Mr. DEROUNIAN. Dr. Lawrence, will you spell out a bit more why you think the quality of medical care will be reduced under the proposed bill?

Dr. LAWRENCE. Congressman Derounian, we feel in our State medical society that if the King bill were passed there would be a certain amount of control over the provision of services to our patients by the doctors in the hospitals who provide these services. We feel that there would be an opportunity to extend this control to such an extent that doctors would not be able to give what they thought was the best care in many instances. We feel that there would be restriction on the hospitals of certain services. We feel that rather than improve medical care to our patients this would decrease the excellent care that our patients are now receiving.

Mr. DEROUNIAN. Dr. Fineberg, you have had quite a career in public health and having some close connection with New York City hospitals, would you tell the committee what you think this proposed bill would do to that quality of care as we have it now?

Dr. FINEBERG. Mr. Derounian and gentlemen, I believe that one of the important problems that we have discussed time after time is the question of the means test. I cannot understand why a means test necessarily means that you are stigmatizing any person that you are investigating. I do not believe it stands for degradation of the individual. Now we have had means test in New York City ever since I can remember for medical care, for patients seeking medical care. I need not remind you, Mr. Derounian and gentlemen, that our hospital department in the city of New York is the largest hospital system in the world. Our budget is close to $180 million despite the fact that we have had a means test. I hate to think what would have happened to our budget and what would have happened to our hospitals if we had not had a means test to keep out those who are not entitled to medical care gratuities, free of charge. I think it is very important. I think if you did not have the means test there would be many people receiving both inpatient care and outpatient care in our great clinics that could ordinarily take care of their medical care needs through their own finances. I think that many of our institutions would be filled with people who are not entitled to that type of medical care.

Now I am speaking purely about medical indigency which differs quite a bit from indigency from other directions. A person can be medically indigent and still be far from being a pauper. We view medical indigency as a criterion for determining whether a patient should receive care in our institutions, both inpatient and outpatient, in the city of New York.

Mr. DEROUNIAN. Then you disagree with Mr. Meany's testimony this morning that the passage of this bill was the difference "between humiliation and dignity, between pauperism and true social security."

Dr. FINEBERG. I don't believe that a means test means humiliation. We have means tests in many aspects of our life in New York City. The means test is used to determine whether a person should receive medical care in some of our Veterans' Administration hospitals. The means test is used to determine whether a person is entitled to certain benefits of low-cost housing. A means test is used in every aspect of our daily life. I do not see why determining whether a person is

entitled to medical care necessarily humiliates him or puts him in the pauper class.

Mr. DEROUNIAN. Dr. Fineberg, do you know of any case while you were first deputy commissioner, Department of Hospitals, City of New York, where any patient who needed help and attention medically, did not receive it, was thrown out on the street to die or to suffer or bleed to death?

Dr. FINEBERG. Mr. Derounian, patients are admitted to our municipal hospitals regardless of age. The only determination is whether they need hospital care, whether they are sick people. Knowingly, we have never turned a person away who needed medical care for any reason. As a matter of fact, I might point out that we not only take care of medically indigent people, that is primarily our aim in municipal support of hospitals, but we admit any emergency. A man can be a pauper or prince and he is admitted if he needs emergency care. We don't question him at all but our investigation does take place later on. We give him treatment first and then we investigate whether he can pay for it.

Mr. DEROUNIAN. Thank you, Mr. Chairman.

Mr. KING. Under the present bill, Dr. Lawrence, H.R. 4222, a patient does not determine whether or not he or she goes to a hospital. Is that not true?

Dr. LAWRENCE. That is true.

Mr. KING. One cannot be admitted unless his or her doctor recommends the admission.

Dr. LAWRENCE. That is true.

Mr. KING. Dr. Lawrence, some question arose over figures on page 4 of your statement that states:

It should also be pointed out that approximately 50 percent of New York persons over 65 are gainfully employed.

Do you know where those figures came from? Who gave them to you or where was the study made?

