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Washington, D. C. The subcommittee convened at 10 a. m., Hon. J. Percy Priest, chairman, presiding.

Mr. PRIEST. The committee will come to order for a further consideration of S. 191 and other related House bills.

We will first hear from Mr. Ludwig Anderson.



Mr. ANDERSON. Mr. Chairman and gentlemen: My reason for appearing is the great interest the members of our cooperative associations have in the passage of legislation to relieve the critical shortage of medical and hospital care, particularly in the smaller cities and towns and the rural areas.

As evidence of our great concern it will interest you to know that there are five successful cooperative hospitals now operating, and at least forty more in various stages of organization. As about 90 percent of our members live in or near rural areas where the need for new hospital facilities is greatest, we have long felt the need of doing something about it. Through our cooperative medical and hospital associations we have constantly tried to interest the public in more and better and less costly medical care for our people of average income. Our efforts have brought us into contact on numerous occasions with conscientious and public-spirited doctors who as individuals heartily approved of our efforts but who have found it impossible to throw in their lot with us until we could furnish them a place to work. From our experience we are in complete agreement with the language of the Senate Committee on Education and Labor, which saysWithout more hospitals, laboratories, and health centers, properly distributed in relation to need, adequate health care cannot be achieved under any method.

Thus, we welcome this hospital survey and construction bill. We do not expect a perfect bill. In its present form its enactment would go far to relieve a bad situation. But we believe it could be improved by some changes that would be easy to make at this time. Most of these needed changes have been incorporated into House bill 5628.

There has been some discussion of the status of the Federal Hospital Council, which, with the Surgeon General, would share responsibility for administration of the bill. We would favor the suggestion already made by Senator Murray in his personal statement on the amended


bill, S. 191, for an amendment which would require the Surgeon General to consult with the other eight members of the hospital council but would not permit the council to take over the administrative authority of the Surgeon General. This change is well provided for in House bill 5628.

On behalf of the consumers of medical and hospital care, whom we represent in some degree, we wish to point out an inconsistency in the bill (S. 191) which should be remedied.

The Federal Hospital Council is a committee consisting of the Surgeon General and eight others, representing both producers and consumers of hospital and health services. But, in setting up requirements which a State must meet in order to qualify for assistance under this bill, the wisdom of insuring representation of the consumer at the State level, where the program will be actually administered, has been overlooked. The State advisory council, the bill says

Shall be broadly representative of non-Government as well as Government groups concerned with the operation, construction, use, and need of hospitals.

There is no provision for representation on this State council of the nonmedical or consumer group. In this respect we much prefer the proposal which is contained in House bill 5628, which was introduced by Mr. Priest.

In certain States, where the organized medical society is actively opposing the organization of cooperative hospitals and cooperative medical care plans, it is not only possible, but probable, that the State council will not be sympathetic with the development of nonprofit hospitals, cooperatively owned and maintained. This possibility would be lessened by the inclusion of a fair representation of nonmed

а ical members on the State advisory council.

The last matter I wish to comment on is one for which I do not have the solution and I do not see it in this bill, nor in H. R. 5628. I refer to the fact, recognized in the bill: (a) That construction of hospital facilities alone is not the complete answer without sound provisions for continuance and maintenance of the services provided for; and, (b) the utter inability of some communities to provide the necessary funds.

Obviously, some further legislation is called for so as to provide the necessary care for communities so handicapped. For the cooperative groups I represent this problem will not be likely to arise even in areas of low income.

But in this connection I would like to suggest a revision in the estimated need for health centers. A community which could not

. afford or support a hospital could very likely support more than one health center. The limit set by this bill of one health center for every 30,000 people seems inadequate.

Since it is admitted that the provisions of the bill will not meet more than 20 percent of the actual estimated need, it seems logical that not only in order to use the money most economically but also from the point of availability and distribution of at least some sort of minimum of medical and hospital care the health center, with from 1 to 10 beds for emergency or other temporary use, affords a more practical method of meeting the need in low-income areas than do hospitals that will, of necessity, be expensive by rural standards and few and far between.

It would seem to me that 1 health center to each 15,000 people would be nearer the right figure, and that this would not only tend to reduce the need for new hospital buildings in areas where support would be difficult, but the speed with which these health centers could be set up would also ease the congested conditions now existing in our hospitals.

We wish to commend the committee on its efforts to work out a good approach to these serious problems. We hope for a favorable report on bill S. 191, properly amended, or a substitute bill which will incorporate the amendments.

Mr. WINTER. Mr. Anderson, you stated that you thought that there should be some further provisions in this bill providing for maintenance and operation of the hospitals.

