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Thank you for your consideration in this important matter. The American College of Nuclear Physicians stands ready to assist you or your staff in any way and we thank you for the opportunity to present our views.

Senator TALMADGE. Thank you, Dr. Reba. It seems to me that you have made a reasonable request and one that can be worked out with staff.

Senator Curtis ?
Senator CURTIS. I have no questions.
Senator TALMADGE. Thank you very much.

The next witness is Dr. Thomas G. Dorrity, director of the Association of American Physicians and Surgeons; accompanied by Maurice A. Kramer, assistant executive director, Washington office.

Dr. Dorrity, we are delighted to have you with us.

STATEMENT OF THOMAS G. DORRITY, M.D., DIRECTOR, ASSOCIA

TION OF AMERICAN PHYSICIANS AND SURGEONS; ACCOMPANIED BY MAURICE A. KRAMER, ASSISTANT EXECUTIVE DIRECTOR, WASHINGTON OFFICE

Dr. DORRITY. Mr. Chairman and Senator Curtis, we appreciate this opportunity to present the views of the Association of American Physicians and Surgeons on S. 1470 which, as we see it, is intended to further extend the bureaucratic grip on the Nation's hospitals. I am Thomas G. Dorrity, M.D., chairman of the AAPS legislative committee. I am a practicing surgeon in Memphis, Tenn. With me is Maurice Kramer, AAPS Washington representative.

The Association of American Physicians and Surgeons is a free, independent, nongovernmental, voluntary organization of physicians who take care of patients. We have been devoting our energies since 1943 to trying to prevent any kind of interference with the freedom cf physicians to exercise their best judgment for the benefit of their patients. We may be distinguished from most other nationwide medical organizations by the fact that we are unalterably opposed to Government subsidies, which only the naive do not recognize result in suffocating and brutally destructive bureaucratic regulation and control.

We believe that Government subsidies corrupt and massive subsidies corrupt massively. Members of AAPS are against compulsory political medicine, whether called medicare, medicaid or 'falsely labeled national health insurance. We are for individual responsibility and freedom, which are the basis for the glorious and noble successes of mankind.

On May 27, Senator Talmadge, announcing these hearings on S. 1470 commented on the alarming report of trustees that the way things are now going, medicare will come up to $9.5 billion short every year for the next 25 years. And that was calculated on constant 1977 dollars, excluding the factor of inflation. Senator Talmadge said:

There are those who advocate transferring tax money from the Medicare trust fund to the cash-short old-age assistance and disability funds. Under the circumstances, that would be akin to the Federal Government trying to borrow money from New York City. Given the enormity of the medicare actuarial deficit, this is the time to face up to the issue and not to compound the problem.

The Association of American Physicians and Surgeons heartily agrees with Senator Talmadge—-up to a point. That point is that we do not believe S. 1470 or anything like it is the proper solution to the twin disasters known as medicare and medicaid. With all due respect to Senator Talmadge, S. 1470 will not solve the financial problems of these programs.

It will simply prolong and intensify them. The reason is that S. 1470 does not—as the Senator wishes-face up to the issue. It seeks to clamp new forms of artificial cost curbs on doctors and hospitals. The spurious reasoning is that they alone are responsible for the calamitous increase in the cost of these programs.

What is wrong with S. 1470 is that it ignores the real villain in this financial mess—the wholly irresponsible deficit spending habits of our profligate Federal Government-a tragic habit for which the Congress must accept considerable blame.

When Members of Congress and the bureaucrats in HEW, the White House, and other executive departments try to solve such problems by blaming someone else, they are simply, in true Machiavellian style, dodging and ducking their own responsibility for the problems and sliding away from the real solution.

The only long-term, permanent solution to the fiscal woes of medicare and medicaid is to abolish both programs and simultaneously, start an honest attempt to stop robbing the citizenry through inflation. Let's quit kidding ourselves and the American people and make a bold and forthright confession of the truth the real culprit in rising costs of everything is inflation and the real cause of inflation is the financial excesses of the Federal Government.

We know the bleeding-heart liberals who do not care what they do to people as long as they can convince them they are doing something for them, will pretend to be aghast at the suggestion of wiping out medicare and medicaid and will accuse us of callous indifference to human needs.

