Now, it may well be that in 2 or 5 or 10 years in education, based upon the experience we have, we can do what we have done in health, but it took us 30 years in the health field to get to this point. We had to work with the State health officers. We had to work with the local health officers. I think that if we did that at the present time in the education field it would be disruptive.

Mr. NELSEN. Mr. Chairman, my time has expired. I would only say that the States have been in the field of education much longer than the Federal Government, and the greatest number of complaints that I get in the administration of the Elementary and Secondary Education Act come from the school administrators themselves because of the interference of the Federal Government. It is my understanding that some of the proposals before the Congress now would attempt to implement the same programs with some more flexibility within the States, and I wish to comment that there seems to be an inconsistency as to policies within HEW on different programs. This I find difficult to understand.

Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Moss.

Mr. Moss. Mr. Cohen, I notice that section 12 is described in your summary and tabular analysis as a widening of the program. Would you elaborate? That is the last page of the bill, page 21.

Mr. COHEN. Mr. Moss, as you and Mr. Rogers I think particularly are aware, we have had over the last few years in connection with the Nurse Training Act a series of problems growing out of the fact of the role of the junior colleges in the accreditation of the nurse training program.

As a result of that you wrote into the act a provision that would give direct program accreditation of the nurse programs to the Commissioner of Education. As you are well aware at the time we were very, very much opposed to that amendment because we didn't want the Commissioner of Education to directly accredit individual programs and so we promised you at the time that we would work with the junior colleges and the regional accrediting board and the nurse groups to try to find a satisfactory solution.

We have worked with them and we felt we had a resolved position on it, and I wrote you and the chairman of the committee informing you of our action, but since the time I wrote you a couple of the groups have felt that they wanted some change in that, and they are meeting on May 5, in a couple of days, to act on the proposal which I assume will be satisfactory both to the American Association of Junior Colleges, the Federation or Regional Accrediting Commissions of Higher Education, and the National Commission on Accreditation as well as the National League for Nursing.

It was on that basis that we submitted this amendment and included it in section 12 to eliminate the amendment giving the Commissioner the authority to do that accrediting.

If the May 5 meeting is completely successful and if they wholeheartedly endorse the proposals which I previously outlined to you, perhaps with some minor modifications, I will write the chairman of the committee and you informing you, and I hope on that basis it will be possible to repeal that provision in the act on the assumption that what has been worked out is satisfactory to all concerned.

Mr. Moss. I hope that you can find it. I was intrigued by the use of the term "widen accreditation options." It is my interpretation that the repeal would have the effect of narrowing them.

Mr. COHEN. I guess we used the word "widen" in the sense that the agreement to be reached by the groups would permit this kind of credit.

Mr. Moss, Prospectively we may have widened it. We will await that law pending before another committee, the Ways and Means Committee, H.R. 5710. In section 129 of that act there is also authority for planning. I wonder if you might tell us whether there is a correlation between the authority granted under this comprehensive bill and H.R. 5710 or whether there is duplication or whether duplication is an inherent possibility or probability under H.R. 5710?

Mr. COHEN. Well, in the first place, Mr. Moss, I would say that the language in the bill before you today stands on its own merits and can be enacted on its own basis.

The legislation in section 129 of H.R. 5710 also can be enacted on its own basis. If both were to be enacted, there would be no duplication. Rather there would be a strengthening of the two.

Now, following out the kind of question that Mr. Nelsen asked me, we feel very strongly that the States must begin to go into a whole new area of planning for facilities more affirmatively and constructively than they have ever done before. Only one State in the Union, at the present time, to my knowledge, is doing at least what I think is vitally necessary and that is the State of New York which has the so-called Folsom law which gives the State health authority the responsibility not merely for licensing facilities but for approving their modernization, their expansion, their modification, their inclusion of equipment.

The reason for this, if we stop and think for a moment is the fact that there are tremendous shortages in the health field, tremendous shortages of personnel, and costs are going up enormously. Hospital costs this last year depending on how you compute them went up somewhere between 12 to 15 percent, which is double the average cost of increase from 1946 to 1965 which was about 7 percent per year. Mr. Moss. Could you tell us why?

