Medicare will be “the most sweeping new departure in American Social legislation since Roosevelt’s Social Security Act thirty years ago.” That description, culled from one of the many news accounts of House passage of the bill, already has deadened into a cliché. All analysts have accepted the fact of medicare’s great impact, but very few have bothered to delve into the details of that impact. How will America and medicine change after medicare?

Only a fool would try to predict this with certainty. A bill, especially one 296 pages long, has byways and tremors and lurking commas that can twist society in a manner no one anticipates. Yet some trends can be spotted ahead of time. Medicare has the potential to confirm doctors’ fears that federal pressures will change the way they practice medicine. It also has the potential to stuff a financial bonanza into the pockets of America’s fat-cat doctors.

The bill, which is sure to become law some time this summer, states that nothing in it  “shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided.” Yet the bill also exacts standards of institutions that take part in the program. While these standards are not, at least initially, to be federally administered, they do amount to a form of federal influence and pressure for improvements that medicine has not accomplished itself.

Every hospital under medicare would have to follow the lead of the most progressive hospitals, and appoint a committee to review cases periodically, to see that no doctor was keeping his patient in the hospital too long. This is a standard not now required for accreditation by the American Hospital Association and one that most doctors resent. These utilization review committees - made up of hospital physicians, nurses and social workers - would be set up to insure efficient use of the hospital and to guard against the tendency of some patients - with their doctor’s approval - to stay in a hospital for as long as their insurance will pay for the bed. The bill does not detail the criteria a utilization review committee must use, but the mere inclusion of the provision creates a mechanism for checking on the judgment of doctors.

Another provision of the bill allows a doctor to transfer a patient no longer in need of intense hospital care to a nursing home for twenty to eighty days of free care, and this may prove a boon to the overtaxed hospitals. Some hospital people feel the bill errs by requiring the doctor to put the patient in a hospital first; they believe the doctor should have the right to send the patient to the nursing home initially if he feels that that is the best way of handling the illness. There is some expectation that doctors will solve the problem by putting a patient in a hospital for the allowed minimum of three days and then transferring him to the nursing home. This would be a clear waste of money - since hospitalization costs are four times as high as those of nursing homes.

Still a third provision in the bill allows federal pressure on medical practices. Ironically, this was put into the bill by Rep. Wilbur Mills (D., Ark. ), chairman of the House Ways and Means Committee, at the request of the AMA, which has screamed for years about the danger of federal interference. The provision prohibits any allocation of the hospitalization benefits as payment for the services of the anesthesiologist, pathologist, radiologist or other medical specialist attached to the hospital. Each of these doctors would have to bill the patient separately.

This prohibition - which may be deleted in the Senate - would represent a victory for the AMA in one of its long-time feuds with the American Hospital Association. The AHA wants hospitals to serve as comprehensive medical centers ready to treat patients in an organized, economical, efficient way. The AMA, on the other hand, wants hospitals to serve as workshops in which individual entrepreneur physicians ply their trade. In recent years, the trend has favored the AHA, and most radiologists, pathologists and other specialists have accepted an arrangement that put them under hospital administration and provided them with a percentage of the charges.

Medicare - as passed by the House – would discourage hospitals from making arrangements that would draw these specialists into a comprehensive medical center. “In the long run.” says Eugene D. Morris. administrator of Edward Hospital of Naperville, Ill., “it would reduce the hospital to little more than a nursing home.” Sen Paul Douglas (D., Ill.) recently gave Congress an example of what might happen if a pathologist was a private entrepreneur and not under the administration of the hospital.

“At the present time, the hospital pathologist can go into a medical staff meeting and tell Dr Feesplitter that 25 per cent of the tissue he removed was normal. The pathologist has this freedom to criticize because he is paid by the hospital. and his responsibility is to the hospital. This freedom of action would be seriously impaired by the present House provision. The pathologist would be dependent upon referrals from physicians such as Dr Feesplitter for his income.”

The provision also would create an administrative quagmire as every specialist in the hospital presented his separate bill to the patient and as the hospital figured out the percentage of laboratory charges, for example, to be billed by the pathologist. “I have seen an estimate made by the director of a major hospital in the East,’’ says Sen. Frank Moss (D., Utah), “that radiologists on that hospital staff would have to issue about 3,000 separate bills per month.”

Besides these present sources of federal pressure, the bill also has devices to increase that pressure in the future. If, for example. the federal government became dissatisfied with the work of the utilization review committees, it is conceivable that the government could dictate the criteria that the committees must use. The bill sets up a vehicle for such decisions - the National Medical Review Committee, comprising nine representatives of the medical fields, including at least five doctors. “It shall be the function of the committee,” the bill says, “to study the utilization of hospital and other medical care and services with a view to recommending any changes ’’ The committee’s annual report could effect significant improvements in the program and in the way medicine is practiced.

Some informed opinion has already urged the federal government to use medicare as a club to pound some medical sense into hospitals and doctors. Dr. Frank Furstenberg, medical director of Smai Hospital’s outpatient department in Baltimore told the House Ways and Means Committee: “The fund itself should not simply become a vendor-paying agency, as indeed, in many instances, the Blue Cross has been... Now when we step into the program of the use of federal funds, these funds should be, it seems to us, used in such a fashion that sensitive service will be given, that there will be standards for the services, and that this should be kept under a public agency’s authority."

The extent to which the government follows Dr Furstenberg’s advice may depend on two factors: whether Blue Cross becomes a medical behemoth administering the program for the federal government, and whether the AMA has enough power left to resist new federal controls and pressures.