And to that, we say hogwash. Physicians who take care of the health needs of the American people have more compassion and know more about human needs than any other group, certainly a lot more than the career politicians and bureaucrats who persistently push the Government into programs it has no business being in.

The Federal Government had no business getting into medicare in the first place. It was conceived in error and promoted by fraud. Let me remind this committee that when politicians, bureaucrats and labor bosses were promoting medicare, they argued that most people over 65 were being denied medical care because they could not pay for the care they needed. But Members of Congress were publicly challenged to produce names of elderly people in that situation. It was promised they would get the care they required without charge. Local medical societies advertised free medical care to the elderly, with confidentiality guaranteed, who needed care but felt they could not pay for it.

Out of the 18 million people who were then over 65, a scattered handful sought care from those appeals and the Members of Congress produced no names.

It will be remembered that the late President Lyndon Johnson pleaded for passage of medicare, promising it would cost no more than a dollar a month per person. Labor union leaders, who have a vested interest in shoving the cost of health care onto the taxpayers to free up billions in union health and welfare funds for other uses, argued the cost per capita would be less than the cost of a package of cigarettes a week.

So, Congress plunged in, ignoring the warnings of excessive costs from physicians, economists, and private insurance company actuaries. HEW officials said medicare hospitalization alone would cost only about $900 million the first year, rising in 5 years to a mere $1.7 billion.

What happened! Government statistics show that hospitalization under medicare the first year cost three times more than HEW actuaries said it would. As predicted by insurance experts and others, costs skyrocketed. Medicare in 1976 cost $17.8 billion. Medicare and medicaid together cost $33.1 billion in 1976—an increase of 2,264 percent from 1965. As Senator Talmadge has noted, the estimated cost of these programs for fiscal 1978 will be $47.5 billion.

Medicare was supposed to be a foot-in-the-door toward full-blown socialized medicine. Remember, the late Aime Forand, speaking in favor of the King-Anderson bill—which became medicare/medicaid-said: “Let's get our foot in the door and we can expand the program after that.” It turned out to be a mighty big foot that just keeps growing.

And if it costs $47.5 billion to partly pay for medical and hospital care for the elderly and indigent, is that not foolish and reckless and irresponsible and dangerous to argue that the Nation can afford full-scale compulsory political medicine for everyone, such as is proposed by Senator Kennedy and by the American Medical Association and others?

Honest people with a serious desire to pursue and expose the truth about political medicine should read "Medicine and the State" by Dr. Matthew J. Lynch and Stanley S. Raphael. It is by far the most objective, most searching inquiry ever undertaken into political medicine and its consequences in the countries of Europe which have had the bad judgment to adopt it. "Medicine and the State” is published by the Association of American Physicians and Surgeons. We will be happy to make copies available to the members of this committee, with the hope that you will stucły it carefully and digest its message completely.

“Medicine and the State” shows conclusively that when government assumes the role of payor and provider of medical care, the quality deteriorates and the cost goes up, most of the time in quantum leaps.

An important aspect of government intrusion into the field of medicine which congressmen have willfully refused to consider is that government is a political organism which by necessity must impose political decisions on the art and science of medicine. Medicine is an art and an individualistic science: government is a paternalistic political entity. The two are incompatible.

The inherent characteristic of government is to tighten its grip on whatever it gets hold of. In the case of medicare and medicaid, the rising cost, for which government is largely responsible, is used as an excuse to take over the operation of hospitals and, at the very least. to further interfere with physicians.

And that, of course, is a political act which directly violates a political promise made by Congress. That is the promise made in section 1801 of the medicare law that the law could not be used to let government officials or employees exercise supervision or control over the practice of medicine or the manner in which medical services are provided or over the administration or operation of any hospital.

But that is the way it is with politics—the promise to do good is too often the precursor of bad deeds.

We find it difficult to understand the surprise and alarm at the swiftly climbing cost of medicare and medicaid when there appears to be no corresponding surprise and alarm at the out-of-control growth of the power-drunk Government here in Washington. No one seems concerned that the dollar that was worth a dollar in 1940 is worth 19 cents because of the theft called inflation or that even the 1967 dollar is now worth only 54 cents. This thievery by officeholders through inflation is performed under the monopoly power of government to regulate the value of money.

