Origins of the Medicare Kidney Disease Entitlement: The Social Security Amendments of 1972

Richard A. Rettig

In the final days of the 1972 presidential campaign, Congress passed and sent to President Richard M. Nixon the Social Security Amendments of 1972. Nixon signed the bill on Monday, October 30, just one week before he was overwhelmingly reelected in his race against Senator George McGovern.

The 1972 social security legislation had begun its journey the previous year in the U.S. House of Representatives as H.R. 1. One of its chief elements had been welfare reform, a response to the administration 's proposed family assistance plan. The other principal element, however, was a review and extension of Medicare and Medicaid, the first time since the 1965 enactment of Medicare that Congress had returned to that historic legislation to improve on its earlier works. (In fact, as we shall see, the Medicare and Medicaid provisions that were part of the social security amendments had almost become law in 1970.)

An eleventh-hour Senate floor amendment to the bill became Section 299I of the final legislation. For more than 90 percent of the nation 's population, this provision extended Medicare coverage to those with chronic kidney failure. The language of this brief amendment is found in an appendix.

Richard A. Rettig is a member of the professional staff of the Institute of Medicine, National Academy of Sciences. He has written extensively about the Medicare End-Stage Renal Disease program.



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BIOMEDICAL POLITICS Origins of the Medicare Kidney Disease Entitlement: The Social Security Amendments of 1972 Richard A. Rettig In the final days of the 1972 presidential campaign, Congress passed and sent to President Richard M. Nixon the Social Security Amendments of 1972. Nixon signed the bill on Monday, October 30, just one week before he was overwhelmingly reelected in his race against Senator George McGovern. The 1972 social security legislation had begun its journey the previous year in the U.S. House of Representatives as H.R. 1. One of its chief elements had been welfare reform, a response to the administration 's proposed family assistance plan. The other principal element, however, was a review and extension of Medicare and Medicaid, the first time since the 1965 enactment of Medicare that Congress had returned to that historic legislation to improve on its earlier works. (In fact, as we shall see, the Medicare and Medicaid provisions that were part of the social security amendments had almost become law in 1970.) An eleventh-hour Senate floor amendment to the bill became Section 299I of the final legislation. For more than 90 percent of the nation 's population, this provision extended Medicare coverage to those with chronic kidney failure. The language of this brief amendment is found in an appendix. Richard A. Rettig is a member of the professional staff of the Institute of Medicine, National Academy of Sciences. He has written extensively about the Medicare End-Stage Renal Disease program.

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BIOMEDICAL POLITICS The purpose of this paper is to review how and why Congress enacted this historic entitlement, the first (and perhaps the last) designed to cover a particular diagnosis. A HISTORICAL FOOTNOTE I was asked to write this paper in the fall of 1989. Because I had previously written about the antecedents to and legislative history of the 1972 Medicare kidney amendments (Rettig, 1976), I was able to suggest the approach that has resulted in this paper. A workshop was held on December 18-19, 1989, at the National Academy of Sciences, with the principals involved in the 1972 legislation.1 The workshop was chaired by Carl W. Gottschalk and supported by Institute of Medicine (IOM) staff. Participants were provided with historical materials before the meeting; several brought additional documents from personal files. The discussion focused on how Congress came to adopt the Medicare kidney disease entitlement. The meeting transcript was used to prepare a draft of this paper. The draft paper was reviewed by all participants and was also discussed at a meeting of the project committee at the National Academy of Sciences Beckman Center in March 1990. Memories are often unreliable sources of details about events that occurred many years ago. As a result, specific factual claims have been corroborated from documented sources. The workshop basically served as a lengthy interview with a number of key individuals that clarified the major assumptions, underlying processes, and contextual factors that influenced the legislative outcome. ANTECEDENTS TO THE 1972 LEGISLATION A brief review of the evolution of federal government policy regarding hemodialysis and kidney transplantation is useful at this point. An extended treatment can be found in the literature (Rettig, 1981, 1982). In 1944, in Nazi-occupied Holland, Willem Kolff first succeeded in prolonging the life of a patient using his primitive artificial kidney machine. (The surviving individual was his seventeenth attempt, all the others having died.) After the war, Kolff sent four of his machines to Europe and the United States, where they provided a basis for successful treatment of acute renal failure in the Korean War. In 1960, Belding Scribner of the University of Washington in Seattle, working with Wayne Quinton, an engineer, invented a permanent vascular access device and placed his first patient on long-term, continuous, intermittent hemodialysis. That patient, Clyde Shields, lived 11 years. In 1963, when the hemodialysis procedure for treating

