an all-time high in the academic year 1960-61. Admissions that year were 24,955, an increase of 8 percent over the prior academic year. Graduations totaled 16,635 in 1960-61, which is less than 1 percent more than the number graduating in 1959-60, but represents a 56-percent increase over the graduations in 1955-56. The following table shows the increase in the number of practical graduate nurses during this period.

Admissions and graduations in State-approved schools of practical and vocational nursing, academic years 1956-57 to 1960-61

Source: "Facts About Nursing, a Statistical Summary," 1962-63 edition, American Nurses' Association

2. NUMBER OF AGENCIES PROVIDING HOME NURSING SERVICES

A survey conducted in 1961 by the Public Health Service showed that 470 of the 676 cities in the United States with 25,000 or more population had agencies providing home nursing services (Public Health Service Publication No. 901, GPO, 1962).

A similar study in 1963 showed that the number of cities with such services had increased to 509. The 1963 survey obtained information also on the smaller towns and counties, and found that 55 percent of the total U.S. population lives in jurisdictions which have organized home nursing care programs. A State-byState breakdown is attached.

Percentage of population with and without nursing care of the sick at home when needed

NOTE--509 of the 676 cities with 25,000 and over population have nursing care at home. care is located in 581 of the 3,134 counties in the United States.

Source: 1963 Survey by Division of Nursing, USPHS.

All nursing

This also would relate to cost, because certainly it is a lot less costly to keep an older person in the home if it can be done properly; second, in a nursing home; and finally, the most costly, the hospital.

One thing I wanted to dwell upon quite a bit, but the time is late, but it is very key to this thing, is this control aspect of this bill which is compulsory from the standpoint of having to pay and come under it. I know you have argued that the bill says in black and white that it is not to have this control, and yet I have argued that because you do have to have concern over the costs, and you stated that you have a provision that any of these hospitals or nursing homes can qualify under these standards, but then it comes to the question, though, of who sets what kind of services can be provided and paid for under this system and what the costs are. For example, if there is disagreement on this, and there well could be, a hospital developing a new technique that maybe you people didn't feel was a good one then perhaps could not be paid for under this system.

Would you explain whether this fear of mine is groundless, or if it is a legitimate concern?

Secretary CELEBREZZE. I don't think there need be any great fear of that, Congressman. As we said, all of it is going to work primarily like what is being done today with the professional organization, the American Hospital Association.

In the bill we set up also that the hospital itself can appoint an agent. For example, a hospital can say, "We don't want to deal with your directly. We will designate the Blue Cross," for example, “to be our agent."

We deal then with that particular group and not directly with the hospital.

Mr. CURTIS. Wouldn't you still be the ultimate authority for what the price would be?

Secretary CELEBREZZE. Well, we agree to pay the reasonable costs of services, but we cannot determine, nor would we try to determine, because then we would be interfering with the internal management of the hospital, how services should be rendered, but we agree, as the other hospital plans do, to pay the reasonable cost of the services.

"Whatever services you have, we can't tell you how to treat the patient in hospital."

Mr. CURTIS. But, Mr. Secretary, that gets to the nub of this thing, the insurance companies, the Blue Cross people, are arguing all the time, and rightly so and I am glad they are, with the hospitals about their costs, and you say on page 8, "Among the devices to control costs that are used in the varying degrees, depending on the type of policy, are" and you go on to explain it. That is the private insurance

company.

Here is the advantage, as I see it, because this is the nub of the thing to a large degree. When you have hundreds of Blue Cross plans, as you do, with hundreds of boards, and 100 different insurance companies all dealing with your hundreds of hospitals and so forth. They are on an equal level when they are arguing about what are the kinds of services they are going to cover and what are the reasonable costs. But when you concentrate the power at the Federal level in a bureaucracy, and I don't use that as an epithet-I do have a high regard for people in civil service to concentrate the decision in Wash

ington, that is an entirely different process for setting prices and determining services.

Secretary CELEBREZZE. The Federal Government doesn't determine

that.

Mr. CURTIS. Your ultimate authority vests there, Mr. Secretary. Secretary CELEBREZZE. The Federal Government doesn't determine the accreditation of hospitals. We will accept the Joint Commission on that.

Mr. CURTIS. I didn't say that you said anything about accreditation. I said once you have accredited a hospital and you have done that, then it gets still to the question of arguing over costs for a particular service and whether indeed a particular service is the kind that is covered by your policy.

These are in the nature of insurance and these kinds of things in the private sector are the very things that are working well I think— they could be improved-to keep costs down, and also continue to relate costs to new techniques.

This is the essence of the private enterprise system that you, in my judgment, would interfere with in putting the base of the health care insurance for hospitals through the compulsory social security system.

Secretary CELEBREZZE. I don't think so because we are relying primarily—and all through the bill the safeguards are with the system as it now exists for private insurance companies and hospitals.

We are not going to change anything that is not in being now. We are going to rely heavily upon the professional people themselves on this, so that certainly I think if you sent Blue Cross a bill and they think that you padded the bill, they are not just going to pay the bill. Mr. CURTIS. Of course not.

Secretary CELEBREZZE. Nor a private insurance company.

Mr. CURTIS. And let me add one other thing, Mr. Secretary. If they feel the hospital has been charging too much for a particular service they will get in there and start arguing with that hospital, not for an individual patient as much as for all their beneficiaries.

Mr. COHEN. May I say, Mr. Curtis, I think you have a very pertinent question and inquiry and my answer would be this. What the bill provides is the payment of the reasonable cost, not the charges, the cost of hospital care as it is defined in the bill. That would be done, of course, by an accounting procedure which has in principle been worked out for the same kind of charges now under the crippled children's program, or the vocational rehabilitation program.

