I am past president of the society and now serve on its board and as editor in chief of its official publication, the Journal of the American Geriatrics Society.

Our organization was formed in 1942 in response to the rapidly increasing number of our older patients. Our members are not newcomers, therefore, to the health problem of the aging.

We are convinced, Mr. Chairman, that H.R. 4222 would be a tragic mistake and that Congress should not pass it into law. We have many reasons for this conviction, but we shall touch upon only a few of them during the brief time allotted for our testimony.

First, let me remind the committee that geriatrics is not a specialty of medical practice. There is no reason why it should be at the present time, for there are few diseases peculiar to older people.

There are simply diseases among older people, just as there are diseases common to all age groups.

However, the elderly experience more chronic illness and less acute illness than our younger people, which means that any device for providing treatment must be based upon this knowledge.

H.R. 4222 is not, for it stresses treatment within the institution and not outside of it.

Chronic illness is sometimes disabling, but not always. The term applies to a recurrent condition or a persistent condition. And in many cases a chronically ill person can lead a normal life limited only in degree by the nature of the illness.

Hearing difficulties, the need for glasses, diabetes, these are examples of chronic illness. Similarly, arthritic and rheumatic ailments fall in the same category, although these may or may not be disabling.

Wherever possible, the aged patient must be kept out of an institution, not in it. Treatment is most effective when the patient is at home with his family in a familiar environment.

Every effort must be made to help the patient retain motivation, interest, involvement with the world around him.

Every effort must be made to avoid the hospital or nursing home, where the patient's world tends to narrow until it embraces little beyond the four walls of a room and the stultifying routines of care that the institution provides.

H.R. 4222 oriented as it is toward the hospital and nursing home, will encourage the unnecessary use of institutional care to the patient's detriment. It will do so simply because it is human nature to seek the use of facilities that are provided free of charge to the patient, and because this bill is limited in the services it would provide.

The Kerr-Mills law, on the other hand, encompasses the flexibility the physician requires in treating the aged. The Kerr-Mills law is a good law. It has required us 18 years to pass a law of this nature and I see no reason to rush in a new one before we have given the Kerr-Mills law an opportunity. We should give it a good hard study for several years before attempting any new legislation.

When fully implemented, this law can provide comprehensive coverage ranging from house calls to hospitalization. The facility chosen by the physician can, therefore, be selected with the individual's particular need in mind and on the basis of medical judgment alone. The choice is not restricted, as it would be under H.R. 4222, to the facilities the Government program could afford to pay for.

You must understand, Mr. Chairman, that the degenerative diseases which cause death among the elderly are still not fully understood by medical science. We are not yet completely sure what causes diseases of the heart, or cancer, or strokes. Similarly, we are not clear as to the causes of such crippling diseases as arthritis and rheumatism or ailments of the brain and nervous system. We can treat these diseases with greater or less effectiveness, but to a large extent their causes are still mysteries.

However, we do know that many of these ailments are susceptible to control through preventive means, proper diet, and living habits, sensible precautions, and regular medical checkups.

There is much we do not know about the problems involved in providing health care for the aged, Mr. Chairman. For example, our society wrote the U.S. Public Health Service for information about available health facilities for the aged. We were told this information was not available. We then wrote the individual States and asked for the same questions. In reply we obtained lists of nursing homes and domiciliary homes for the elderly, and very little other information about specific programs or facilities.

If we do not know what we have, Mr. Chairman, how are we to decide intelligently on what we need?

H.R. 4222 suggests that hospitals and nursing homes are the answer; that these facilities are readily available throughout the Nation for use, and predictable unnecessary use, by the aged.

We disagree. The American Geriatrics Society believes that first priority must be given to a comprehensive survey of the Nation's health facilities for the aged, which must provide the individualized care required by the aged.

Second priority must be given to intelligent planning, in order that we can use presently available facilities to best effect in caring, not only for the aged, but for patients of all ages.

Old people should live within and be a part of society and many of their health needs can be met only by the actions of society as a whole.

The house a man lives in, his opportunity for recreation, the acceptance and understanding he receives from his community, the chance to use the skills and talents he has developed over half a century, the need to continue to be of society, not apart from society: these factors affect his health and affect it vitally.

