fare is the only individual mentioned having authority for the administration of this bill. However, it is left completely up to the Secretary as to which department he will designate for administration at the State level, and possibly at the Federal level for day-to-day administration of the provisions of this important bill. We would strongly recommend that the department of health in each State be specified as the department best qualified to administer said program in the various States. We would urge that such language be inserted into the bill, or if this cannot be done, that the bill be so amended as to allow the Governor of each State to designate that department which he believes best equipped to administer the bill in his own State.

(2) There is mention of "reasonable cost of services" in the bill. In that section pertaining to change in child health laws, the bill would not provide adequate funds for the payment of the "reasonable cost of services" as defined elsewhere to service crippled children. Unless the amounts of money appropriated are substantially increased, the result would be that decreased numbers of handicapped children could receive necessary medical and surgical treatment services because of increased payments required by the bill. Most States have negotiated contracts with participating hospitals at far less than the daily cost of services in that hospital for the care of handicapped children.

(3) There is also a section of this bill which denies payments for physicians' services in hospitals such as pathologists, X-ray specialists, and certain laboratory specialists. This is diametrically opposed to the usual practice of hospitals to employ physicians under negotiated contractual arrangement, to perform this type of specialized and essential work in hospitals. Certain of these costs should definitely be included in the cost of hospitalization. We feel that the individual patient would not be able to pay these additional costs as well as the deductibles already charged under the provisions of the bill.

(4) On page 125 of the bill, it is mentioned that by 1970 support of certain sectain sections pertaining to welfare programs will be completely supported by Federal and State funds. If it is intended to completely eliminate local payments for certain welfare services included under the umbrella of this legislation, I would recommend amendment to provide for local financial participation, giving the State ample authority to establish higher standards for the necessary welfare services to their own citizens.

Further, we believe that the voluntary supplementary insurance plan in general provides better comprehensive benefits than does the plan for medical care under the social security title. We would suggest that if all individuals in the United States are ultimately to be covered by some type of national medical care insurance, that this would be better accomplished through a mechanism similar to that providing voluntary insurance plan under H.R. 6675.

STATEMENT OF JOHN W. EDELMAN, PRESIDENT, NATIONAL COUNCIL OF SENIOR CITIZENS, INC., WASHINGTON, D.C.

At the opening of this statement, the National Council of Senior Citizens wishes to thank the committee chairman, Senator Byrd, for his kindness in inviting former Congressman Aime J. Forand, the founder and president emeritus of our organization, to be the first public witness in support of this bill at these Senate Finance Committee hearings.

The distinguished former legislator from Rhode Island worked diligently during his years in Congress to enact a bill to provide health care of the aged through the social security system. And, when Aime Forand retired from Congress because of ill health, he organized the National Council of Senior Citizens on behalf of thousands of completely independent, widely scattered, older people's clubs across the Nation. He established a national voice for them.

Many of these older people's clubs, and councils of clubs, supported Aime Forand's early struggles on behalf of the Forand bill, and they now urge enactment of what has become popularly known as "medicare" but by which we have always meant the provision of hospital insurance for the elderly financed under social security. Your committee has heard from the Council of Golden Ring Clubs of New York which is one of our affiliated organizations. The National Council of Senior Citizens, in 4 years, has grown to represent more than 2,000 such clubs with a combined membership of over 2 million.

Under the leadership of Aime Forand, the National Council of Senior Citizens jumped into the vanguard of those national groups which have sought to shed

light-and not merely heat-on the desperate problem of providing health care for America's elderly with dignity-without forcing proud oldsters onto relief rolls. I am proud to have been elected president of the organization a year ago when Aime Forand was forced to retire from active work with us-again because of ill health.

Our club members in all States have helped the Members of this Congress come face to face with the bitter facts concerning the desperate needs of our older Americans and they have acted always on the principle that health needs of the aged affect the whole family and the entire community.

Many thousands of our club members have died since August 1961 when Aime Forand first raised the banner of this organization to fight for the kind of legislation which is included in the provisions of H.R. 6675 which is now before this committee. Many more will die before the bill-if it passes Congress as envisioned-will go into effect on July 1, 1966. They urge you to pass this bill to help America's future.

