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I haven't described it fully, but does that idea suggest merit to you?

Mr. UNRUH. Yes, it does, Senator: I am very strongly in favor of that program, particularly I think it is apropos to the elderly who sort of get pushed out of our society now to feel, among other things, they aren't wanted. That is unfortunately, I think, too much the case.

I think the program in addition has broad social significancesocially significant values—and if we are indeed to have the change in the kind of politics that too often has pervaded us in government and in our society in the past, that is, I think, more and more people have to be concerned with something other than simply No. 1, and this is a group of people who obviously could be.

They have the time, they have the experience, and I think it has great, great value. Senator WILLIAMS. Thank

you. Mr. UNRUH. Senator, I just want to conclude by saying that I think our goal should be the maintenance of the health and independence of our older citizens.

To accomplish this goal, we have to realize that health is dependent upon all sorts of nonmedical factors, as well as medical factors, that these ought to have equal priority with medical care in any programs devised for the elderly.

Thank you very much. That concludes my testimony.

Senator WILLIAMS. I have interrupted you many times. It has been a magnificent statement, and we certainly appreciate it-I am not sure everybody will, but any statement of importance will have to find some disagreement—whether they live in Sacramento or New York City. I know one person who will not be in disagreement, and he is from the most beautiful State of West Virginia.

Senator RANDOLPH. I can agree that that is the most beautiful State. I don't know if I can agree on the rest.

Senator WILLIAMS. Let me draw back, if I can. “The most beautiful State of West Virginia.” That doesn't mean that I rule out my

State. Senator RANDOLPH. Well, autumn touches West Virginia with beauty just now, you understand.

Mr. Speaker, on page 2, would you refer to your informative statement-very informative statement.

You say that Congress has been irresponsible. Now, I think for the record, you want to be definitive in reference to such a statement. I imagine that I know what your reply will be, but I think it should be on the record.

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Mr. UNRUH. Yes. I refer to the capping action which Congress took after throwing out this program, and then finding that one State was somewhat more enterprising than perhaps they should have been in utilizing the open endedness of the program. That really pulled the rug out from under us on our Cal-Med program, which I think, if we had been allowed to develop it, would have provided a better cap to the costs of this program than is provided by the rather arbitrary action of simply saying, “This is the flat dollar amount that we will support.”

I think a program which is devised to meet a particular social need ought not to be largely altered, as I think this was—the possibility of the program being developed was-by the capping of a flat dollar amount which had to significantly cut into the purposes of the program.

Senator RANDOLPH. Are you specifically referring to the 1966 social security cutback?

Mr. UNRUH. I think in 1967. The Mills amendment, as I recall.
Senator RANDOLPH. The medicaid cutbacks?
Mr. UNRUH. It was the Long amendment, I believe.

Senator RANDOLPH. Well, of course the Long amendment has not become law.

Mr. UNRUH. I am not talking about the-
Senator RANDOLPH. Mr. Oriol, let's have an explanation.

Mr. ORIOL. Well, there were two Long amendments, so-called because they were introduced by Senator Russell Long. That of 1968, which did not become law, and that of 1967, which did. You were referring to the 1967 ?

Mr. UNRUH. Yes. The 1967; that's right.
Senator RANDOLPH. And what was that amendment?

Mr. UNRUH. That was the amendment which said that the income of a person receiving this could not exceed 11/3 times the AFDC limits.

Senator RANDOLPH. You recognize that the Congress was faced, Mr. Speaker, with, let's say, a cost squeeze. And not on one program, but across the board, and I am not attempting to argue the point, but would you agree with me that once this situation in the Congress

Mr. ÜNRUH. Well, I am not in a position to argue with you, Senator. You know the facts better than I do, but I am inclined to believe in a system of alternatives that this ought to have had considerably more value than other things that Congress did spend money on. I am not prepared to argue that. It may serve little purpose. In fact it has been done.

I think the net result of that was to drastically cut back the quality of medical care in the State of New York, and to hobble innovation in the State of California which might have provided a considerably better health care program, and even at somewhat less cost, had we been allowed to develop a program as we thought we were being invited to do by the Congress, the year before.

