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less access to medical personnel and facilities, less protection by health insurance, and weaker coverage by all sorts of organized health care programs than citydwellers.

The aged, passing the sixty-five-year mark at the rate of about a thousand a day, are faced with the highest illness burden of all. Their physical and mental troubles come more frequently and last much longer. Yet these problems strike them at a time when they are least able to meet the blows, both economically and spiritually. Much progress has been made in helping old people cope with their problems through our national social security system and, for the very poor, through our federal-state systems of old age assistance. Recent federal legislation on Medical Assistance to the Aged (Kerr-Mills Act) has brought a little further help. The commercial insurance industry has been trying hard to extend coverage for hospital benefits to older people on an indemnity basis. Yet, in 1960, of the approximately $5 billion devoted to the health care of the aged, about three-fourths was spent by aged persons themselves from private resources."

The mentally ill are still pariahs among us, if one can judge from the level of care being rendered in most of our mental hospitals. Despite great improve. ments, a vast realization that the psychoses do respond to an all-out therapeutic push, and the conversion of many backwoods asylums into active treatment institutions, most hospitalized mental patients are still treated by standards which-in the world of general medicine and surgery—would be considered primitive or even barbarous. Ambulatory treatment of persons with serious mental and emotional disturbances is still largely confined to a relative handful of the persons in need-largely in the uppermost income groups.'

Other long-term disorders, among persons of all ages, receive service far below our potentialities. A robust movement in rehabilitation and geriatric medicine has developed in the last thirty years, and the scientific literature is full of accounts of what can be and should be done. Yet most institutionalized persons with chronic disease are kept in small profit-making nursing homes, most of them totally lacking in rehabilitation programs, many without even a single registered nurse, and few with any organized medical staff supervision.' There is much talk of organized home care programs, emanting from hospitals to serve the chronic sick at home, but hardly sixty out of the nation's six thousand general hospitals have established such programs.

For years, medical and public health leadership has advocated periodic health examinations of adults, no less than children, as a principal key to general health promotion. Such regular attention would facilitate not only early disease detection but also positive health counseling about a mode of life conducive to health. We do a great deal of propagandizing about such periodic health supervision, but the evidence is that hardly 20 per cent of our people actually get it. With expanded insurance and greater public sophistication, a rising volume of medical care is being obtained by the American population, but for most persons this care is hurried and episodic, rather than thorough and continuous.

One could catalogue other deficiencies in public health, industrial hygiene, hospital provisions, nursing service, accident prevention, and day-to-day medical and dental care, but this may be enough to indicate that there are still vast and serious unmet health needs all around us. Are these deficiencies necessary? Can anything be done about them? Could we afford the price of an optimal health program in every community, a program that would apply fully everything we know about the prevention and treatment of disease?


EXPENDITURES AND WASTAGES In 1963, the United States population spent $34 billion, or 6 per cent of the gross national product, on all health and medical purposes. This amount includes pu and private expenditures and the costs of facility construction and research, but not of professional education. This expenditure, both in absolute dollars and as a share of GNP, has been rising gradually since 1930, when data of this type were first collected. With this rise, more health services have been received by more people, more research has been done, and better quality personnel have been serving the population. But is this expenditure enough to do an adequate job? Should we be spending more, and could we afford it?

a Social Security Administration, The Health Care of the Aged (Washington, D.C. : Government Printing Office, 1962), pp. 33–34.

3 Joint Commission on Mental Illness and Health, Action for Mental Health (New York: Basic Books, 1961).

* H. B. Spier, Characteristics of Nursing Homes and Related Facilities (Public Health Service Publication No. 930-F-5 (Washington, D.C., 1963)).

6 "President's Message on Health" (excerpts from President Johnson's special message to Congress on health and medical care), New York Times, February 11, 1964.

One would be hard pressed to specify a “proper" percentage of GNP to be devoted to health services. We do know that our expenditure is higher proportionately than that of other comparable countries, like Great Britain or Sweden, where the outlay is between 3 and 4 per cent of GNP. Yet, in those countries, the whole populations have virtually free access to medical care; they receive slightly higher rates of physican's visits and appreciably higher rates of hospital days than we do. There are certainly fewer inequities between upper and lower income groups than characterize the American scene. Still, there are many inadequacies in European medical service which could be corrected only if their economies could support a higher investment for health purposes.

