1. Benefits would not be limited to those elderly persons in actual financial need.

In fact, all persons over 65 eligible for social security benefits would also be eligible for Federal health care services. No consideration would be given individual financial need for such assistance.

As a result, a rather considerable number of persons would have provided for them by the Federal Government health services they could easily afford themselves.

The Kerr-Mills health care plan is limited to the medically needed. 2. Benefits would not be available to the 4 million aged persons not eligible for social security payments and, thus, the program would unfairly discriminate against such persons.

Bear in mind that neither that group nor the one comprised of persons already receiving social security benefits would have paid any social security taxes toward the health care plan.

Why one group should be granted the Federal aid and not the other is hardly a matter of either logic or equity.

It should also be noted that program benefits would be denied as well to the many medically needy persons under 65 and ineligible for social security assistance.

Kerr-Mills plan offers health care services to all medically needy aged, whether eligible for social security benefits, or not.

3. Benefits would not be needed by a fairly large proportion of those 8 million persons over 65 having adequate private health insurance plans.

It would also be unnecessary in the case of the medically needy aged eligible for Kerr-Mills plan benefits, or for those eligible for the veterans health care program, or the plan for retired military personnel and their dependents.

I also wish to take this opportunity to state that independent retail pharmacists, like the Nation's physicians, would never deny essential services to the medically indigent.

Personally, I have never refused to fill a prescription for a person unable to pay for it. The same, I am sure, can be said for retail druggists all over the country. Literally millions of dollars of drugs are given to the medically needy every year by druggists like myself.

4. Financing of benefits by means of social security taxes places a greater tax burden upon lower income workers than it does upon high income recipients.

Percentagewise, the worker earning $5,200 would be paying a greater percentage of his gross income than would a person earning in excess of that figure.

Frankly, I feel that the burden of providing health care to the needy should be shared more equitably by the American people. The answer, of course, is to use general tax revenues, as does the KerrMills Act.

5. Benefits provided would not assure adequate health care for our aged citizens.

As has been noted, neither physicians services nor out-of-hospital prescription drugs are included in the plan. Thus, the plan is incomplete and would be of only limited value to the eligible elderly.

By comparison, the Kerr-Mills plan authorizes a complete health care service for its beneficiaries.

6. The plan would produce an administrative nightmare, with Federal officials first working out contracts with 6,000 hospitals, 25,000 nursing homes, 700 visiting nurse groups, and, later, should physicians services and out-of-hospital drugs be included, with 208,000 doctors and 55,000 retail pharmacists.

The paperwork involved in processing claims for the 12 million beneficiaries of the plan staggers the imagination. An extremely large force of Government workers would undoubtedly be required to do the job.

Although primarily opposed to H.R. 4222, the NARD does ask to be recorded again before this committee as offering its continuing support to the Kerr-Mills plan. That legislative program properly limits its benefits to those in actual financial need of such aid.

In doing so, Congress has reaffirmed its belief in the capacity of our traditional free enterprise system to meet the health needs of our senior citizens.

In our view, Congress should be concentrating all of its efforts right now on making sure of the success of the Kerr-Mills health care plan. In passing, I should like to point out that the Kerr-Mills Act could be strengthened by an amendment expressly providing that plan beneficiaries are to be granted the same freedom of choice in making their prescription drug purchases as they will have in selecting a physician or hospital, for example.

Even though the freedom-of-choice principle is strongly evidenced in the legislative history of the act, thanks largely to you, Mr. Chairman, and to Mr. Mason, on the House side, and to Senators Humphrey and Kerr on the Senate, its statement in specific statutory terins would once and for all preclude any possibility of administrative misunderstanding.

Retail pharmacists belive that plan beneficiaries should have an absolute guarantee of the same freedom of choice that is enjoyed by citizens able to finance their own health care.

Thank you for this opportunity to present the views of the NARD on this proposed legislation. It has been a pleasure for me to appear before you, and I hope I have given you a better understanding of the reasons why the Nation's retail pharmacists must continue their vigorous opposition to H.R. 4222.

Mr. Chairman, one final request: Would you please have inserted, following my testimony, a passage I have taken from a British telecast of life under that country's socialized medical system. The passage I am offering deals with the difficulties involved in a physician's prescribing glucose instead of plain cane sugar.

The CHAIRMAN. Without objection that material will be included in the record.

