The CHAIRMAN. Let us see if we understand one another. Medicine that is provided by a county, State, or any local community, to an indigent person, is not socialized medicine?

Dr. ALLMAN. Not under proper circumstances.

The CHAIRMAN. As presently operating it is not socialized medi

cine?

Dr. ALLMAN. That is correct.

The CHAIRMAN. If instead of the taxpayer paying the bill there is an insured group they will pay the bill. That is not socialized medicine, is it?

Dr. ALLMAN. Insurance company will not pay the bill for any indigent person.

The CHAIRMAN. I said where an insurance company will pay the bill for a member or a subscriber to that company or that group, that is not socialized medicine, is it?

Dr. ALLMAN. No. That is free enterprise.

The CHAIRMAN. Then why would it be socialized medicine, or why would it tend to socialize medicine, if the Federal Government backed the insurance company to make certain that the individual got what he wanted and the company would not fail financially in giving it to him?

Dr. ALLMAN. I think you know the answer, but the reason is that after the Federal Government started giving these insurance companies money, when it got to be a certain amount the Federal Government would start to have some control of the insurance companies, and then in turn it would go down to the control of the doctor, patient and everybody else, and that would be socialized medicine. It is the Federal control we are afraid of in this bill, because it leaves so much to the discretion of the Secretary that it is difficult to say that this would not be the way of getting socialized medicine by Federal subsidy.

The CHAIRMAN. If we wrote into the bill the specific standards for reinsurance rather than leaving it to the discretion of the Secretary, would that eliminate the socialized medicine feature?

Dr. ALLMAN. That would obviate, as I said, one of the objectionable features, but this is a reinsurance bill by the Federal Government to which we are opposed, and for which we see no need.

The CHAIRMAN. You have indicated that there is no need because, using your words, of the already extensive reinsurance facilities available. Would you tell me what justification there is for the statement "already extensive reinsurance facilities"?

Dr. ALLMAN. The statements made by competent insurance men to that effect.

The CHAIRMAN. You are basing it upon somebody else's testimony rather than on the information that the AMA has, then?

Dr. ALLMAN. We have that information from them to that effect. The CHAIRMAN. I would be very glad if the AMA would reinform us and give us justification for the statement "already extensive reinsurance facilities." It has not appeared to us as yet.

Dr. ALLMAN. We have had insurance men tell us at our joint meetings that they had ample reinsurance facilities.

The CHAIRMAN. Did they participate in the meeting held in Chicago a few days ago?

Dr. ALLMAN. We called them in.

The CHAIRMAN. And lay the basis for this statement you have made this morning?

Dr. ALLMAN. We called them in for advice. We called various different people in for advice. We heard their opinions on the matter, and then we went into executive session and formulated our opinions. The CHAIRMAN. Was your opinion formed on their dislike of it or because of your individual thought that it would lead to socialized medicine?

Dr. ALLMAN. It was formed on all of the facts we had at hand, sir. The CHAIRMAN. You have already stated the extent to which voluntary group insurance is now carried. If I remember correctly I think you said there were 93 million.

Dr. ALLMAN. I did not use the number.

The CHAIRMAN. Do you know what the number is?

Dr. ALLMAN. This graph would seem to show it is about 92 million or 93 million.

The CHAIRMAN. That is what I thought. And there were about 60 million who were not covered?

Dr. ALLMAN. Yes.

The CHAIRMAN. Did you have figures which would indicate that, notwithstanding the great number who held voluntary insurance, such as has been indicated, 93 million, the insurance they had only covered about 15 percent of the cost?

Dr. ALLMAN. I don't know that I had the percentages. I probably heard them at that time but I don't know that we have those percentages here.

The CHAIRMAN. It is my recollection we heard it covers only 15 percent of the cost so that the large number who have it is all out of proportion to the part of the cost that it covers.

Dr. ALLMAN. I think Dr. Howard can answer that if he may.
The CHAIRMAN. Very well.

Dr. HOWARD. The 15 percent figure which has been used applies to the total cost of medical and hospital care, not to the cost of medical and hospital care that is insured a totally inappropriate figure because it does not apply to the cost that is insured. It applies to the total medical and hospital cost.

