However, this section of the legislation is vague and needs clarification as to its intent. There is need for definition and limitation of the services to be provided." These strictures remain unchanged, and the Association accordingly finds itself unable to support this portion of the legislation for comprehensive public health services as presently constituted.

Alternate proposal to provide flexibility

We believe that the flexibility which is sought through the elimination of categorical grants can be achieved by either a block grant for support of stated programs identified in the law, or by a continuation of grants for the separate programs but with authority in the States to transfer, with the approval of the Surgeon General, funds from one program to another to provide emphasis in any category as needed within the particular State.

PROJECT GRANTS FOR "HEALTH SERVICES"

Under our discussion of the provision for grants for comprehensive public health services, we stated there is no restriction as to the type of services which may be permitted.

Under Public Law 89-749, in section 314 (a) of the Public Health Service Act, where "health services" are provided, it seems clear there is authorized under this section a type of "health service" different from "public health services." That this is so is evident, not from any distinction stated through definition, but by the difference in terminology and from the language in the subsection which states that only insofar as projects under clause (1) of the subsection involve the furnishing of public health services must these services conform to the state plans of the State Planning Agency. Thus any limitation on services which may be advanced by implication from the term "public health services" is now swept away under the project grant provision. Apparently then, services other than "public health services" are to be provided, and these need not conform to the State's plan. Aside from the difficulty which may well arise under this subsection in trying to determine when services are "public health services" and must comply with the State's plan, there arises a more basic consideration. The intention of the legislation, which originally was to eliminate categorical grants, is thus negated. The provision for project grants perpetuates the categorical grants. Moreover, under HEW projected appropriations, categorical grants will not only continue but will more likely flourish to a greater degree than before.

We do not believe that it is the intention of this Congress to have provide unrestricted health services for our population. It is incumbent that some limitation be stated clarifying the Act. Section 314 (e) should be changed to a program relating to public health services properly defined under subsection (d). As the law stands, the Association cannot support this vague section providing undefined services for unidentified persons. Accordingly, that portion of H.R. 6418 extending and expanding section 314 (e) cannot be supported.

GRANTS TO SCHOOLS OF PUBLIC HEALTH

We support an extension of the program of grants to schools of public health.

LICENSING OF CLINICAL LABORATORIES

This bill would also require federal licensing of clinical laboratories engaged in interstate commerce. The licensing of laboratories within a State has traditionally been a matter within the purview of state legislation. Standards for the operation of clinical laboratories have been promulgated by HEW in order for a laboratory to be certified for participation under the medicare program. We believe that these requirements will do much to raise the standards of laboratories where this is necessary to participate in the medicare program. A reasonable period of time should now elapse to determine the effectiveness of these new requirements. Accordingly, we do not support that portion of the bill which would require federal licensure, and we recommend the deletion of this section.

SUMMARY

In testimony before this Committee last year we stated our support of the planning grant program under section 314 (a) if amendments which we sug

gested were incorporated. Notwithstanding this, we believe that a coordinating commission would be more effective to accomplish the objectives of avoiding duplication of programs and would most effectively utilize facilities and manpower. Accordingly, we recommend that a coordinating commission within the State be established to replace the planning grant program.

As to the program for comprehensive public health services under section 314 (d), we believe that the services to be supported should be identified, and, accordingly, we recommend that the Congress provide either for a block grant for support of stated programs identified under the law, or for a continuation of grants for the separate programs, but with authority in the State to transfer, with the approval of the Surgeon General, funds from one program to another program to provide emphasis in any category as needed within the particular State.

The program of project grants, as provided under section 314 (e) should be related to the public health services which we have recommended be identified under subsection (d).

Other amendments to Public Law 89-749, given in our testimony before this Committee October 11, 1966 (set out in the Appendix attached hereto), including the creation of a National Advisory Council, should be incorporated into the law. (The amendments relating to the planning grants (section 314 (a)) would not be necessary upon the adoption of the program establishing the State Coordinating Commission.)

