eral policy and guidelines to assist occupational boards. The potential role for the State comprehensive health planning agencies in closer coordination between planning and regulation must also be explored in detail.

A determination of staffing needs and possible funding sources should be undertaken in each State. These determinations must be based on increased board duties for the regulation of new categories and the need for more board initiative to utilize existent authority to promulgate rules and regulations that clarify scope-of-practice problems and delegational standards without waiting for legislative action. Meaningful involvement in the regulatory aspects of quality control would mean, for most boards, a need for a larger and more highly qualified staff than these agencies now have.

6. The professional organizations and States are urged to incorporate a specific requirement for the assurance of a continued level of practitioners' competence as one condition in the recredentialing process. Employers are encouraged to provide opportunity for participation in programs directed toward assuring continuing competence; participation should be a major criteria in employee evaluation and incentives. Additional studies of the best mechanisms to assure continued competence should be supported on a high-priority basis. A number of groups deserve recognition for the efforts being made to implement these objectives. Financing problems, difficulties that will be experienced by certain practitioners in allocating time for continuing education, and the possible effect of premature exclusion of older practitioners from patient care must be dealt with. The problem of general versus specialty knowledge in connection with recredentialing requirements must be closely analyzed. Professional review organizations should be expected to make recommendations for action in continuing education; institutions, particularly those receiving Federal support, should provide equal access to continuing education programs for all health practitioners.

7. The concept of extending institutional licensure—to include the regulation of health personnel beyond the traditional facility licensure has important potential as a supplement or alternative to existing forms of individual licensure. Demonstration projects should be initiated as soon as practicable.

Institutional licensure should not, at this time, be overstated as a panacea for present licensing problems. However, the significance of this approach is its recognition of the foreseeable trends in the organization of health delivery patterns. In addition, it encourages the health-team approach to the provision of services; and it would provide a regulatory framework for the systematic development of new kinds of personnel in organizational settings.

The Department has taken steps to keep systematically abreast of all bills introduced in those State legislatures, in session this year, which deal with the licensing, certification, and accreditation of health personnel and training programs. The Secretary's call for a moratorium on health manpower licensure will be communicated directly to the States and the possibility of encouraging a study commission on health personnal credentialing within each State is being seriously considered at this time. Copies of the report will be forwarded to the over 600 State licensing boards for their information and comment.

Last September, with departmental funding, an Invitational Conference on Certification and Allied Health Professions, sponsored by the Association of Schools of Allied Health Professions, brought a large number of national organizations together to look specifically at certification procedures. Building on this base, the Assistant Secretary for Health and Scientific Affairs is now considering a proposal for implementation of departmental action No. 4 which requires a determination of the feasibility of a national health professions certification system. That determination is expected to be completed within a year.

The Secretary has had a small departmental working group explore the possibility of a model law for physician assistants. Additional efforts are being made to see if model laws covering the allied health field are feasible at this time and potentially effective ultimately.

The Illinois Hospital Association has initiated preliminary discussions with the Denartment regarding a demonstration project on institutional licensure using several health facilities in that State. We are encouraging interest in such a project in other locations as well.

A Department of Labor study entitled, "Occupational Licensing: Implications for Public Policy," is just now being completed. While this work deals with occupational licensure in general, much attention is given to the health professions. We are, therefore, utilizing the leaders of that study in consulting capacities to

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assure that our departmental activities benefit from their findings and recommendations.

In addition to presentations by representatives of the Department to various organizations and a number of continuing contacts with individual representatives of the health occupations, we have discussed these matters with the National Health Council, the National Board of Medical Examiners, the Federation of State Medical Boards, the American Hospital Association, the Association of Schools of Allied Health Professions, and the American Medical Association. We expect these working contacts to expand considerably within the next several months.

The Secretary will prepare an interim report this July, covering the first year after his report was submitted to the Congress, indicating the progress made on the problems identified by the report.

HEALTH MAINTENANCE ORGANIZATIONS

Secretary RICHARDSON. Your point prompts me to cite one other development that is of key importance. That is the health maintenance organization legislation now pending before Interstate and Foreign Commerce in Mr. Roger's committee.

