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Mr. O'HARA. When you work out the actual system you work it out in terms of the long pull, not this month or next month.

There is one further point I would like to make. This business of— under the miners' welfare fund-persons coming to you and saying they want to go to the hospital because the lancing of a boil could be done at no cost in the hospital, and since that would be covered by the welfare fund and not if done in a doctor's office, that sort of practice was pioneered by the Blue Cross-Blue Shield program.

Dr. BRANDFASS. No. I do not think that was pioneered by the doctors. The doctors are getting sick and tired of policing these funds. We are here to be doctors and not policemen.

The welfare fund says we have a responsibility to look out for their interests.

Mr. O'HARA. Isn't it a fact that before the miners' pension welfare setup the Blue Cross-Blue Shield was operative and this practice was well established of the hospitalization, for anything that could be taken care of in an office that you take advantage of the provisions of the Blue Cross-Blue Shield policies?

Dr. BRANDFASS. It may well be, but I cannot say definitely and I do not think anybody else can either.

Mr. O'HARA. What you are practicing as a member of the continuing physicians with the mine workers' welfare fund system, when such cases are brought to your attention-in other words, when persons come to your office who could be handled with office surgery or could be handled with hospitalization and whose expenses would be covered by the fund if they were hospitalized and not if work were done in the office, do you ever send any of them to the hospital?

Dr. BRANDFASS. I sent that patient to the hospital. She needed a boil opened.

I feel that if the insurance companies and the welfare funds have that built into their policies, they know what they are putting in the policies. That is their worry. My worry is to give the patient medical care.

Mr. O'HARA. One of the great alleged abuses of the Blue CrossBlue Shield program is that there is unnecessary hospitalization under it.

Dr. BRANDFASS. It is one of the most efficient in the group, because it is regularly policed. It is policed on a local basis. If they choose to go in the red on their own, the doctors in their own system have to accept less fee. So they watch out pretty close for it.

Mr. O'HARA. They can raise the fees. I think that is pretty well covered by the State legislature.

Dr. BRANDFASS. My main interest is to keep centralized bureaucratic type of medicine out of medicine, so we can keep it on a local State level and keep our inherent freedoms.

That 1601 is very dangerous, simply because they can say what hospital is on the approved list and what hospital is not, and in the same breath they can say what doctors the patients can go to and what ones they cannot.

Mr. O'HARA. Blue Cross does that.

Dr. BRANDFASS. Every doctor that comes into an area has an opportunity to join the system.

Mr. O'HARA. If you have a Blue Cross-Blue Shield policy there are certain hospitals you can go to and certain hospitals you cannot.

Dr. BRANDFASS. That may well be in other areas. I do not know of any hospital in this area that is not cooperating with Blue CrossBlue Shield.

Mr. O'HARA. There are a lot of hospitals that are not Blue CrossBlue Shield hospitals.

Dr. BRANDFASS. I just know about the local situation.

Mr. O'HARA. As I understand the King-Anderson bill, in the first place, no hospital is going to be required to cooperate under the King-Anderson bill.

Dr. BRANDFASS. That is right. Even if they wanted to, they might not be able to.

Mr. O'HARA. Furthermore, it is my understanding that the KingAnderson bill would not be serving its purpose if hospitals which adduced the King-Anderson were permitted to continue under KingAnderson provisions, and I would assume further that the administrating action which would be the Social Security Administration— I might tell you the section you refer to is the section of Health, Education, and Welfare-that is one of the standard drafting techniques of the Social Security Administration of the Department of Health, Education, and Welfare, and you are free to extend the authority to the head of the department.

But the Social Security Administration would have some responsibility in addition, it seems to me, to see to it that the bills were not used by hospitals that do not use techniques approved which hospital administrators of repute and unaccredited hospitals and hospitals that do not have the sort of professional associations that would give any assurance that the patients were receiving adequate care.