We support those provisions of the bill continuing the grants for areawide planning and grants supporting public health schools. We oppose the provisions requiring certain medical laboratories to be licensed by the Secretary of HEW. We further recommend that a continuation of Public Law 89-749 should be limited to a one-year extension with appropriation authorizations being specifically stated in the legislation. We believe that this program is of such significance that it warrants a further evaluation by this Committee and the Congress after another year.

APPENDIX

Summary of position of American Medical Association presented on October 11, 1966 on S. 3008 and H.R. 13197, 89th Congress-the "Comprehensive Health Planning and Public Health Services Amendments of 1966."

The AMA supported the concept of comprehensive health planning, recommending stated changes, and supported the program for areawide planning. It did not support the program for formula grants for comprehensive undefined "public health services" and project grants for undefined "health services" as contained in the bill, again proposing certain recommendations, and indicating support of programs for appropriate public health programs. The Association also supported other provisions of the legislation, including the training of public health personnel and grants to schools of public health. As to the formula and project grants, it recommended a continuation of the then existing categorical programs with flexibility in the States to shift funds from one category to another to meet special needs within the State. In voicing these positions, the Association advocated certain amendments should be made.

In brief, the recommendations for amendments to the program were as follows: Planning

(a) provide that the single State agency shall be the State health authority or an interagency commission composed of representatives of State agencies or departments concerned with health and related activities;

(b) provide that a State Health Planning Council shall include representatives of a State Medical Society, with the majority of the Council being physicians, including those in the private practice of medicine;

(c) provide that a State plan must be approved by the Planning Council, that the review of the plan be made in consultation with the Council, and modifications be approved by the Council.

Formula and project grants

(a) clarify the scope of any health services to be provided by: (1) adding a definition of “public health services";

(2) identifying the program of project grants for health services development by changing it to one relating to public health, as defined;

(b) delete the provision that standards for comprehensive public health services, including scope and quality of services, shall be set by regulations. General

(a) provide for the creation of a National Advisory Council to the Surgeon General of the Public Health Service, with authority to approve grants to the States and changes in State plans, and with representation from the national organizations whose state affiliates are represented on the State planning councils;

(b) insert a provision indicating there shall be no interference with the private practice of medicine.

STATEMENT OF THE NATIONAL ASSOCIATION FOR RETARDED CHILDREN

The National Association for Retarded Children has a continuing interest in the Partnership for Health legislation, since health and health related services for the mentally retarded are still inadequately developed. Between 1963 and 1966 mental retardation was looked on by the Public Health Service as a concern of the Division of Chronic Diseases. Although not specifically mentioned in the old law, a "categorical" program of project grants in mental retardation had been initiated. Within the Division it was administered by the Mental Retardation Branch, now the Mental Retardation Division of the Bureau of Health Services. We can only assume, in the absence of positive responses to recent inquiries, that the vital training and service needs to which these funds had been so successfully directed in that brief three years will continue to receive support.

Among the mental retardation activities which deserve attention are the Student Work Experience and Training Program, planning funds for universities which are contemplating development of university affiliated facilities for the mentally retarded, and information and referral services.

Of even greater concern to us at this time is the fate of mental retardation within the programs administered by the state health and mental health authorities. In fiscal 1966 the formula grant appropriation for Chronic Diseases and Health of the Aging was increased by $2.5 million to enable the state health departments to initiate activities affecting the health of the retarded, especially the adult retarded. There was, however, no requirement that they do so, and most states gave higher priority to other on-going activities. Clearly action on behalf of the mentally retarded at the state level cannot be realistically anticipated unless federal appropriations are substantially increased. Therefore, we urge the Committee to authorize amounts which are realistic in view of the enormous task before us.

In some states (e.g., Ohio and Virginia) the state mental health authority has a significant responsibility for community programs for the retarded (exclusive of education and vocational rehabilitation). In others (e.g., Oklahoma and Florida) responsibility lies elsewhere. Thus, there is no protection for the interests of the retarded in the earmarking of 15% of formula grant funds for the state mental health authorities.

