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3. A large number of people needed hospitalization but were financially unable to provide it for themselves.

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 SLH 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.

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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 the 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.

NOTE. 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.

STATEMENT OF THE ILLINOIS STATE MEDICAL SOCIETY REGARDING THE ADMINISTRATION'S PROPOSAL INVOLVING MEDICAL-HOSPITAL CARE FOR THE ELDERLY The Illinois State Medical Society, founded more than 125 years ago, is comprised of over 10,000 physician members. Its main purposes are to promote the science and art of medicine; to elevate the standards of medical education and to protect the public health. In its effort to maintain the highest standards and quality of medical care this country has ever known, the Illinois State Medical Society opposes medical care coverage under social security now being discussed before your committee.

Such legislation would result in poorer and less satisfactory health care. Specifically, it represents the beginning of socialized medicine; it would provide medical care to an entire segment of the population regardless of need; its compulsory features would augment the coercive power and influence of the Government over private citizens; it violates the basic concept of OASI by providing services rather than cash benefits; and regulations affecting the quantity and quality of service rendered would be determined in Washington. A centralized Federal program of financing medical care under social security is unnecessary. Existing voluntary and local governmental programs are meeting the need.

POLICY ON CARE OF THE AGING

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The Illinois State Medical Society has demonstrated its concern for the health care of the aging by conducting a very active program on the aging. The society has maintained an active committee on aging for many years. activities, interest, and concern are largely summarized in the 12-point policy statement issued January 1961 appended to this report.

In it, the society reaffirms its position that no patient, aged or otherwise, need go without medical services because of inability to pay. Further, that it is striving to improve medical and related facilities and services for the aging through various means of communication.

The latest developments of the society's public information program include television, newspaper, and radio series pertaining to health care, which are informative not only to the public in general, but to the aging in particular.

In cooperation with the Illinois Department of Public Health, the society coordinated the emergency medical self-selp training course which was televised each week and had over 10,000 individuals enrolled of the estimated 200,000 viewers.

Our monthly scientific medical journal has contained articles on such vital topics as "Kerr-Mills in Illinois" and health insurance plans for the over 65. The society has been highly commended by governmental and private agencies for its postgraduate programs on the rehabilitation of the stroke patient carried out under the direction of the society's committee on aging. Demand for the program was so great, the society produced a film entitled, "Stroke-Early Restorative Measures in Your Hospital" in cooperation with the department of public health. Copies have been purchased by government agencies, scientific organizations, medical libraries, departments of public health, and hospitals.

COMMUNITY HEALTH ACTIVITIES

The society works with numerous community groups in developing services and facilities on behalf of the aging population. Many community groups in the State have stepped up their activities in the health and hospital fields, particularly with respect to the aging. One specific example is a project at Hopedale, Ill., involving a residence for elderly people, known as Hopedale House. This has been added to the Hopedale complex of medical facilities formerly consisting of a hospital and nursing home. The project was financed on a voluntary basis through the sale of bonds to residents of Hopedale and nearby communities. This is an excellent example of what can be done for the aging without tax support.

There also are seven organized home care programs in Illinois. Three of the four programs in Cook County and one of the three downstate programs are operated by nonprofit community hospitals. Two of the downstate programs are operated by nonprofit groups through voluntary community financing. These programs enable many of the aged to receive needed medical services in their homes without expensive bureaucratic organization and without the need for hospitalization. The Illinois State Medical Society's Committee on Aging continues to encourage and sponsor the development of more organized home care programs. Such voluntary community effort would be impeded by the Government's willingness to institutionalize patients under arbitrary rules and regulations promulgated in Washington, without regard for patient requirements and community needs.

Countywide home nursing service has been jointly developed by the local health department and the Visiting Nurses' Association in three Illinois areas. These efforts are good examples of how voluntary effort can be supplemented by local government to provide health services when the local community cannot do the whole job. Visiting nurses' services are available in many counties in

Illinois and are financed by voluntary effort. In most cases this is done through the United Fund. Cooperative action of this sort, at tremendous tax savings to individuals, is possible under a voluntary system as we know it today.

Incentive to continue and expand such activities would be reduced, if not destroyed, to the detriment of the public if Government medicine came into existence through the enactment of pending legislation.

SUPPORT HEALTH INSURANCE FOR AGING

We continue to work actively with the private health insurance industry to improve coverage in all possible ways for those over 65.

A special medical plan for the aged was developed by Illinois Blue Shield in 1959. The Blue Shield "Over 65 Plan" was broadened and remarketed in Octo ber 1962. Membership rose to a new high. The addition of new subscribers now gives Blue Shield in Illinois a total membership of 225,000 aged individuals. The fact that over 7,000 Illinois physicians have signed the Blue Shield participating physician's agreement to accept reduced fees as payment in full for services rendered to beneficiaries, once again indicates that our system of voluntary health care is responding with vigor to meet the needs of the over 65. The health insurance industry, supported by organized medicine, has shown remarkable progress particularly in covering those over 65 who need and want such coverage. In fact, the proportion of the aged in this country with health insurance has more than doubled since 1952. In terms of absolute numbers, the 26 percent insured in 1952 represented only slightly over 3 million individuals whereas more than 10 million or 60 percent of the over 65 are covered today.

STATUS OF ILLINOIS AGING

The University of Illinois, in 1961, conducted a survey of the aged in Decatur. The results indicated that 68 percent of the over 65 had health insurance. Of those not covered, 13 percent indicated that they did not want to be. And 96 percent reported no unmet physicians' needs due to financial reasons.

