that is expected to bear the burden of financing this proposed bill, and we strongly protest being forced to pay for unnecessary legislation that would complicate and seriously hamper the job we are all attempting to accomplish in our work, by giving of our time and our skill, in helping to provide adequate medical care for all who need it, regardless of ability to pay. Many of us also have small children, many bills, and few assets, and we do not feel that we should be expected to finance the hospital bills of some of the aged who are much more financially solvent that we are.

In summary, we feel, from personal contact with the aged, that H.R. 4222 is unnecessary in that it would be completely impractical and inadequate to meet the medical, social, and economic needs of the aged.

Thank you, gentlemen.

The CHAIRMAN. Thank you so much, ladies, for coming to the committee, especially at this late hour, to advise us of the views of the American Association of Medical Assistants. We appreciate hearing from you.

Miss WILLIAMS. Mr. Chairman, may I have permission to make one comment?

The CHAIRMAN. You certainly may.

Miss WILLIAMS. I was president of this group for 2 years, and it was my opportunity to address and visit with medical assistants all over the United States. I have talked personally with hundreds of medical assistants. I have been told on many occasions that they have conducted in their offices informal polls among their patients regard ing their feeling concerning this type of medical legislation, and I have learned from them-now, this cannot be substantiated by statistics, but nevertheless it is factual-that a great many of their patients have expressed themselves as being opposed to this form of medical legislation.

In addition to that, I have been a medical assistant for 25 years. My duties have been largely concerned with the financial end of the group practice, in whose employ I am, and I have found in my personal experience, talking with many, many patients about their finances, that they, too, are opposed to this form of medical legislation. The CHAIRMAN. Thank you again.

Is Mr. Tarrell present?

Mr. Tarrell?

Dr. Hendryson?

Doctor, we always save the real good witness to the last. You happen to be the one for today. We are sorry we have to keep you so long to hear you. But if you will identify yourself for the record, we will proceed to recognize you.

STATEMENT OF IRVIN E. HENDRYSON, M.D., REPRESENTING THE COLORADO STATE MEDICAL SOCIETY

Dr. HENDRYSON. Mr. Chairman, members of the committee, I am Dr. Irvin E. Hendryson of Denver, Colo., a practicing physician, testifying before you today as a representative of the Colorado State Medical Society. This testimony is in the interest of those many individuals and organizations who have been actively and closely associated with the needs of our senior citizens in Colorado for a

great number of years. Since the State's earliest foundings physicians, hospitals, charitable organizations, community governments, churches, and civic organizations have not only been vitally interested in the total needs of our senior citizens but have been actively engaged in promoting programs to fill these needs. As the years have progressed established local welfare departments have entered the scene and have contributed to the solutions of these problems. As early as 1935, senior citizens themselves have banded together (in membership in the National Annuity League) and have contributed intelligently to aid in equitable solution of the needs of the senior citizen in our State. We have had a rather extensive medical care program for our aged pensioners for over 311⁄2 years.

It is because of this background, gentlemen, that we appear before you today hoping that some of our experiences may be of value in your consideration of the proposed legislation and also the total problem dealing with the best solution to help those aged citizens who need help in providing for themselves. We respectfully suggest that our experience is long, and dedicated. We believe that we are not Johnny-come-latelies in this field and we are presenting facts here that have been derived from the hard school of experience.

In our testimony we should like to review briefly (for background information) our old-age pension plan which has been functioning successfully in Colorado since 1936. We will also familiarize you with the health and medical care program which was approved by a constitutional amendment in November 1956. We shall point out the strength of the program as well as the weaknesses which have - become apparent during its years of operation.

With our experience in this area as background information we will try to illustrate our conclusion that the legislation you are now considering, the King-Anderson bill, is not needed in Colorado, and we feel would, in fact, be a dangerous precedent for our Federal Government.