Whether or not the share of our national wealth devoted to health is now optimal, it is quite clear that, while unmet needs abound wasted, a great deal of money is being wasted. In 1962, about $4.2 billion a year was spent on drugs purchased outside of hospitals. This amount constituted some 19 per cent of personal medical-care expenditures. At least one-third of this amount, or about $1.4 billion, went for self-prescribed and patent medicine, the bulk of which was probably of little medical value. This is quite aside from large pharmaceutical company profits on the prescribed drugs and the many hundred million dollars (about 40 per cent of sales income) spent by the so-called ethical drug manufacturers on advertising and sales promotion. It is the patient, of course, who ultimately pays for this.

The medical cults still thrive in America. For the ministrations of chiropractors, naturopaths, and other "healers,” Americans are squandering about half a billion dollars a year. The pity is that people of low income and limited education, who can least afford such waste, are most susceptible to the claims of these so-called healers.

Voluntary health insurance has brought enormous benefits, but our free enterprise system, with hundreds of competing insurance carriers, the largest of them in business for profit, has exacted a high price for the protection. Quite aside from the medical expenses paid, the mere cost of overhead, reserves, and profits of private health insurance plans in 1962 amounted to over $2 billion.' Most of this went to commercial carriers. If the administrative expenses of American health insurance were at the level, for example, that has been achieved in the universal governmentally operated hospital insurance programs of Canada (about 3 per cent of premium income), this amount could be reduced greatly, at a saving of about $1 billion dollars a year.

The larger extravagances, however, are to be found, not in these tributaries, but in the central stream of American medicine. In this era of specialism, with need for elaborate equipment and auxiliary health personnel, the pattern of medical service prevailing in isolated individual offices is a technological anachronism. The duplication of office nurses, rented space, X-ray equipment, technicians, and record systems is a waste for which the patient must pay. Although they have been slowly growing, group practice clinics now involve only about 6 percent of American physicians. Yet the great economies of this form of medical service organization have been amply demonstrated by the Kaiser Health Plan and many other programs of high-quality service. The advantages of group medical practice, moreover, go much beyond financial savings.

The fee-for-service system by which physicians and dentists are usually paid in America is associated with further extravagance. Its built-in incentives are all toward maximization of expenditures. When rates of elective surgeryespecially for procedures which may be of dubious need, like tonsillectomies, appendectomies, and uterine suspensions are calculated under conditions of feefor-service, compared with salaried medical remuneration, they are invariably higher under the former scheme. In a university teaching hospital, where fee

Chart Book of Basic Health Economic Data (Public Health Service Publication No. 947-3, Health Economics Series No. 3 (Washington, D.C., February 1964]), p. 7.

In 1962 the premium income received by all voluntary health insurance organizations in the United States was $9.3 billion, while the benefits paid out were $7.1 billion (Health Insurance Institute, Source Book of Health Insurance Data (New York: The Institute, 1963), pp. 36. 46).

Wedical Groups in the United States, 1959 (Public Health Service Publication No. 1063 (Washington, D.C., 1963]).

• Paul M. Densen, E. Balamuth, and S. Shapiro, Prepaid Medical Care and Hospital Utilization (Monograph Series No. 3 (Chicago : American Hospital Association, 1958]). incentives are largely lacking, it is customary to find, on surgical tissue review, that not more than 15 percent of organs removed are non-pathological; in the typical open-staff general hospital, the percentage of unjustified surgery—on careful medical auditsis seldom this low. Every administrator of a medicalcare program paying doctors on a fee-for-service basis can testify to the vexing problems of this payment system.

The free-and-easy operation of most health insurance plans has led to further extravagance. Physicians admit many patients to hospitals for workups that could be done more economically in clinics, simply because use of the hospital is convenient for the doctor and is covered by insurance. Most insurance is on an indemnity rather than a service basis, and many physicians inflate their final fees when the bulk of the charge is insured. There have been frequent appeals by medical leaders to refrain from this practice in order not to discredit the whole voluntary insurance movement. With insurance income to buttress the financing of most general hospitals, extravagances develop, like selective-menu diets, corporation-type administrative salaries, and fat fees for fund-raising counsel or public relations consultants. Moreover, there is the mushrooming, in recent years, of small proprietary hospitals, providing a tidy profit for their owners by the simple expedient of accepting only paying patients and carrying none of the community responsibilities for long-term care, out-patient and indigent service, professional education, or medical research.

