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The composition of the Federal Hospital Council in S. 191 is as follows (p. 23):

Five of the eight appointed members shall be persons who are outstanding in fields pertaining to hospital and health activities three of whom shall be authorities in matters relating to the operation of hospitals, and the other three members shall be appointed to represent the consumers of hospital services and shall be persons familiar with the need for hospital services in urban or rural areas. This provision seeks to insure appropriate professional representacion, which is desirable in the administration of this program, much of which requires special technical knowledge. The proportion of technical experts in the present bill should not be reduced.

LOCAL CONTROL OF HOSPITALS

In its deliberations of this problem, the Senate subcommittee wisely and consistently insisted, as did most of those testifying, that hospitals constructed under this act be subject only to local control, with no interference from any central source in the operation of the hospital. For example, the Senate committee and the Senate itself rejected a proposal to limit awarding of construction funds to hospitals maintaining "open staffs”, so that any licensed physician would be permitted to hospitalize his patients in these institutions. The determination of who shall serve on a hospital staff should be entirely a matter for local determination by those most familiar with the qualifications of the individual applicants for hospital staff appointments. The advantages of this plan in terms of improved medical care outweight occasional abuses.

DESIRABLE LIMITATIONS OF THE BILL

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Objections to S. 191 have been voiced on the grounds that the appropriations provided are inadequate, calling for the expenditure of 375 millions of dollars by the Federal Government in a 5-year period. This sum may seem small by comparison with the present plant evaluation of existing hospitals registered by the council on medical education and hospitals of the American Medical Association, estimated at 5 billions of dollars, and with the sums planned for merely expanding and improving existing hospitals, conservatively estimated at about 500 millions of dollars, entirely apart from the construction of new hospitals. However, the program under this bill is experimental. It would be unwise to undertake a vast program of hospital construction without the experience and information that will be made available by this experiment.

Furthermore, a reasonable limitation of funds should stimulate the States to evaluate their hospital needs more carefully and avoid unnecessary construction. It will be important for States to avoid multiple pressures for construction. There will be a tendency for every community to think it needs a hospital. Experience has shown that three nearby communities are better and more efficiently served by one 150-bed hospital than by three 50-bed institutions. State plans should incorporate intercommunity and intercounty collaboration, and should provide networks of hospitals rather than isolated institutions for isolated communities. Some limitation of available funds will constitute an effective stimulus in this direction.

The proposed program provides for financial assistance for hospital construction demonstrated to be needed only when it can be shown that the hospital can be operated locally. There is no provision for maintenance with Federal funds. This limitation of the program is wise, at least initially, since we do not now know where and how many hospitals are now needed in areas or counties financially unable to maintain and operate them even with State aid. Such information should come from the State surveys and might serve as a basis for subsequent modification of the program.

CONCLUSION

It is important to bear in mind that even the most successful consumation of the proposed program will not solve our medical-care problems, particularly as they relate to the distribution of physicians. Doctors not only need hospitals and other facilities to practice modern medicine, but, like other normal human beings, desire to live where there are good homes, good churches, and good schools for heir families and stimulating intellectual and professional contacts as well. For this reason, economically ill-favored areas may never attract physicians of high quality, even if hospitals are provided, until and unless the general economic and cultural level of the area can be elevated.

The American Medical Asociation believes that the program provided by S. 191, as passed by the Senate, promises to contribute to improved hospital and medical care in this country, endorses the bill strongly, and offrs its every assistance in carrying out the provisions of the measure, should this bill become law.

I have developed somewhat the work which is done by the council of which I am the executive officer, and I will proceed at once to this question of the need for hospitals.

I think that the recognized need for hospitals is apropos of some of these discussions, some of your comments, Mr. Winter.

This figure of 4.5 to 5.5 beds per thousand is well above the number of beds available in the United States as a whole, if we leave out the Army, Navy and veterans' hospitals. There were about 3.5 beds per thousand in non-Government hospitals throughout the country at large.

Mr. WINTER. In non-Government?
Dr. JOHNSON. Non-Government, yes.

Mr. WINTER. That corresponds with this chart that Dr. Parran has in the Senate hearings.

