these demonstrations and programs for comprehensive medical plan, and so forth; in other words, to relieve the Federal Government of the necessity of financing a portion of the State effort? Is there any provision for that? Mr. COHEN. Well, no; there really isn't. Mr. BROWN. In other words, you presume that indefinitely the Federal Government will be assisting the States through Federal resources? Mr. COHEN. Yes; and I think that that is what I tried to say before. I think that is what is going to happen. The States and localities are spending in the neighborhood of $700 million in this area per year. Mr. ROGERS. Will the gentleman yield? I think it is true that this money is not just automatically allocated. Must there be now with the State plan a request from the State? Dr. STEWART. That is correct. Mr. ROGERS. So your action in allocating certain monies to the State is a result of a State's request for the Federal Government to participate. So that really, I presume, the basic decision as to whether a State will contribute in the program or continue to rely on Federal funds comes down to a State decision when they present their plan. Mr. COHEN. Yes; and I was assuming that. What I think Mr. Brown may have been getting at, if I understood his question correctly, is that we are going to be putting $100, $200, $300 million into this area. The States, as I said, are putting in $700 million a year. I would expect the States and localities to have to continue to increase their share as the Federal Government increased its share, so that in a few years from now I think the total expenditures in this whole area would be well over a billion dollars a year. And I think with a growing population we need to spend more too on family planning services, the need for the training of more nurses and physicians, and the organizing of local health services. I know in my State of many places where they do not adequately exist, and I would have to say that both the Federal Government and the State and localities are going to have to increase. Mr. ROGERS. I am surprised to see that there is nothing in this act, as in the Mental Health Facilities Act, to encourage the States and localities to take over the responsibility of their own demonstrations or comprehensive medical plans. Mr. COHEN. Only to the extent that they are already spending so much more than the Federal Government is spending already, and we would expect them to continue to do so. Dr. STEWART. This is what I was going to say. There is another way to say it. Federal-State-local expenditure for public health services amounts to about $4.25 per capita: $2 is State, $1.50 is local, and 75 cents Federal. From all the studies and State surveys that we have seen, we think that the level we should approach is around $6 per capita within the next few years. This is really a shared expenditure to carry out services. While the services may change as techniques and problems change, there are so many great needs that as far as we can see this shared effort will continue. Mr. ROGERS. Do I understand that the dollars and cents in this whole thing is $182 million? Mr. COHEN. Well, if everything in this bill were under the present law, it would be $157 million. We are asking for $25 million more in 1968. The comparable total for 1969 would be $284 million. Mr. ROGERS, 1968 was $192 million; is that correct? Mr. COHEN. Yes; $182 million. That is both sections 314, 305, and 309. It doesn't include anything that is involved in the regulation and licensing of the clinical laboratories, however. Mr. ROGERS. No expense figure for that? Mr. COHEN. No expense figures for that, no; or the 51 additional people that Dr. Sencer mentioned as the additional number of people. This will only have to do with the grants and other factors. Mr. ROGERS. Is it your thought to come in with a supplemental request for that later? Mr. COHEN. Either a supplemental or in the normal appropriation for the National Communicable Disease Center. Mr. ROGERS. Let me pursue that for just a minute. You say there will be 51 additional personnel required to administer the laboratorylicensing provision? Dr. SENCER. Yes, sir. Mr. ROGERS. And I think it would be well to submit for the record the number and cost. (The information requested follows:) "PARTNERSHIP FOR HEALTH AMENDMENTS OF 1967" CLINICAL LABORATORIES IMPROVEMENT-LICENSING OF LABORATORIES-PERSONNEL AND COST ESTIMATES Personnel Payroll benefits.. Travel Transportation Budget summary, 1st year Communications (telephone, postage, parcel post). Rent (300 gross square feet per person times $3 per square foot) - etc.) reference labs for evaluation_. Supplies and reagents--- Equipment (1st year cost-subsequent years 10 percent). Total BUDGET NOTES $457, 648 45, 765 71, 500 15,000 20,000 46,900 250,000 293, 187 300, 000 1,500,000 1. Budget based on an estimated 1,000 laboratories transacting business in interstate commerce. 2. An Annual cycle for reviews and certification is planned. 3. Evaluation of performance will be carried out throughout each year. 4. Resurvey of approximately 90 laboratories where correctable deficiencies are found. 5. Review of 150 laboratories per year per man is estimated. (260 gross work days less 20 days less annual leave, 7 days sick leave, and 13 holidays=220 net work days. At 4 reviews every 5 days, 176 reviews per man-year would be performed. This is rounded to 150 reviews to allow for travel, report writing, and general in-house administrative duties. 