SOCIAL SECURITY: MEDICAL CARE FOR THE AGED AMENDMENTS

WEDNESDAY, AUGUST 12, 1964

U.S. SENATE,

COMMITTEE ON FINANCE,
Washington, D.C.

The committee met, pursuant to recess, at 10:10 a.m., in room 2221, New Senate Office Building, Senator Harry Flood Byrd (chairman) presiding.

Present: Senators Byrd, Douglas, Gore, Hartke, McCarthy, Ribicoff, Williams, and Carlson.

Also present: Elizabeth B. Springer, chief clerk; and Fred Arner and Helen Livingston of the Education and Public Welfare Division, Legislative Reference Service, Library of Congress.

The CHAIRMAN. The committee will come to order.

We are very pleased today to have Senator Jacob Javits of the State of New York.

Will you proceed, sir.

STATEMENT OF HON. JACOB K. JAVITS, A U.S. SENATOR FROM THE STATE OF NEW YORK

Senator JAVITS. Mr. Chairman, I am grateful to the committee for holding a hearing. As the Chair knows, I have been active in this matter for a long time, and have always been most careful to present my views to the committee before seeking to have them considered by the Senate.

I might say, too, Mr. Chairman, that I think we are very fortunate to have as a member of the Finance Committee to consider this problem the former Secretary of Health, Education, and Welfare, Mr. Ribicoff, my longstanding friend and colleague, because I think the expertise gained in the job that he had will be very valuable to all of us, and this, Mr. Chairman, stands whether or not he agrees with

me.

Mr. Chairman, I am testifying for the health care program with which Senator Anderson and I and others of our associates have been associated, and which got a very substantial vote in the Senate last time it was considered in 1962.

It may be recalled that the bill lost as an amendment to another social security bill by four votes.

Since that time, Mr. Chairman, a fine body of information upon this subject has been developed by a blue ribbon group of citizens headed by Arthur Flemming, who has already testified before this

committee, now president of the University of Oregon and himself a former Secretary of Health, Education, and Welfare, and including among its membership also another former Secretary, Marion Folsom, of my State, of Rochester, N.Y., as well as doctors, insurance company officials, and other distinguished Americans; and I believe that the report of this committee which, in my judgment, rendered an outstanding public service, should be commended to the Finance Committee in consideration of this whole subject.

I call attention to that again. I believe it is very adequately before the committee, and there is no point of putting it in the record, but it is the report of the National Committee on Health Care of the Aged which was issued in 1963 and of which copies are available and I shall be glad to make them available to every member of the committee.

Second, Mr. Chairman, I believe that a health care plan for the aging is more important than a 5-percent increase in social security benefits.

I wish to state that flatly to the committee.

I believe that the approximately $77 a year which the normal social security recipient family would get under the 5-percent increase is fine and I am all for it, but it does not begin to relate to their needs in terms of a medical care plan. I wish to associate myself with those on this committee who have expressed themselves strongly upon that subject.

Now, as a matter of practicality, I also agree that it may be just as well to give those who choose it an option to take the 5 percent or the medical care plan, but I think that is as far as I would personally go the option route, but no more, because I believe this is essential. For myself and my own constituency, I would not hesitate to vote to supplant the 5-percent increase with the medical care plan.

I believe the rest of this committee bill is extremely important, and I hope very much to support it. It has some very fine provisions including the opening of the social security system to doctors, which I am entirely in favor of

Also, Mr. Chairman, I hope the committee will bear with me if I refer to the fact that for many years I have been plugging, as the curbstone saying goes, for extending to age 22 the benefits of the child's insurance, the child survivor's insurance to those who attend school after they reach the age of 18.

I think this is a splendid provision in this bill.

Now, the medical care plan, Mr. Chairman, which I have laid before the Senate, together with my own associates-in view of the fact that Senator Anderson was not yet ready to join in a bipartisan effort on this very much the same plan, as he did in 1962-is incorporated as an amendment to the bill pending before the committee, amendment No. 1163, submitted on behalf of myself, Senators Case, Keating, Kuchel, Mrs. Smith, and Cooper, which has been referred to the Committee on Finance. There were some misprints and other minor corrections to be made in the amendment after its printing, Mr. Chairman, and as I shall submit it in the corrected form, I now submit to the committee as an exhibit the amendment to which I am testifying, and ask unanimous consent that it may be received and either printed or dealt with as the Chair wishes.

