Statement by the President on the First Anniversary of Medicare.

THE SUCCESS of the Medicare program in its first year has surpassed even the expectations of some of its staunchest supporters. The program is fulfilling the promise that older Americans and their families will be free of the fear of major financial hardship because of illness.

Secretary John Gardner submitted a report to me today in which he advised that in the past year under Medicare:

--4 million older Americans entered hospitals, and $2.4 billion in hospital bills was paid out.

--$640 million for other medical services, primarily physicians' services, was paid out for the elderly enrolled in the voluntary medical insurance part of the program.

--200,000 people have received home health services.

Since January 1, 1967 another 200,000 people have received care in professional nursing homes. The impact of Medicare goes far beyond what can be learned from a recital of statistics. The program has triggered deep and beneficial changes in American life:

--In the past, many aged Americans received the medical care they needed as ward patients or on a charity basis. Today they receive care on a private patient basis, with the dignity and freedom of choice that goes with the ability to pay provided by Medicare.

--Millions of aged Americans now have the peace of mind that comes from the knowledge that health care will not entail deep financial distress. They know they will not have to ask their children or other relatives to assume the responsibility of their medical bills. Before Medicare only a little over half of the aged had any health insurance, and less than one-half of those had broad protection against hospital costs.

--As a result of title VI of the Civil Rights Act as applied to Medicare, members of minority groups in many communities have access to quality hospital care previously barred to them. Over 95 percent of the Nation's hospitals are now in compliance.

--Medicare has been a powerful force in upgrading the level of health care available to all Americans. Today, 6,800 hospitals, containing 98.5 percent of the bed capacity of non-Federal, general care hospitals in the United States, meet the quality standards of Medicare. For several hundred of these hospitals considerable upgrading was required in order to participate. In addition, the participation of 320 psychiatric institutions, 4,000 extended care facilities, and about 1,800 home health agencies is also conditioned on their ability to provide quality care.

--Medicare has stimulated the development of alternatives to hospital care: hospital outpatient services, hospital extended care, home heath care, as well as physicians' services in the hospital, office, or home. This wide range of Medicare alternatives makes it possible for the doctor, patient, or family to make a realistic choice of the service which best meets the patient's needs. In 1963, only about 250 home health agencies in the country could have met Medicare standards. Today 1,800 agencies are certified for Medicare participation.

--The comprehensiveness of Medicare coverage sets a standard against which all age groups measure the scope of their health insurance coverage. Medicare is stimulating improved health insurance coverage in the private sector for the entire population.

IMPROVING OPERATIONS

Medicare is an enterprise involving many millions of people and thousands of organizations. In setting up a program of such magnitude, there were many unprecedented administrative and procedural problems to be solved.

For the most part, the administration of hospital benefits has gone well. Most hospitals are reimbursed on a timely basis. Some simplifications are possible and are being pursued, but the administrative problems in this area are no longer substantial.

The payment of outpatient hospital benefits continues to present problems. We have recommended to Congress a major simplification of these benefit provisions.

On a national basis, insurance carriers had a backlog of nearly 8 weeks' work after the first a months of the opening of the program. By the first of this year, this had been cut to 5 weeks. Today, it is down to about 2.3 weeks.

In 51 of 59 carrier service areas, serving 90 percent of the Medicare beneficiaries, physicians' bills are being processed on an average of less than 21 days, and in 14 of these areas the average bill processing time is 10 days or less. Our goal is that all insurance carriers should achieve the processing time that these 14 carriers have attained.

Carriers are continuing to reduce processing time, although bills are still coming in at a rate of over 700,000 a week. Reductions result from the introduction of electronic data processing equipment by the carriers, increases in staff and improvements in training, and simplifications in policies and procedures. The informational efforts of the carriers and the Social Security Administration have also led to a better understanding of the program by physicians and beneficiaries, reducing the proportion of improperly filed claims that had to be returned. The rate of claims returned by carriers for additional information is down from an earlier 30 to 40 percent to 4 1/2 percent.

One major current problem concerns how the patient can be relieved of the hardship caused by large bills submitted by a physician who is unwilling to take payment on assignment, thereby forcing the patient to pay the physician out of his own funds before Medicare can make payment.

Nearly 57 percent of the physicians in the country accept assignments, at least part of the time. However, some patients of the other 43 percent may suffer serious hardships. We are studying ways to relieve the patient of unnecessary burdens, without increasing inflationary pressures on the size of the physician's fees.

Medicare goes into its second year on a sound administrative basis. Many of the difficulties that arose have been ironed out and the entire process is being carefully reviewed to assure that it operates at maximum efficiency and with minimum difficulty for all who are involved in or affected by it.

During the first year of Medicare, superior health care has been provided for millions of aged Americans, and health standards. have been raised for all Americans. This has come about because of cooperation between the Federal Government, physicians., insurance carriers, and the States. It would not have been possible without the strong support of each of these groups. We have forged a partnership for a healthier America.