provide that kind of protection that you referred to in a way that will be acceptable by the American people and with reasonable expectation that it could be accomplished by the Congress, it might be that we would have a very good plan. But certainly, in all of these matters such as this where it is pioneering, it seems we never get in the first instance all that we would like to have. That does not deter us from working toward the ultimate objective of perfection.

Now, with your permission, and with some timidity, I ask you this question: Do you think that your insurance plan could be used by large companies only, or could smaller business concerns provide similar plans for their employees?

Mr. LORBER. I believe that the type of plan outlined in my statement to this committee can be made applicable to a great majority of the American people, and that the type of plan need not be confined to employees of a large corporation only. Within recent years, the insurance industry has been able to write this type of plan for any homogeneous group. A plan was written for one of the large drug companies to include under it 10,000 or so independent drugstores which could not obtain their own small group insurance programs. Now, this drug company plan encompasses 10,000 drugstores over whom they have no financial control. There is a relationship, a contractual relationship between them and the parent group. By the same token this type of plan could be made applicable to other similar groups. As a matter of fact, we were talking about it rather recently, about making it available to the large number of independent theater owners throughout the country who employ 5 or 10 or 15 people and who could not obtain group-insurance protection for their own small group.

I maintain, Mr. Chairman, that it is possible to apply this plan to any homogeneous group within the mechanics of such a plan, and it is possible to be administered. We get administrative problems, but they are not too serious. I believe, ultimately, with direction and clear thinking and perhaps a lot of courage, we can cover somewhere between 75 million and 90 million Americans under this type of plan. I have no answer as to how we can take in the single self-employed person. We just have not developed any formula for that type of person. Perhaps, the individual contract at a high cost must of necessity be applied to that type of person.

The CHAIRMAN. I do not know what type of legal assistance you have in your company with reference to a matter of this kind, but I have no question that they are men of outstanding ability in the profession. Would it be possible for you, through them, to present to this committee a bill that would accomplish the objective that you have in mind and which your company has so well done on a voluntary way?

Mr. LORDER. I will be very glad to enlist the services of some of my associates and other people and endeavor to present such a plan to the committee.

The CHAIRMAN. If we could have the benefit of their assistance in putting into legal language the plan that you have in operation in your company, taking into consideration that legislation which is passed by Congress has nationwide effectiveness, we would greatly appreciate it. Mr. LORBER. I would be very glad to submit such a plan.

The CHAIRMAN. Are there any other questions?

Mr. O'HARA. Mr. Lorber, the questions which the chairman addressed to you remind me of what an old lawyer said one time in advice to a young lawyer: Never ask a witness a question direct or cross that you don't know the answer. I recognize your frankness and candor in discussing this whole problem and, personally, I appreciate it.

Mr. Lorber, you have spoken, of course, of a plan which originates between the employer and the employees, either initiated by the employer or initiated by the employees through their labor groups. But, of course, that type of person is limited when you come to consider that we have about 160 million people in this country. Do you also recognize, Mr. Lorber, that in the rural communities and poorer communities there may be a substantial shortage of hospital facilities as well as medical and technical assistance, which makes any overall plans which this committee would attempt to write exceedingly difficult? Do you agree to that?

Mr. LORBER. I agree with that; surely.

Mr. O'HARA. What is the approximate cost to your company, and to the employees? Do they pay relatively each the same amount per person, or what is the situation? I am just speaking now in general terms.

Mr. LORBER. If you will, turn to exhibit C, which is a reprint of our announcement in August of 1952, of our original medical plan and which has since been amended.

Mr. O'HARA. Which exhibit is that?

Mr. LORBER. It is entitled, "For You and Your Family," and it is a very graphic sort of thing. For the employee himself, and I am adjusting this for subsequent changes, he is now entitled to a benefit of $12 a day in the hospital for 180 days, case-room fees up to $1,000, surgical fees up to a maximum of $350, unlimited X-ray benefits outside of the hospital, and the major medical plans outlined in my statement to this committee at a cost to the employee of 23 cents per week. My company contributes an equal amount to this cost.

