Dr. RICHARD M. FREEMAN. Not all patients can be trained, unfortunately, for home. In certain areas, you see, there may be one dialysis unit in a 50-mile radius, so that patient no longer has a choice. If the unit closes in that area, the patient would have no choice.

Mr. PICKLE. Mr. Bland.

Mr. BLAND. If I could comment further. St. Christopher's is the only pediatric end-stage renal disease facility in the Delaware Valley. That is a very large metropolitan area, and I can tell you unequivocally and categorically if the proposed regulations are implemented, which we perceive as giving rise to a significant financial deficit for our program, we would have to make a very difficult decision, and that difficult decision might be to close our program.

If we close our program, there are no other children's centers in our area for transplantation or dialysis. You cannot just take a child and move him to an adult center. It is not a mechanical process. It is a very complex physiological service and need which is being met by the pediatric center. So therefore, if we close it is a problem.

Mr. PICKLE. Is the panel asking for more funds in the overall program or just a delay in the issuance of the rule so that we might have more consideration given to the existing facilities?

MS. DIENER. This is John Newmann, the president of our association. He has just arrived and I would like to introduce him.

Mr. NEWMANN. Our written testimony is based upon our concern that all patients have access to care. As we pointed out, the HCFA analysis currently shows that 46 percent of the hospitals' current costs and 28 percent of the independent centers' costs will be above these proposed rates.

We are suggesting that the proposal be withdrawn and redone, and we have made a number of suggestions as to how this could happen. A very important one is bringing the cost data up to date from 1977 to the present due to inflation and asking HCFA to not assume, but to insure that those centers which are at risk will be able to have their patients treated either in their centers or nearby.

And the assumption has been made, but the assurance has not been given. There has been no data analysis of those centers who are at risk. What is their home patient population, will they be able to absorb the deficit cost? And we feel it would be more responsible to know that before implementing the rules.

Mr. PICKLE. Well, I can understand that.

Under the existing rules with which we have operated in, let us say, the last 5 years, have there been any increases in reimbursements for either hospitals or physicians who treat the patients? Have fees stayed the same while costs kept rising?

Dr. RICHARD M. FREEMAN. The physician reimbursement is largely a State factor, and it has not increased.

Mr. PICKLE. In what period of time?

Dr. RICHARD M. FREEMAN. In almost 10 years. There has been a very slight increase, but essentially none. Hospitals, some have been approved for an exceptions process, and if so they may have had an increase over that period of time. That is the data we are not sure about.

Proprietary facilities have not had an increase for some time. So in general, the cost of the program per patient has gone down rather than up. The problem has been that the program has been successful. We have been saving lives and we have 60,000 people who are alive now. So the problem has been that we have patients alive. No one anticipated 50 years ago that 70-year-old people would thrive on dialysis.

Mr. PICKLE. And it costs the same.

Dr. RICHARD M. FREEMAN. And it costs the same. But their lives are as valuable as anyone else's.

Mr. PICKLE. Thank you, Mr. Chairman.

Mr. BLAND. One more comment about the adequacy of current reimbursement. As I indicated in my testimony, we have a half million dollars still outstanding for care to end-stage renal disease patients. Now, this is a result of a cost that is in excess of what they call the screen, or $138.

Our costs are about $300. I have described extensively why pediatric hospitals have higher costs. Despite the fact that some of those costs tend to be recognized through the exceptions process, the exceptions process currently is a very cumbersome and lengthy one. When we have a half million dollars that has not been paid to us, we have to go to somebody else to give us that half million dollars to meet our operating needs in the current year. We cannot wait year after year after year for a lengthy appeals process.

So my comment is twofold: The current process is grossly inadequate; and that which is being proposed is grossly inadequate.

Mr. PICKLE. On the flip side of that argument, the program is costly, but we have saved lives. Yet the administration is proposing rules to try to find a different way to get at the cost because of the tightness of money. They are not trying to not offer solutions. They are just trying to cut costs.

You are just saying that which is proposed is not workable and would hurt your operations.

Mr. BLAND. That is correct.

Mr. PICKLE. Thank you, Mr. Chairman.

