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The experience in the rapid growth of substandard nursing homes subsidized by the Public Assistance program, which does not insist on standards of care, clearly demonstrates that a medical care program without adequate safeguards of quality may do its beneficiaries more harm than good.
The need for a range of benefits.-Whatever the amount of these funds, and whatever the other limitations in the final legislation enacted, the subcommittee strongly urges that the range of benefits described here be included, even if this means scaling down the amounts of such benefits. Each element, each type of benefit, is in reality part of a continuum of health services. For example, it would be far better to provide a smaller number of hospital days than to eliminate outpatient diagnostic services from the range of services.
OMISSION OF PHYSICIANS' AND SURGEONS' FEES Ideally, perhaps, these basic elements in a balanced health care program for the aged to be financed through the social insurance system should include provision for the payment of physicians' fees. Certainly, physicians are an indispensable part of health maintenance. But the reasons for not including them are several.
First, and probably most important, is that the rate of payroll deduction through the OASDI mechanism under consideration (one-half percent of the first $4,800) would not yield sufficient funds to pay for such services.
Second, the availability of the services that are included in an OASDI program would constitute a significant foundation which would encourage individuals to utilize physicians' services through other means of financing. As older persons find that their basic health care costs are met through prepayment before retirement their limited income can be increasingly available for items not covered by such prepaid insurance. The present absence of such a foundation is a barrier to such utilization, and discourages elderly people from seeking any health care.
Third, the medical profession as a whole has asserted its willingness to provide medical care to all, regardless of their ability to pay. None of the other health professions, such as nursing, therapy, laboratory technicians, etc., is in a comparable position to offer free or reduced-fee services.
COMMENTS ON THE ROLE OF THE SOCIAL INSURANCE PRINCIPLE
Regrettably, the problem of financing medical care for the aged has been distorted into an emotional issue. What should be simply a matter of determining the most rational and practical mechanism for solving a problem has been turned into a subject of heated and sometimes irrational and hysterical controversy.
Each time an innovation in the social insurance system of the American people has been proposed, it seems that a review of the philosophy underlying that system is necessary, in order to allay distortions and misunderstandings. Briefly, the philosophy has to do with the concept of self-reliance and the prevention of dependency. Traditionally, Americans have felt, as a reflection of the nature of our preindustrial society, that "economic self-reliance was of particular
concern to the individual alone." 16 The Government and the community, according to this tradition, should play a role only in those abnormal cases of individual distress and then only with great reluctance. The notion of Government playing a positive role in the prevention of dependency and the maintenance of self-reliance of the individual was absent, although this idea was fully recognized by the founders of the Nation.
Instead, the Government acted only in a last-resort type of paternalism. Self-reliance versus paternalism were considered to be the only alternative patterns. Originally, the numbers of persons concerned were relatively small and these two approaches were somewhat workable.
But with the momentous increase in the numbers of retired and hence potentially dependent aged in modern society, these two approaches have undergone considerable strain. There is, however, a third alternative, which was embodied in the Social Security Act of 1935 which seems to be poorly understood by many persons and groups today: the concept of "cooperative contract,'' to use Dean Brown's terminology. In a modern, industrial society, the Government
in order to assure a self-reliant and responsible citizenry
our people.17 The system of Old Age, Survivors, and Disability Insurance created by the Social Security Act has in no way weakened the emphasis on self-reliance. Nor has it endangered the role of the family and its integrity. Indeed, it might be argued that social insurance has improved the conditions under which self-reliance and family integrity are possible. "It is true," as Dean Brown writes
that old-age insurance seeks to lift the support of the aged
life.18 Furthermore, the presence of the social insurance system in this country does not eliminate the continued contribution to be made by the individual over and above his payroll deductions, and by his family and voluntary, private organizations. The system is not an all-or-nothing substitute for individual and private enterprise, nor was it ever intended to be.
It is, however, a substitute for State paternalism, the chief characteristic of which is the "means test." Not only is this means test out of keeping with the spirit of modern industrial America; it is a less rational and effective method of meeting the risks faced by our increasing numbers of retired men and women whose retirement lives 18 J. Douglas Brown, "The Role of Social Insurance in the United States," Industrial and Labor Rela.
tions Review, October 1960, p. 107.
17 Ibid., p. 107. 18 Ibid., p. 111.
are likewise increasing in duration. Careful thought on the various implications of the paternalist "means test” has led observers to question this approach which, in effect, penalizes the majority of our aged population. These observers have asked, for instance, is a lifetime of work, effort, careful planning and savings to be rewarded in old age by the punishment of noneligibility for medical care programs?
This type of question naturally follows from an examination of a public policy which provides such programs only to those individuals who, for one reason or another, find themselves with virtually no assets, savings, income, or family assistance to help pay for medical care. The position of the subcommittee is not that the families of the aged, or the aged themselves, should be relieved of all responsibility in meeting the mounting costs of medical care for the retired population. The position is, instead, that a portion of these costs be financed by individuals through a system of social insurance. There still would remain a multitude of needs to be met in part or in whole by the individual, his family, private organizations, and by State and local governments.
The subcommittee believes that the principle of providing protection against the hazards of old age and retirement, already implemented in the form of social security cash benefits, should also apply to other concomitants of old age and retirement, particularly to health care costs. It is a proper function of the Nation's social insurance system to provide health care benefits to its retired beneficiaries, no less proper than cash benefits or funeral benefits.
In assessing the extension of the social insurance principle to basic medical services for the aged in America, we should remind ourselves of the essentially pragmatic nature of our national approach to specific, concrete problems, as opposed to any rigid ideological approach. What this means in this particular case is that the use of the social security approach in financing medical care for the aged does not automatically portend an inevitable system of health insurance, through OASDI, for the total population. As long as the existent pattern of private health insurance for the employed segment of the population works, as long as the public is satisfied with that pattern, there will be no need, and hence no argument, for a changeover to protection for the employed population through social insurance financing: This subcommittee is talking about the need and the feasibility of protecting the retired population only, and nothing more, nothing less. The foot-in-the-door argument against our recommendation, i.e., that it is "really” the first step toward Government insurance for the total population and "socialized medicine,” is an irrelevant protest and only serves to prevent reasonable discussion of a practical, businesslike solution of a real and pressing problem.
THE CHARGE OF "SOCIALIZED MEDICINE"
Finally, it is time, once and for all, to lay low the ghost of "socialized medicine," the label often tacked onto the recommendation approved by the subcommittee. In its true sense, this term refers to a system of medical care wherein (a) hospitals are owned and operated by the Government, and (b) physicians and other medical personnel (nurses, laboratory technicians, orderlies, maintenance personnel, etc.) are on Government payrolls.
In none of the bills introduced for the purpose of extending the social security system to include medical benefits for the aged, is there any expressed or implied provision for a system of Government owned and operated hospitals and of health personnel on Government payrolls.
What the subcommittee does recommend is a mechanism through which our people can, while they are earning and not during retirement-finance through the insurance principle the health care they will need during their years of retirement. Through such programs as Blue Cross, hospitals and patients have developed satisfactory relationships based on insurance financing. The subcommittee's recommendation simply makes it possible for such a relationship to continue—and for more of the elderly than is now possible during the retirement years when such private plans are beyond the financial reach of our older population.