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BIOMEDICAL POLITICS chronic kidney failure was barely three years old, the Veterans Administration (VA) announced its intention to establish approximately 30 dialysis treatment units in VA hospitals across the country. These efforts, among others, would later prompt the Bureau of the Budget to question the fiscal implications of dialysis. In fact, when the Gottschalk Committee was formed in the mid-1960s, for example, Pierre Palmer, the Budget Bureau staff officer assigned to it, was the examiner for the VA hospital program. The National Institutes of Health (NIH), through the National Institute of Allergy and Infectious Diseases, established a program in transplant immunology in 1964 in response to the discovery that immunosuppressive drugs prevented rejection of transplanted kidneys. In 1965 the National Institute of Arthritis and Metabolic Diseases initiated the artificial kidney/chronic uremia program, one year after the establishment of an artificial heart program in the National Heart Institute. Also in 1965 the Public Health Service (PHS) started the Kidney Disease Control Program (KDCP). The program awarded 12 grants to establish dialysis centers across the country on a declining, step-funded basis. Alarmed by the cost implications of center dialysis, it then awarded 14 home dialysis contracts in 1966. Still seeking to dodge the fiscal implications of even this least costly treatment, in 1969 it let seven organ procurement contracts for organ procurement and combined kidney transplantation/home dialysis programs. In 1969 the PHS KDCP was administratively transferred to the Regional Medical Program, a transfer ratified by legislation in 1970. Several years after the VA dialysis program had begun, and as various plans for a PHS dialysis program were being debated within the executive branch, the Bureau of the Budget, prompted by the White House Office of Science and Technology Policy, established an expert committee to review growing federal government obligations in the treatment of end-stage renal disease (ESRD). The group, later known as the Gottschalk Committee, after its chairman, issued the Report of the Committee on Chronic Kidney Disease in 1967 (Bureau of the Budget, 1967). The effect of that report is examined below. The culmination of these events, for the purposes of this paper, was the enactment by Congress, in the Social Security Amendments of 1972 (P.L. 92-603), of Section 299I. This legislation authorized Medicare entitlement for individuals with a diagnosis of chronic renal failure who were fully or currently insured under social security: it also authorized coverage for the spouse and dependent children of fully or currently insured individuals. Persons with a diagnosis of chronic renal failure were “deemed to be disabled” for purposes of coverage under Parts A and B of Medicare.

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BIOMEDICAL POLITICS The Influence of the Gottschalk Report One question of great historical interest that has been asked repeatedly was whether the Gottschalk report influenced the events of 1972. Gottschalk, chairman of the expert committee, and George Schreiner, a member, elaborated on the 1967 report during the December 1989 workshop; the other participants dealt with the legislative events of 1972. The question posed at the workshop was this: Is there any evidence that the Gottschalk report influenced the thinking of any major actors in 1972 or that it influenced the 1972 congressional deliberations in any way? The answer has three basic parts. First, the key congressional staff had not read the Gottschalk report; indeed, they were unaware of its existence. This lack of awareness extended to the members of Congress. Second, the report greatly influenced the medical community. Prepared by a distinguished committee, it essentially declared that hemodialysis and kidney transplantation were established therapies for the treatment of ESRD, thus resolving the debate about the “ experimental versus established” status of these treatments. It also sanctioned the work of many clinicians who were then treating patients. Third, the 1967 report recommended a Medicare entitlement for chronic kidney failure patients that was quite similar to the entitlement that was adopted in 1972. The particulars of the report anticipated many features both of the legislation and of the program that was later established. What explains the report's lack of influence on the key congressional actors of the drama? For one thing, the Bureau of the Budget established this expert committee as a secret group. Although its existence and the identity of its members became known in a short time, it was not a public body (Medical World News, 1967). Therefore, when the committee submitted its confidential report to the Budget Bureau in September 1967, the members were graciously thanked by letter by the director, Charles L. Shultze, but they were not publicly acknowledged. The report was “released” in November by the National Institute of Arthritis and Metabolic Diseases, which had reproduced copies of the report for limited public distribution. The audience, however, was a medical research and public health one and not strongly connected to the new Medicare program. In addition, the National Kidney Foundation at that time had no Washington representative to publicize the report's conclusions. The report, therefore, did not reach enough of the right people. Furthermore, the Medicare establishment had other concerns. The Bureau of Health Insurance of the Social Security Administration was preoccupied with the initial tasks of administering the fledgling Medi-

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BIOMEDICAL POLITICS care program. The House Ways and Means Committee and the Senate Finance Committee were also concerned mainly with Medicare and Medicaid start-up problems. Receptivity to expanding Medicare to individuals under age 65 for treatments that very recently had been regarded as experimental was low. Setting the Legislative Stage The “Big Four” in dialysis in the 1960s included George Schreiner, Willem Kolff, John Merrill, and Belding Scribner. Kolff had invented the artificial kidney machine, and Scribner had invented the vascular access device that made continuous dialysis possible. Merrill led the nation's premier kidney transplant group at the Peter Bent Brigham Hospital in Boston. Schreiner conducted research and ran a major nephrology training program at Georgetown University in Washington, D.C. In addition, he was a founder of the American Society for Artificial Internal Organs in 1954, served as its president in 1959-1960, and for 29 years edited the Transactions of its annual meeting. He was also a founder of the American Society of Nephrology in 1967. In 1966 and 1967, he served as a member of the Gottschalk Committee. Of these four, Scribner and Schreiner played important political roles in the development of federal government policy, the former as the outside advocate, the latter as the Washington strategist and tactician. Scribner, within a few months after his first three patients were rehabilitated by chronic hemodialysis, became the country 's leading spokesman for treating patients by dialysis. His efforts resulted in Seattle's receiving the first dialysis center grant from the PHS in 1964, thus paving the way for the creation of the KDCP the following year. Seattle also pioneered home dialysis treatment, setting the stage for a PHS home dialysis contract program in 1966 and 1967. Schreiner, in addition to bearing the above responsibilities, was also active in the National Kidney Foundation, serving as its president from 1968 to 1970. After that, he served several years as chairman of its legislative committee. In 1969, he hired Charles Plante, his next-door neighbor, as Washington representative of the foundation. Plante had worked on Capitol Hill for the senators from his home state of North Dakota from 1954 to 1966 and had spent two years in the Peace Corps before returning to Washington in 1969. An initial step taken by the Schreiner-Plante team was to hold a meeting in 1969 and develop a five-year plan of legislative activity. The plan emphasized several courses of action: increasing NIH funding for kidney research and obtaining a new kidney institute; establishing ESRD-related activities, and securing funding for them in the Regional

