on State and Federal largesse. In no way does it make provision for the aged recipient of medical care to contribute to the cost of that care during those years when he can most afford to contributewhen he (or his spouse) is employed. This would form the basis of dependency prevention in the retirement years.

Second, the 1960 legislation contains no assurance to the individual or the community that medical benefits would in actuality be definitely available, even for the so-called medical indigents. The reasons are clear:

(a) There is a strong probability that a large number of States will not appropriate matching funds. According to the Bureau of Public Assistance, 10 there are 19 States (plus Guam) with a population of nearly 6.5 million persons aged 65 and older which are not planning any action to implement the Federal matching program. Less than 1 million of the aged in these States are now receiving old-age assistance.

There are at present (December 1960) only 12 States (including Puerto Rico) taking definite action. These States have an aged population of nearly 3 million, of whom nearly 600,000 are already receiving old-age assistance.

(b) Even in those States that will take any action, it is doubtful that they will provide the range of services authorized in the Federal legislation. For example, in West Virginia, which has already acted, 102,000 aged persons are ostensibly eligible. If this State, already in the throes of financial distress, were to provide the full range of services allowed under the Federal legislation its share of the cost would be more than $7 million." Faced with this overwhelming prospect, the State has been forced to pare down the kinds and degrees of medical services for its "medical indigents." West Virginia's program finally legislated, in dollar terms, is only one-third of the total possible program. Other States experiencing fiscal difficulties would likewise be forced to restrict their appropriations--or substantially deprive other State programs.

It is clear from these and similar conditions that only an insurance system can avoid the indefiniteness of the Federal-State matching approach as provided in the 1960 legislation.

Third, the administrative costs involved in such an approach are necessarily great because of the expenses that must accompany any program that requires detailed investigation of incomes, resources, relative responsibility, etc.

Fourth, the 1960 legislation ignores the long-run implications and dimensions of a growing population of aged men and women, and of the practicality of creating a program whereby the presently employed 70 million workers employed covered under social security could meet their basic old-age medical costs on a planned, orderly basis-without the prospects of limited retirement income restricting their medical purchasing power and without their being a drain on the general revenues of the Federal and State Governments.

The 1960 legislation's program of medical care for non-OAA indigents, unless buttressed by a social insurance system for financing

10 Mimeographed report, Nov. 15, 1960.

11 The total cost for the 102,000 eligibles, using the previously cited estimate of $265 per capita medical expenditures (p. 47), would be $27,030,000, of which the State and local governments would pay approximately 27 percent, or $7.298,000.

basic medical care, can conceivably result-and in the near futurein near bankruptcy for those States attempting to utilize the approach established by that legislation. This is not an outlandish possibility, given the projected rates of increase in the aged population (including the growing ratio of great-grandparents to grandparents); the relatively low improvement, if any, in their retirement income's purchasing power; their greater health risks, and the continuing rise in the costs of hospitalization and other health services.

In

On the other hand, if there is established a program of basic health services for the aged through a social insurance program, the uneven burden upon the States will be substantially reduced. Such a program does not call for a substitute for the program enacted in 1960. stead, the latter program of medical assistance for needy non-OAA aged persons, could constitute an emergency refuge for those smaller numbers of persons who might exhaust the range of benefits available to them as a right through their social security eligibility—or those who are not eligible in the first place if their States have appropriated matching funds under Public Law 86-778.

The argument has been made that the health and economic problems of the aged are only transitory, and that increasingly in the future the new generations of the aged in the country will be able to meet these problems through existing patterns. This argument, we believe, is not realistic. First of all, the prospects that the purchasing power of the aged's retirement income will keep abreast of the costs of medical care are not well enough assured to support the argument. Second, the more effective way of assuring health service benefits during retirement, through OASDI, is a safeguard against the injurious effects of economic cycles during working life, which could otherwise impair such assurances. Third, the extent to which protection against basic medical costs during retirement is assured, as a result of its inclusion in the social security system, will indeed be one of the avenues through which future generations of aged Americans can divert their incomes to other needs. As a matter of fact, the argument, to begin with, might just as well be used against the entire program of Old-Age, Survivors, and Disability Insurance. But the subcommittee doubts that anyone would seriously suggest such a liquidation.

