Now, how typical Monroe County is of other county societies I have no way of knowing. I do know in casual conversations around Massachusetts General, a very large proportion of the staff are in favor of this proposal. I cannot tell you the exact number. We have never taken a poll.

I have spoken on television in Massachusetts within the last week in a debate with the president of the Massachusetts Medical Society on this topic.

As I came to the hospital many doctors stopped me in the hall and said, "That was fine; this is exactly the view that I hold.”

So, while I cannot give you any quantitative data that are reliable at all, I think it is fair to assume that a good many physicians are not as opposed to this legislation as the leadership of the AMA has possibly indicated.

Now on the legislation itself, there are a few points, most of which have been made, that I think deserve a little attention. I, myself, would prefer to see the benefits broader. I also think, as Mr. Colman stated, that a good deal of medical care of elderly people should be, must be, ought to be provided for ambulatory cases, and while this does make some start on that with diagnostic benefits, I hope eventually this would be broadened. This would be a better type of preventive program, I believe, than simply institutional care and diagnostic benefits plus home service. This is a good start.

The principal reason for my coming to testify is that I was a member of President-elect Kennedy's task-force on health and social security, whose report you have undoubtedly seen and which report was in favor of this type of legislation including the various elements I just listed and which are in this bill.

I also share the view that the Blue Cross, in particular, may well benefit from this legislation by having the burden, actuarial burden, of the 65-and-over group removed from their contracts enabling them to compete more favorably with other insurance schemes which have not done as much for the 65 and over as the Blue Cross has.

The result of the present situation is that the Blue Cross premium, in order to cover this group, has often had to be higher than competing companies. With the removal of this obligation-which I think should be stated in praise of Blue Cross, they have tried to meet which has put them at a disadvantage competitively—that would be improved.

As to the utilization under such a program, I do not see how one can make any further more reliable estimates than have been given to you.

It is true, by providing financing, unquestionably there will be uncovered needs that will have to be met. Whether our present facilities can meet them all or not is perhaps debatable.

I would say that it will very likely, as Mr. Colman has suggested, result in some expansion of the facilities. If so, if this proves to be true, it is excellent proof of the fact that need was existing and that the program may make it possible to meet it.

Now how large that unmet need is is put before you in various studies. I cannot really give you any better estimate than you have already.

I do myself believe personally that we will be able to meet it, perhaps with some delays at first that, over a period of time, however, this

will be reached, accommodation will be reached and the program will not tax our facilities and personnel beyond a reasonable amount over the long run.

A good deal of reference has been made as to the effect on quality of care. In my opinion, if anything, this program would improve the quality of care. Obviously, care now being provided with the very difficult financial problems it creates for hospitals, many times is paid for more or less at cost or in full, makes it impossible to provide a higher quality of care. And then access to care that its people have, with less barrier in between themselves and hospital utilization, nursing-home utilization, obviously is a measure to some extent of the quality of care. If care is available and then is made accessible to persons, this is obviously improving the quality of care that he formerly would not have received, or received with more difficulty.

I think there are two more points that perhaps should be mentioned. One of the questions raised was restriction of facilities or doctors that the people might choose from. This again, it seems to me, has been much overemphasized. It is quite clear to me that the patient would have no more restrictive choice than he has under Blue Cross plans or anything else. After all, hospitals in most States have to agree to join before they are accesible under Blue Cross or any other program. Therefore, I would not think that there would be any serious restric tion of any sort, as far as choice goes, of institutions.

One point, it seems to me, has not been mentioned and I do not believe it is very easy to demonstrate how important it is, yet I think it must lie behind some of the opposition to this program and particularly to the possible expansion of it someday into payments for physicians' services, and my point here is a fear-an unspoken oftentimes fear on the part of the physician, of the fixed fee they would be obliged to accept for the services provided if physicians' services were included.

As you well know, there is a tradition among physicians that the fees should not be fixed, they should be adjusted to the circumstances of the patient, either up or down. There is a good deal of resistance generally to programs that tend to fix these fees. I think this must lie behind opposition more than is immediately apparent.

I would guess if the program called for money payments or money contributions toward the doctor's bill, let us say, rather than, say, payment of the doctor's bill, there would be much less opposition.

To illustrate the kind of thing that happens, in the Massachusetts Blue Shield the income limits were raised about 2 years ago, the income limits below which the physician was required to accept the payment of the Blue Shield in full as the payment of his bill, were raised up to $7,500, I believe. There was a tremendous uproar in our medical society about this. Indeed, a serious attempt was made to have this action rescinded. It was not.

In Connecticut, when somewhat similar action was taken-you may have heard of this from other witnesses-the result was-I am not sure it was formal impeachment, but at least throwing out of all the officers of the medical society that had approved the increase in income limits and elections of other officers. So there is an intense feeling on the part of physicians about the fixing of the fee and I think this is behind a lot of the opposition and fear that a program like this, if extended to physicians, would result in a fixed fee and

obligation of the physician to accept this as he does in medicare, for instance, for full payment of his services.

