GTE executive tells Congress that government should join with business to become a 'purchaser' of health-care services

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WASHINGTON -- Testifying before the House Ways and Means Committee's

Subcommittee on Health here, GTE Senior Vice President - Human

Resources and Administration J. Randall MacDonald said that government

should join business in becoming a "purchaser" of health-care services

rather than just a "payer" and "regulator."

The committee is conducting hearings to determine how the

government's Medicare program can best move from a traditional "fee-for-

service" system to a managed care environment that uses health-care

providers such as HMOs.

"GTE and other employers that are aggressive and responsible

purchasers of health-care services are in the best position to demand

information and accountability from health plans. We encourage the Health Care

Financing Administration (HCFA) and other governmental purchasers to join us,"

said MacDonald. "We welcome Medicare's efforts to become a more prudent

purchaser of health care on behalf of its 38 million beneficiaries," he added.

MacDonald said GTE provides health-care coverage for a quarter

million employees, retirees and dependents in all 50 states. "GTE spends

more than $500 million each year on direct health-care costs and

estimates an equal amount in lost time at work.

"We've been successful in improving health care by bringing

information, measurement, accountability, health-plan choice and employee

education to the process through relationships with our management and

union employees," he said. As a result, more than 65 percent of GTE's

employees voluntarily chose managed health-care plans for 1997.

Employees Are Satisfied with Managed Care Plans

MacDonald added that surveys show greater employee satisfaction

with managed health-care plans than with traditional fee-for-service

plans. "We believe high employee satisfaction is directly related to the high-

quality plans that we offer. GTE holds health plans accountable in a way that

does not interrupt the doctor-patient relationship and focuses on medical

necessity and appropriateness. A key to quality is insisting that only

physicians make medical decisions. We believe that neither private nor public

health-care purchasers should mandate medical practice," he said.

MacDonald went on to explain how GTE gathers information on

provider performance from a variety of increasingly sophisticated sources

and then shares it with employees in an easy-to-understand format. In

addition, it rates the plans in terms of quality, overall cost effectiveness and

patient satisfaction, awarding the top performers with GTE's "Exceptional

Quality Designation" as a way to assist employees in their selections.

"Our employees have the responsibility for the health-care

choices they make. We assist employees with making informed choices, but they

select the health plan that provides the best value for their individual

circumstances," MacDonald explained.

He said the company also shares the results with all of its providers,

identifying "best practices" that can be used to raise the overall quality of

services for employees. Most importantly, "we now have very good

evidence that the better quality health plans actually cost less: improved

quality drives costs down."

Government Moving In Right Direction, But Must Do More

MacDonald said GTE supports the steps HCFA had already taken to

use its market influence on health-care purchasing but that it can

further enhance its efforts and those of the private sector by exercising its

leverage in demanding improved data, cost and quality; developing a standardized

method to share information with consumers; and, maintaining a commitment to the

development of standards in cooperation with private purchasers such as GTE.

"Congress must be very careful not to undermine managed health-care --

the delivery system that may be crucial to the government's ability to

control its own health-care quality and cost," MacDonald said. "We urge

agencies to build upon the work of private employers and not preempt them

or establish conflicting requirements," he said.

About GTE

GTE, with revenues of more than $21 billion in 1996, is one of

the largest publicly owned telecommunications companies in the world. It is

also the largest U.S.-based local telephone company and a leading

cellular-service provider -- with wireline and wireless operations that form a

market area covering about one third of the country's population. Outside the

United States, where GTE has operated for more than 40 years, the company serves

over 6 million wireline and wireless customers. GTE is also a leader in

government and defense communications systems and equipment, aircraft-passenger

telecommunications, directories and telecommunications information services and




Additional information about GTE can be found on the INTERNET at


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