Dr. JOHNSON. In other words, if we assume that the figure of 4,5 to 5.5 beds per thousand represents a minimum need, then we have to admit that there are great needs for hospital construction since the over-all is only 3.5 beds.

Mr. WINTER. Without the Government hospitals ?
Dr. JOHNSON. Without them,
Mr. WINTER. That would leave one bed short per thousand.
Dr. JOHNSON. In the over-all picture.
Mr. WINTER. In the over-all picture.

Dr. JOHNSON. That, of course, includes such regions as Washington, D. C., which has about the highest bed-per-thousand rate of any area in the country.

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Mr. WINTER. The State of Nevada has the highest, and it is one of the smallest populated States.

Dr. Johnson. The point is that since the over-all picture is below this figure of 4.5 to 5.5, it necessarily follows that since there is an uneven distribution of these hospitals, there are going to be areas very distinctly in need of hospital construction. And as to what those areas are, there is a pretty good correlation between per capital income and number of beds.

If you would arrange the States in the order of their per capita income, there would be very few exceptions to a similar order for the per capita beds, so that the fact that there are a few hospital beds in an area bears a relationship to the ability to construct hospital beds in addition to any such factors as unwillingness to construct hospital beds which you mentioned.

Mr. Brown. May I ask if you are in favor of the Senate bill as written with the amendments ?

Dr. JOHNSON. That is right, sir.
Mr. Brown. And oppose the amendments that have been suggested?

Dr. JOHNSON. Particularly, I am in favor of the organization of the Federal Hospital Council.

Mr. BROWN. With authority?

Dr. JOHNSON. In which there are certain veto powers. I stated that originally about a year ago before the Senate committee. At that time S. 191 did not grant very much authority to the Federal Hospital Council, but now there are several places in the bill to which I refer, in which that council has been given considerable authority.

Mr. PRIEST. May I ask another question, since you are on the subject of the proposed amendments? How do you feel about the court review procedure?

Dr. JOHNSON. Well, I think that could, as you say, clutter up the courts pretty extensively. There will be local differences of opinion about hospital construction. You have the factor of community pride to deal with. You may have three relatively near-by communities, each of them wishing a 50-bed hospital, where any person informed in hospital matters would know that one 150-bed hospital would be cheaper and more efficient for those three communities.

I think an inhibition to hospital construction is a very important factor that we must take into consideration or we will have innumerable small hospitals which are not efficient.

We feel that one of the most promising

Mr. WINTER. Just a moment on that appeal that you are talking about. You are talking about the appeal that Father Schwitalla suggested, or the appeal that is now provided in the bill!

Dr. JOHNSON. Well, the question referred, I think, to the appeal that is provided in the bill-appeal to the courts

Is that not what you referred to?

Mr. PRIEST. That is the appeal by the State government, or a State agency, on its plan. That was the question. I gathered by your answer, though, that you were referring to the proposal made yesterday for appeals within a State, but my question specifically was directed toward the provision that is in the bill, and I have, in a bill that

a I introduced, the provision which proposes to strike that provision from the bill.

Dr. JOHNSON. I would be inclined to agree with that opinion regarding this court appeal.

Mr. PRIEST. Are there any other questions!

Dr. Johnson. Regarding the funds, I would like to mention one or two points. In considering the amount of the appropriation, I think, we must bear in mind the fact that a tremendous volume of hospital construction will take place in this country entirely independently of this $375,000,000 in Federal funds.

Mr. WINTER. Is that to be taken into consideration in this survey?

Dr. JOHNSON. That should be taken into consideration. Certainly, there should be no inhibition of independent activities in the direction of increased hospital beds where they are needed. This provides this bill provides $375,000,000. It has been recently estimated that about a billion dollars will be spent simply in renovating hospitals already existing and expanding their facilities on the part of the hospitals themselves, not taking into account new hospital construction by independent nongovernmental agencies, so that the amount specified in the bill here is aimed at meeting emergency situations, I think.

The great mass of spending for hospital construction will be from private sources.

I, too, wish to offer the facilities of the American Medical Association Council and I am glad to have been here.