In medicare, of which I happen to be on the advisory committee, one of the administrators, General Robinson, and later General Wergelund, have felt that the law requires them to say to the beneficiary, "The doctor may not charge you anything beyond what the medicare program pays the doctor."

This provision has been bitterly attacked by a good many physicians and at least four-I think it is four-State medical societies have withdrawn their approval or do not give their approval to the medicare program, largely on this ground. I am not sure of these States, I believe Texas, either Ohio or Indiana, Rhode Island and South Carolina, possibly Georgia, have refused to give approval or withdrawn approval of medicare.

I was at the hearing when the people came before General Robinson and General Wergelund and asked to have the system changed. They disapproved largely because they were obliged to accept the fee as full payment for services rendered.

There lies behind some of the opposition a fear that a similar situation might arise if physicians' services were included.

Mr. Chairman, these are about all the observations I had in mind which do not duplicate in one way or another what you have already heard.

I would ask permission to send you a copy-I have a copy to leave but it is so scratched up as I altered it during the day that I would prefer to mail it in to you in the next day or so when I can get it retyped so that it is more legible for you.

The CHAIRMAN. That will be fine, Doctor. It will be included in. the record without objection.

(The statement referred to follows:)

MASSACHUSETTS GENERAL HOSPITAL,

Boston, August 17, 1961.

Mr. LEO H. IRWIN,

Chief Counsel, Committee on Ways and Means,

New House Office Building,

Washington, D.C.

DEAR MR. IRWIN: At the time of my appearance before the House Ways and Means Committee to testify in favor of H.R. 4222, on August 3, 1961, I received permission of the committee to submit a further statement for the record.

After reviewing what I gave in testimony before the committee I find that I did not have additional specific information of major importance and, therefore, prefer to submit at this time a summary of my general views on the matter, which I hope you will deem suitable to be put in the record.

It is generally agreed that a very large number of those 65 and older, when faced with hospitalization and chronic illness, need financial help. They simply do not have the funds to meet the increasingly high costs of hospitalization and the ancillary medical services. The cost per patient-day at Massachusetts General Hospital is now $40 and, as you well know, relatively few of the aged can afford such a drain on their capital. And this figure does not even include the costs of private duty nurses, laboratory services, and doctors' fees. There are many reports, surveys, conference minutes, and testimonies which corroborate the following facts concerning the cost of medical care for the aged :

(1) The aged individual generally lacks private funds sufficient to cover such high costs. His capital and lifetime savings are very quickly drained away when he is faced with a long-term illness.

(2) Commercial insurance companies, in competition to keep premiums down while making a profit, haven't been able to take major responsibility for covering the retired aged, the highest risk group.

76123-61-pt. 3-29

(3) Blue Cross has tried * * * but is finding it increasingly difficult. It is under great pressure to continue to compete with commercial insurance premium rates. Blue Cross directors recently admitted that "the aged are uninsurable by Blue Cross."

(4) Persons aged 65 and over use about 21⁄2 times as many days of hospitalization per capita as are used by the population under 65 years of age. Thus, it is accurate to say that the majority of aged people entering hospitals or nursing homes for more than short periods have neither sufficient capital and income nor sufficient insurance to cover their medical costs. And the situation will not correct itself without Government assuming a greater role, in one way or another.

The congressional controversy over medical care for the aged springs from a conflict in method of approach to the problem of helping the aged with their medical bills: There is substantial agreement that the aged need this help.

The two approaches are: (1) An expansion of the present public assistance programs to cover medical costs of old-age assistance recipients and to help the "medically indigent," the category of individuals who can ordinarily support themselves without welfare funds but who cannot meet the high costs of illness. The recently enacted Kerr-Mills law functions according to this approach and the program it established is known as medical assistance for the aged. It allows the States additional Federal funds for extension of their welfare programs to cover medical costs for qualifying individuals. The States must pass enabling legislation in order to become eligible for these funds and they must match the Federal funds according to a prearranged formula. Massachusetts has enacted such a law and it has been in effect since October 1, 1960. Aged persons applying for medical assistance for the aged must undergo a thorough financial investigation (means test) to make sure they are unable to meet all the ! costs of their medical care from their own resources.

The second approach is to extend the scope of the social security mechanism to include payment of the unpredictable high-cost portions of medical care (longterm hospitalization, nursing home care, home care, and outpatient laboratory fees) for those over 65 who are eligible for OASDI. This approach is embodied in the King-Anderson bill supported by the present administration. As you can see, the scope of its coverage is limited to a few areas of medical costs. It does not at present include physicians' fees, medications, etc.