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BIOMEDICAL POLITICS Medical Program of the PHS, the Vocational Rehabilitation Program, and the crippled children's program; and obtaining coverage for the treatment of ESRD. Bills to increase the federal government's role in financing the treatment of kidney disease were introduced in every session of Congress from 1965 onward. Most bills proposed to amend the Public Health Service Act; several pertained to vocational rehabilitation and other federal programs. Scribner's advocacy, for example, found strong support from the two powerful Washington State senators, Warren G. Magnuson and Henry M. Jackson. From 1965 onward, Jackson routinely submitted legislation to finance treatment of ESRD. 2 In addition, others, like Senator John Tower (R-Tex.) and Congressman Edward Roybal (D-Calif.) consistently sponsored kidney legislation during these years. Clearly, kidney disease became an item on the legislative agenda of the U.S. Congress during this time. It was not until 1970, however, when the Heart Disease, Cancer, and Stroke Amendments of 1965 were modified by the inclusion of “and Kidney Disease” in the law's title and throughout its text that this activity resulted in legislation. Another important feature of the process was that no congressional hearings on kidney disease were held during this period (1965-1970), revealing the deliberateness with which Congress approached this issue. In the 1960s several things were occurring simultaneously in the field of kidney disease treatment. The formation of the American Society of Nephrology in 1966 reinforced the development of the nephrology specialty within medicine. The Gottschalk Committee report, in 1967, sanctioned dialysis and transplantation as established therapies, thus resolving the conflict between clinicians who wished to treat patients and researchers who thought dialysis experimental. These several stimuli resulted in an increase in the number of physicians entering nephrology as opportunities for treating uremic patients grew. The number of treatment centers was also steadily increasing. The Seattle Artificial Kidney Center, founded in 1962, pioneered the development of dialysis treatment centers. In 1963 the VA committed itself to developing 30 treatment centers. A number of centers were directly supported by the PHS from 1965 through 1968, and still more were later assisted by planning efforts of the PHS Regional Medical Program. Most centers were financed through a patchwork of funding sources—PHS programs, NIH grants, state kidney programs (being enacted in Illinois, for example, and elsewhere), and community fund-raising drives. Relations between treatment units and academic medical centers, which provided most of the physicians for such facilities, proved complicated. In Seattle, the University of Washington sought to limit its in-

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BIOMEDICAL POLITICS volvement in dialysis, a policy that gave rise to the Seattle Artificial Kidney Center. In Minneapolis, the Regional Kidney Disease Program at Hennepin County Hospital, predominantly a dialysis effort, reflected the resistance of the University of Minnesota School of Medicine to housing the effort on their premises. John S. Najarian, chairman of surgery, believed that kidney transplantation was a cure but dialysis only a holding procedure.3 In Boston, a controversial breakaway from Harvard University's Peter Bent Brigham Hospital resulted in the establishment of National Medical Care, Inc. But whatever the local reasons, the nation's dialysis treatment capacity continued to grow during this time. Most important, the number of patients was also increasing. Nephrologists trooped to Seattle in the early 1960s to learn how to perform dialysis, and programs sprang up across the country, each growing over time as means were found to finance treatment. During the time the Gottschalk Committee was at work, 4 there were fewer than 1,000 patients being dialyzed in the entire country, but that number had increased to approximately 10,000 by the time the 1972 legislation was adopted. As the number of physicians, treatment facilities, and patients increased, so too did local newspaper and television coverage of dialysis and kidney transplantation. In turn, members of Congress heard from and about constituents who needed dialysis, much of the information coming through local newspapers. Individual physicians, of course, made their views known to their own representatives and senators. The foundation for political action was being laid. The National Kidney Foundation, through the efforts of Schreiner and Plante, focused these developments in the legislative arena much like a parabolic reflector gathers signals from many sources and focuses them on a single point. The foundation provided full-time professional representation of its cause to members of Congress and their staff, supplied them with continuous information, and pursued all available legislative and executive opportunities to advance the cause of kidney disease. THE SOCIAL SECURITY AMENDMENTS OF 1972, SECTION 2991 The section above notes the stimuli to the 1972 legislation. What can be said about other “receptor sites” in Congress? Were representatives and senators prepared to hear from the advocates of kidney disease? The Legislative Process The legislative process in 1972 differed greatly from that of today. Power was concentrated in committee chairmen to a much greater

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BIOMEDICAL POLITICS extent than is now true, both for legislation and for appropriations. Congressional staff agencies, which are now prominent features of the scene, were much less important. The General Accounting Office (GAO) was beginning to shift from a traditional audit and accounting emphasis to one of program and management analysis. In the Library of Congress, the Legislative Reference Service provided strong constituent support to individual congressmen; the current Congressional Research Service, by contrast, provides professional staff support to committees. The Office of Technology Assessment was created in 1972. Most important, the 1974 Budget Reform Act had not yet been passed. Consequently, the Senate and House budget committees were not yet in existence and thus had not yet disrupted relations between legislative and appropriations committees. The annual budget reconciliation process of today had not been established, and the Congressional Budget Office, which was authorized by this law, did not exist. The end result was that a more deliberate, patterned approach to legislation and fiscal matters occurred in 1972. In this context, the Committee on Ways and Means was clearly the most powerful committee of the House of Representatives. In addition to its legislative authority, until the early 1970s the chairman and his Democratic colleagues on the committee had the authority to make all committee assignments for House Democrats. Wilbur Mills (D-Ark.), its chairman, was arguably the most powerful member of the House Democratic leadership. Understandably, assignment to the Ways and Means Committee was highly prized and went only to individuals who had shown themselves to be responsible legislators over several terms in the House. The legislative jurisdiction of Ways and Means included the Internal Revenue Act (the tax code), international trade and tariffs, general revenue sharing, and the Social Security Act (including old age, survivors, and disability insurance, cash assistance programs, and Medicare and Medicaid). As one workshop participant said, the Ways and Means Committee, together with the Senate Finance Committee, “raised all of the federal government's revenue and spent half of it.” The House Ways and Means Committee had, and still has, an important advantage over the Senate Finance Committee. The Constitution stipulates that all revenue legislation must originate in the House of Representatives. That requirement was extended over time to include all those matters under its jurisdiction. Administration proposals affecting taxes, social security, and Medicare, for example, are submitted first to the Ways and Means Committee. It serves as the architect, one might say, for legislation that reaches the Senate. In 1970, the House of Representatives, following the lead of its Ways and Means Committee, sent to the Senate the proposed Social Security