We do not ask for earmarking at this time but would urge the Committee to reaffirm its intent, as explicitly expressed in its report of last year, that formula grant funds be used to improve health services to the mentally retarded.

Finally, we wish to express support for the new opportunities which would be opened up under Section 3 of H.R. 6418. There is much interest in the application of experimental approaches and use of new materials and functional designs in facilities for the mentally retarded; therefore, we welcome the inclusion of mental retardation facilities among those with respect to which grants and contracts may be awarded.

STATEMENT OF THE NATIONAL ASSOCIATION FOR MENTAL HEALTH, INC.

The National Association for Mental Health is a national voluntary citizens organization directing its efforts to improved care and treatment of the mentally ill and the prevention and reduction of the incidence of mental illness or disability.

*

We strongly support H.R. 6418, amending the Public Health Service Act by extending and expanding the authorizations for grants for comprehensive health planning and services, and for other purposes.

We subscribe fully to the Congress' findings and declaration of purpose set forth in PL 89-749, the "Comprehensive Health Planning and Public Health Services Amendments of 1966", to be extended and expanded by H.R. 6418. We sincerely believe that "to assure comprehensive health services of high quality for every person, . . . comprehensive planning for health services, health manpower and health facilities is essential at every level of government; that desirable administration requires strengthening the leadership and capacities of state health agencies; and that support of health services provided to people in their communities should be broadened and made more flexible".

It was therefore our privilege to testify last year before this Committee in favor of the bills which were later enacted as PL 89-749, although we did at that time express some reservations about the adequacy of the authorizations and the term thereof. We are indeed grateful that we now have this opportunity to support H.R. 6418, which increases those authorizations and extends the term of the program through fiscal year 1972.

We favor the proposed amendment of subsection (7) of Section 314 (d) which would require that at least 70 per centum of the amount reserved for mental health services and at least 70 per centum of the remainder of a State's allotment under this subsection shall be available only for the provision under the State plan of services in communities of the State.

Through this amendment, funds will be made available on a realistic basis compared with known needs, for the development of mental health services in communities.

We regard it as particularly significant that subsection (7) of Section 314 (d) permits specialized planning by the State mental health authority to meet the mental health needs of the State and, at the same time, relates the specialized planning to the comprehensive planning. As was stated by the Office of Comprehensive Health Planning and Development:

"Comprehensive health planning neither negates or diminishes the need for continued or expanded functional or specialized planning. Operating State and local agencies and private and voluntary organizations should continue to plan for specialized programs-the construction of health facilities, the development and expansion of community mental health programs, regional medical programs. programs in environmental control, services for the mentally retarded, etc.-and to plan for increasing the supply and effective utilization of trained manpower. Comprehensive State health planning provides a framework for strengthening such efforts by relating objectives in these specialized areas to each other and to the overall needs and resources of the State.'

"Information and Policies on Grants to States for Comprehensive State Health Planning under Section 314 (a), Public Health Service Act as Amended" (draft dated April 11, 1967), issued by the Office of Comprehensive Health Planning and Development, H.E.W.

In summary, we urge passage of H.R. 6418 because, with respect to comprehensive planning, it provides adequate funds to the States, for a reasonable period of time, to continue the vital planning now just beginning; and with respect to comprehensive public health services, because the bill makes Federal grant funds available to States, and through them, to their local communities, on a flexible basis for the provision of comprehensive public health services focused on individuals and on families in their communities.

STATEMENT OF KAISER FOUNDATION HOSPITAL PLAN, INC.

We appreciate the opportunity to present our views on the important subject of comprehensive planning for health facilities and services as embodied in the "Partnership for Health Amendments of 1967.” In our opinion this legislation has significant constructive aspects including Section 5 dealing with improvement of clinical laboratories engaged in interstate activities, Section 7 authorizing the Public Health Service to enter into cooperative arrangements, and particularly Section 3 which will provide affirmative encouragement for innovation in the health care field. We wish to express our support for these provisions.