The CHAIRMAN. Without objection.
Senator JAVITS. I thank the Chair.

Now, in a word, the amendment which I have proposed is in two parts, and it is distinguished from the so-called administration approach by the fact that it is in two parts. The second part is the distinguishing feature of the amendment proposed by my associates and myself.

The first part provides for a hospitalization insurance program to all over 65 on a social security-financed basis, and gives a basic 45-day hospitalization and very much the same provisions which we have become accustomed to considering as part of the administration's plan. The difference between my own plan and the administration plan is that ours has no deductible, such as the $90 deductible in the administration's plan.

Secondly, my proposal carries a flat 45 days of hospitalization, and it is viable on its own financing because we have increased the social security tax to an aggregate of 10.16 percent, which we are advised by the Actuary of the Social Security Administration, Mr. Myers, is necessary in order to carry this plan.

Now, I might say to the committee that if the committee should think favorably of including such a plan in the bill, that it is entirely possible to trim the 45 days to 40, 41, 42, or 43, or some reduction in nursing home benefits, and thereby bring the increase in the social security tax down to the magic 10 percent, which has been so much discussed, or even less. Upon the actuarial experience, the aged requirement for hospitalization can be reasonably and fairly met by a 40-day standard as well as by a 45-day standard.

But the reason I have stuck to the 45-day standard is that this is the pattern that Senator Anderson and I set, and this is the pattern which seems to be the accepted one as a normal one for hospitalization if we are to have a medical care plan at all.

Therefore, in order not to change the rules in the middle of the debate, I have kept to the 45-day proposition.

But I emphasize that the 45 days is not a magic figure and that it can be adjusted, and that by adjusting it you deal with the question of costs.

But if you take the plan exactly as we have designed it, that is Senator Anderson and I, 2 years ago, and which substantially carries over into now, it is a plan which will require an aggregate maximum tax of 10.16 percent.

It provides for 45 days of hospital care, and up to 180 days of skilled nursing home care or 240 days of home care following treatment in a hospital.

Now, it is not 100 percent like the administration approach, but it is so substantially like it that I did not wish to take the committee's time to go into the refined details which the committee can very easily ascertain from its own staff analysis.

It is the second part of the bill, Mr. Chairman, that I would especially like to call to the attention of the committee because it represents a unique factor which my associates and I have for such a long time tried to build into any medical care plan.

This part deals with the private sector, and it opens an opportunity to the private sector on a national 65-plus basis.

May I repeat that, because it is the whole key to this idea? It opens to the private sector on a national 65-plus basis, an opportunity to provide insurance for health over and above the basic Government coverage for the things which the Government does not cover, and that at a very reasonable premium.

The reason that the premium becomes reasonable is because it is applied universally, it is free of tax, and it involves an across-theboard actuarial risk which very materially cuts down its costs, including costs of promotion, costs of selling, and the other costs which are normally incident to any effort for health coverage, even nonprofit health coverage.

Now, the bill then would effectuate this by allowing the formation of federally chartered nonprofit corporation with subsidiary regional corporations in which private insurance and group service company can participate by membership in those associations as insurers of a uniform basic plan at a uniform low rate with regional variations, both in premium and in benefits, depending upon the needs of particular regions.

This would be available to anyone over 65 who wanted to buy it on a voluntary basis. The estimated cost is $2 a week per person covered and it, therefore, should be brought well within the financial reach of 80 percent of our older citizens who can afford to pay roughly a hundred dollars a year for the difference between basic Government hospital coverage and complete coverage.

It would be complete, Mr. Chairman, and the testimony of the Committee on Health Care of the Aged, which, as the committee, this committee, will see from examining-its membership, a very expert body, backs up that statement-covers expenses for physicians' and surgeons' care, diagnostic and surgical services, drugs, and appliances. Now, Mr. Chairman, this is extremely important because all the testimony of the geriatrics experts and the doctors, and so forth, say one thing beyond anything else and that is, keep the older person ambulatory. I held an important seminar at Columbia University, College of Physicians and Surgeons, which has been made available to all my colleagues and perhaps again, Mr. Chairman, I ask unanimous consent that I may make that report available to the committee. (The matter referred to is as follows:)

CONFERENCE ON THE "ROLE OF THE FEDERAL GOVERNMENT IN PROBLEMS OF HEALTH AND MEDICAL RESEARCH," SATURDAY, MARCH 12, 1960, 9:30 A.M.