Senator RANDOLPH. I think that is a valid statement; that there was encouragement given. I just wanted it to be on the record, because West Virginia is one of those States—38 in number—that have had the necessary implementing legislation on medicaid, as California, of course.

Mr. Speaker, would you turn to page 4.

You have underscored a statement here—a situation in California. You used language, let's say, which is very understandable-I would say it is strong language--you speak about the undermining of the medical care program to the people of California.

Now, where does California stand in this list of States--percentagewise? Of


New York-very liberal. Arkansas—very conservative.

Mr. UNRUH. Well, I don't have that in front of me at this point, but as I remember, the cap on our program, as far as income is concerned, was far, far below that of New York, and considerably below that of several other States. How many, I do not know.

Senator RANDOLPH. Mr. Speaker-
Mr. UNRUH. Our cap on income is $3,800—in the State of California.
New York was $6,000. I think there are two or three other States
with a

Senator WILLIAMS. Notwithstanding the size of the family?
Mr. UNRUH. A family of four—which is the usual family.

Let me say that is one of the tragedies of not being able to develop the Cal-Med program, because we felt that quite clearly, $3,800 is not a very wildly irresponsible figure insofar as the cap is concerned. It is clear that any little extra jiggle in the health pattern of a family is going to upset that.

Those people with more income ought not to be thrown into the poverty level by an unforeseen health consequence. That is the kind of a program we were trying to develop here so that we could help those people above that level with unforeseen costs.

Senator RANDOLPH. This would not be in the category of the aged alone, but would go across the board, even including the middleaged; is that correct?

Mr. UNRUH. That is correct. That program would have covered, in effect, virtually everyone in the State.

PHYSICIANS' INCOME FROM MEDI-CAL Senator RANDOLPH. Mr. Speaker, a final observation, and perhaps a couple of other observations.

Would you turn, please, to page 8. The percentage, Mr. Speaker, of these, let's say, unethical physicians—members of the medical profession--that you had spotlighted here by your use of the figure 1,000.

How many persons are involved in administering that program in the State of California ?

Mr. UNRUH. I don't believe I could--are you talking about the doctors that are

Senator RANDOLPH. The Medi-Cal patients.
Senator WILLIAMS. Patients, or doctors?
Senator RANDOLPH. No, the doctors that administer the program.
Mr. UNRUH. Somewhere between 2,200 and 2,400 doctors.

Senator RANDOLPH. You mean that when you say 1,000, you are speaking of, let's say, 80 or 60 percent—50 percent ?

Mr. UNRUH. Forty percent—roughly 40 percent of the doctors would be making that figure.

That is a gross figure, Senator, I would hasten to add.

Senator WILLIAMS. That does not include the expense of medicines and nurses?

Mr. UNRUH. No.
Mr. MANLEY. May I add something here?
Mr. UNRUH. Yes, Mr. Manley would like to

Mr. MANLEY. I am informed, Senator, that there are approximately 25,000 doctors who participate in some fashion, in some small or large fashion, in the Medi-Cal program.

However, there are only about 2,000 of them who participate in a large way in the program. So what we are saying here is about half of those doctors in the last fiscal year did gross $70,000 a year.

Mr. UNRUH. From the program.
Senator RANDOLPH. Thank you, Mr. Manley.

Mr. Speaker, now let's take the 40-percent-figure, and let's think in terms of the gross income.

I would like to ask you if those members of the medical profession are using, let's say, a major portion of their time—70, 80, 90 percenton this program, or are they practicing other medicine? Is this the major proportion of their income, or is it only 20 or 30 percent of their income?

Mr. UNRUH. I think, Senator, probably that this constitutes a major portion of their income. In some cases it may constitute virtually all of it.

The only thing that I would add to that is that our indication is that exceeds the average income of those doctors who are not practicing in that field.

Senator RANDOLPH. Thank you, Mr. Speaker, and Mr. Manley.

Mr. Chairman, I think we might perhaps through staff research go into this matter. It reflects itself not only in this Štate, but I think we might study it more carefully in other States as well.

I am not attempting to

Mr. UNRUH. There are other cases, but I did not list or go into them in depth because they are sensationalizing-pointing to the practices of some individual doctors which are part of the attorney general's investigation in this State,* which is supposed to be out, I believe, the first of next week—so far as the results of that are concerned. But we would be very happy to communicate that to the committee.