Mr. COHEN. Well, I think that a factor, a very substantial factor in the increase in hospital costs is the increase in nurses' salaries which has been taking place in the last couple of years because, quite frankly, nurses' salaries were very low in many places. I think that it has been true that many young women in some localities could do better not by going to nursing school but by becoming a secretary, and nurses' salaries were not really competitive with other employment for young women in terms of the educational requirements.

I think, as you will recall, in California they have had nurses' strikes and pressure for increased nurses' salaries that has been a factor.

Secondly, the amount of personnel per patient in a hospital has been increasing because of the technical equipment that hospitals have.

Mr. Moss. Mr. Secretary, you have said that in a period of years a 7-percent increase occurred.

Mr. COHEN. Per year.

Mr. Moss. Per year?

Mr. COHEN. Per year, yes, sir.

Mr. Moss. And in the past year that has increased to 12 to 15 per

cent.

Mr. COHEN. Let's say about 14 percent.

Mr. Moss. Has there been just suddenly in the last year an increase in staffing beyond that characteristic of previous years? You are not ascribing the entire increase to nurses' salaries?

Mr. COHEN. No, sir. I am not.

Mr. Moss. Would you give us a breakdown on the components of that increase?

Mr. COHEN. I will put in the record the best information we have on what the components are. This may not be a factor but the minimum wage was also increased for hospital employees, and I don't know just what date that was effective, but I do think that also will have an effect on hospital costs.

(The information requested follows:)

177

STATEMENT OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, ON

HOSPITAL COST INCREASES IN 1966

From December 1965 to December 1966, total costs per patient day in nonfederal short-term general hospitals increased 13.7 percent. During this period, total cost per patient day rose from $49.87 to $56.69. Payroll costs per patient day, which are more than 60.0 percent of total costs, went up 15.0 percent. Nonpayroll costs per patient day increased 11.3 percent. In contrast, from 1960-65, the rate of increase in payroll and nonpayroll costs were nearly identical.

Hospital payroll per employee went up 9.0 percent in 1966. Furthermore, the number of full-time equivalent employees in hospitals rose 8.2 percent.

There is some evidence that nurses salaries increased faster than the wages and salaries of other hospital employees in 1966. The Bureau of Labor Statistics reported that many hospitals throughout the country granted substantial salary increases to nurses in the last half of 1966. In Baltimore, for example, the starting salaries of professional nurses have been raised in a number of hospitals from $4,800 to $6,500 per year.

Further, the BLS reported that in several metropolitan areas, the amount of the increase during the last half of 1966 exceeded the entire increase between July 1963 and July 1966. During this period, the salaries of general duty nurses employed in nonfederal short-term general hospitals rose 20 percent. Since the internal consistency among the wages of employees in hospitals cannot be severely distorted, salary increases of this magnitude are bound to exert upward pressure on the wages of all hospital employees.

Mr. COHEN. If I might take just one more second, Mr. Chairman, I want to finish this thought, that I think that the tremendous need for increased facilities for the modernization of hospital facilities, the increased need for nursing homes, the increased need for equipment is going to bring us more and more to the point where State health agencies have to take a greater role in determining whether facilities can or should be built, expanded or modernized in a community or otherwise the costs are going to continue to be, you might say, imposed upon us, and the extent of Federal and State financing in it will rise so rapidly that the only other alternative would be for the Federal Government to get into the field, and I would rather see the States be encouraged to take a more affirmative role in this at the earliest possible moment.

Mr. Moss. Then, going back to my original question, your view is that H.R. 5710 is complementary to this legislation and not duplicative at all?

Mr. COHEN. That is correct, Mr. Moss.

Mr. Moss. Thank you.

The CHAIRMAN. Mr. Broyhill?

Mr. BROYHILL. Thank you, Mr. Chairman.

Mr. Cohen, under section 3 of this bill, who would get some of these grants? What are some specific examples of some of the institutions who would get these grants?

Would they be medical schools or would they be individual hospitals?

Dr. STEWART. May I answer that?

Mr. BROYHILL. Yes.

Dr. STEWART. The grants would be to nonprofit organizations that do research; universities, medical schools, large hospitals, other schools within the university that are involved in the problems of organization like schools of hospital administration or possibly the schools of economics; the whole gamut of nonprofit research groups. The contracts would be used with nonprofit organizations that are in the business of conducting studies and demonstrations in these areas.

