Such an ultimate provision would be another necessary link in a floor of adequate health-cost protection. According to studies of the Health Information Foundationfinanced by the drug companies of America-in recent years the aged have had a far greater increase than younger persons in expenditures for medicines. They spend a higher portion of the medical dollars on drugs and medicines and the absolute amounts they spend on them is more than twice the amounts spent by younger persons. The records of the Special Committee on Aging include case after case of older persons putting off going to see a physician-not so much because of payments to the doctor but because of the fear that the costs of prescriptions resulting from the doctor's diagnosis would just be too much to afford. Two, since one of the most publicized arguments against the KingAnderson type of legislation is that it would not protect those aged ineligible for social security benefits, why not provide for a contribution from general revenues to a social security health insurance trust fund, in order to cover certain categories of aged persons-especially those now on old age assistance and medical assistance for the aged? The costs of such a proposal-equivalent to the per capita costs for those eligible under social security-would not be new costs, by and large. The Federal Government is already paying such sums in the form of grants to the States, payments to the Veterans' Administration, and so forth. Additional costs-if any-would be no more than $25 million. In closing, let me make one brief comment. The Nation as a whole is in favor of financing old age health care that is, minimal but basic benefits-through social security. And the Nation can afford such a program. Let no one divert us from that proposition by outcries of uncontrollable, astronomical costs. The issue now boils down to whether or not the Congress has the proper will and courage to enact the program. The decision that must be made is, therefore, a moral one. The American people have already made their decision. It is now up to their representatives to demonstrate their responsiveness to the human need for a civilized health care program for those citizens who have spent a lifetime of productive effort contributing to the prosperity and material wellbeing of all of us-and now have stepped aside for younger persons to take their place. "The moral tone and lifespan of a civilization," Arnold Toynbee has written, "can be measured by the respect and care given its elderly citizens." The respect and care given to our senior Americans will, in no small degree, be measured by your decision on the No. 1 priority among the problems of the aged, the sound financing of definitely assured health care benefits for all older Americans, as a matter of right and not dependent upon the caprice or largesse of private and governmental charity. I am submitting a chapter from the staff report entitled "State Action To Implement Medical Programs for the Aged," which I would appreciate having inserted in the record of the hearings at the conclusion of my statement. (The excerpt from the report referred to follows:) STATE ACTION TO IMPLEMENT MEDICAL PROGRAMS FOR THE AGED A STATE REPORT TO THE SPECIAL COMMITTEE ON AGING, U.S. SENATE, JUNE 8, 1961 CHAPTER VI. SOME GENERAL CONSIDERATIONS The role of public assistance in providing medical care Beginning in 1950, a series of amendments to the Social Security Act has served to strengthen the role of public assistance in providing medical care to the needy and medically needy aged. In these laws Congress specifically authorized the use of Federal funds for medical care for the four categories of recipients of public assistance. By increasing the maximum in which the Federal Government will share the States have been encouraged to provide more comprehensive medical services to the needy aged. Despite increasing support for medical care in these programs, and even though there has been substantial progress, there are important deficiencies still existing in a number of States with respect to the provision of medical care for the needy aged. Inadequate legislation in some States, insufficient appropriations in others, and administrative complexities in still others, have resulted in very uneven programs of medical care among the States. No more than about a third of the States have programs in which the needy aged can receive all the medical care they need. The other States have programs which provide only limited medical care, financing one or more services but not the broad scope which is needed by sick people. With the expansion and maturing of our social security programs (private as well as public) a larger proportion of the aged receiving public assistance have become eligible because of large medical needs. This is true even though public assistance rolls may decline in proportion to the aged population in the future. A growing number of persons in old age assistance require continuous and costly nursing home care. Many are chronically ill and in need of costly types of medical service in their homes as well as in the hospital. Expenditures for medical care for the needy aged will tend to increase as the aged population and the need for medical care increase. Voluntary health insurance, geared to covering a working population and to providing benefits for short-term hospitalized illness, does not readily lend itself to meeting the medical needs of aged persons. It is not likely to cover all or most low-income aged persons in the near future.' Hence, some new arrangements had to be developed to meet the health needs of aged persons, particularly those with low incomes and with unusual health needs. The Social Security Amendments of 1960 continued the increases in the Federal financing of medical care for those on old-age assistance. This legislation also authorized the extension of these programs to provide for the low-income aged who need medical care, by giving the States a financial incentive to establish a new category of recipients of public assistance, medical assistance to the aged. As with the program of medical care for recipients of old-age assistance, the States would have broad latitude in determining eligibility for benefits and the scope and nature of the services to be provided. Two approaches to financing In extending public assistance medical care to meet the health needs of the aged who are not recipients of public assistance, Congress chose, as a matter of public policy, the tax-supported approach of financing medical care over the social insurance approach. In general, the two approaches view differently the role of public assistance in meeting medical care needs of the aged. Public assistance, including MAA, is considered in the one approach as the primary resource for dealing with the Nation's problem of financing care for the aged. The social insurance approach sees the primary solution to this problem coming out of a system of uniform benefits over the Nation as a whole for all insured persons, with public assistance acting as a second line of defense for those services not provided under insurance or for those persons who are not beneficiaries of the insurance program. 