The above facts may be enough to suggest that within the $34 billion a year we are spending on health in America there is much waste. If this waste were eliminated, we could, within our current expenditures, do a great deal to reduce the many unmet needs reviewed earlier.

GREATER PLANNING NEEDED Such a course of action would require a greater degree of planning and organization of all sectors of public health and medical care in America-more than we have so far been willing to undertake. Yet, as suggested at the outset, we have been clearly moving in the direction of greater systematization of both the financing and the provision of health services. If we wish to solve our problems, we must accelerate the rate of this movement.

The implications of such movement would be a greater shift of health activities to what Kenneth Galbraith speaks of as the public sector of the economy. Such a shift could mean, not only a reduction of extravagance and waste, a better return from our health dollar, but, I suspect, an enlargement also of the net share of GNP devoted to health. As public responsibility is more prominently assumed for the protection and maintenance of health, the value and importance of health benefits will be more widely appreciated. If, instead of 6 percent of GNP, it takes 8 percent or 10 percent to do the job, then why should this not be done? What is more precious than life itself?

Is this utopian naïveté? In 1961, we were devoting 10.2 per cent of personal consumption expenditures to clothing, accessories, and jewelry-pleasant purposes, of course, but much of it a commercially induced pursuit of the latest fashion.o Tobacco and liquor take almost the same share of our consumption dollar as do health services, and recreational expenditures about the same amount. One need not be a heartless kill-joy to question these proportions. The profiteering of the funeral industry has been recently documented in two important books, and who is to estimate the billions squandered each year on gambling, prostitution, and the illicit sale of narcotics? Most of this spending is done by persons least able to afford it. More respectable gouging of the poor is carried out by the loan companies on the main street of every American town, or the "easy credit” furniture and auto merchants who exact prices 25 or 50 percent higher than would be paid by the man with cash in hand. Then there is the $55 billion a year we are spending on military purposes, not counting $10 billion for interest on past military debts. It is more than a parlor game to calculate how many rehabilitation units or community mental health centers could be built and operated for the cost of one supersonic bomber.

There is no lack of economic resources with which to meet health needs in America, if we set out to meet them. It is a question of how we choose to use

10 U.S. Department of Commerce, Statistical Abstract of the United States, 1963 (Washington, D.C. : Government Printing Office, 1963).

and organize our resources. If we choose to waste billions of dollars both within the health arena and in our total notional economy, we should be aware of the price we are paying in serious community problems and in personal anguish. If we want to shift our national patterns of spending and resource allocation, it will take more planning than preaching to accomplish it.

There are some, of course, who argue that pain and death are preferable to regimentation, for they fear that greater organization of our economy in general and our health service system in particular would mean an irreparable loss of freedom. This is a vast distortion, however, of the true meaning of freedom. We have built a great framework of public education in America- compulsory in its support through taxes and compulsory in its attendance by children and it has enriched, not diminished, our freedom. Our social security system has enhanced our personal freedom in the later years of life by compelling us to save in the earlier years. Our public health system, with such compulsions as smallpox vaccination and pasteurization of milk, has helped to free us from disease, just as the workmen's compensation laws have helped to liberate workers from the hazards of industrial injury. A group-practice clinic frees the doctor from the preoccupations of the small merchant and permits him better to practice scientific medicine. The regionalized hospital system can assure the freedom of a country-dweller to get the scientific care he may need in an urban center. A flouridated water supply frees children from needless dental district and frees families from needless expenses.


The path to freedom and to truth may be found more surely in the method of science than in that of tradition or faith or surmise. Yet scientific knowledge both about nature and about society itself has not yet reached the extent that all persons, or even the majority, can make the wisest decisions for their own good. Flouridation of the water supply is still submitted to community referendums, launched by public officials with a distorted view of the democratic process. More often than not, the people have voted against this safe and effective measure. Scientific medicine is still shunned by many in favor of quackery.

