financial partners in the Nation's health enterprise because congressional concern and public attention has been aroused by a variety of urgent, specific health problems. Federal support was provided in the form of ear-marked grants.

The result, over the past decades, has been a salutary growth in health resources and some dramatic breakthroughs in health protection.

Thirty years of Federal-State cooperation in health programs has brought us to the point where the States can and should be given a larger role and a much greater measure of flexibility in planning and carrying out health programs. Two important changes in this direction were provided by the Comprehensive Health Planning and Public Health Services Amendments of 1966: first, a real opportunity and a mechanism for the States and localities to identify their own most urgent health needs; and, second, a change in Federal funding to help them meet those needs.

I would like to also put in the record, Mr. Chairman, at the end of my testimony exactly the dates on which Congress authorized the different categorical programs that are replaced in this legislation, because I think it gives you an idea of the long history of the way in which Congress acted to get at the present stage of where some of these various categorical programs could be brought together.

The CHAIRMAN. As a part of your testimony, it will be included in the record.

Mr. COHEN. Last year we appeared before this committee in the closing days of the 89th Congress, as you indicated, to request that the Congress enact those amendments into law. We asked for your quick action at that time because we felt that it was of great importance that the principle embodied in the bill, which has now become Public Law 89-749, be made part of the structure of our national health effort. Your action was timely. We are grateful for it. I think our major concern at that time, Mr. Chairman, was to give every evidence that we wanted to strengthen the role of the State health departments with the passage of medicare and with the passage of medicaid. And a great deal of other legislation passed through this committee. It was imperative that we do everything possible to try to strengthen the role of the State health department in this rather substantial area of Federal-State health legislation that has been enacted since 1965.

President Johnson specifically recognized the importance of your action in his February 28 message to the Congress on health and education when he said:

The Partnership for Health legislation, enacted by the 89th Congress, is designed to strengthen State and local programs to encourage broad gage planning in health. It gives the States new flexibility to use Federal funds by freeing them from tightly compartmentalized grant programs. It also allows the States to attack special health problems which have regional or local impact.

This is the heart of the new law: planning for the efficient use of resources, and sufficient flexibility to use resources efficiently. We have as a nation, Mr. Chairman, committed outselves to promoting and assuring the best level of health attainable for every person in this country. The magnitude and complexity of that commitment requires that we marshal all our available health recources, public and private, in a vital partnership to achieve this important objective. The bill be

fore the committee would continue and expand the new partnership which the Congress created last year.

In the intervening months, since you last considered the partnership for health, the Public Health Service and the Department have become more intimately acquainted with the possibilities and problems posed by this large effort. We have begun to lay the base which is necessary to move away from the restrictive effects of fragmented and outmoded patterns. We have begun the task of creating a new relationship which can enable every sector of the total health community to provide fuller service to our citizens.

The Public Health Service has been consulting with representatives of State, county, and local governments; with university officials; with representatives of professional organizations such as the American Medical Association, the American Hospital Association, the American Public Health Association, the American Institute of Planners; and with many voluntary organizations which have a longstanding interest and involvement in health affairs. Some of them, for example, are the American Heart Association, the American Cancer Society, the National Tuberculosis Association. These meetings have done much to shape our initial thinking and indicate the direction we must take in launching this nationwide program.

Early in January, Secretary Gardner wrote to each of the Governors of the various States and expressed his belief that Public Law 89-749 is one of the most significant health measures passed by the Congress.

The response from the States to the Secretary's letter has been most gratifying. The Honorable William L. Guy, Governor of the State of North Dakota and chairman of the National Governors' Conference, wrote to the Governor of each State, saying:

This new health legislation could be a milestone in our continuing progress toward improved Federal-State relations.

Then, Governor Guy wrote this to President Johnson:

When you signed into law Public Law 89-749, known as the "Comprehensive Health Planning and Public Health Services Amendments for 1966," you gave Federal aid an historic turn for greater Federal-State relations. The act will now permit total comprehensive planning in the field of health.