1 See the staff report of this committee, "Basic Facts on the Health and Economic Status of Older Americans," June 2, 1961. The social insurance approach provides uniform and standard benefits for all eligible persons regardless of the State in which they live. On the basis of typical current legislative proposals following this approach, such benefits would include hospital and nursing-home care and nursing services in the home to all eligible aged in all the States. The legislation does not contemplate including physicians' services in the home, office or hospital, or dental care. The public assistance approach, on the other hand, permits each State to determine the range of benefits to be provided for its aged population. Depending on the State's fiscal situation and its orientation to public welfare medical services, the range of medical services available under MAA programs may vary from the relatively comprehensive (including hospitalization, physicians' services in the home, office and hospital, nursing-home care and prescribed drugs) in some States, to the provision of very limited services by other States, e.g., nursing-home care only. Under both the social insurance and public assistance approaches, some areas of medical need will remain uncovered by either type of program. The benefits contemplated under social insurance financing thus would constitute a "floor" of protection for all aged persons insured under the program. Similarly, the scope of services provided through MAA in those States with less than comprehensive programs, also constitute a "floor" of medical care. However, because eligibility under the two programs differs, the degree of protection afforded differs for the two populations. Under the social insurance approach protection against the high costs of hospital and nursing-home care would relieve the beneficiary from meeting these costs out of his retirement income and thus enable him to meet the costs of needed physicians' care and other medical services not covered by the program. The MAA program is designed for persons who are unable to pay for needed medical care regardless of the type of care required. If such a person requires some category of medical care other than that provided through the program, it must be obtained in some other way. However, it is the intent of the legislation to help the States extend such programs so that they provide a more comprehensive scope of benefits. Under the social insurance approach, all the insured would be eligible for benefits. Benefits are available by reason of being in an insured status, rather than by reason of need for medical assistance. The public assistance approach is predicated on the view that government action should be limited to persons with demonstrated need as established by a means test. As with benefits, eligibility under the social insurance approach is uniform; under the public assistance approach, criteria of eligibility are determined by the individual States, and thus are not uniform. Principles of medical assistance to the aged program The underlying premise of Public Law 86-778, in respect to its provisions for assistance to medically needy aged persons not receiving old-age assistance, is that it represents an adequate solution to the problem of medical care costs for the aged. It has been referred to as a "significant advance in responsible welfare legislation" and it has been predicted that it will prove to be both "effective and popular when fully implemented." An evaluation of this program must address itself to its stated objectives. The degree to which the stated objectives are being met can be determined on the basis of the program's accomplishments to date, as reported by the 53 jurisdictions responding to the questionnaire of the Special Committee on Aging. This evaluation can be meaningfully formulated in relation to the medical, social, and economic aspects of the program. Evaluation of medical aspects.-The scope of medical services is determined by the States. However, it is clear that the intent of the MAA program is to provide a comprehensive range of services, since the Federal Government will participate in financing a program with a very broad range of both institutional and noninstitutional services. Medical care of good quality cannot be obtained unless a complete range of services is available. Particularly important in the care of the aged are services for preventive and rehabilitative measures. Such preventive measures as provision for the early diagnosis and prompt treatment of illness, and rehabilitation programs which lead to self-sufficiency and self-care, must be included. However, current State reports indicate that only 6 of the 20 States with definite program plans have a broad range of services which provide the necessary base for a comprehensive medical program of good quality. The remaining 14 States have major limitations in services so that there are serious doubts that the program objectives can be met. In those States which provide only institutional care, there is the further problem of utilizing hospital and nursing-home beds inappropriately because alternative services such as physicians' home and office care and nursing care in the home, are not provided. Evaluation of social aspects.