Senator Jacob K. Javits and staff:

Mrs. Jacob K. Javits.

Mr. Allen Lesser.

Columbia staff:

CONFEREES

Dr. H. Houston Merritt, dean, College of Physicians & Surgeons, and vice president in charge of medical affairs, Columbia University.

Dr. Willard C. Rappleye, dean emeritus and vice president emeritus in charge of medical affairs, College of Physicians & Surgeons.

Dr. Aura E. Severinghaus, associate dean, College of Physicians & Surgeons, and professor of anatomy.

Dr. Melvin D. Yahr, associate professor of clinical neurology.

Others:

Dr. John Bourke, hospital survey and planning committee.
Dr. Francis Browning, University of Rochester Medical School.

Mr. George Bugbee, president, Health Information Foundation, Inc.
Mr. Winslow Carlton, vice president, Group Health Insurance.
Dr. Martin Cherkasky, director, Montefiore Hospital, New York City.
Dr. John E. Dietrick, dean, Cornell University Medical College.

Dr. Marcus D. Kogel, dean, Albert Einstein College of Medicine, New York City.

Mr. McAllister Lloyd, chairman of the board, Teachers Insurance & Annuity Association.

Dr. Aimes C. McGuinness, executive secretary, New York Academy of Medicine.

The Honorable George P. Metcalf, State senator.

Dr. David Seegal, professor of medicine, college of physicians and surgeons.

Dr. Martin R. Steinberg, director, Mount Sinai Hospital.

Dr. Thomas Thacher, superintendent of insurance, State of New York.
Dr. A. W. Wright, Albany Medical School, Albany.

Dr. Frederick D. Zeman, chief of the medical services, Home for Aged & Infirm Hebrews.

The problem of health care for those 65 years old and over is distinct from the problem of health care for those under that age; Federal assistance is necessary in handling any health care program for the aging; and any such health care program should be voluntary, with contributions by the beneficiary as well as by State and Federal Governments. These are the major conclusions that may be drawn from the papers and discussions of those who engaged in the conference.

Discussion-1

The first paper was delivered by Dr. Frederick D. Zeman, chief of the medical services of the Home for Aged & Infirm Hebrews, who spoke on medical preventive services for the aged. He said that the problem of caring for the aged so far as medicine is concerned starts on the day the individual is born, and stressed the need for retraining professionals so that they could handle the problems that older people present. He described the advantages of a geriatrics institution, the specialized equipment used by such an institution as contrasted with the hospitals. There were no operating rooms, no X-ray laboratories, etc., but the geriatric institution could provide better postoperative care than a general hospital and had many advantages in caring for those 65 and over.

Zeman emphasized that the problems of care for those 65 and over are quite different from those we usually anticipate. He pointed out that of the 100,000 or more who are institutionalized in New York State mental hospitals, many are over 65. At Central Islip, for example, more than 50 percent are 65 years old and over. However, he said, these 50 percent were not necessarily hopelessly insane; their mental illness is part of the whole process of aging, and with proper care they could be taken out of this kind of an institution.

Prevention of disease among the older people is part of the larger picture of preventive medicine, and begins long before the individual has reached the age of 65; a dynamic aggressive approach to the problems of preventive medicine with particular reference to the early detection of chronic illnesses before they become obvious in the aged is what is needed. These preventive services are extremely important.

Dr. Martin Cherkasky, director of the Montefiore Hospital in New York, pointed out that the older patients primarily suffer from chronic illnesses as contrasted with the acute character of the illnesses that strike younger people. He said it is impossible to provide adequately for the older people because there is a wide gap in the amount of knowledge that physicians have about treating them. One should start in preventive medicine long before the patient reaches the age of 65. General medical care must exist first if the program for the older patients is to be considered.

Dr. Cherkasky said that to prevent chronic illnesses, one must be able to detect them at a very early stage. Usually the onset of a chronic ailment is insidious, the patient doesn't even know that he has it. The patient, therefore, must have "easy" access to physicians if chronic illness are to be checked in