The Honorable Hulett C. Smith, Governor of the State of West Virginia, wrote to say that "West Virginia is eager to take full advantage of the comprehensive Health Planning and Public Health Service Amendments."

Governor Harold LeVander, of Minnesota, concluded his letter to the Secretary by saying:

*** This program will undertake to assess the present level of health programming and health resources. This assessment, I am confident, will lead to improved and more efficient programs and to fruitful working relationships between the health consumer, the governmental, the private and the voluntary health agencies in our State.

I might add, Mr. Chairman, that Secretary Gardner, the Surgeon General, and myself, and various members of our staff, met with the executive committee of the Governors' Conference of which Governor Guy is chairman, with about eight or nine other Governors, and they evidenced the most complete cooperation in making this new law a success. They are very enthusiastic about its potentialities, as are we.

Thirty-seven States, the territories, and Puerto Rico, each have already designated a comprehensive health planning agency. We believe that the remaining States will take action to designate an agency within the very near future. I might say, Mr. Chairman, that I am hopeful that more States will designate it, because with the reporting out by the full Appropriations Committee of the supplemental for 1967 I think other States will be encouraged rapidly to designate the State agencies.

We are greatly encouraged, Mr. Chairman, by the very deep interest and marked enthusiasm which the States have shown in this new program.

Section 2 of this comprehensive bill which deals with the comprehensive changes embodies no major changes in philosophy, direction, or emphasis from Public Law 89-749. It extends and expands the authorizations for grants for comprehensive health planning and services which were provided last year. The important innovations enacted last year are preserved in full in the bill before you

The concept of comprehensive health planning to be undertaken by the States with Federal grant support;

The extension of areawide planning of facilities to encompass all health services;

The training of the personnel necessary for these planning efforts; The new program of flexible assistance through State formula grants, without categorical restriction, for the public health services. the States need the most;

The broad project grant authority for the stimulation of new kinds. of services, and for dealing with special types of problems.

The bill extends the authorization for each of these aspects of the program through fiscal 1972. It would increase the authorizations for assistance to the States for planning activities, under section 314(a) of the Public Health Service Act, from the present $5 million to $7 million for fiscal year 1968. It would extend for an additional 4 years, the authorization for grants to schools of public health. It would also increase the authorizations for both formula grants under section 314(d) and project grants under section 314(e) from the present $62.5 million to $70 million for fiscal 1968. Funds to support these increased authorizations are included in the President's 1968 budget request. Formula grants to the States in fiscal 1967, under the previous Public Health Service Act authorization, were at a level of approximately $55 million annually, and assistance under the project grant authorizations was at a level of $58 million annually. A large proportion of the funds authorized under the Partnership for Health Amendments for fiscal 1968 are likely to be committed by the States to programs approved and begun in earlier years. Therefore, the $70 million authorization for fiscal 1968 will thus allow for only a modest expansion in these activities, and result in a roughly constant Federal share of of the total cost.

There is little doubt that diversity of needs and resources extends down into the localities within the States; and the partnership for health legislation recognizes this, both in the planning and funding of health services. Local planning is an essential base for the statewide planning effort. Local participation and knowledge of the area to be served can best come from the areawide planning groups. The

provision in this bill that at least 70 percent of the allotments for support of health services shall be available only for services in communities is further evidence of the desire to move planning and program closer to the people and the locality to be served.

The new project grant authority in section 314(e) is also broad and flexible. It will permit the development and initial support of health services and will make it possible to mount narrower, targeted attacks on problems of limited geographical scope or of special regional or special national significance.

The combination of these two approaches, a highly focused developmental effort and flexible support for continuing service offers, we believe, a framework within which the comprehensive planning carried out by States and localities can be meaningfully translated into the highest quality health care.

