This will assist the handicapped, but there are other groups for the improvement of whose health the Federal Government might, I believe, properly take some direct leadership in the improvement of the health of Federal employees, people in receipt of federally aided public assistance, and persons dependent upon old age and survivors' insurance. By contributing part or, if need be, all of the premiums for prepaid medical care insurance for these groups, on what might be called the employer contribution principle, the Federal Government would be aiding where aid, in many instances, is badly needed and, indirectly, would be stimulating the growth of prepaid medical and hospital care plans.

The groups just mentioned are easily identified and are, one way or another, already related rather closely to Federal Government operations. But there is a group, much harder to define, variously estimated at from 20 to 40 million in number, who may need assistance, at one time or another, in meeting medical costs, or even in paying medical care insurance premiums. There is also the problem of encouraging the development of the best and most comprehensive prepayment plans. Should the Federal Government have any part in solving these problems? The President's Commission, already referred to, felt that at least stimulation from the Federal Government was desirable in these areas and suggested grants-in-aid to the States, on a matching basis, for these purposes. The idea was to provide grants large enough to attract the interest of States and local communities, and thus to stimulate local initiative, but not so large as to be a burdensome Federal expense nor to threaten any Federal domination. This still seems to me to be an idea worth careful study.

Yesterday I had an opportunity to confer with Mr. Jerry Voorhis, with whom I am associated in the Cooperative Health Federation of America, after he had testified here. He asked me to say that since he had not been able to study the President's message before testifying, I would be speaking for both of us in presenting this part of my testimony. Specifically, we would urge that means to found to place particular emphasis upon encouraging the establishment and growth of comprehensive, direct medical service prepayment plans, with organized medical groups to provide the services and with the public strongly represented on the governing bodies. I refer to plans similar in character to the Health Insurance Plan of Greater New York, with the establishment of which I am proud to have been associated.

These plans, though small in number, have already amply demonstrated in widely scattered parts of the country that it is both financially and professionally possible to provide comprehensive direct services of high quality within the means of large segments of the community, particularly when aided by employer contributions. This is a financial necessity of a large segment of the community.

Mr. Wolverton's bill for loans to construct facilities for such plans would be one helpful measure. Another would be loans or grants of capital sufficient for organizing purposes where a group of citizens has given indication that, if financed, it could establish such a plan. Certain restrictive legislation in the States, and certain opposition tactics against such plans by local medical societies, would, in some way, have to be eliminated for the best promise of success.

Finally, the proposals for reinsurance for certain health insurance plans might be an encouragement to the comprehensive, group practice type of plan, if satisfactory arrangements could be worked out. For one thing, a reinsurance scheme or any reinsurance plan, would need careful safeguards to make sure that it was rewarding the most efficiently operated plans and not rewarding inefficient or extravagent ones. For another thing, care should be taken, as is indicated in H. R. 6949-which I realize is a bill drawn in 1950 and reintroduced for discussion purposes-that premiums be in some way related to the subscriber's ability to pay. But, on the other hand, in the same bill appears a clause, section (10) (C), page 16, line 4,

That all licensed physicians in the State where the association is located shall be eligible to render professional services to subscribers

which would seemingly eliminate comprehensive group practice prepayment plans by definition, since virtually all of them must of necessity contract with limited panels or groups of physicians. Here the phraseology might be altered to assure freedom of the subscriber to select such a closed panel plan or not, as he desires. Moreover, the possible implied limitation of compensated physicians' visits to 12 in any 12-month period (p. 15, line 20-21) would be undesirable, from the point of view of a comprehensive service plan.

Perhaps a reinsurance schedule could be devised to which the premiums paid by an insurance plan would be reduced in amount as the comprehensiveness of its benefits to subscribers was broadened. This might be financially justifiable, I should think, on the grounds that in a plan where basic preventive, diagnostic, and therapeutic medical services of high quality were available to subscribers, there would be a much smaller, though still appreciable, risk of overwhelming expenses connected with catastrophic illness. In other words, where a prepayment plan is helping to keep its subscribers well, treating them early in illness, furnishing health education, visiting nurse service in the home, and so on, the chances of very heavy costs for many serious cases would be fewer and hence might be justifiable that its premiums can be lower for reinsurance.