FEATURES OF A POSITIVE HEALTH PROGRAM FOR THE AGED UNDER

OASDI

The ultimate value against which the several proposed approaches to the problem should be weighed involves not only the question of the soundest approach to financing medical care for the aged. It rests also on the increasing belief in the possibility of extending human life under conditions of dignity and creative activity, and using the best of modern medical science toward this end.

In arriving at the following specific provisions of a positive health program, the subcommittee has consulted a wide range of authorities in medicine, hospital care, public health, and medical economics. The limitations of these provisions derive essentially from practical considerations, in particular, the amount of funds that the American people are judged willing to devote during their employment years

toward the systematic prepayment of assured medical care in their

old age.

These provisions are:

1. Preventive medical care through outpatient diagnostic services.

2. Rehabilitative and restorative services in appropriate facilities, including skilled nursing homes and home health services.

3. The rational utilization of hospital care.

4. Alleviation of the costs of expensive drugs and medicines. 5. Assurance of high-quality care.

The maintenance and restoration of useful and meaningful lives for the aged population, i.e., preventive and rehabilitative medicine.Modern medical practice in the field of geriatrics should be concerned with the avoidance of a "custodial" philosophy of medical care, which provides only a minimal physical survival of the human organism, and the treatment of men and women only after they have become acutely or catastrophically ill or in pain. We should, instead, encourage preventive medicine, which means, among other things, diagnostic services (laboratory examination, X-rays, etc.). Modern medical care strives to keep people out of hospitals. Insurance legislation should therefore provide for services on an outpatient basis.

As the subcommittee stated in its first report, an intensive application of preventive medicine is the only intelligent avenue for reducing disability rates among the aged, and the enormous hospital expenditures that otherwise will multiply. Preventive medical care for the aged, therefore, must be considered an investment, the relative costs of which are low when contrasted with our current pattern of excessive hospitalization due to our failure to use fully the potentials of diagnostic health care and followup health services.

There has been sufficient experience with the results of such procedures as health screening, through demonstration projects, to support our position. Such programs are ample proof of the importance of a preventive health approach, because many chronic diseases of the aged have an insidious development without any obvious symptoms of which the individual can be aware-until it is too late.12 Diabetes, glaucoma, cardiovascular ailments, and cancer-these diseases and others could be greatly minimized in their human and dollar costs if we had a preventive program for the aged population. As the Deputy Surgeon General of the Public Health Service, Dr. John D. Porterfield, stated in his testimony before the subcommittee:

One promising avenue of approach-perhaps the most promising of all in the long run-lies in the prevention of disabilities associated with aging. There has been a tendency in the past to accept these disabilities as an inescapable burden of society; consequently, our major efforts in this field have been directed toward alleviating handicaps after they exist. There is abundant evidence to support my conviction, however, that active application of preventive principles can greatly reduce the number of disabled older

persons.

12 See ch. IV, "Health Status and Programs," of the subcommittee's 1960 report; and its hearings of April 1960 entitled "Health Needs of the Aged and Aging."

The key to a successful preventive program, for older persons as well as for children, is the health maintenance examination and accompanying health counseling. Through periodic examinations, potentially disabling conditions can be detected and checked at an early stage.13

Any balanced health program for the aged, then, must include early diagnosis. A system of prepaid outpatient diagnosis, and thus of early treatment of chronic ailments, would reduce the rates of hospitalized illnesses, long hospital stays, and prolonged disability. On the other hand, the net result of our current pattern of medical care and its financing is delay in seeking medical attention and failure to forestall the incipient development of illness and disease, intensifying further the mounting costs of hospital bills, disability, and custodial

care.