No one in Congress or the White House or the bureaucracy is facing up to the appalling fact that the annual Federal deficit has ballooned an astounding 2,442 percent since 1950, that while private spending for health care since 1950 has increased 797 percent, Government spending has spiraled upward by 1,860 percent, that the amount of earnings and income taken away from citizens and spent by Government has grown from 32 percent in 1950 to 53.7 percent today.

A few noisy people who envy the professional and financial success of the majority of physicians or do not like doctors for a variety of other personal reasons, keep shouting about the rising cost of medical and hospital care. We have listened and listened and we just do not hear those voices shouting their indignation that HEW is getting fatter and fatter and fatter at the expense of taxpayers. Make no mistake—these long-suffering taxpayers are growing mighty tired of this kind of misrepresentation here in Washington.

This Congress is being asked to slap a 9-percent ceiling on the yearly increase in income of hospitals. But we have not seen any proposal from the White House or HEW to limit HEW's spending increases to 9 percent a year. And that is interesting because HEW's budget has grown 973 percent since 1960, from $15.1 billion to an estimated $162 billion for 1978—and that is an average of 54 percent a year.

Medicare and medicaid have not proved anything, except that when Government tackles something it inevitably runs the cost up without improving it—like Amtrak, the postal service, airlines, food stamps, and other welfare programs. Medicare and medicaid simply have not improved the quality of medical and hospital care for their recipients; they have not made care more available; they have just increased the costs.

The truth of the matter is that S. 1470 is in itself a ringing derlaration of Government failure in attempting to control and pay for the provision of medical and hospital care for a portion of the population. It is stirring proof of what happens when Federal bureaucrats presume that they are more competent and capable of providing goods or services than private citizens.

Thank you.

S. 1470 would create a ponderous, tangled and complex structure of procedures for reimbursing hospitals and physicians which would be intended to curb costs. What it would actually do is create an injustice on hospitals and physicians by bludgeoning them for a situation caused by the very Government that is wielding the club. It would add to the bureaucratic cost of administering these programs. And when this program also failed because it was the wrong answer to the problem, some new controls would be imposed.

The Government has proved it is incompetent and incapable of providing, regulating and paying for health care services to the elderly and the indigent. It is time that this Congress courageously faced up to that indisputable fact and made arrangements to abandon these disastrous experiments in governmental intrusion into private affairs where it does not belong.

Before these programs were enacted, U.S. physicians gave more than a billion dollars of free care to their patients every year. They are willing now as they were then to assure that no one in this country is denied needed medical care solely because of finances. We assure you the elderly and the poor will be denied far, far less than they are now if these programs are recognized as abysmal failures and abandoned.

We urge that this committee not pass 1470 but deal with the question of Government interference in medicare and medicaid, where it is doing more harm than good.

Senator TALMADGE. Thank you, Dr. Dorrity. I certainly agree with you on one thing—we ought not to expand further coverage until we can get a handle on the costs that we are expending now.

Senator Curtis?

Senator CURTIS. I want to say to you, Doctor, in reference to your remarks about inflation and the fact that the chief culprit was unbridled government spending, that you are speaking to receptive ears. The distinguished chairman of this subcommittee, Senator Talmadge. is the author of a constitutional amendment that will compel the Government to go on a balanced budget. He cosponsored mine and I cosponsored his. Mine is slightly different.

He believes that there is much danger in deficit financing. Serious individuals were worried when deficits remained at $2, $3, $4, $5 billion a year. Now we are talking in terms of $50 to $60 billion and it is time to take note; we certainly agree with you. Whether we are talking about hospital expenses or household expenses or anything else, inflation is across the board. The Government cannot escape its responsibilities.

We also believe that, aside from its effect on inflation preventing the continuous rise in national debt, the pay-as-you go requirement will mean good government, because then the Congress will have to consider programs to see which ones are desirable, which ones are absoIntely necessary, which ones should have priority and they will have to believe in them enough to say yes, we will raise the taxes to pay for them.

I just wanted you to know that you are speaking to a receptive audience this morning.

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