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BIOMEDICAL POLITICS Amendments of 1970. The Senate Finance Committee deliberated at length, adopted a bill that the Senate passed, and returned a substantially amended bill to the House in the week between Christmas 1970 and the new year. The Senate announced, however, that it had no time to go to conference to resolve differences. It was “take it or leave it” politics. Although the legislation contained many provisions desired by members of the House, they rejected the Senate proposal rather than yield on such a fundamental procedural matter. No bill was passed as the ninety-first Congress adjourned. Under Wilbur Mills, the Ways and Means Committee's style was well known. There were no subcommittees; all committee work was done by the full committee. Deliberately, every three or four years, the committee took up one of the major statutes under its jurisdiction—tax, international trade, social security, or Medicare. It then devoted great attention to the issues before it (many of which had accumulated since the last time they had been addressed), holding extensive hearings on any given subject. Members debated general legislative issues in executive session until consensus on the main provisions was established, and then, within an agreed-upon framework, the legislative and executive branch staff wrote language that could be implemented. Mills seldom sponsored legislation himself. Rather, he allowed a bill to emerge from the deliberative processes of the committee. The legislation that went to the floor of the House had a bipartisan seal of approval; Mills took great care to ensure that John Byrnes (R-Wis.), the ranking minority member, and all of the committee Republicans agreed to it.5 Mills's objective was to achieve unanimity of the committee as a preliminary step to carrying the full House. One tradition of the Ways and Means Committee was to hear any citizen who wished to address the committee. Mills did not engage in selective hearings that were restricted to those advocating a point of view or to organizations representing major constituent interests. Consequently, hearings of the Ways and Means Committee always included statements by a number of interested individuals. The Senate Finance Committee had comparable legislative jurisdiction, which was exercised under the chairmanship of Russell B. Long (D-La.). (Long, however, did not play the same political role in the Senate Democratic leadership as Mills played in the House.) The Committee was organized into subcommittees in the early 1970s, and the Subcommittee on Health was chaired by Herman Talmadge (D-Ga.), who worked closely with the chairman. The Senate Finance Committee lacked the internal cohesion of the House Ways and Means Committee. On welfare reform, for example, a major element of the social security legislation in 1972, Long favored a

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BIOMEDICAL POLITICS fiscally conservative bill that emphasized work by welfare recipients. Abraham Ribicoff (D-Conn.), although supporting the work provision, favored a financially more generous bill. The administration's original proposal, the family assistance plan authored by Secretary of Labor Daniel P. Moynihan, represented an intermediate position. Each of the three parties had roughly one-third of the Senate votes. No one was prepared to compromise to assemble a majority, and the resulting three-way deadlock defeated welfare reform. Finally, it is important to note that congressional staff, although fewer in number than today, exercised great influence and were a tightly knit group with close ties to the executive branch. William Fullerton joined the Ways and Means Committee in 1970 as its first professional staff person; in 1972, he was the only such staff attached to the committee. His counterpart in the Senate, Jay Constantine, had joined the Senate Finance Committee in 1966 as its first professional staff person on Medicare, Medicaid, and welfare. In 1972, he was aided, especially in the ESRD amendment, by James Mongan, a physician, and Paul Rettig from the Social Security Administration (SSA), who worked at the Senate Finance Committee on a daily basis during this time. Congressional staff ties to the SSA's Bureau of Health Insurance were strong. Irwin Wolkstein, the bureau 's deputy director for policy, had worked on health insurance issues since before the 1965 enactment of Medicare and Medicaid. Fullerton had worked for him at SSA, as had Rettig. In 1969, Constantine recruited Fullerton from the Legislative Reference Service of the Library of Congress to coauthor Medicare and Medicaid: Problems, Prospects, and Alternatives. This report greatly influenced the proposed legislation of 1970, which, although not enacted at that time, was basically adopted in 1972. In short, both committees' staff constituted a group of individuals with strong personal and professional ties to each other and with effective working relationships to the executive branch. The Policy Context Several features characterized the setting in which the 1972 legislation was enacted. First, there was a strong commitment among the members of Congress to pass a bill. They had no desire to repeat the experience of 1970 when legislation was not passed because the Senate refused to go to conference. Second, the policy debate focused much attention on national health insurance. Senator Edward M. Kennedy (D-Mass.) had become chairman of the Subcommittee on Health of the Senate Committee on Labor and Public Welfare in January 1971 and immediately began to discuss national health insurance. The Nixon