In conclusion, Mr. Chairman, I wish again to express my appreciation for the opportunity of appearing before you. I wish also to summarize my views in this important matter by stating that I would urge your committee to keep constantly in mind not only the financial factors in obtaining medical services, important as these are, but also the factors directly influencing the health of the population and the quality of health services it receives. To this end, I would emphasize the need for measures to assure an adequate supply of wellqualified professional personnel; sufficient modern facilities; research; and encouragement of medical service organizations designed to supply comprehensive preventive, diagnostic, and therapeutic medical services of the highest quality.

The CHAIRMAN. Dr. Clark, while we realize that while your statement is not complete, that it does contain many thoughtful suggestions. As I have already said, coming from the mouth of a man with such a broad experience as yours, we are entitled to have serious consideration of this subject.

I am inclined to think as the work of the committee progresses, particularly when it takes up the question as to the form of legislation

we shall write, that a person of your wide experience can be very helpful to the committee in the formation of such legislation and I trust that we will have that, and be able to call upon you and have the benefit of your experience in that respect.

Dr. CLARK. Mr. Chairman, I shall be happy to be at your service at any time.

The CHAIRMAN. Thank you.

Are there any questions, gentlemen?
Mr. DOLLIVER. Mr. Chairman.

The CHAIRMAN. Mr. Dolliver.

Mr. DOLLIVER. I observe, Dr. Clark, that you are an M. D.
Dr. CLARK. Yes, sir.

Mr. DOLLIVER. A member of the medical profession, and a very distinguished one, I may say.

One of the matters that has been extremely difficult for me, and I am sure other members of the committee, has been the apparent conflict there as between the attitude of the medical profession and the lay people who are interested in the health program-that is, I mean the nonmedical people. We had a good example of that yesterday where one of the witnesses rather vigorously attacked a hospital provision, and from that extreme, we have had testimony showing the conflict, which has varied down to the rather small conflict as was observed in the Kaiser plan.

Has it not been the historical pattern of the medical profession that it has been controlled by States rather than Federal rules and regulations?

Dr. CLARK. Physicians are licensed by the States.

Mr. DOLLIVER. That is what I mean.

Dr. CLARK. And public-health measures, by and large, are under State laws, except those which have to do with foreign quarantine and

so on.

Hospitals are chartered, or licensed by States in most instances. So I think your statement is essentially correct, sir.

Mr. DOLLIVER. Well, does not this whole program which you have so well outlined, envisage rather a new and different kind of attitude toward health, and the healing arts, that is to say, is more or less an intervention of the Federal Government into that field in a new and different way?

Dr. CLARK. I do not think I would put it quite that way, sir, if I

may say so.

Mr. DOLLIVER. I am not trying to put words in your mouth. I wanted you to give me some information on that.

Dr. CLARK. There have been for a long time, for a very long time, Federal grants in aid to the States for various medical purposes. Mr. DOLLIVER. For example?

Dr. CLARK. For example, public health; for example, vocational rehabilitation; for medical care of people on the Federal-State public assistance, in limited form.

So that the idea of using national resources to, you might say, equalize a bit the ability of the various States to improve their medical and health facilities, is not new. Some of the applications of this general idea given in my remarks are new-not new ideas, but they would be new programs if adopted; new in practice.

Mr. DOLLIVER. Would you elaborate on that statement?

Dr. CLARK. There are, for example, no Federal funds available at the moment, directly, for the medical care of people living on old age and survivors assistance. Those people, if they need medical care and have no resources other than their ÓASI, usually would have to get local or State public assistance. It is true that some Federal aid would be included in old-age assistance.

Mr. DOLLIVER. Well, as I understand your statement, this thing that you envisage in this whole thing is not a direct interference by the Federal Government?

Dr. CLARK. No, sir.

Mr. DOLLIVER. But is rather an attempt to influence the local people, through grants and aids in other ways; is that correct?

Dr. CLARK. Yes; in saying that, that is essentially the position taken by the Commission, which we mentioned last year; President Truman's Commission. That grant-in-aid formula is not only assistance financially, but is a stimulator of local initiative.