The CHAIRMAN. What would you give to be the total figure?
Dr. HOWARD. I don't know that.

The CHAIRMAN. Have you any available source of information which would enable us to have that information?

Dr. HOWARD. Yes, we do. We would be glad to provide that information.

The CHAIRMAN. It would be a very interesting matter.

Yesterday I listened with a great deal of interest to a forum which was conducted by the Chicago Roundtable in which some very outstanding men in the field of health carried on a panel discussion among themselves. Did you have the opportunity of hearing that? Dr. ALLMAN. I didn't, sir.

The CHAIRMAN. It contained some very worthwhile information, and I feel certain that when I have it before me in detail it will confirm what I have just said about the cost.

However, if the cost is on a different basis from what you think it should be, then I would be pleased for you to give us the figures

that you think justify the statements you have made this morning, Dr. Howard.

Dr. HOWARD. Very well.

The CHAIRMAN. In your statement you stated that 15 studies have been made to date and 5 more will be completed this summer. Are those 15 studies available to this committee?

Dr. ALLMAN. Yes, sir.

The CHAIRMAN. We would appreciate

Dr. ALLMAN. Ten are available. The rest are in the process. The CHAIRMAN. Whenever they are available we would appreciate having them for the benefit of the committee.

Dr. ALLMAN. The committee already has them, I understand, and they are in your hands.

The CHAIRMAN. Have they been made part of our record, Dr. Wilson?

Dr. WILSON. Yes, sir.

The CHAIRMAN. Very well.

Who supplied them for our record?

Dr. ALLMAN. They were supplied to the committee staff, the 10 of them which have been published.

The CHAIRMAN. Doctor, it has been very clearly demonstrated to this committee that there are a great number who are not covered by insurance-there are the indigent, to which considerable reference has been made; there are those who are self-employed; there are those who are chronically ill, and I might go on and enumerate many groups that are not covered.

Does the AMA have any plan which it could offer to this committee which would enable those groups to have adequate insurance?

Dr. ALLMAN. The AMA has ideas about how many of them could be insured, and Dr. Martin in his testimony covered that ground completely.

Of course, there are some who never can be insured under any circumstances, and that is the indigent again because they just can't buy insurance, but they can receive adequate medical care and attention if developed properly along State and local lines.

The CHAIRMAN. Would you agree with a suggestion made by one of our witnesses a day or two ago that there should be a Federal sales tax to cover the cost of insurance for indigent persons?

Dr. ALLMAN. We have not had time to consider that statement or give an opinion on it.

The CHAIRMAN. Does the AMA have any plan which would encourage insurance companies to extend their field of activity beyond that which they now think would be sound?

Dr. ALLMAN. I don't think the AMA has any plan. That is not our field.

The CHAIRMAN. What I am trying to get at, Doctor, is this: This bill comes before us after considerable thought on the part of people from the Department of Health, Education, and Welfare. They have had consultation with those in the field of insurance, and it is offered to the Congress. This committee holds hearings to determine whether it is a good, bad, or indifferent thing, whether it should be taken as offered, whether it should be amended, and so on.

This is an effort to meet a situation which is recognized to exist.

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What I am asking is this: Does the AMA have any substitute bill for that which we have before us? It is very easy to criticize; it is very difficult sometimes to be constructive. Some of the witnesses who have come before us have just criticized. Some have helped by making constructive suggestions.

What this committee would like to have are constructive criticisms upon the part of those who say this bill will not do. It is natural for us to ask, then, what kind of a bill will do.

Is there any statement of principles upon which a bill can be drawn instead of this bill which can be offered by the AMA?

Dr. ALLMAN. The AMA is not here to criticize, sir. We come here to try to be of help, the same as everyone else does.

The AMA has no bill to offer in place of this bill because we do not think you need any. We do not think you need this bill and we do not think you need a substitute bill.

We think the record is shown by this graph of private health and accident insurance. We think that is an enviable record. We think if they are let alone, with perhaps some slight prodding, that this fine record of theirs will continue so that we see, as I say in my statement, no need for any such bill, and, therefore, we have no substitute bill. We think just leaving private enterprise alone would be well. It is doing a good job.

