nurse practitioners. Their interest in this venture came as a result of participation in the Rural Health Hearings held in Vermont and sponsored by Senator Leahy and Senator Clark and this subcommittee where reimbursement issues were presented. Blue Shield officials visited the Health Center, met with consumers and beneficiaries, reviewed the system of services and entered into a contract with the VNA September 1, 1976. The contract itself offers a model for reimbursement. The VNA bills monthly on a ledger sheet all the charges for that period incurred by Blue Shield beneficiaries. The VNA is reimbursed directly. At the end of six months, an audit will be performed and a retroactive settlement considered on the basis of mutual costs of services based on number of visits by Blue Shield beneficiaries. It is an amazingly simple process, and we are very encouraged by Blue Shield's leadership. I believe the important components of this contract are: 1. that it reimburses a system and not the individual practitioner for services provided; 2. that it requires a system of care that is accountable, and has mechanisms for ongoing audit of practice of all the providers of care; 3. that it reimburses on the basis of actual costs following audit.

In the first five months, 14.69% of the visits to the Health Center were by Blue Shield beneficiaries. This means that as long as we can demonstrate prudent fiscal management and cost effectiveness, we can count on 14% of our costs being met by this contract.

IMPLICATIONS OF S. 708

10.9% of the population (409 individuals) in Grand Isle County is over 65. Approximately 180 people or 44% of that population have been seen at the Health Center over the past two years. If there was reimbursement for the services provided for that population, we believe that this would represent approximately 20% of all services provided. This would be one more very important step to improving the financial viability of the Health Center.

Passage of S. 708 would remove a significant barrier in supporting the concept of rural health centers and the system I have attempted to describe. We believe that nurse practitioners and physician assistants as part of a team provide an appropriate entry point to a total system of care and assist in creating the necessary linkages to that system. We believe that this concept could be critical in helping to create order out of the chaos of the present non-system. And finally, we are convinced that improved accessibility combined with education and consumer responsibility leads to earlier intervention in illness, improved preventive practices and ultimately reduced costs of total care. Thank you for this opportunity to express our support of S. 708.

STATEMENT OF DAVID A. HANTMAN, M.D., AND LINDA LABROKE, R.N., DANVILLE HEALTH CENTER, DANVILLE, VT.

The Danville Health Center is a rural health clinic recently established to offer geographically accessible comprehensive health care to an isolated area of approximately 3,000 people in northeastern Vermont.

CHARACTER OF THE AREA

This is a rural area with an economic base of farming, trade, and some light industry. The unemployment rate is high, and the per-capita and perfamily income are far below state and national averages. The number of individuals and families qualifying for welfare assistance under various programs exceeds the state average.

Until the Danville Health Center was established, no medical care was available in Danville. The nearest physicians are in St. Johnsbury, 10 miles away. St. Johnsbury also contains the nearest hospital.

THE DANVILLE HEALTH CENTER

The Center is staffed by a Family Nurse Practitioner, Ms. Linda Labroke, and supporting personnel. Physician supervision is provided by two Internists

with a private practice in St. Johnsbury, Drs. David Hantman and Jerry Berke. The Center is open 40 hours a week, during which time patients are seen by appointment by the Nurse Practitioner. Physician visits to the Center are limited to 2 day per week for consultations on patients with complex medical problems. Physician supervision is provided by telephone consultation with the Nurse Practitioner, by referral of complicated or severely ill patients to the physicians' office or to the hospital under their supervision, and by routine physcian audit of all patient records. Most important, treatment protocols dealing with specific medical problems, written by the physicians, are used by the Nurse Practitioner in managing patients.

The Center was established with the close cooperation and continued support of the citizens of Danville and their elected representatives. A fourteen member board of directors representing the community directs the operation of the Center, which is organized as a non-profit corporation.

The Center operates on a fee for service basis, with fees set at a lower level than prevailing physicians' fees in the area. We have received a two year grant from the Kellogg Foundation to cover some of the start-up costs. A pilot reimbursement program was begun at our suggestion by the VermontNew Hampshire Blue Cross/Blue Shield to reimburse for Nurse Practitioner services.