Mr. WINTER. I would like to ask you a question on that proposition. You say there is in excess of a billion dollars to be spent in repairing

а. and renovating existing hospitals. In how long a time did you say?

Dr. JOHNSON. In the course of perhaps 5 or 6 years.
Mr. WINTER. Does that include the operating costs?

Dr. Johnson. No. That is construction of additional wings to hospitals and equipping them. It has nothing to do with the cost of running the hospitals.

Mr. WINTER. There is a billion dollars being spent every year in the operation of hospitals throughout the United States now.

Dr. JOHNSON. There are nearly 2,000,000 hospital beds in approved hospitals, and it costs perhaps on the average less than $2,000 a bed to operate, to run a hospital bed, and 2,000 times 2,000,000 would give you the figure that is spent on hospital care.

Mr. WINTER. Now, then, supposing that under this bill, have you given any thought as to where the money is coming from in a period of 5 years if we double the hospital beds in the country and by building new hospitals?

Dr. JOHNSON. As I understand this bill, funds will not be awarded for hospital construction unless there is reasonable assurance, I think the wording is, that the local community will be able to maintain that hospital—that it will be able, in other words, to take care of any deficits in the operation of that hospital.

As I understand it, if a community needs the hospital but cannot show that it can maintain the hospital, such a situation is not covered by this bill at all.

Mr. WINTER. Then that throws it right back to the very class of type of people that you would want to get medical care for, and they are. not going to get it. They live in the poorer sections of the country.

Dr. JOHNSON. Not necessarily. To a certain extent that will be true, Mr. Winter, but we feel that such facts will come out of this survey. One of the byproducts of the survey will be to find out such areas in hospital care that are not covered by this bill. Certainly they are not covered by this bill.

Mr. WINTER. That is one thing that I am worried about, whether or not this is the first step to get these hospitals built and then to come back and ask the taxpayers to pay generally, over the United States, for the operation of them.

Dr. JOHNSON. Well, I think that so far as providing for construction as well as the survey is concerned, I think those two are quite legitimate to incorporate in the bill.

I think no one would disagree with the fact that we know we need more hospital beds.

Mr. WINTER. I think everybody agrees with that.
Dr. Johnson. The survey will tell us where we need them.

Mr. Brown. You said there would be a billion dollars spent for renovation and remodeling in addition to existing hospital facilities. Have you any information as to contemplated expenditures in the next 5 or 6 years on entirely new hospitals?

Dr. Johnson. No. I think, if you wish, perhaps Mr. Bugby of the American Hospital Association can tell you that.

The total evaluation of hospitals in the country is about $5,000,000,000. My own guess, but it would be a guess, would be that new construction would probably run to about a billion dollars, also, but Mr. Bugby could give you more accurate information.

Mr. Brown. I know the number in my own district and communities that are contemplated, that is all.

Mr. PRIEST. We certainly appreciate your appearance before the committee.

Mayor Walter Chandler, of Memphis, who also represents all of the mayors, I believe, wishes to address us.

Will you give full identification for the record ?

STATEMENT OF HON. WALTER CHANDLER, MAYOR OF THE CITY

OF MEMPHIS, TENN., VICE PRESIDENT OF THE UNITED STATES
CONFERENCE OF MAYORS

Mr. CHANDLER. My name is Walter Chandler. I live in Memphis,
Tenn., and since 1940 have been mayor of the city.

I am chairman of the legislative committee of the United States
Conference of Mayors.

Prior to 1940, I was a member of the House of Representatives.
Mr. Brown. In other words, you have been promoted to mayor?
Mr. CHANDLER. Well, you remember I resigned from Congress, the
76th Congress, to go home to be mayor.

Mr. WINTER. You showed excellent judgment.

Mr. CHANDLER. I do not know whether it was a wise move or not. I think I jumped from the frying pan into the fire.

Mr. PRIEST. I would like for the record to carry my opinion of a. fellow Tennesseean, that he was a very distinguished Member of Congress, of the Judiciary Committee, and is also a very distinguished mayor of the great city of Memphis.

Mr. CHANDLER. That is very kind of you. Since I left here I have seen many things that I omitted to do that I probably should have

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