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BIOMEDICAL POLITICS White House responded with legislation of its own. In a message to Congress on February 18, 1971, President Nixon proposed the National Health Insurance Partnership Act of 1971, one of the most important of the many proposals put forward at that time (U.S. Congress, House, Committee on Ways and Means, 1971b). There is some feeling that Nixon 's action came out of his fear of the possibility of a Kennedy candidacy for the presidency the following year (Rettig, 1977). Reflecting this interest in national health insurance, the House Ways and Means Committee, after passing H.R. 1 in the summer of 1971, held 21 days of hearings in October and November on national health insurance proposals, including that of the administration (U.S. Congress, House, Committee on Ways and Means, 1971a). In February 1972, the administration submitted extensive amendments to its original proposal (U.S. Congress, House, Committee on Ways and Means, 1972). In the Senate, although Finance Committee Chairman Long did not favor comprehensive health insurance measures, he did advocate insurance against the catastrophic costs of health care, indicating the broad interest in expansion of the existing Medicare and Medicaid programs. The legislative agenda in 1971 and 1972, however, was dominated by H.R. 1, not by national health insurance. This legislation, as noted earlier, dealt with social security, Medicare, and welfare reform. Perhaps the bill's most important amendment to Medicare, marking its most significant expansion since 1965, was the extension of Medicare coverage to the disabled. President Lyndon Johnson had proposed such an extension in 1967, two years after Medicare had been enacted, but then it was regarded as too soon to be seriously considered. In 1970, however, it had been part of the bill that failed enactment for procedural reasons. Its passage in 1972 was a foregone conclusion. The Senate Finance Committee first considered H.R. 1 in July and August 1971, as soon as the bill was sent over by the House (U.S. Congress, Senate, Committee on Finance, 1971). These hearings were limited to administration witnesses and focused mainly on the family assistance plan. Senator Long noted with asperity that two-thirds of the bill consisted of Senate amendments adopted in 1970. He noted that the most controversial feature of the legislation was the welfare reform proposal of the administration, as modified by the House. The Senate committee resumed hearings again in January and February 1972, and the opening statements of Long and Ribicoff foreshadowed the welfare reform deadlock mentioned above (U.S. Congress, Senate, Committee on Finance, 1972a). That deadlock, and the ensuing controversy and behind-the-scenes negotiations, delayed Senate action on the bill until members had returned to Washington from the summer recess.

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BIOMEDICAL POLITICS join as a cosponsor. If the time is right, why not join? is my view. If you are for something, why not cosponsor it? Otherwise, I would have had to oppose it, defeat it, and explain why. It is one thing to say that something is premature. It is another thing if you are going to have to vote on the record. Often you would rather vote for something than explain why you voted against it. “I can recall testimony by a doctor that impressed me. He testified that he had patients with kidney failure—hardworking people, good, responsible citizens, honest, salt-of-the-earth people. ‘What are my possibilities?' they would ask. ‘Kidney transplant, dialysis, or death,' he would reply. ‘What does it cost?' was their next question. When told, they responded, ‘There is no way to raise that kind of money. What am I to do?' “As chairman [of the Senate Finance Committee], I sat there and thought to myself: We are the greatest nation on earth, the wealthiest per capita. Are we so hard pressed that we cannot pay for this? A life could be extended 10 to 15 years. You're not going to make any money that way. But it struck me as a case of compelling need. “My attitude on Medicare and catastrophic was that the government shouldn't start out paying bills that people were able to pay themselves. The overwhelming majority of middle-income people needed some help to pay the bills, but it was better to help them than to pay the bill. On catastrophic, though, it was an area where it was appropriate for the government to say ‘We'll take care of you.' “My attitude at the time, probably not expressed on the floor but in committee or conference, was that the kidney amendments would give us some sense for the cost and impact of coverage for catastrophic illness. If it turned out a lot worse than the estimates, that ought to give us some basis for thinking about catastrophic illness. The cost of catastrophic will jolt you. Kidney may be a jolt, but it will be nothing compared to all catastrophic. For advocates of action, cost is not important. It is the right thing to do. If you have responsibility for paying the bill, though, it is a different matter.” [Question: what estimate were you given?] “They gave me an estimate of approximately $1 billion a year. On estimates, look at the original Medicaid estimate of $200 million. A few years down the line it was at $20 billion. They initially looked at what the states were doing at the time. A minor change in the regulations can change things in a major way.” [Question: In retrospect, do you have any second thoughts, any reservations, about the kidney amendment?] “On this one, no. It was an idea whose time had come. It has done a lot of good. It has brought some of the same problems as Medicare and catastrophic, cost control problems. But it was something that the government should have been involved in.”

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BIOMEDICAL POLITICS APPENDIX Public Law 92-603, 92nd Congress, H.R. 1 October 30, 1972 Chronic Renal Disease Considered to Constitute Disability Sec. 299I. Effective with respect to services provided on and after July 1, 1973, section 226 of the Social Security Act (as amended by section 201(b)(5) of the Act) is amended by redesignating subsection (e) as subsection (f), and by inserting after subsection (d) the following new subsection: “(e) Notwithstanding the foregoing provisions of this section, every individual who— “(1) has not attained the age of 65; “(2) (A) is fully or currently insured (as such terms are defined in section 214 of this Act), or (B) is entitled to monthly insurance benefits under title II of this Act, or (C) is the spouse or dependent child (as defined in regulations) of an individual who is fully or currently insured, or (D) is the spouse or dependent child (as defined in regulations) of an individual entitled to monthly insurance benefits under title II of this Act; and “(3) is medically determined to have chronic renal disease and who requires hemodialysis or renal transplantation for such disease; shall be deemed to be disabled for purposes of coverage under parts A and B of Medicare subject to the deductible, premium, and copayment provisions of title XVIII. “(f) Medicare eligibility on the basis of chronic kidney failure shall begin with the third month after the month in which a course of renal dialysis is initiated and would end with the twelfth month after the month in which the person has a renal transplant or such course of dialysis is terminated. “(g) The Secretary is authorized to limit reimbursement under Medicare for kidney transplant and dialysis to kidney disease treatment centers which meet such requirements as he may by regulation prescribe: Provided, That such requirements must include at least requirements for a minimal utilization rate for covered procedures and for a medical review board to screen the appropriateness of patients for the proposed treatment procedures.” NOTES 1. Workshop participants, with historical identities noted, included Carl W. Gottschalk, M.D., who had chaired the Bureau of the Budget Committee in