The bill encourages the Secretary of Health, Education and Welfare to contract much of the administrative work of the medicare program to private organizations. Blue Cross would like to do the whole job. Walter J. McNerney, president of the Blue Cross Association, told the House Ways and Means Committee at the executive hearings this year that “the medical profession is still quite ‘antsy’ about ... manipulation from the outside. This same profession, although It doesn’t always welcome it, is at least fairly used to dealing with an agency such as ours. . . .” But, as Rep. Martha W. Griffiths (D., Mich.) and Dr. Furstenberg have pointed out, Blue Cross is so closely tied up with hospitals and doctors that it perhaps would not engage in sufficiently stringent regulation. Mrs. Griffiths, noting that 17 per cent of Blue Cross board members were doctors, said: “I think it would be very difficult to get into the situation where you are having doctors reviewing the prices charged by doctors and in which they are profiting. There should be someone who is far removed from any possible statement by the public that doctors are reaching into the taxpayer’s pocket and getting rich.” Federal pressures on American medicine would be lessened if Blue Cross acts as a buffer between the federal government and organized medicine.

The American Medical Association has so tarnished its image in the savage battle against medicare that it may find no one willing to listen to another outcry against federal encroachment. The AMA may have screeched wolf too often. At the end of the battle in the House, the AMA was even isolated from all Republicans but one on the Ways and Means Committee. In fact, the AMA performance at the final committee hearings was so childish as to defy belief. Dr. Donovan Ward, AMA president, marched in waving a clipping from the St. Louis Globe Democrat about a “still secret study” which showed that the medicare fund would be depleted by 1976. Later the committee discovered that this “still secret study” - based on lower taxes than the bill provided - had been prepared by the Social Security Administration and handed to an AMA representative who had asked for it. The AMA then evidently planted it with the Globe Democrat.

Medicare will have impact on areas other than the role of government in medicine. One is the wealth of doctors. Despite the prolonged bad temper of the AMA, the bill’s combination of compulsory hospitalization insurance and voluntary medical insurance hands benefits to doctors where it pleases them most - their pocketbooks.

Since many more people over 65 will be paying customers rather than charity patients, their improved chance for care will mean money for doctors. Every benefit provided by the bill - either in the hospitalization or medical programs - hinges on some certification by a physician. The bill will not pay for diagnostic services, hospitalization, nursing-home care or homecare visits unless a doctor has authorized them. Each authorization means a fee.

No one yet has estimated the size of the bonanza that medicare promises for America’s doctors, but two figures hint at it. The total cost of health care for Americans over 65 was more than $5 billion last year. Blue Cross, government and private insurance witnesses have told the House Ways and Means Committee that the bill surely would increase the use of hospitals by the aged, estimates vary from 10 to 40 per cent in the first years.

The bill’s emphasis on nursing-home facilities should encourage the construction and staffing of these facilities. Public Health Service figures showed that the U.S. had only 325,000 acceptable nursing-home beds last year to meet a need for 840,000 beds. In short, even without the stimulation of medicare, the United States had less than 40 per cent of its needed beds. Under the bill, certain standards are set for nursing homes. Perhaps the most important: every home must have twenty-four-hour nursing services, with at least one registered nurse on duty at all times. The nursing-home association says only half the nation’s 10,000 skilled nursing homes would qualify now.

Finally the bill may encourage Americans under 65 to push for health insurance for themselves. The history of all social legislation is evidence that pressures for expansion build up quickly. During the medicare debate itself, Rep. George M. Rhodes (D., Pa.) suggested that Congress reduce the social security retirement age from 65 to 60.

One way of financing expanded benefits was suggested by Sen. Robert F. Kennedy (D., N.Y.) in a recent speech to the National Council on the Aging. He proposed a “limited use of general revenue financing for the [social security] system.” He said it was “no longer the case” that “the worker gets out during the years of retirement what he put in during the working years.” Kennedy said that “we are now providing benefits to deserving people who properly were not asked to pay for them. But we are doing so out of payroll contributions of others.” Kennedy predicted that general tax revenues will go up $30 billion by 1970, and “I think we can certainly afford to contribute some of this to social security.”

When the social security rate gets higher and Americans begin to realize they are paying a tax and not an insurance premium, there may be less compunction about using the general tax revenues to pay for health insurance and social security benefits. In fact, some use of general revenues has started already: the government, for example, will contribute $3 a month toward every enrolled person’s voluntary medical insurance.

Medicare may have its most profound impact on American society if its pressures lead to the day when the federal government uses general revenues to pay for more pensions and health insurance than it does now. Financing these through social security alone follows the principle that every man has the right to help himself. Financing these through general revenues as well recognizes that self-help alone cannot do an adequate job and that every man has the right to expect his government to help him to a pension and health insurance. That, in fact, would be a “sweeping new departure in American social legislation.”

Medicare: The Major Provisions

BASIC HOSPITALIZATION COMPULSORY

Benefits:
‍1. Up to 60 days hospitalization for each illness (patient pays $40 deductible)
2. Post-hospital care at nursing home for 20 to 80 days (depending on length of hospitalization)
3. Out-patient diagnostic service (patient pays $20 deductible)
4. Maximum of 100 visits by home health services

Financing:
‍Payroll tax of 0.35 per cent of social security wage base ($5,600) in 1966
The rate increases to 0.80 per cent by 1987 and the wage base to $6,600 by 1970

MEDICAL INSURANCE VOLUNTARY

Persons become eligible at 65 and if they wish to join must do so within three years of eligibility

Benefits:
‍Pays doctor’s fees, home health services, psychiatric hospital services and other miscellaneous medical and health services (patient pays annual $50 deductible, plus 20 per cent of balance)

Financing:
‍Those enrolled pay a premium of $3 a month, which is matched by the federal government

Stanley Meisler is a frequent Nation contributor