We believe that Colorado is providing good medical care to our needy aged. Our old-age pension medical care program is currently in financial trouble and we recognize the fact that there will undoubtedly be more troubles from time to time with our program. We believe the very nature of this type of medical practice financed by State money will inevitably lead to problems but we sincerely believe that we can best solve these problems on a local level without a federally controlled program. Implementation of the Kerr-Mills law in Colorado will go a long way toward answering our current problems and handled intelligently should also provide a long-range solution to many of our problems.

THE OLD-AGE PENSION PROGRAM IN COLORADO

In 1936 the citizens of Colorado approved a constitutional amendment which created a statewide pension system. The amendment provided that all persons over the age of 60 would receive a minimum pension (less other income) of $45 a month and as much above $45 as the pension fund could pay. To finance this program the amendment assigned 85 percent of all proceeds from the State sales, use, and liquor taxes, as well as all revenue from a special levy in inheritance taxes and corporation license fees, and 85 percent of the

revenue from all city and town beer and liquor licenses. The fund was also assigned 85 percent of all of the future excise taxes that the State might levy. Whatever sums accumulated during the year above the amounts paid out monthly to pensioners were distributed as a bonus to the pensioners. At the time of the acceptance of this responsibility it was intended to satisfy the total minimum needs of older people.

The program became operative September 1937. About 30,000 persons were immediately eligible for benefits. In 1941 a residence requirement was instituted for pensioners between the age of 60 and 64. To be eligible for the pension persons in this age group had to have resided in the State since 1906. This was later changed in 1949 to a flat 35 years. The resident requirement for those 65 and over remained at 5 years as residents of the State.

It became evident in 1943 that it was economically necessary to limit a pensioner's assets for continued eligibility to $750 a year. This latter figure was raised to $1,000 in 1957. These necessary changes for eligibility in the pension program were the result of raids on the program by those who did not specifically need help. When this was recognized there was no question raised concerning the rights of a person to receive the benefit. Nor was there any feeling voiced by the public that it was particularly immoral to expect recipients of the program to state honestly and sincerely that their means were such that they should receive benefits under the program. The regulations written into the program were a means test. It was found very early in the operation of the program that unless regulations of this type were written, the very purpose for which it was designed would be defeated because of financial disaster to the program.

As time went on and population growth in the State rapidly increased, it became obvious that the initial assessment of 85 percent of all future excise taxes to the plan was working an intolerable financial hardship on an ever-expanding State government. It became apparent that new taxes would have to be raised in order to keep the State government financially solvent but with the 85 percent provision written into the initial law any expansion in excise taxation would still produce only a 15 percent advantage for the State government.

To correct this problem a new program was developed. As a result in November of 1956 another constitutional amendment was placed before the voters which (1) assured payment of $100 per month (less any other income) for all eligible State pensioners, with increases if the cost of living rose; (2) established a $5 million stabilization fund to assure full pension payments at all times; (3) established a $10 million a year fund from tax revenue to finance a health and medical care program for pensioners; and (4) provided that all tax revenue about that needed each year for pension payments and the $10 million health care program were to revert to the State general fund for other public expenditures. The citizens of Colorado approved this new amendment and on January 1, 1957, the new program became effective and accumulation of the new medical care fund began. This relieved much of the financial burden of the State government. It preserved the old-age pension plan for care of the needy and it established a medical and health program plan to which I would now like to turn your attention.

MEDICAL CARE PROGRAM FOR THE AGED

Since the constitutional amendment did not specify the kind of health care program to be instituted, the decision was left to the State welfare department. This agency, recognizing that this was indeed a community effort, involving many segments of the community, promptly organized a medical advisory committee to guide it in implementing the program. The organizations represented on the medical advisory committee included the State medical society, osteopathic association, pharmacal association, hospital association, dental association, the State department of public health, the State association of county commissioners, the National Annuity League, the State chamber of commerce, league of women voters, and county welfare directors association.

