4. Providing adequate hospital care for medically indigent persons is the joint responsibility of the State and localities. 5. Hospital facilities which were available were not evenly distributed or equally accessible to all counties and cities. 6. No State agency was charged with the responsibility or had the authority to provide hospitalization for the indigent. 7. Eligibility and admission requirements to hospitals were not uniform. It was found difficult to have an indigent person admitted to a hospital, “*** and frequently patients are sent a long distance to a hospital only to find that they cannot be admitted." 8. There was a great difference in the ability and willingness of local governing bodies to provide hospitalization for those unable to do so for themselves. 9. There was no uniform rate paid to hospitals by localities for their medically indigent. These and other facts pointed clearly to the need for a uniform law for the hospitalization of medically indigent persons, a law which would be made available, on a local option basis, to all counties and cities. WHAT DOES THE SLH PROGRAM DO-WHO IS HELPED ? The State-local hospitalization program makes hospital care possible to those of limited income who otherwise might not be able to obtain it. Persons who are certified as eligible to have their hospitalization paid for from public funds are admitted as ward patients. Whatever medical or surgical care is needed for SLH patients is provided without charge by physicians and surgeons who are members of the medical staff of the hospital. By reimbursing hospitals for care of the indigent, the SLH program is helping hospitals meet the staggering financial burden of caring for these persons, so that the cost of this care is not passed on to the private patients. The SLH program is helping to protect and maintain the health of the citizens of the Commonwealth by encouraging and assisting counties and cities to take care of those of their citizens who require hospitalization, but are not able to assume this responsibility themselves. It is also helping to provide financial stability for Virginia hospitals. The SLH program is a factor in keeping people off welfare rolls by making hospitalization available to them for corrective procedures. This restores many workers to gainful employment as taxpaying citizens. WHO PARTICIPATES IN THE SLH PROGRAM? Over 130 general hospitals in Virginia and bordering States participate in the State-local hospitalization program. Counties and cities may negotiate contracts with any general hospital that is willing to accept medically indigent patients in accordance with the provisions of the law. These agreements are negotiated between localities and hospitals on the basis of a flat, all inclusive, per diem cost. Of the 97 counties, 95 participate in the SLH program. Of the 32 cities, 31 participate. As of July 1, 1963, a maximum per diem rate of $27.32, excluding depreciation, was established to reimburse hospitals. In most instances this is "acceptable" to hospitals, but in many cases it does not cover the hospitals' operating expenses which averaged $29.36 per patient-day in 1962. ADMINISTRATIVE PROBLEMS IN THE SLH PROGRAM The law under which the State-local hospitalization program was established is one of the most progressive pieces of legislation of its kind anywhere. However, there are some problems which handicap the program, and which hinder it from functioning as effectively as it should. The following are some of the problems: 1. A lack of local matching money provided by some areas. 2. Insufficient State matching money. 3. Poor communicating between authorizing agents and hospitals. 4. Local policies which exclude certain types of cases. 5. A lack of uniformity in interpreting the SIH law. 6. A lack of uniform criteria for eligibility. 7. Difficulty in verifying eligibility-socioeconomic information. 8. Unwillingness on the part of some local governing bodies to recognize their responsibilities as they relate to their indigent residents and the SLH program. WHY MUST THE SLH PROGRAM BE EXPANDED? There is still a wide gap between the cost of care borne by the hospitals and the amount they receive as reimbursement. During 1962 it is estimated that Virginia hospitals lost a total of $10 million taking care of indigent persons for which they were not paid. When State or local funds are exhausted before the end of a fiscal period, hospitals frequently must admit emergency patients for which they will not be paid. This leaves hospitals no recourse but to pass some of this cost along to private patients. Before the close of the fiscal period ending June 30, 1963, 42 counties and 23 cities used all or had exceeded their 50-50 matching money. During the fiscal year which ended June 30, 1963, the State was only able to match $966,000 of its 50-percent share of $1,226,450. In other words, the State appropriation should have been $260,450 more to have fully matched the eligible local expenditures. A growing population requires that the SLH program be expanded through the appropriation of more State and local matching money in order to keep pace with the growth and development of Virginia. If Virginia is to meet the