definition of certain types of facilities, particularly diagnostic and treatment centers. The views that we expressed at that time have proven to be well founded.

In our opinion, every physician's office can be construed to be a diagnostic and treatment center. It therefore appeared that if the Federal Government proposed constructing physicians' offices the whole program might be subject to serious question.

DEVIATION FROM BASIC CONCEPT OF ACT

Another aspect of the 1954 amendments which concerned us was that the categorical approach deviated from the basic concept of the Hill-Burton program. Such approach is inflexible. It does not permit the States to decide which facilities are most needed. The interchangeability of funds provided for among three of the categories was a decided improvement. However, it failed to satisfy the situations which we believed would have been taken care of by providing for complete interchangeability within the categories and between the categories and the basic Hill-Burton program.

We are now confronted with a situation where States have documented a pressing need for facilities under the basic program and where funds are not sufficient to meet these needs. It is regrettable, therefore, that in instances where funds under the four categories which may not be immediately required, cannot be transferred so as to meet these needs.

REDUCTIONS IN APPROPRIATIONS

In the history of the Hill-Burton program only once has Congress provided the total funds authorized. When the program was first set up, its sponsors visualized that $150 million would not meet the full needs, but they felt that it would meet the Federal Government's fair share of construction and would do much to alleviate the needs of the people. However, the drastic reductions in the appropriations which Congress has made yearly has resulted in the Hill-Burton program doing much less than it was expected to do and therefore the accumulative needs have grown to such proportions that the Federal share is now equal to over 8 times the $75 million which is included in the bill that passed the House.

So far we have directed our discussions in this statement to the need for new health facilities. In addition there exists a great need for funds for renovation and modernization of existing facilities. Such needs have been demonstrated in the State surveys and inventories. Many older health facilities are obsolete and presently inadequate for high quality health care.

Under present regulations, initial installations and additions to existing facilities are given priority over replacements except in instances where the existing facilities are completely unacceptable and consititute a public hazard. We believe that if Congress will appropriate the full amounts authorized under the basic Hill-Burton program that funds will channel from these high priority projects to enable the restoration and modernization of many of the older health facilities.

The American Hospital Association urgently request, therefore, that this committee appropriate the full authorized amount of $150 million

under the basic program, for which there is a great documented need, and such further amounts as in your judgment are required to satisfy relative needs under the categories.

RESEARCH ON HOSPITAL FACILITIES

There is a further section of the act upon which we would like to comment. This is section 5 of the Hospital Survey and Construction Amendments of 1949. This section, which is also referred to as section 636 of the Public Health Services Act, enables the Surgeon General of the Public Health Service to conduct research, experiments and demonstrations relating to the development and utilization of hospital services, facilities and resources.

Moreover, it also enables him, after consultation with the Federal Hospital Council, to make grants-in-aid to the States, political subdivisions, universities, hospitals, and other public and private nonprofit institutions or organizations for projects to conduct research, experiments or demonstrations concerning the utilization, development, and coordination of hospital service, facilities and resources.

While this section authorizes an appropriation of $1.2 million in any fiscal year, no moneys have been appropriated. The association has consistently expressed its feeling that with funds being expended for the whole program of hospital facilities development there should be an ongoing program of study and research.

We know, for example, Mr. Chairman, that industry, if it is successful today, puts aside and spends a commensurate portion of its capital on research. And they have to do so to keep up with changing times. It seems sad to us that in this field, with hospitals, in which the States and local governments are expending money, that there isn't a like philosophy in effect.

For example, we believe there is at the present time an urgent need to conduct studies with respect to the utilization of health personnel to determine to what extent such personnel may be more effectively utilized.

PERCENTAGE OF HOSPITAL SPACE USED FOR BEDS

Another example, Mr. Chairman, that might indicate what happens to the hospitals is that hospitals find that about 80 percent of the total floor area in an institution is devoted to facilities required other than the actual beds occupied by patients. Only about 20 percent of the floor area built into a hospital today is occupied by beds.

I think, Senator Potter, that is about as effective a demonstration of what has happened in terms of the facilities, research and special needs that goes into modern medical care. But without research to keep up with the study and application of these changes, it simply isn't a sensible approach, to us.

Other purposes for which this section is designed concern research, experiments and demonstrations with relation to the needs of communities for hospital and related services-the measurement of resources available and necessary to meet these needs-methods of increasing the availability and effectiveness of hospital servicesmethods by which the services of hospitals can be improved or the costs of services maintained through coordination of hospitals is essential.

We, therefore, urge that the full amount authorized under this section be appropriated since it can be effectively used to improve the entire program.

REDUCTION IN COST OF HOSPITALIZATION

Senator HILL. You think, then, that with this research, as authorized in the act of 1949 we might be able to take some very definite steps that would bring down the cost of hospitalization?

Mr. WILLIAMSON. Yes. I think, Senator, that the American Hospital Association sponsored an independent public commission which reported its conclusions last year, and Mr. Gordon Gray, well known in Washington and president of the University of North Carolina, was president of the independent commission. They spent 2 years studying the finances, and financial impact of the hospitals, and throughout that report you will see numerous indications of what needs to be done to develop better techniques and research and studies to control hospital costs.

Senator HILL. Hospital costs today are very high, and of course that reflects itself directly in the cost to the patient; is that not true?

Mr. WILLIAMSON. Yes; that is right, Senator. Of course, we have to realize that the cost of modern medical care gets more expensive, the whole procedure. The public, in other words, it seems to us, has been willing to balance greater costs perhaps in single instances against the benefits which result in longer life and more life and the rest of it.