I know of no member of the National Council of Senior Citizens who was not thrilled by the action of the U.S. Senate in adding medicare provisions to the House-passed social security amendments which came up for consideration last year and which, regrettably, omitted this urgently needed program. Had agreement been reached in conference, this program could have started this summer. However, we are tremendously encouraged by the far-reaching proposals for improvement of the health security of the elderly recently voted so overwhelmingly in the House. We know it represents a victory for all of America—not just the aged-for it will importantly benefit the economic security of the younger workers who were trying to meet the problems of their children's education while trying to assist their own aged parents to meet the spiraling costs of health care. Before we ask your special concern for particular details of the comprehensive, far-reaching measure which is known as H.R. 6675, we wish to express our wholehearted support of the general provisions of the legislation and urge you to grant it immediate favorable consideration.

We are deeply gratified that its provisions for institutional care and related benefits accept the extension of the proven principle of contributory social insurance. In this respect America will now be able to catch up with what the industrial nations of Europe did for their elderly more than 50 years ago. Health care becomes a matter of earned right.

We also support the bill's provisions to help pay the costs of physicians' services and which use Federal funds to match premium contributions from the elderly. We are grateful that this program recognizes it is appropriate to use funds from general revenues to help pay the costs of health insurance without the application of a means test.

The cash benefit increases in social security recommended by this bill are desperately needed by millions of elderly-particularly by those more than 8 million aged whose only means of support comes from the social security system. But the suggested increase is not enough. The recommended 7-percent raise hardly keeps pace with the rise in living costs since the last general increase in 1958, and we believe that the recommendations of the Advisory Council on Social Security for a 15-percent benefit increase would permit the elderly to share in the advancing standard of the American way of life-instead of dragging behind it.

Our affiliated groups in all States have been helpful in providing information which has helped us gage the effectiveness of the Kerr-Mills program of medical assistance to the aged-and at previous hearings of this committee and other committees of the Senate we have expressed our views concerning the inadequacies of this program.

But the health insurance programs of this bill will relieve the particpating States from the major part of the heavy financial burden they are now carrying in their efforts to meet the health costs of the elderly on an assistance basis. We welcome the provisions of this bill which would combine additional Federal aid with the State funds thus freed, to provide a more adequate MAA health care program. However, we feel administrative responsibility for this program might be better in health departments rather than in welfare agencies.

However, this bill can stand some improvement in two particular areas in which we feel very qualified to speak.

Our first concern is for the removal of the deductible and coinsurance provisions. At the very time older people retire and experience drastical reductions in income they find themselves faced with health care expenditures much greater

than those confronting younger people. In fact, 9 out of 10 of those who reach age 65 will be hospitalized at least once during their remaining years, and most of them will go to hospital 2 or more times.

But the older people who enter hospitals are also the ones who will have large other medical expenses. In 1962, for example, medical care costs for all aged couples averaged about $442-but the medical expenses of those aged couples with one or both members hospitalized during the year averaged $1,220.

Why then, must we hit the aged who are hospitalized-and who are needing physicians' care the most-with these discriminatory deductible and coinsurance charges? In the section of the bill which is social security based there are deductibles of $40 for the first hospital day and $20 for diagnostic services. Then, under the voluntary coverage for physicians' services there are a $50 deductible and 20-percent coinsurance provisions. This penalizes the poorest of the aged-particularly those four out of five aged beneficiaries who have been found to be dependent on social security as their major source of income and the one out of two beneficiaries for whom it is the only income.

If a sick elderly patient was treated by his doctor, later given a diagnostic examination and finally removed to hospital, he would be asked to pay $110 in deductibles and then additional unknown sums to meet the 20 percent of the physicians' and other services under the voluntary program. This might be too

heavy a burden.

The National Council of Senior Citizens is happy to note the American Hospital Association is on record before this committee as also being opposed to the deductibles as confusing to old persons and liable to deprive them of needed care. It is also probable that for many of the sick poor the State assistance programs will need to pay these deductibles. A few days less hospitalization should meet the actuarial requirements of deductibles loss without serious effect.

The National Council of Senior Citizens also supports the American Hospital Association in its suggestion that provisions for outpatient diagnostic services be expanded to cover accidental injuries. Elderly persons are prone to falls and other accidents which require X-ray or other diagnostic tests.