(The information referred to follows:)

TRANSCRIPT OF MOVIE "ON CALL TO A NATION," A BRITISH BROADCASTING
CORP. DOCUMENTARY

Narrator: "Prescriptions, drugs, and medicine. Everyone receiving treatment from a National Health Service doctor is entitled to free drugs and medicine, if the doctor prescribes them. And 16,000 chemists have joined the service to make this possible. You have to pay the much-disputed shilling for every item on the prescription form. This is a kind of taxation, intended to put a brake on the national drug bill. Behind the scenes the prescription forms are carefully kept. They are the means by which the chemist gets his money. And at

the end of the month he sends them all off to a pricing bureau. (Scene shifts from chemist's to show pricing bureau.) This is the scene on the first of each month at 19 pricing bureaus throughout Great Britain. Hundreds of thousands of prescriptions, each needing to be examined and priced so that chemists can be paid for the drugs they have handed over the counter. The task would seem impossible. Two hundred and thirty million prescriptions a year, all in different doctors' handwritings. The job of pricing clerk is skilled and complicated. The cost of drugs is always changing. On the one hand there are the standard drugs, thousands of official names to be memorized or looked up in an index, and the price filled in on each prescription form. On the other hand, there are the proprietary drugs, 5,000 trade names with new ones being added every month. When the prescriptions have been priced and the total added up, the chemists are paid. Seventy-two million pounds a year. The nation's drug bill is often criticized. But a Government committee found no evidence of irresponsibility on the part of the doctors in prescribing. An essential feature of the National Health Service is that doctors must be allowed to prescribe whatever they think is right for the proper treatment of their patient. The medical profession insisted on complete clinical freedom when the service began. Most doctors say they've had all the freedom they need. There are, of course, certain rules. Doctors must not prescribe such things as foods or toilet preparations. Prescriptions for these things are thrown out by the pricing bureau and the doctor has to pay for them himself, unless he can justify his actions before a committee of fellow doctors."

Doctor No. 1: "Has Mrs. Botley got indigestion? You know, I know nothing about it."

Patient: "That's what she said, anyway."

Doctor No. 1: "I see. Well, now, you tell Mrs. Botley she'll have to come and ask for that herself, you see, because I don't like giving medicine to people if I don't know what's the matter with them. Tell her you can't do her shopping for her. Well, here you are, your prescription. You take that along to the chemist's. Come and see me again in a week's time."

Patient: "Thank you, doctor."

Narrator: "And the doctor is told the finding. There are other checks on prescribing. Every so often the costs of all prescriptions is analyzed, doctor by doctor, area by area. If any doctor is found to be prescribing more expensively than the other doctors in his area, his prescriptions are investigated by the Ministry of Health. He may then be interviewed by a regional medical officer. All this is designed to keep down the cost."

The CHAIRMAN. We thank you, sir, for bringing to the total committee the views of the National Association of Retail Druggists. Mr. King has a question.

Mr. KING. Mr. Rooke, how many member pharmacists are in the national association?

Mr. ROOKE. 37,000.

Mr. KING. By what method, Mr. Rooke, was the association able to determine the will or wishes of these 37,000 druggists?

Mr. ROOKE. By resolution in convention.

Mr. KING. Are they all members of the National Association or most all of them?

Mr. ROOKE. No, sir, not all. However we publish a journal and this matter has been publicized in the journal and we have received many letters in our headquarters office with reference to this legislation.

Mr. KING. Would you have knowledge of how many druggists attended the convention?

Mr. ROOKE. About 7,000 or 8,000.

Mr. KING. The reason I ask that, Mr. Rooke, is that I have inquired. of several druggist friends of mine who are members and they were not canvassed or solicited in any way to indicate their views to the national association on the proposal, which is why I have asked the question.

Mr. ROOKE. Well, each State sends a number of delegates. They are instructed before they attend the convention as to their voting on matters of this kind. So it is a pretty large segment represented. Mr. KING. Thank you.

The CHAIRMAN. Thank you again, Mr. Rooke.

Dr. Rennie, will you please identify yourself for the record, giving this committee your name, your address, and the capacity in which you are appearing at the present time?

STATEMENT OF ROBERT A. RENNIE, PH. D., VICE PRESIDENT OF RESEARCH, NATIONWIDE INSURANCE COS., COLUMBUS, OHIO

Dr. RENNIE. Mr. Chairman, my name is Robert Rennie. I am appearing this morning as vice president in charge of research of the Nationwide Insurance Cos., of Columbus, Ohio. Mr. Chairman, my appearance this morning is in support of H.R. 4222, and is, as you recognize, somewhat in variance with that of some of the other insurance companies in our country. This is somewhat the same position that we found ourselves in in the mid-1930's when the Social Security Act itself was first being considered. I think that many of our colleagues in the insurance business necessarily today would agree that the Social Security Act, the cash benefits, retirement benefits that have been paid under the Social Security Act provided the foundation for a great deal of the growth of private voluntary life insurance and retirement plans. It made the American public aware and it also gave them the basic benefits upon which they could build with private insurance policies and retirement plans. I think we are in somewhat the same position here today. I am not speaking on the basis of academic facts and figures. I am speaking from our own experience over the last 20 years of trying to provide health insurance, voluntary health insurance for our own policyholders both in rural and in urban areas. We found ourselves on a treadmill. This is not a question of just the number of older people insured. It is also a question of the comprehensiveness and the adequacy of those policies. In one case that I could cite we have tried to provide health insurance benefits for our founding members, the Ohio Farm Bureau Federation. These are people who are not just customers. They were the people who founded our company back in the 1920's. We have found ourselves continually behind in providing adequate health insurance programs for these people, particularly as they grew older, as the average age of this group grew older and older.