H.R. 4222 does not seem to consider the fact that old people want to retain their pride and dignity. They want to continue to be useful and to use the hospital or nursing home simply as a repair shop is a mistake. The whole person must be considered--not simply his disease.

We assure the committee that this approach will be unsuccessful. The society can offer no simple answer to the problem for no simple answer exists.

Any attempt to legislate an answer into being is foredoomed to failure, for legislation in this area can be palliative, at best; destructive at worst.

In our opinion, H.R. 4222 falls into the latter category.

On behalf of the American Geriatrics Society, we urge that this bill be rejected as unnecessary, ineffective in meeting the problems, and damaging to health care standards for older Americans.

I thank the committee for this opportunity to express our views. H.R. 4222, the Kerr-Mills bill, as I stated before, is a good law. Let us keep it. Let us make it work. Let us study it for a few years and see where we stand.

I thank you, Mr. Chairman and the committee, for this opportunity

to appear.

Mr. KING. We thank you, Dr. Henderson, for presenting the views of the American Geriatrics Society.

Are there any questions?

There are no questions, Dr. Henderson. Thank you.

Dr. Francis J. Braceland.

Mr. BURKE. I have a letter here from the Massachusetts State Labor Council, AFL-CIO, signed by Mr. Kenneth J. Kelley, secretary

treasurer.

He has requested that his material be placed in the record.
Mr. KING. If there is no objection, it is so ordered.

(The statement referred to follows:)

MASSACHUSETTS STATE LABOR COUNCIL, AFL-CIO,

Congressman JAMES A. BURKE,
House Office Building,

Washington, D.C.

Boston, Mass., August 3, 1961.

DEAR CONGRESSMAN BURKE: For your information I am enclosing herewith a copy of my letter to Chairman Mills of the House Ways and Means Committee. Please see that this is included as a part of the official record of current hearings.

With kindest personal regards.
Sincerely,

KENNETH J. KELLEY, Secretary-Treasurer.

JULY 31,

1961.

Hon. WILBUR D. MILLS,

Chairman, House Ways and Means Committee,
New House Office Building, Washington, D.C.

DEAR CONGRESSMAN MILLS: On behalf of the Massachusetts State Labor Council, AFL-CIO, I wish to record that our organization and its 500,000 members are strongly in support of H.R. 4222, the King bill, establishing health insurance benefits for the aged under the social security system. We heartily concur in the views expressed by AFL-CIO President George Meany on this legislation.

As you know, Massachusetts is one of the seven States that has availed itself of the medical care for the needy aged (Kerr-Mills bill) enacted by the 1960 Congress. While this medical assistance legislation has been beneficial to approximately 15,000 aged in Massachusetts since its adoption, it has still failed to benefit the majority of our citizens over 65 who are not on public welfare (OAA) or who, if on Federal social security, can't qualify or prefer not to undergo the community stigma of the means tests requirements.

In Massachusetts there are approximately 575,000 persons aged 65 or over, 85 percent of whom would qualify for benefits under the King bill. Our State has long been one of the most progressive and liberal States as far as old-age assistance and other welfare benefits are concerned. However, Massachusetts, faced with serious fiscal problems, shortly will be unable to continue to finance these welfare benefits from existing tax revenues. Like most of the New England States, Massachusetts has a higher average per capita age than prevails throughout the Nation. Accordingly, the medical care needs of this higher-than-average age population can't continue to be financed from general

taxation.

In our opinion, financing medical care for the aged under the contributory social security system is more economical, efficient, and acceptable than the existing program or any other that has been proposed. Based upon my observation of the experience of Massachusetts under the 1960 Federal legislation, this

stopgap measure has created more problems than it has solved. Medical care for the aged, integrated with the social security system, will enable a worker, on a pay-as-you-earn basis, to provide for his medical care problems and payments when he reaches age 65. He will be able to do so during his lifetime of work with a feeling of security, while retaining his self-respect and freedom of choice of doctors, etc., upon his retirement.

I strongly urge that your honorable committee approve H.R. 4222 and thereby bring about a logical and economical extension of the social security system. Respectfully submitted.

Mr. KING. Mr. Russell Johnson.