I would be very much in favor of a procedure which would require the Social Security Administration to make some use of this known technique and have accreditation and not let the funds be used in programs where the patients did not receive adequate care. I know that is the purpose of that provision.

I have no other questions.

Chairman BAILEY. I would like to approach it just for a minute on the basis of a stable economy. When I go back to 1958 and remember there were 72 million people unemployed, I would like to ask you what you think would have happened to our economy, in the 1930 depression. Panic would have been more than repeated if it had not been for the numerous payments coming from the Government in the way of pensions and welfare funds and the social security.

Dr. BRANDFASS. But medical aid to the aged under the KingAnderson bill is not a payment of funds directly to the patient. They are not getting any money. They get their services paid for them. Chairman BAILEY. That is fine.

Dr. BRANDFASS. That is not putting any money out to the patient. Chairman BAILEY. It will if they have been participants in the fund, which they have been under this bill.

Dr. BRANDFASS. I think social security has helped.

Chairman BAILEY. I think it would have a stabilizing effect on our economy, and for that reason alone I worry more about the failure of our basic economy than I worry about Russian aggression. Dr. BRANDFASS. I agree with that.

Chairman BAILEY. We have to have a sound economy and have to have these people working, if possible, and some of them do work for which they would be compensated if they had the proper medical care, even if they were beyond retirement.

So I think we have to look to the stability of our economy and the elimination of unemployment.

When I remind you that $72 out of every $100 paid in the United States comes from corporate income tax and individual income tax, you can see the necessity of having everybody working and paying into the Government as a taxpayer. These 412 million who are unemployed now are a liability on our economy and not an asset to it.

So we ought to go to the thing that would stabilize our economy and let the United States get to a point where we would meet these growing demands on the amount of money that comes into the Treasury each year.

Dr. BRANDFASS. I am not here to discredit the Social Security System. That is not what I stood up for.

Chairman BAILEY. We thank you for your observations.

Mrs. HANSEN. The King-Anderson bill is in the Ways and Means Committee. When the Ways and Means Committee works on a bill there are many amendments offered and many viewpoints reflected. Unusually the refinement of language and so on is such that sometimes many of these discussions have been purely academic, because the viewpoints are pretty well ironed out, because I think it is a recognized part of any legislative body that there are compromises made in all legislation to try and reflect viewpoints and make things as administratively workable and to do the job that is proper as possible. I think the suggestions and viewpoints that are to be made could very properly be made to Mr. Mills, the chairman of Ways and Means. Undoubtedly, I am sure, he would welcome your suggestions.

Many doctors in our own travels have written, and I recommended they write, to Mr. Mills their viewpoints and to mention the viewpoints on technical parts of the bill, which I am sure everyone wants to hear discussed on these techniques, because any bill in the process of amendment is open to complete suggestion. That is the American way of government.

Dr. BRANDFASS. I realize he has had all the suggestions.

Mr. O'HARA. I want to assure you before you leave that I was not trying to harass or badger you in any way. You said something that I thought might leave an impression unless we amplified upon it.

Dr. BRANDFASS. I know the fund is in the red and it was going downhill. I know if the medical program isn't in it, it is going back downhill again.

Mr. O'HARA. I am not an actuary, but I do know the fund is set up in a way that actuaries have computed it, when we have a social security amendment bill we have to be through the problem of actuaries provided by the Government through the social security fund with a long series of calculated funds and projects. We have never passed a social security amendment unless it meets the actuaries' approval.

Be that as it may, I grant there is a departure from what we have in the social security bill than the King-Anderson bill, and that is that

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you would have benefits of other than a strictly monetary nature.

I think you will grant there is some reason for doing it that way. In regard to medical care, if you were to attempt to average out this cost and add that much each month to each beneficiary's check, you would take care of the problem you were trying to meet, which is for those beneficiaries who have serious medical problems to have a financial means of meeting them. That obviously is the reason for the number of questions raised with regard to where our social security system is going, and I welcome your contribution to whatever debates

occur on that.

I thank you.