In the initial planning many alternatives were considered. In the committee's deliberations there were four major alternatives to be considered from the point of view of administration of the program and of provision of services to the pensioner.

(1) It was suggested that the welfare department administer the program directly by contracting with physicians and hospitals for their services to pensioners. This would have required the department to establish fee schedules for physicians, payment formulas for hospitals, and regulations governing quality and quantity of services pensioners would receive. It would have required the creation of a new system and broad expansion of the department to meet the demands of the new program. The welfare department believed that working with existing medical agencies would provide the desired results more efficiently and more economically.

(2) It was suggested that the entire medical care fund could be prorated among counties so that each county welfare department could administer its own health and care program. Because of the geographical nature of our State, the large size and sparse population of some of our counties, and the wide variations in available medical facilities, this condition was readily recognized to be unworkable and undesirable.

(3) Another consideration was that the State employ panels of physicians to care for the pensioners and even construct and operate special hospitals for the aged. This was rejected immediately because it denied free choice of physician and hospital for the pensioner which all participants felt to be a vital consideration.

(4) Finally, a suggestion which gained strong support was that the State welfare department purchase Blue Cross and Blue Shield health insurance for all pensioners. Since these plans already covered close to 40 percent of the State's population, their use could free the welfare department of direct administrative responsibility and of all but final fiscal responsibility and review. There were several objections to this proposal. The standard contract of Blue Cross and Blue Shield did not suit the needs of the pensioners without modification and there were no figures on use, so that premiums could not be fixed with any accuracy.

Finally, a close alternative was worked out in line with this last proposal. This proposal provided that the welfare department contract with the Blue Cross and Blue Shield plans for their administration of a program of hospital care and inhospital medical services.

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The department would pay their costs plus a fixed fee per claim. The department elected at the same time to administer directly a program of financing nursing-home care for pensioners.

HOSPITAL SERVICES

The program arrived at provided for the coverage of full cost of hospital care in a semiprivate room in any general hospital in the State from the first day of hospitalization through the 30th day per admission. Full coverage could be extended beyond the 30th day if requested by the attending physician and approved by the welfare department. Waiting periods for preexisting conditions were waived.

PHYSICIANS' SERVICES

The medical care benefits for pensioners agreed to by the physician in Colorado and Blue Shield were essentially those of the standard Blue Shield contract then in effect on a service basis for low-income subscribers. The contract provided complete coverage for inhospital surgical and medical care, as well as accident and emergency care in or out of the hospital. As in the Blue Cross agreement, waiting periods for preexisting conditions were waived for pensioners. After the program was initiated several changes were made to provide for physicians' services. On December 1, 1958, physicians' services were extended to pensioners in nursing homes. Physicians agreed to accept as payment in full the fees set for visits to pensioners in nursing homes and they varied from $2 to $5 per call. In July 1959, limited benefits for physicians' home and office calls were added to the program. Each pensioner could receive a maximum of two home or office calls in each calendar quarter. On January 1, 1960, a new physicians' fee schedule was accepted for services under a new schedule called the standard A plan fee schedule.

NURSING-HOME CARE

The State welfare department contracted directly with the State's nursing home to provide nursing-home care for pensioners. The pensioner entering a nursing home agreed to pay the home $100 from his pension or other income and the welfare department agreed to supplement the pensioner's payment by an amount dependent jointly upon the services available in the home and the amount of care required by the patient. The amount of care required by the patient was broken down into four categories dependent on whether the patient could care for himself or whether he needed bed care and professional nursing care. These supplementary payments by the welfare department varied from no payments to a maximum amount of $95 per month.

COSTS OF DRUGS AND TRANSPORTATION

Drugs were provided pensioners only in hospitals and nursing homes. In hospitals they were paid for within the Blue Cross formula for reimbursing hospitals. The welfare department paid the cost of public transportation needed by pensioners to reach hospitals or nursing homes. This provision was necessitated by the long