EFFICIENT UTILIZATION OF HOSPITALS

Senator POTTER. Is it not true, Doctor, that we are not utilizing the hospitals as well as we should? For example, many times we have patients who are in the hospital just because of old age or for convalescent purposes that do not require the other medical services that are available at the hospital, but they are paying for those services whether they use them, or not.

For example, there is a maternity ward and all those services, and certainly a person who is in the hospital for arthritis is paying for that additional cost.

I am just wondering. I do not have full knowledge of this, but I am just wondering if there is a tendency to specialize, known as hospital specilization.

Mr. WILLIAMS. Senator. there is a trend, say, and tendency toward adding units, for example, adjacent to existing general hospitals for the chronic, so that you can relieve the cost of the general bed, putting these people into less expensive units. However, they are keeping them close to acute facilities because they do need them periodically, that is true.

I think, too, this situation of acute beds being occupied by people who, you might say, don't really need them is felt most acutely in Government hospitals, city and county hospitals particularly.

I think there is one factor we have to realize, too, Senator, and that is that when you withdraw the patient load in a general hospital, who are long-term patients, who have gone beyond the immediate needs of that facility and put them in with the other facilities, you immediately raise the cost on a patient remaining in the other facilities. So there is a contrary effect.

It is something we need to study; that is a good example of one of the things we should be doing.

Senator HILL. That is one of the things that research for which you are asking for now would embody?

Mr. WILLIAMSON. That is right, sir.

SUPERVISION OF NURSING HOMES

Senator KILGORE. Do you not think this and I think really it comes from the problems of the public health hospitals-that by proper and careful supervision of nursing homes, to make certain that people in the nursing home are getting proper care, that it would take a great deal off the load of that hospital facility? We have a number of nursing homes around Washington of which I have heard where there is no supervision. There are just people who are too old to get around and they need supervision from somebody. About all they need really is proper food and a place to sleep. Some of the homes are really bad."

But there is no organization set up to supervise them and see that they are what they are advertised to be. Do you not think that would go a long way to correct the situation that the Senator from Michigan refers to?

Mr. WILLIAMSON. There is no question but what the State licensing laws have been moving in that direction to raise the standards and improve the nursing home facilities, Senator.

The relationship of nursing homes, chronic disease beds, mental and the rest to the hospital, that total area for research, the relationship of those areas one to the other needs to be studied, because they interchange. There are no neat segments. They flow between one another.

Senator KILGORE. The mere licensing would not cure the evil. You have to have the constant supervision.

Mr. WILLIAMSON. That is right.

Senator KILGORE. By somebody going in and supervising, going in and making periodic inspections and that sort of thing.

CASES UNNECESSARILY HOSPITALIZED

Another complaint that I have had in West Virginia is this: A very distinguished surgeon made a speech on the subject that physicians were too inclined to send patients into the hospital that they ought to treat at home. That is particularly true in the industrial sections in West Virginia, where they have cases and the physicians do not bother with the patient at home, just gives him a ticket to the hospital. And that overloads the hospital facilities and overloads the hospital staffs, too. It gives them more work, particularly with the present shortage of physicians we have in the smaller hospitals. Have you found any of that?

Mr. WILLIAMSON. Yes, there is no doubt, Senator, of such a situation to a certain extent. However, part of the answer- -it is a hard question to answer because part of the question is the point you just touched on at the end there, a shortage of physicians.

If a physician spends his time wandering around the landscape and seeing 20 patients and what that takes, though it may be more costly,

if he can put them all in 1 unit, those 20 patients, plus other patients, are more likely to get the attention of the physician. The hospital proves a costly way to do that, perhaps, but in the end the people may be getting better care as a result of it. You have to balance it up.

Senator KILGORE. I know 1 coal company that has about 6 or 7 mines, that has a different list system than the others do. It combines health insurance, hospital insurance, and they have a physician. You pay a flat sum per month. But if the physician has to make a house call there is an added penalty put on it. It is not much, 50 cents, a charge of that kind.

That takes away the unnecessary, as you call it, running around the countryside, and brings them into his office, which is in the community. They find that highly successful. It cuts down a tremendous amount of lost time.

Senator HILL. It would be a thing, a matter of that kind, which, among other things, you would study under the section to which you addressed yourself; is that right?

Mr. WILLIAMSON. Yes, under the terminology. Those fancy words, "better utilization of facilities," that is one of the aspects we think needs to be studied; what can be done to insure the best utilization of those facilities.

CLINICAL CENTER FOR DOCTORS

Senator KILGORE. Also your clinical center for the doctors, where they can have certain laboratories right at their offices, and grouped in one building, as you have here in Washington, where you have a couple of medical buildings. Do you think that would also help out in cutting down a lot of the burden on the hospitals?

Mr. WILLIAMSON. It will in some areas. However, that is a question that concerns us, because if there is a hospital in the community, then that facility should incorporate the expensive diagnostic equipment and facilities and personnel and not have them duplicated in other facilities in the community.

You would have to look at the community and see what the needs were, to make sure you did not duplicate and therefore thereby have waste.

Senator HILL. I have here a splendid memorandum, prepared and sent to me by Mr. Foster, your legislative assistant, I believe, on this question. I am so glad he raised here the question of the availability of beds and question of changes in medical practice, and effect of development of outpatient services. That may mean more outpatient services. That means perhaps an outpatient, as in the case of hospitals, he could come to the hospital and see the doctor there and have the benefits of the hospital without taking a bed there.

DEVELOPMENT OF HOME CARE PROGRAMS

Development of home care programs, naturally there is the question of ability of communities to finance activities, and then the question of improved transportation and communication. That is making a difference as to location of hospitals. If you build these roads and highways, the quicker you can get to a hospital.

Mr. WILLIAMSON. In fact, Senator, people do not realize that time and not miles is the factor. Right in New York City, say at 42d and