In these circumstances we have found that we could not keep up the benefits because these people simply did not have the ability to pay for adequate private voluntary insurance. It is on this basis that we come to you this morning with a resolution from our board of directors which is still elected basically from these membership organizations throughout the East. This resolution was passed by our board of directors on April 6, 1960. I would like to read it.

Before I do that, Mr. Chairman, might I introduce the whole statement into the record in the interests of saving time?

The CHAIRMAN. Without objection your entire statement will appear in the record, Dr. Rennie.

(The statement referred to follows:)

STATEMENT IN SUPPORT OF H.R. 4222, HEALTH INSURANCE BENEFITS ACT OF 1961, BY ROBERT A. RENNIE, PH. D., VICE PRESIDENT, RESEARCH, NATIONWIDE INSURANCE COS., COLUMBUS, OHIO

The Nationwide Insurance Cos., support of the financing of basic medical care benefits for older people through social security. More than a year ago, our board of directors adopted the following policy:

"Whereas the Nationwide Insurance Cos., are deeply committed to the principle of helping people to meet their social and economic needs; and the health needs of older citizens are among the most urgent and pressing social problems remaining unsolved; and

"Whereas most of the health costs of older people are not being met by insurance as evidenced by certain statistics which indicate that 86 percent of couples receiving social security benefits in 1957 had none of their medical care costs met by insurance; and

Whereas certain statistics indicate that most older people had neither the income nor the assets to meet such expenses as evidenced by the figures that nearly 4 out of 10 couples over 65 years of age had total income of less than $2,000 in 1958: Be it

"Resolved, That it be the policy of the Nationwide Insurance Cos. :

"(a) To support the use of the social insurance principle to meet the health needs of older citizens;

"(b) To support the application of this principle in appropriate legislation to provide basic health insurance to those eligible for old-age, survivors, and disability benefits as a feasible and desirable step in this direction; and

"(c) To continue our efforts in our own insurance program, in conjuction with cooperative health plans, and as members of the private insurance industry to provide further health care through voluntary coverage in addition to that which is furnished through Government programs."

The adoption of this policy by our board of directors stemmed from several major considerations. Basic to this decision was the knowledge that America has changed in recent decades from a rural, agricultural country to an urban, industrial nation. These changes have often created greater degrees of financial dependence within our social structure. The average family no longer owns the land or the productive tools which were once the main source of its income. And the compulsory retirement plans of the modern corporation have compounded the problem of income maintenance in old age.

Profound shifts have taken place during the decade of the fifties in terms of the welfare of persons aged 65 and over. Most of these people are now assured of some small regular income through social insurance and pension plans-increasingly without a means test-when earnings decline or cease. The proportion of people over 65 who held jobs declined steadily during the decade. On the other hand, payments under public income-maintenance programs to persons aged 65 and over amounted to $14 billion in 1960 as compared to only $3 billion in 1950. This steady improvement in the provision of income to meet the basic needs of food, clothing, and shelter has served, perhaps, to bring into sharp focus the lack of medical care benefits for older people. It is undoubtedly their greatest remaining threat to economic security.

No responsible person now questions the right of our older people to receive high-quality medical care. This right is no longer an issue. And there is general recognition that "support from the Federal Government is essential for an adequate program of health care insurance for the aging." These were the words of a group of Senators (Javits, Aiken, Cooper, Saltonstall, et al.) who introduced a bill in the last Congress calling for medical care benefits to be financed from general revenues.

The need for Federal assistance is clear. Older people simply do not have the "ability to pay" for medical care. They must spend twice as much for health care as those under 65, but their annual incomes are only half as much. Fewer than 6 older couples in 10 having a hospital stay are able to meet all their medical bills by themselves. Most of the health costs of older people are not being met by insurance. As noted above, 86 percent (85.6 percent) of couples receiving OASDI benefits in 1957 had none of their medical care costs met by insurance. Nine out of ten (91.8 percent) of the single beneficiaries had none of their costs so met. Of those who were hospitalized and received some benefits, 44 percent had less than one-quarter of their bills covered by insurance, and 75 percent had less than half of the bill covered.