Dr. LAWRENCE. I cannot give you that source material at the moment, Congressman King. We did get them from our staff in the State medical society. I can get their sources and forward them to you.

Mr. KING. I wish you would. There has been some question. It seems that figure runs a little out of bounds with other areas and some question arose over whether or not that figure is correct. Dr. LAWRENCE. I will get the information for you. (The information referred to follows:)

Hon. CECIL R. KING,

FLUSHING, N.Y., August 16, 1961.

Committee on Ways and Means, House of Representatives,
House Office Building, Washington, D.C.

DEAR MR. KING: When I appeared before the House Ways and Means Committee on July 27 to discuss H.R. 4222, I promised to obtain some source material for you. This material is as follows:

The Bureau of Labor Statistics, U.S. Department of Labor, reports that 43.7 percent of the persons over age 65 are in the labor force now. This figure is believed to be about 8 percent less than 1956-60 (50.6 percent).

The belief is that, as a greater percentage of people over 65 become eligible for social security benefits, a larger number withdraw from the labor forces.

Special Bulletin H. 234, volume 1, New York State Department of Labor (special survey, 1956-59) published December 1960 (latest figures available) reports the following:

NOTE.-Average for all employed workers over 65 is 33 percent in New York State.

Allow me to take this opportunity to thank you for your courtesy and cordial interest in my remarks to the committee. I appreciate your desire to help the elderly people of our country and I am sure that we, as Americans, will ultimately arrive at a solution in a democratic way.

Yours very truly,

GEORGE L. LAWRENCE, M.D.

Mr. KING. If there are no further questions, thank you, gentlemen, for your statement of your views.

Dr. LAWRENCE. Thank you, Mr. Chairman.

Mr. KING. Mr. Shipman, will you come forward, please?

Before you proceed, Mr. Shipman, I felt that perhaps it should be explained this committee is one of the few committees in the House that is granted permanent permission to conduct committee hearings. during the session of the House, for obvious reasons.

Today, perhaps one of the most controversial and interesting proposals, the farm bill, is on the floor, which accounts for the absence of many of the members of the committee during this session here.

STATEMENT OF RICHARD C. SHIPMAN, ASSISTANT DIRECTOR, DIVISION OF LEGISLATIVE SERVICES, WASHINGTON OFFICE, NATIONAL FARMERS UNION

Mr. SHIPMAN. Mr. Chairman, members of the committee, my name is Richard C. Shipman, assistant director of the division of legislative service of the Washington office of the National Farmers Union. We appreciate very much, Mr. Chairman, this opportunity to present the views of the National Farmers Union.

The National Farmers Union is in full support of H.R. 4222, the Health Insurance Benefits Act of 1961. We support it because we believe that health care as a part of the social security program is the most logical, the most practical, the most equitable, and the most economical way of providing for our senior citizens in their declining years. We support it, also, because we believe it is the program the great majority of the American people want. The White House Conference on Aging proved this beyond any reasonable doubt.

National Farmers Union is an organization of nearly 300,000 farm families. Consequently, we believe it is our duty to present to the committee those various aspects of the problems which are most peculiar to rural America.

We are, therefore, appearing today in behalf of farm families, and with the experience of a farm organization which has spent a good portion of the past 20 years trying to assist our membership by

means of health insurance. It is from this experience in the insurance business that we have become keenly aware of the particular problems of insuring the health of older farm and country people.

PARTICULAR ECONOMIC CONDITIONS IN RURAL AREAS

The problems of meeting the medical and hospital needs of farm people over 65 years of age is a particularly difficult one for a number of general economic reasons:

1. There are approximately twice the number of persons over 65 on farms as there are in the general population. I should add these are percentagewise.

2. Because of weak bargaining power the income of farm families is only about half of that of nonfarm families. Therefore, their ability to pay for essential health services is much less. This in turn is reflected in deprived rural communities as a whole which suffer because they are so largely tied into a depressed agriculture. These conditions are chronic in some regions. They have their ups and downs. Older people, trapped in these depressed rural situations, are the victims of economic forces beyond their control. H.R. 4222 would be of great assistance in alleviating this problem.

