SECTION I

DESCRIPTION OF AMERICAN MEDICAL ASSOCIATION

AND ITS POSITION ON H.R. 4222, 87TH CONGRESS

Mr. Chairman and Members of the Committee:

I am Dr. Leonard W. Larson, President of the American Medical Association on whose behalf I am appearing today to present the views of the medical profession with respect to H.R. 4222, 87th Congress. Accompanying me are Dr. Edward R. Annis, who will also present a statement on behalf of the Association; Dr. Ernest B. Howard, Assistant Executive Vice President of the AMA; and Mr. C. Joseph Stetler, Director of the Association's Legal and Socio-Economic Division.

The AMA is a non-profit, professional, public service institution to which more than 180,000 physicians belong. Its membership constitutes 70.2 per cent of the total physician population of the United States.

The Association has two principle goals, clearly set forth in its constitution. One is to promote the science and art of medicine; and the other is to work for the betterment of public health.

These goals are the policy guideposts followed by our House of Delegates, which meets twice a year, and by our Board of Trustees, the members of which are elected by the House of Delegates and serve as the Association's interim governing body.

The AMA is responsive to its membership. Voting delegates are chosen by the state medical associations on the basis of one for each 1,000 physician members within the state. These representatives comprise our House of Delegates, along with twenty others elected by the AMA's Scientific Assembly, and five delegates chosen by the Surgeons-General of the Army, Navy, Air Force and Public Health Service, and the Chief Medical Officer of the Veterans Administration.

As official spokesman for the Association, I therefore speak for the overwhelming majority of physicians within this country. On their behalf, let me thank the Committee for this opportunity of expressing our viewpoint and presenting our reasons for feeling as we do.

We vigorously oppose H. R. 4222, 87th Congress, the measure now under consideration by this Committee, and any similar legislation which proposes the use of Title II of the Social Security Act as a mechanism for financing a Federal program of health care for the aged.

We reject this legislation because it would enable the Federal Government to levy a compulsory tax on working people covered by the Social Security Act, and to use these funds to pay the providers of medical and ancillary services for care rendered to all elderly persons eligible for

retirement benefits under Social Security regardless of their wishes or economic status.

We recognize that there are certain persons who have a special claim on the Federal Government--either as employees, wards, members of the uniformed services, or veterans disabled in the service of the nation. We do not believe the aged, who would be covered under this legislation, have such a claim on the Federal Government, or that a compulsory payroll tax should be imposed to provide benefits for millions of older people who do not need or want Federal help.

We base our reasons for this position on many counts, ranging from the philosophical to the practical, from the general to the specific. Our major concern, however, is that the passage of H. R. 4222 or similar legislation would retard rather than promote the science and art of medicine and the betterment of the public health. For these and many other valid reasons this measure should, in our opinion, be rejected.

So much, for the moment, on what we oppose.

We definitely do not believe that our responsibility can be discharged simply by expressing our opposition to a particular measure or type of legislation. It is also incumbent upon us to propose wiser alternatives.

As a first step we believe it is imperative that a sound, scientific appraisal be made of the true needs and desires of our aged citizens, and that vigorous resistance be demonstrated against efforts to exploit their obvious political potential.

We favor helping those of the aged who need help. We believe that the Kerr-Mills Medical Aid for the Aged Law (P. L. 86-778), which is being put into effect with encouraging speed, provides the means whereby medical benefits can be made available for those of the aged who need them.

The AMA supported this legislation from the beginning and supports it still. Our physician members have done everything within their power to implement the Kerr-Mills Law in the individual states. It would be false modesty if we did not claim some share of the credit for the law's rapid implementation.

We have never believed the Kerr-Mills Law could do the job alone; nor did its drafters and Congressional supporters. We have stated repeatedly, and do so again, our belief in the efficacy of Blue Shield and Blue Cross plans and privately purchased health insurance, the growth of which has been phenomenal. Finally we reiterate our belief in the great contribution made through the voluntary efforts of American citizens, working together within their own communities, to solve community problems.

To sum up, then, to the extent that some older people have trouble financing their health care costs--and we are convinced that the problem is far less serious than it has been pictured to be--we believe the remedies we will discuss today provide effective solutions.

SECTION II

SPECIFIC OBJECTIONS TO H. R. 4222

Mr. Chairman, we will attempt in our testimony to show that I.R. 4222 is bad legislation for these reasons:

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(4)

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It would be unpredictably, but extremely expensive.
It would endanger the entire Social Security system.
It would undermine private health insurance and other
prepayment mechanisms.

It would lead to the decline, if not the demise, of
voluntary efforts at the community level.

(7) It would expand into a full-fledged system of socialized
medicine, eventually covering every citizen of this nation.
It would cover millions of people who neither need help in
paying the costs of their health care, nor want such help.
It would compel the nation's younger workers to pay for
these unnecessary benefits through an increased compulsory
gross payroll tax.