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BIOMEDICAL POLITICS 1966-1967 that prepared the Report of the Committee on Chronic Kidney Disease, Washington, D.C., 1967; Jay Constantine, staff director of the Subcommittee on Health, Senate Finance Committee; William D. Fullerton, professional staff, House of Representatives, Committee on Ways and Means; David McCusick, assistant actuary (for Medicare), Social Security Administration (SSA); Charles L. Plante, Washington representative of the National Kidney Foundation (NKF); George E. Schreiner, M.D., past president and chairman of the committee on legislation, NKF; Gordon R. Trapnell, chief actuary (for Medicare), SSA; Irwin Wolkstein, deputy director (for policy), Bureau of Health Insurance, SSA; and James J. Mongan, M.D. (who participated by telephone), professional staff to the Subcommittee on Health, Senate Finance Committee. 2. Senator Jackson had a personal interest in Scribner's work. In 1964, a close grammar school friend of Jackson's, Ms. Kay Sloane, had become one of Scribner's patients. She began dialysis in 1967 and lived until 1977. 3. Noteworthy of Najarian's efforts in this regard was the sponsorship in 1972 by Senator Walter F. Mondale (D-Minn.) of legislation that emphasized kidney transplantation. 4. Even with the small number of patients in 1967, the Gottschalk Committee deemed both dialysis and transplantation to be established treatments that were no longer experimental. 5. Byrnes, an avid fan of the Green Bay Packers, was informed of the status of a key Packer with kidney disease by the treating nephrologist in Neenah, Wisconsin. 6. Constantine credits Paul Rettig with inventing the formula that permanent kidney failure patients were “deemed to be disabled for purposes of coverage under Parts A and B of Medicare,” thus making the kidney amendment part of the larger disability provisions. 7. Kountz was also prominent as the only black transplant surgeon in the country. Moreover, he had come to San Francisco from Little Rock, Arkansas, his home state, and was known to Mills and his staff. 8. David McCusick, Trapnell's assistant, recalls receiving a call from Mongan at 9 a.m. on Saturday, September 30, before the amendment was taken to the floor, asking for an estimate. He recalls saying that within 10 years the provision would cost $2 billion a year, an estimate that Mongan, according to McCusick, did not believe. Mongan does not recall this conversation. No documentation exists to check these differing recollections about an obviously hectic time. 9. Gordon Trapnell's January 18, 1973, memorandum included attachments indicating estimates for the kidney disease provision of 25-year costs to the hospital insurance portion of the program and the cash cost for the first five program years. These attachments were missing from the copy of the memorandum that was available to me. REFERENCES Altman, L. 1973. Kidney foundation criticizes articles on care costs. New York Times, January 19, p. 30.

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BIOMEDICAL POLITICS Bureau of the Budget. 1967. Report of the Committee on Chronic Kidney Disease. Washington, D.C. Evans, R., D. L. Manninen, L. P. Garrison, Jr., L. G. Hart, C. R. Blagg, R. A. Gutman, A. R. Hall, and E. G. Lowrie. 1985. The quality of life of patients with end-stage renal disease. New England Journal of Medicine 312:553-559. Institute of Medicine. 1989. Workshop on the Kidney Disease Entitlement. Washington, D.C., December 18-19. Lyons, R. 1973. Program to aid kidney victims faces millions in excess costs. New York Times, January 11, p. 1. Medical World News. 1967. Secret panel weights U.S. kidney policy. August 15, pp. 36-38. New York Times. 1973. Medicarelessness. January 14, p. 16. Rettig, R. A. 1976. The policy debate on patient care financing for victims of end-stage renal disease. Law and Contemporary Problems 40:196-230. Rettig, R. A. 1977. Cancer Crusade: The Story of the National Cancer Act of 1971. Princeton, N.J.: Princeton University Press. Rettig, R. A. 1981. Formal analysis, policy formulation, and end-stage renal disease. Case Study #1 in Background Paper #2: Case Studies of Medical Technologies; The Implications of Cost-Effectiveness Analysis of Medical Technology. Contractor report for the Office of Technology Assessment, U.S. Congress. Washington, D.C. Rettig, R. A. 1982. The federal government and social planning for end-stage renal disease: Past, present, and future. Seminars in Nephrology 2:111-133. Schelling, T. 1972. A process of residential segregation: Neighborhood tipping. In Racial Discrimination in Economic Life, Anthony Pascal, ed. Lexington, Mass.: Lexington Books. Trapnell, G. R. 1973. Memorandum concerning cost estimates furnished to the Congress during consideration of H.R. 1 for the cost of chronic kidney disease amendment January 18. U.S. Congress, Conference Committee. 1972. H.R. 1, Social Security Amendments of 1972: Brief Description of Senate Amendments (prepared for the use of the conferees). Conference committee print, 92nd Congress, 2nd Session, October 11, pp. 13-14. U.S. Congress, House, Committee on Ways and Means. 1971a. National Health Insurance Proposals. Hearings, 92nd Congress, 1st Session, October 19, 20, 26-29, November 1-5, 8-12, 15-19, Parts 1-13. U.S. Congress, House, Committee on Ways and Means. 1971b. National Health Insurance Proposals. Hearings, 92nd Congress, 1st Session, October 19 and 20, Part 1 of 13 parts, pp. 218-236. U.S. Congress, House, Committee on Ways and Means. 1971c. Statement of Shep Glazer, Vice President, National Association of Patients on Hemodialysis, et seq., National Health Insurance Proposals. Hearings, 92nd Congress, 1st Session, November 4, part 7 of 13 parts, pp. 1524-1546. U.S. Congress, House, Committee on Ways and Means. 1971d. National Health Insurance Proposals. Hearings, 92nd Congress, 1st Session, November 11, Part 10 of 13 parts, pp. 2226-2228.

