HEALTH REINSURANCE LEGISLATION

FRIDAY, MAY 7, 1954

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., in room 1334, New House Office Building, Hon. Charles A. Wolverton (chairman) presiding.

The CHAIRMAN. The committee will come to order.

We will first give consideration this morning to H. R. 8356. Mr. Childs will be the witness with respect to that bill. Mr. Childs is vice president of the United Rubber Workers of America. He has worked practically all his life in the rubber industry. He has served as a public official of the city of Akron, Ohio, was on the city council for a 2-year term, and during that time he served on different committees, including welfare, finance, general health, and sanitation. He also served as an executive member of the War Labor Board, and as executive board member of the national committee, Council of Community Chests of America, Inc. He is also a member of the executive board of the Congress of Industrial Organizations.

Mr. Childs, we are pleased to have you present this morning, and will be pleased to hear your testimony.

STATEMENT OF JOSEPH W. CHILDS, VICE PRESIDENT, UNITED RUBBER, CORK, LINOLEUM, AND PLASTIC WORKERS OF AMERICA, CIO, AKRON, OHIO, ACCOMPANIED BY MRS. KATHERINE P. ELLICKSON, ASSOCIATE DIRECTOR, CIO DEPARTMENT OF RESEARCH AND EDUCATION, WASHINGTON, D. C.; AND PAUL SIFTON, NATIONAL LEGISLATIVE REPRESENTATIVE, UNITED AUTOMOBILE WORKERS, CIO, WASHINGTON, D. C.

Mr. CHILDS. Thank you, Mr. Chairman and members of the committee.

This statement is presented on behalf of the Congress of Industrial Organizations. It supplements our testimony of January 19 before your committee and the letter of February 16 on the hospital-construction bill by Joseph Curran, chairman of the CIO social-security committee.

As your committee considers what bills to recommend for enactment this year, the basic issue before you is primarily a moral one. Will you take leadership in sponsoring a program that places greater value on healthy human lives than on superficial dollar costs?

Plenty of information is available on unmet medical needs in your own committee records and in substantial studies made in the past years by public and private groups. The technical experts know how given objectives can be written into law and translated into administrative procedures.

Your great contribution this year to America's health needs can be the development of a dramatic program geared to America's resources and sufficient over a period of years to make the marvels of modern medical science available to everyone in the United States.

Don't let the budget balancers and the tax cutters keep pushing people onto the scrap heap. Don't promote cheap bills with a nice name but no contents when real money will obtain genuine prevention and eures.

Some things must be done for the sake of human decency even if they cost money. The value of human lives cannot be weighed or measured, nor can the loss of dignity and the tragic suffering that result from failure of Congress to act in the past. We all know in our hearts that the test of the value of our institutions lies not in material things but in the regard we have for people and the degree to which those who live in this country are able to develop their full human potentialities.

How can this Nation, with a gross national product of over $350 billion a year, refuse to take the necessary steps to overcome longcontinuing shortages in medical facilities? How can we continue to exclude millions of our people from access to proper medical care except on the basis of charity? How can we hesitate to appropriate necessary sums to search out for prompt solution the mysteries of diseases which take a gigantic toll each year?

The chairman of this committee has traveled in other countries and seen what they have done toward the solution of medical-care problems even though their resources are far less. We may wish to adopt some of their methods or develop our own. But surely we have no excuse for saying that we do not have the ability to move forward as fast as they have done.

We urge you to rise above shortsighted considerations of cost because unfortunately the present administration has apparently trimmed its program to the demands of the budget balancers. We say this with regret based on an earlier hope that health would not need to be a partisan matter.

We know that prominent Republicans had introduced a bill in both Houses of Congress, commonly known as the Flanders-Ives-Javits bill (S. 1153), which proposed the expenditure of something like $800 million a year for a broad program to expand medical facilities and aid voluntary health plans. We have not supported this bill, but we believe that it embodied certain good features and that many of its objectives were splendid.

But Senator Ives appeared before the Senate Subcommittee on Health 2 weeks ago, and, on behalf of the sponsors, withdrew this bill in favor of the administration's program. It was reported by the Washington Report on the Medical Sciences that withdrawal of the bill was due to "strong pressure *** exerted *** by the White House and the office of Secretary Hobby ***"

We hope that your committee will not similarly bury the bill and all hope of a strong positive program this year.

We have just learned yesterday that the administration indicated to the Senate Appropriations Committee that they are going to request an additional $25 million for hospital construction, and also for the restoration of public-health-service grants to the level appropriated last year. And we believe this change of heart on the part of the administration reinforces our arguments and that it is possible to obtain more adequate sums for health if a real effort is made. Of course, we still feel that these amounts are inadequate.

If you confine yourself to the administration program, progress will be meager indeed. The somewhat broadened program for the construction of health facilities which the House has passed falls far short of supplying the number of hospital beds and other types of care required by the Nation. A little more money for rehabilitation on a short-run basis has been requested by the administration, with the dangerous implication that Federal money and responsibility may later be reduced. The limited Federal guaranty of loans for certain health facilities will merely scratch the surface when subsidies and direct Federal aid are needed. The reinsurance proposal for prepaid health programs is far more imaginative than substantive when dealing with health needs. These last two measures involve no Federal expenditures-only money advances to be repaid ultimately by healthservice consumers. Without real Federal contributions, these bills will accomplish little.

Not only is little advance proposed by the President's budget for 1955 involved actual reductions. The request for public-health services under existing legislation was cut $14.3 million, a 6-percent reduction from the current fiscal year. Although slight increases were proposed for some services, the $14.3 million cut in estimated expenditures for 1955 was made by paring down such public-health programs as construction of research facilities (by $4.4 million), control of venereal disease, tuberculosis, and other communicable diseases (by $5.9 million), the National Institutes of Health (by $1 million) and by cutting salary and expense budgets for Public Health Service operations. It is our position that this is no time to cut these programs. The President's Commission on the health needs of the Na

tion recommended that "greatly increased expenditures * * * be

used to speed the eradication of tuberculosis, syphilis, typhoid fever, diphtheria, and other communicable diseases."