The task of leadership in a democracy, it seems to me, is to apply social measures for the benefit of people, based on the best knowledge that science has produced at a given time and place. The next year, the next day, science may yield a better answer, and then the policy must be changed. Within these limits, political and social leadership must be responsive to the will of the people. In the provision of health service, we have learned a great deal both technically and socially over the centuries, but we are far from applying all that we know. There are manifold resistances to the social changes that would be necessary to apply that knowledge, and the ultimate source of strength to overcome those resistances is the understanding of the people.

Social workers have a great role in increasing that understanding. They are carriers of a torch that is fed by a fuel of humanism-not just a merciful kind, with pity for the underdog, but a rational humanism that sees the importance of social responsibility for the personal well-being of every individual. They can help to advance the struggle of man to learn, in the achievement of health as in pursuit of other essential goals, that he is, indeed, his brother's keeper.


A-THE EMERGING MISSION OF THE NATIONAL HEALTH COUNCIL (Inaugural Address by George James, M.D., President, National Health Council)

To some extent the National Health Council has become known as a sort of corporate representative of the voluntary health movement in the United States, and there is truth in this. But the real purpose and basic commitment of the Council is to promote health.

If the National Health Council is thought of as speaking for voluntary organizations waging war against specific diseases or collections of diseases, the image is incomplete. But I think in some people's minds there is a picture of the Council as representing a number of groups that are free and independent, not much in

See statement, p. 71.

contact with each other and not only out of contact with government, but rather suspicious of it.

The fact is that if you consider the active members of the Council you quickly get a picture of the interrelatedness of American health effort and how we are all tied together. For example, the American Medical Association has as members doctors who conduct private practices, but it also includes many other doctors—some who are employed by government at various levels, and even some who are employed by pharmaceutical manufacturers. The American Nurses Association covers the whole field of nursing and that includes nurses in health departments, which are government, and nurses in voluntary health agencies, which are not. The Association of State and Territorial Health Officers is a voluntary group in that it is made up of men and women who have freely decided to keep it in existence and who choose its policies as they see fit. But in their daily work, these people are in government.

This broad spectrum in my view is one of the strengths of the Council. Through the individual members of its member organizations it reaches every part of the American health movement. Only by touching all these parts and dealing with all of them can we hope to be an influential generalist and an effective catalyst in health today.


If we in the Council are going to do anything that makes any sense, we have to meet the needs of public health today and in the foreseeable future. We aren't going to be useful solving problems that don't exist, or that have essentially been solved already.

The nation, as you know, is experiencing an increase of population at both ends of the gamut: more youngsters, more old people. We have problems with the young, especially variations in infant mortality in different areas and we need much more effort in this field. But we already have a large number of sophisticated, well equipped and supported agencies and programs here. What really sobers us with its enormity and our unpreparedness is the medical problems of our older people. In my city we will have one million persons 65 or over in a few years and the nation will have about 25 million in this age group by 1980.

These older people are going to want all the benefits of first-rate American medical and health care for acute disease, when it is needed. But the great problem among them is chronic disease, very often half a dozen or more concurrent long-term diseases for which, as yet, we have no biologic cure but for which we do have treatment that can be effective in sustaining their precious independence and self-sufficiency.

I think I could convince you that if these older people do not get continuing care, then they are very apt to decline quickly and have to be put into hospitals or other institutions. The cost of institutionalization is high, however, and if it becomes the main instrument for care of the aged, the total expense will be so astronomical that it seems impossible to design budgets to include it. Estimated figures just for this city run to billions, rather than millions per year.

The cost of keeping people independent, of preventing their conditions from becoming crippling, is far less than institutional care, but even this costs money. And older people have less money than the average. There is a great deal of poverty among them, much of it brought about by illness; and there is a great deal of illness among them, influenced and promoted by poverty; a vicious circle if there ever was one.

When I say we don't have biologic cures for some of our long-term medical conditions, you will say: well, this is what we are looking for. We are looking for ways of curing arthritis and curing or preventing cancer and coronary heart disease. I believe that some of the organizations represented here will indeed contribute greatly to the solution of such problems some day, but these are complicated problems, likely to be overcome a little at a time, perhaps leukemia first, perhaps then another kind of cancer, perhaps over a period of many years, several others. But I think we must expect chronic disease to grow as a problem in the foreseeable future.

It is in this environment that all of our member organizations, and all their chapters, and all their people, and all their professionals and all their laymen and indeed, all of American health effort must function. I need hardly emphasize

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