Many of our elderly are paying an increasingly high proportion of their meager incomes to purchase needed drugs which have been prescribed by their doctors as essential for maintenance of their health standards. Some way must be found to provide Federal assistance for doctor's prescribed drugs for the agedhopefully using generic or established names for the prescriptions instead of fabulously high priced brand names.

We do not believe that profitmaking home health agencies should be permitted to qualify for payment under the social security financed program for this would open the door to exploitation of the aged who are too willing to sacrifice service and quality for financial gain. For this reason we urge that the provision limiting payment to nonprofit agencies be restored.

Our final criticism of the social security health care section of the bill concerns the payment of services for the hospital specialists. Originally part of the King-Anderson bills S. 1 and H.R. 1, these fees have now been switched to the voluntary insurance sector covering physicians' services. This reduction in benefits from the original plan is a serious matter to older people. They would be forced to join the voluntary insurance program to get specialists' coverage at all--and then they would be asked to pay 20 percent of these costs after a $50 deductible.

We understand that American Hospital Association and others have criticized the specialists omission on many other grounds-principally that it would require disruption of medical care services that have developed over the years to a high degree of efficiency and quality of care in hospitals. It would also perpetuate and extend the piecework approach to assessing medical care costs-a decidedly inflationary procedure. Directing hospitals to change their systems is obviously direct Federal interference with customary hospital practice and should be avoided as should the introduction of any new administrative procedure which would increase costs.

The National Council of Senior Citizens has had much experience working with older Americans-and we must express some concern for the magnitude of the task which faces the Social Security Administration in reaching the elderly with details of this great legislative measure when it wins congressional approval.

We wish to remind this committee that many of our older citizens are continually confused by Government communications-all communications of this

kind, no matter how well they are prepared. Moreover, this is an extremely complicated piece of legislation. Social Security Administration may have problems getting the elderly to sign and return their papers signifying they wish to authorize a deduction of $3 per month from their social security checks to pay their part of the premiums for the insurance plan for physicians' services. It is our belief that much confusion could be prevented and much Federal Government time, labor, and money could be saved if at least the current social security beneficiaries could be automatically entered into the physicians payment plan, provided that they did not elect to drop out of the plan by March 31, 1966 the final date for acceptance.

Admittedly the Social Security Administration will still need to locate and contact the elderly who are not on social security rolls to make arrangements for their voluntary participation and set up billing procedures-but this is a much lesser task.

The bill is a legislative milestone-and its imperfections can be further remedied by approaches of reason and good will whenever the hierarchy of the American Medical Association will cease its senseless opposition.

We urge that the Senate Finance Committee speedily report this bill favorably with the improvements we have suggested to make it immediately one of the greatest social boons of the century.

STATEMENT OF THE AMERICAN PUBLIC HEALTH ASSOCIATION, SUBMITTED BY N. J. SWEARINGEN, DIRECTOR, WASHINGTON OFFICE

The American Public Health Association, representing the professional workers who provide leadership and day-to-day services in public health programs across the Nation, enthusiastically supports the enactment of H.R. 6675. Since 1958 our association has urged and supported attempts to provide for adequate health services to the aged and to other elements of our population with special health needs.

We congratulate this Congress on its responsiveness to a growing countrywide awareness of these national needs.

The competence, experience, and dedicated interest of our physician, dentist, nurse, scientist, and medical care administrator members in the welfare of our sick and disabled citizens qualifies us, we believe, to speak with authority regarding practical considerations in making this legislation work.

Volumes have been spoken and written over the past two decades on this problem. The paramount point, however, is that this must be a program good for people. Such assurance is not now contained in this bill. We have for years supported the concept of paid-up insurance to cover the health needs of the elderly. H.R. 6675 is intended to do this. Unfortunately, the motive and intent of the bill outshine the bill itself, which seems preoccupied with financing and quantity of services rather than with any assurance that the long neglected health needs of these groups will be met with high quality services.