Chairman BAILEY. The gentleman who has his hand up, please come forward.

STATEMENT OF DR. STEPHEN D. WARD

Dr. WARD. I am Stephen D. Ward. I am a practicing physician in Wheeling.

Mr. O'Hara, I think there needs to be some things straightened out. I think you intimated that the doctors and even me perhaps are opposed to social security. I do not think the people at this meeting, and I do not think the committee members, should go away with this misconception.

The doctors in this country have supported the social security programs in the past.

They opposed the specific measure of the King-Anderson bill because it is a departure, as you pointed out. It pays a service instead of doctors.

This form of security provides a dollar wage basis as a form of security for our elderly citizens. We do not believe this plan should be used to provide a system of socialized medicine for this country, which this plan would inevitably do.

I think there is also a lot of evidence that can be gathered. There is evidence in other countries of the world that have systems of socialized medicine. It is an inferior system of medicine to that which we have in our country.

I do not think there is any member of this committee who will disagree with me when I say we do have in this country the finest system of medical care that the world has ever known.

There is another misconception that I think you, as a Representative, and a Member of the House of Representatives, should clarify. I think you might have left a misconception. That is in regard to the trust fund that the Social Security Administration has available.

You intimated, I think, that this trust fund was practically limitless. Actually, about 3 years ago the money they had in reserve amounted to about $120 billion. As of this year the reserve amount has gone to about $20 billion. It has gone down by a hundred billion dollars in the last several years.

If social security taxes were stopped today the Social Security Administration would be in bankruptcy within a year. The Government would find itself in debt approximately, according to private estimates, between $350 billion and $400 billion. I think these figures are quite accurate and many of them come directly from the Social Security Administration itself.

I have another comment to make. That is that it has been testified today before this commitee pretty consistently that the real difficulty in financing all living expenses of the aged group is the problem of a fixed income in the face of this Nation. The doctors, and I think the majority of people in this country, believe it is just commonsense to work on the inflationary problem rather than making sporadic efforts at increasing the fixed income, which in effect contributes to further inflation. These efforts in themselves are at least partially self-defeating. We do not believe that inflation of our economy is necessarily inevitable.

It is in the direction of controlling inflation that our Congressmen could most effectively direct their efforts.

Mr. O'HARA. Doctor, I did not intimate that the medical association was necessarily against social security any more, although I am unaware of the medical association adopting a resolution in favor of the social security system.

Dr. WARD. The American Medical Association was asked to testify before Congress when this bill was pending, on one portion of this bill. That had to do with the extension of public health benefits. The medical association testified in favor of it.

Mr. O'HARA. I do not think we ought to get bogged down on this, because I did not say the American Medical Association opposed social security, although to the best of my knowledge, the only resolution of the American Medical Association convention on the general subject of social security was one of the thirties, which did oppose social security.

But I think that is more or less water over the dam, because the system has been in operation for 20-some years. I think that probably if some poll were taken of the American Medical Association, they would say the social security was all right.

Dr. WARD. I think they have, as I have indicated. There is no evidence at all that the American Medical Association was ever opposed to the social security plan.

Mr. O'HARA. Isn't there a resolution of the body of delegates in 1937 to that effect?

Dr. WARD. Not to my knowledge.

Mr. O'HARA. I cannot recollect it now, but I have a book of this resolution of the American Medical Association. It is my recollection about that. I do not think that matters.

Dr. WARD. The doctors did have a resolution to the effect they did not want to be involved in it personally, because as far as it was concerned for the general public, that is fine if they wanted it. But doctors did not and do not want to be involved in it personally.

Mr. O'HARA. I do not really care, and I did not attempt to say that the medical association was against it.

What I did attempt to say was that the objections being made by your colleagues here today with regard to the financing of the social security trust fund applied with equal vigor to the entire system of social security. The question of whether or not the fund is actuarially sound, the question of what is done with the collections that are assigned to the fund are the questions that go to the very basis of the social security system, not just the medical care provision, if one is enacted.

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