Of the 995,000 individuals in Illinois over 65, it is estimated that 225,000 are employed or are the wives of employed persons; an estimated 100,000 receive veterans' and other types of Government pensions such as railroad retirement or civil service; 109,000 are estimated to be receiving private pensions or annuities: and 50 percent are estimated to have some income from assets in the form of interest dividends and rent. Estimates are based on official U.S. Government data. About 558,000 are recipients of OASI; 62,000—only 6.3 percent-receive old-age assistance benefits-a percentage significantly below the national average of 12.9 percent. The University of Illinois study of senior citizens indicated their median income to be about $4,000 per year; the 1960 census indicated their income to be over $3,700-more than a twofold increase since the 1950 census. Approximately 12,000 older citizens in Illinois are inmates of the 12 Illinois mental institutions; others are inmates of prisons and State and Federal institutions where they receive their medical care from the government. An undetermined number receive medical care from the Veterans' Administration medical care programs for retired military personnel and their dependents; some are in homes for the aged financed by religious organizations, fraternal orders, and other groups where medical care is provided.

These data support the position that a large percentage of the aged in Illinois are able to provide for their medical care and that their economic position points to a constantly improving situation. Yet, the pending legislation postulates a future where all changes in the economic status of the aged are adverse.

Such legislation, if enacted, would result in needless waste and inhibit the future progress of voluntary organizations operating in a free society. Furthermore, such legislation would make medical care available to all over 65 as a matter of "right" resulting in less care for those in need than it otherwise would be. With high levels of taxation it is not possible to combine more benefits for those in need with the principle of equal benefits for all. Public aid programs in Illinois, available to qualified applicants, are designed to help those in actual need.

PROVISIONS OF KERR-MILLS PROGRAM

Since August 1, 1961, qualified applicants have received hospital services without limitations on length of stay, including all inpatient hospital services and drugs without limitation; physicians' services while hospitalized (except in Cook County where such services are available to needy patients at no charge in

the Cook County Hospital); and physicians' home and office calls for a 30-day recovery period following hospitalization. Single persons 65 years of age or over with annual incomes of $1,800 or less, and couples with $2,400 or less, may qualify for payment if they possess not more than a like amount of liquid or marketable assets. The homestead and contiguous real estate, regardless of value, and limited life insurance are exempt from these calculations.

ABOUT 10,000 INDIVIDUALS BENEFITED

During the first 24 months of operation about 10,000 persons over 65 have received care under the Kerr-Mills program with payments for individual patients ranging from a low of $4 to a high of $5,200. Of the initial $20 million appropriation for the Kerr-Mills program for the biennium ending June 30, 1963, just under $6 million had been paid out.

To provide for a sharing of responsibility, the original Kerr-Mills law in Illinois required the recipient to pay an amount equal to 10 percent of his income toward his medical bill. Kerr-Mills medical assistance covered the balance for qualified recipients.

At our request the 1963 State legislature, by amendment, changed the provision for deducting 10 percent of income in establishing eligibility, to deducting a portion of income or assets in accordance with standards prescribed by the Illinois Department of Public Aid. This has now been liberalized to where the first $1,200 of income is exempt for qualified individuals and the first $1,800 is exempt from contribution for married couples. The amendment also changed the amount of life insurance exempted as a resource from $1,000 face value to "life insurance having a cash value of $1,000 or less."

BENEFITS ADDED, IMPROVED SPIRIT OF COOPERATION

At the conclusion of 23 months' experience with Kerr-Mills in Illinois during the 1961-63 biennium, steps were taken to evaluate the program. Numerous joint meetings were held with the department of public aid to consider expansion of the benefits offered to recipients under the program within financial limits.

We are particularly happy that the Kerr-Mills program has been extended to provide for the cost of drugs during visits within the 30 days' posthospitalization. In addition, the extended program includes up to 90 days' posthospitalization nursing home care including physicians' services and drugs connected with such care; or up to 90 days' rehabilitation nursing home care also including physicians' services and drugs.

Since the Kerr-Mills program was first implemented in Illinois, administrative changes within the department of public aid have led to a greatly improved spirit of cooperation between its administrators and the purveyors of medical services. A firm feeling now exists that all medically needy aged citizens in Illinois can be cared for adequately under this program. This rapport has been developed with the cooperation of the Governor of Illinois and his staff.

OTHER WELFARE PROGRAMS

In addition to Kerr-Mills, Illinois pays for comprehensive medical care for the indigent of all ages and not for just those over 65. This program, referred to as aid to the medically indigent (AMI), is operated at the township level and is financed through funds from general assistance in the State without financial assistance or controls from the Federal Government. The AMI program may finance services for the indigent aged that are not presently provided by KerrMills, thereby dovetailing the two programs.

We also have Cook County Hospital, where patients may receive care who are unable to pay for it. Old-age assistance recipients discharged in 1962 received a total of 51,052 days' care in Cook County Hospital.

The Illinois State Medical Society actively cooperates with the Illinois Department of Public Aid in the operation of all medical programs by providing active advisory committees to the medical division at the State and county levels. These committees meet regularly to recommend standards of quality, quantity, and cost of the various programs.

The existing public programs provide medical care to those over 65 as well as those under 65 who need and want it. They are administered locally and are economical. The programs that we have in existence will maintain rather than discourage high-quality medical care and can be expanded, as we have experienced with Kerr-Mills, to meet the need when the need is indicated.

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