Mr. BROYHILL. Would they be going to nursing homes?

Dr. STEWART. Well, it is conceivable that a grant would go to a nursing home to demonstrate a new type of organization of service or experimenting with a new kind of service which would have some effect on, say, diet or bed sores or some other subject of concern to nursing homes such as improving the quality of care and the efficiency and organization of it.

Mr. BROYHILL. Then your smalltown hospitals would not benefit from this section?

Dr. STEWART. Well, they certainly would benefit from the information that is generated. This is an attempt to provide grants and contracts to do the research and then to put the findings into operational settings to see if it works. These findings would then be adopted by many health institutions.

Mr. BROYHILL. What about facility design, organization and operation of hospitals? Could this not be undertaken in a smaller town hospital?

Dr. STEWART. I think it is quite possible. When we experiment with smaller town hospitals, these smaller hospitals have a unique set of problems and would be eligible to carry out the type of research or demonstration of a kind of new type of facility which would meet the needs of smalltown hospital care.

Mr. BROYHILL. You are asking for $20 million for this section in the fiscal year ending June 30, 1968?

Dr. STEWART. That is correct.

Mr. BROYHILL. How much are you asking for the 4 succeeding years? Dr. STEWART. Mr. Cohen has said we will supply that to the committee.

Mr. COHEN. Of that $20 million, $12 million is existing money and $8 million is new money to make the $20 million, so that then we would propose that it go up to $60 million in 1969 and $100 million in 1970, $135 million in 1971 and $170 million in 1972.

I would like to say in further expansion of what the Surgeon General said that one of the areas that I think is extremely important in relation to my discussion with Mr. Moss is to find a way to bring

more comprehensive medical care to the rural areas without building hospitals and clinics and cobalt bombs in every community in the United States or in every hospital in the United States.

Mr. BROYHILL. My thought is you may have three or four small towns who together might do some sharing in this.

Dr. STEWART. Quite right, Mr. Broyhill, and I think this might be a good approach to considering a pattern of care for an area where three or four towns are served instead of building four different structures with limited service.

Mr. BROYHILL. You may already have the structures there and all you do is work out a plan where one would specialize in one area and one another, and they would only be 20 or 30 miles apart and have referral back and forth.

Dr. STEWART. This would be quite possible, too.

Mr. COHEN. The other thing, Mr. Broyhill, the way I see it is to work out ways in which you have a continuity of care with your convalescent care, your extended care facilities, your skilled nursing homes and your nursing homes so that people don't get into acute $50 or $75-a-day hospital care when they could be as well taken care of for their medical needs at a lower per diem cost in a less than acute care facility.

Hospital care is already running on the average close to $50 a day and if these increased costs keep going up as the trend indicates, it is going to be $75 or $80 a day in the next decade, and we have to find some way that any person who doesn't need a day of hospital care doesn't get in that hospital for that day and gets in for the proper facility at the proper time and in the proper place.

Mr. BROYHILL. You have outlined six major areas in which you plan to carry out this research and development. Is there criteria as to how this money will be divided among these six areas?

Dr. STEWART. No, sir, Mr. Broyhill. These are just the areas in which we will be trying to stimulate research and demonstration effort, but how it is divided will really depend on the availability of people to carry out these types of research and demonstrations, and their ability to move. These are the areas which we think will receive the greatest emphasis because they are the areas which will have the greatest impact and in which the interest lies now.

Mr. BROYHILL. One other question, Mr. Chairman.

Dr. Stewart, in your testimony on page 4 you were explaining what section 9 of the bill does. What does this do in effect on your research contracts?

Dr. STEWART. Well, it extends the present authority that the Public Health Service has to conduct research under contract which expires as of this June.

Mr. BROYHILL. It expires as of 1968, is that right, or 1967?

Dr. STEWART. I believe it's 1968.

Mr. BROYHILL. As I recall, we gave you a 2-year authorization here, was it? I believe it was 2 or 3 years ago.

Dr. STEWART. Yes, about 3 years ago this contract authority was established. It now is expiring and this is an attempt to extend it. Mr. BROYHILL. What this does is to extend it for how many years? Mr. COHEN. It's making it permanent.

Mr. BROYHILL. It would make it permanent rather than extending it for any specific number of years, is that correct?

Dr. STEWART. That is correct.