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BIOMEDICAL POLITICS U.S. Congress, House, Committee on Ways and Means. 1972. Material Relating to Amendments to the Administration's National Health Insurance Partnership Act. Committee Print, 92nd Congress, 2nd Session, February 10. U.S. Congress, Senate, Committee on Finance. 1971. Social Security Amendments of 1971. Hearings, 92nd Congress, 1st Session, July 27, 29, August 2 and 3 U.S. Congress, Senate, Committee on Finance. 1972a. Social Security Amendments of 1971. Hearings, 92nd Congress, 2nd Session, January 20, 21, 24, 25, 27, 28, and 31, February 1-3, 7-9, Parts 2-6. U.S. Congress, Senate, Committee on Finance. 1972b. Social Security Amendments of 1972. 92nd Congress, 2nd Session, Report No. 92-1230, September 26 (legislative day, September 25). 118 U.S. Congressional Record 4840-4842, 1972a. 118 U.S. Congressional Record 33003, 1972b. 118 U.S. Congressional Record 33009, 1972c.

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BIOMEDICAL POLITICS Commentary Carl W. Gottschalk The circumstances of this case are unique in at least two regards. Patients with chronic renal failure are a cohort of identified individuals with an inexorable progress of their disease to a fatal outcome. There is absolute certainty that the disease process will be fatal unless patients are treated by one of the two available treatment modalities, which are potentially either curative (kidney transplantation) or palliative (chronic dialysis). Either can prolong survival for many years. The other unique feature of this case is that Section 2991 of the Social Security Amendments of 1972 is the only entitlement for a specific disease process, namely, chronic kidney failure. Richard A. Rettig presents a fascinating account of the enactment of Medicare coverage for patients with chronic kidney failure. At his initiative, for the first time, many of the principals, legislative assistants, officials of the Social Security Administration, and leading advocates for the program who were involved in passage of the legislation were assembled for a candid discussion of the events immediately preceding the adoption of the program in October 1972. The context of those events was multifaceted. Two very expensive treatment modalities had been painstakingly developed, largely at taxpayer expense, but they were essentially inaccessible except to the Carl W. Gottschalk is a Career Investigator of the American Heart Association and Kenan Professor of Medicine and Physiology at the University of North Carolina at Chapel Hill. He chaired the Gottschalk Committee.

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BIOMEDICAL POLITICS very wealthy because of the great discrepancy between supply and demand. The equity issue was agonizing. The proceedings of “life or death committees,” as they struggled with rationing these services in the few centers in which they were available, received widespread media attention. Advocacy groups consisting of patients, their families, and physicians, as well as the National Kidney Foundation, worked vigorously to stimulate federal and state governments to provide financial coverage for treatment. The issue of equity became even more sharply focused when in 1963 the Veterans Administration announced its intention to establish treatment units in VA hospitals across the country. The Public Health Service also established a number of treatment centers as demonstration units with decreasing funding. The widespread public visibility of these issues and the major fiscal considerations led the President 's Office of Science and Technology Policy to prompt the Bureau of the Budget to establish an expert committee to consider all aspects of the problems posed by chronic kidney disease and to make recommendations that addressed these problems. The committee's recommendations were not pursued. The 1967 report of this committee in effect resolved the debate about the experimental versus established nature of the two treatment modalities and recommended a federal program involving Medicare entitlement for chronic kidney failure patients similar to the provision that was eventually adopted. Although the report was well known to nephrologists, members of Congress and key congressional staff were totally unaware of it. Why was a national program adopted in 1972? Simply, the time was right. As the media extensively and effectively told the public, a serious health care problem existed, with many thousands dying each year because there was no access to scarce and costly treatment modalities. The unrelenting lobbying effort of several individuals was instrumental in creating a growing awareness of this need among members of Congress and their staff. Support for the proposed program abetted the political aspirations of certain powerful legislators, and at the time there was much congressional support for national catastrophic health insurance. The kidney legislation was viewed as a pilot program. All of these factors came together in the push toward completing action on the amendments to the social security legislation. There was little time for staff assistants and Social Security Administration actuaries to develop estimates of cost and the number of patients involved, and they were unaware of the detailed projections in the Bureau of the Budget report. Nevertheless, by a kind of political alchemy, the program was adopted with minimal public debate and signed into law by President Nixon one week before the 1972 presidential election. The hastily assembled cost estimates quickly proved to be seriously underestimated, and today costs continue to escalate. In 1987 they were $2.8

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BIOMEDICAL POLITICS billion, and equaled 3 percent of total Medicare costs. Ironically, the original legislation called for quality control surveillance that could have helped in cost control, but this feature has never been implemented. The great quandary when the legislation was enacted was whether to proceed with a less than perfect treatment program for the fatally ill or wait for a research breakthrough that would cure or preferably prevent the occurrence of chronic renal failure. Twenty-eight years later, this quandary persists. Thousands of lives have been extended for very significant periods of time. The extent of rehabilitation and the quality of life have been variable, but few have opted to drop out of the program. Techniques have improved and unit costs of transplantation and dialysis have decreased, but no research breakthrough is in sight. This commentator believes that such policy decisions should be based on the public's opinion as implemented by their informed elected officials.