A persuasive case has been made for the benefits of comprehensive health planning and the proposed legislation is a responsibly supported effort to deal with the very difficult problems posed by uncoordinated development of health care facilities and related services. Nonetheless, on the basis of considerable experience and study of both governmental and voluntary planning efforts in the

health care field we have deep reservations as to whether or not the benefits claimed for governmentally supported health facility planning will in fact be realized to a substantial degree. In this connection and in the interest of the brevity of this record we would like to refer to our statement made before the Ways and Means Committee of the House of Representatives during public hearings on H.R. 5710, the "Social Security Amendments of 1967." 1

More important than the lack of effectiveness which we anticipate is the serious potential inherent in governmentally supported health facility planning for perpetuating the status quo and stifling useful innovation. We urge this committee to give careful attention to the establishment of federal standards which will assure, insofar as realistically possible, that the health facility planning effort contemplated by H.R. 6418 does not become primarily a tool for preserving traditional methods of organizing health facilities and services and precluding or hampering the development of useful or potentially useful alternatives under which the stimulus of competition and the expression of consumer preference may contribute toward improving the efficiency and economy of our health care system. There is one proven alternative repeatedly endorsed by the Federal Government and other responsible sources which deserves particular attention—namely prepaid group practice health care.2

Because the group practice prepayment approach to the provision of health care services is both effective and non-traditional, it tends to be viewed as a threat or at least with skepticism and concern by many traditionally minded persons and organizations. These forces play key roles in the health care field and are certain to exert considerable influence on the development of state and local health facility plans such as those contemplated by H.R. 6418. Unless special attention is given to this problem, the frequently declared policy and intention of the Federal Government to encourage the development of prepaid group practice health care programs will be frustrated in the planning process.

The essential characteristic of group practice prepayment plans, and a likely characteristic of possible variations and innovations not yet clearly formulated or recognized, lies in the concept of assuming responsibility for comprehensive health services for a defined population consisting of individuals and families wishing to avail themselves of an organized approach to the provision of health

care.

The traditional and dominant health care system in the United States, built around the individual medical practitioner or small group of physicians, involves a strong assumption of responsibility for treating the illnesses of individual patients. Although its full potential is as yet far from achieved, and barely recognized-even by the most advanced thinkers in the field-the group practice prepayment approach involves assumption of a much broader more pervasive responsibility:

Assumption of responsibility not only to treat the illnesses of individual patients but also to promote the health of a population consisting of all enrolled individuals whether or not they are patients.

To the end that H.R. 6418 may contribute to the effective planning of health facilities and services by encouraging, not inhibiting, assumption of broad responsibility for health rather than narrow responsibility for treatment of illness, we urge that this concept be expressly embodied in federal standards guiding the planning process. A suggested amendment representing one method of including such concept in the legislation is attached as Exhibit A to this statement.

We wish to offer another suggestion of a more technical nature. The planning unit dealt with in H.R. 6418 is the individual health care facility. Thus on page 2 lines 17 through 21. the bill requires state plans to "provide for assisting cach health care facility in the state to develop a program for capital expenditure. which is consistent with an overall state plan" (emphasis added). A basic point made in the opening session of the National Conference on Medical Costs on Tuesday, June 27, 1967, in Washington, D.C., was the potential value of recognizing and encouraging systems of health care facilities rather than individual units. We suggest that H.R. 6418 should further this useful concept by deleting the

1 Report of hearings before the Ways and Means Committee of the House of Representatives. 90th Congress, 1st Session, on H.R. 5710: Part 2. pages 780 through 786. 2 See, for example. "Medical Care Prices," a report to the President by Health. Education and Welfare, published February 1967, pages 4 and 5. See also: "Building America's Health" (A Report to the President by the President's Commission on the Health Needs of the Nation). 1952. Vol. 1. pages 33-34: "Health Care for California" (The Report of the Governor's Committee on Medical Aid and Health), December, 1960, page 16: "Health of the Nation" (Message from President Lyndon B. Johnson to Congress), February 10, 1964.