cian. Information on these projects is now being disseminated throughout the country.

The budget for maternal and child health includes $12 million for the training of nurse mid-wives, pediatric nurse practitioners, and physicians' assistants. This is yet another effort to increase the supply of para-professionals available to physicians.

HEALTH MAINTENANCE ORGANIZATIONS

An important feature of the administration's health strategy is an effort to encourage the creation and growth of health maintenance organizations. Currently our health system is, by and large, oriented toward providing service on an after-the-fact, fee-for-service basis. Health insurance plans, including medicaid and medicare, are geared to pay whatever bills are submitted by physicians and hospitals. Many persons are hospitalized when they could be treated on an outpatient basis. There are few incentives for disease prevention. Very often the result is an over-utilization of an already over-burdened system.

Mr. FLOOD. Do you have the malpractice problem here?

Secretary RICHARDSON. Not more acutely than elsewhere, except for the reliance on allied personnel.

Mr. FLOOD. We have the impression that because of the number of malpractice suits and the size of some of the verdicts, doctors are overly cautious and have been hospitalizing people in many instances who could be well cared for at much lower cost.

Secretary RICHARDSON. I think this is true. They want to cover all their bets, in effect, and it does tend to result in excessive tests and perhaps hypercaution, putting people to bed when they don't really need to.

A health maintenance organization, in contrast, has a built-in incentive to keep the persons enrolled as healthy as possible. Their success depends on the number of patient well days rather than sick days or days spent in a hospital. Consequently, health maintenance organizations emphasize prevention and early detection of disease and attempt to minimize costly inpatient procedures.

The evidence available to us clearly indicates that a more widespread use of health maintenance organizations would significantly improve the efficiency of our health delivery system. Consequently, we will propose legislation to authorize Federal support to help new health maintenance organizations get started.

Another means of encouraging the growth of health maintenance organizations will be the guaranteed prepayments under medicare and medicaid. Under medicaid, States already can give beneficiaries the option of converting their benefits into premium payments to health maintenance organizations. Our proposed amendments to medicare will provide this option to medicare beneficiaries.

As you may know, Mr. Chairman and members of the committee, both branches of the Congress did pass an amendment to the Social Security Act that would have provided for this option. It is just a question of when the new social security bill will get through this year. The administration's proposed family health insurance plan, which will replace the major part of medicaid, will also incorporate such an option. We believe these guaranteed prepayments will be a strong incentive for health maintenance organizations to provide services to the poor and the aged.

SPECIAL HEALTH CENTERS

The Department currently supports several different kinds of community health centers. These include Neighborhood Health Centers, some of which were started by the Office of Economic Opportunity and transferred to HEW, Maternal and Infant Care Centers, and Children and Youth Centers which are part of our maternal and child health program, and Community Mental Health Centers which are supported by the National Institute of Mental Health. In 1972, we would like to take the first steps toward integrating the operation of these centers with health maintenance organizations.

The Neighborhood Health Centers and the Children and Youth Centers seem to be particularly adaptable to this objective. Both have proven to be effective ways of bringing health services to urban and rural poverty areas. Becoming a part of a health maintenance organization may require some broadening of their mission. We will be prepared to offer special technical assistance to help them through the transitional period. This effort combines several themes of the administration's health strategy. It helps to bring services to people who are not now receiving them. It encourages a more equitable distribution of health manpower. And it contributes to the more efficient operation of the health care system in general.

Mr. FLOOD. Would you here insert in the record the definition of a neighborhood health center as distinguished from the children and youth centers?

Secretary RICHARDSON. I will be glad to do that, Mr. Chairman. (The information follows:)

DEFINITION OF NEIGHBORHOOD HEALTH CENTERS AS DISTINGUISHED FROM CHILDREN AND YOUTH CENTERS

The neighborhood health center is an ambulatory care program which seeks to provide comprehensive health and health related services designed to meet the needs of the majority of a defined geographical area and population. Its distinguishing characteristics usually are: proximity of the health care program to the population served; family oriented health care; team practice of medicine with emphasis on disease and injury prevention and health maintenance; a broad scope of services within one facility; continuity of care including referral and active followup arrangements through the center's health team; utilization of neighborhood residents in filling staff positions with an appropriate training program; and emphasis on consumer participation in program planning and policy development.