It is a simple but annoying fact of life that the costs of health care almost defy budgeting. It is not difficult to plan for food, clothing and shelter, but it is impossible to foresee all eventualities in relation to illness and its medical costs. This legislation or any other action taken by Government must in no way impede progress toward better medical care. We agree with the espoused principle that this bill should in no way supervise or control the practice of medicine or the manner in which medical services are provided. But every effort must be made to guard against creating a static situation or perpetuating and vastly extending unsatisfactory methods of providing care. Naturally, this legislation ought to allow room for innovation, for encouraging the improvement of medical care under our existing system of private medical practice. Additionally, full utilization of existing competencies and skills should not only be encouraged but guaranteed in order that the best of medicine be forthcoming.

Good quality health care is specific; it is tangible; it is obtainable-but it does not just happen. Although most persons can adequately judge for themselves the value of goods and services used in everyday living, the quality of health care is, by its nature and sophistication, vastly more difficult to evaluate even by professionals trained and skilled in the science and art. Safeguarding the quality of care to be given to the elderly, to the recipients of welfare medical care services, to children, to all of the millions who are to be covered under this bill is equally

important with assuring these persons care of some kind—be it good, bad, or indifferent. This can be achieved by due regard to a few practical assurances of sound administration of these benefits.

We propose three simple amendments to H.R. 6675 which are essential to improve the quality of services to be authorized by this legislation :

1. Part A of the bill should be amended so that the services provided by associated specialists—radiologists, anesthesiologists, pathologists, and physiatrists-be restored as was proposed in S. 1.

2. Part B should assure full-service benefits, guaranteeing no additional charge to patients for services rendered, and arrangements made so that other than fee-for-service plans would be eligible for inclusion.

3. The bill should be amended appropriately so that the skills and competencies of State and local health departments will be utilized to the maximum degree feasible. This will insure that the quality of health care provided can be continuously reviewed and improved, rather than resulting in the development of a vast, expensive parallel which would only duplicate an existing health structure in government.

With respect to recommendation No. 1, we believe it would be a long step backward and a clear disruption of an accepted manner of providing health care to require that the services of the hospital-associated specialists be excluded from the hospital insurance program. This bill should not determine the ad ministrative relationships between hospitals and physicians. Sufficient latitude for continuation of relationships of proved effectiveness and imaginative new arrangements in relation to these and other specialties should be encouraged so that continued improvement be possible. We join Secretary Celebrezze, the American Hospital Association, the AFL-CIO, and others in urging a return to this sound concept.

With respect to recommendation No. 2, we strongly urge protection against an additional charge to patients for medical services. This practice, not unknown with existing insurance programs, would defeat the highest intent of the bill. In addition, it is essential to amend the present provisions under part B so that coverage for health services on other than a fee-for-service basis will be possible. The provision of the bill that payment be based on a receipted bill or on the basis of assignment would exclude group health plans operating on a capitation payment basis which have been responsible for many of the outstanding improvements in the quality of American medical service. Amendment of this provision so that such groups would be included would protect advances made in our systems of delivering medical care rather than set back the clock. With respect to recommendation No. 3, it is essential, if there is to be quality control of the services authorized by this legislation, that these new health benefits be directed by agencies with appropriate health and medical experience. It is imperative to remember that, in the main, H.R. 6675 authorizes only payment for medical services. It should be axiomatic that medical services be administered by a medically competent agency. We recommend as strongly as we can that appropriate provision be made to mandate utilization of existing health agency skills. Provisions should also be added to the bill to assist State and local health departments to improve these competencies where they do not now exist in the necessary degree.

The successes of health agencies in controlling disease, improving health, and extending our life span are almost unparalleled in recent history of public service. These successful experiences, in both the preventive and administrative fields, should provide the base for these proposed expansions and related health services.

In addition to these three points of paramount importance, there are several other changes which would materially improve the bill.

We recommend inserting in H.R. 6675 that portion of the Kerr-Mills Act which directs the Secretary, HEW, to establish standards for medical services, and further that the Secretary specifically delegate to the Public Health Service and to the Children's Bureau responsibility to establish minimum Federal standards. Both have had long experience in setting high medical standards. Section 1902 (a)(5) should be amended so that the State agency which administers, or supervises the administration of, medical assistance shall be the State health agency; and the local health authority or other appropriate local agency currently administering maternal and child health services administer medical assistance in such subdivision. This authority should apply to professional medical activities; for equally cogent reasons, the responsibility for certifying eligibility should belong to the welfare agency.