The Center offers comprehensive health care, including treatment of acute and chronic medical problems, preventive medicine and health maintenance services such as complete initial and annual physical examinations, hypertension screening, routine Pap and breast examinations, dietary instruction, and family planning services. A wide variety of health education programs are planned.

THE ROLE OF MEDICARE

An estimated 25% of patient visits to the Center will potentially be covered by Medicare.

We strongly believe that the inclusion of physician extender services under Medicare will benefit our patients in two ways: by increasing the accessibility of health care and by reducing health care costs.

1. INCREASED ACCESSIBILITY OF HEALTH CARE

Our Center has increased the geographical accessibility of health care services to the residents of the Danville area. In addition to making it easier to obtain routine and emergency care, we feel that we are able to provide care for many elderly individuals who up to now have received no care at all, or who have sought medical attention only in emergencies, because of their distance from other facilities. Without Medicare reimbursement, contact with these individuals would be lost.

More important, we must become self sufficient on a fee for service basis within two years. Medicare reimbursement for 25% of the patients seen at the Center would provide an estimated $14,000 of the $56,000 yearly operating budget of the Center. Without these funds, the Center would not be able to survive past the duration of our Kellogg Foundation grant.

2. REDUCTION OF HEALTH CARE COSTS

We feel that our Center, incorporating the classical concepts of physician extender use, can effect substantial savings to the patients and to the Medicare program itself. As outlined in Table 1, which compares costs in the Danville Health Center with costs in nearby physicians' offices and with those in the local hospital emergency room for treatment of two representative acute illnesses, savings of between 15% and 60% can be effected.

Furthermore, routine health maintenance and preventive medical services may reduce the need for expensive hospitalizations in our patient population. We at the Danville Health Center feel that passage of S. 708 would be beneficial in helping us increase the availability of medical care to the elderly population of our area, and that it would help reduce the costs of medical care. We recommend passage of the Bill.

TABLE 1.-COMPARISON OF COSTS OF TREATING 2 REPRESENTATIVE ACUTE ILLNESSES IN THE DANVILLE HEALTH CENTER, LOCAL PHYSICIANS' OFFICES, AND IN THE LOCAL HOSPITAL EMERGENCY ROOM

STATEMENT OF JOHN W. RUNYAN, JR., M.D., PROFESSOR AND CHAIRMAN, DEPARTMENT OF COMMUNITY MEDICINE, UNIVERSITY OF TENNESSEE COLLEGE OF MEDICINE, MEMPHIS, TENN.

Nearly half the population of the United States suffers from one or more chronic diseases. (1) This segment of the population is estimated to account for 80% of all health care services delivered. Those in the medicare age group account for the largest share of this chronically ill population. It is becoming increasing apparent that continuing care for the mounting population of chronic disease patients by physicians on a one-to-one basis is impossible and the attempt may be a misdirection of the physician's time and talent. The care of most chronic disease patients centers on patient education and counseling and empathy with adjustments of a simple therapeutic program from time to time. The training of the primary care physician extenders encompasses these important elements of care.

Our studies indicate that in the system of health care delivery in Memphis and Shelby County operated by the Health Department that the nurse in an extended role utilizing written protocols with physician and medical center back-up can provide services of high quality. (2-8) Currently there are 26 decentralized clinic locations in both urban and rural areas of the county where this care is provided for a population of about 225,000 out of the county's 750,000. (Appendix 1)

The studies relating to quality of care and hospital utilization that have been underway for the past six years involve a subset of the chronic disease population of 10,000 of which 90% have hypertension, diabetes mellitus, and cardiac disease. The blood pressure levels in hypertensive patients are maintained within an acceptable range in 95 to 96% of patients with a follow-up rate of 75% over the past five year period. These results compare favorably with those under physician care in the City Hospital and with research studies being conducted on a national level by the National Heart, Lung and Blood Institute. There is a reduction after transfer to this decentralized network of 52% in hospital utilization for these hypertensive patients with a significant decrease in the occurrence of stroke and congestive heart failure which are known to be complications of inadequately controlled high blood pressure. (See Appendix 2)