While there is need, and probably always will be, for a relief program of medical care for aged persons in financial need, it seems to me that the great bulk of aged persons who are self-supporting for the ordinary costs of living but who cannot meet the costs of hospitalization or of prolonged nursing-home care without aid, ought to be able to secure such aid without a financial investigation if they are eligible for old-age and survivors insurance (social security) by reason of having made their contributions to this system during their working life. Therefore, I am in favor of Congress adopting the KingAnderson bill in addition to the Kerr-Mills law. Between the two programs virtually all aged persons could then receive aid in meeting the costs of hospitalization, nursing-home care, and other necessary medical services. Briefly out lined, my reasons for this position are:

(1) Welfare programs are emotionally difficult for the aged. The means test is acknowledged to be stressful. It feels undignified to the individual and is, therefore, rejected. Moreover, in order to qualify for medical assistance for the aged, one must be very nearly a pauper, even by the liberal Massachusetts qualifying requirements. Relatively few States have even passed legislation which implements the Federal Kerr-Mills law and, even supposing that all States do put it into effect, there will be large inequalities in benefits provided and eligibility requirements from one State to another.

(2) The aged themselves want a contributory mechanism; i.e., a prepayment mechanism to which the costs of illness in old age are paid for in advance during the productive years. The King-Anderson bill provides this mechanism on a uniform, nationwide basis.

(3) Because there is presently in effect no satisfactory program to help those over 65 pay their medical bills, hospitals are continuing to have more and more bad debts, causing serious deficit situations. In the case of the Massachusetts General Hospital, for instance, we estimate there is an annual loss of about $750,000 on the inpatient care provided here for persons aged 65 and over.

(4) Once adopted as an amendment to the Social Security Act, the KingAnderson proposal would not be subject to political maneuvering in either

Congress or the State legislatures to anything like the degree that is almost bound to occur in any program (such as that under the Kerr-Mills law) dependent upon annual Federal and State appropriations.

The principal objections to the King-Anderson bill voiced by the American Medical Association, the U.S. Chamber of Commerce, and a few (very few, since a recent Gallup poll showed 63 percent of the population to be in favor of it) others are:

(1) It would involve direct action by an agency of the Federal Government in local medical affairs. (Why this is so horrible, I can't see, since our experience with National Institutes of Health, for example, has encountered nothing but intelligence, interest, efficiency, and fairness.)

(2) Such a program would not long be limited to persons 65 and over but would inevitably be enlarged, eventually to include the entire working population and their families. (My guess is quite different, namely, that by taking the heavy burden of care of the aged off Blue Cross-Blue Shield and other voluntary insurance it would make possible a much needed expansion and improvement of voluntary insurance, with the result that there would be no need for any Government action in regard to the working population and their families.)

(3) The program would not long remain limited to hospitalization and other institutional benefits but would inevitably grow to include the services of physicians in private practice. (Maybe so, but would that be bad? I suspect that behind this lurks an unspoken fear that physicians taking part in such a program would have to accept a fixed fee for their services which organized medicine always opposes. But this would be no different from the Baker Memorial system in effect at the Massachusetts General Hospital for 30 years, or consulting for the Veterans' Administration or Public Health Service, or payment for services to dependents of the Armed Forces, to which doctors seem to have no objection.)

(4) In some undefined way, the King-Anderson bill would restrict the patient's choice of physician and hospital and would lower the quality of medical care received by aged persons. (Wide-open free choice is provided in the bill, so I think the charge of "restriction" is just a deliberate fabrication. As to quality, my guess is this would be improved through more ready access to needed service of all kinds, more thorough diagnostic and treament procedures, etc.)

All in all, it seems to me that vastly more good than harm for patients, doctors, hospitals, and others would result from enactment of this very constructive program.

Sincerely yours,

DEAN A. CLARK, M.D.,

General Director.

Dr. CLARK. Are there any questions? The CHAIRMAN. Are there any questions? Mr. KING. I would not want to miss the opportunity, Dr. Clark. You have been so frank in touching on certain matters that I feel perhaps you are the witness to help me satisfy myself in respect to what I consider the incongruity, if that is a good word. In the event you do not know, I am going to spell out what the Kerr-Mills bill provides. When you read it, and I am directing this question, Doctor, with respect to the constant reminders that we in the committee have received of the British system. I repeatedly say it is not a fair comparison to compare the benefits that will derive from H.R. 4222, if it is passed, with a totally socialized system in Great Britain. But the Kerr-Mills bill provides 12 distinct valuable services: Inpatient hospital service, skilled nursing-home service, physician service, outpatient hospital or clinic services, home health care services, private duty nursing, physical therapy and related services, dental services, lab and X-ray services, prescribed drugs, eyeglasses, dentures, prosthetic devices. Incidentally, it was descried shortly after the British system became effective, diagnostic screening and preventive services and any other medical care or remedial care recognized under State law.