6. Travel and per diem costs estimated on basis of seven travelers making 2 trips per week for 44 weeks during the year, as follows: 14 trips times $100 per trip times 44 weeks___ 3 days per diem times 7 people times $16 per diem times 44 weeks___ Total $61, 600 9,900 71,500 Mr. ROGERS. I notice that there is also a provision that the Secretary may, if he deems it appropriate, require payment of fees for the issuance and renewal of licenses. What is the Department position. on that? Do you contemplate that, and what is the stipulated cost? Mr. COHEN. We quite frankly, Mr. Rogers, have not reached any final decision in our own mind as to whether there should be fees or not. But recognizing that if we decided that there should be fees that we couldn't do it without authorization, we put this into the law. I think there are different points of view on this matter. Some people feel that when you are giving a service to an organization like this which is a profitmaking organization you ought to charge the reasonable cost of the service that you provide them. The other way of looking at it is, as I said earlier, that this is a community service to assure you as a consumer of medical care just like in the Food and Drug Administration that you have pure food, pure drugs and, in a sense, a pure laboratory. But we would go into it and talk with the interested parties and make some kind of a survey to see whether we should charge a fee, and on what basis. Mr. ROGERS. I think it would be well to submit to the committee some of your thinking on this, a possible range of license fees. Because I think the committee would want to go into this before we approve any approach. We would like to have some idea of what the costs would be, what burden it would place on the laboratories and additional cost for a laboratory test if the cost is very high. Mr. COHEN. We will be glad to submit something for the record. (The information requested follows:) DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE EXAMPLES OF FEE SCHEDULES UNDER CLINICAL LICENSING ACT 1. A flat fee proposal of $25 per lab which would recover approximately 25 thousand dollars of the total licensing cost of one million, 500 thousand. 2. A cost per test schedule that would be graduated from a high cost per test for very complicated lab procedures to a low cost per test for simpler ones. For example, a licensing charge of 25¢ per test run by laboratories specializing in very complicated analyses and 2 to 3¢ per test for labs engaged in massive quantities of simple procedures could be made. This may produce revenues as follows: A. A lab performing a thousand highly specialized tests at 25¢ per test would have a total licensing fee of $250. B. A lab producing 10 thousand tests at 3¢ a test would have a licensing fee of $300. 3. A differential schedule would be designed to produce revenue meeting the full costs of the licensing program. This schedule would use a formula that extends the fee on the total number of tests run regardless of difficulty or complexity of the analytic procedures. Under this method, approximately 1 thousand labs would have to produce 1 million, 500 thousand dollars in revenue, or an average of $1500 per laboratory. Mr. ROGERS. I think it would be well for us to clarify this quickly, and I will try not to detain you much longer. You have been very generous with your time before the committee this morning. On comprehensive planning, I think it would be well just to clarify some of the questions that we are beginning to get on how comprehensive State planning will fit in with regional planning, how do the two mesh or do they? Maybe you could clarify that as quickly as possible. Dr. STEWART. Mr. Rogers, the planning under a regional medical program bears the same relation to comprehensive planning as the mental health and mental retardation planning and Hill-Burton planning and all the other specific program planning that is going on. The regional medical program planning is to move from where they are to the operation of a program which results in better care of people with heart disease, cancer, and stroke in their community setting. In so doing it creates resources and it uses resources. It uses trained people and it uses hospital beds and other things. The comprehensive health planning agency is looking at longer range targets. They are looking at all the individual health planning efforts and all the objectives that they are attempting to meet. The comprehensive agency is saying, "Will we be able to implement these plans with the number of physicians, the number of nurses and the economic growth of our State over the next 10 years? What are the choices we have if we cannot do everything we want to do within the resources we have?" I would bet that most of the time they will come up with more plans and more programs than they have resources for since there is a shortage of almost everything at the present time. The comprehensive health planning agency will gather information on what are the States' objectives, what are the goals they are trying to reach. Many of the goals are being defined by the individual planning efforts like the mental health and the mental retardation planning programs. Then they have to look at what are all the resources that may be devoted to health in this State over this period of time. What kind of choices do they have? If they go this way, they might be able to make it. If they go this other way, they may have to decide to put something aside or time it differently or perhaps if they really want to carry out these objectives, they have to build two more medical schools in their State. They are trying to relate resources to programs in a broad sense so that they are complementary to each other. The information generated by the regional medical program to carry out its objective is part of the information that the comprehensive State health planning agency will use. Similarly, the information generated by Blue Cross or generated by Hill-Burton or generated by any other study group on resources or programs is information that is used. What the agency does is lay this out in a pattern so one can |