needs of its medically indigent persons, and help keep its general hospitals from financial disaster, more matching money, both from State and local sources, must be made available. SOME FACTS AND FIGURES ON SLH During the 17 years of the SLH program, over 170,000 medically indigent Virginia citizens have been provided with care and treatment in over 200 general hospitals throughout the Commonwealth and bordering States at a total cost of $27 million. Of this amount the State has appropriated $11,700,000 and localities $15,300,000. Physicians have given of their time, knowledge, and skills to perform 55,000 surgical operations; have cared for 90,000 medical, 16,000 obstetrical, and 9,000 diagnostic cases. It is estimated that the collective value of these services donated by physicians totals at least $17 million. During the fiscal year ended June 30, 1963, 10,923 persons were hospitalized under the SLH program costing a total of $2,699,661. During this same period Virginia hospitals lost approximately $10 million absorbing the cost of caring for the medically indigent for which they were not paid. WHY THE SLH PROGRAM IS IMPORTANT TO ALL VIRGINIANS Adequate payments for indigent hospitalization are essential to guarantee high standards and good quality of care for all citizens in hospitals throughout Virginia. The SLH program is important to the survival of general hospitals in every part of the State. Without the SLH program the cost of hospitalizing the medically indigent could place hospital care beyond the reach of the average citizen. If Virginia fails to meet its obligation to its indigent citizens through a sound, locally administered program which has the enthusiastic support of the Medical Society of Virginia, the State department of welfare and institutions, the Virginia Council on Health and Medical Care, the Virginia Hospital Association, and many other groups, then Virginia leaves the door open for a flood of federally financed, federally administered, and federally controlled programs, foreign to its own philosophy of States rights and free enterprise. This Special Report No. 3 was financed jointly by the Medical Society of Virginia and the Virginia Hospital Association, and was prepared by the Virginia Council on Health, and Medical Care. Thanks are due John L. Bruner, chief, bureau of hospitalization and homes for adults, State department of welfare and institutions, who compiled much of the material from which this report was written. WASHINGTON STATE MEDICAL ASSOCIATION, Hon. WILBUR MILLS, Chairman, House Ways and Means Committee, DEAR CHAIRMAN MILLS: Enclosed is a statement of the Washington State Medical Association on H.R. 3920 and on the Kerr-Mills Act. In essence, our statement documents the substantial growth since August 1961 of a wide variety of voluntary methods and plans for providing health care for the aging population of our State. The basic point we should like to make is that the older people of our country will receive the best health care when that health care is provided through a wide variety of voluntary plans and methods plus Kerr-Mills assistance for those comparatively few elderly who cannot qualify for such varied plans. We believe our experience with health insurance coverage for the elderly demonstrates that the "varied plans" approach is a dynamic and ongoing way to solve elder care problems. It is typical of America that we should combine our compassion, inventiveness, and business capabilities to develop the “varied plans" approach. It would be unwise and impractical to change our national policy by transferring health care into the public sector. In view of our experience in the State of Washington, it is not difficult for us to see how passage of H.R. 3920 would result in such a transfer, and, in the process, would completely destroy the "varied plans" approach which is responsible for our continuing to have the world's best medical care for all of our people, including the aged. Thus, we believe this is not a matter of H.R. 3920 versus the Kerr-Mills Act, but rather it is H.R. 3920 versus the whole host of methods and plans now in effect and constantly expanding under the power the American people are generating out of their compassion, their inventiveness, and their ability to "get the job done" within a system which produces the human energy to do the job, and to do it better than it has ever been done by any country in the world. The Kerr-Mills Act is doing an adequate job in the State of Washington when it is considered as a part-and small part at that of the "varied plans" approach. We have had our share of difficulty with the "selected statistics" of the agency which administers the act, and we are working vigorously to make it work better and we believe we will succeed in doing so. However, we always have viewed the Kerr-Mills program as only one of the many alternatives the private sector offers to solve the problem of health care for the aged. Again, we state the issue is not H.R. 3920 versus Kerr-Mills. It is H.R. 3920 versus the constantly evolving dynamic "varied plans" some of which are described in our statement, and others of which we will learn about as they develop; which they will do