Your committee knows from your prolonged examination of these problems that such a limited program is not enough.

Great emphasis is being placed by those who oppose a broad Government program on the development of voluntary health insurance plans. We in the CIO have done as much as any group in the Nation to promote such plans. Our earlier testimony described our remarkable success in bargaining through our unions for employer support of group plans for hospitalization and medical care.

When last I appeared before this committee I went into considerable detail on what our organization, the United Rubber Workers of the CIO, had been able to accomplish in our negotiations in 1953 with the rubber corporations of this country, and also the same programs were carried out in Canada, some better and some not quite as good as the basic program that we negotiated. We feel it has been a wonderful advancement, that it has done a lot of good for the rubber workers, but we still see in those programs the shortcomings that we antici

pated, and actually there are some new ones cropping up. We do not feel that those programs which we have negotiated are adequate in the sense of preventive medicine, clinical care and medical bills, and we feel that too many times the doctors of this country have taken advantage of the programs which we have negotiated, and, as I said before this committee before, have used that merely as a floor from which they base their charges. We see a growing tendency on the part of the doctors in this country to do just that.

We also told you of the diagnostic centers and clinics sponsored by some unions. A few weeks ago, additional evidence of the CIO's interest in expanding nongovernmental facilities was provided by a gift from the Philip Murray Memorial Foundation to the Providence Hospital in Washington, D. C.

But as we pointed out to you earlier, these voluntary plans have many limitations with which we are all too familiar from experience with them. Among the major weaknesses in voluntary health programs we pointed out the following:

They do not cover most medical expenses. At present, insurance for either home or office medical visits is either not available or is far too expensive. No program which does not permit rather extensive diagnostic and preventive medical treatment can meet the major medical expenses that an individual is sure to incur.

Hospital and medical insurance covered by company or collective bargaining plans on a group basis is usually lost if workers change jobs, are laid off, or retire. To be protected under these circumstances people would be compelled to buy individual hospital and medical insurance for themselves and their families on an individual policy basis, which is far more expensive.

I might add, Mr. Chairman, that is exactly what has occurred in the rubber industry. The programs which were negotiated for the rubber workers have been lost to them due to the fact that they have been laid off and they are out of employment. Something better than 10 percent at the present time are laid off, and they and their families have lost that hospital coverage which we were successful in negotiating for them.

Both hospital charges and doctors' fees have soared upward and premiums have likewise increased.

Most voluntary plans, a majority of which are cash indemnity plans, do not cover all charges but merely a fee schedule, and many types of expenses are excluded.

It is incorrect to conclude that the continued spread of voluntary health plans will solve medical care problems. The growth of such plans has been remarkable, but figures that are sometimes quoted are misleading. Actually only about 3 percent of the persons who belong have comprehensive coverage. The majority of those who are counted as having coverage do not have adequate protection. Only about 15 percent of the total personal expenditures for medical care are paid for through voluntary health insurance plans. And at least two-fifths of the population have no prepayment protection at all, either for hospitalization or other types of care.

The groups that have been covered have been easier to reach than those that remain unprotected. This is especially true of the lowincome people. Our union plans have included a certain number of these but many are unfortunately not organized in trade unions so

this channel is closed to them except as we are able in the future to bring them the benefits of unionism. We hope to do so, but some are not in occupations where unions are appropriate or easily built, and restrictive antilabor legislation severely hampers our efforts.

Spokesmen for some insurance companies and other business groups take the view that the low-income people can turn to charity and that everyone else can secure protection through insurance companies or other types of voluntary plans. We disagree with this. We do not think the American people should be thus divided into those who are independent and those who must undergo a means test to secure help. Certainly under present conditions the charges involved in voluntary plans, where they are not met or shared by the employer, are too high for many persons who are regularly employed or who have incomes from self-employment. Prolonged periods of illness or unemployment may make it difficult even for those who ordinarily earn relatively high incomes to keep up payments.

Public assistance or relief should be available to everyone when they need it, and should be surrounded with all possible safeguards to human dignity. But such assistance is accompanied by a means test, by its very nature, and under present circumstances has many shortcomings. Even under ideal conditions such assistance programs are not what the people really want.

They desire access to medical care as a matter of right, and they are willing to contribute toward it and to pay their fair share through taxes based on ability to pay or some other reasonable method.

National health insurance is a method by which the needs of those people can be met. Everyone in gainful employment would contribute a certain percent of his income each year to the health insurance fund, just as he now pays into the trust fund for old-age and survivors insurance. Then when he received medical care the costs thereof would be met from the fund, to which employers and the Government would also contribute.

Such insurance of the costs of medical care should be part of a national health program that would greatly advance medical knowledge, increase facilities and personnel, and make comprehensive medical care available to all sections of the people.

National health insurance is not socialized medicine since it would not increase direct provision of medical services by the Government. At least it would not do so substantially. We object to this bogeyman of socialized medicine which is used as a threat to scare people from looking at actual proposals. We presume that any program for extending medical research and services would be bound to extend also the fine facilities now run by the Government, such as the United States Naval Hosiptal in Bethesda, the Walter Reed Hospital, and the many other institutions run by Federal, State, county, and city governments.

National health insurance is now before the House of Representatives in a bill sponsored by Representative Dingell, H. R. 1817. We would like to see you report this bill favorably. Such a program would promote efficient provision of medical services and high quality of care. It would preserve the free choice of doctors and patients. It would remove the financial barrier which now keeps patients from go