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It would determine eligibility for medical aid on the basis
of age rather than on the basis of need.

(11) It would destroy the concepts of individual and familial
responsibility.

(12) It would overcrowd existing facilities through overuse.

These and other reasons will be discussed in detail in other sections of this testimony. First, however, we should like to examine H.R. 4222 in specific terms.

The opening section of the bill suggests that none of its provisions will result in Federal control of medical practice. Under the heading "Prohibition Against Interference, Title XVI states, in part, that no Federal officer or any Federal employee shall exercise any control over the practice of medicine or the administration of hospitals, facilities or agencies.

The very next section declares that the patient may freely choose those who will provide the services covered.

Taken at face value, this is most reassuring. But while the first provision of the new title contains a prohibition against interference in the practice of medicine, it also contains the following language, describing the power of the Secretary of Health, Education and Welfare, and I quote:

"...Or, except as otherwise specifically provided, to exercise any supervision or control over the administration or operation of any such hospital, facility or agency" (emphasis added).

Mr. Chairman, those five little words--"except as otherwise specifically provided"--are a blanket authorization for the Federal government to control the providers of services. Put this language into its proper perspective, and it means that the Secretary of HEW can exercise control over the administration or operation of a hospital, facility, physician, or agency.

For the bill also states that the Secretary would be empowered to set "such other conditions of participation...as the Secretary may find necessary in the interest of health and safety of individuals who are furnished services by or in such institution." Here the measure is referring to requirements for participation by a hospital.

Now before the Secretary can establish "such other conditions of participation, he would be required to consult with a Federal advisory board which would be appointed by him, appropriate state agencies, and recognized listing or accrediting bodies. Surely this would be a safeguard, the bill's supporters say. But would it? H.R. 4222 says that the Secretary need only consult with the advisory board. Nowhere does the bill state that the Board's recommendations to him would be binding.

The permissive language of this proposal thus provides the means by which Federal officials can regiment and control all providers of the services covered. I say Federal officials can regiment and control. Would they?

In

I submit that the answer is an unqualified "yes". It is axiomatic that the Federal government tends to control what it subsidizes. deed, the government must, for it is duty-bound to see that the taxpayer's money is spent properly and with efficiency. The problem arises as a result of the fact that the providers of services and the government may not see eye-to-eye on the subject of what constitutes "efficiency". For as I shall discuss later, government must concern itself primarily with the financial aspects of these programs; and the health professions must, if they are to provide quality medical care, concern themselves with quality medical care above all else.

H.R. 4222 disclaims its intention of meddling with the free practice of medicine, Mr. Chairman, as is customary in all bills which seek to utilize the compulsory Social Security mechanism as a device for financing health care for the aged. But if a single government agency were empowered to buy from ten to twenty per cent of all care in the nation's general hospitals, it takes no ouija board to predict that this agency would wield the power it had been given to influence the operation and management of such hospitals.

Under this type of arrangement, it would be well nigh impossible to avoid a situation in which government employees would be telling doctors what drugs and treatment they could provide; telling hospital admini

strators how to run their hospitals; and telling the nursing homes what they could and could not do.

The proponents of this legislation make much of the fact that hospitals will not be forced to participate in this program and that its beneficiaries will have freedom of choice.

What kind of freedom of choice would a patient have if the hospital where his physician had hospital privileges chose not to participate or was considered ineligible? Or what kind of freedom of choice would a patient have if the only hospital in his area chose not to participate or was considered ineligible?

This brings us to the point of considering to what degree physicians' services are covered under H. R. 4222. According to Section 1603, under the heading of "inpatient hospital services, beneficiaries would be entitled to services supplied by pathologists, radiologists, physiatrists, anesthesiologists, and all interns and residents in training under an approvied teaching program.

The providers of these services are physicians, Mr. Chairman. And when spokesmen for Health, Education and Welfare state publicly--as they often do--that only a handful of physicians would be affected by the bill, they are either deliberately misstating the facts or demonstrating that they have failed to comprehend the full implications of the proposal.

Interns and residents are doctors in training. As such, they are agents of hospital staff physicians, who are responsible for all services these students render under approved teaching programs.

Thus, H. R. 4222 involves the provision of services, and the responsibility for the provision of services, of at least 50,000 physicians. And probably 5,000 more could be added to this total. This is the breakdown:

As of September 1, 1959, there were 37,843 interns in the United States. To this number must be added 3,100 to 5,000 anesthesiologists; 3,500 pathologists; 3,500 to 4,000 radiologists; and 250 to 400 physiatrists. Taking the smallest numbers involved in these ranges, emerge with a figure of 48,193 physicians; and taking the upward figure in the range I have given, we have 50,743.

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Further, we must add to these figures the numbers of other staff physicians in hospitals with approved training programs who are responsible for the services provided by physicians in training under approved teaching programs.

Let me also point out that the bill authorizes the financing of outpatient hospital diagnostic services. This provision would, in effect,