Hon. HARLEY O. STAGGERS, DEPARTMENT OF LABOR, OFFICE OF THE SECRETARY, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: This is in reply to your request for our comments on H.R. 6418, the "Partnership for Health Amendments of 1967.”* We support the proposed bill which would strengthen and extend State and local health programs, and thus carry out the President's recommendations for strengthening our Partnership for Health. The Bureau of the Budget advises that there is no objection to the submission of this report from the standpoint of the Administration's program, Sincerely, W. WILLARD WIRTZ, B-157924. Hon. HARLEY O. STAGGERS, COMPTROLLER GENERAL OF THE UNITED STATES, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: Your letter of March 13, 1967, requests our comments on H.R. 6418, which, if enacted, would be cited as the "Partnership for Health Amendments of 1967." The purpose of the bill is stated in its title as being to amend the Public Health Service Act to extend and expand the authorizations for grants for comprehensive health planning and services, to broaden and improve the authorization for research and demonstrations relating to the delivery of health service, to improve the performance of clinical laboratories, and to authorize cooperative activities between the Public Health Service hospitals and community facilities, and for other purposes. We offer the following comments for consideration by your committee. Section 3 of H.R. 6418 would provide for the replacement of the existing section 304 of the Public Health Service Act (42 U.S.C. 242b) with new provisions authorizing the Secretary, Department of Health, Education, and Welfare (hereinafter referred to as the Secretary) to make project grants to States and other public or nonprofit organizations, and to enter into contracts with public or private organizations, for the conduct of research, experiments, or demonstrations relating to the development, utilization, and coordination of new or existing services provided by medical facilities and new or existing methods of organization, delivery, or financing of health services. The amount of any grant or contract for construction or acquisition of equipment may not, except in unusual circumstances, exceed 50 percent of the cost of the project as determined by the Secretary. We believe that the committee may wish to include in the bill language, similar to that now provided in legislation applicable to other construction grant programs now authorized by the Public Health Service Act, to provide for the return to the Federal Government of all or a portion of the Federal grant assistance for the construction or the purchase of facilities or equipment in the event such facilities or equipment cease to be used for the purposes for which constructed or purchased. For example, section 624, title VI, Public Health Service Act (which would be repealed by section 3 (b) of H.R. 6418) concerning studies and demonstrations relating to coordinated use of hospital facilities including the construction of units of hospitals or other medical facilities which involve experimental architectural designs or functional layout, provides for the recovery of a portion of the Federal participation if, within 20 years after the completion of construction, the applicant or other owner of the facility shall cease to be a public or other nonprofit institution or organization, or the facility shall cease to be used for the purposes for which it was constructed. Section 4 of H.R. 6418 would authorize the Secretary, at the request of the appropriate State or local authority, to extend temporary (not in excess of 45 days) assistance to States or localities in meeting health emergencies of such nature as to warrant Federal assistance. Also, this section provides that that the Secretary may require such reimbursement of the United States for aid as the Secretary may determine to be reasonable under the circumstances. Rather than to leave this determination to the Secretary's discretion, we believe that the committee may wish to amend the bill to make it mandatory that the Secretary make a formal determination as to the amount, if any, of the reimbursement which would be reasonable under the circumstances. Section 5 of H.R. 6418 would amend the Public Health Service Act to include a new section 353 relating to the licensing of clinical laboratories by the Secretary. The proposed new section 353 (d) (3) would provide that the Secretary may, if he deems it appropriate, require payment of fees for the issuance and renewal of licenses, but the amount of such fees shall not exceed such sum (which in no event may be more than the sum determined by him to be necessary on the average to provide, maintain, and equip an adequate service for the purpose) as the Secretary may by regulation prescribe from time to time. The licensing of the clinical laboratories, in our opinion, appears to be a type of service which would be within the intent of legislation enacted in 1951 (5 U.S.C. 140) which states that it is the sense of the Congress that an agency shall charge a fair and equitable fee for "*** any work, service publication, report, document, benefit, privilege, authority, use, franchise, license, permit, certificate, registration, or similar thing of value or utility performed, furnished, provided, granted, prepared, or issued by any Federal agency ***." The committee may wish to amend the bill to require that fees for the furnishing of licenses be established pursuant to criteria set forth in 5 U.S.C. 140, rather than leaving the matter to the Secretary's discretion. H.R. 6418 would provide for a number of amendments to section 314 of the Public Health Service Act including extension and expansion of formula grants to States for comprehensive health planning and public health services. As part of our review of formula grants to States for health services, we issued a report to the Congress on our review of financial administration of selected grants for health services made to the State of Indiana, dated September 23, 1966, B-156635. In this report, we pointed out that the use of research expenditures for matching formula control grants by the State, in our opinion, is not in accord with the purpose of control programs which, as stated by the House Committee on Interstate and Foreign Commerce in House Report 2144, dated June 2, 1948, is to bridge the gap between basic research discoveries and their application to the benefit of disease victims. Therefore, in our opinion, there is ample support for the view that the basic research expenditures