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BIOMEDICAL POLITICS Commentary Stanley Joel Reiser The funding of kidney dialysis and transplantation through the federal budget of the United States in 1972 was a landmark decision in modern health care policy. As such, it has suffered a fate characteristic of landmark events—to be often cited but rarely understood. We are then indebted to Richard Rettig for the clarification his essay offers. Why it should count as a landmark is perhaps the most interesting facet of this tale of policy and a question to be engaged shortly. But first let us proceed to other features of this story, beginning with the influence of a frequently used instrument of policy—the advisory committee report. Here, it is represented by the 1967 Report of the Committee on Chronic Kidney Disease, which is known commonly, taking the name of its chair, as the Gottschalk report. The advisory committee is now a commonly used instrument of policy in the United States. Its stated purpose generally is to sort out in a controversial subject the true state of events, which it accomplishes through a panel of learned and often uninvolved parties. Such reports, however, are often commissioned or used after they are written for extrascientific purposes such as gaining support for a particular political position, pacifying critics, or postponing action. Rettig indicates that the report scientifically resolved the ques- Stanley Joel Reiser is the Griff T. Ross Professor and Director of the Program on Humanities and Technology in Health Care at the University of Texas Health Science Center, Houston.

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BIOMEDICAL POLITICS tion of whether dialysis and transplantation were effective in favor of the therapy and recommended the payment mechanism that was eventually decided upon for it—Medicare entitlement. Yet his research indicates that the report was virtually unknown to key policymakers who ultimately fashioned the 1972 kidney legislation. This situation is a typical fate of policy papers. Those for whom the paper is significant or even intended often do not see it. How to get such relevant data to decision makers is a problem that requires attention. Just as pressing an issue, however, is the fact that such documents are rarely designed for the multiple purposes to which they will ultimately be put. Here we can learn much from the British, who have a long history of policymaking through their version of advisory committees, the royal commission. The congressional hearing is a second feature of this story. Like the advisory committee, it is a vehicle for knowledge seeking, but as a forum for Congress, political purpose openly pervades its use. Rettig sheds a revealing light on the true events occurring on November 4, 1971, when the House Ways and Means Committee provided a forum for testimony on kidney disease therapy and allowed the dialysis of a patient before members of Congress and the press. By this time, the dialysis machine had become a potent symbol of the power of the emerging technology of medical rescue; technology that could make both biologically secure and socially productive life possible. Just as penicillin stood for the progress medical science was making through drugs when it was introduced in the 1940s, so the kidney dialysis machinery had become for the 1970s the epitome of medicine's ability to turn away death with advanced machines that could substitute for critical biological functions. Politicians found support of such innovation attractive and, in the end, easy to give—as long as their cost was not prohibitive. It is here that miscalculation crept in, for the ground under the long-term estimates of a new technology's cost cannot be trusted to sustain the weight of future uses. No one foresaw in 1972 the magnitude of the growth in dialysis and transplantation because no one could anticipate how future clinicians would expand the clinical indications for the technology. Time and again, projections of a technology's use are based on indications from the present continuing into the future. New developments that improve the effectiveness and safeness of a technology, clinical experience with its use, and changes in reimbursement policy are some of the many facts that inevitably influence the way a technology is applied. Such uncertainties should be recognized and cited in the development and announcement of projected costs. As the costs of treating kidney disease have passed the $2 billion mark and are creeping toward $3 billion per year, many wonder at the wisdom of the initial policy and recommend caution in introducing federal financing of disease-specific therapy. It is in this negative sense that the kidney treatment

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BIOMEDICAL POLITICS program is cited as a landmark—of a policy not wisely calculated from a fiscal perspective and of a disease-specific approach that is inappropriate for the public financing of medical care because it is unfair to those who suffer from other ailments. It must be understood, however, that the approach of the United States to coverage of population groups for medical care has followed an incremental and sometimes disease-based pattern. For example, in the nineteenth and twentieth centuries, public facilities for treatment of mental illness and mental retardation were made available. Thus, the kidney treatment legislation was within the realm of American policy tradition for health care. Furthermore, this is not the first time that long-term program costs have been underestimated by government. We do it continually, with the overruns on Medicare and Medicaid as even more dramatic examples of our failings. Thus, a misreading of the traditions of American health policy accounts for one source of criticism of federal funding of kidney disease treatment. But there is another facet that helps explain the place of the kidney legislation as a cautionary tale in the lore of health policy—the ambivalent feelings generated in us by its technological mainstay, the dialysis machine. It is a power that saves and a power that costs; it makes life possible, but that life can be a source of misery. The evocation of such multiple and conflicting images creates ambiguity and perplexity regarding appropriate clinical use and public policy. The dialysis machine has become a metaphor for modern technological medicine, and deciding the right response to this whole new area of treatment continues to elude the makers of policy and holders of political power in the United States.