3. In a great many instances problems of sparse population and general geographic remoteness of farm communities have prevented the development of readily accessible medical and hospital facilities. Where facilities have been developed, they are often too costly for people of moderate income. The result has been hospitals without patients because people could not pay for urgently needed hospital

care.

We believe passage of H.R. 4222 would aid materially in stabilizing income to hospitals and health centers, thus lowering costs of services. It would also aid the establishment and development of new facilities where needed.

4. The assets of farm people facing retirement are generally tied up in farms and farm operations. Over the past 10 years it has been necessary because of the price-cost squeeze in agriculture to apply more and more gross income to maintenance of the farm plant itself, leaving a decreasing amount of liquid assets available for essential medical and health services of the farm family. During this time total farm debt has increased 32 percent.

5. Farm families, as age increases, are forced to allocate an increasing amount of their income for medical expenditures-at age 64, 8 percent. Over the past 20 years, between 1935 and 1955, expressed in 1955 dollars, farm family consumption expenditures have increased 41 percent, while medical expenditures increased 178 percent during the same period.

6. Great natural disasters, such as drought, floods, grasshopper plagues, and hurricanes are additional hazards which strike at the income and financial resources of farm people. At times these calamities are of such scope that they ravage not only individuals, communities, and States, but groups of States. I cite as an example the drought now prevailing over large parts of Montana, North and South Dakota, Minnesota, Wisconsin, Michigan, Wyoming, Idaho, and Nevada. In our opinion, only a nationwide Federal program such as proposed in

H.R. 4222 can make secure the old age of people who spend their lives in those areas and those occupations where disaster from natural causes beyond their control is the everyday fact of life.

INADEQUACY OF VOLUNTARY PRIVATE INSURANCE

We would like now to point out some of the problems which make it impossible for private voluntary programs of insurance to provide adequate coverage in rural areas:

1. Where programs are voluntary, many people of financial means who can well afford to pay hospital bills do not buy insurance policies; therefore, they do not absorb a portion of the risk and make no contribution to the insurance company assets.

2. Since people past 65 are twice as numerous in rural areas as elsewhere, the risk to voluntary programs of special ills of the aged are doubled.

3. Because funds to pay claims in voluntary programs are limited by low income and increasing hospital expenses, underwriting procedures must protect the solvency of the company by limiting risk. Older people constituting a serious risk are by one underwriting rule or another denied protection. Many are therefore deprived of insurance at any cost if they apply after age 65.

4. Voluntary programs have promotion and sales costs which add to overhead expenses, thereby cutting the amount of funds available to pay claims.

5. Most policies grant no coverage for preexistent chronic diseases. Older persons, with a lifetime of accumulated medical history, on the average have had more diseases for which their policies will pay them nothing. In these cases they are paying their hard-earned money into a fund which will pay them nothing on the diseases for which they are most likely to be hospitalized. (Under social security, there are no waivers or riders or rejections because of medical history.) We believe the passage of the Anderson-King bill should be welcomed by the insurance industry as a great aid to their success because it will remove from their shoulders a risk which they have been trying to carry, but without success.

We believe this has brought some discredit upon insurance companies which we can ill afford to disregard. In fact, E. Sidney Wells, head of General Electric Co.'s employee benefit service was quoted in Business Week recently as saying:

If Blue Cross and Blue Shield keep operating the way they do now they'll risk bankruptcy. And if they collapse they could well bring everything down with them and lead us straight into Government health insurance.

INADEQUACY OF PRESENT LEGISLATION, KERR-MILLS ACT

Two major objections deprive the Kerr-Mills approach of adequacy in meeting the problem-in rural areas particularly.

1. Farm people long accustomed to operating their own farms, paying their own bills, meeting their own obligations, will in most instances deprive themselves of sorely neded hospitalization rather than subject themselves to the indignity of "charity" or "pauper oath"

programs.

76123-61-pt. 1——37