The Congress has done much in the past several years to meet the justifiable expectations of the American people that this country can and will provide the best in health care to all its citizens. Medicare and medicaid are major steps in removing financial barriers to health care, and it placed a very great responsibility on State health department in carrying out this area of work.

This committee has recommended a series of laws which are building up the basic resources necessary to produce an adequate supply of trained manpower and womanpower in the health fields. Since 1946 we have been redressing imbalances and inadequacies in the supply and distribution of health facilities. And we have begun a program which will create a network of services designed to reduce the lives lost to heart, cancer, stroke, and other major diseases. Each of these individual steps was important; each was basic. We have now reached a stage really where harder tasks must be faced. We must find ways to make the total organization of our health efforts in the Nation as efficient as possible. The partnership for health is an indispensable element in reaching that goal.

HEALTH SERVICES RESEARCH AND DEVELOPMENT

I would now like to go on, Mr. Chairman, to another section in the bill, section 3, relating to research and demonstrations relating to health facilities and services. Because, as I have just pointed out, I think the next great step in our whole health field is how to bring a greater degree of coordination and efficiency and productivity, if I may put it that way, into the whole health area. At the present time we are spending in the Nation about $43 billion a year for all health services. This has been going up at a rate of about $3 billion a year, so that in the next couple of years we are going to be reaching the total of over $50 billion a year in the whole field of health and medical

care.

President Johnson, in his health and education message, pointed out that despite a $43 billion annual expenditure for health and medical care our system of providing health services is not operating as efficiently and effectively as it should. The Congress has done much to train the manpower, to build the facilities, through the Hill-Burton Act, and to pay for the services through medicare and medicaid, which

the American people demand and require. We have not, however, done nearly enough to mobilize our universities, our industries, our private practitioners, and research institutions to seek new ways of providing medical services and to hold down the cost of health care. Research and development can greatly improve the health services system. Yet today, the governmentwide total investment in health services research amounts to less than one-tenth of 1 percent of our total annual investment in health care.

A major concern of the Department of Health, Education, and Welfare is to create a research and development program which will bring health services to a level of productivity which compares favorably in efficiency and effectiveness with biomedical science, on the one hand, and with some of our most advanced industries, on the other.

We must accomplish this if for no other reason than that health and medical care prices are rising rapidly. And, Mr. Chairman, any reasonable forecast that we have been able to make is that these prices will continue to increase for some time into the future. Secretary Gardner recently transmitted to President Johnson a report on the problem, and the Department has called a conference on medical care costs, to be held in Washington, D.C., on June 27. Experts from all segments of the health industry have been invited to attend and will search for the best ways to retard the rate of increase of the cost of medical care of course, always consistent with our objective of trying to provide and improve the highest quality of medical care in the Nation.

Section 3 of H.R. 6418 would give us the broadest, most flexible kind of authority to employ the Nation's best minds, wherever they are, to design the facilities, design the information systems, develop the training methods and the more efficient patterns of health services we must have. Much knowledge, and many new technological developments already exist and we can take advantage of them immediately. An early step that we are planning to take is the establishment within the Public Health Service of a National Center for Health Services Research and Development. The National Center will be responsible for administering coordinated grant and contract assistance for research and development in the entire health enterprise system, as well as for establishing and maintaining a flow of carefully evaluated research and development results to health service agencies and to practitioners throughout the country.

We must clearly identify the working, dynamic elements of health services. We must understand what they contribute to health, and we must select the critical points at which well-designed experiments will result in more effective medical results, greater efficiency in terms of dollar costs and other scarce resources, and greater availability of services to all of our people.

The health industry today, Mr. Chairman, employs well over 3 million people in the United States, and you can see that this very gigantic industry so important to our national life is important and essential, and we believe that there are six major areas, in which we plan to carry out research and development to bring a greater degree of efficiency and productivity to this whole industry. First, in the field of medical services the work of physicians, nurses, and other health