Chairman RANGEL. Mr. Bland, I think your case is, in dealing with children, just because they are children they are more helpless, there is turnover, and they are moving on to transplant. You just cannot deal with this problem using the same type of figures. You have to deal with a process that

Mr. BLAND. Yes, you have to deal with a process that recognizes the specific and unique characteristics of pediatric ESRD facilities. The goal, to some extent, of adult dialysis is chronic maintenance. The goal of pediatric dialysis is really toward successful transplantation.

Chairman RANGEL. Why have you not been able to convince the professionals of the uniqueness of what you are trying to do? Mr. BLAND. I do not really know.

Chairman RANGEL. Do you belong to any association?

Mr. BLAND. Yes, the National Association of Children's Hospitals and Related Institutions has a specific committee on end-stage renal disease. Dr. Gruskin, who is the chairman of our department at St. Christopher's and also chairman of that committee, will speak on a later panel and address that in great detail.

Chairman RANGEL. Do you know whether they have been in touch with the administration as it relates to this?

Mr. BLAND. Yes, they have.

Chairman RANGEL. Who did you say will be speaking?

Mr. BLAND. Dr. Alan Gruskin, on the second panel.

Chairman RANGEL. That is close enough for me not to forget. But will you do me a favor?

Mr. BLAND. Certainly.

Chairman RANGEL. Get a copy of the cases made out for the children that have kidney problems and outline the additional costs involved, and see whether you can send a copy of that to the Secretary, with a copy to me. Because I really do not think that we should be talking about the problem of children involving dialysis and transplants in the same focus with other people. I would like to handle that separately.

So if I do not ask you questions, it is not because I do not like you.

Mr. BLAND. I never thought that for a moment.

Chairman RANGEL. Let me ask some questions. It is good to see you again, Mr. Newmann.

How do you know the providers are providing quality care at reasonable rates? I speak with a lot of people who are not doctors, who are providers, who have a lot of stockholders who are concerned with improving profits, and I would think that that is what their business is and should be.

How do you know? Your association is concerned with access and quality care. How do you monitor those things and costs?

Mr. NEWMANN. We do not know that they are receiving quality care. I think the assumption is that generally around the country they are. However, we receive occasional complaints from patients, and the difficult thing is when we try to follow it up very few patients are willing to be identified and talk directly with their doctor about these complaints for fear of being treated improperly or losing the place, the dialysis unit.

And as you know, the certificate of need process has limited the dialysis units across the country. So when a doctor says go somewhere else there is often nowhere else to go. So many patients have been reluctant to stand up and be counted, although they would offer an unsigned complaint letter.

Our interest, as we suggested in our testimony, is to, as we suggested, have a consensus conference where doctors, patients and the administration would get together to determine the medical rehabilitation and cost data required to properly monitor the program. We have also suggested in the testimony that perhaps a process similar to the joint accreditation of hospitals be developed, on reviewing dialysis facilities for outcome data, cost and quality of care. And that successful review would be dependent upon the renewal of ongoing reimbursement for medicare.

We have spoken informally to people in the National Kidney Foundation, the Renal Physicians Association, and there has been some interest in pursuing these discussions. These are our suggestions and our testimony for beginning to get a hold on quality of

care.

We are not trying to suggest that medical care should be regulated or legislated. We are trying to get the people involved agreeing to protecting all of their own interests.

[The following was subsequently received:]

NATIONAL ASSOCIATION OF PATIENTS ON
HEMODIALYSIS AND TRANSPLANTATION, INC.,
New York, N. Y., May 7, 1982.

JOHN J. SALMON,
Chief Counsel, Committee on Ways and Means, U.S. House of Representatives, Wash-
ington, D.C.

DEAR MR. SALMON: I am pleased to enclose the corrected transcript of the testimony presented by NAPHT at the Subcommittee on Oversight hearing on the End Stage Renal Disease program on April 22, 1982. On page 38 of the transcript, Congressman Rangel asked us for information on evaluation of quality of care.

NAPHT does not have a final answer to this question, but is deeply concerned about the lack of data and the inadequate quality assurance mechanisms now in place. On page 5 of our formal comments (in the form initially submitted to the Subcommittee-additional copy enclosed), we addressed the quality of care issue. With both the issue of quality of care and cost of treatment, the primary need is for more data.