Now, to include the family for the same benefits, and we don't care how many members of his family are included within the definition of dependents, the cost for this entire family coverage is 80 cents per week. My company contributes an equal amount to this cost. At $1.03 per week for this complete package for his entire family or about $52 a year, we believe our employees and their families have a full package of protection.

Mr. O'HARA. That is all, Mr. Chairman.

The CHAIRMAN. I will say to the members of the committee that in view of the large attendance that we have today, and the evident desire of many of the members to ask questions, I think it would be appreciated by all members if each one would ask but two questions until everyone who has had an opportunity to ask questions has had that chance. Of course, that will help from the standpoint of questioning, and I would like if the witness would likewise observe the necessity of abbreviation to the extent that the answer will not be too long.

Mr. PRIEST. Mr. Lorber, I was very much interested in your reply to the chairman that you would be happy, with the assistance of some of your legal counsel, to submit to the committee a bill. I assume from

what you said in reply to the chairman's first question that you are not at all impressed with the suggestion of a reinsurance plan, as far as Federal Government participation is concerned. Following that assumption, I wonder if you have in mind generally some idea as to what nature Federal participation should be in such a plan. Eliminating the reinsurance program, then to what extent and in what manner should the Federal Government participate?

Mr. LORBER. Well, I believe the Federal Government should look at this problem from the other end of the cart. We have fixed laws of supply and demand. If we increase the supply of medical care, or medical services, throughout the country, I believe that the costs of such medical services, each component part of that medical service, will go down. I know I live in a community of 45,000 people where there is, roughly 1 doctor to 2,000 of population. Medical costs in my community are very high.

Mr. PRIEST. You feel primarily that the Federal Government emphasis should be placed on providing an issue of additional facilities, plus additional doctors and nurses, and those qualified to give medical care?

Mr. LORBER. I think that that is the essential answer, Mr. Priest. Mr. PRIEST. That is all, Mr. Chairman.

The CHAIRMAN. Mr. Dolliver.

Mr. DOLLIVER. Mr. Lorber, like the others, I have been greatly interested in this plan. There are just two matters that I want to bring out. One is this: This plan of yours is carried by the John Hancock Mutual Life Insurance Co.?

Mr. LORBER. That is right.

Mr. DOLLIVER. Do they have any plan commensurate or similar to this which can be purchased by an individual as he purchases life insurance?

Mr. LORBER. I am not too sure that John Hancock sells this type of plan on an individual basis. If it does, obviously, they could not apply the same cost factor to an individual contract as they do to a group contract. I think it might be well for this committee to inquire of John Hancock and other life-insurance companies as to what they offer in this field of medical care.

Mr. DOLLIVER. The other question is this: There is a deductible amount, that is to say the first amount up to $100 paid by the patient and the carrying of the insurance is beyond that amount?

Mr. LORBER. That is right.

Mr. DOLLIVER. That is all.

The CHAIRMAN. Mr. Harris.

Mr. HARRIS. Mr. Lorber, I have been very much interested in your presentation here this morning, and I had 3 or 4 points in mind. One was the cost which you have just given in reply to a question from our colleague Mr. O'Hara and the other was on the reinsurance phase which I believe you said that you were opposed to.

Mr. LORBER. Yes, sir.

Mr. HARRIS. The other was on the basis of Federal participation. Now, you gave a very clear and concise illustration of how a program can work as your company has developed it over a period of years. That is based on a private operation without Government participation; is that right?

Mr. LORBER. That is right, sir.

Mr. HARRIS. And you feel that the problem can be met in this manner?

Mr. LORBER. Yes, sir.

Mr. HARRIS. Then I was somewhat confused that, after such a statement that was so interesting and enlightening as well as encouraging, you come up with the Federal Government's part as providing all of the facilities leading up to this particular part of the program. As I assume, from what you feel and what you believe, that the Government should provide the doctors and the hospital facilities in order to make a plan like this work?

Mr. LORBER. Well, I see no answer to the question of providing medical care to the greatest part of the American population unless you have the medical-care facilities available. No matter what system, if you have no doctors or nurses and hospitals, you have nothing to pay for. It is not that problem; it is a problem of getting the facilities where they ought to be.

Mr. HARRIS. I understood that you say that that is the end in which the Government should subsidize.