KENNETH J. KELLEY,

Secretary-Treasurer.

Please identify yourself for the record, and proceed.

STATEMENT OF RUSSELL I. JOHNSON, IN BEHALF OF THE ILLINOIS STATE CHAMBER OF COMMERCE

Mr. JOHNSON. Thank you. Mr. Chairman and members of the House Ways and Means Committee, I am Russell Johnson, Caterpillar Tractor Co., Peoria, Ill.

I am an active member of the Illinois State Chamber of Commerce, Social Security Committee, whose views along with those of my company, I shall relate to you this afternoon.

It is my privilege, sir, to appear before the House Ways and Means Committee.

My purpose here today is to oppose H.R. 4222. I have several reasons for urging you to also oppose this legislation.

First of all, I am convinced that there is no need for a system of medical care for the aged under social security. Only last year Congress passed the Kerr-Mills medical care program for the aged. This program was designed to help all who need help.

The Kerr-Mills plan provides local administration, local determination of benefits, and local designation of eligible beneficiaries.

In other words, actual administration of the Kerr-Mills medical care program occurs right at the local level, where administrators are most familiar with local conditions and local needs; thus, the Kerr-Mills plan preserves the traditionally American working partnership between local, State, and Federal governments.

The Kerr-Mills plan is in operation in 28 States. My own State of Illinois is one of these. In fact, the Governor signed it into law within the last 48 hours.

I am confident it will achieve the desired results if given ample opportunity.

Also, I would like to remind you of the widespread availability of excellent private health insurance plans. I am sure you have already heard considerable testimony concerning the remarkable and largely unexpected growth of private health insurance that has taken place in recent years.

My own company, Caterpillar Tractor Co., offers an excellent health insurance plan to retired employees as do, I am informed, many other firms.

As a matter of fact, H.R. 4222 fails to fulfill the one real need that may exist. It would not provide medical care for persons who are not covered by social security.

On the contrary, it will cover persons who are well able to pay for their own medical services.

Secondly, I oppose this bill because it will ultimately bring about an overtaxing of medical services and with it perhaps a lessening in the standards of American medical care.

Experience with governmental programs in Great Britain and Canada show that the public uses facilities more when they think such care is free and, of course, you and I know that such care is not free, which leads me to my third reason for opposition: the ultimate cost of this type of medical care program. Surely it could develop into a staggering amount. Social security planners have already disclosed that their original analysis estimates of the cost were unrealistically low.

When Great Britain began its medical care program its cost was estimated at about $475 million a year. This for a population of some 44 million people.

By 1959 the cost of their program had risen to $2 billion annually. Might this proposal also cost four times our original estimate? If so, the financial stability of the social security program could be endangered.

Now, let me point out the effect of this cost upon employers. After all, this is my primary reason for being here. As a member of management of Caterpillar Tractor Co., I want to emphasize to you that $507 which is the scheduled maximum annual employer-employee cost, including this bill, is actually about one-half the total wage of workers in competitive firms in Japan, competitive to our type of business.

I am sure this is true of other businesses. It is more than one-third the average annual wage of most European production workers. The Japanese built a product almost identical in appearance with. ours with labor costs of some 55 cents an hour.

Industry in Western Germany and Italy undersell us throughout the free world.

This is a critical consideration to us. Caterpillar has an annual sales volume of approximately three-quarters of a billion dollars. Almost half of these sales come from outside the United States. We are one of America's largest exporters.

Measures such as H.R. 4222 will further impede our ability to compete in foreign markets, for it represents another permanent addition to our cost of doing business in the United States.

I cannot overemphasize the importance of this point as it relates not only to my own company, and to other companies, but as it will ultimately adversely affect our economy.

I urge you to remember that every additional cost of operation is one more roadblock facing American industry's attempts to successfully compete in foreign markets.

World markets, in my opinion, offer American business unlimited opportunities if price does not drive it from the marketplace.

Finally, I believe this measure represents another unnecessary Government assumption of responsibilities that should, and could, re

main with individuals.

I believe that financing health care for the aged is the duty first of the individual, then of the family, and then of voluntary community agencies. Then, if all of these fail, we do have the Kerr-Mills plan to fall back on.