cal care program were administered rigidly under inflexible laws and not based on need exclusively, then certainly many cases with intense needs will get far less help than many other cases with minor needs.

To administer a medical care program based on need, the department would have to establish priorities of medical fund usage. Identical cases located in different parts of the state might receive different amounts of money. The concept of spreading the money evenly over all cases would have to be discouraged. No one would have a right to "so much medical care each month." Rather, if the recipient were in need and care were not available, the DPW would have to determine, with the help of that recipient's doctor, the best method of procedure. If responsible adult children could help, the DPW should be free to require their participation. Likewise, if part or all the medical care costs would be borne by the local unit of government, the DPW should be free to use their services.

Without question any welfare program based on professional decisions, administrative and needs priorities, and oriented to the extent of individual needs will be attended by administrative difficulties. On the other hand, if the program is not so oriented, it cannot meet respondable medical needs effectively. This poses a real dilemma for the Welfare Department. Can its field force administer the medical care program in a manner quite different from the way it administers the public assistance programs? The research staff feels it can, but it would greatly tax the competency and resourcefulness of the Welfare Department's professional staff.

II. A STATE-FINANCED MEDICAL CARE PROGRAM
BASED ON AN "EXCESS RECIPIENT" FORMULA

A state administered, state financed medical care program not based primarily on "individual needs," but based on a more general index of need would be administratively easier for the DPW. To be effective such a system must be based on a fund distribution formula which would channel new buying power for medical services into the areas where respondable needs are concentrated. The main requirement for such a system is that it be practical, i.e., that it be easily applied and that the end result is, in fact, the channeling of funds to areas of greatest need. The system which fills these criteria is termed the "excess recipient" formula. The two factors which comprise this formula are 1) welfare caseload by P. A. category on an annual basis, and 2) population of

each Texas county on an annual basis. The first is readily available from the Welfare Department and the second from the Texas Employment Commission. To understand the system it is necessary to know how the P. A. caseload is distributed throughout the state.

THE UNEQUAL DISTRIBUTION OF P. A. RECIPIENTS throughout the state is one important factor which makes it difficult for some Texas counties to assume the full burden of continuing medical care. Some counties have a higher concentration of public assistance recipients than others, making for a greater burden in providing indigent medical care services. Primarily, these are the counties which have been losing populations since 1940, losing persons who take jobs elsewhere but not losing those who become welfare recipients. This means that the proportion of welfare cases to their total population has been increasing while those persons in the taxpaying category have been decreasing. By contrast, the growing metropolitan areas have had the reverse experience.

The following table illustrates what has happened. It shows three rural counties in which approximately ten per cent of the population receives public assistance, contrasted with the Houston and Dallas metropolitan counties where the percentage drops to two per cent. The three rural counties are less able to finance a local medical care program, yet have proportionately higher caseloads.

If the Legislature wishes to recognize the problem of the high caseload counties, yet retain generally the principle of local responsibility for indigent medical care, it could distribute new medical care funds based on a formula using ratio of recipients to population. Medical assistance could be made available in those counties where recipients per population exceed the state average. The amount of aid would be determined by the number of "excess recipients" (i.e., the number exceeding the state average) by category divided into the total available funds. This latter figure would be based on cost of respondable medical needs from the TRL need analysis, allocated by P. A. category. This would permit an effective fund allocation by welfare region and a somewhat less effective fund allocation by counties. Since expenditures are based on

individual needs, controls exist on both the fund allocation and expenditure side of this program. Applying this formula to the five counties shown above would have the following results:

As shown, recipients in Dallas and Harris County would receive no additional grants for medical care since these counties have a recipient rate lower than the state average. Total funds which would be allocated in each DPW region is shown on Map A.

Of the 254 counties the number having excess recipients are as follows:

Of the total, 186 counties have excess recipients in at least one of the categories. Sixty-eight counties had a lower-than-state average in all categories and thus would be fully responsible for indigent medical care for public assistant recipients residing in these counties.

PRINICPLES TO BE FOLLOWED in the administration of this plan would be:

☆At the beginning of each fiscal year, each DPW regional field representative would be notified of the amount of funds allocated to his region for the year. He would also be given the allowance computed for each county within the region. Expenditures would then be governed by these allowances but with the understanding that the county expenditures may vary from quarter to quarter. The controlling total would be the amount allocated for the entire region. That total could not be exceeded without approval of the State Board of Public Welfare and then only if another region could transfer out of its balance sufficient funds to cover such amount.

Counties which had no excess of recipients would not be included even though funds were allocated to the region.

✰ Expenditures would be made only for medical care received, and payment would be to the vendor of the service under regulations and procedures established by the department. The full range of medical needs should be covered (hospitalization, physician services, nursing home care, drugs) in order that recipients who have the greatest need can be adequately covered. To the extent possible these items would be budgeted in the individual's monthly P. A. grant.

✩The DPW field worker, realizing the upper limit of funds in his area, would have to use a system of priorities in certifying each case. Such priorities could include availability of local resources (governmental and private), ability of relatives to meet the recipient's medical needs, and private welfare resources. If used effectively, such procedures could result in adequate care for those in real need and yet prevent the transfer of local and family responsibility.

ADVANTAGES:

☆Medical care funds would be channeled into those counties with the highest proportion of P. A. recipients in their population. By removing the financial burden of this excess load, these counties could devote their available resources to meeting their overall indigent care responsibilities.

☆ New medical care funds would not be going to those urban centers which already operate indigent medical care programs. There would be no question of these units of government transferring existing medical care costs onto the new state program. Generally urban counties and sparsely populated West Texas counties with a proportionately smaller welfare burden are, because of a more favorable tax base, capable of meeting indigent medical needs locally.

The injection of large amounts of new medical care buying power into all areas of the state would be curtailed by this approach, and undue drain upon medical facilities and resources avoided.

DISADVANTAGES:

If a county with a recipient rate below the state average (a nonexcess caseload county) chose not to provide indigent care services, the P. A. recipient would be limited to only those medical care funds budgeted in his P. A. grant. But it should be possible for the DPW to provide for this type of case without running the risk of inviting those counties which have local services to abandon their local programs.

✩Because available funds would be spread more thinly over more recipients, the chances of taking care of those P. A. cases with