if they aren't thwarted in infancy by the passage of any bill which would tend to place the sole responsibility for furnishing medical care on government. Sincerely, ROBERT B. HUNTER, M.D., President. STATEMENT OF THE WASHINGTON STATE MEDICAL ASSOCIATION ON H.R. 3920 AND ON KERR-MILLS LAW IMPLEMENTATION In order to identify the organization making this statement, we should like to point out that the Washington State Medical Association was organized in 1889, nearly 75 years ago. Membership is voluntary and virtually all doctors belong. We have 3,343 licensed physicians who are in practice in the State, and 3,167 are members. We are organized into an association to assure continuing improvement in the quality and quantity of medical care received by our people. Since the time of its establishment in 1889, our association has worked hard and successfully in providing the people of our State with a wide variety of health services in the fields of medical care for the aged, children's and school health, rehabilitation, mental health, immunization, medical education, and medical research. We enter into legislative activity only when proposed legislation might influence directly the health care of our patients or when a program is proposed, which program would alter or change the basic concepts of the practice of medicine as we know them. 27-166-64-pt. 5-18 For 45 years our association has taken the leadership in our State in organizing nonprofit prepaid medical and hospital service plans, including special plans for the aged. We also have played a leading role in creating and servicing State government programs which provide medical care and other health services to our senior citizens who are recipients of old-age assistance, and, since October of 1960, to our senior citizens who have qualified for medical assistance to the aged under the Kerr-Mills law. During the summer of 1961, this committee heard the statement of Homer W. Humiston, M.D., of Tacoma, Wash., who at that time was president of the Washington State Medical Association. (See vol. 2 of the record of the hearings before the Committee on Ways and Means, 87th Cong., pp. 1014-18.) We should like to repeat here the conclusion of that statement, as follows: "CONCLUSION "We have had extensive experience in the State of Washington with both prepaid medical care and medical care furnished in kind by government. "We have learned that there is constant pressure from those covered by both types of medical care plans to make their plans more comprehensive. "We feel, consequently, that pressure would be exerted by recipients of care under a law such as H.R. 4222 for many more benefits than this bill provides. This pressure for more steps, beyond this first one, leads us to believe that the long-term effects of embarking on such a program as H.R. 4222 represents a more important consideration than the details of this bill. We are concerned that if the Congress accepts the principle of furnishing medical care in kind to other than the needy or near needy, we may well be on the way to a universal program of this type; a monolithic program. “We have learned from experience that medical care furnished in kind by Government is regulated medical care, and the quality of that care is adversely affected. Under such a program, we can anticipate trusses instead of operations for hernia, elastic stockings instead of vein-stripping operations. This type of regulation can be tolerated, and does exist, in our welfare program. However, this is a small island in a large sea of other ways of furnishing medical care. Consequently, such a regulated program is constantly up for comparison with the care others in the community are receiving. For the sake of the quality of the care, we need to preserve our present variety of ways of paying for medical care, including that for the aged. There are no other considerations with respect to medical care that are of more importance than the quality of care.” PROGRESS SINCE AUGUST 1961 Our experience in the State of Washington since August of 1961, demonstrates how we have progressed in following through on Dr. Humiston's statement that "*** we need to preserve our present variety of ways of paying for medical care, including that for the aged." The following positive accomplishments, we believe, would not have been possible had H.R. 4222 been passed, and we believe these forward steps would be obliterated should H.R. 3920 be passed. These accomplishments include 1. Since August 1961, 15,700 senior citizens have purchased “over-65” coverage which has been offered by 11 out of 23 of our physician-sponsored prepaid medical service bureaus. Of the remaining bureaus, six are developing "over-65" plans, and six are located in areas where there is no need not currently being met by other medical service plans or by private insurance companies. These plans have been developed at the urging of the American Medical Association, and under the guidance of the Washington State Medical Association. 