In that legislation as you know we are concerned with encouraging the development of comprehensive prepayment plans under which services are paid for on a capitation basis. It is important both from the point of view of prevention, insofar as the health maintenance organization has a direct incentive to keep people well, and from the standpoint of cost savings. It can be important also in developing a more rational network of service including service in remote areas and the health maintenance organization may well be in many areas the best organizational matrix in which to provide the kind of structure and pattern we were talking about earlier.

In any event, the point I wanted to make is that in this legislation we have a provision to the effect that where a health maintenance organization enters into a contract with the Federal Government for the provision of service under our health financing legislation, that if in carrying out its functions under the contract it employs a physician's assistant or subprofessional not otherwise licensed in that State, under the contract clause of the Constitution that person would nevertheless be regarded as qualified, if the responsible physician in the HMO deemed him to be capable of performing the service delegated to him. The physician would remain responsible.

Mr. SMITH. But the service would still be performed in the HMO center, wouldn't it?

Secretary RICHARDSON. A HMO isn't necessarily a facility. A HMO is a financing system. He would have to be employed by the HMO. If the HMO consisted, for example, of a central building and outpatient ambulatory diagnostic facilities in, let's say, Billings, Mont.. it might have outpatient clinics in a number of smaller communities which were staffed by physician's assistants. It might have a contract with a community hospital to assure that it would have acute care beds available to its subscribers. It wouldn't have to own the hospital in order to have that arrangement. And if it then in addition had a contract with the United States under which it undertook on a capitation basis to provide the comprehensive care to a person whose care was subsidized under medicaid or under our proposed family health insurance plan, then this contractual clause would apply and it could use physician's assistants for the provision of this care notwithstanding barriers of State law.

HMO OPERATION IN RURAL AREAS

Mr. SMITHI. To use your example, everybody I have talked to about HMO's seem to visualize the HMO in Billings as being the answer for that whole part of the State. We are still talking about transportation. They tried that 10 years ago and that didn't provide preventive health care at all for rural areas.

To use your example, what they would need then is in Melstone which is 60 miles east, to have a clinic there occupied by a nurse practitioner or somebody with a telephone line to the physicians in Billings.

Secretary RICHARDSON. Exactly.

Mr. SMITH. She could make house calls on the elderly folks there and operate a well baby clinic and recognize the abnormal in the local citizenry when they came to the office and also know if they needed to go to Billings immediately or see the doctor the next time he comes to the clinic in Melstone.

Secretary RICHARDSON. Exactly.

OBSTACLE OF STATE LAW

Mr. SMITH. But everybody I have talked to visualized the HMO to be the answer without going into additional steps and without Montana changing their law so that the allied personnel could perform this service in Melstone. At the present time, she would have to be operating in the same office as the doctor.

Secretary RICHARDSON. Our general counsel was consulted originally about whether or not he thought the provision I am talking about in our bill would in effect supersede State law in that kind of a situation where the Federal Government did have a contract with the HMO. He thinks it would, and to that extent at least here would be the opportunity to make fairly substantial impact, depending on the rate at which HMO's come into business and depending on the amountwe don't think we need a great deal of money under the HMO legislation, however, because what is essentially required are startup costs. We have under consideration opportunities and ways and means of forward funding of HMO services where these are federally subsidized. It has never made any sense to me, for example, if we know we are going to provide medicare funds to reimburse services to the elderly people in a given community, if we know there are a certain proportion of poor people going to become entitled to medicaid service reimbursed up to 50 percent by the Federal Government, there is no reason whatever, it seems to me, that we should not make funds available in advance based on some conservative estimate of level of services to be provided. If we do this, then the HMO can, in effect, begin to develop services with an assured source of financing from the beginning.

And under our contract with an HMO, under which it would be obligated to provide services to our beneficiaries-they might be Indians as well as the elderly or the poor-it could employ, under that contract, nursing assistants or nurse midwives or physician's assistants who could be the person in a small remote village tied in electronically with the responsible doctor. Then in those circumstances it wouldn't

matter what the State law restrictions were. This I think is as important as any step we do now have in the works.

Mr. SMITH. The legislation we passed last year for scholarships for doctors and so forth and the various bills that have come up have been presented as if they are the answer to the medical problem in the United States. There is practically no possibility of us getting a new doctor out of medical school to go to Melstone, Mont.