The CHAIRMAN. Do you see any difference in principle betwen this and that which underlies Federal deposit insurance?

Dr. ALLMAN. I don't know enough about Federal deposit insurance. Mr. CHAIRMAN. You know the underlying purpose of it is to insure bank deposits against loss up to $10,000 by Federal guaranty. Is that any different than the Federal Government's guaranteeing against the loss which might come from insurance of the type we speak?

Dr. ALLMAN. I don't think I am qualified to answer that, sir. That is an insurance man's problem. I wouldn't attempt to answer it. Mr. CHAIRMAN. In other words, you do not feel you are qualified to speak on that?

Dr. ALLMAN. That is correct.

Mr. CHAIRMAN. May I say in that connection that that is Federal insurance but it didn't lead to socialized banking.

What about the RFC making loans? Is that principle the same in general as this bill is in its objectives?

Dr. ALLMAN. I don't know enough about it, sir.

The CHAIRMAN. I have to comment on my own. I don't think RFC has ever led to socialized industry because it was helpful to them.

If I remember correctly, during the war, because the insurance companies did not cover our men in service, national insurance was provided. Would that be considered socialized insurance?

Dr. ALLMAN. That was life insurance, as I recall it. It was a straight life policy, wasn't it? I am not an insurance man and don't know enough about it.

The CHAIRMAN. Do you have to be an insurance man or a banker or a businessman to determine whether the principle is socialistic or not? If so, it has not been harmful to the country in my opinion. I will not press that any further.

We appreciate your attendance.

I would like to ask other questions but it is time for the House to meet.

I have here questions I have submitted to other witnesses asking them to give their answers for the record.

Rather than to ask them to answer off the cuff, so to speak, I will leave them with the witnesses for their more mature thought and this can be made an extension of their remarks.

I will give such a set to you. There are 10 in number, and we will be pleased to have answers if you care to give them to us.

The other set I am giving to you is a contrast between the bill which I introduced in the early part of this session, known as H. R. 6949, which was a bill which I originally introduced back in 1950, so that medical groups might have the opportunity of studying it and making replies. What I am submitting to you is a sort of comparison between H. R. 6949 and H. R. 8356, both of which seek to cover the same subject, but do it in different ways.

The former bill does contain many and numerous and varied standards which are not included in H. R. 8356 so that I will give those to you for that purpose if you are willing to answer them.

Dr. ALLMAN. We will be happy to try to answer them. (The following letter was later received:)

Hon. CHARLES A. WOLVERTON,

AMERICAN MEDICAL ASSOCIATION
Washington, D. C., April 21, 1954.

Chairman, House Interstate and Foreign Commerce Committee,

House of Representatives, Washington, D. C.

DEAR CONGRESSMAN: The written questions submitted by Mr. Wolverton to Drs. Allman and Howard on occasion of their testimony before the House Interstate and Foreign Commerce Committee on H. R. 8356 on April 5, 1954, have been reviewed, as well as the oral requests of the committee members.

We regret very much that we cannot furnish the requested data but have been advised than any insurance company will be able to do so. The desired information would only be available to an organization in the insurance business.

Sincerely yours,

F. E. WILSON. M. D., Director.

The CHAIRMAN. On this subject of reinsurance, it was stated to us by an insurance man who was testifying that frequently one policy on a man's life for $1 million, might not be acceptable to an individual company but it would be taken, and by the process of reinsurance with other companies in which each was taking a part it could be accomplished in that way.

What I had in mind about this bill was this: It does not deal with an amount, as I have illustrated, but it does seek to cover those cases where there would be a larger insurance coverage given than is now applicable, and the dangers that might come from extending that coverage are to be covered by reinsurance just the same as, in this instance, the company would reinsure its million dollar life policy with other companies.

I am certainly hopeful, I have not yet given up hope, that it would be possible for the AMA to sit down with individuals who can supply the information they desire, with insurance and social groups that recognize the necessity of some kind of insurance, so that the great number of our people are taken care of. The very wealthy on the other extreme are able to take care of themselves without insurance, but there is that wide expanse in between those two extremes which cover millions of our people who are not in a position to have the necessary insurance.