There are a great many patients and a number of doctors who like this type of delivery system.

There is a much larger percentage of both patients and doctors who do not find it satisfactory. Private health insurance has made great strides in the past 30 years and the majority of Americans are now covered by quite satisfactory health programs. In my view, the most urgent areas requiring coverage for national health insurance are an adequate plan for the poor and some type of catastrophic coverage for everyone.

It should be pointed out here that those who have good private health insurance can add catastrophic coverage for minimal cost. However, some arrangement should be made guaranteeing catastrophic coverage for all. Within medicine, for many years, we have been concerned that there be no financial barrier to adequate health care. Certainly a comprehensive program covering the poor is a must.

As a corollary of freedom, we believe that pluralism in methods of health care delivery must be allowed. Certainly different areas and certain population bases require different kinds of systems. Any national program should allow for eixsting systems, as well as the development of new health care systems. I think it is of great concern to all physicians that a Federal program not freeze the health care delivery at the current level and allow no room for innovation or experimentation. That seems to have been the experience in other countries.

As a second corollary of freedom we believe there should be State jurisdiction over licensure, certification, and regulation of insurance benefits—perhaps operating under Federal guidelines, but nevertheless administered at the State level.

We also feel that the funding should come from multiple sources, including employer-employee contributions, as now exist in many fine private health insurance programs. We also feel that a system of individual tax credit has merit and should be attempted through social security taxes, nor should the program be administered by Social Security. This use of all existing financing mechanisms should allow for minimum Federal financing.

Any workable national health insurance program must include some control over access or the demand for services will soon swamp the system and drive the costs to unacceptable levels. The most workable cost control devices are co-insurance and deductibles, except for the poor. These are time tested and have served the private health insurance industry quite well.

I would agree that some assurance of quality control should be included, but I strongly feel that the development of quality standards and their enforcement should be left within the medical profession. I think all physicians have a basic fear that quality control by Federal guidelines would lead to an over-standardization of medicine and the development of "cookbook techniques," which depersonalize this most personal of services. We are convinced this would lead to the deterioration of medical care for both patient and physician.

We have all heard that medical care in the United States is a "nonsystem.” I would point out that any attempt to systematize medicine automatically dehumanizes it. I am certain that any such dehumanizing would be unacceptable to both the doctor and the patient.

I am aware, as are most of the physicians in this country, of the great difficulties confronting this committee to solve the vast complexities involved in any national health insurance program. It is, indeed, a formidable task. I would again echo the sentiments of witnesses already heard before this committee, that any plan be evolved slowly and begin with basic principles. As we gain experience, we can better judge the optimum benefits which can be allowed within the available resources of the country, professionally as well as financially.

As a final point, I would like to make a plea for the young people entering medicine today. We have been fortunate in recent years to attract a particularly bright and talented group of young people into the field of medicine. Whatever system evolves, if we allow our younger generation of doctors to practice the kind of medicine they know how to practice, where they want to practice, and under what system they wish to practice, I have no fear for the future standards of health care in this country.

It should not be necessary to point out that any system of national health insurance will ultimately depend on the cooperation of the doctors in this country for its success. The satisfaction and the happiness of the individual physician is important to the quality of health care. I don't think any of you would want to consult a physician who is unhappy in his job. I would submit, in all sincerity. that freedom within the widest possible latitudes in the practice of medical care is an ingredient absolutely essential to the success of any National Health Insurance program.

I thank you for the opportunity of testifying before this committee.
Mr. ROSTENKOWSKI. Thank you, Dr. McGill.
Dr. Masland.


It is a privilege to be here, and I thank you for your invitation to appear.

I am David S. Masland, president-elect of the Pennsylvania Medical Society. I am also a board certified internist and for the past 20 years have practiced in the small Pennsylvania town of Carlisle.

In speaking to you today, both of these capacities are important. As an officer of a large State medical society, I am acquainted with the thoughts and opinions of my colleagues. As a physician with a large private practice, I experience daily the problems of our health care system, as well as its many good points.

As a physician, I am concerned that quality health care be available to everyone.

In our group practice, my three partners and I see approximately 500 patients every week. This is the greatest number we can see and still provide quality care.

I am sure you are all familiar with the 1974 study performed by the Rand Corp. concerning the effects a national health insurance plan would have on our health care delivery system. That study pointed out that an NHI plan offering full coverage without deductibles or coinsurance would generate an increase of 75 percent in the demand for ambulatory services.

In other words, we could expect a 75-percent increase in the demand for primary care.

I personally know of no way that my partners and I could expand our practice to accommodate an additional 375 patients and still give quality care. I know of no primary care physician who could accommodate a 75-percent increase in the number of patient visits.

This problem is complicated by the fact that much of this increase would undoubtedly come from the "worried well,” people who really are not in need of medical care. To allow such an unnecessary increase in demand would jeopardize the delivery of care to those who really need it.

Obviously then, as a primary care physician I am concerned that any national health insurance plan have some type of control over unnecessary demands for increased services. Perhaps this could be in the form of coinsurance.

As an example, I offer some personal experience in this area. When I first came to Carlisle and established my practice many years ago, for personal and professional reasons, I chose to treat certain persons free. These were not indigent individuals but persons that I felt I should offer care without charge.

I found, however, that these patients quickly became the most demanding. Their demands for appointments were two to three times greater than those of paying patients. The same held true of their demand for house calls, two to three times greater.

In an effort to correct what was fast becoming an uncontrollable situation, I found it necessary to institute a partial charge for these patients. This could be compared to the coinsurance provision contained in some national health insurance bills.

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