A House Commerce subcommittee survey taken 10 days ago showed that Washington Hospital Center was paying only 79 cents a pint for dextrose solution, but Arlington Hospital was paying $1.33 and Children's Hospital $2.68 for the same brand.
A similar survey two days ago disclosed that one D.C. hospital was paying its suppliers 50 cents, another 60 cents and a third 79 cents for a white bread costing 33 to 34 cents at Safeway or Giant.
These startling differences were cited by Chairman Bob Eckhart (D-Tex.) and Reps. Edward J. Markey (D-Mass.) and Doug Walgren (D-Pa.), at a House Commerce oversight subcommittee hearing yesterday as examples of how the federal government and the states are wasting billions of dollars in the Medicaid and Medicare programs each year.
Eckhardt and Markey strongly pressed Secretary of Health, Education and Welfare Patricia Roberts Harris to move faster on these and other examples of waste outlined by subcommittee members or by Elmer B. Staats, U.S. comptroller general. Harris declared that HEW had initiated action on 93 percent of Staat's recent cost-saving proposals.
Eckhardt, Staats and Markey cited these examples of waste:
For at least 10 years, the government has been reimbursing hospitals or the states for Medicare and Medicaid drugs found to be ineffective by the National Academy of Sciences or still to be proven effective -- at a cost Eckhardt and the General Accounting Office estimated at $40 million a year, at least counting only these drugs actually declared ineffective.
Dr. Sidney M. Wolfe, director of Health Research Group, said the figure is $100 million a year if the still-to-be-proven group of drugs is included in the calculation.
Although HEW banned use of both groups of drugs in its own direct medical services (like Public Health Service hospitals) 10 years ago and the surgeon general recommended the ban for Medicare-Medicaid, too, HEW hasn't taken that step.
Harris told Eckhardt that while she has the legal power to ban most of these durgs on the basis of findings so far, the findings are only "preliminary" and she would prefer to wait until she gets a complete report from the Food and Drug Administration.
Eckhardt said this process would take until 1985, meaning that the drug would still be paid for until 15 years after the NAS first made its findings. Wolfe is suing HEW to block reimbursement immediately.
Staats said HEW must move much faster to press states to do routine blood sampling of newborn infants to detect metabolic conditions which cause mental retardation if untreated early. For $18.5 million a year they could save untold agony to children and parents, prevent 50 deaths a year and incidentally save $437 million in the costs of caring for those who, untreated, would become retarded.
Staats said HEW hasn't done a good job of pressing states to set up good medical management information systems -- which locate fraud and abuse in Medicaid. Eckhardt estimated a good nationwide system would save $1 billion annually based on New York experience.
Staats said there is great waste in the enormous differences in prices paid by hospitals in the same community for drugs and supplies, reimbursed by federal and state governments under Medicare and Medicaid. He said GAO's surveys indicate 100 percent price differences for at least one-fifth of items surveyed.
He suggested HEW publish price lists so that hospitals in a community could learn what others were paying and avoid overpaying. Harris said she likes the idea but indicated HEW isn't ready to move yet, adding that clamping some ceiling on what HEW will reimburse for drugs and supplies might just cause hospitals to make up the money by charging their private patients more.
She said the administration hospital cost containment bill (which the House killed last year) is the solution. Markey hammered her on the price list idea, in a heated exchange, demanding faster action by HEW.
Staats said some of the states had failed to get back large overpayments in the Medicaid program paid to hospitals and other medical providers -- for example, in only five states (New York, California, Florida, Georgia and South Carolina) the GAO, in one survey, found $222 million uncollected Sometimes when states did collect, instead of paying the federal government back its share rapidly, the states held the money for long periods -- years, even -- and earned interest on it.
Harris, challenged on why HEW hasn't moved faster on some of these problems, vigorously defended her agency and said initiatives are under way in many criticized areas.
She said HEW is proposing legislation to allow bulk purchases of supplies for Medicare and Medicaid patients, thus reducing high prices now paid by individual hospitals or patients for drugs, eyeglasses, hearing aids, lab tests and the like.