For patients with diabetes mellitus hospital utilization is decreased by 49 per cent. After four years over seventy percent of the initial diabetic population is being followed with average blood sugars levels maintained within satisfactory levels as outlined in the goals of therapy in our protocols which are published as the Primary Care Guide. (9) Hospital utilization for the preventable complications such as diabetic acidosis, (the extreme form of diabetes), severe infections as a result of uncontrolled diabetes and lower extremity amputations from poor blood supply and infection of the feet are significantly reduced. (See Appendix 3) In an entirely rural care system operated in Kentucky by nurses with physician back-up (i.e. Frontier Nursing Service) hospitalization rates for diabetic patients are also considerably less than the national average. The average number of days spent in a hospital nationally per year by diabetic patients is 5.4, while in the Memphis and Shelby County Program it is 1.68 days and for the rural Kentucky Frontier Nursing Service it is 1.6 days per year. In urban Los Angeles when ambulatory care was made more accessible to diabetic patients, including the use of physician extenders, there was a reduction of 5.6 to 1.74 days per year. (See Appendix 4)

Since in our program ambulatory and home care are emphasized, over-all health care costs are significantly reduced for each day that a patient can be kept out of the hospital can pay for many ambulatory and home care visits. Physician extenders trained in primary care are oriented towards ambulatory and home care which are the most suitable locations to administer to the chronically ill and elderly unless hospitalization becomes mandatory. The benefits to their health and well being that elderly people receive upon hospitalization is often questionable and certainly many do better in the familiar surroundings of their own home or in a clinic with devoted, friendly professionals and personnel. Since home care is such an important extension of health services, I would suggest that its availability be considered as a criteria to qualify for medicare reimbursement for rural clinics.

Other medical services are offered adults as well as other age groups by the Memphis and Shelby County network of clinics including episodic care of common problems and self-limited illnesses (see Appendix 5). However, my research has not extended to these other services but of course they are essential for a rural clinic. Even though I have no personal data other reports and our own experience suggest that physician extenders can be very effective in providing these services.

It would be my opinion that Bill S. 708 has those essential ingredients that would promote high quality and safe care for the rural elderly, particularly if some type of home care services could be provided. I have entered the published papers that have arisen from our work in Memphis and Shelby County. Thank you.

REFERENCES.

(1) Somers, A. R. 1971. Health care in transition: Directions for the future. Chicago Hospital Research and Educational Trust, p. 20.

(2) Guthrie, N., Runyan, J. W., Jr., Clark, J., et al: The clinical nursing conferences: A preliminary report. N. Engl. J. Med. 270:1411-1413, 1964.

(3) Runyan, J. W., Jr., Phillips, W. E., Herring, O., et. al: A program for the care of patients with chronic diseases. JAMA 211:476-479, 1970.

(4) Editorial: Physician's assistant or assistant physician? JAMA 212:313, 1970.

(5) Runyan, J. W., Jr.: Letter to the Editor: Physicians' assistants: Nurses as physicians. JAMA 213:1037, 1970.

(6) Runyan, J. W., Jr.: Decentralized medical care of chronic disease. Trans Assoc. Am. Physicians 83:237-244, 1973.

(7) Runyan, J. W., Jr.: The Memphis chronic disease program: Comparisons in outcome and the nurse's extended role. JAMA 231:264-267, 1975.

(8) Miller, L. V., Goldstein, J. and Runyan, J. W., Jr.: Improving the Organization of care for the chronically ill. Diabetes Mellitus. Fogarty International Series on Preventive Medicine. Volume 2:41-46, 1976.

(9) Runyan, J. W., Jr.: Primary Care Guide. Harper and Row, 1975.