I don't care how many doctors are graduated, they are not going to move to such places as Melstone, Mont., or to towns of a thousand population. They want to go where other doctors are and practice a specialty now. So we have to recognize the need for these satellite clinics.

UNDERUTILIZATION OF CAPABLE PERSONNEL

The other thing about it is that we talk about these returning veterans and training them, but when the States won't permit them to use their training to the extent that they are really capable of using it. what incentive is there for them to go to these schools and get this training. We first need to have the delegation of authority legalized so that they can get a job that is meaningful to them. We have nurses by the hundreds who are not practicing their profession because they don't want to go down to the county hospital or to an HMO for that matter to merely change bed pans or perform menial labor.

They would come right out of retirement tomorrow if they could operate a clinic somewhere under a doctor. I find to my surprise-and the change has been great in the last 2 or 3 years-I think fully 40 percent of the doctors also want to do this.

Secretary RICHARDSON. I think this is true.

We have run tests with Federal funds in dental care, too, which show how enormously increased the productivity of dentists can be made by use of assistance; and, the dental profession is very supportive of this.

This is something that you may want to go into further with Dr. Duval and Dr. Wilson of the Health Services Mental Health Administration. Both of them are very interested, very sympathetic, and very supportive. I think it is fair to say we all agree completely with what you have said. We have tried to avoid overselling any single component of the approach to this, the various components I have tried to outline. And certainly you are absolutely right that the State law restrictions are a serious obstacle to the rational development of services.

I will, as I offered earlier, provide for you and for the record a summary of what have been our efforts along these lines, and what is still coming up so that you can look this over and see whether you think we are doing enough, and if not, tell us what more you think we should be doing.

EMPHASIS ON LARGER CITIES

Mr. SMITH. This is one of those things that doesn't cost money, and I think it is more important than anything we are talking about that would cost huge sums of money. I am also concerned that people are looking only at the important problems of the bigger cities, the places where the HMO would be located and so forth.

Secretary RICHARDSON. This problem, of course, that you are mentioning exists within the bigger cities as well as in remote areas.

Mr. SMITH. That is true.

Secretary RICHARDSON. There are serious shortages of medical personnel in the poorest areas of our cities just as there are in rural areas. The problems are somewhat different but the need for the use of paraprofessionals and subprofessionals tied in with doctors is essentially the way we have been talking about is not different in principle. Mr. SMITп. I agree that is true. In fact doctor's offices are usually located primarily in just one part of a city in most of the cities. Secretary RICHARDSON. Yes.

NEED FOR A WHITE HOUSE CONFERENCE

Mr. SMITH. The President calls the parties in when there is a strike and he can get them into a room and say, "You stay there until you settle this strike," and he usually gets results. He uses the prestige of his office to get people to get together. In the same way, I think he should also use the prestige of the office to get these health people together and say, "Now you come up with a plan under which authority can be properly delegated and you can go back to your States and accomplish this objective." This is not something that has to wait until some Federal law is passed. It is something they can do next month. Secretary RICHARDSON. I think this is a good idea.

Mr. SMITH. I think we could have an improvement in preventive health care almost overnight with this kind of approach. That is all I have. Thank you, sir.

Mr. NATCHER. Mr. Conte.

COMMENDATION OF SECRETARY

Mr. CONTE. Mr. Chairman, I want to join with my other colleagues in complimenting the Secreary for a clear, concise, and excellent statement. It is one of the best statements I have heard before this committee or any other committee in the Congress. I compliment him not only on the statement but also for his stewardship of the Department of Health, Education, and Welfare which has grown by leaps and bounds and is one of the most difficult-to-manage agencies in the whole Federal Government. I don't want to sound biased because the Secretary comes from Massachusetts, but I have heard, as have us all, that he has been one of the best Secretaries in the history of the Department. I want to compliment him on the outstanding job he has done. Secretary RICHARDSON. Thank you very much, Mr. Conte.

NEED FOR HEALTH CARE INITIATIVES

Mr. CONTE. I was interest in what Mr. Smith said and we have developed this point before. It is amazing to see some of the towns in my district-take the town A for instance. At one time it had maybe seven or eight doctors and a very fine hospital. Today it is down to two doctors that are almost on the verge of retirement. Soon there will be no doctor in that community. You can multiply this situation many times. I think we have to implement the new type of concept that Mr. Smith is developing.