The neighborhood health centers. sometimes referred to as comprehensive health care centers, are supported through the comprehensive health planning and services appropriation under section 314(e) of the Public Health Service Act. The children and youth center, generally referred to as a children and youth project, is primarily an ambulatory care program which seeks to provide comprehensive health and health related services for school or preschool age children in a defined geographical area and population. It is organized to provide a full range of services responsive to the special needs of the pediatric population and emphasizes active, prospective medical management and disease prevention. The children and youth projects provide these services for those children who would not otherwise receive them because they are from low-income families or for other reasons beyond the childrens' control.

The children and youth projects are supported through the maternal and child health appropriation under section 509 of the Social Security Act.

The community mental health centers which serve suburban areas and small towns as well ast he inner city, have had a significant effect on the way in which mental health care is provided in this country. In combination with improvements in drug therapy, community men

tal health centers have contributed to a continuing decline in the patient population of large State mental institutions. The fiscal year 1972 budget will provide financial support to 450 centers of which about 377 will actually be in operation.

The relationship of the community mental health centers to the effort to encourage the growth of health maintenance organizations is less direct than is the case with neighborhood health centers and children and youth centers. We will encourage community mental health centers to develop cooperative relationships with HMŎ's which include mental health services in their prepayment package. These services, of course, can be most efficiently provided through the community mental health centers.

FAMILY PLANNING

The 1972 budget takes a very substantial step toward the goal of providing family planning services to the 5 million women who need, but cannot now afford, such services. For programs authorized by the Family Planning Services and Population Research Act of 1970 the budget requests $91 million, an increase of $58 million over the 1971 appropriation. These funds will permit services to be provided to 1.6 million women in 1972 compared to 750,000 in 1971 and 450,000 in 1970.

The population and reproduction research program conducted by the National Institute of Child Health and Human Development will be expanded to $38 million in 1972, an increase of $9 million over 1971. These additional funds will be used to expand the work on the development of new contraceptives and evaluate the effectiveness of those contraceptive devices which are currently available.

NARCOTIC ADDICTION AND ALCOHOLISM

Narcotic addiction and alcoholism have now reached epidemic proportions. The use of alcohol is a factor in over half of the Nation's traffic fatalities. Alcoholism also contributes to the breakup of families and results in the loss of much productive time on the job.

Narcotic addition, besides ruining the lives of the addicts, is a major factor in the increase in crime. In recognition of the seriousness of these problems, the 1972 budget contains $40.2 million to support community centers for the treatment and rehabilitation of narcotic addicts and alcoholics, an increase of $18.6 million over 1971. These projects complement the related programs of other Federal agencies including the Department of Housing and Urban Development, the Justice Department, the Office of Economic Opportunity, and the Veterans' Administration.

In addition to these community assistance programs, the National Institute of Mental Health will strengthen its applied research, training, and educational activities dealing with the problems of alcoholism, narcotic addiction, and drug abuse. A special effort will be made to train paraprofessional personnel to be employed in Community Mental Health Centers and other agencies serving the inner city and other areas where drug abuse and alcoholism are serious problems. Another important dimension of this effort is the dissemination of accurate information about these problems to all segments of the community, and

especially to school-age children, who are most susceptible to the dangers of drug abuse and alcoholism. This aspect of the program is being closely coordinated with the drug abuse education program being conducted by the Office of Education.

PROGRAMS TO CONTROL ALCOHOLISM AND DRUG ABUSE

Mr. FLOOD. These alcohol and drug centers will be separate and distinct from the other centers?

Secretary RICHARDSON. Community mental health centers may undertake to provide rehabilitation for alcoholics and drug users.