Senator RANDOLPH. Thank you very much, Mr. Speaker.

Senator WILLIAMS. A most helpful statement, Mr. Speaker, and the part that you did not read, as we said, will be included in the record.

I agree with Senator Randolph that further study is indicated along many lines that you discussed. We will


off the record for a moment now. (Discussion off the record.) Senator WILLIAMS. On the record.

Mr. UNRUH. Thank you very much. I appreciate the opportunity to come before you. It is a very great problem, and I appreciate the opportunity to lay it before you.

Senator WILLIAMS. Thank you very much.

(Subsequent to the hearing, Senator Williams asked the following questions in a letter to Mr. Unruh:)

a 1. You will remember that there was some discussion of Governor Reagan's proposals to "cut out a block of recipients totally and completely.” Mr. Vanley gave as an example the “medically indigent,” a group of some 600,000 individuals. May we have additional details on this proposal and other proposed cutbacks ?

2. You noted that “ethical, reputable doctors . are doing their dead level best” to arrive at some kind of fee schedule that could be employed in Medi-Cal. Have you additional information on this point?

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*Letter and report from California office of attorney general, see app. 3, pp. 811-836.

3. May we have additional details on your comment that the relative's responbility section of Title 19 has made it "financially easy for children to place their parents in nursing homes?

4. Mr. Carel Mulder of the California Department of Health Care Services, said later in the day in regard to a fee schedule under Medi-Cal : "the physicians who customarily charge below the average will immediately move up to the average, and that physicians who customarily charge above the average will become disinclined to participate in the program, if it doesn't provide them with their usual fees." We would like to have your reply to this statement. (the full text of Mr. Mulder's testimony is enclosed, for whatever additional commentary you may wish to make. We are also sending to Mr. Mulder a transcript of your remarks.)

5. Your discussion of the CAL-MED proposal prompts three questions: a. How would CAL-MED mesh with the Federal Medicare coverage?

b. Is it fair to assume that more emphasis could be placed upon health maintenance, or preventive medicine, than is now the case-particularly among people from age 45 and up, when such health practices and services can yield maximum benefits?

c. Your testimony mentions several private organizations that offer comprehensive health services on a prepaid basis. Would such zations have the capacity to provide the services called for by CAL-MED? What incentives could be offered for organizing personnel into similar organizations? Could Federal resources be helpful here? (The following reply was received.)


Sacramento, Calif., November 22, 1968. DEAR SENATOR WILLIAMS: In response to your request of November 7 that I amplify on remarks I made before your U.S. Senate Committee in Los Angeles earlier this fall, I am enclosing answers to each question you posed. In addition, I am forwarding to you a copy of a report of the California Attorney General on our Medi-Cal program operated under Title 19.* This report was the one I alluded to in my testimony which had not then been published. It contains several illustrations of fraud current in our program, plus a wealth of other material and suggestions for improved administration. Since the report is perhaps the first of its kind to be attempted by any state operating a Title 19 program, you may wish to include it in your Committee's hearing record.

Suffice it to say that the Attorney General's report completely bears out my comments that some physicians and other providers of health care services in California are making exhorbitant and unjustified profits from the Medi-Cal program,

I hope this material is of use to you. If there is anything additional I can provide to assist your Committee please do not hestitate to let me know. Sincerely,


Speaker of the Assembly.

[Enclosure) 1. The correct number of medically indigent who would have been cut by Governor Reagan was 160,000, not 600,000. These are persons who are not quite as poor as those who are public assistance recipients and in the original Medi-Cal legislation were given a lower priority for services and continuation in the program. The Governor could have legally eliminated these persons from the program and threatened to do so unless the Legislature changed the Medi-Cal law. This threat was not considered seriously by the Legislature since the result would have been greatly increased county costs because the counties would have had to care for these persons.

The other proposed cutbacks by the Governor would have eliminated most of the non-required services except most drugs, emergency dental care and home health care. These were ruled illegal by the State Supreme Court. Other so-called cutbacks included a limitation of length of stay in private hospitals to eight days and a roll back of physician fees to the sixtieth (60) percentile of usual and customary fees. The latter program modifications are still in effect.

*See app. 3, p. 811.

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