in question are not valid for matching purposes. Because the Public Health Service expressed the view that in the absence of specific prohibitions to the contrary, such expenditures were legally acceptable and valid for State matching purposes, we proposed in our report that the Congress may wish to consider amending the Public Health Service Act to specifically preclude the use of basic research expenditures as allowable State matching funds for formula control programs. Accordingly, the committee may wish to amend the bill in this regard. Sections 314 (a) (2) (G) and 314(d) (2) (H) of the Public Health Service Act, as amended by section 3 of the Comprehensive Health Planning and Public Health Services Amendments of 1966, Public Law 89-749, concerning grants for comprehensive health planning and public health services, require the State agency to make such reports, in such form, and containing such information as is required by the Surgeon General. Also, sections 314(a) (2) (I) and 314(d) (2) (I) require such fiscal control and fund accounting procedures as may be necessary to assure the proper disbursement of and accounting for funds paid to the States. However, no provision is made in the 1966 amendments or in the current bill requiring a grantee to keep adequate cost records of the projects to which the Federal Government makes financial contributions, nor is there any provision in the 1966 amendments or in the current bill specifically authorizing the Secretary of Health, Education, and Welfare or the Comptroller General to have access to the grantee's records for purposes of audit and examination. In view of the increase in grant programs over the last several years, we feel that in order to determine whether grants funds have been expended for the purpose for which the grant was made, the grantee should be required by law to keep records which fully disclose the disposition of such funds. We also feel that the head of the agency as well as the General Accounting Office should be permitted to have access to the grantee's 80-641-67-2 records for the purpose of audit and examination. We therefore suggest that consideration be given to adding a new section to the bill including such requirements with respect to the grant programs contained in the 1966 amendments and the current bill. This could be accomplished by the following language: "Records and Audit "(a) Each recipient of assistance under this act shall keep such records as the Surgeon General shall prescribe, including records which fully disclose the amount and disposition by such recipient of the proceeds of such grants, the total cost of the project or undertaking in connection with which such funds are given or used, and the amount of that portion of the cost of the project or undertaking supplied by other sources, and such other records as will facilitate an effective audit. "(b) The Secretary of Health, Education, and Welfare and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access for the purpose of audit and examination to any books, documents, papers, and records of the recipients that are pertinent to the grants received under this act." Language similar to that suggested above under other parts of the Public Health Service Act is codified in sections 280b-11, 291d (10) and (11), and 299i of title 42, United States Code. Sincerely yours, FRANK H. WEITZEL, Assistant Comptroller General of the United States. Hon. HARLEY O. STAGGERS, U.S. CIVIL SERVICE COMMISSION, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Rayburn House Office Building. DEAR MR. CHAIRMAN: This is in further reference to your request for the Commission's views on H.R. 6418, a bill to amend the Public Health Service Act to extend and expand the authorizations for grants for comprehensive health planning and services, to broaden and improve the authorization for research and demonstrations relating to the delivery of health services, to improve the performance of clinical laboratories, and to authorize cooperative activities between the Public Health Service hospitals and community facilities, and for other purposes. The Commission favors the enactment of H.R. 6418. Its comments are limited to sections 6, 7, and 10 of the bill. Section 6 would add a new section 223 to title II of the Public Health Service Act authorizing the acceptance of volunteer and uncompensated services for use in the operation of any health care facility. Presumably the intent of this is to permit the acceptance of services of "gray ladies", and "candy stripers". The utilization of such volunteers is a common practice in most private hospitals, and there is no objection to the authorization of similar services for Public Health Service facilities, as long as it is understood that these personnel will not be used to occupy positions normally designated for Federal personnel. Section 7 would amend part C of title II of the Public Health Service Act by adding a new section 328 concerning the sharing of medical facilities and resources. Subsection 328(b)(1) provides authority for the Secretary to enter into agreements or arrangements with schools of medicine and other agencies and institutions for the "interchange or cooperative use of facilities and services on a reciprocal or reimbursable basis." This provision might conceivably be interpreted as authorizing the interchange of personnel between the Public Health Service and non-Federal health facilities. However, the Commission understands that this provision is not intended to be used for personnel interchange and with that understanding, the Commission has no objection to it. Section 10 of the bill would (1) repeal section 322 (a) (7) of the Public Health Service Act which authorizes free medical services for civilian field employees of the Public Health Service, and (2) authorize the Secretary to provide medical services, on a reimbursable basis, for Federal employees and their dependents at remote stations where other medical care is not available. Under present law, civilian field service employees of the Public Health Service are entitled to special medical benefits which are not available to other civilian employees of the United States. Whatever the basis may have been for this preferential treatment of a small number of Federal employees, changing times and the availability of the Government-wide Health Benefits Program have made its continuance inappropriate. This bill would assure that civilian field service employees of the Public Service would receive only those medical services which are available to other Federal employees similarly situated. At the same time, this bill would help to assure adequate medical care for Federal employees in isolated areas, such as Public Health Service field employees in the Indian Health program. The Bureau of the Budget advises that from the standpoint of the Administration's program there is no objection to the submission of this report and enactment of H.R. 6418 would be in accord with the President's program. By direction of the Commission: Sincerely yours, JOHN W. MACY, Jr., Chairman. ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS, Hon. HARLEY O. STAGGERS, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: I am writing to comment on H.R. 6418, the "Partnership for Health Amendments of 1967." The bill would make a number of amendments to the Public Health Services Act, including extending and expanding authorizations for grants for comprehensive health planning and services. Our comments will be directed to this aspect of the bill only. The Commission has urged greater flexibility in Federal health grants and expressed support for last year's bills which established the Partnership for Health program. In a 1961 report, Modification of Federal Grants-in-Aid for Public Health Services, the Advisory Commission recommended that States be authorized to transfer up to one-third of Federal public health funds in any one grant category to other categories. The Commission took this position in the belief that States should be given more discretion in applying the grant funds in areas of greatest need and that the narrow categories of the then existing public health grant system imposed undue rigidity. The Commission was gratified, therefore, when the Administration proposed and the Congress enacted the Comprehensive Health Planning and Public Health Services Amendments of 1966 which provided for administering Federal health grants through State comprehensive health plans and the use of block grants for formerly categorical grant programs. The reaction to the new program has been most gratifying. It has been widely supported as providing a simplification of procedures and a greater adaptability to State and local needs. The President pointed out in his "Quality of American Government" message earlier this year that last year's Partnership for Health Act points the way***" to a consideration of fundamental restructuring of grant-in-aid programs. The Commission endorses the objectives of Sections 2(a) and 2(d) of this bill, which would extend for four years the comprehensive health planning and block grant features of the 1966 act. We urge that consideration be given by the committee to an additional proposal as means of strengthening the Federal-State-local partnership in public health administration; namely, modification of the "single State agency" requirement for various public health grant categories so that, subject to approval of an alternative arrangement by the Secretary of Health, Education, and Welfare, States would have flexibility to develop the administrative structure suited to their overall needs. This could be accomplished by the following amendment: "Notwithstanding any other Federal law which provides that a single State agency or multimember board or commission must be established or designated to administer or supervise the administration of any public health program, the Secretary of Health, Education, and Welfare may, upon request of the Governor or other appropriate executive or legislative authority of the State responsible for determining or revising the organizational structure of State government, waive the single State agency or multimember board or commission provision upon adequate showing that such provision prevents the establishment of the most effective and efficient organizational arrangements within the State government and approve other State administrative structure or arrangements: Provided, That the Secretary determines that the objectives of the Federal statute authorizing the public health program will not be endangered by the use of such other State structure or arrangements." The language suggested is similar to that contained in the proposed Intergovernmental Cooperation Act (H.R. 5522) which is strongly supported by this Commission. These views are those of the Advisory Commission and its staff and do not necessarily reflect those of the Administration. I hope they will assist the Committee in its deliberations on this significant legislation. Sincerely yours, FARRIS BRYANT, Chairman. The CHAIRMAN. Our first witness this morning is the Under Secretary of the Department of Health, Education, and Welfare, Mr. Wilbur J. Cohen, accompanied by Dr. William H. Stewart, the Surgeon General of the United States, and his associates. Mr. Cohen, we are very happy to have you with us today, and you may proceed with your statement in any way that you see fit. STATEMENT OF WILBUR J. COHEN, UNDER SECRETARY, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE; ACCOMPANIED BY WILLIAM H. STEWART, M.D., SURGEON GENERAL; DAVID J. SENCER, M.D., DIRECTOR, COMMUNICABLE DISEASE CENTER; AND PAUL Q. PETERSON, M.D., DEPUTY DIRECTOR, BUREAU OF HEALTH SERVICES, PUBLIC HEALTH SERVICE Mr. COHEN. Thank you, Mr. Chairman. Also accompanying me at the table is Dr. Paul Peterson, the Deputy Director of the Bureau of Health Services in the Public Health Service, to my right, and Dr. David Sencer, the Director of the National Communicable Disease Center, on my left. Mr. Chairman and members of the committee, I am pleased to be here with Dr. William H. Stewart, Surgeon General of the Public Health Service to give the Department's wholehearted and enthusiastic support to the Partnership for Health Amendments of 1967, H.R. 6418, introduced by the distinguished chairman of the committee, Mr. Staggers. of I might ask, Mr. Chairman, to put into the record at the conclusion my testimony a tabular analysis of the provisions of the bill. As you pointed out, there are several different subsections of the bill, and I think this summary of it would help the committee when it gets to reviewing the legislation. (See p. 22.) The CHAIRMAN. As a part of your testimony it will be carried in the record. Mr. Moss. Mr. Chairman, I wonder if we may have copies. Mr. COHEN. I have a couple and can give you one here. Does any other member of the committee wish one? In 1935 Congress passed the Social Security Act, and in 1936 the Congress first provided appropriations for a general health program to support any part of a State's public health program. Since that time the Federal Government has continued to be one of the major |