The principles have been well developed and the procedure has been well developed in cooperation with the hospitals and the American Hospital Association. In terms of your question, the reason why the bill would not in any way act as any kind of a stimulus, it seems to me, to the hospital to not have its costs or charges determined in the free market is because they still have to charge the individual under 65. Therefore I think you still have a market situation. As I understand what the main purpose of your question is, a market situation would still exist because whatever they were charging the social security system, they would have to charge the Blue Cross plans and private patients under age 65.

Certainly the commercial carriers and the Blue Cross people would be interested in keeping that cost down for people under the age of

65 because the cost to the social security system would have to bear a reasonable relationship to charges to others.

Mr. CURTIS. You are certainly being responsive to the question, Mr. Cohen. That is the area I would comment on further because this needs further development of course in the field of geriatrics we are getting into something that would be unique.

The reason this program would be different from the one you mentioned is that this program is covering everybody, while in the other there are some crippled children of course that are under private programs and so forth, but here you would be covering everyone in this comprehensive thing, and this is the concern.

Mr. COHEN. I have studied that question very carefully, and I think it would be an appropriate question for you to ask the hospital people when they come, I wouldn't want to call it a competitive situation, because one doesn't think, in terms of quality of hospital care, that it is a competitive thing-but I do think a market situation would still retain and thus would be an economic and fiscal protection both to the social security system and the individual.

Mr. CURTIS. I certainly do intend to ask these people those questions. I have been asking this question for some years because it has been inherent in whatever your compulsory system is. This is inherent in it and from the other side of the coin as one who raises taxes would say we have an obligation at the Federal level to be sure that this money is spent in accordance with the law and its proper administrations so that hospitals or whoever, couldn't overcharge, but it gets into the essence of the marketplace technique, where if you err by being too stringent, you can hurt the hospitals.

On the other hand, if you err the other way you hurt the taxpayer and you end up really with the ultimate decision being vested as it has to be, Mr. Secretary, right here in Washington, while in this marketplace operation it is a thousand different little boards arguing with each other over these prices and so forth.

To an extent, as Mr. Cohen is now saying, you can cash in and benefit from the marketplace operation going on. Yes, and I would look at that. Then I would come to the final question, of course, which was the question that has been posed to you.

How can we limit this program to people over 65 on social security? As has been pointed out, certainly people on disability social insurance almost by definition are those who are most in need of help on their medical costs.

They are an increasing group as opposed to the people over 65 who have to use our Government programs. The same is true of the orphan, and a family on aid to dependent children. Yes, it would be for a person who is a minor child and the wage earner dies. They are social security beneficiaries, are they not?

Mr. BALL. Just to correct the record on that, Mr. Curtis, because I am sure you didn't mean to misspeak-the relationship as far as the aid to dependent children program and social security on the orphansit has been greatly declining in AFDC for the same reasons that it declines in old-age assistance.

Mr. CURTIS. Let me get this straight. I thought aid to dependent. children was an increasing number?"

Mr. BALL. Not so far as orphans are concerned.

Mr. CURTIS. Oh, I should not have interjected orphans.
Mr. BALL. That is my point.

Mr. CURTIS. I beg your pardon?

Mr. BALL. The AFDC program has been increasing by reason of children who are in need because of broken homes.

Mr. CURTIS. That is right, but the point still is there that here is a need of an increasing group that has had to go to Government welfare and yet are not included in this health proposal. I only threw in orphans because I was trying to describe another group which is in addition to aid to dependent children, though.

They are entitled to benefits directly under OASDI.

Mr. BALL. Yes.

Mr. CURTIS. But I wanted to interjet that group as being in need and greater need as a group than this declining group to which you are directing attention. I am trying to direct attention in this basic thing to how can we in conscience have a program that we would embark upon for people over 65 limited to them and to 30 or 33 percent of the cost of medical care to this group.

The logic suggests it would have to be extended to the disabled on social security, to the orphans who are the social security beneficiaries, and to the aid to dependent children group.

Mr. BALL. I was merely making the point, Mr. Curtis, that so far as the orphans and young widows on social security are concerned, by your test of the degree to which they have to turn to assistance, they are a declining group and not an increasing group.

Mr. CURTIS. They are?

Mr. BALL. Yes, indeed, and very largely declining. Only about 6 percent of the children who now receive aid to dependent children assistance are there because of the death of a parent.

Mr. CURTIS. I didn't know that figure and I am really pleased to know that that phase of it is going out. So then the aid to dependent children group increase is even more startling?

Mr. BALL. The aid to dependent children group is in need largely because of either the absence of a parent from the home or the disability of a parent.

Mr. CURTIS. But it does bear out. Whatever the group, that we have, the two then certainly are expanding groups and are of continuing concern with these health costs. I don't see the logic, if we once establish the basis of a whole group in our society, using the governmental mechanism instead of being ancillary to the private sector, of how we could keep that confined to that aged group.

The logic looks like once we have done this we are going to have to extend it further. That is why I think logically people say this will lead to socialized medicine, not saying those who advocate it are Socialists I want to emphasize that again-but would lead to the technique of the Government moving heavily into the entire field of health care.

Mr. BALL. So far as this group of young widows and orphans are concerned who are beneficiaries under social security, Mr. Curtis, there is just not anything like the same reason for health insurance protection under social security by reason of the fact that the health risk is not nearly as great and therefore the cost of the private protection for orphans-for young children--and for young widows, is not anything like it is for the aged.