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

see where they are trying to go in 10 years in their State and what are their needs and resources in order to accomplish their goals.

Mr. ROGERS. Do you anticipate that the Hill-Burton program will be carried as a separate program or in a comprehensive block program? Dr. STEWART. The Hill-Burton program will be carried separately. It is planning and developing new facilities in the State. This information would have to be related to planning of other kinds of health facilities in the State since there is a limit to the amount of capital that may be available within that State, for the construction of facilities over the next 10 years.

Mr. ROGERS. What about the medical schools? Suppose there is a medical school or maybe there may be four of them. They want to expand. Maybe they serve more than just one State.

How does the comprehensive State plan affect the future expansion, say, of a medical college?

Dr. STEWART. I would think that a State would take a look at where their doctors come from now? They would determine how many are coming from their own schools and how many from other State schools or other schools in other States, and then determine what the pattern has been? Then they look at all the developments that are being planned for the next 10 years in their State and find their needs are going to exceed the supply of physicians in that State even though those coming from other States may be doubled in their estimate. Therefore, they find they have an immediate need for a medical school in order to reach these 10-year program goals since a 10-year leadtime is needed in building a medical school. This means then that the capital to develop a medical school has to be put into that State to do it.

Mr. ROGERS. Suppose they have an oversupply for that particular State?

Dr. STEWART. If they have an oversupply of physicians as far as meeting the program goals that they are developing in that State, those goals being developed both privately and publicly, then they don't have to worry about developing a new medical school in their State.

Mr. ROGERS. Maybe the State is in New England. Maybe they serve a three-State area.

Dr. STEWART. If one of the objectives of that State is to be the producer of physicians not only for their State but for other areas, they would count this in their plan.

Mr. ROGERS. Here is what I think people are concerned with: Will the comprehensive State plan be the determining factor; is it going to be a regional plan or what? Then I think we need some assurance on these questions.

Dr. STEWART. The comprehensive State plan relates to that State and the resources of that State and whatever the program objectives are in that State. If that State is serving other States, as for instance in a case where a city is situated on a State boundary this will come into consideration. There will have to be come interrelation between these States.

While it will lay out these priorities and choices, there is nothing in the legislation that gives the comprehensive State health planning agency the authority to say, "This has to be," or "This has to be."

Mr. COHEN. There is no question, Mr. Rogers, that this national aspect has to be taken into consideration. The University of Michigan Medical School, with which I am very intimately familiar, obviously serves not only the State of Michigan, but being the largest, nearly the largest medical school in the Nation, it has great national significance and its research program and the people who come to it have an impact all over the country.

I think that you would have to, in the State planning, take account of that type of institution that performs out-of-State service. Mr. ROGERS. Out-of-State service?

Mr. COHEN. There is no question about that. I think that would have to be looked at as one of the considerations of the State plan. When you get to Minnesota and you deal with the Mayo Clinic, you certainly can't deal with the Mayo Clinic in terms of the type of medical services and the people who come there and all the other things in terms of Minnesota.

Mr. ROGERS. I would agree with you, but I think there has been some concern about this and this needs to be cleared up. Now, also about the community mental health facilities, here again would be a problem I would think.

Dr. STEWART. I think the best way I can illustrate it, Mr. Rogers, is that you have a whole series of programs being planned-community mental health, regional medical programs but there is no way at the present to look across these and relate all of these plans to determine the possibilities of using existing and developing additional resources. It is a method of collecting the information and laying it down so that one can look at it. This is what the role of the comprehensive health planning agency is.

Mr. ROGERS. Do we have a comprehensive plan for the United States?

Dr. STEWART. No, we have not. We have, I think, cited some goals. The President cited four goals in the health message this year. We do have national objectives in certain areas, but not in the sense that we are talking about here.

Mr. ROGERS. Should we?

Dr. STEWART. I think eventually we will come to this point. I think it is probably better to build it up from the legal areas than it is to start now.

Mr. BROWN. Will the gentleman yield?

Mr. ROGERS. Yes.

Mr. BROWN. It seems to me that this is really what we are talking about. There has been some implied criticism, not of the community of Rochester specifically, but of other communities, for their failure to take into account what the other guy may be doing in the interest of economics, efficiency, and so forth.

Dr. STEWART. That is correct.

Mr. BROWN. If you don't take into account what is being done in the medical schools in Cincinnati and the hospitals of Cincinnati, how are you going to have a comprehensive plan for the State of Kentucky, much of which is served by the medical facilities in Cincinnati?

Dr. STEWART. You are quite right, Mr. Brown. The development of a comprehensive State health plan in Ohio would certainly have to

take into account the relationship of the health personnel in Ohio and Kentucky.

Mr. BROWN. And it can't do this without a comprehensive plan for the United States.

Dr. STEWART. I was taking this in a different connotation. There is some comprehensive planning in the United States. We have some idea of what the economic development will be in the United States and what proportion of the dollar, the health dollar, might be 10 years from now and how that might be distributed between capital and expenditures.

Mr. ROGERS. If the gentleman will permit, I think we would be concerned about manpower here, is there enough national effort in the individual States to have enough schools to provide the proper manpower.

Dr. STEWART. No, I think we have recognized there is not enough effort.

Mr. ROGERS. Should we start devoting more effort to this area? In other words, I think we kind of need an across-the-whole-spectrum as well as vertical view.

Mr. BROWN. I don't want to appear to sandbag you in cooperation with my colleague in the chair.

Mr. ROGERS. The Chair, I might say, is not trying to.

Mr. BROWN. We have had some discussion in the State of Ohio as to whether or not we should have another medical school. I think this patently is a question which involves more than just the State of Ohio because if every State is going to have another medical school, then perhaps we have too many medical schools in the United States. Again it seems to me that in determining the criteria that are mentioned on page 2 of the legislation that there is implicit some kind of an overall plan for the entire United States in order to get an adequate plan for the individual States, and if that is not the case, then the criticism which is made of the local community in defense of the State plan is invalid.

Dr. STEWART. What I am saying, Mr. Brown, is in your decisionmaking as to whether you should or should not have another medical school in Ohio, besides taking into consideration the manpower needs, I think you would also need to know what kind of capital is going to be needed in your State for hospital construction in the next 10 years, for community mental health centers, and for all the other health needs in relation to what you think the capital resources will be in the next 5 years. This helps you make your choice.

Mr. ROGERS. I agree with the Surgeon General, and I am sure Mr. Brown does, too, that we need to know this information and a comprehensive plan is a good idea and the Congress adopted it. This committee did.

I think the point we are trying to develop is that perhaps we also need some thought of a group within the Department presenting an overall picture for the United States and relating it for the committee. Mr. COHEN. Very definitely we would conceive of our responsibility more and more to develop the totality of the information necessary for the whole health resources in the country, and it is not simply because of the factors that you mentioned of the medical school, but the point is that the Federal Government is going to be putting so