Questions are raised from time to time about why HEW should embrace this variety of agencies that are included within the Department today and I don't think there is a better illustration of the reason for this than the illustration of efforts to prevent and control drug abuse or efforts to prevent and control alcoholism. I think it is quite apparent without elaborating the point to this committee that these are problems that involve in one way or another almost every segment of the Department and our effectiveness in combating them will therefore depend to a large degree upon the extent to which we can bring together the resources of the Department in a way that produces a total impact greater than some of the parts.

I have, for this reason, named the Director of the National Institute of Mental Health, Bert Brown, as Special Assistant to the Secretary for Drug Abuse Problems. I had in mind, among other things, that it is exceedingly important for the National Institute of Mental Health in the development of programs to educate people and especially children to the dangers of drug abuse, to work very closely with the Office of Education.

Mr. FLOOD. Have you found any intramural problem with regard to resentment rather than cooperation between constituent agencies? Have you bumped into anything within your four walls on this?

Secretary RICHARDSON. Not seriously, no, but I think it is necessary in that kind of situation to make a specific point of the necessity for the development of complementary and cooperative relationships. Otherwise, there is a tendency for people in the Department to do their own thing without much communication and without such adaptation of their own programs to what is being done by other people. But I think here, as well as in many other areas, you have a good illustration of why it is important to have an integrated kind of capability through the Office of the Secretary, to put the pieces together.

We, I am sure, can do better than we are doing, but I conceive the role of the Secretary and the Office of the Secretary as, in effect, trying to give leadership and encouragement to this kind of mutual collab oration within the whole Department.

FEDERAL FACILITIES FOR NARCOTIC ADDICTS

The 1972 budget also includes a major change in the method of providing services for narcotic addicts in Federal facilities. The narcotic hospital in Fort Worth, Tex., is being transferred to the Justice Department. The addicts who have been receiving treatment at this facility will either be treated at the narcotic hospital in Lexington,

Ky., or treated on a contract basis in their own communities. Community-based treatment is a better way of rehabilitating narcotic addicts. This is the basic concept behind our grant program for community narcotic treatment facilities and programs. The shift in the provision of services for Federal beneficiaries imply another step in that direction.

Mr. FLOOD. With reference to the narcotics hospital in Lexington, have you heard at any time any comments that this place is not all it is cracked up to be for its purpose?

Secretary RICHARDSON. I haven't heard that. I have heard many times over the years that the record of the hospital in curing addictsthat is, the number of addicts who leave the hospital and remain permanently free of heroin addiction is poor, but I have never heard this charged to the deficiency of the program as distinguished from the sheer intractability of the problem itself.

You might want to question Dr. Brown further about this.

It is true that something like 85 percent of all Lexington Hospital patients who are discharged after the attempt to treat them for heroin addiction revert to heroin addiction at some future date.

PHS BENEFICIARIES

The 1972 budget also moves in a new direction in the provision of health services for merchant seamen and other PHS beneficiaries. For some time the Department has been attempting to determine the best means for providing medical care to these beneficiaries. Most of the PHS hospital facilities are in poor condition and modernizing them would be very costly.

I might add here the last figure I saw was $240 million. Furthermore, we suspect that the PHS hospitals and clinics could be better utilized if they were converted to community use. We are now developing a plan for providing care for PHS beneficiaries by expanding existing contractual agreements with other Federal and community facilities. Reviews are now underway in each of the communities where the eight PHS hospitals are located to see what provisions can be made both for the care of PHS beneficiaries and the possible conversion of these facilities to community use. The budget is based on the assumption that (1) these efforts will be successful, (2) the facilities will be transformed into community resources, and (3) care can be provided to the beneficiaries on a contractual basis, mostly in other Federal facilities, at lower cost. As a result, the budget request for the PHS hospital system is $14 million lower than the 1971 appropriation. I want to emphasize, however, that should our efforts be unsuccessful we will request whatever additional appropriations are required to provide medical care for our beneficiaries.

I am aware that the committee will be under great pressure to block our efforts to convert the PHS hospitals into community facilities. I would ask you to keep an open mind on this issue, so that we may have the opportunity to demonstrate the feasibility and desirability of our proposal.

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