2. Since August 1961, our association's committee on aging has been working cooperatively with the private insurance industry which has conducted merchandising campaigns for special health and accident insurance plans tailored to the health needs and economic status of the elderly. National averages and the rough statistics of the local insurance industry indicate that these programs have enrolled 20.000 additional senior citizens in our State. This number of new policyholders is in addition to the 85,470 elderly citizens who purchased their original coverage prior to August 1961. 3. Since August 1961, an additional number of elderly-approximately 19,500-have enrolled in the Blue Cross, closed panel, and other group plans. 4. National statistics (current Survey of Business, Office of Business Eco nomics, U.S. Department of Commerce), when adjusted for the aged, indicate that approximately 28,030 elderly in our State are able and choose to make direct cash payments for health services, out of their own incomes or savings. 5. Our association successfully supported an act in the 1963 session of the Washington State Legislature which permits private insurance companies to pool risks, premiums, and sales efforts in offering special "over-65" plans to Washington State senior citizens. These plans-and a continuation of medical service bureau offerings-will enable the 28,030 elderly, who now make direct cash payments, to obtain insurance coverage, if they wish to do so. 6. Since August 1961, our association has been meeting with employers and with labor unions and other employees' groups to give our help and assistance in the following proposals: A. Working cooperatively with labor unions, employers, and insurance companies to extend fringe benefits in such a way that employees will have health insurance policies truly paid up at time of retirement. A major breakthrough in this area will, we believe, do much to establish paid-up-atretirement health insurance as a practically universal policy and expectation on the part of all of the Nation's employers and employees. B. We are working with employers and employees to urge and to assist in the establishment of preretirement planning and counseling as a standard part of personnel management policies, on the basis that proper adjustment to all aspects of the retirement situation is essential to the maximum good health of the retired. This counseling will include, of course, consideration of how the employee will pay for his health care after retirement. 7. Our largest county medical society is located in King County which includes Seattle, Wash., and which contains approximately one-third of the State's population. The doctors of this large county have established a new voluntary method, administered and operated by physicians, and intended to make sure older persons get medical care without charge, or at sharply reduced fees. This plan has received much favorable comment, and is described in the attached article from the Seattle Times Our other county medical societies have similar plans in operation or in the process of development. (See attached typescript of reprint from the Congressional Record of Jan. 15, 1963: exhibit I.) Our vigirous activities in the field of prepaid health insurance for the aged in our State have sharply reduced the number of elderly who heretofore might have utilized this type of plan. Additionally, as we work on all phases of our voluntary health care plans described above, we see that this type of plan will one day be unnecessary. In the meantime, however, we are proud to have this plan in operation. It is known as the past-65 plan and it provides medical care to the elderly free or at reduced fees. The plan was originated by doctors, and doctors voluntarily perform the administrative work involved and do so in such a manner that the elderly of this area have been delighted with the program. AGED HEALTH CARE NEEDS BEING MET The continuing and improving programs described above demonstrate, we believe, that real progress continues to be made in meeting the health care needs of senior citizens in Washington State. Recent polls conducted by Congressmen I'elly, Stinson, and Tollefson, of our State, show our people now favor the variedplans approach which we believe has made such excellent progress not only in Washington State but throughout the Nation, under the leadership of the American Medical Association. As our wide variety of plans continue to spread, our people become more vigorously opposed to the social security approach. Our association believes the Congress will find that the people of our State want the aged medical care problem solved through a variety of voluntary plans, with Kerr-Mills programs and private humanitarian efforts filling the diminishing need for public assistance. We say diminishing need, because we believe the record shows that voluntary and free competitive market plans and programs will progressively provide for true health insurance contracts, paid up at retirement age, for all or nearly all of our people. During the time it takes to build up this paid-up-at-retirement system, the diminishing number of aged who are not covered, and who cannot pay for health services which are needed, can and will be cared for in our State under Kerr-Mills and through the efforts of private individuals and groups. That the number of needy aged in our State is dimin |