Mr. ANDERSON. I suggest the need for further study and further legislation; yes. I do not know whether it should be incorporated in this bill. I believe, however, that the possibilities have not been thoroughly explored. I think there are ways of meeting the situation for maintenance, and so on.

Mr. WINTER. You followed that statement with the statement that the group you represent, that this problem was not likely to occur. I would like to have you explain that.

Mr. ANDERSON. That is right, sir.
Mr. WINTER. As to why that is.

Mr. ANDERSON. The cooperatives have worked out a very simple way of meeting the problem, even in areas of very low income and very scattered population. The Elk City Cooperative has at Elk City, Okla., the best example of that sponsored by the Farmers Union, a cooperative hospital owned by the people in the community, costing the people who belong to the association'a membership fee or a share, rather, I believe it is $100 which may be paid in quarterly payments in order to join the organization and support the hospital, and an annual fee of approximately $25 per family,

That is in a community where, in 1929, when it was organized, they had to go 100 to 150 miles to a hospital, and yet the hospital has been successfully operated up to date. And at this time, is one of the finest health institutions in the State of Oklahoma.

Mr. WINTER. Are the facilities of that hospital available to the public generally or to just members of the cooperative?

Mr. ANDERSON. That is right; it is available to members of the association at special rates which they pay for by this insurance contract they carry, but the public may use it; that is, if you are a doctor you may bring a patient in to that hospital and the patient who is not a member of the association pays the prevailing fees. You pay the same fee there that you would pay in any other hospital.

Mr. WINTER. Do you not think that is a much better plan of providing for the maintenance and financing of these hospitals after they are constructed than to try to work out some plan whereby the Federal Government will take on the stupendous job of caring for the operation of the hospitals?

Mr. ANDERSON. I think it is the right answer. There may be localities where it would not work, but I think it would have to be an exceptional community in which it would not work.

Mr. WINTER. How great an area does a hospital cover, does it serve!

Mr. ANDERSON. I cannot answer that. I do know, however, that they had members living as much as 100 miles from the hospital.

Mr. WINTER. They had members living 100 miles from the hospital?

Mr. ANDERSON. I do know that. How far the area, whether they solicited members that far away, I would not be able to answer, but I know they had members who voluntarily joined and paid their fees.

The point here is that what we are interested in from a public health point of view and a cooperative point of view is the local, home ownership and home interest in maintaining those facilities, and the possibility of doing so when the cost is shared by the community.

On this basis, in your own experience, you know that illness is apt to cost you from $300 to $1,000 a time. $1,000 can well pay the medical needs for a life time on that system of $25 a year.

Mr. WINTER. This hospital, how large is it, do you know how many beds it contains ?

Mr. ANDERSON. The last report I read had a membership; that is, a dues-paying membership of 1,800 families; that is, 1,800 heads of families or individuals, 1,800 memberships. That was in 1940. I do not know what the membership is today, but for many years they got along with a membership of 800 families, and paid expenses and paid their doctors. They furnished some dental care. Îhey furnished any amount of ordinary common medical care, the type that costs the average family the most money in the long run; that is, the occasional office calls. That is free under the contract.

Mr. WINTER. Well, now, you say 1,800 dues-paying members, or 1,800 families ? Mr. ANDERSON. 1,800 dues-paying members.

Mr. WINTER. And those dues-paying members are at the rate of $25 per year per family?

Mr. ANDERSON. That is right.
Mr. WINTER. That would not amount to that much.
Mr. PRIEST. Will my colleague yield?
Mr. WINTER. Yes.

Mr. Priest. That $25 per year is in addition to the $100 original per family.

Mr. ANDERSON. They must be members of the association; yes. They must own a share in the hospital which goes to the hospital fund in its entirety.

Mr. WINTER. Who built the hospital, to start with?

Mr. ANDERSON. It was originally financed by Dr. Shaded who has received some national prominence by reason of the fact that he pioneered this plan. He is now urging some of these hospitals that I mentioned to you that are in process of organization, are being organized by Dr. Shaded.

After he had initiated the plan and built a small hospital, the Farmers Union became interested and the hospital has been taken over by the association and bought and it is being operated by the dues-paying members now, but Dr. Shaded started that.

Mr. WINTER. Do you know what they paid for the hospital?
Mr. ANDERSON. That, I do not know.

Mr. WINTER. If they put in $100 apiece and there are 1,800 members, that is a considerable sum of money, $180,000.

Mr. ANDERSON. I do not know what the hospital cost. The hospital has been enlarged 3 times. It started out with 20 beds, a small enterprise, and it has been enlarged 3 times. I think now it is in the neighborhood of 100 beds.

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