I am not sure I can give the figures correctly, but they can be verified-illustrating that. Grants-in-aid for public health were started in a general way with the Social Security Act in 1935 or 1936. At the beginning of that program of grants-in-aid for public health, the Federal funds constituted approximately half of all funds used for public health in the States. Now although there are vastly more Federal dollars than the funds being expended for public health in 1935, Federal funds constitute only about 25 percent of the total expenditures.

In other words, the State funds called forth by the Federal-State program have gone up much more rapidly than have the Federal grants. I think one can safely say that a part of that shift was due to the stimulus provided by the Federal grants.

Mr. DOLLIVER. Substantially, would that increase in the total amount in spending result in a decrease in the Federal share? Or, has the actual dollar amount expended by the Federal Government increased?

Dr. CLARK. Oh, yes; quite a bit. I cannot really say how much. It is 2 or 3 times the original amount.

Mr. DOLLIVER. But the States' amounts have increased

Dr. CLARK. More rapidly. The State and local.

Mr. DOLLIVER. I beg your pardon.

Dr. CLARK. The State and local.

Mr. DOLLIVER. The State and local?

Dr. CLARK. Yes, sir.

Mr. DOLLIVER. Has that been coincidental with what might be termed "an improvement" in the public-health service in the local communities?

Dr. CLARK. Very much so. There is no question about that.

Mr. DOLLIVER. Is that visible and observable to a member of the medical profession or the members of the medical profession throughout the country?

Dr. CLARK. Well, I should think so, sir.

Mr. DOLLIVER. What I am thinking of is, you are, I take it, a resident of Boston and interested in an area where there is a high concentration of population.

Dr. CLARK. Yes, sir.

Mr. DOLLIVER. I am wondering if that same observation would apply in areas like I represent, from the country, or Mr. Heselton represents, who is from western Massachusetts.

Dr. CLARK. Yes; I think that is observable in a great many rural areas-perhaps not all-because the States are free to use the Federal funds for local assistance, if they wish; but frequently it has not been possible for them to do as much as they might wish to have done. Nevertheless, I would say that it is a fair statement that, generally speaking, public health services have improved very much throughout the country during the last 15 years.

Mr. DOLLIVER. You are familiar, of course, with the Hospital Construction Act.

Dr. CLARK. Yes.

Mr. DOLLIVER. Have you had an opportunity to observe the operations of the Hill-Burton Act?

Dr. CLARK. Yes, sir.

Mr. DOLLIVER. Do you have any comments or criticisms to make on that?

Dr. CLARK. I have this comment to make. We had a meeting about a month ago, or so, where all of the projects that have been approved in Massachusetts were reviewed by a large group of people-not by any means simply hospital people, or simply those benefited at alland I would say that with very few exceptions the funds have been used extremely well in Massachusetts and have met the needs of both the rural and urban areas, by providing modern hospitals.

Mr. DOLLIVER. One criticism-and it is quite a severe criticismI have heard of the operation of the Hospital Construction Act is this, that where Federal aid is granted, the cost of construction is sometimes nearly double what the cost of private construction is. I have a specific example in my own district where in one community they accepted Federal aid and in another community they built their own hospital, and each community acquired substantially equal facilities, but the Federal-aid hospital cost nearly twice as much as the locally constructed hospital.

Do you have any experience or do you have any comments to make about that?

Dr. CLARK. I am a little bit surprised to hear it. I do not doubt that it is true in some instances.

Mr. DOLLIVER. I am not trying to give specific figures. That is the information I have.

Dr. CLARK. Because after all, the determination of what is to be expended, how it is to be expended, is a local matter and State matter. However there could be one explanation, namely--and I do not say that it applies in your particular district, sir-but there could be one explanation, if this is true generally, and that is that there have been certain standards established, agreed to by the States, applied in the Hill-Burton Act, generally; standards of construction for safety, for purity of water, sewage disposal, and that sort of thing. That sometimes does mount up.

The other comment that I would make is that I know of two hospitals in Boston, very close neighbors of each other, one of which built its wing with its own locally raised funds, and the other with Federal aid, and to the best of my knowledge, the construction costs of those