We would reiterate our previously stated concern that the current data and quality system in place, the ESRD Networks, should not be eliminated until and unless another and better system is in place.

Please share this information with Congressman Rangel. If further information is needed, please let me know.

Sincerely,

MARGARET DIENER,
Executive Director.

Chairman RANGEL. But when doctors and providers tell your association that they have reached a decision that the proposed reimbursement rates will force them to close, you do not have time to evaluate that. You have to immediately come to their support, do you not?

Ms. DIENER. We base our assessment on what HCFA said in the Federal Register. Yes, we have been told by providers they cannot stay in business. But we have no way of evaluating that. We assume HCFA does, and if they say 46 percent of hospitals and 28 percent of independent facilities have costs above the new proposed rate, that is where our concern comes from.

Chairman RANGEL. How do patients, who really have no idea what the best modality is for them-they want to live and stay well, and most of them do not care what the process is as long as they have confidence in their doctor. If you tell a company that it can make more money by directing patients toward home dialysis and the person concerned with reimbursement is concerned with money, how does the doctor fit into that?

You have a patient and you are on salary and you are not going to make any more money no matter what happens. And the person who hired you now looks and finds out that, assuming HCFA is rightand I hope nothing I say infers that I do believe they are right. [Laughter.]

But assuming they did work out something where it would be more profitable to provide training, physical, psychological, and better health care at home, and the bookkeeper says, my God, we are in the wrong business, we should not be doing this here, we should be sending them home, how does the doctor fit into that at all?

Dr. RICHARD M. FREEMAN. It is a very complex question, and you are talking to a physician in whose State 30 to 40 percent of patients get trained for home dialysis now.

But what you are saying is, if the situation told me more money would be made for home dialysis in my State, I would have to look the administrator in the eye and say: Well, you know, for the past 10 years we have pushed toward home dialysis, and we may have a few additonal patients for whom this is appropriate, but not many, and this is not going to be an area where money will be made.

Now, if you go to another place in which this potential has not been realized, I can conceive where that might be a successful venture. But I cannot predict this. To assume that all of our motivations are related to the economic aspects is not true.

As I said before, doctors have been trained how to diagnose illnesses and save lives. We have not been trained to be economists. That is a recent issue.

Chairman RANGEL. I am not talking about doctors. I did not make my question clear. I am assuming the doctor is an employee of a nondoctor.

Dr. RICHARD M. FREEMAN. All right, the doctor is an employee of the nondoctor.

Chairman RANGEL. The doctor's employer is a corporation with stockholders.

Dr. RICHARD M. FREEMAN. I see. I do not know how to answer that question.

Mr. NEWMANN. I might comment from a patient's point of view. One of the dangers of overstressing economic incentives in this whole area is the destruction of the doctor-patient relationship. One would hope that the mode of treatment and the location of treatment would be determined primarily by medical and appropriate psychological, personal and environmental grounds.

If patients are to be able to maintain a trust in their doctors to assist them in deciding where the best place for treatment is, the economic incentives for a corporation owning a facility must not override this important doctor-patient relationship.

Chairman RANGEL. Mr. Newmann, I could not agree with you more. But you are here trying to improve access, quality of care, and to make certain that arbitrary reimbursement rates are not set, right? That would damage the quality and access. There is nothing I would like better than to perfect the doctor-patient relationship. But I did not create these chains of dialysis centers throughout the country, and you as a patient cannot see the chairman of the board at the center where you are being dialysed.

It is not my fault. I am just asking. If the rate change comes in and your doctor is not able to make decisions-and I know the doctor has a code of ethics and everything else, but he has a job.

Mr. NEWMANN. Well, as came up in the national conference in the beginning of March, there were some who speculated that if the rates are not appropriate and people were being forced home inappropriately, unfortunately the answer may end up in some lawsuits as a result of patient deaths.

Chairman RANGEL. Let me inerrupt. First of all, I want all of the help I can get from patients and doctors that they are not forced to take home dialysis under conditions which for health reasons are not practical, health including physical as well as psychological. I do not want to interfere with what any doctor decides. If they make mistakes they have enough problems without having legislative oversight, all right.