-The intent of the new program is to furnish medical assistance to aged persons not on old-age assistance, but whose income and resources are insufficient to meet the costs of necessary medical services. The program could provide potential protection for as many as 10 to 15 million persons aged 65 and over who may be medically needy. It has been estimated that if and when all State plans are in full operation, 1⁄2 to 1 million persons may receive medical services annually under this program. When these goals for including a large proportion of the aged are compared with the States' projected programs, there are serious doubts that such goals might be achieved. For the 20 States providing estimates on the number of persons eligible under their MAA programs, only 3.3 million out of 8 million aged would be potentially covered. Some caution must be used in projecting this proportion to the Nation's entire aged population of 16 million. However, the States reporting their plans are reasonably well distributed with respect to per capita income and aged population. With this in mind, it would be reasonable to infer that no more than 6 to 7 million aged in the Nation as a whole would be potentially covered. Even so, experience to date has shown that a sizable proportion of those certified as eligible and receiving services under the program have in fact been transferred from the old-age-assistance caseload. Viewed from a broader perspective, our expanding programs of private and social insurance appear to represent the pattern for meeting income maintenance needs as well as security against the costs of illness. A medical care program in a public assistance framework does not appear to be consistent with this development, and the aged, with their heavier burden of illness and reduced resources, are being isolated from the rest of the population in respect to their medical care. Evaluation of economic aspects. In the first year after the enactment of the legislation it was expected that an estimated $120 million (approximately half of which is Federal) will be expended on MAA. This was based on the fact that relatively few States would have developed comprehensive programs. The 20 reporting States anticipated total costs for the first year of operation of about $330 million. For just five States, those with MAA programs already in operation, about $18 million was spent for the first 6 months. Not only are current estimates by the States far exceeding those made when the legislation was passed, but it would appear that annual costs for this program would rise substantially if the medical and social purposes of the program are fully implemented. Thus, if comprehensive services are provided for the potential eligible population of 10 million aged, annual costs may be expected to exceed well over a billion dollars. At the present time, it appears doubtful that the large sums required to implement the full scope of the MAA program will be made available by the States even with the Federal Government providing at least half the total costs. The States already are experiencing difficulty in financing other essential programs and many have consistently failed to take advantage of all Federal matching money now available for public assistance. The danger emerges therefore that the economic burden of the MAA program will tend to restrict the scope of benefits and the aged population to be covered, and thus fail to meet the longrange legislative intent of the program. Mr. KING. Dr. Blake. STATEMENT OF HON. CLARK MacGREGOR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA Mr. MACGREGOR. Mr. Chairman, with your kind permission it is my great pleasure as Congressman from Minnesota, representing its Third Congressional District, to introduce to this distinguished committee one of my finest constituents, Dr. James A. Blake of Hopkins, Minn. Dr. Blake comes extremely well qualified, first as the son of a distinguished pioneer physician in the Minneapolis, Minn., area and also as the brother of two physicians in the Minneapolis area, each of whom is extremely well regarded. Your next witness stands high in his profession and is one of the civic leaders in his home community. Dr. James A. Blake is a graduate of the University of Minnesota School of Medicine in 1934 and interned in Jersey City, N.J. His professional accomplishments are many and varied. He is presently a member of the Committee on Legislation and Public Policy of the American Academy of General Practice, and is currently serving as chairman of its subcommittee on legislation. Dr. Blake has been president of the Minnesota branch of the Academy of General Practice and has served as its executive secretary for 8 years. He is a former chief of staff at the Minneapolis Eitel Hospital and is presently on the staff of Eitel, Methodist, and St. Marys Hospitals, three of the leading institutions of their kind in the city of Minneapolis. Dr. Blake is currently serving as president of the Hennepin County Medical Society. Hennepin County includes the city of Minneapolis, of which Hopkins is a suburb, and the county numbers approximately 850,000 people. The Hennepin County Medical Society is the 13th largest county medical society in the United States. May I add, Mr. Chairman, that in Dr. Blake's personal life he has demonstrated his compassion by being the father of four adopted sons. It is a real pleasure to have the opportunity, sir, to appear before this committee and to introduce to you one of the very leading citizens of the Minneapolis area, Dr. James A. Blake, of Hopkins, Minn. STATEMENT OF JAMES A. BLAKE, M.D., ON BEHALF OF THE AMERICAN ACADEMY OF GENERAL PRACTICE, KANSAS CITY, MO. Dr. BLAKE. Thank you very much. Mr. KING. Mr. Blake, not only are you qualified, we will take that for granted, but you come well recommended. Dr. BLAKE. Thank you, sir. Mr. KING. He is not by chance for the bill, is he? Mr. MACGREGOR. May I say, Mr. Chairman, that Dr. Blake has not disclosed to me his feelings about your particular piece of legislation. I have my suspicion regarding his stand, as does the chairman. Mr. KING. Doctor, with all the doctor relatives, they would be quite an asset if we could have them on our side. Mr. MACGREGOR. One of his brothers, sir, is a personal friend of mine: Dr. Paul Blake is recognized not only in the Minneapolis area, but throughout the Middle West, as one of the finest neurosurgeons in the entire country. Mr. KING. Thank you, Mr. MacGregor. Mr. KING. Proceed, Dr. Blake. Dr. BLAKE. I appear for the American Academy of General Practice. The American Academy of General Practice is the Nation's second largest medical association and has more than 27,000 family doctor members in 50 State chapters. I am also president of Hennepin County Medical Society, which includes the city of Minneapolis. Hopkins is a suburb of this fine city. I am a general practitioner and except for 3 war years in the Army, I have practiced 25 years in my |