Restorative and rehabilitative services. In a recent symposium on geriatrics, Dr. Frank H. Krusen of the Mayo Clinic underscored the importance of another basic element in a balanced health program for the aged:

The role of rehabilitation has been a leading factor in bringing into bold relief the necessity for the drastic revision in our approach to the management of chronic illness and serious disability. No longer should handicapped people be consigned to the back bedrooms of their homes, to the wards of city and State hospitals, and to nursing homes to wait for the end. The medical profession and society in general has a moral obligation and an economic necessity to apply in all possible cases the comprehensive rehabilitation measures which are now rapidly being made possible.14

As in the case of preventive measures and outpatient diagnostic services, the subcommittee is convinced that rehabilitative services are an indispensable part of a balanced health care program for the aged population. One of the major areas of neglect is the failure to take measures to eliminate or reduce the side effects of many disabilities, such as atrophy, contracture, decreased cardiocirculatory efficiency, nutritional deficiencies, etc. The research evidence is clear that the "functional management" (physical therapy, etc.) of persons with impairments is a successful technique for attacking such side effects-especially if such care is provided at an early stage.15

Again, rehabilitative services can and should be provided, as much as possible, on an outpatient basis. Once a patient is recovered from a stroke, for example, he could undergo treatment at first in a hospital but after a certain point could be released, provided convalescent and rehabilitative facilities were available either in his home or in an outpatient clinic. Home health services, thus, should constitute part of the balanced medical care program.

Rational use of hospitalization.-While one of the greatest factors in a balanced health program for the aged should be adequate hospitalization, we have not listed it first, because of our emphasis on the desirability of keeping persons out of the hospital through a preventive

13 In "Health Needs of the Aged and Aging," hearings before the subcommittee, Apr. 4-6, 11-13, 1960, p. 25. 14" Rehabilitation of the Aging," in the Southern Medical Journal, November 1960, p. 1377.

18 "The Challenge of Disability to Medicine," by Charles D. Shields and Bernard D. Daitz, report presented to meeting of American Medical Association, Miami Beach, June 1960. See also the examples of restorative programs described in the subcommittee's 1960 report, pp. 94-96.

and outpatient program. Nevertheless, hospitalization remains an indispensable core of a broad program. It remains the largest single item in the aged's total medical expenditures, outside of payments to physicians, and the increases in hospital rates are chiefly responsible for the general rise in the cost of medical care.

Consequently, from the standpoint of both a philosophy of preventive medicine and costs, the subcommittee believes that hospitalization should be restricted to those medical services that cannot otherwise be obtained and administered through nonhospital facilities. Indeed, given the means and the incentive to use these other facilities and services, including diagnosis, home health programs (visiting nurses, therapists, etc.), and skilled nursing home care, the rate of hospital utilization can be kept at a level in keeping with the Nation's

resources.

By assuring a greater number of skilled nursing home days, and of home health visits, there could be introduced an incentive toward this much needed goal. For example, for each unused hospital day-up to a given maximum number of hospital days-the individual could be entitled to a larger number of nursing home days, or home health visits, both of which are much less costly.

Thus, in the opinion of the medical and health experts consulted by the subcommittee, the basic provisions of hospitalization accompanied by skilled nursing home services, home health services supported by outpatient diagnostic services-constitute the core of a balanced health services program for the aged population of this country.

To repeat, hospitalization by itself is no answer. After basic treatment in a hospital, the aged person might need only skilled nursing care in a qualified nursing home, or rehabilitative care in his own home or in an outpatient facility. Unless there are such alternatives and follow-through services, providing hospitalization alone can very well lead to the overusage of beds and be self-defeating for the purposes of an adequate medical program for the aged. With these alternatives, the utilization rates, and hence the costs, of hospitalization can be reduced by a significant degree, estimated to be at least 10 to 15 percent.

Drugs and medicines.-In contrast to younger age groups, the aged, with their many chronic conditions, need a greater volume of drugs and medicines, on a steady-rather than an intermittent-basis. The records of the subcommittee are replete with examples of older men and women putting off medical care because of their fear of the costs of prescribed medicines deemed essential by their physician for a chronic condition. Alleviation of this particular item in the health budget of the elderly-in part or in whole-should also be part of a balanced program of their medical care financing, to as great a degree as is feasible within the framework of funds collected through a social insurance system.

Quality of medical care.—If the beneficiaries are to be assured that the service they receive is of an acceptable standard of quality, provision must be made for the establishment of standards. An Advisory Council consisting of representatives of the concerned professional groups, as well as the public, would recommend feasible standards to the Secretary of HEW, and would modify them in the light of changing medical knowledge.

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