Mr. LORBER. I believe that is so at this point.

Mr. HARRIS. Now, you replied to a question from Mr. Dolliver that it could be extended to all individuals.

Mr. LORBER. To a great number of individuals.

Mr. HARRIS. Are the employees of your company carefully screened before they become a part of your organization?

Mr. LORBER. No, sir. On the west coast, where we have a large concentration of our employees, we hire, and our union contracts provide for hiring, through the union setup. We have a closed shop, of course, in the motion-picture industry. We do not choose our employees in the crafts primarily because they are part of the union setup.

We do not insist on any medical examination prior to employment or at any time during the employment. Any employee who is hired— and the hiring has nothing to do with his physical condition-is automatically entitled to participate in our group plan after the usual administrative waiting period of 30 or 60 days.

Mr. HARRIS. The 3,500 employees of your organization are what you would say would be the average of the American public?

Mr. LORBER. That is right.

Mr. HARRIS. That is most amazing. I always thought that these companies required certain standards, physical standards, and examinations, and so forth, before they were accepted. Thank you very much.

Mr. LORBER. That is not so.

The CHAIRMAN. Mr. Heselton.

Mr. HESELTON. What happens when the employment is terminated? Mr. LORBER. After a nominal extension period of 30 or 60 days to take care of a lag, the insurance is terminated, of course. The relationship between the employer and the employee has terminated and, of course, the insurance is terminated. That is true except, as a result of a recent arrangement on behalf of our older employees, older in terms of years of service, who are either retired or semiretired from our employ. They can keep it forever.

Mr. HESELTON. You referred to those who retired.
Mr. LORBER. Yes.

Mr. HESELTON. What is the situation here?

Mr. LORBER. They keep their insurance forever.
Mr. HESELTON. Do they continue to pay premiums?

Mr. LORBER. Yes; the same premium as they would have paid had they remained in active service.

Mr. HESELTON. That is all, Mr. Chairman.

Mr. LORBER. I would like to say one more thing, that, as a matter of company policy, we never terminate the insurance of an employee who ceases his employment because of physical disability. He continues the insurance for himself and his family during the term of that disability. I think that is one of the great things in our plan that wẹ are proud of.

The CHAIRMAN. Mr. Rogers.

Mr. ROGERS. Mr. Lorber, I would like to know whether or not your membership has freedom of choice in the selection of doctors?

Mr. LORBER. We have nothing to do with the doctors. All we do is get the bill, and we pay 75 percent of the bill.

Mr. ROGERS. No doctors are connected with your plan at all?

Mr. LORBER. We have no doctors on our payroll except two doctors that are at our studio who provide first-aid treatment in the case of industrial injury.

Mr. ROGERS. They absolutely have freedom of choice?

Mr. LORBER. We have nothing to do with that by either direct contact or communication with the doctor.

Mr. ROGERS. You just pay the bills?

Mr. LORBER. That is all.

The CHAIRMAN. Mr. Beamer.

Mr. BEAMER. You referred to the number of employees, and do I understand 3,500 is the total number, or does that represent the number of people who are presently in the system?

Mr. LORBER. There are 3,500 participants in our group plan, and it represents somewhere between 93 and 95 percent of our normal employed population.

Mr. BEAMER. That is a voluntary basis, then?

Mr. LORBER. Yes, sir.

Mr. BEAMER. Now the other question and may I ask this-it would probably be one that is not necessary to be asked-is Universal Pictures a company of many shareholders?

Mr. LORBER. Yes, sir; it is listed on the big board.

Mr. BEAMER. We do not get a chance to look at the big board as Congressmen, but what I wanted to ask you is, Does Universal Pictures ask for any assistance from the Federal Government in any form?

Mr. LORBER. No, sir.

Mr. BEAMER. That is all.

The CHAIRMAN. Mr. Klein.

Mr. KLEIN. Mr. Lorber, carrying Mr. Roger's point just one step further, you say that there was complete freedom of choice on the part of the employee with regard to doctors. However, many of these plans have a panel of doctors, do they not? By that I mean the HIP and others.

Mr. LORBER. Those are the service-type plans, Mr. Klein.